Jonathan has had a career in the telecommunications space that spans more than 30 years. He currently serves as partner with Conexon. Jonathan's work has primarily focused on getting electric cooperatives access to the materials they need to serve rural America.
Before joining Conexon, Jonathan served as the chief of the the FCC's Office of Strategic Planning and Policy Analysis -- a position he held for four years.
He holds a J.D. from Georgetown University Law Center and bachelor's degree in economics from Yale University.
Jase Wilson: So, Jonathan. First, thank you for making time. The community is really honored to get to spend time with Jonathan Chambers. I know many of you know him, you've seen his talks before, you've read his weekly, which if you don't already, you should. You've seen his latest news and the critique of the upcoming mapping process. Right? We're gonna talk about all those things. This is our largest Ask Me Anything! To date. Over 700 folks in the room. So it's an honor Jonathan, to be with you and we know you're busy, so thank you first of all, for making time to hang out with the Broadband Grants community.
Jonathan Chambers: Thank you, Jase. Thanks for all the nice things that you've just said and have been saying in the last week or so.
Jase: Yeah, I mean it man. Like here's how I think of you. I'm just a dude in a trucker hat, but I think of you, Jonathan, as like... I'm from a tiny town, right, in rural America, and I've seen you and your partner, Randy Klindt, and the team at Conexon help turn over a hundred rural electric cooperatives, who are the folks, the men and women that helped wire up our nation with electricity, you've helped over a hundred of them turn into ISPs. Right? Which is freaking awesome. So thank you for you for doing that. I know you didn't have to do that. Like you could have done a ton of other stuff after all of your career FCC and private equity and everything. So we'll talk about that in a bit, but I wanna say shout out, thank you on behalf of rural folks too, 'cause it means a lot for folks to... I don't think you're from a tiny town. I don't know if you're from rural America or not, but you apparently care and you're doing awesome stuff and the Conexon team too. So...
Jonathan: I think you told me once, Jase, that your father was a lineman, is that right?
Jase: Yeah. Yeah, my old man. He was a journeyman lineman for three decades up at what is now United Electric Co-op and they have United Fiber, but he left at the tail end of when they started their fiber project. So...
Jonathan: So United Electric Cooperative in northwestern part of Missouri...
Jase: That's right.
Jonathan: Is a 7,000 member cooperative and the density of United's electric distribution network is less than two members per mile, less than two, right?
Jonathan: United, I saw, posted yesterday, just signed up their 25,000th broadband subscriber. Fiber to the home.
Jase: Yep. Fiber.
Jonathan: All of the members of United. Of course with 7,000 members and 25,000 fiber subscribers, they had to go outside of their service territory in order to pick up some density to go into some towns. Rural towns in America are also unserved, but they're not typically served by electric cooperatives, since those were carved out in the thirties and forties from the electric co-op territory and maintained by the investor-owned utilities. But 25,000 fiber subscribers by a 7,000 member cooperative that has less than two member per mile population density. I always bring up United, which is why I asked you about it and your father, because United is the proof that population density is not the obstacle to building fiber to every rural home.
Jase: Wow. That was spot on Jonathan. That's a powerful example. Thank you for leading with that. I think old man, you're probably on the call watching Jonathan, so shout out there and that's really powerful stuff. So that is, I think, gonna help to shape where we go first, Jonathan, there's dozens of questions from the community to get into. You, by way of background, I know you as like a dude that's helping to change these RECs from being just electricity into electricity plus information, right? You're helping them become ISPs. You're helping bring fiber to the premises, to rural America, which I love. I know by background, you're a smart dude. Yale, FCC, I think you spent some time in private equity and I'd love for you, if you could, just give a quick background and primer to folks to let folks know. I know you're a broadband polymath as I described you. So what can you tell us in your own words, in a couple minutes, your background trajectory and what brought you there? 'Cause my follow-up question, Jonathan, is gonna be, what the hell brought you to these RECs, right? That's gonna be my follow-up.
Jonathan: So I won't dwell on my background. I just, to the point of why we are together here talking today, I've spent most of the last 30 years either in the federal government or working for cable and wireless and now electric cooperatives, always doing the same basic thing, which is building new networks. Wireless networks, cable networks, cable broadband networks, fiber optic networks. So I've been on both the policy side of things on Capitol Hill and at the FCC and dealing with government agencies, both in the states and in Europe, as companies that I worked for built new networks. I've always been on the side of the so-called new entrant, that is, breaking into a new market, constructing a new network, always to compete with the incumbent networks. And that has... It's been my preference to be on that side of things. And it's also informed me about what government policy should be. And it started for me back in the early 1990s when Congress was fashioning new laws to open up the then telecommunications monopolies to competition, the cable monopolies to competition.
Jonathan: And then when I left Capitol Hill, I went to do what I thought the folks, my then colleagues, had wanted industry to do, which is to build new networks and compete. And I returned to government in 2012, and it was there, working at the FCC, that I discovered what to me was a new frontier, sort of old wine in new bottles, which is electric co-ops that were starting to build fiber networks in order to serve their members in the same fashion that, in the 1930s and early 1940s, the original electric co-ops were first constructed. Members formed these organizations to serve themselves with electricity, serving themselves with broadband became the new thing. And it so intrigued me that I learned everything I could about it, and I joined the one person who had done it, the one person who I found to be one of the most creative, innovative, and smartest guy I know, my business partner, Randy Klindt, who had built the first, really the first of these fiber networks to all of the members of a cooperative and made it work. And that's what we've been doing ever since, he and I, and our team of 500-600 employees now.
Jase: Five or 600? That's amazing. That's incredible. Amazing. Congrats on that.
Jonathan: We build, these days, over a thousand miles, and that's route miles, not fiber strand miles, about over a thousand miles each and every week in rural America.
Jase: That's a stunning number. That's like multiple tier ones combined. Right? That's a ridiculous number of fiber that you're actually wiring America up with.
Jonathan: My personal goal is for us to have designed and managed the construction of, been involved in the construction of a million fiber miles before I retire, which would be about 20% of the country. I think we're on pace to do that now, because it'll be 50,000 miles, more than 50,000 miles this year, but I expect by next year, we will have increased to 60,000, 70,000, 80,000 miles a year, and then 100,000 miles a year. There's that much work ahead. And now that the federal government has appropriated yet another $60-$70 billion, and this is for rural broadband, that's on top of the $50, $60, $70 billion that was spent in the last 10 years. But with that opportunity ahead, I think what I've been saying for a long time, what I said earlier, the nation can build fiber to every single rural home in the country.
Jonathan: There's that much funding available, and it's been demonstrated, that's why I mentioned United. It's been demonstrated that you can build a fiber network anywhere in the country that there's an electric distribution network. And since it's a lot more expensive to build electric networks, I don't even understand why people should doubt that you could build fiber networks. I think it's an imperative for the country. That is, I think, we were saying this before COVID. Of course, COVID convinced an awful lot of people that broadband was not just a nice to have, but an essential service. We certainly go a step further. Any old broadband, to us, isn't enough. If you're gonna build something, you ought to build the best. Rural America deserves the best, not because it's rural, but because, as a nation, we should be together. We should be as one, and we should be providing the same levels of service in all parts of the country to all homes so that everyone has the benefit of the same economic opportunity.
Jonathan: We have enough money to do it. There's more than enough money in the BEAD program and the American Rescue Plan Act, in order to accomplish that very thing, fiber optic network to every single unserved home in the country. Whether we'll do it or not, of course, it's not one of those devil is in the details questions, it's in the implementation. And it's up to the FCC and NTIA and state broadband offices and county and local officials, and it's up to electric co-ops, and it's up to communities. It's up to an awful lot of people, but essentially, my belief has been for a long, long time, it's up to local communities to step forward and demand that what gets built in their communities is something that is as good as anywhere else in the country, anywhere else in the world, and that the money be used well in order to accomplish that. And it takes a little bit of a demanding. That is, it takes a little bit of standing up for yourselves.
Jonathan: You see that with some electric co-ops. They have a history of community service. They are, to me, the purest expression of a community gathering together and to serve themselves when nobody else would do it, when nobody else would do it in the '30s, and nobody else will do it today with a different type of technology, a different type of industry, but the basics are still the same. It's community led. It's community investment. It's community owned. Those aren't the principles that the federal government and the state governments usually follow. While I know that it is possible to achieve the objective of superior service, superior that is the best type of network built to every single American home. While I know we could achieve that, we certainly will not do it. We are...
Jonathan: Well, there's a lot of interference in the way the money gets handed out. And I think any community that wants it, will achieve it. You can't just sit back. Any state that really wants it will achieve it. But you can see in all the equivocation that comes out of the FCC, NTIA, state broadband offices, all of the rest, politicians, lawmakers at the state and federal level, the equivocation about what the objective is, there's your why. If you set as your goal, the best possible network to every single American home, you can achieve that goal. If you set and set stead, set as your goal. Well, any old thing, any old thing, any old technology, any old transmission medium, anything that somebody claims might be good enough, the good enough crowd. The good enough crowd would say that you can get internet access today everywhere. Why should we spend a dime more? The difference between the best and the good enough crowd, that's my answer as to why it won't be achieved, because the good enough crowd that usually prevails in today's America. It wouldn't have been satisfactory to folks in the '30s and '40s I think you know. I'm not a nostalgic, oh, things were better.
Jonathan: I mean, things were shit in the '30s, the '30s were maybe the worst period of...
Jase: That's tough time.
Jonathan: Of human history. But people rose up, people met the challenge. I think the people we work with in the places we work, in Mississippi and Arkansas and Louisiana and Missouri and Georgia and Florida, all across the country, the people we work with, they step up and meet the challenge. So I have no doubt that it's possible, but I see the headwinds and I see the opposition and I see the doubters and I... Like the opposition, you're not... We're not walking through an open door. You gotta break down doors, you gotta make people angry, you gotta... If you're gonna succeed in something where there's folks standing in the way, you have to push them out of the way. So I'm not saying that just because I say something is possible that it's gonna happen. I'm saying it takes real work. It takes hard work. It takes the kind of hard work that electric co-ops and rural communities have done for decades. But first they've gotta believe it's possible. Second, they've gotta be... They have to be given the resources from the policy makers, the resources from the broadband offices, from the legislatures, from NTIA and the FCC. They have to be given the tools to make this work and the funding to make it work. And they can't be undermined all of the time, which is what happens all of the time. Undermined in the sense that they're not given the right tools, the maps... I mean, when I say tools, I mean things like the starting point. Just the broad...
Jonathan: Just the broadband maps. I know you'd wanted to talk a little bit about the broadband maps. You couldn't explain this to anybody and have them believe you.
Jonathan: You couldn't explain that Congress appropriated tens of millions of dollars, 65 million under the data act, maybe it was more than that, maybe it was less, but that number sticks in my head. $65 million to the FCC to create more granular maps. You couldn't explain to anybody that, that money spent by the public, taxpayer dollars go to create maps and those maps and the underlying data and the methodology used, and the maps themselves are not public. And they say, well, what did we spend our money on if we don't own it? If we don't own it, the money has been misspent.
Jase: This is incredible line of thinking, Jonathan. And I mean you, at your time at the FCC, I mean, you help create clear, sensible approaches to getting the data, and this latest batch, it sounds absolutely bonkers. It actually gets into a question from a community member, Peggy Schaeffer, he's been fighting great, fights up in the state of Maine. Peggy asked, "The states are gathering their own data from ISPs at cost, plus that data will add value to the FCC database. And who will be shared with, who owns it, right? What rights do you think the FCC is expecting for the use of the challenge data?" Right? So there's all these questions that flow out of there, right? Where a private company owns America's official broadband data, and is only sharing bits and pieces for the purpose of error correction, and that same private company is authorized, reserves the right to license that data or not, right? To any other group. So we're... What the hell, can you say more? You've always been sensible about these things, I mean, when our first check in conversation, you were like, what if we just did it off of electricity meters, right? Electric meters. Why wouldn't that work? Right? That's... There's gotta be something here. So...
Jase: I'd love to talk more about that if you can.
Jonathan: Well, you have to start with the purpose of the maps. Why is there going to be...
Jonathan: And what is the use of these new Data Act Broadband Maps. And while there are those who advocated for and passed into law and now are producing granular down to the level of the structure, so Broadband Serviceable Locations is what the FCC is charged with producing. That is, what is served and unserved and with what kind of technology and what kind of speeds and latency at Broadband Serviceable Locations. A Broadband Serviceable Location is interpreted more or less by the FCC and its consultant as structures. Now, that leaves out a lot of farms. So, look, I'm not a...
Jonathan: I'm not a farm kid, but my partner grew up on a farm. It leaves out a lot of places that aren't identified as structures, leaves out a lot of trailer parks. We serve trailer parks with fiber. So the very first set of data that is not owned by the public is what's referred to as the location fabric. That is the identification of every Broadband Serviceable Location according to the FCC's interpretation. Where can things be served? The purpose of that is to then take the data that was supplied by every internet service provider as to where they offer service, what's the type of service, level of service technology used, all of that. Over lay it on this location of fabric. That is not... That's neither owned by the government nor by a private company. That's still the property of the companies that supply it, the ISPs. What I'm getting at is none of the information is public. At least the location fabric should be public.
Jonathan: Now, the states at the same time, most of the states, it looks to me, most of the states are creating their own maps. And this really gets to my reference a few weeks ago in an interview when I referred to a train wreck, this is the train wreck I was referring to.
Jonathan: It's fine for states. In fact, I would do it if I were at a state. It's fine for states to create their own maps because the federal maps are not available yet. And the states are being asked to produce broadband plans and you can't produce a broadband plan without the underlying map. That is the first tool. So the states, most of them put out RFPs, there are a half a dozen or eight or 10 different consultants that produce broadband maps. I'm not in that business. We don't bid for that sort of thing. Now here's the train wreck. Everybody is producing maps based on their own methodology. The federal methodology, the one used by the FCC's consultant is different than the methodology used in Georgia. It's different than the one being used in Florida, which is different than the one being used in Minnesota, which is... They're all different.
Jonathan: The methodologies themselves are not only different, they're proprietary secret. So, if you don't have an agreement as to what you're measuring, take that one example, the simplest example that I can give you as to a difference in view. I'm at a trailer park, there are spaces for... And this is, look man, this is rural America. And that's what all we're really talking about, because it's unserved and unserved is really... The vast majority of unserved is in rural America. So if the FCC does not count all of the places where there could be homes, could be trailer homes in the trailer park, they're not counting it because they don't see something there through satellite imagery. We would say every place where there's already an electric meter is a serviceable location. Why do we think that? We think that because we already built fiber, we design and built fiber to meter locations.
Jonathan: Now at the webinar that the FCC held just a couple of days ago, to explain the challenge process to the location fabric. They said straight out that electric meters are not in their view, Broadband Serviceable Locations. We build fiber to electric meters, to every electric meter in an electric distribution system run by an electric cooperative. So to us, it isn't the issue of whether there's a meter there, it's that we've already designed and built fiber there. So there's a disagreement. And you might think, well, that's a, maybe a small percentage. It's probably 5%-10% difference, just that, maybe more than 10%. If you go to my example of a farm, well, the FCC has in the past, and it's hard to tell based on what they said the other day in the webinar, as in the past said, well, there's a location on a farm. You know, there's a residence or there's a business structure on a farm.
Jonathan: There's a lot of use on farms for broadband. Modern farms more and more need to be connected. And it's not all wireless. You need to get fiber to lots of places on the farm. We're not talking about just fiber though, we're talking about broadband serviceable locations. I would have a different count of the number of broadband serviceable locations on a farm than the FCC. I'm just giving you my difference. Our definition isn't being used by any state or any broadband mapping, but different methodologies are being used. It's the different methodologies that will produce different maps. Contradictory maps.
Jonathan: So when the FCC produces its map, and I know it's saying that it wants to receive challenges first to the location fabric, and yet they haven't made the location fabric public. You can't get that. You, Jase, you can't get a copy of the location fabric. I can get it, but only in those places where I provide broadband services and ISP. The states can get it, but then they have to hold the data private. They can't make it public to the citizens of their state. And there are only certain permitted uses. And if you make a challenge, here's a real kicker. If you make a challenge, the data that you supply, the FCC claims becomes property, the property of their consultant. So...
Jase: Okay. [chuckle]
Jonathan: I have a simpler point in all of this. My simpler point is that all of the data, all of the, all of the methodological assumptions and all of the underlying data to produce maps that are being used to spend $50, $60, $70 billion of the public's money, that should all be made public...
Jonathan: Should be made public, and if folks are unwilling to make it public, then it shouldn't be used. This isn't very difficult stuff. You don't have to use, if the FCC doesn't want to make its data public, well, then maybe the data act maps shouldn't be used by anybody. The states have a role to play in this, of course.
Jonathan: Communities have a role to play in this of course, but it only works if we're talking about data that people can see, the people can play with. Don't just give me the results. If you give me results, you produce a map and you say, here's my results. And I don't know what went on behind the scenes, under the hood, whatever. Then I don't have a way to know whether the results are good or not. I don't have a way to know. I don't have a way really to challenge that data if I can't see the data. And the secrecy that goes on at the federal government and state governments about something that involves public money should be changed. It, again, it isn't that hard conceptually to understand. We are spending a lot of public money. We should own that thing. And that's, you know, that's my like beginning and end to how to improve, how to improve the maps, how to avoid the train wreck, make the damn data public.
Jase: Okay. Jonathan, we have, on the call, several state broadband directors, we have on the call several folks from the broadband mapping coalition. I sincerely hope, Jonathan, that you joined the broadband mapping coalition, because your leadership would be extremely valuable there. Folks like, and we are gonna get into a second question from Peggy about the challenge process and the role that you described, Jonathan, that states play. Ben, can you allow me to share my screen? I wanna show something real fast 'cause, Jonathan and the Conexon team have been working their tails off on making it really possible for RECs, you know, to help wire up folks and recently there was a... I'll start with Peggy's question. I wanna show you something real fast. So recently, so Peggy asked, "What was your ideal state level challenge process look like? Should challenges only consider upload download or should a combo of technology... "
Jase: I think I know your answer there. And it's ability to be upgraded at reasonable cost, inform it? Okay. And then what role from that would communities play? But I would like to show you something real fast, Jonathan. Like we early on met with broadband mapping coalition and have been listening to their concerns about what you're describing and the real concern that we're seeing emerge is like this very private and secretive map, as you're describing it, the train wreck, could potentially paint a picture that doesn't account for a lot of, not just rural, but everywhere, how people actually live in settlement patterns. Right? And we wanna make sure that like, it's really easy for them to get their data.
Jase: So we worked out a tool called the community broadband kit. And let me show you really fast. Like it's intention is to be something that communities and states can go forward and use to map out their broadband reality. But it's part of that research and development phase that's active right now. It's part of a system that's like trying to be as open and transparent as possible about what's going on in this situation with existing data. But there was a recent situation down in the East Carroll Parish down in Louisiana where y'all had worked with, what we hear from our team member, Scott Woods, former NTIA, is the least connected of the parishes in Louisiana. And you had this awesome grant. Okay. That was in motion. And then suddenly out of nowhere at the last minute, a place, a group, a cable one group, I think, was the folks that did the challenge.
Jase: They came in and said, well, no, it's not served at all. Right? But when we looked at the data and we studied it from the perspective of like, you know, following the broadband mapping coalition's open methodology, it's published, it's open, it's transparent like you said. What we found is that less than 5% of that parish is served, right? And the rest is total crap. So they were blocked from getting the services that you were gonna be bringing by the fact of this like secretive mapping process combined with like a crazy challenge process. So can we answer Peggy's question? Like what should states do? How should states structure their challenge process in light of knowing that they don't wanna be the next Louisiana in the service?
Jonathan: So let's... Yeah, so let's separate out the word challenge from the use of it here, which is... There is a challenge process that is starting to the FCC's maps, first to the location fabric and then later, once they publish served, unserved to that. That's gonna be a very difficult challenge. The challenge process that's going on in Louisiana is a challenge to applications for funding, and that's what I'd rather focus on, at least for states that are fashioning grant programs. The worst kind of program allows for challenges to applications without defining what eligible areas are. That is the self-definition, apply for something and you define what you think, and then allow for challenges. I know it's become popular, but it is the worst program, it is the most time consuming, it is nothing but conflict and delay. To answer the question directly, there ought not be a challenge process to applications for grants. The way you avoid it is the state broadband office ought to publish eligible areas. That's all. They can go through some process to get to their list of eligible areas, census blocks, to say. Eligible census blocks, eligible locations, whatever geographic area they wanna use, I would say census blocks.
Jonathan: They can list eligible census blocks and have those be funded, and after that, the door is shut on challenges. Now... And I say the worst because it's not like one program, like Louisiana. The ReConnect Program was like that, the NTIA program was like that. NTIA, which had a program pointed to their own maps, and if you use the NTIA maps, NTIA allowed for challenges to its own maps after applications were submitted. The case you're referencing in Louisiana after an award was announced, a challenge was made to the application, to the award afterwards, after nine months of an application process. The challenges that is the challenge to first create a map, that is who in the state is unserved, who in the state, what areas are eligible for funding. That's the work that should be going on right now. Having defined the areas that are eligible for funding. Then you can run a cleaner process, a cleaner grant process. It is really key to setting up a grant program and avoiding the amount of unnecessary work, the back and forth with challenges, the lack of common definitions about what we're talking about.
Jonathan: If a state's not doing that now, and most of the states are getting broadband maps, but you have to go through that broadband mapping process and say, "We have now defined areas eligible for funding." For all the criticism the FCC gets, they define areas eligible for funding and they stick with it. To the extent they have a challenge process, it occurs before the funding process, it occurs before the auctions or the applications. The same is true with Georgia. Georgia defines eligible areas and then allows for grant applications for those eligible areas. Mississippi and the CARES Act defined eligible areas, they were able to run a process that took only a few weeks. After they defined the eligible areas, they accepted applications, and they were able to review and award those applications in a matter of weeks. If by contrast, as a state, you allow for challenges afterwards, at any point afterwards, you know why the challenges are coming. The challenges are coming to delay things. Everybody can speak about how, you know, "Oh, they just wanna make sure there's no over-building and they just wanna make sure the public's money is being wisely used," all that's crap.
Jonathan: Of course everybody can say that, that's not the real reason. To avoid that which is delay, set the process upright ahead of time. This to me is the most important set of issues that NTIA could be helping with today, but of course has gone off on their own into some new areas trying to create a new idea. They didn't do the basic work. My criticism of NTIA is they didn't do the basic work to help state broadband offices. And now it's really, I think up to state broadband offices to work together to form coalitions, to decide if NTIA is not gonna help them, that they will form regional groups or they will form their own national group to set up their own broadband processes 'cause NTIA is not doing it for them. And to let NTIA do the only thing that they're really given to do under the act, which is to take out their calculator and divide one number by another number and multiply it by 42.5. What they could have done is they could have helped with the mapping process to define eligible areas all across the country. They could have come up with a set of tools to be used to administer these programs by states.
Jonathan: Because the programs have to be administered by states and the state broadband offices are by and large small, two people, four people, under-staffed and trying to prepare to spend on... An average state spend $500 million to a billion dollars. With all of the pressure from communities and from politicians and from their own interest in trying to do good, to produce this once opportunity. My buddy Blair Levine referred to it as this isn't once in a generation or once in a decade, this is a once opportunity to take this money...
Jonathan: And spend it in such a way that you do get the best service available to every single citizen of your state. You need tools for that. And the tool...
Jase: That's right.
Jonathan: Could have been developed, still could be developed if anybody at NTIA cared enough, could be developed for use by the states, 'cause they've gotta run the programs, not NTIA, not the FCC, not this time. The FCC Congress took that ability away from them here, that is, instead of giving the money to the FCC to administer said, "No, you had your shot, we're gonna give it to somebody else." They didn't give it to NTIA either. They could have made the 42.5 billion an NTIA program, Congress did not do that. Congress said the money goes to the states under a set of very loose definitions, completely loose. You could define that stuff any way you want. The states though have this huge responsibility and are understaffed in the broadband offices.
Jonathan: And will be overwhelmed because the average like ratio of applications to budget tends to be like 10 to 1. And everybody thinks their applications are deserving. You'll run a... You'll have $100 million and you get a billion dollars in applications. In this case, the money that's coming, the money that's coming is a tidal wave of money. The very, I said, the first thing that NTIA should have done is start working on the maps. Here's really the first thing or second thing or third thing, but it should be in the top three that they should have done. They should tell every state what the allocation is going to be, give or take a few percent. That's knowable today under the Act, Infrastructure Act. They have to wait until the Data Act broadband maps are published or made public by the FCC before that allocation calculation is. But you know what it's going to be within a few percentage point today. This isn't a difficult computational issue, it's just... It's arithmetic.
Jonathan: And if NTIA were to inform states about the budget that's to come, a billion dollars in this state, several billion dollars in a larger state, $500, $600 million in a smaller state, $100 million in the smallest states. If they're to tell the states, "Here's your budget," and to help them with some of the other tools that are available from the FCC and NTIA, not just planning tools, but modeling tools, the cost quest Connect America Fund model, so folks can see how much money it would take to build broadband. We've published our own projections for how much money it takes to build broadband in every census block in the country. We've published that. We don't charge anything for it. People can see at least what we think based on our data, which is building tens and tens of thousands of miles a year.
Jase: Oh, don't you have a bit of unfair advantage when it comes to cost structure because RECs already have like a key infrastructure and poles and right of way and they're a century of hard work and training and they've made interchangeable so that they can help each other during outages. Don't you have a massive unfair advantage when it comes to the cost? Or is that not the case?
Jonathan: So, seven years ago Randy Klindt formed our company Conexon. We don't own any electric cooperative infrastructure, he and I. We don't own the poles. We don't own any wires. We don't have poles, ducts, conduits, rights of way, bucket trucks, we started with nothing. Our advantage; innovation, creation of new techniques. We coded our own software for fiber design. We developed some of our own equipment and materials. We came up with new processes. Our advantage is in our innovation, not in the fact that there's some poles out there. We don't only build on electric co-op infrastructure, we build off-system as well. No, what I'm saying is that anyone with hard work and diligence could have done what we started doing seven years ago. I'm not talking about that though.
Jonathan: I'm talking about first starting with the budget a state has for broadband, using that with different tools. You could do a simpler allocation. My preferred allocation is to push the allocation of funds all the way down to the census block in a simple, straight line form, if you want to. That is, you could do a simple calculation based on miles and homes and say, "Alright, the NTIA is gonna decide on the allocation of the 42.5 billion to each state." We use the same basic path to say, "Okay, that's based on the number of unserved locations in a state. Now I'm gonna push it down to the next level." We just say, "What does that look like for every census block in the state?" Census blocks, they roll up into block groups, which roll up into tracks, which roll up into counties. So you can come up with county figures.
Jonathan: And then if I were at a state running a broadband office, I would use that as my initial allocation. I would say, "Here's my allocation of funding to every county." I'd go down further though, I'd get more granular, I'd get down to the level of the census block and I'd say, "Here's my allocation to every census block that is unserved or partially served or underserved in the state." And then I'd say, "Anyone that is willing to build the best possible network, here's the amount of money that's available to you," but don't tell me that you're gonna build it over the next decade. Tell me what you can build this year. Don't tell me it's gonna take you two years.
Jonathan: If it's gonna take you two years, wait a year and then...
Jase: Year it by year data on the table if you wanna participate.
Jonathan: "If you want to build, here's how much money is available in every census block, block group, every track, every county. Here's how much money is available, if you wanna build it, apply for that. Build it. You got 12 months. Ready, set, go. If you don't get it done, you're not gonna get the money, so I don't ask for too much. Don't ask for too much territory." If you think like, "Oh, I can't build that much, I can't build a thousand miles," we build about a thousand miles per year in any given project. So that's our advantage. We're fast. But that doesn't mean somebody else can't say, "You know, I can't build a thousand miles in a year, but I could build a hundred," so apply for that. "I could build 50," apply for that. Have it be a race to see who gets the job done. Don't complicate it by trying to compare different transmission media and different technologies and different... No, this is pretty basic stuff. There is one transmission medium that the world is building. One. Build that. And then let people compete for how quickly they can build it. Make the money available, let them build it.
Jonathan: And then this is the key to all of it, which is, you've got a small broadband office, right? Again, two people, four people, maybe you get to staff up with the $5 million you just got from the federal government and then you have 10 people. Wow, you know. It's hard to process all of these applications if you're comparing engineering studies and you're comparing... So you gotta do a couple of basic things. First of all, you have to vet folks ahead of time. And there's an easy way to vet somebody as to their capability to build a fiber network. "Have you built one before?" If you're asking to build, you want money to build...
Jase: That is crazy talk. I mean come on. [chuckle]
Jonathan: 500 miles, show me that you built 500 miles last year if you wanna build 500 miles next year. If you have, well, you pass one hurdle. Second thing, show me that you have access to materials. Don't tell me nine months from now that you're still waiting on your shipment of fiber. Show me that you actually have materials, that you actually have labour, show me you have the personnel to build, show me you have the rights of way or you have a way to get the rights to way. Show me that you have access to poles, or if you don't have access to poles, you're gonna build underground and you're gonna be able to do that. Show me that upfront. That is the vetting upfront is pretty simple. And then you don't have to have some reimbursement program where you're checking people's invoices, and did they spend what they say. No, you've already established an amount of money. If they get the job done in a year, they get the money, and the only thing you have to do is verify it at the end. Verify, did the thing get built? That's visual more or less, but, you know, they have to give you some kind of demonstration.
Jonathan: Maps, as-built maps, for example. "Here's my as-built map that I built where I said I was gonna build." That's your verification. You wanna do some spot checking, you can do that. You can run a program like that with just a few people. What you can't run with just a few people is a process where you're allowing challenges and rebuttals and appeals, and you're sifting through engineering diagrams, and you're trying to do all of that and you're trying to score things. "I'm gonna award five points because you said you would do this in a certain way, and I'm gonna give you 10 points for your speed, and I'm gonna give you 12 points here because, you know, you got letters submitted by school children writing nice pictures with crayons, and I'm gonna give you... The mayor said that he supported it, so I'm giving you five points." Forget the point system. All you really need is you need to tell people how much they can get, you can verify, you can vet them upfront, you can verify at the back end whether they got it done, after they got it done, they can get the money.
Jonathan: You can run a program like that and you can knock off these census blocks year after year after year within a few years, most states will get the job completely done, fiber to every single home in a state. I have designed programs, I have participated in programs. I'm not telling you this to say, "Oh, this works best for us." I'm saying we'll play any game people wanna set up. We've been hugely successful in getting access to public funds. I'll participate in an auction, I'll submit something with an application, I'll get the school children's letters. I'll do all those things if that's the way you want, we can play all those games. I'm saying this is the best way to get the job done quickly, efficiently, easy to manage with small staff. Proven, proven, that is, somebody says you're gonna build something, and if they build it, they get the money. If they don't build it, they don't get the money. Then folks have to curb their own appetite as to how much money they want and how much they can build. That program would work. It's more or less. I'm not saying all this is a brand new idea.
Jonathan: That's more or less the way the CARES Act program was run in lots of states. I'm most familiar with the way it was run in the state of Mississippi. State of Mississippi in a four-month period of time got several thousand miles and tens of thousands of homes passed with fiber enrollment in rural Mississippi for a whopping $75 million. It was fantastic. And the reason it all happened was that because the CARES Act had a deadline of December 31st of that year. I know they changed it, Congress changed the deadline on December 30th. But if you were waiting for Congress to change it, you basically already, you know, lost out. Because there was a hard deadline. Because you could only get the money if you completed your work by that deadline. Folks who applied for the money in Mississippi applied knowing that they could get the work done. And we brought in dozens and dozens of crews, hundreds of crews to build out Mississippi. Mississippi, and I was telling you this the other day, for my money, Mississippi leads the nation in Broadband today, and they maybe got problems with their water system in Jackson.
Jase: Jackson's water. Wow.
Jonathan: But in rural Mississippi, there has been more fiber construction per capita per home than anywhere in the country in the last few years. Mississippi figured out how to get the job done.
Jase: That's an interesting segment to something, Jonathan, we're getting close to the end of time. I definitely cleared my schedule afterwards. I don't know if you did, but if we have a little bit of extra time, we got about 20 more questions from the community. We can get into like a lightning round if it's okay? But the first one that we wanna go to, that's a great segment to this. It's from community member, Emily Hockwins, who asks, "Jonathan, what's your company's definition of rural and is there a process of determining eligibility for a community/region?" Right, so what is rural? Right? And you just pointed out, it's like Mississippi against everybody's thought process probably is like, they actually lead from your point of view and you've got the data to show it from fiber to the premises in rural context, but then Jackson's like struggling with the capitals, like the people can't drink the water. Right? So what is the definition between urban, rural and how do you see that?
Jonathan: Yeah. I don't have any particular definition as everybody knows that like Rural Electric Co-ops formed in the '30s.
Jonathan: Some of them have towns that grew into them. Atlanta is surrounded by Electric Co-ops and as Atlanta grew, those Electric Co-ops became really dense. They don't look like they used to. I look, there is Census Bureau definitions. I would just take one of them. Like this goes back to the allocation. Here's the easiest way one could have done an allocation of funds. Take the Census Bureau data from 2020, figure out what number of rural households or residents live in a state compared to the country, divide the 42.5 billion that way. You would've come up... I'll bet you, I'll publish that number at some point. I'll bet you, it is within a few percent of the number that's come up with after the Broadband Map is produced in the challenge process and the tens of thousands and millions and tens of millions of dollars are spent. And it is tens of millions of dollars that will be spent to do what? To calculate an allocation. That's the only purpose in the Infrastructure Act, of all of this effort, that is the Broadband Map. The thing I went on and on about. The only use in the Infrastructure Act is to calculate the allocation. We calculated an allocation a year ago and published it again. You could calculate an allocation using different metrics. If you're just doing it for the allocation, it's a large waste of time, but that's rural, I don't know. The folks at The Census Bureau know more than I do about demographics.
Jase: Okay. Fair. Great. So you mentioned REC, this question is gonna combine questions from community members. Where did my question go? We have questions about RECs from a few folks Ben asked like why RECs... Right. Dave McGarry asked, what is the role of the rural extra cooperative in building the high capacity Broadband? Are they inherently better suited to the task than incumbents and rural telecommunications companies? And then community member, postgres Dunn, asks "Jonathan, as a leader who works closely with Electric Co-ops to bring the digital divide in rural America... To bridge the digital divide in rural America, what do you make of states that are adopting rules that effectively disenfranchise providers who've not yet launched Broadband services?" Right? So that could be, you've already helped maybe like a hundred plus RECs become ISPs or they're on their way to becoming them. Are there gonna be problems for folks that aren't already in a business of providing internet service? And so, yeah, let's talk about RECs for a minute.
Jonathan: So the why electric co-ops, it's... All you have to do is look at a map of where there are electric co-ops and then a map of what's unserved in the country. Take anybody's broadband unserved, underserved map, it's a glove fit. The same places that were unserved by electricity in the 1930s...
Jonathan: Tends to be unserved and underserved by broadband today. It's just the network economics of population density, that's all. So it's a good place to start. It's not everywhere. I mean, it's not a 100%, but it's, you know, if you're gonna tackle a really big problem and you've got a large portion all with one type of entity, and so let me talk about that type of entity. Sure electric co-ops have poles and ducts and conduits and rights of way and bucket trucks and linemen. What they really have, they have a community.
Jonathan: They have a community that is a member owned organization. If you told me, "I could only make one rule as far as spending the public's money on broadband," I wouldn't say, "Oh, all the money goes to co-ops or something." I'd say, "If you put one priority in the expenditure of public funds, that priority is the money should first go to a community owned network." That's what a co-op is. Co-ops have a community owned network, a community owned electric network, which when they build fiber, becomes a community owned fiber network. It's the ownership. And if you're spending public money, you're... And you give it to a co-op, what you're really doing is you're giving money back to the people who live in that area so that they can own an asset that will last for decades, 30, 40, 50 years.
Jonathan: They've already proven they can maintain an asset for 80 plus years. They will maintain that fiber asset. It will stay within the community. It ain't gonna be sold. They're not gonna go bankrupt. They're not gonna take money from the Apollo group or some large private equity firm to buy them out and convert them into something else. They're not gonna get into some different business, that is, these guys will stick to their knitting they have in electricity for a long, long time. So while it's all of this infrastructure, and there's other infrastructure that's valuable. They have GIS data on the location of every pole, every meter, every span, all of that is useful. These things are useful, but the key is it's a member owned asset. The fiber asset becomes member owned.
Jonathan: That to me, that is superior to all other aspects of this. If you look at electric rates by electric co-ops, the customer satisfaction is higher. The rates are lower than comparative utilities, than investor own utilities, than municipal utilities. It's electric, rural electric co-ops are really an American institution. I don't know. There's a little bit of them in the Philippines and maybe in Canada, I don't know, but it is an American institution. It is unique and it has been successful. And while a lot of people point to the electrification of the country, the rural electrification of the country in the '30s and '40s as an analogy to what should happen with broadband, I'm not talking about analogies. I'm talking about doing the same thing, having a fiber network owned by the people who live there so that they can ensure that that network is maintained, that the service at the levels of service and the price for that service and all of those things are what they expect as owners. That's an entirely different model than most of the funding programs to date, but it is the model that was followed in the 1930s and 1940s. At the very least once in a while, we should say, "That worked. Let's do that again."
Jase: Spot on, Jonathan. This has been absolutely amazing for me personally. I hope, community, you're getting a lot out of this too. We could go on for hours and hours. We're at the time, Jonathan. Do you have a couple extra minutes for a few extra questions or you need to hop?
Jonathan: I got a couple of minutes, but I do have to hop, so...
Jase: Okay. A question from Zoe Howell Brown, "What are your thoughts on open access network?" So you just got into this really beautiful model of like the RECs, you made a great point, it's like they're communities, right? They're member owned, right? They're gonna own the fiber assets and that's a really powerful thing that we could do with public money is the first thing to do. There's this next level of like, well, how do you operate it? Who's providing the service? Is it necessarily the co-op that might not have that experience? Y'all have connects on connects, I believe, which sounds like it's gonna be an amazing asset for RECs that don't wanna do that. And then there's these... This growing wave of open access networks, the... Enabled by the separation of planes and software definition that's taken root here in America after a decade of success in Europe and in other places. So what are your thoughts on that? Can those REC networks and other networks be open access or is that a bad model or what's up?
Jonathan: Yeah, I'll answer this and I'll take another question, 'cause I don't wanna leave on a sour note.
Jase: Okay. [laughter] It's alright.
Jonathan: But I don't think it works in rural America. I don't think it works in rural areas. I don't think you have the density. What you have to do... So here's the... I'll give you just the straight why I don't think it works. And it's the electric co-op model. You have to have a network to make an electric network work. The deal is you serve everyone. Right? You serve everyone no matter where they are in the network, you offer them the same prices, you give them the same level of service. You are not cherry picking or all that, we're all in it together, one for all for one. That's not the open access model. The open access model is a cherry pick model. The open access model gets cherry picked by companies like Google. If you want to see who's taking advantage of open access models, [chuckle] see if somebody at Google will tell you how they view it. They think it's great. They're gonna pay 15% or something of a network and they'll treat... They'll save themselves money. You can't fill up with enough ISPs in a rural area open access model, you gotta have one provider who's gonna provide service to everyone at the same quality level.
Jonathan: It just doesn't have the density. I'm not saying open access doesn't work anywhere, can't be made to work anywhere. I'm saying this model, a community that owns the network can either operate the network themselves, and this is the same thing we've done throughout the last decade, operate the network themselves or lease the network to somebody who will provide those same standards, who will make service available to everyone.
Jase: Single one entity that's the known sort of brands. And it's not allowed to cherry pick and say, "We're this price over here on this side of town." That's clear. Okay. You're for separation of ownership from operation, but full open access, not like... Not in rural at least because of all those problems. That's a great framing. So two other quick questions, please if we could, Jonathan, to end on a high note. One is from my co-founder, my version of Randy, the smartest person that I know, postgres Flynn. postgres asks like, "When you're not thinking about fiber deployments, what do you do in your spare time if there is any?" And then community member Greg asks, "Do you golf, Jonathan, and what's your handicap if you will?"
Jonathan: [chuckle] I'll answer that second one first. I've been golfing since I was a kid. I now, after my first boy was born, I made a decision to only golf with my kids. So for the last 20 years, the only people I have golfed with are my two boys because I couldn't justify spending that much time away from them, but I could be a good dad and golf with them, alright.
Jase: I love it.
Jonathan: And my handicap, I don't keep score. I like to hit golf balls. I find that keeping score ruins my game. [laughter]
Jase: I got you.
Jonathan: So the what do I think about... I don't know. So I'll tell you, I'll leave it with this. I, about 10 years ago, 15 years ago, I stopped reading the news. I shut everything off. I took every news app off of my phone. I took all... I wouldn't watch anything. CNN, Fox, MSNBC, I wouldn't watch anything and instead I just started reading. Like, I'd always read, but I said, "Well, if I'm gonna spend any time looking at a screen... " And I mostly read the books on my phone or a e-reader. [chuckle] So I used to read all the time, continuously, novels only, fiction only. It's the only thing. Man, I was reading a book, two books, three books a week sometimes. And then I got sucked back into the news in the 2016 campaign and everything that went on and everything that's going on in these last few years. Here is my goal, this is the way I'll answer your question, my goal is to shut off all the news apps again, to shut off all of the cable news and to go back to reading novels and to stop paying any attention to the news, 'cause man it's just poison. I can't stand it.
Jase: Yeah. Well, I'm on Dost... I'm revisiting some Dostoevsky if it's of any help, and that's a really great place for wonderful minds like yours, Jonathan. So I really appreciate this man. Like, you don't have to do this. You don't have to help these RECs. Like, you could have been a two and 20 like multimillion dollar year kind of guy and just go out and have a bunch of land and do a bunch of multimillionaire things and have a lot of fun after you took off from there, instead you rolled up your sleeves, you helped a bunch of RECs get to become ISPs. No doubt you're gonna do that for even more of them in this upcoming set of programs, and we're super big fans of y'all at Conexon and the stuff that y'all are doing. Jonathan, though, thank you again on behalf of the Broadband Money community for making time to connect and for all you're doing to help Americans get access to the good stuff. So we appreciate you.
Jonathan: Thank you, Jase. Thanks for all the time.
Jase: Yeah. I hope you have a wonderful Friday.
Jase: See you.
Jonathan: I'm a big fan of the fourth commandment so...
Jase: There you go.
Jonathan: The last couple hours before Sunday and on a Friday are my favorite time of the week.
Jase: Very good, have fun.
Jase: It's good to hang with you. Thank you for making time.