Ask Me Anything! with Joshua Broder, CEO at Tilson

Drew Clark: Good afternoon and welcome to Ask Me Anything. I'm Drew Clark with Broadband Breakfast, and my guest is...

Josh Broder: Josh Broder, Tilson.

Drew: [laughter] Josh Broder of Tilson, CEO of Tilson. I am so excited to be here to spend this hour with Josh and with all of you in this community. Tilson has just kind of... I don't know whether we say grown like a weed or like a rocket, it's just like going crazy. 1400 employees, and this is up from 12, several years back. So Josh just give us the quick story of Tilson and its growth and what you're doing in the broadband space right now.

Josh: Sure. So I'll take a rocket ship, not like a weed trimmed later. But we started Tilson with the idea that people need a good advice about building their infrastructure. And we did that as consultants, so we were being analytical and providing good advice and coaching and some outsource management, and we got frustrated that we couldn't really give advice unless we had good designs and cost estimates. And can't really do good cost estimates unless you're doing some engineering, so we went from consultants to engineers. And ultimately, we got a little frustrated that a lot of our projects get put on the shelf and didn't get built or wanted to get built, couldn't find the right resources, so we then became constructors. And then our customers said, okay, so you built it, what do we do when we fix it? Be like, guys over here, and they call those guys and then call us back and say like, they didn't do a great job, could you come fix this for us? And we said, yeah, sure, okay, well, fix it.

Josh: And then customers started saying, okay, so I want you to fix it, but how do I know when it's broken? And so we started providing some operational support services through an outsource CloudKnox. And so all those things are what our services company does. We consult, we design, we build, we provide maintenance services, and we'll provide remote monitoring of networks, and we do that nationally through the US. And somewhere along the way, I think it might have been in 2014-ish, some customers told us that's great that you can design, build our stuff, but there are situations where we might want you to finance and own some of that infrastructure. And we said okay, we can do that. So we started Tilson Infrastructure in 2014. We spun it out as its own company in 2019. It's actually a different company than the Tilson Services Company that most people know, and so now, we also finance and operate some infrastructure, which for us are generally poles, towers, and some long-haul fiber routes.

Drew: Well, you have, of course given us a great summary of so much of what we wanna talk about here. Let's go back to the beginning a little bit more. And before you became CEO of Tilson and as was noted in the article posted in the Broadband Community, you didn't found it, but you practically did like you were employee number three or so, and you've grown it since then since, I guess 2000. So tell me a little bit about what you did in the military that got you interested in telecom, because it's a very interesting story, and I think you'd obviously be better to capture it, so tell us a little bit about that Josh.

Josh: Sure. So anybody's who's in telecom kinda arrived there accidentally. There's not a lot of people who, when they were six and people were dressing up as fireman and stuff like, I wanna be a telecom engineer when I grow up. So you wind up in it accidentally, and that's what happened to me. I had gone to college on a Army ROTC Scholarship. And sort of the deal was if you put your nose to the grindstone and you made your grades and you did well on the ROTC stuff, then you could choose your assignment. You get to choose what part of the army you wanted to be in, think like infantry, aviation, armor, and you got to choose your first assignment. And assuming they had a seat and a location that worked, if you made the grades, you could go do that. And so I had wanted to be a army military intelligence officer leading a group in Japan, and it looked like I was gonna be able to go do that.

Josh: And when September 11th happened, it also impacted Pentagon, not just the Trade Center. And when the plane hit the Pentagon, actually killed the group of people that were meeting to determine where my year cohort was gonna be going and doing, and I wound up in the Signal Corps. Bunch of this, like a little bit of a longer story there, but after not getting an assignment for a while 'cause of the chaos, I wound up in the Signal Corps. So it was a part of the army that provided communications. Signal Corps goes all the way back to the time where the guys with the flags, kinda communicating that way.

Josh: And through that experience, I wound up leading a unit that was based in Europe and deployed all over the world designing and building and operating networks. And my last assignment in the army was building a big IP network in Afghanistan. It was sort of moving from analog to digital and having a packet network and Predator drone feeds were all the hotness and telephone networks couldn't support drone feeds. So built a big IP network there with a big unit and got out of the army and went looking for something to do. So I moved back to Maine and got involved with Tilson.

Drew: So is there a difference... Just sticking on the military Signal Corps for a moment, is there a difference between the technology, the IP technology that is used to facilitate the kind of capacity to do things like drones versus sort of out in the fields signals and what we think of or is this just kind of all one big seamless broadband connection that maybe has a couple of different security elements? 

Josh: Yeah, so there's some slides somewhere in some sales presentation for companies like Lockheed and General Dynamics where probably it looks pretty seamless, but it's not. [laughter] And at the time I was doing that, we were transitioning from stuff that was in a green box that was sold by an aerospace company that focused on defense, the kind of the stuff that we all know and love as telecom people off the shelf, Cisco routers and Dell servers and all of the equipment that has come out of civil telecommunications. And so my projects were often to go into a place and establish telecom for the first time, or if it had been previously established like on that Afghanistan rotation, someone had previously come in and put in 16 kilobit scritchy, scratchy field phones. I say scritchy scratchy like it wasn't 64 kilobit sprint pin drop phones, they were field phones, you could hammer a tent peg in with them. And to go from that to drone feeds on everybody's laptop or mobile device, whether they were in a box or at a command post meant that we had to move to an IP network and all that stuff was commercial off the shelf technology.

Josh: So that was an opportunity to kinda learn how telecom companies build their networks, and you can think of us like a telecom company in those places providing what then was kind of really modern IP networks for the first time.

Drew: Well, and kind of you think more recently about the recent military conflicts, the one in Israel is so recent that I don't know what the stories have come out, but the Russia's invasion of Ukraine has brought a lot of attention on the incredible role of telecom networks, the incredible role of instantaneous communications of even crowdsourcing positions of different units. Do you keep up with military telecommunications, Josh? 

Josh: Not really. I've been out of it for 20 years, so I don't have a lot of insight on that, except what I read in the news. But I think it's true that virtually every application of human life industry and I assume defense now benefits from connectivity, and there's a lot more technology tool box in the toolbox than when I was doing that. We would mostly come to a remote place via satellite and then spread that signal out via microwave or fiber, and Starlink wasn't a thing yet. And LEO technology has brought down the cost and increased the speeds and lowered the latencies of broadband connection, so I'm assuming defense industry is enjoying the fruits of all of that. But I think increasingly civil telecom is driving the train here, whatever the state of the art that we're enjoying in the technologies that we use every day, or what the defense guys are gonna put into place. There was a time, and that time is decades ago, where defense was driving the train on that and those applications were first, but I think at this point, you know the most modern stuff is supported by private investors and is out in the market, and then they're trying to figure out how do adapt that to the defense context.

Drew: To defense. Well, okay, so that's 20 years ago. Now, let's go back just 10 years ago. Okay? And I think we might have first interacted around the BTOP, the Broadband Technology Opportunity Program, of course, was in the state broadband office at the time. And I know this is kind of where Tilson really took off. So let's talk a little bit about that first round of infrastructure investments and not only how it affected Tilson and your founding, so to speak, but what's your thoughts on how that round of investment paves the way for what we're in the middle of right now, Josh? 

Josh: Yeah, so I'll go back to 2007. I joined Tilson right out of the army, and I got hired by the original founder of Tilson, guy by the name Mike Dow. And he had been a construction company CIO and deployed big IT and systems for big field construction companies. And he hired me to join them on the mission and go consult. And so we did that together and hired a bunch of other people. And right about 2008, October 2008, we got a call from our five biggest clients who all said stop work. For folks who were old enough to be in commercial context in 2008, it was about October when the wheels kinda seized up and they kinda just stopped working and the bottom dropped out. And so we sat around a little plastic table at our tiny little one room artist studio of an office and said, what are we gonna do? And we decided to go to half rations on salary and figure out what was gonna come next. And we thought the thing that was gonna come next was gonna be federal stimulus, and broadband was becoming a hot topic at the time. And they did.

Josh: So by 2009, federal government announced a bunch of programs, one of which was to BTOP, the Broad Technology Opportunity Program, coming out of the NTIA, a sub of Commerce, and we lined up with a few companies and won a bunch of grants, mostly as vendors to those companies and private investors and public agencies who won those grants. And one award led to another award, which led to another award, and before you knew it, we had a bunch of BTOP grant contracts working as a contractor to BTOP grant winners. And we had also won some Department of Energy projects with power companies that were implementing smart grid technology, which the difference between a smart grid and a dumb grid is a telecom network, so we were putting networks on grids.

Josh: And that was really meaningful for us. We went from on the ropes and maybe not gonna make it as a company to becoming good size. And we earned our stripes as a big project company doing some of those projects in the early days. When we did our first BTOP project, the biggest fiber network we'd ever built was about 10 miles, 10 ground miles. And the second Fiber project we ever did was 1100 ground miles, just to give you a context of what that explosion meant. And so by the time we had finished those things, we had credibly deployed some of the biggest networks that had ever been deployed all at once. Lots of telecom companies had bigger networks, but they hadn't been deployed in a year and a half, they'd been deployed over two decades. And so these are some really big projects. And I would say for us that was... That transformation I was talking about where we went from consulting on it, to engineering it, building it, we were sort of working our way through those gates in that time. And it was probably 2012 timeframe when I wound up buying the company. We we're still pretty small in 2012. I don't know, maybe 15 employees.

Josh: And at that time, the original founder guy, Mike Dow, had the opportunity to go to work for some of my army buddies back overseas, and so that was the occasion of me buying the company. And I had decided, look, I was happy to be home. I had spent a bunch of time abroad, almost five years, and I was really happy to be in Maine. And so accidentally winding up in telecom, I kinda accidentally wound owning the company. At the time, I was looking for a loan from a bank to finance the growth and sort of the fact that that loan needed to be personally guaranteed, it was a conversation starter on the sale of a company, and I wound up going back to that same bank and saying, look I'll guarantee it, but I need a loan to buy the company too. And luckily, it was small enough that it wasn't that big a loan at the time, but it still took me a bunch of years to pay it off.

Drew: Well, so as an accidental CEO, what have you learned? What's it been like? We hear CEOs, the culture of startups is strong right now, lots of people have that aspiration. How are you looking back on it from the view of 10 plus years, what do you think about the things that the people who are interested in that that path should be aware of and learning? 

Josh: Yeah. Well, gosh, it's a great question. I was the accidental CEO in that moment, but I was an intentional leader. I had sought out originally that Army ROTC Scholarship to go to college because I was interested in leading people. And so the first job as the CEO was leading a team, then they also have to have a business strategy and know how to manage and all those things are important, but fundamentally, a CEO is a leader of a group of people who are trying to get a thing done. And so I found the leadership part of it pretty easy, but I would say the business part of it, I had to learn. And you said, your question was, what did I learn through all that, and the first thing is always have more cash than you think you need. [laughter] Because when you're around big capital projects, you can tie up a lot of cash for a long time. And particularly in services, I would say if you look at the anatomy of companies that didn't make it along the way and we've all heard of examples of companies that fell out along the wayside over the years, probably not having sufficient cash was one of those problems.

Josh: I think the other part is governance. So the anatomy of most small closely held private companies are that you have a dictator CEO person as a majority shareholder that kinda make all the decisions. And so the other thing we see in the anatomy of companies who fall out as crummy governance where a CEO was kinda winging it and there was nobody to ask him a tough question or push on that person's point of view. And so one of the things we've gotten right over the years is we brought in the right investors to have the liquidity we need to do our projects and also to have serious governance so that the CEO is not drinking their own Kool-Aid.

Drew: Who does that for you Josh? Who's the person who says, Josh, you're on the wrong path here, you need to course correct. How do you get that advice from people that work for you? 

Josh: I've got a pretty sophisticated board today. It's a nine-member board, of which I am one member, but the people on the border serious people, they mostly have more experience than I do. One of them is Paul Anderson, who before he retired to the coast of Maine and made an investment in a little company called Tilson, was the CEO of Duke Energy, and before that, he was the CEO of the biggest mining company in the world, BHP Billiton. This guy is a serious leader guy. Got a couple of great investors on the board who asked me tough questions and have more financial experience than I do. And also have operating experience. There's a woman on the board who is a former executive at AIG. There's a woman on the board who's the Chief Administrative Officer of Brookfield's Data Center Platform, and she's also an attorney. So these are serious people who ask serious questions. And oftentimes, they ask me a question I didn't anticipate. And a lot of times if they call me out on something, I agree with that, and I'm like, oh gosh, I'm glad you pointed that out because that would have been a mistake. So I think that governance piece is often overlooked and people assume that CEOs and entrepreneurs have all the answers, and you better have a lot of answers, but if you think you have all the answers, you'd probably get yourself into trouble.

Drew: If we were to put on a graph, the kind of the growth curve of Tilson like... So you talked about it being a 12-person operation. Maybe you said six back in 2012, where did it go? Like year by year, when did you kind of hit that spike that you're at now, and is the spike gonna keep growing? Give us a taste for that employee headcount that you've got there.

Josh: So our growth has been fast, but it's been consistent. We haven't had the same amount of growth every year, but our average compounding annual growth rate, CAGR, is about 30% going back to 2012. And if you come into the in-years, if you shorten that timeframe, it gets a little higher, it's more like 40%. So probably our growth has been accelerating over time, is another way to think about that, but it's been consistently big year over year. And so the Inc. 5000 publishes a list of the 5000 fastest growing companies in America, and it's pretty easy to get on the list. If you're in a small business, $5 million business and you have a 10 million dollar a year, you're making the list. What you often see though is companies come on and off the list, and we've been on the list for 13 consecutive years, and only half a percent of the listed companies, not even half a percent, I think it's like 0.5%, that's a 10th of a percent, have been listed for 13 consecutive years. And so I think what's remarkable about Tilson is the sustainability of the growth. We're not just having good years and bad years, but we are wired for growth And so that means you're gonna build the company a little bit differently to sustain that, and so we're adding about 100 plus people a month.

Josh: The most current number I have is October, we hired 136 or 137 employees. We don't have perfect retention, so we'd be net something a little lower than that up for the month, but you start to play out those numbers month over month, and I think the growth will continue at this rate.

Drew: So right now, we're kind of in a moment where everyone's talking about everyone's planning for preparing for the BEAD investment, plus the others, the Middle Mile Investments and so forth. And so 65 billion of IIJA, which of course is amplified by the match funds and the state pools and so forth. So it's kind of clear we're in a moment of investment, so to speak, but what about during those lean years, like from '15 to 2020 before the pandemic and everyone realized, oh my gosh, we need to have fiber symmetrical networks. What is the state of growth or how did you manage that, or how are you really, maybe more to the point, how are you preparing for those lean years in the future right now as you're building this company, Josh? 

Josh: Yeah, that's a really good question, Drew, because the one thing that would be obvious to anybody that works in technology is that the technology changes pretty frequently, and the thing you're doing today is probably not the thing you're doing tomorrow. And so if you look back on the history of the company, it's a history of pivots. And as each technology change happened, we pivoted again. So I told you a little bit about what we were doing during the American Recovery and Reinvestment Act period. That was like 2010 through '13 kinda timeframe. And if you were doing those projects, you had to pivot 'cause eventually the money ran out. That was kind of the question you're asking about today's RAMP, I can kinda look back to the last one, it's like, well what happened between then and now? What did I do between the stimulus surges? And so in 2012, we had a meeting of the managers in the company and we said, well, now this federal stimulus story is gonna end. We gotta go find somebody to pay us to keep doing work. And the thing that was hot then was LTE deployment, so that was 4G on the cellular side. And so we said, hey, let's go build a site acquisition group and a civil engineering group that does the kind of tower structural drawings and construction drawings, and let's go build the tower climbing group. We built all those groups in that 2012-'13 timeframe, and we went from doing mostly public money work to mostly private money work in the 2013 timeframe.

Josh: I think I remember we won a contract with General Dynamics as a sub on a AT&T turf project in upstate New York, and we hired all the main National Guardsmen and drove them out to a Staybridge Suites in upstate New York. And took that over and made that our New York Headquarters, and we built 700 or 800 AT&T sites over the next year. And by the time the next year came, AT&T had bought DirectTV and 4G was pretty far along, and they were in a little bit of a CapEx holiday, and we said, gosh, we gotta do something else. So we found SprintVision's project in the southeast, we won a contract changing light bulbs for Crown Castle in the northeast on their towers. You have to do that a lot less now that there's LEDs, but back then those lights burned out a lo. And we started building fiber to the cell site, which was becoming a new thing, and I was a fiber to the data center. And so for us, it was not only where is the CapEx, but it was like, what is the technology that's gonna drive growth here? 

Josh: And so we knew that that the cellular stuff was gonna end, like all the 4G was eventually gonna be up on tower, so what was next? And as we went looking around for that work, we saw that Verizon had an initiative to build small cells, and they had been renting them from folks like ExteNet and Crown for a while, but they wanted to self-perform and own their own facilities, they were calling it owner's economics. And as we were looking at that, we thought, gosh, it's pretty hard to put stuff on utility poles, and I bet the cellular guys are gonna struggle with it. So we called on Verizon in New England, we went to their office and I put together a slide deck of all of the wireless devices we had put on utility poles for the electric companies. Turns out that when Verizon built in those days a small cell, it looked like a white can on a antenna, a white can antenna on a pole, and when the power company did a meter reading kind of system that was wireless, they put a white can on a pole, so it's the same thing. And so I went there with the slide deck and said, hey, we put wireless on poles, and they're like, great, we're looking for guys who put wireless on poles, so this is kind of a funny true story about how this stuff goes.

Drew: And it was a white can, right? 

Josh: Yeah, it was a white can. That is like the same thing. And to someone who doesn't own a pole, the pole owner is like a hostile counter party, but we knew what the pole owner wanted. Things had to be far enough apart, so nobody got electrocuted. There are standards around that stuff, it's an engineering discipline, and we knew about it. And so I said to that local Verizon office, I said, okay, let's go. How many of these things do you wanna build? And they're like, oh, we're gonna build thousands. I said, great, when can we start? They said, oh, we just looked in our system and you don't have a contract. And I said, okay, well, give me a contract. And they said, no, it's like too hard to do. I was like, what do you mean it's too hard to do? And they said, no, we can't give you a contract because nobody here... We haven't hired a new vendor in 10 years, and it's just too hard to do. So I said, good grief, so I have the thing you want, but you can't use me because I don't have a contract and you don't know how to give you a new contract? They are like, yes, that. I said, oh shucks. Okay, well, call me if you change your mind. I'm like, gosh this was kind of like my Hail Mary to find something for the company to do now that we're done working on towers for a little while.

Josh: And so I went home and I was young, single, I'm a little sleep guy, so I tend to work at night, most nights. And I was like up online looking at stuff, and I somehow found my way into the Verizon supplier diversity website. And they had a web form that said like if you're a diverse supplier, and they listed a bunch of socioeconomic categories, and one of them was a veteran-owned business. And I'm like, I'm a veteran-owned business, I filled out the form. [laughter] And I don't know, that was like 2:00 in the morning, I went to bed. 2:30, my phone rings, I got a flip phone at this point, nice 4G flip phone, and it was a guy in India, like Verizon Data Services, like their India business process outsourcing affiliate or something. He called me, he's like, hey, I got your web form here, it says you're a veteran-owned business. Can I ask you a few questions so we can complete the process? He's like, I didn't expect you to answer. It's like 2:30 your time, right? I said, oh yeah, that's fine. You didn't get spam calls back then.

Drew: We didn't get that many.

Josh: I was like, oh, I saw an Indian number, I was kinda wondering who's calling me. So I stay on the phone with this guy for two hours, we finish the process, and I had a vendor number by morning.

Drew: Wow.

Josh: And so next day I call the guy back in New England and I'm like, hey, I got a vendor number. He's like, you do not. I was like, I got a vendor number. This guy in India called me, got me a vendor number. Anyway, so from there, we wound up building a bunch of Verizon small cells all over the country and that led to the next thing. So if you look back at our history like, well, what technology made the company. Well, it was Middle Mile Fiber, and then it was smart grid technology, and then it was 4G on towers, and it was 4G on poles, and then it was 5G on poles, and then it was fiber to the home. Pick a trend. Our value proposition as a company is not grinding out the same thing we did 10 years ago for two cents cheaper, we're at the front of the change cycle trying to help our customers understand how to do something new and difficult, and then how to scale that activity.

Drew: Wow. No, this is fascinating. Well, let's get some questions from some of the many people who have chimed in here. I'm wondering if you could talk a little bit... We've got a question from me to Anita Shalavi about AI, about incoming telecom and AI progress. What do you see? Obviously, we're still... Well, we're not a year and we're 10 years into the exiting of the AI winter and obviously large language models, this is not my area, I don't think it's your area, but it's affecting every area. And so how are you thinking right now at Tilson about AI and the role that it's going to play in telecom networks right now? 

Josh: So let me start with what I think is happening with AI writ large and I'll talk a little bit about how we might use AI. But big picture, where this is like the first minute of AI. We are so early and the hyper-scalers, the folks that are providing the core infrastructure that power AI, Google, Meta, Amazon, these folks who build really big technology infrastructure facilities to do this processing already know that it's gonna be really demanding and they're gonna need a lot more infrastructure. And so I'm not an AI expert, but my insights on how it relates to telecom is that it's driving a huge amount of data center development, and that data center development also needs connectivity. And I think if you ask somebody five years ago, six years ago, where are we in long haul connectivity, they would have said, it's kind of mostly done, all the cities have been connected, there's rings and it kinda works okay. But when you look at it today, and some of that fiber is more than 20 years old, some of it is 30 years old, and old fiber is kind of a problem, it doesn't work as well, and there's new kinds of fiber that work better.

Josh: We're starting to see actual installations of hollow-core fiber for lower latency applications, a totally different kind of fiber. So all of a sudden we have more data centers because of AI, and those new data centers need connectivity, and the old data centers have kind of crappy fiber to them, not to be too crude, but it was great when it was put in, but today, it's kind of dated. And there's some new technologies coming out that may be a little bit disruptive, and so my view from a telecom perspective is that AI is gonna drive for data center deployment, it's gonna drive degree capitalization of existing fiber routes, and it's driving new fiber routes for better inter-connectivity between data centers, and then also the deployment of new technology. So I'm actually quite bullish that AI is gonna drive a huge amount of development in telecom. Tactically, as a guy who is running a couple of companies, like every company in the world, we're like what can we do with AI? Could we run a better company? Could we automate some of the things we do? At Tilson, we're in the early innings of some of that, but we've successfully deployed AI into a few of our applications, and it's helping humans in the company do work more efficiently.

Drew: Now, you discussed how you're a couple of companies, and I think you said that Tilson, the vast bulk of these 1400 people are on your consulting side, your consulting engineering side. You have a very small number of people on the infrastructure side, and that is to say, this is that you're an asset owner. Could you just speak a little bit about that distinction why you separated the ventures, is it because there's a potential conflict? Is there a potential conflict? Just talk a little bit about how the consulting arm of Tilson works with the infrastructure arm of Tilson.

Josh: Yeah, great question. So in 2014, when we started the infrastructure company, it was just one company, it was a wholly-owned affiliate, and we did it to help a customer out of a bind, out of a jam. They were deploying small cells. I'll tell you another funny story, if I could just take two minutes on this.

Drew: Go for it.

Josh: I was in a Verizon office in New Jersey and they were deploying small cells, and we had a big assignment out on the Jersey Shore, like Jersey City, Hoboken, Weehawken, those kind of places. And there was a problem because the poles that were on the river walk, like out over the Hudson, imagine like a cantilevered walkway out over the river, were kind of flossy and small, and so we need to structurally heavier poles there. And the city was like, we don't wanna touch them. And the carrier was like, we don't wanna touch on. And the power company was like, we don't wanna touch them. And so we thought we might lose the project, the whole thing might be canned if we couldn't figure out who was gonna own on these polls, so we wound up owning the pole to keep the project on the rails. So today, that was like, I don't know, 10 poles or something. Today, that sort of pole portfolio is 2500 poles around the country, some big densities in some big cities. And what we thought was, look, this is really its own business, it needs to be capitalized differently, it needs to be managed differently.

Josh: So we spun it out into its own thing. And has its own leadership, has its own capitalization and investors that has different ownership. If you were to go look at the investors behind the two companies, there are some different ownership in that. But we took on a private equity partner in that company pretty early, STC Capital Partners, who's been a great partner, and we think that their companies need to be managed fundamentally differently. And so to your point earlier about employees, I got 15 employees in the infrastructure company and 1400 employees in the services company. They clearly do really different things, but we have a lot of assets in the infrastructure company. And the people that manage that are focused on that and the people that manage our services company are focused on services. And we also didn't wanna create a competitive dynamic where we help a lot of asset owners build and maintain their facilities, and we didn't want the same people touching both things. And so really, they operate pretty independently, today, in the early days, there was a bunch of co-sell like, hey, we'll go do a thing and we can own this piece for you, and we can still do that, but mostly they're off doing their own thing. And I would say infrastructure ownership is a really different game than service company, one is about leading people, and the other's about squaring an equation.

Drew: And yeah, are you the only touch point between the two, you're CEO of both companies and you've got, as you've said, strong COOs who are really running the respected companies Are you the only link between the two? 

Josh: Yeah, so I'm the common bond there as the CEO of both companies, but to your point, Daryl Ingram who is the COO of the services company really runs all the day-to-day operations in the services company, and Alda Licis who's the COO of the infrastructure company really runs all the day-to-day operations there. So it gets confusing out in the marketplace. People know us as Tilson, but there's actually really two companies that are there that are quite different.

Drew: I know. Yeah. We got a great question here from Janet Fitzgerald. She asks, are you participating in laying the groundwork for Massachusetts to have 5G? Okay, so let's talk a little bit about 5G and the marketing story that was 5G and kinda where that stands now. And Janet also asks about the whole issue of electromagnetic frequency. You hear about this issue, and there is a lot of people out there that talk about it in the industry, we tend to kind of dismiss a lot of those, but I do wanna just ask it. We do have this question, and I wonder if you could speak to the concern that people have raised about this topic.

Josh: Yeah, so let me address that question in its different parts on are we involved in 5G in Massachusetts? The answer is yes. One of the things about 5G is that it's a wireless technology that's relatively short range, and so the backbone of 5G is actually fiber. And so we've deployed quite a lot of fiber in Massachusetts as we have in most states in the country in support of a number of moving data around kinda applications, data centers, cell sites, homes. We have also deployed a lot of fiber to the home in Massachusetts. And so what I would say kinda getting to that question about like should it be 5G or should it be fiber to the home? I think both tools have a role in the broadband economy, and I think there should be awesome connectivity everywhere. Everybody should have access to fiber speeds in their house, and I also think everybody should have great mobility, so when they leave their house, it's fast. On the health topic, I am not a expert in medical sciences, and I'm not an RF engineer, but my understanding is that the issue of RF safety is largely a cell matter. RF's been around for a really long time, it's intrinsically a part of our literal universe. And humans have been harnessing it for more than 100 years and is it... I just can't... I haven't seen... 'Cause we look at this issue 'cause a lot of us...

Drew: Yeah, yeah, everyone.

Josh: I just haven't seen compelling data that makes me believe that it's a human health risk the kind of powers involved in cell phones. And also I think that the 5G being sort of intrinsically more dangerous than other kinds of RF I think is a bit of a red herring. I think there's been some evidence that maybe some of that's been amplified on social media by Russian troll farms. But 5G operates on all kinds of frequencies as do other Gs and so 5G is just a protocol used between the radios. And I don't really view 5G as more or less threatening than any other wireless technology. So if you can live with Wi-Fi, you can live with 5G.

Drew: Well putting that health question aside, from a business perspective, there certainly was a big push marketing-wise around 5G and it hasn't really been instantiated just yet. Keith Miller asked the question, what's the expected timeline for carrier wireless projects to pick back up? Do you wanna kinda speak? Are we kind of on a holiday from wireless and we're back on wireline and maybe in the future we'll flip back? What's your perspective on that? 

Josh: So 5G as you mentioned earlier is kind of a lay person's description of a basket of technologies. And then it's used in various contexts in marketing by different companies at different times. Mostly in most parts of the country, 5G is available today, but 5G is not the same everywhere in the country for every carrier in every place. And so what I would say is that there is 5G generally that is deployed on mid-band spectrum. And mid-band spectrum is as it sounds, not too high, not too low, and it provides a nice mix of propagation on the amount of data it can encode. And 5G mid-band spectrum is demonstrably faster as deployed in the field than 4G. And the speed tests bare that out, so our phones are getting faster. We're also consuming more data, so it might not feel a lot better, but what I would say is had 5G not been deployed, it would be a lot worse. There are places where 5G works exceptionally better than 4G, and these are at places with high-band spectrum deployed millimeter-wave spectrum. And the speeds that you can achieve with that very high-band spectrum approximate that as fiber. I've seen in our own tests on sites we deploy a gig down and two or 300 up is not crazy on millimeter-wave. Now I live in Portland, Maine, and across the street from my house is a 5G cellular node.

Josh: That that cellular carries cells a home broadband service on it. But when I take my phone out and stand in my driveway across the street from this 5G node that is fed by fiber, so it's only 200 feet from me, it's mostly a fiber network and a little bit of wireless, I get over a gig on my phone standing right there. When I walk a block away, I pick up another one and another one and then there's one block where they don't have one and I don't get that speed. And so the 5G that people are experiencing is really different depending on what the carrier has installed near them. And what I would say is generally in rural areas, they've gotten more of this mid-band spectrum that's pretty good, pretty good proposition, propagation, pretty good speed. And in the urban and suburban areas, they often get this millimeter-wave technology which is way fast. It's not like a little bit faster, it's way faster.

Drew: Yeah.

Josh: And so I think we're kind of early in 5G.

Drew: Interesting. No, no, great perspective.

Josh: Yeah. I also think we're gonna see some densification of these networks meaning there'll be more nodes. And as there's more nodes, the networks will get much faster and have higher capacity.

Drew: Let's drill into one of the controversies around BEAD, the Broadband Equity, Access, and Deployment Program just to kind of define our terms. And obviously you're doing a lot of work in this space I presume. Just speak a little bit about that. Tom Randstrom asked the question, how do you see the requirements for a letter of credit to accept the BEAD grant impeding Tilson or other companies from utilizing the grant? And I should point out for Tom and all of our viewers in the broadband community, we're gonna have a special event. I don't know if it's an Ask Me Anything or a special event, next Thursday at 12 noon Eastern Time to talk about the changes that were announced just two days ago to the letter of credit requirement from the National Telecommunications and Information Administration. And we're gonna have seven different advocates who are pushing for changes on our special program, again next Thursday the 9th on these letter of credit changes. So I didn't mean to undercut completely your answer, Josh, but do tell us what you say to Tom about the letter of credit rules and how they impact not just Tilson but the ecosystem.

Josh: Sure. So by way of explanation for folks who may not be as familiar with Tom as Tom is with the issue, the issue here that he is referring to is that the federal government's last mile broadband subsidy program called BEAD through the NTIA has a requirement that grantees, the people who eventually get the money from their state broadband offices, post a letter of credit and that letter of credit is a form of surety that they're gonna do the thing that the grant said they had to do. And without getting into the financial engineering, that letter of credit functionally is a bit like debt. It takes away from the company's financial capacity. And as Drew mentioned, the NTIA has received a lot of feedback on this topic, critical feedback around, look, there are lots of entities that wanna go build broadband that are gonna struggle financially to meet the bar. Now, that's kind of the point of the rule, which is to say like, look, you need some financial capacity to be able to do this. So that's true, but it is also true that the higher that bar is the less kinds of entities and the less individuals who can participate. So the NTIA just released new guidance that softened that letter of credit requirement and people are still analyzing their feedback. I think it's less than a day old this news.

Josh: And my read of it is it really doesn't remove the requirement but it makes the requirement more flexible, which allows someone who's trying to find a way to be compliant more tools to find more products and mechanics to get to yes on that, and also allows people to ratchet back the requirement over time as they complete the project a little more quickly. So I think the NTIA was quite responsive to all of the public comments they got from broadband offices, from carriers, from individuals, and really tried to stretch to make the program more flexible while also still safeguarding the program from a company that didn't have the financial capacity or an organization that didn't have the financial capacity sort of getting out over their skis and losing the money.

Drew: Well, speaking of state broadband offices, talk a little bit about the work that Tilson is doing with state broadband offices. We've had many, many more than a dozen state broadband officers in Ask Me Anything sessions here in the broadband community. And I'm just wondering if you could speak a little bit to, again how Tilson is interacting with them and your view on their role in this process.

Josh: Yeah. So one of Tilson's core services has been helping public instrumentalities, particularly state governments and tribal governments and territorial governments run their broadband programs. And so we provide policy advice and program management support on these programs. And we're currently assisting something like 15 state tribal and territorial governments on these projects. And so we're lots of places in the country embedded in those offices helping to craft their plans supporting them programmatically. And we got into that early in our history that I had mentioned before we were a consulting company before we were anything else, and this is a moment where state broadband offices were... Some of the range of state broadband offices when these big federal subsidies came down were one or two or three or four people. That was pretty well staffed in the spectrum of offices to no state broadband office at all when this money came down. And so those offices are in the process of building their staff capacity, their consulting capacity and we've been sort of part of the solution around being able to bring the resources and the expertise to bear in those offices as they've moved to ramp up in these programs.

Josh: So we're really excited because people say how is BEAD affecting you? You build a lot of fiber, right? And we say, well, we're actually helping states craft the programs and those states where we're crafting the programs, you're not gonna see us building fiber in those programs, you're gonna see us as consultants helping those state offices. And that brought us in more than a year earlier than deployment activities would have. And just from an impact standpoint, I feel like we're doing a lot of good in the early phase trying to get the program and policy right. We'll do some good later in some other places doing some building, but ultimately the sort of best thing we could do is to use our expertise to help try and get the programmatic stuff correct.

Drew: Any particular programs or even just kind of themes, problems that you've tackled with reference to the state broadband offices that you'd want to share to our listeners here? 

Josh: Sure. So the state's responses to these federal programs have been as different as the states themselves. If you go to each state broadband office, their office comply with the same statutes but they've done a good job really trying to meet the requirements of their unique facts and circumstances of their state. And that's sort of the point of doing it as block grants versus the federal government, making those awards to companies directly. And one of the things we've seen to be very successful with a number of the states who have been progressive on this is been not to craft a one size fits all solution. And so one thing that we think is a best practice is to look at a variety of tools to deploy federal funds to meet different requirements. For example, there are places where there is no broadband at all and there's not a broadband anywhere near it. And to get to it, you need somebody to bite off the whole project. And so you're making a big monolithic award to someone to go cover a place. So that's one kind of program with certain specific requirements. There are other places where there's lots of broadband but there are little pockets where people don't have service. And this would be a classic situation where you're on a long road, maybe the cable company provides service to the first 10 houses and that's along a two mile frontage but the road goes on for two more miles and there's only two more customers and cable doesn't go the rest of the way.

Josh: Well, it doesn't make sense, I don't think. To then bring a broadband provider in to rebuild that entire four miles of frontage plus everything to get to that road, you just need to extend the line a little further. And so we'll see states have a line extension program where they'll use just a little bit of capital to get to those stranded households. So again, I just think the states who are doing this well often will have a bunch of different nuanced programs to solve a bunch of different kinds of problems.

Drew: We have a question here from David Fine. Can you tell us a little about environmental challenges, waterways, protected areas, how to break through those barriers for fiber installations? And why don't you speak for a minute or two about your being up there in Maine and what's the topography and the issues that you've had to deal with just in your backyard? 

Josh: Sure. So whether we're talking about a subsidized project or not, one of the great things about America is that it's regulated. People complain a lot about regulation, but not having it would be chaos and deploying things in the field actually leads to a better quality of life. We've got cleaner air and cleaner water and more biodiversity and all that. And so whether we're talking about federal funds that are regulated by a specific NEPA requirement that drives specific environmental regulation or you're just on a commercial project and you're trying to cross a waterway, there's a whole host of permitting activity that needs to happen to be able to build networks successfully. And so one of the good news things about networks is that networks are not intrinsically polluting. Fiber is passive, it doesn't have an electromagnetic field, it just is. It just exists. And it doesn't have a smokestack. In fact, it prevents cars from getting on the road to go have an in-person meeting because he can jump on a Zoom or have a thing like this. And so the kinds of environmental regulation that we see being less like check the box 'cause it was designed for something else that wasn't broadband, is when there's civil construction necessary to deploy broadband. And we find this a lot in our underground broadband construction project.

Josh: So it's very common for us to have to drill under a waterway to bring broadband to the other side of the river or the other side of a canal or something. And it's not uncommon that we have to do a lot of excavation and heavy dirt work to get fiber under the streets. And so while there are less invasive ways of doing that, we use horizontal directional drills and micro trenchers and other tools to make less of a mess. You've still got to regulate the impact of the civil construction projects. And what I have found is that if you follow the established path that other civil engineering projects take, whether people are building roads or buildings or whatever infrastructure is out in the world, a gas line, if you just show up and work the system in the way the system was designed to do, you walk in through the front door of these agencies and permit your stuff like using the process they've designed, it goes okay. That takes time, but usually the front door and going through the normal process is the fastest. And in our engineering team, we have a whole permitting pod and they deal with those kinds of permits. And you don't think about railroads and canals and endangered animals and things when you're thinking about broadband, but actually civil construction projects have all of that stuff. So what I would say is it's kind of a nuisance, but it's not a showstopper. You just got to follow the process.

Drew: We've got a number of questions about wireless versus fiber and which technology to deploy when. Will we be able to get everywhere with fiber or not? And I know I'm piling on one more fiber question here which is, have you seen a slowdown in fiber deployment, asks Scott Genovese. If so, do you expect that to pick back up? I'm not hearing of a slowdown in fiber deployment, but I thought I'd ask you.

Josh: Yeah, so let me pull that apart a little bit. There's a lot of tension out in the marketplace particularly in subsidized broadband projects around who should get that subsidy naturally. And look, if you're a wireless carrier, you think you should get the subsidy. If you're a fiber carrier, you think you should get the subsidy. There are lots of strong opinions on this. And my opinion is a bit more technology-neutral. Different tools are used to get different jobs done, and I don't think anybody would disagree that, look, if money were no object and in some states that's the case relative to these programs, you'd bring fiber to a home if you could. There are places where that's not feasible and the BEAD program in particular has very clear guidelines around the situations that states can enable wireless providers to close the gap instead of fiber providers. And I think we'll see some fiber deployed with... I think we'll see mostly fiber deployed with BEAD dollars and just a tiny bit of wireless 'cause the rules provide only a very narrow path for BEAD dollars to go to wireless. However, out in the world outside of the subsidized world, there's a ton of broadband getting built and some of it's wireless and some of it's fiber.

Josh: And I think what we'll see over time is that the total addressable market of wireless served prems is gonna go down and the total addressable market of fiber served prems is gonna go up. And most state governments are gonna drive a fiber first agenda is what we've seen, but I really do believe there are certain circumstances, extremely high cost circumstances where resources are limited where sometimes wireless can get the job done in a way that fiber can't. On the question of fiber slowdown, it's hard to understand what's going on in the fiber economy because if you look at a given company, it doesn't reflect the entire market. And so there are a number of fiber companies that have slowed their fiber build programs not because there's anything wrong with the intrinsic unit economics of fiber or their belief in their customer's interest in that product, but because of their own financial situation and structural debt from technologies before fiber. So these are some of the legacy telephone companies have run into situations where they need to deal with their capital structure before they can continue building fiber. I think those are one-off situations that are in regards to those specific companies, but interest rates are real.

Josh: And the high interest rate environment that we have have put more pressure on those companies and driven those situations into a more acute phase and slowed down, I think have meaningfully slowed down some fiber projects writ large across the whole country, across all kinds of ISPs. We've never been busier and we're getting new orders every day. And so I think in general, fiber deployment is really strong, but interest rates have put pressure on companies who have other structural financial problems and also cause projects that I would consider to be like maybe kind of borderline, not well constructed projects to fail and to stop. But those were vulnerable projects to dying a bad death for other reasons. But I think writ large, the fiber to the home economy is really healthy.

Drew: All right. This is my penultimate question for you, Josh. This is from Manny Vannon. And Vanny highlights, great to hear each state broadband office is crafting a plan unique specific requirements. How do we ensure that we optimize the overall national plan for public-private partnerships? And I might even just throw in here, what is good software? What are the tools that state broadband offices or that Tilson uses or needs to use to optimize those kind of high level designs? 

Josh: So if I'm kind of ferreting out what's at the core of Manny's question, he's sort of speaking to the tension between these state-specific requirements and maybe what the federal government has retained as their role in ensuring the project's going a certain way. And I think the reality of the situation is is that once you get through writing the statute, like Congress says do X, and then the agency writes their rules and publishes those roles in the federal register and says Congress asks us to do X, here's how we're gonna do it, mostly the die has been cast. And in the statute, the statute says the states are gonna make a lot of decisions, and the rules say Congress said the states are gonna make a lot of decisions. But the NTIA in particular has retained some discretion in requiring the states to deploy a plan before they go do the thing and submit that plan and for them to review and provide feedback and approve those plans. And so I think we're into that now. If folks are paying close attention to what's going on in their state, they should note that states have been having open comment periods to these draft plans and they gotta pay close attention 'cause those open up and they close and you lose your... If you wanna have a voice, you gotta act now and make the window when they're soliciting that feedback, that window's closed in a number of states already.

Josh: And then the plans go to the NTIA and the NTIA approves them. And I think just the other day, they approved Virginia. So that process is actually playing out here in real time. And so I think actually the federal government has a relatively modest role to play here. Manny asks about public-private partnerships as a model. And one of the things that the BEAD statute, the IIJA that define the BEAD program says is that basically every kind of entity can participate. Utilities, private companies, public instrumentalities like PPPs ought to be an eligible agency or an eligible entity to do a thing but nothing in that statute says they have to be, and nothing in the IIJA rules said they have to be. So then you gotta look at the state program and say does the gravity of the state program favor a PPP structure or not? So I think that's still soon to be seen.

Drew: Well...

Josh: Yeah, go ahead Drew.

Drew: We're running out of time and we can't end without hearing about Lab Rats, all right? So we chatted about this earlier. Tell us about how you've gotten involved in Lab Rats and what that tells us about broadband, if anything.

Josh: Oh gosh. So Drew and I were talking before the show about some of my extracurricular activities, and I'm on a bunch of boards outside of my day job at Tilson. And one of the boards is actually not rats, it's mice. We really like... Rats are the bad guys. Mice...

Drew: Okay, sorry.

Josh: Mice are really helpful. Mice are helpful for research.

Drew: In precise definition there.

Josh: [laughter] But I'm on a number of boards somewhere around broadband. I'm on the board of VETRO, a fiber management software. I'm on the board of VASANT, investor-owned utility, and I'm on the board in Maine of an organization called the Jackson Labs which actually manufactures mice. If you're doing research and you need a mouse that is the same genetically as a 1958 experiment on cystic fibrosis, you call these guys and they send you a box of live mice a few weeks later that have that exact sort of gene profile. And so it's a global biotech. It has about 2500 employees. It's actually structured as a nonprofit, which is unusual for a thing that does that. And so what I found is that board service and adjacent industries helps me understand kinda what's going on in the bigger economy and gives me a little more perspective to take on at Tilson.

Drew: Anything else you'd like to say before we end this great discussion, and thank you for spending this hour with us, Josh.

Josh: Yeah, I would just like to say that, with all this funding going into broadband, there's gonna be a lot of linemen and other technicians out on the roads doing work. And so put your cell phone down, pay attention to your driving and respect those work zones because what these guys are doing is really important for our economy but it's also life or death for them. And it'd be really important that we protect the safety of our crews out doing this work and pick our head up from the policy and recognize that at the end of the day, all of this funding and all of these technologies lead to a person and a bucket truck doing the work.

Drew: Well, that will have to be our last word. A reminder, we've got a really special Ask Me Anything event coming up next Thursday the 9th involving a discussion around these letter of credit issues that Josh and I talked about during the session. And we are looking forward to future ask many things. We are hoping to get Oklahoma State Broadband officer November 17th as well as many more in the near future. On behalf of our guest, Josh Broder, I'm Drew Clark. We'll see you next week. Take care.

Josh: Bye-Bye.