In the last 15 years, Nathan Stooke went from programming PCs to building Wisper into a successful multi-million-dollar Internet service provider. With headquarters in local Mascoutah, Illinois, Wisper now services Illinois, Kansas, Missouri, and Oklahoma. In 2018, the FCC announced that Wisper ISP won $220.3 million of federal funding in the FCC's rural broadband auction (The Connect America Fund Phase II). The company used the money to leverage its role as one of the most successful Wireless Internet Service Providers nationwide.
As CEO of Wisper, Nathan has provided high-speed Internet service to tens of thousands of happy customers; many in rural areas where previous service providers had been spotty or nonexistent.
Stooke is a well-respected businessman in the St. Louis area; he was selected as a "Top 30 Under 30" by the St. Louis Business Journal and named on the list of the "Top 100 St. Louisans to Know" by the St. Louis Small Business Monthly. Wisper was named one of the Top 20 Small Businesses in 2014 and one of the 50 Fastest-Growing companies in St. Louis by St. Louis Small Business Monthly.
Drew Clark: And we're live. Good afternoon, welcome to the Broadband Grants Communities. Ask Me Anything. I'm Drew Clark, editor and publisher of Broadband Breakfast, and joined by Nathan Stooke. Nathan is the CEO of Wisper Internet, and he's a very respected and accomplished spokesman, it's almost like I'm talking about an elder spokesman here, [laughter] but Nathan is a very, very vibrant young man, he's an expert swimmer, he just got a really interesting swimming story we're gonna touch on, but we're just so excited to have Nathan, to have you here, talk about the history of Wisper, talk about the present of Wisper and the future, and... Thank you. Thanks first for being with us today, Nathan.
Nathan Stooke: Yeah, thanks so much for having me. I love doing these things. It's great to get out there, talk to other people in the community and see what we can do to help 'em.
Drew: Well, you know, Nathan, we of course met just over 10 years ago, I was the executive director of Broadband, Illinois, which was the State broadband initiative entity, and we were out meeting broadband providers and working with state... The state government and federal government. And I don't know, quite how I heard of you or ran across you, but some people on our team, were like, "Hey, there's this guy who's doing all this incredible stuff down in southern Illinois", and we ended up sending a team of our reporters down there and they did a article about you, which we got a link to and a little video clip about you, and that was so much fun, just reflect back on your experience running Wisper Internet and how it came to be the entity that it is now.
Nathan: Yeah, absolutely. So 10 years ago, well, that was a long time ago, but it's crazy to think Wisper in September, we're turning 19, 19 years old. My oldest son is one month older than Wisper. So looking back, it was crazy to have our first child and start Wisper at the same time, and my wife went from being a teacher to a stay at home mom, and it was crazy, but failure was never an option for us, we saw an opportunity, and that opportunity was to provide people service in areas where they couldn't get it from anyone else, where the cable and the phone companies wouldn't go, and I convinced my wife that it was a good idea. Everybody needs internet here, back in 2003, that may or may not have been a true statement, but everybody needs internet and I convinced her it was a good idea to put $36,000 across three of our credit cards in order to buy our first batch of equipment. I learned how to climb on our first 462 foot tower, that even to this day, we're still on and was able to start Wisper. And back in 2003, it was kind of a slow start.
Nathan: Not everybody needed internet, and we were gonna be just business only, they're open all the time, they pay more. But when we started to see a lot of that demand for the rural market for people who really needed service out in those rural areas, and we decided to take our last $20,000 and put up some equipment in a residential neighborhood instead of taking $20,000 and trying to do marketing to gain business customers. And it's been a whirlwind. Since then, for sure, it's been a lot of fun, a lot of challenges, but those are definitely the early years.
Drew: Well, let's roll back a little bit and talk about what the landscape was like 19 years ago, 20 years ago. Illinois, where you're from, and I know you've expanded beyond that state, but there's a lot of flat terrain, and there's not quite as much trees, and so in some ways, wireless internet service is a awesome technological choice. Walk us back to again, 2003, the way you described it is, you didn't even start in the garage, you started in the back of your Honda Accord. What kind of process did you go through in thinking about, "Well, do I wanna start this type of an internet service business or that type of an ISP business?"
Nathan: Yeah, so my next door neighbor needed internet about two miles down the road, so we could get cable and DSL at our house, and we could get a $1200 a month T1 in his office or a very expensive satellite, and that time satellite was satellite down and dial-up up and here he is trying to run a multi-million dollar plumbing business off of that. So I did six months with the research to figure out how to get him service. I looked at fiber, I looked at dry alarm pairs where you get an alarm pair from the phone company, and then you can put your own DSL over it, but it's kind of illegal to do that, per the contract, so I figured that wasn't a good idea to start a business on a illegal premise. Right? [chuckle] So I came across fixed wireless and I was like, "Well, wait a minute, if I can do this for him, I can do this for a lot of other people. I can do this for many, many other people", so we found the tower that would allow us to get connectivity to his office, we did the research on what equipment we should use, how it should be... What should we do?
Nathan: And fiber is a great tool, but it just had too many zeros behind it. I, as an entrepreneur or someone who was starting off my own credit cards, and you're correct, we didn't even start out of my garage, it was out of my '86 Honda Accord with a fold-up ladder, and we'd go out and do the install. And we actually did, it worked out well, and sometimes I would go to somebody's house and they wouldn't... My ladder wouldn't be big enough and they wouldn't have a ladder, so I'd go knock on the next door neighbor and be like, "Hey, can I borrow a ladder?" And they're like, "What do you need it for?" I'm like, "Well, I'm installing internet for your next door neighbor." And they're like, "Sure, you can use our ladder, as soon as you... As long as you install us next." It's like, "Well, this is actually a really good sales pitch. I'm gonna start just asking everybody for their neighbors ladder", and it worked out well as we were kinda growing.
Nathan: But we concluded that fixed wireless was the fastest way that we could get service out there, but you did mention the trees...
Nathan: That has always been kind of one of our Achilles' heels, is that we just fixed wireless up until recently, had a really hard time going through the trees to provide reliable service, so you ended up building a lot of little rural towers. I'm happy to say our third tower we ever did was a small cell, it was on a two-story house or repeater is what we called them. And now the small cell is a very common word, all the manufacturers, all the big telcos were talking about small cell, and it's like, "Oh, we've been doing that for years. It's nice that they finally caught up to our design of how do you get as close as you can to the customer to get around your challenges we had with the spectrum and the equipment that we had available to us at the time."
Drew: So what... When you say there were too many zeros at the end, is that a testament to the fact that you can do a good enough job... Clearly, fiber is a... Can be or I... Look, it's a better technology, it is better when... But I'm not saying all things are equal. Right. So Nathan, what... Where do you come down on this? Are you saying you're not gonna do fiber or you will do fiber in some circumstances, but not others, how do you have to weigh that as you think through the technological choices for internet service?
Nathan: Right, right. So I think that's an interesting question, it's a question that our industry has been asking since we started. When we got to three to five Meg service, the cable companies went from 3 to 5 Meg and went to 10; when we got to 10 Meg service, they were at 30; when we got to 30 Meg service, they were at 100. So it felt like wireless was always trying to catch up. And your comment of it, "Well, is it good enough?" I have wireless at my house, I had it for years and years and years. We have 20,000 subscribers that are on it, and it is a viable option, and it does really, really, actually work.
Nathan: And when I say that fiber has too many zeros behind it, the cost to put it in the ground or the cost to hang it becomes very cost-prohibitive, and that's why fiber isn't everywhere, that's why the government is looking at subsidizing a lot of broadband build because even for the big guys, it's very time consuming and it's very costly to be able to do that. And then we've also had advances in our wireless now. Now we can go through the trees, now we can provide hundreds of Megs of service, and I would argue that once the 6 Gig comes out, we're gonna be able to offer Gigs of service over wireless. So now you have to weigh up, even though wireless is about 30% the cost to deploy than fiber, when you actually look at everything... I can deploy wireless faster than you can even plan fiber. I can deploy my wireless, I can upgrade my wireless when it needs to be, there's a lot of things you can do with wireless that we don't have to worry about, "Well, there's only five people per mile. "
Nathan: Well, that works perfect for wireless, but I also believe in the right tool for the right job. I am not of advocate that says, "No, do not put any money towards fiber or do not put any money towards wireless", I believe in letting the best technology win; if our goal is to get people service... And I tend to focus on the people that have no service now, not the ones that have a 100 Meg and want to go to a Gig. I look at the people who have no service now, fixed wireless is the most economical, the fastest way to be able to get service to people out in those rural areas where they don't have service, or in some cases now in urban areas, where they have very poor infrastructure and it is astronomically expensive to run fiber in an urban area, and we're able to come back with wireless and cover a lot more people, and soon to be multiple Gigs and everything to the house over wireless very reliably. So, right tool for the right job, and sometimes fibre makes a lot of sense, sometimes wireless makes a lot of sense.
Drew: Let's just step back and look a little bit about your business as it is now. We'll kind of dial back to history in a moment. But like who's the core... Who's the core customer? How many customers do you have on the network, and do you see yourself competing more with big name, big name telcos AT&T, Verizon, or are you more competing with rural co-ops?
Nathan: Okay, so we cover six states with a lot of holes in that coverage, but we're mostly Southern Illinois, Southern Missouri, a little bit of Indiana, a little bit of Kansas, a little bit of Oklahoma, and a little bit of Arkansas, and we have about 20,000 subscribers, 200 employees, we have seven offices across our entire coverage area, and we're about halfway through our build, our Connect America Fund build, or CAF 2 build that we have, so we're about halfway through that build ahead of schedule by quite a bit, actually. So that's a little bit about who we are. We are 95-97%, maybe even higher than that, wireless, we do have some fiber, we even have a little bit of legacy DSL for some... From some acquisitions, but we are mostly residential, mostly fixed wireless, and we've been deploying... For our CAF deployments, we've been deploying Tarana. It's a... We love to say it's a new equipment, but it's 12 years in the making, kinda like we're an overnight success story, 19 years in the making. They're an overnight success story, 12 years in the making, but they've allowed us to really scale our fixed wireless to be able to go through the trees, to be able to provide very, very reliable service at scale.
Nathan: We're now instead of needing five towers to cover a town, I need one tower. Well, that accelerates my build massively, where I was just looking at some form 477 data a couple of days ago, and we're actually by coverage, we're the third largest provider in Missouri. So it's pretty impressive to have a small company like us to be the third largest provider. That's next to AT&T and T-Mobile for their fixed service. So who do we compete against... Go ahead.
Drew: The third largest in terms of customers? The third largest in terms...
Nathan: In terms of coverage. In terms of coverage. In terms of coverage.
Drew: Area? Okay.
Nathan: Yep, area space. But as far as who do we compete against, a lot of areas, we're the only provider other than Satellite. And typically, we don't even have to compete against Satellite. It's a very different animal out there than us. So a lot of our areas, we're the only provider willing and able to go into those areas.
Nathan: And then we start to have some areas where the co-ops are building out fibre, or we have areas where there's cable and DSL. DSL is the new dial-up, right? Once COVID hit, you can't do upload with DSL, your videos don't work. It really is a non-existent competitor right now. Cables, they've been able to upgrade. But even cable, the coax cables, they have a hard time with that upload, where you get a couple of people on a Zoom meeting or something and it starts to really, really have problems. And it's like, "Well, that's your upload." Well, the entire world has been stilted towards the download, which rightfully so, but there is a need for a little bit more upload from your broadband provider, and we can do that because of the technology we have. So we're out there kind of competing with all of them, but our bread and butter is that rural market. We set our prices the same across all of our areas, so it's not like we cherry-pick like a lot of people do, where it's like, "Oh, I know you don't have a competitor in this area, so I'm gonna charge more." We like transparency in pricing. We have no extra hidden fees or taxes or anything. Our price is our price. We love providing service to our customer, and we hope you love being our customer. And that's kind of the mantra we go by to provide service to our customers.
Drew: Well, you know, and the thing that just always impresses me, and I would just kinda come back to this, is the entrepreneurialism of WISP members, right? Of WISPA members. And again, I saw this just so starkly in Illinois, where companies like yours would just go out there... And your ladder story is just... It's wonderful because it's like, "Hey, we're gonna show you that this can be done. We're gonna put a tower up on a water tower or a church steeple or whatever," and so that's definitely in the mix. But I wanna roll back just even a little bit more than that. We got a question from Benjamin Khan. He references this, he says, "Nathan, you've spoken publicly about the challenges you face living with dyslexia, but you've also said you've been able to turn those challenges into advantages." What is it like growing up with that challenge or having that challenge? How do you compensate for that challenge, Nathan?
Nathan: Yeah. So this is really Ask Me Anything. I love this. This is great. This is great. No question off limits, so.
Drew: Yeah, anything. Yeah.
Nathan: So dyslexia is the single hardest thing I've ever had to deal with. I spell at a third grade level and read at a six. And if you don't believe me, just wait until you get an email from me. I promise I read it over, but I missed something. [chuckle] I missed whatever I had. And so going through school, you get graded on everything you're not good at, right? I couldn't be in the advanced math class because I couldn't read the math problems, the word problems, but I was bored out of my mind in the middle math class. I couldn't go on to the next reading class because I couldn't read, and everything. So you get graded on everything. My handwriting is atrocious, 'cause I have to spend so much effort trying to figure out how to spell. And you go through school, just every turn you make, they grade you poorly on what you're trying to do. And then you get out into the real world, and then all of those traits that I developed getting around my dyslexia or fighting through the tenacity to make it through school or the extra work, it took me three times as long to do my homework as anybody else in my class and those type of things. Now I get into business, and it's like, "Wait a minute, I can hire people to read my emails and write my papers for me?" I mean, that's legal. In school, that wasn't legal, but in business, I could do it. It's amazing.
Nathan: So I literally have an assistant, and one of her jobs, she's amazing, is that she reads every email that comes into my inbox and she filters out, "These are the urgent ones. These are the ones you need." And sometimes if I'm on the road, I call her and she reads the emails to me, "What do you wanna respond? How do you wanna do this?" Because it will take me twice as long to respond back to your email or three times as long, and that's not a good use of my time.
Nathan: And what I found is that the way... Like you mentioned, the entrepreneurial spirit of a WISP, like my mom would read my history book into a tape and then I would listen to it while I drove to swim practice twice a day. So that's two hours worth of driving that a "normal person" would only be able to drive, where I got to listen to my history class and everything, and I had a very, very supportive mom with that. But now you fast-forward to the real world... And I listen to Audible. I've been listening to a book a week for the last, I don't know, close to 10 years. And a normal person has a hard time listening and still functioning and doing other things, and... So I've really been able to see that my hard work and my problem-solving ability has helped me now into the entrepreneurial side because being a WISP is not easy, especially back in the day when you had to know what radio to choose, you had to know what pigtail to use. You built the radio in your garage. Never used a Pringles can, but you built a radio in your garage, and then you went out and installed it on the customer's house. And that type of figure it out and solve it and work long hours because you're dedicated to it is something I learned with my dyslexia.
Drew: I believe you've used a technical term there, a pigtail. What is a pigtail?
Nathan: A pigtail. Oh yeah. So when you have an antenna and then you have the radio card, so the actual radio, there's a cable that connects the two, and that is a pigtail. And you're right, that is a very technical term. But if you look it up, it is the real term.
Drew: Well, we've talked about dyslexia. I can't miss talking about swimming. You are a Olympic level swimmer, and as I understand it, you went to Southern Illinois University and you got into this, and you were the number one open water distance swimmer in the country, earning a spot on the American National Team and taking on medals. And I think the only reason you didn't get an Olympic medal, as I understand, is the event didn't exist at the time, right? So tell us about that, Nathan.
Nathan: It didn't. Yeah, so I didn't start swimming until I was 15, so very, very late. Nowadays, kids start when they're three because their parents want them to go... I could swim, but I didn't really start swimming until I was 15. And I just loved it. I went to practice, and I was twice as tall as everyone else in my lane, and I was there just to... Whatever the coach said, I did. And my first year, I went from being lapped by nine ten-year-olds to leading the lane, to then making the Y national swim team. So as a local team, we made the Y national... I made the Y national swim team. And then you fast forward to college, I was a walk-on at college to Southern Illinois University, Carbondale.
Nathan: And my coach was being interviewed a couple of years ago, and he said that... He told this to a reporter. This is a true story. He told this reporter that I was the least talented swimmer to come through his program. He actually told that to the reporter, and the reporter put it in the article, [chuckle] that I was the least talented swimmer. But he said, but I was also the only one to talk like a champion. Not in an ego way, but in like, "When I make the Olympics, what do I need to do, Coach? I will do anything you tell me to do, and I will do more because I love swimming. I'm not gonna skip out of practice. I'm not gonna... Whatever. I am there because I love swimming." And I went on to be the only one from the US, at least, on the US National Team from Carbondale.
Nathan: I did the 25-kilometer swim, so this is 15 and a half miles of a straight swim. It takes five and a half hours to swim. I've done it in the ocean, I've done it in the inter-coastal waterway, I got to go to Australia, Japan. There's been five people that have done it under under five hours. It was two Americans back in the early '90s. Myself, an Australian, and a Canadian in '97 did it in Fukuoka, Japan. I got third there. And it's just, I just love to swim. And most people when I tell them, "Wait a minute. You used to swim for five and a half hours straight?" I'm like, "Yeah, I did." They're like, "I don't do anything but sleep for five and a half hours straight. How could you even fathom doing something for five and a half hours?"
Nathan: So I just... I enjoyed it. And you're right, it wasn't in the Olympics, right? It was... But the 10K is now in the Olympics since Beijing, so Beijing, London and Brazil. And my fastest 10K time is still faster than the gold medal time.
Nathan: Now, it doesn't guarantee me that I would have been a gold medalist, it just guarantees that I would have been in the fight, right? I would have been up there with the lead pack. So it's kind of cool to say that I wasn't there, but I could have been, if it was in there.
Drew: Well, you have some big, big level challenges there with dyslexia and some big level successes with this swimming. And so what did you do after you graduated from college? I think there was a reference to a loan shark industry. I didn't know about this.
Drew: So what did you do before you got into being a CEO of an ISP?
Nathan: Yeah, so loan shark. Oh boy! Yes, yes. So that was in high school. Again, I didn't know it was illegal, so please don't come after me and everything like that. I was a very nice loan shark. So I was on the track team, not a very good runner, but I was on the track team and they would give us $5 every time we had a track meet to go to McDonald's and you would get your meal. Well, that was never enough, so I started lending out money to all my friends. And I would make them sign something. You know, in high school, signing a piece of paper is a pretty big deal. So, "I so and so will pay Nathan Stooke back this amount," and they would have to sign it, and I would keep it that they signed it. And if I lent you $2 and you pay me back the next day, it was just $2. No interest at all. That's a very nice person, right? I was very nice.
Nathan: Every day you didn't pay me, it doubled. I mean, that's fair, right? And holidays didn't...
Drew: It doubled.
Nathan: Yeah, it doubled.
Drew: Exponential interest rate. [laughter]
Nathan: Yes, yeah. Now, holidays didn't count, weekends didn't count, and if I was sick from school or you were sick from school, it didn't count. And in my second year of operations, what actually shut me down was the school was doing an analysis of why all these kids kept missing school and they were losing out on their state funding and federal funding, and the common denominator was they all owed me money. So they came to me. They called me into the office and they're like, "Listen, what are you doing?" I'm like, "Oh, what do you mean what am I doing?" I mean, I was a goody two shoes in school. My mom would say otherwise at home, but at school, I was a goody two shoes. I'm like, "What are you talking about?" They're like, "No, [chuckle] no, you cannot lend money like that, and you can't do this. We're losing out on all this revenue, 'cause kids are missing school." Like, "Oh, alright." So I got shut down.
Drew: But was this your first job? I would start... ISP that is, not loan shark, was this your first...
Nathan: Oh yeah, yes. Yeah. So I went out as a consultant first, so I was a consultant at just an IT firm, and I got my MBernie in college, was a consultant there. I was there for about a year. I got an opportunity to basically almost double or triple the amount of money I was making to go out on my own. So I went out on my own. And really, it was the Lord protecting me, because I went out on my own, I got some huge contracts, and then the dot com bubble burst, right? And then all of my friends that were still at that other company, they had to move to Texas or moved to Kansas City or lost their jobs, whereas I still had all these big contracts and it was just me, so I didn't have to support anybody, but me. We did that for a couple of years, and then I actually started programming for the Coast Guard. I was a contractor for them. I wrote their whole recruiting software, like if you went into the Coast Guard, you went through my system. And then I figured out that I wanted to make money while I was sleeping. And how do you do that, right? How do you make money while you're sleeping? 'Cause as a consultant, I only make money if I'm billing out my time.
Nathan: And with my wife being from South Africa, we would go back home there to visit with her family. And again, if I wasn't working, then we weren't bringing money into the family. So I wanted to be a service industry. That's why I thought of like a restaurant. That's great. Restaurant is a service industry. And then I realized, one, I hate to cook, and then two, really, most restaurants fail anyway, so that's not gonna work. And I settled on being an ISP because it was more like a utility, it was the only unregulated utility that as long as I provided you a good job or I did a good job providing you service, you would continue to pay me, and that was a recurring revenue. And now, if you read all the business books, everyone wants recurring revenue. It is the gold standard. You have to have recurring revenue. But 19 years ago, it was like an unheard of thing. Like they were subscription rate? Nobody pays attention to subscription. Sell it once, you want all that money upfront. And I was going for that recurring revenue so I could make money while I'm sleeping. So that was the drive to find something.
Drew: So from 2003 until you brought your dad out of retirement, you said, to be selling... He did take calls while you do... You go and... What was the turning point? When did you become a little more kind of operational professional, right? As an ISP from your perspective?
Nathan: Yeah, so it really comes down to kinda like that critical mass, right? What is that critical mass? I was the only one in the company, I was driving my '86 Honda Accord. Eventually we upgraded to a bucket truck, but it's still just me. And we were doing about three installs a week.
Nathan: And then we got on this one tower. I had a friend who needed service. I kept saying I couldn't get him service, I couldn't get him service, and then I happened to be late. Every month, he would have me come out and check. And I was late to his house one night where it was dark and we could see through the trees, we could actually see a blinking light of a tower, I'm like, "Oh well, I'll try to go get on that tower." We got lucky. We literally were able to get in that tower within a month. That's our Mine Haul Road tower. It's a giant, giant old Air Force base tower, huge tower. We deployed on that, and we went from three installs a week to three a day, because it had just enough density of people around it that we had a massive win for us. We still have multiple hundreds of customers off that tower today. But it wasn't dense enough for cable or DSL to build out in the area. And that's when... You're right, I called my dad out of retirement. I'm like, "Dad, I can't take tech support calls, drive the lag bolts into the roof, I can't stay on the road, driving... " 'Cause that time, it wasn't illegal to be on your phone and drive. And so I brought him out of retirement and said, "Dad, could you please drive me around while I do this? I can't afford to pay you anything, but could you help me?" And he's like, "Oh sure." So we got to hang out for six months before we actually grew to be large enough to be able to hire my first actual employee.
Drew: Yeah. Well, and you were still kind of on the up and up in 2012 when we did this article for our...
Drew: You really kind of took a steep ascent upward. And I don't know if... Let's talk about this Connect America Fund story, okay? So what is Connect America Fund? And why did you decide to approach it? And has it been... Had there been any downsides and negatives to getting all of this funding from the federal government that has really turbo-charged a lot of aspects of Wisper Internet?
Nathan: Yeah, yeah, so we look at The Connect America Fund as the catalyst to our growth, not the end game. And Connect America Fund, for years, the federal government, the FCC has been giving billions of dollars to other providers. So, "Oh, your name is AT&T. Here's your six billion." "Oh, your name is CenturyLink. Here's your 10 billion." And they give them all this money, and the mandate is they build out broadband, or at first it was to build out phone, and they did that, and then now it's to build out broadband. And we all pay for it. If you look at your bill, you'll see USF fund down there, and we all pay for that. But what was happening is they were taking the money, but then not really building out as fast as they should or where they should. So the FCC said, "Well, we're gonna open this up to more people." They gave all the big guys the opportunity to actually get the money, and they turned it down. And then they opened it up. And WISPA, our Wireless Association, they did an amazing job putting us at the table, right? It should be open to all technologies. It should not just be wireline, it should be open to all businesses.
Nathan: So we started learning about it, we got a lot of information. WISPA had a lot of information out there for us to learn. And then we started looking at it as defensive. The last thing I wanted to do is to have someone get federal dollars in an area where I was already providing service, 'cause I already had it served, but maybe I didn't check the box for what they were considering and everything. So we went into it defensively. However, there was very few people in the auction, to begin with, so we then went on the offensive, and we ended up winning $220 million, paid out over 10 years, so $22 million a year. At that time, we were about an $11 million company, but we always had aspirations of being much larger, right? I've always had this dream of having lots of customers and lots of employees, not because I'm driven by the number, but because I'm driven by if I have lots of employees and lots of customers, I hope I've impacted them positively. I hope then that I can input positive spin on my employees and help them, and then also the customers we connect, no one else was out there doing it, but we're out there doing it. So we took that Connect America Fund and we won in those six states that I told you that we provide service in, mostly in Missouri and in southern Illinois, and we said, "Okay, this is not the end game. We are going to go grow our business and try to get to even more customers."
Nathan: Now we can't use the CAF dollars to get to those more customers, but I'm on a lot of towers, so I can negotiate better rates. So I can do different things, and we're looking at this as this huge catalyst. We started getting our funding in February of 2020. We all know what happened in March of 2020, right? [chuckle] And so it was a little challenging that we had to start growing. We went from 79 employees to 200 all during COVID, all during supply chain shortages, but we met our milestones. You mentioned being creative and very much an entrepreneur, we had to do that in order to meet all of our milestones during COVID, and we were able to do that. And then we even got ahead of where we were.
Nathan: So some of the negatives, I think for me at least because I'm an entrepreneur is as you grow in scale, we have more people that have worked at our company for less than a year, then have worked at our company for more than a year. So what does that culture look like? What are those challenges? I know everybody, all business owners are having a hard time hiring people. I agree, totally. So how do you train them? How do you get them in? How do you get them to drink your Kool-Aid, to believe in your culture when they come to work for you? Especially while we were in turmoil ourselves, right? I mean, we literally took a $2 million a year budget, CapEx budget, and turned it into a $30 million [chuckle] a year CapEx budget, right? So how do you do that? And what do you do? And we were in our own turmoil as we tried to figure that out and solve it. And we did it. It was messy behind the scenes, but we did it, and it's... I would do it all over again. I really would, 'cause this is where I wanna take Wisper.
Drew: Well, in some ways, there's kind of, if you'll forgive me, a division in WISPA, the organization. By the way, we had the last executive director, Claude Aiken on one of our Ask Me Anything about six months.
Nathan: Oh, Claude? Yeah.
Drew: And he was great, it was a great discussion.
Drew: But there's kind of like, there's the faction within WISPA that is kind of going forward, right? And like you said, you went from 2 million to 30 million because of CAF. [chuckle] And then there's a group that's like, "We're allergic to taking funds from the government. We don't want that. That's not part of what we signed up for." What do you think of that group of people? And they're active, we hear from them, we know who they are. And I'm not trying to diminish the argument because there's a lot of... There can be a lot of negatives to the paperwork and the red tape, so what would you say to those members of WISPA who're like, "Ah, I don't wanna get involved in taking funds from CAF or from IIJA or other sources?
Nathan: I have turned down every other government funding I could have possibly gotten because it wasn't the right government funding, too many strings attached, too many chains attached. We almost applied for BTOP money, but then it was crazy, the program. So I totally hear what they're saying, and I actually support them. I would stand up in front of Congress today and say, "Stop all subsidies to broadband. We were doing just fine without it," right? Because I think there's so much waste in that, and it's just... We were doing fine. The reality of the fact is me saying I'm not going to take the money and I don't believe in it isn't going to stop it from being there. So we then shifted and said, "Okay, if we're gonna win the money, we're gonna do it the right way. We're gonna be squeaky clean and have everything exactly correct. We're not gonna bend the rules at all. We're gonna build out faster than we have to. We're gonna do those things, because even though I don't necessarily believe in the subsidy, but I won a lot of it, we're gonna make sure we're actually doing what we wanted to do. Anyway, it's a catalyst for us to build out."
Nathan: But for those that don't wanna do the money, I don't fault them at all. It's a business decision. I sat down with my family, and even before the CAF dollars, we had an opportunity to buy two companies five and a half hours away from our office, and I sat down with my family, my three kids and my wife, and said, "Listen, if we buy these companies, I'm going to be on the road more. If we buy these companies, I may not be able to make it to your swim meet because I have other things we have to do. If we buy these companies, it's going to be hard for the first couple of months while we get them integrated, and then hopefully it'll slow back down." So we had a conscious discussion on it, and as you know, it always takes you longer [chuckle] than you plan. So what I saw with my kids though is that as I was gone more and more, it affected them more and more until we had to have a family talk about... No, I have to cut back more, I have to be in town more. I didn't like what I was seeing in my kids as they were growing older, so I made that decision to not buy the next company a little bit further away.
Nathan: So I think it's a business decision, and I have no problem with people saying they don't want it. That's fine. No problem. I would highly encourage them to understand the programs though. Because we didn't file for BTOP, we decided not to, but the second the challenge round came around and we had people applying for funds in our area when we did meet the criteria, I was able to bring the person up, and I took him on a... We literally drove around our network and I showed them, "Here's where we're already providing service. Here's where we're already doing this." These are all the things that should discount someone else from being able to get funding, and we fought off 18 different companies in one of our areas that all... They put the DSL map and the cable map, and they all applied for the one in the middle, well, we're the hole in the middle already, and there was no reason for anybody to get funding for that. And we fought them off. So if you don't believe in the funding, that doesn't mean you can stick your head in the sand and hope that it's not gonna affect you. It will affect you, but you need to be smart about it, and how can you protect yourself in a defensive way?
Drew: Well, let's do a short glossary here. BTOP is the Broadband Technology Opportunity Program that was funding from the Recovery Act in 2009-2010. And around this time, of course, we met. I was at Broadband Illinois. And I wanna kinda come back to that because I wanna ask a question about what you saw our role as a state broadband authority back then, what role did the mapping play in what we were doing at Broadband Illinois? And now let's talk about these new programs, okay, so CAF, the Connect America Fund, that's the one we've talked about, 220 million over 10 years. We haven't talked about RDOF, the Rural Digital Opportunity Fund, which has kind of gotten a bit of a black eye, and we can talk about that, and the big one, the big one that we're all kind of concerned about, focused on is the Infrastructure Investment and Jobs Act, right? And so I'd love your thoughts on the role of a WISP in a state and the state broadband authority, and also kind of how you're seeing these next programs, the RDOF program and the IIJA program.
Nathan: I'm glad you brought up mapping, that is the single best way you can defend your area, whether you're gonna go for funds or not go for funds. Because if you're already providing service in that area, I know so many WISPs that are like, "Well, I don't know that I wanna be... " The state comes home and says, "Hey, we want your coverage, we wanna know where you provide service." "Well, I don't wanna share that information." Well, then you're gonna kinda guarantee yourself, you're gonna be overbuilt it, so if you provide your information, you can protect yourself and everything, but you provide that, then that at least lets the broadband people in the state know, that's why we love working with you guys so much. 'cause you were reaching out to everybody. You weren't just going, "Well, what is the phone company saying? What does the cable company say?"
Nathan: You're like, "Well, what is out there in the real world?" And all of a sudden we pop up and we're like, "Hey, we're here," and you're like, "Holy cow. We didn't even know what you guys are. What are you?" And we got to educate you that We're here, we work very closely with the Missouri broadband office and everything, because we're out there providing that service, but if you're not advocating for yourself, no one else is advocating for you, so I would say having a really good relationship with your state, your county, especially the way a lot of the ARPA money, we didn't even mention ARPA, right? That money that's coming out in a lot of states, that is going to be done more on a state level, and you really, really need to have that connections into your state, to let them know you're there.
Nathan: And then if you're going to go after the money, then those are the people you're gonna have work through their programs to be able to get it.
Nathan: CAF, I think was an anomaly. We won 220 million, there weren't that many companies in it, nobody really understood what it was, and then all of a sudden we win the second largest amount and everybody was like, "Whoa, whoa, whoa, what is this?" With this... And then everybody was in RDOF, every... RDOF is just CAF 3, basically, but everyone is in RDOF, and it went really, really low and we won a whopping a $1 million... Oh!
Drew: Went low, meaning that this is a reverse auction, and so the...
Nathan: Yes, a reverse auction. Yes.
Drew: A lot of people... Lots of people are basically driving the price down, and the government hand got to cut some reverse auction, instead of going to the highest bidder, it's going to the lowest bidder, and you're basically saying that the prices got too low, right? There was not... Oh... Right?
Nathan: Yeah, I was willing. We were shooting for trying to win anywhere from 3 to $500 million, that was what we were comfortable with, that was within our resources we had to take on, but we only won $1 million over 10 years because we pulled out, because it was insane. I was not gonna sign up my company to do something that I didn't think we could do. Now with wireless, I thought we could do it a lot better and we could go lower than say a fiber person and more realistically get out to that many people, but ultimately, we pulled out of it 'cause it wasn't the right idea, it wasn't the right thing, you went down so low in that reverse auction, and I think that's kind of why it's gotten something that black eye, 'cause it's hard to believe that nobody has built out to a lot of these areas as yet, because it's kind of expensive, and then it goes down so low that you're gonna still be able to build out to them while you only got little from the federal government. But I think that's kind of why they've been changed to the NTIA, administrating this next one, the IIJA, there's so many acronyms. Right?
Nathan: Administrating that. And the thing I would say to those that don't believe in the subsidies, there is a little bit of comfort, I've done some very, very quick math, I took all of the roads in America and assumed we had to run fiber on all of them. I then took off 20% because a lot of the mapping shows that 20% of America has fiber, so you get down to... And then you assign it like a $25,000 a mile or $30,000 a miles price tag, it's $480 billion to build fiber to everyone in America, give or take, right? [chuckle] And if you say that there's $40 billion, maybe $60 billion that are coming, it's going to barely scratch the surface. And then the other thing that I find is very concerning to me is that when they qualify someone who doesn't have a 100 Meg down by 100 Meg up as an eligible area or someone that only... If you only have a 100 Meg down by 20 Meg up, that's an eligible area, do you realize that every Cable customer in America that has coax can't barely... Can barely do more than 20 Meg, so that means all those... On the upload.
Nathan: So all of those are now eligible. So where does all the money go? Well, the money goes where all the companies want to build out, which is in the more dense areas, and they forget the rural, it doesn't go to the rural, it doesn't go to the people that have no service, it goes to where the businesses want to do it and they put in their projects and it all looks great. I want us to focus on those areas that have no service or very little service, and... I'm sorry, 100 by 20. You can do anything you want on the internet at 100 by 20 right now, today, there is nothing you can't do and you can do it multiple times over, we don't need a 100 Meg down by a 100 Meg up, we don't need a Gig down by half a Gig up, don't get me wrong, I'd love to have it. But once you tell me everybody in America has access to 100 by 20, then I think we can start looking at what it takes to get us to a Gig down by half a Gig up.
Drew: So it's actually a very timely discussion because just this week, 13 Republican senators put out a letter to Secretary of Commerce, Gina Raimondo, basically criticizing the Notice of Funding Opportunity and then the details and claiming that you're actually doing things you're not allowed to do in particular, putting too much emphasis on fiber, there's some other things that are going on there to. But I'm just wondering if, again, let's come back to this point here as to, do you think that there's too much emphasis on spending the IIJA money on fiber? Would you like to see more opportunities and alternatives for wireless internet service providers to be able to get access to spend on 100 by 20 type of broadband?
Nathan: Short answer: Absolutely. Absolutely. There's just too much focus on it, I would rather... What WISPA was able to do with RDOF and CAF was let the best technology win, and it depends, what is their goal? Is their goal, they keep saying it's to get people who don't have service service. We have to bridge the digital divide. Well, by forcing it to be fiber, you've now shrunk down the number of people you can serve, because it's just the reality of it. There's too many zeros added on the end of fiber compared to what it is with fixed wireless. So I think there should be some fiber projects in there. I'm never advocating for, don't exclude anything. What I'm advocating for is, don't dictate the technology. What happens when we get fixed wireless at scale at a Gig, why should it not be able to be wireless then because now I can run way faster, I can deploy way faster than that... Than I can with fiber. So their politics needs to stay out of the how. They need to facilitate the, what is our end goal? And what do we wanna get there, and if they let the market decide the most efficient way to get there, and the way that statistic works is the federal government gave out in CAF 2 round one, I believe they gave out about $16 billion.
Nathan: I can't remember if it was 13 or 16, but north of $10 billion. And they got 10 Meg down by one Meg up, that was the speed that the phone companies were required to provide, $16 billion in CAF 2, Phase II, which is the one we won, they gave out just over $1 billion and the average speed they got was a Gig.
Nathan: Well, that seems like the market solved that one pretty good, us entrepreneurs are solving the problem, saying, "I'm willing to put my reputation, my name on the line that says I can provide that speed and we're getting it done now."
Drew: What speeds did you commit to building out at, Nathan?
Nathan: For CAF, we did 100 Meg down by 20 Meg up.
Nathan: That was what we did. Yep.
Drew: We have a question that David Tate asks almost every Ask Me Anything, he says, "Have you read the latency report of the Broadband Technical Advisory Group, what are you doing to manage buffer bloat, jitter and latency and make video conferencing better on your network for your subscribers?
Nathan: So I have not read that specific document, although I'm sure I've talked to several people about it. But latency is... There's two reasons why we have latency on our network, either you have a poor wireless signal, right, so we have a lot of re-transmissions, we all know how well our cell phones don't work, so it's kinda like when you have a bad connection on the cell phone, that's one reason why latency spikes. The other reason we have a high latency would be congestion. So we had one of our towers, when we moved into our office five years ago, I had to go from having our wireless service at my house to having a cable provider at my house. I won't say which one, but I switched out the cable to the cable provider during the day. My kids came home from school. Now, I was on my 20 Meg connection from Wisper, and we had a 200 Meg connection from the cable company when they came home that day, they came home, they turned on their X-boxes and within five minutes, they're like, "Dad, dad, my games are lagging, they're not working, they're... Something's not right with the internet, you need to fix it." And I'm like, "Well, kids, I'm not our internet service provider anymore, 'cause we had to get off the tower we were on at that office, and... "
Nathan: So just because you have 200 Meg doesn't mean you're gonna get 200 Meg service, if they're congested at their head end where they're going to the gaming servers of the gaming content. That's gonna affect your performance. So just saying I'm gonna sell you a Gig doesn't mean that you're gonna be any better. So what we do on our network is we manage that. The interesting thing that people don't realize is, wireless is at the speed of light, just like fiber is at the speed of light, right? So we have very low latencies, just like fiber, if you don't believe that, there's a lot of day traders that are actually putting in wireless links across multiple states because it's faster than the fiber, so you can go look up that. I think there's even a movie called Hummingbird on it, it's kind of cool and everything, so... Yeah, yeah, so I'm not trying to sway anybody, I'm just... It's physics, it's the real world. They're virtually the same. So we manage that latency very carefully, we have tools in place that watch our capacity, and then when we start to run out of capacity with an upgrade, and we do those things, and because we're a smaller company, we typically don't have the big, big, super constraints on bandwidth, because our customers, we have smaller number of customers, so we can manage that a little bit better. Sometimes it is harder on the individual case with what we're doing, but latency is very important because if you ever...
Nathan: And anybody's ever had satellite, satellite provides... In some areas they're really fast service, like 20, 30, 40 Meg faster than our... In some of our areas that we provide, but it has a perceived slowness, you go click on a link, and even though the website comes down all at once, it takes it two to three seconds to come down because you have to go all way to the satellite and all all the way back, whereas our service may download slower 'cause it's not 40 Meg, in some of the areas we offer now 400 Meg service, but this is back in the day, then when you click on the button, it starts to download and you get it about the same time, but with a slow latency, there's a perceived problem. And now with everybody being on Zoom, and I don't even know how much it is on Zoom with the latency problem, it's typically more the capacity on the upload that when you run out of that capacity, you then start to get spikes and latency, you start to have problems where there just isn't enough bandwidth to provide the streaming service that you expect.
Drew: Right. We have a question from Sarili Stirland, "What kind of guidance or help do you want or do you need from state broadband officers?" And we could take it in Illinois or any of the states even?
Nathan: Yeah. So one of our biggest problems is people don't know about us. I don't have the marketing budget that the cable guys do or the phone guys. I've got an amazing network that provides 400 Meg service, I've got plenty of capacity now, especially with our CAF build that we have, but a lot of people don't know about us. And what we've also found out is, especially in the rural market, a lot of people, they don't believe any marketing because they've been lied to so many times, "Oh, fiber is coming to your area", or "Super fast internet," or "Satellite is amazing," and then they get it and it's horrible. So they're like, "No, we're not gonna believe that." So what we've had to do is find the right connectors, find the people who get them connected, get them service, and then they go, tell others. So for us, what we always look for state people is to help us do the aggregation of demand, people go to the State page and complain they don't have internet or they have different groups all around the State, we just wanna know where we can do the best good. Where can we do the most good? Where are the people that don't have service, where are the people who need that service, because sometimes we don't know where that is, but we have to build over such a wide area, we can help influence where we're building, but we need that help to know where their big pain points are.
Nathan: And then the other thing we really like from our state people is I like having a relationship and a dialogue. Again, I'm not one to advocate for only one technology, but I would love to be their technical advocate to be like, "Hey, this is where fiber makes a lot of sense, or this is where the wireless makes a lot of sense, and sometimes you can get tunnel vision because of the lobbyists that are lobbying them for what they want or don't want," and I just love having that relationship with them and having them be open, that it isn't one size fit all and it isn't one cookie-cutter approach, that we really need to solve this, lots of different ways.
Drew: What's your take on the Affordable Connectivity Program, Nathan, and ways that it can ensure that people get connected... Get the affordability issues addressed so that they can subscribe?
Nathan: Yeah. So in general, I say I'm not for subsidies. Right, this is a little bit different, this isn't really a subsidy to the provider, this is a subsidy to an individual families in need, and I would support that a lot more than I would say I support just flat out subsidies to the provider, because we have to be providing service in order to get those subsidies. I think it's a good program. I think... I'm glad to see that they changed it a little bit, they broadened it, we actually have several hundred customers on it right now, and they're very thankful, very appreciative of it, and we're happy to be able to do our part with that and be part of that.
Nathan: Should it become kind of like a permanent fixture? I think with most government programs, once they're instituted, it's really hard to take them away, so I would imagine it's going to stay around and be able to use some funding from somewhere to be able to do it. The thing I do like about it different than subsidies is again, as a provider, I have to be providing service in order to get it, whereas a lot of times with subsidies, it creates bloat, it create all these other things, and then maybe I'm providing service, maybe I'm not providing service to the customer, this one, you actually have to be doing that, and I think that makes the program much better in my book.
Drew: Now, in addition to running Wisper as the CEO, you served a period of time as the Chairman of WISPA, the Wireless Internet Service Providers Association, obviously not the executive director running the organization, but the Chair. Just talk to us a little bit about WISPA as an organization and the role you played as chairman.
Nathan: Yeah, absolutely. So it's an amazing organization. We have so few staff, and we do so much for our industry, we're really... I think someone once said, "We're punching above our weight." We're really, really doing a really, really good job of affecting... And what I think is kind of hard for people to see is they say, "Oh well, I didn't like the outcome of this, and you guys didn't do this right." Well, remember, we're not getting to be the ones that make the decision, we're just advocating for our industry and we're going up against the cable guys and the phone guys or whoever we're partnering with are going up against." So it is a very hard working group of staff and volunteers on all the committees, and I think credit isn't always given for what they do actually pull off because nobody ever gets everything they want. But I would encourage people to be a member. One of the problems we've always had as WISPA is, you get all the benefits of WISPA, even if you're not a member. If we open up to 6 Gigahertz, if we change... Remember that 5 Gigahertz rule where all of a sudden one day, they lowered all the power available on 5 Gig and we're like, "Wait a minute, what is this?" We fought that and we got them to change it. If you're not a member, you still benefited from that, so we need everyone's support in WISPA, we need everyone to come to our shows.
Nathan: I'm also the agenda Chairman, I've been doing that for, whoo... I think I'm now pushing now for 13, 14 years, we have two shows a year. I love doing that, love bringing people together and then being able to have these educational shows, but we need people to go to those 'cause that's where we get our budget from to continue to fight the good fight for our industry. And the other thing I love about our industry is they have a lot of the views I have with WISPA is we've never advocated for just one technology, we're always the ones in there advocating for a level playing field. Level playing field. Level playing field, if we can just make it that, may the best person win. But when you stilt the rules one way to favor fiber or you stilt it to fiber wireline, that doesn't sit well with us, and we fight for that pretty hard.
Drew: Where do most WISPs, including Wisper stand on using unlicensed versus licensed spectrum, is it really still most WISPs that are relying on unlicensed or have you began to see more licensed packages pockets?
Nathan: You know, I remember back in the day when we started 15 years ago, maybe longer. I was told very clearly by a lot of people who were in the industry, the cable and phone guys, that unlicensed providers are never gonna last, you can't build a business model off it 'cause that's what they go to the FCC and tell them, right? "You need to auction off more spectrum, we can't build a business off of unlicensed." And it's like, "Oh, really? Well, I'm here, 15 years later, till 20 years later, going strong." You can build a business, you can build a very reliable business, especially with the technology that we have coming out now, where we have interference rejection, where we can... And you reuse the spectrum we have. Don't get me wrong, we need as much spectrum as we can get, but there are lots of advances we've been having that say that unlicensed is just as good as licensed and we can actually do it. In my opinion. I've had licensed band, we've owned 2.5 spectrum, and the problem with license band is my equipment goes through the roof, the cost, because it's not as widely used and it's not as good, and there's all kinds of expenses with that.
Nathan: And then not only did I pay a lot for the spectrum, I had to pay a lot for the equipment, and then it's subpar service to the customer. And so we've looked at that unlicensed, as this is really where it is. And what other people don't realize is, you know these cell phones, we call them cell phones, right, 80%, over 80% of the traffic over the cell phone goes over unlicensed spectrum, it goes over WiFi, because the cellular carriers know that they can't support the amount of traffic on their license band because there's not enough spectrum, so there's a lot of kind of missed things, because the big guys have to tell the FCC, "We have to have our spectrum, it's so valuable, we have to have it." Which don't get me wrong, if we could have it, it'd be great, but the reality is, especially with the advances, we don't... We don't need it as much as it maybe used to be, or people thought we did.
Drew: We're rapidly closing on the end, I've got three rapid fire questions for you, Nathan.
Drew: First, what is your favorite swimming stroke?
Nathan: Freestyle is my favorite swimming stroke, and my favorite practice that I would do was 10,000 kilometers straight, so that was my favorite practice, come in, you get in the water and an hour and 50 minutes later, I've done 10,000 and I'm out. So that was my favorite.
Drew: What is Shannon's law and what does its future hold for wireless internet service providers?
Nathan: Ooh, Shannon's law. I don't know, is Shannon's law really a self-fulfilling prophecy, because people believe in Shannon's law that every... I don't remember the numbers. Every so many years, it's gonna double that people then fight for that, like, "We should be able to get to this. We should be able to get to this. We should be able to get to this." What I do know is I listen to the gentleman who worked at Motorola, then started Memorylink, who holds a ton of patents, knows way more about wireless than I ever will... Unfortunately, he's passed away now, but he said, "The knowledge we have on wireless is so little compared to fiber or compared to wireline that we have amazing things we've never even thought of on wireless." Right, and if you just to look at when wireless started being used and then where we are today compared to when other things were being used, it takes hundreds of years for electricity to be used, we have so many more things going on for us that there's nothing but massive leaps forward in the wireless arena for sure.
Drew: And Nathan finally, what was the mileage on that 1986 Honda Accord?
Nathan: Two hundred and thirty some odd thousand miles. And the only reason we stopped driving it around is a semi-truck took my wife and I out, fortunately we were safe...
Drew: Oh, my God!
Nathan: But they... He took us out and totaled the car, or I'd probably honestly still own it now, I still own a 2001 Highlander, my middle child just got his license today, and he's driving that one, so.
Drew: Well, Nathan, it's been such a pleasure to spend this time with you, to get to know you and Wisper Internet, you're doing amazing things, and it's great to get the perspective of someone who's not all fiber all the time, because there's a lot that can and should be done from wireless broadband. Thank you for being with us, Nathan, anything you'd like to say before we close out?
Nathan: Just thanks for having me, and remember right tool for the right job, right? Thanks so much.
Drew: Yeah. Great, wonderful. We'll see you two weeks from now when we come and talk with the next guest for our Broadband.money, Ask Me Anything Series, we'll see you next time. Take care.