Offir founded the network consultancy Capcon Networks in 2016, but prior to founding Capcon Networks, he founded LOFT Home in 2005. He served as president of the company until 2017.
In addition to being an entrepreneur, Offir also served as a carrier sales director for GTT, and a global account manager for GIGLINX, Inc.
Offir holds a bachelors degree from Arizona State University in business and mass communications.
Ben Kahn: All right. And we're live. Thank you, everybody, for joining us. We're just going to give a couple more seconds for people to filter in. All right. So, we'll start off. Hi, everyone. I'm Ben Kahn, I am the Digital Community Lead for Broadband.io for Ready.net And today we have with us Offir Schwartz, who is the CEO of CAPCON Networks. Offir, thank you for joining us today.
Offir Schwartz: Thanks for having me. I'm looking forward to it.
Ben: Could you? As we're getting started, as people continue to kinda join the room. Would you mind going into just a little bit of detail of what CAPCON does and the work that you do?
Offir: Sure. Absolutely, yes. So we basically work with rural broadband operators, helping them connect their networks to what I call the internet at large. So we are highly proficient experts in the sourcing of network connectivity services, middle mile bandwidth, IPv4 allocations, and all those critical elements that are required for a network operator to operate a network. And so unique to rural broadband operators, there are some challenges that are very, very difficult to surmount. And so we help them surmount those challenges with regards to some of those aspects that I mentioned earlier, help them compete on a level playing field.
Ben: So there was... One of the ways that we've talked about this event leading up to it is, we said that this will be the event to go to, to hear about middle mile and hear about the work that you're doing on the rural digital divide. I was wondering if you could go into middle mile a little bit, if you could define it and how CAPCON Networks looks at middle mile. A mutual friend of ours has said that, middle mile is kind of the overlooked middle child of infrastructure. [laughter] If that's a sentiment you share, if you could speak to that a little bit, maybe unpack that for our audience.
Offir: Yeah, no, it's... Well, it's definitely the middle child. If it's gonna live up to the name middle child, it's definitely the middle child. I've got one. But so middle mile means a lot of different things to a lot of different people. It really depends on who you are in the industry and how you position yourself, or how you orient yourself to your customer. So if I'm a... What I've seen a lot is that if rural broadband operators refer to middle mile as the connectivity, basically a distribution network. Connecting their head ends back to their core location.
Offir: Our customers and how we operate, our lens is focused on rural broadband operators. So when we talk middle mile, we're actually talking about that transport leg between the customer's head end or core location in their market, to the major internet gateways in the world. And so those connections are typically much longer in distance, and they're also much higher in capacity, simply because they're aggregating all of the some aggregate traffic of all the subscribers on the network. And they have to be thought of and planned carefully, forecasted for capacity growth, and also for diversity and redundancy.
Offir: And so when I'm looking at a network, I'm looking at it from a transport perspective. How are we gonna get all of the traffic we need to this network from the major internet gateways of the world?
Ben: Great, I want to take a second to just remind our audience that, this is obviously a live show. And we encourage you to leave questions for Offir either in the comment section on this video, or go back to the event page and ask a question there. So Offir, talking about rural connectivity, we're talking about middle mile, we're talking about CAPCON. How did you find yourself in this line of work in the first place? What attracted you to space? I said that you were the CEO, but you're also the founder of CAPCON, correct?
Offir: Oh, yeah, yes. Yes. I'm trying not to date myself, but I've been in the internet industry for a really, really, really long time. I actually started in the internet industry back in 1998. So back then, T1s were the hottest thing since sliced bread. And DS3 was like, whoa, if you could get a DS3, that's 45 megs per second. That's a big deal. And so I started off working in, actually, in a space that's not all too dissimilar from what I'm doing today is in the wholesale carrier space. Working with ISPs and service providers, helping them optimize bandwidth on their network and bring capacity to their network. That's where I started. And then I went through a bunch of different iterations, spent some time in the retail space, selling voice over IP back in 2000 and 2001, when voice over IP was really, really hot. And then ended up coming back to the wholesale data space many years later. And we got acquired, the company I was working for at the time was acquired by GIGLINX sorry, by GTT Communications.
Offir: And while I was working at GTT Communications, I realized that there is a highly underserved population of network operators, namely rural broadband operators, that aren't getting the level of service that they need. And I personally am passionate about the digital divide, about solving it in this country. And so, I thought it was a good marriage between my personal drive and my knowledge. And where those two intersect is where we started CAPCON. And so since our inception, we've been focused on helping rural broadband operators achieve their goals in serving their communities.
Ben: Now that we have a little bit of background about you, I'd like to kind of dive right into middle mile, into rural. Can you talk to us a little bit about how the middle mile line of business is different from... This is kind of a two-parter, the typical last mile to the home. And also in addition to that, the MDU space, the multi-dwelling unit space. How does this business little differ?
Offir: So it's different in that we're... I'm gonna call it the transport world for right now. But in the transport world, it's dominated by only a handful of providers. You're talking about large incumbent providers, typically because they're the only ones that can afford to put fiber in the ground from Dallas to Louisiana or to East Texas, or West Texas or South Texas. And I use Dallas because Dallas is the major peering hub for the entire region. Arkansas, Louisiana, Texas, obviously. The western parts of Tennessee and Georgia, they all come down to Dallas to get their internet.
Offir: And so the transport world is predominant, is dominated by a handful of carriers. AT&T, Lumen, Verizon, Zayo, so on and so forth. They're the ones that have the long haul fiber. So the problem is, is that those carriers, and in some cases some of those carriers are also fiber to the home providers as well. And so typically they see rural broadband as a threat to their business, and rural broadband operators, the size and scale of the networks that they're operating are far smaller than another operator in a major metro. They're far further out in geography as well, and so the costs, for the transport services that are needed tend to become considerably more expensive, and in some cases can be very hard for a robot and operator to acquire simply because they'd effectively be competing with that operator.
Offir: And so those are some of the challenges. That's how we look at transport now, MDUs are a little bit different. So MDUs, they're not all that different in that you have to... There's very limited fiber capacity typically delivered to MDUs. There's only one, maybe two providers. And those one or two providers are your typical traditional triple play providers. And they have a habit of blocking out other providers from coming in to compete with them. They sign multi-year contracts with the owners, and it becomes very, very challenging.
Offir: And so it does take a third party, to either lease capacity to get into those MDUs, or bring their own fiber into those MDUs to offer more competition to the subscribers in those units. Did that answer the question?
Ben: Yeah, I think so. I'm glad we kind of addressed that because, as we said, this is kind of a topic that gets a little bit overlooked when we're talking about all this. So I'm glad we kind of got to that. But one thing, I just wanted to add onto is if we're talking about middle mile, we're talking about transport. There's a term that I wanted to introduce early, and we'll probably circle back to it as the show goes on. But if we could talk a little bit about IXPs. If you could explain what an IXP is for our audience who might not know.
Offir: Yeah, absolutely. So an IXP is an internet exchange, essentially, or an internet exchange peering. And so what it is, is it's effectively the process of an eyeball network establishing themselves in an internet exchange fabric. Those are typically carrier neutral hotels, that are located in the major peering gateways of the world. So we're talking about Dallas, New York, Ashburn, Palo Alto, etcetera. There's about eight of them here in the US, and that's where all the big content providers go to meet. The internet's divided into two parts, content and eyeball networks. All the rural broadband operators out there in the world, those are rural broad... Those are eyeball networks. All the content providers is pretty much everything else. You don't have to be a Netflix or a Disney or a Hulu to still be considered a content provider.
Offir: Microsoft is basically a content provider, so is Cloudflare. They host websites. And so those two networks have to meet somewhere. In order for traffic to traverse each other's networks, source and destination, they have to meet somewhere. Typically, we use a third party intermediary known as an IP transit provider in order to get to content providers. IXP essentially leapfrogs the IP transit provider. You go... You as a service operator, as a broadband operator go to one of those peering gateways. You typically would have to take co-location. Which is one of the big challenges for... That was one of the questions I think was what are the challenges around internet exchange. One of the big challenges is that it's expensive. You have to take co-location in a major gateway. You have to establish peers, so you have to get transport. It can be very expensive, daunting, and complicated.
Offir: But once you are at an internet exchange, and you are a member of that exchange, all your traffic essentially can flow directly to those destinations, bypassing any IP transit providers. So the benefits of it, obviously are latency, packet loss, security, but also cost. Even though it may be expensive to establish yourself in an IX, the cost per Meg to peer your traffic off to a provider versus paying somebody to transit that traffic is exponentially lower. And so there are some real long-term benefits for IX. We're big proponents of it. Big advocates.
Ben: We got a question here in the chat, from Jace, Jace Wilson who says, "Can you talk a little bit about the various carrier neutral/open transport models, and how they might help reduce cost structure of fiber to the premises delivery?
Offir: Well, fiber to the premise is still fiber to the premise. There's really no... I'm not aware of at least today as it relates to last mile, how you can make that more effective. Somebody's got to put fiber in the ground. Now, what you see today is a lot of folks overbuilding each other. And I think that that's a problem, and I think that's where carrier neutral or open transport models can really, really, really have an impact. If we can reduce the amount of CapEx that is going into the actual construction of the infrastructure, there may be an argument to be made that we can deliver services at a lower cost because we're not overbuilding over everybody.
Offir: It's not carrier A in a wholly owned a corporation installing fiber right next to carrier B, right next to carrier C, and everybody's making this investment over and over, and over really to deliver the same service. It's sort of similar to like highways. The federal government pays for a highway but there's just one highway, everybody uses it. And so if the federal government and cities and everybody else or had to build competing highways and stuff, it would be really, really difficult and expensive to navigate. And so, I do think that there is an argument to be made for open transport models that really extend and improve the ROI on the investment that goes into fiber to the home. And that goes beyond just fiber to the home it really includes everything, middle mile, transport, you name it.
Ben: Now, Offir, for this next question you're either gonna love it or you're gonna wanna throttle me for asking it. But is overbuilding really a bad thing? What do you do if you're dealing with... What do we do if we're dealing with crappy incumbent networks?
Offir: Well, okay that's a good question. You turned it on me. So... [laughter] If you're dealing with a crappy incumbent network, yeah overbuilding may very well be a solution. But there's a hundred billion dollars of federal funding out there right now for fiber to the premise, essentially bills. I think it would be a colossal waste of money if people use that money to just overbuild somebody else. Good news is that BEAD and a lot of these other grants that are out there are specifically designed for rural markets where there are no other providers or very little providers.
Offir: And so it gives us a really, really nice opportunity to build a carrier, a very progressive class A carrier solution. But delivering fiber and just overbuilding in markets. I live in Austin and we've got Grande, we've got Google Fiber and we've got AT&T and we've got Spectrum. And to me fiber is fiber, so long as the access method is fiber, anybody can deliver the IP, anybody can deliver the internet.
Ben: Got it. We're getting a lot of...
Offir: I see.
Ben: A lot of conversation in the chat. Dave Todd asked a question. What does carrier neutral mean? And I'm gonna build out a little bit off of that and say what is the difference between carrier... Excuse me, carrier neutral and non-carrier neutral networks? Say that five times fast.
Offir: So, carrier neutral typically means that it's typically used in the context of data centers in the data center environment. And so a carrier neutral data center, as an example, is basically a data center where the data center operator themselves is not the carrier. And all the carriers go there to meet and there's a meet me room in that building or in that suite, and as a customer of that data center, I can pick any carrier I want that is physically present in there. And not locked into using one carrier or let's say the data center's network. That's what carrier neutral means.
Offir: And so we also... We have this term in the industry called carrier hotels. And carrier hotels are basically physical buildings. 1950 North Stemmons in Dallas is a carrier hotel and each floor has a bunch of data centers. And in some of those buildings they have a common meeting room where all the carriers go and all the data centers run fiber. Others have it in their suites but they run fiber up and down the risers and to each other and everybody can cross connect and meet with each other and exchange traffic. And that's what it means. That's what carrier neutral typically means in our industry.
Ben: I see.
Ben: We... Is something up here?
Offir: Well he was gonna say, so he said, in terms of MPLS, IPV6, GPON and XGS-PON, oh boy. In terms of carrier neutral... Can I call a friend? I don't know, can I phone a friend? I don't know those are protocols. MPLS, IPV6, those are all protocols. GPON is a... GPON and XGS-PON those are just modes of delivery equipment. So I'm not really sure if they're relevant to the carrier neutral conversation.
Ben: Sure. I wanna switch gears here a little bit and talk a little bit about the rural equation trying to get all these areas connected. Can we retread some old ground here and just talk about return to the work that CAPCON is specifically doing in rural areas?
Offir: We do a lot of work today with power co-ops that seems to be the sort of the... I would say, the most tailwinds in the industry right now, stem from power co-ops and it's logical because power co-ops already have a cable running to every meter, anybody that they serve.
Offir: Telephone co-ops also have that, but telephone co-ops have come a long way, and they're a little bit more mature in the industry. Municipalities and independent fiber operators, obviously they're always gonna be active in the space. And with the BEAD grant headed our way, that is gonna make a significant dent. It won't be the silver bullet, at least I don't think so. But I do think it'll make a big impact on the amount of subscribers that will have access to high speed internet in this country.
Offir: If you think about power co-ops, power co-ops serve, 95 or 98, I don't know what it is, percent of the addressable population in the United States. And of the 65 million underserved or unserved residents in the United States, power co-ops serve pretty much almost all of them today. And my prediction as we look towards BEAD and other funding mechanisms is that, power co-ops really will have the most impact in delivering high-speed connectivity into rural America.
Ben: Johannes asked a question. I'm gonna ask you to kind of gaze into your crystal ball now, and maybe do a little bit of speculating here. Johannes asked, do you think rural ISPs will be major beneficiaries of BEAD funding, or do you think the big providers will get most of the funding and over build rural areas? I'd love to hear your perspective on this.
Offir: It's a really good question. I hope that it's the former and not the latter. I really do. Rural ISPs are in the heart of the community. And that they're the ones that should get the money because they're closest to the community. They're the ones that are best, with the best intent to serve the community and not their shareholders. I really do hope that the rural ISPs get the lion's share of the capital. Knowing what I know about how the BEAD grant was written. And its callouts for connecting the, most amount of subscribers at the lowest cost possible, I don't think that that is a model that is succinct with the large incumbent carrier operators. I don't think that that is crossing their thresholds for investing into rural communities.
Offir: Will there be some communities that will go to the large providers? Absolutely. They do have the largest economies of scale, when it comes to network deployments. And I think that a good portion will go to them, but I wanna say the lion share will go to rural ISPs simply just because of how the BEAD grant was written. Whether or not NTIA and, they stick to it, once they're faced with a bunch of proposals to serve communities that have very very low density that's yet to be seen. But my guess is that that rural ISPs will get a lot of it.
Ben: Follow up comment to this, George said, BEAD awards are up to the states to divvy out, so it'll vary. That is, how the money gets, allotted. And I just ask, do you agree with this? What should state broadband offices do to be successful on rural deployment and rural middle mile?
Offir: Community engagement. That's probably the first thing. The state broadband offices have been tasked with the responsibility of distributing $65 billion of funds. Their constituents are subscribers. And it's really in their best interests to really keep the subscribers front and center when it comes to the deployment of these funds. Who's gonna best serve those subscribers at what cost? Obviously that's a consideration.
Offir: Those are all major factors that state broadband offices, and by the way, I think they're already doing this. And this is not the first grant for state broadband offices. State broadband offices have been around for a long time. Now they're more prevalent than ever due to BEAD, but they've been around for a long time. They serve an important role. But with BEAD funding, BEAD funding is pretty unique. It's our... It's perhaps a once in a lifetime shot at putting a dent in this problem. And so I think community engagement and community focus number one is probably the way that I would, like to see them proceed as they make decisions on how to deploy these funds.
Ben: There's a comment from Monty who says, for electrical cooperatives expanding to... Excuse me, for a rural electric cooperative expanding to become a broadband ISP, when is a good time to start building community engagement as part of a marketing strategy?
Offir: Ah, I well answered that question.
Ben: Well. Is it... Is this... Obviously it seems the best question is, or the best time is like yesterday. But I wonder...
Offir: It's never too early. Yeah.
Ben: I wonder if you can kind of go down that rabbit hole a little bit about the ways that they can engage in that.
Offir: It's never too early to start engaging the community. But it also really depends on where you're at in the evaluation phase of whether or not you're gonna build a network. If you're in the very, very early stages, then I can't imagine community engagement isn't important. You're gonna need to get some sort of idea of what take rates are gonna be like. Are people satisfied with what is out there now? Those are questions that need to get answered.
Offir: Community engagement as early on as possible is the best way to go, and that can be done in the form... And that doesn't have to be a big marketing campaign. That's more of a town hall meeting, meeting with your city leaders and having an open town hall forum discussion about, what do you guys want? We're thinking about building a network and delivering internet. What do you want? What's important to you? If an organization or if a municipality is a little further on down the road, they've already made decisions as to going forward with a network or at least hiring a consultant to start a feasibility study. On how feasible is it? What does the competitive market look like?
Offir: Once you've made the decision, the go decision to build the network it's time to get people excited now. And that's more community engagement. Keeping people up-to-date on where's the fiber? How close is it to you? How long before you can expect it? You're building up and you're building all this excitement till you finally go live. And at that point you start taking signups. And then it's just sales after that. Boots on the street.
Ben: Great, Monty had a follow up comment. They said you made a good point about rural ISPs will better serve the community. How can continue to make and plan and manage risk of their investments as this environment continues to change with more overbuild?
Offir: Prey would be my answer. The more you invest in rural, the lower the likelihood you're gonna get overbuilt. Because it's expensive. The money isn't gonna go to more than one provider to build in a rural community. So I think the spoils will go to the ones who win these bids because these are hard to reach places. This is where nobody has built network before. And so just because... Those subscribers have always been there, and just because there's fiber coming or fiber going to be there doesn't mean somebody's gonna overbuild you. Because if they wanted to overbuild you, they would've just built you already. Or built that network already.
Ben: Jace has a question that I wanna circle over too. And he says state directors might not know a lot about these topics. What should states think about in a world of open-access/IXP, etcetera, to help them make the most of the bead investment? How might CAPCON help if they reduce redundant costs through coordinated assets, can they serve to fund more providers, to connect more families with broadband? And I want... I know we already discussed precisely what IXPs are, but as a little bit of a perhaps visualization I was wondering if you could revisit our conversation that we had just prior to the call, your little investigation that you did in five minutes and explain. [laughter]
Offir: Got it, got it, got it. Well, so I think maybe giving some background [laughter] might help, but Ben is working remote, just got married yesterday. Congratulations by the way.
Ben: Thank you.
Offir: And working remote out in Delaware and I was surprised 'cause you're outside and the quality of the call is really well. So I asked who's the service provider that we're using? What service is this? And you told me what it was. And so I did a little bit of internet sleuthing on that service and was able to ascertain that service is physically very close to you. You're in Delaware and it's likely in New York or Ashburn. And so it just goes to show that if you don't have a really fast connection but you've got a really good connection, it can almost be better sometimes.
Offir: Because the measurement of a quality connection isn't just speed. And more so it's typically jitter, packet loss, and latency. If you don't have those, that trifecta of performance metrics in line, you can have all the speed in the world and it's not gonna matter. So as it pertains to IXP and the deployment of BEAD funds to IXPs I would caution, I would approach that with caution. IXPs serve a critical vital role in the internet. Whether or not they need to be expanded into rural communities simply for the purpose of accessing applications such as this one or content. I think there's a lot of evidence out there that would say it's the opposite. Now we don't know what's coming.
Offir: We don't know what we don't know. What's the next-gen application? How low latency of an application is that gonna be? If we're talking about using BEAD grant money to fund IXPs in rural communities for ultra low latency content deployment, that's a use case that I think is yet to be proven out. It's a little too early for that. And more so more, a bigger problem I think in this nation is hooking people up to the internet. High speed internet access. And so when it comes to BEAD and IXP, I'm a big fan of IXPs, but I think every dollar should go to building network to get more people connected to the internet. That's my opinion.
Ben: And can you address the second part of Jace's question that, how might CAPCON help if they reduce redundant costs or coordinated assets? Can they serve and fund more providers to connect more families with broadband? Yeah, sorry we kinda went on a little bit of a tangent the first part.
Offir: I was connecting sorry, BEAD to IXP. I guess I didn't catch that. Okay, so reduce redundant cost or the coordinated assets... That's more correct. Yeah, that's absolutely true. How can we help? Okay, so how CAPCON help with that? It's simply it's our connections. It's our industry knowledge. It's our knowledge of the players in the industry that are operating open-access models and the people that want to join the industry or expand their networks, and putting the two together into and making that introduction in such a way, just like you framed it, Jace, which is, look there's an investment going to occur here. Let's reduce the redundant costs and let's serve the country better and fund more providers by eliminating redundant costs. So that's how we can help with that. So we work on several open-access networks today. We're big advocates of open-access networks. I think it's the best use of funds for last mile and distribution networks in America. And I'd like to see it extend even further. The $1 billion middle mile grant is nice. It's not gonna do much in the way of long haul and transport but it's certainly a step in the right direction.
Ben: Nope. Ben's here. Sorry about that. Had to turn my camera off for a second. [laughter],
Offir: I was just saying how good your internet connection was and then you're gone.
Ben: [laughter] No, I, yeah, my internet connection is great. My laptop's battery is less so, so I had to skedaddle and grab a charger. But I wanted to touch on a question that we see raised a lot. Like, like a lot. Every single conference we go to, everyone we talk with raises this question. Dave, raised the question in the chat. He says, what's the role for wireless and WISPs? And I think maybe Dave, if you can clarify, but I'm guessing he means maybe in [0:34:46.8] ____ deployment. I'm not 100% sure, but, that's what I would guess based on the context.
Offir: So at Mountain Connect, I sat in, in a several of the state broadband, panels. And I think in several of the panels, wireless delivery was on the table. So if there were sections of the markets that you wanted to serve, that were just com... What they called very high cost threshold, I think that's what the terminology they used then wireless was a legitimate option that they would consider. Now what, what that very high cost threshold and what that calculation is I really don't know. But it was on the table.
Ben: Great. Sorry, just working on. Sorry about that guys. Two, I know we have a lot of stuff going on in the chat, so I'm kind of bouncing around a little bit. But Drew Clark raises this question he's talking about, he says, talk about IXP internet exchange point. What is the problem with them right now? How will these issues get addressed and how do you think about the effort by Connected Nation and Hunter Newby to build IXPs in every state and territory? I know that was some of the conversation that was going on at Mountain Connect. I'm wondering if you can speak to that a little bit more.
Offir: So the big challenge, I think if you look at it through the lens of a rural broadband operator, I mean, that's obviously what we're talking about. So if you look at it through the lens of a rural broadband operator, the challenge is getting to an IXP. The cost associated with, you have to have co-location, like I mentioned, transport equipment and so on and so forth. So that's one of the big, I would say challenges for rural broadband operators. And then, as far as the... Is it Connected America or a Connected Nation?
Ben: I believe...
Ben: Yeah, I believe it was Connect. Yeah, sure. [laughter]
Offir: Connected America. The push for ISP is in every state. So a lot of states have IXPs, and a lot of states don't, and there's... I think that there's a reason for that. And so the whole purpose of IXPs is to bring content closer to the edge. But what if the edge is already close enough? For example, let's take a look at New Jersey. Do we need an IXP in New Jersey? I mean, New Jersey is four milliseconds from the biggest internet exchange in the world. New York IX. Do we need an IXP in, I don't know, I'm gonna use Colorado Springs as an example? Colorado Springs is what, 120 miles? I don't really know the difference. Do we need an IXP to go to Denver?
Offir: Denver's pretty close. It's got some pretty good IXs there. Do we need an IXP in South Dakota? I might venture to say, yeah, I think that South Dakota could use an IXP. The closest Major IX to South Dakota is probably Palo Alto. That's a fair distance. You know what I mean? Now I don't wanna get into the, like... I could really go on about this forever. But the only way IXs work is if the member count is high enough. If the member count is low enough, it doesn't really take on any form or shape or any real, have any real utility for the users that are in it. And so how that connectivity happens is still sort of a little bit of an illusion to me.
Offir: I really don't... I don't know, I don't understand how that all comes together. Because the internet doesn't exist in South Dakota. Maybe you can bring some content providers, or application providers, or open access networks even into that IXP in South Dakota, but where's the internet. The internet is in Palo Alto, it's in Los Angeles, it's not in South Dakota. Maybe Chicago. I don't know which one's closer, but, the internet, the term internet is the internet working of networks. That's how the internet works. And the critical mass of those operators meeting together in one central place is how the internet works and functions. And so to date the eight or so major IXs that we have in the nation have served us fairly well. My Netflix works great. I wouldn't be surprised if you could download pretty much anything you want on that 300 by 10 internet connection of yours, because Netflix has one of the largest most distributed content networks in the world.
Ben: There's a question, that Innocent asked earlier in the session that just got steamrolled because we had so many questions coming in but we'll get back to that, where they said, there's some back and forth about this, but we are increasingly seeing the dominance of remote peering. He says... They say, what are your thoughts? And then they followed up and they said, lower costs, but less resilience. So if you could touch on this question about remote peering.
Offir: Yeah, no, I'm, yeah. I like remote peering. I think it's definitely has value. So we actually offer, sorry, shameless plug here. But, we actually offer a what's called, what we call a transport peering product, which is essentially the amalgamation of both IP transit and IX over the same transport connection. And it basically eliminates the need for a provider to have a point of presence in a major data center. We'll do all the work in the data center, and we'll just give you a circuit and it'll have both IX and internet on it. Great. That's remote peering. The alternative to that is if you are already in an IX, is remote peering, which is basically accessing a peer further off, not maybe necessarily located right there in that facility or nearby. And yeah, there is a reduction in utility and resilience in that because you're having to backhaul traffic from who knows where. But if you need to get to somebody and you need to get to them securely, without... And avoid all the major points on the congestion on the internet, then it's a worthwhile investment, I think.
Ben: In speaking of shameless plugs, Dave dropped his bittag latency report in the comment thread, and as always he asked, have you read it. Have you read it by any chance?
Offir: I have not. So let's take a look at it. So it's a pch.net.
Ben: It's at, bittag.org. He asks as a follow up, what are your recommendations for providing good quality of experience for video conferencing, voiceover net protocol and gaming?
Offir: Caching, that's probably content caching. So depending on, I don't know what platforms you're looking at, but there's a lot of solutions for caching. So if you're a service provider, you can cache locally on your network that helps keep traffic locally. So for gaming, I know that's a pretty popular way to go for content. Yes. Hulu, all those guys, Akamai, Google, they'll all do content caching, VoIP caching, I don't know about that. I don't know if you could do VoIP caching. [laughter] You need to connect to the SIP providers of the world. So dedicated connectivity to your upstream providers is critical for that. So whether that is using optical waves to get to their data centers, I don't know. There's a multitude of ways in which you can connect to your upstream providers. And connecting them in dedicated fashion is probably the quickest and easiest way to go about it.
Ben: We've gotten really technical and down into the weeds of some of this stuff of the last several questions. So I take a step back, less technical diverting, again, more towards rural. Broadband Breakfast ask a question. As a company, how do you make the decision to invest in rural broadband when there's often more challenging road to making returns on your investment in this area? So what was the thought process that went into deciding to pursue that as a business model?
Offir: Well so we ourselves don't build fiber. So we lease capacity. We're effectively an aggregator of buying power from all the rural broadband operators in the world or in the country, I should say, and so our big, I would say claim to fame is just being an advocate for our customers. And because of what we do, we're able to achieve certain levels of scale that a rural broadband operator on their own wouldn't be able to do. Simply just because of geography and the size of the population that they're addressing. So we knew that going into, as I look at it from the lens of CAPCON, we knew early on that we could make an impact here. We could offer some real value to real broadband operators in being a trusted advisor and intermediary between them and large providers. And that's why we made the decision to start the business.
Ben: I'm just trying to go through some of these questions that we have coming in. Here there's a question. Let me see, just looking closely at some of these, I just had one that I lost. So this is another broader question. We often hear people talk about narrowing, bridging, closing the digital divide and then we have a lot of other people who say, the digital divide can never be closed. It can be... Perhaps it can be narrowed, perhaps that we can shift what we're trying to narrow as time goes by, but I'm really curious because this is part of the work that you do. How do you guys view that? How do you view the digital divide? Is it something that can be closed and shut and completely addressed? I'm really curious to hear your thoughts on this.
Offir: So I've got in my back pocket, my big hairy audacious goal, and I think this is going to answer your question. So my mission in life, my goal in life professionally, obviously, is high speed internet to every home in America, period end of story. And it doesn't necessarily mean it's gotta be fiber, but it's gotta be pretty damn close. So I do believe that the digital divide, is a problem we can solve. I believe that no one solution is what it's gonna take to solve it, so BEAD is an arrow in the quiver, but we're gonna need more arrows in the quiver in order to solve it. And if you look out there, you can see that I'm not the only one that believes that this is a problem that can be solved. You've got Starlink now, you've got all sorts of new technologies being developed or currently under development and being released that extend the distance in which we can deliver internet services over wireless frequencies at high speeds and low latencies.
Offir: You have a multitude of startup companies, developing these technologies and also, large incumbent companies continuing to invest in innovation to help solve this problem. I think we've got the smartest minds in the country working on it. So I absolutely think it is a problem we can solve.
Ben: Thank you. Robert posed this to you in the chat, and I believe you've... You may have even followed up with him. But this kind of ties into the community outreach, where he says, rural middle mile is crucial and you're doing great work. Consider adding a health and tech literacy partner to improve your offering to rural communities. If you wouldn't mind speaking to that, like, what can that look like for an organization or an entity like CAPCON? What can that kind of community outreach specifically as it is mentioned here can look like?
Offir: Well, so, I'm actually really intrigued by that as well, to be honest. And so I've actually got a follow up I'm gonna schedule here with Robert on that. [laughter] Because I'd like to know my...
Offir: I'd like to know myself, what that looks like. We work with operators. We don't work and interface directly with the community members.
Offir: And you know what I mean? And so it's intriguing to me how I can help is a question I don't know yet simply 'cause I just don't know enough. And so I think the goal of my conversation with Robert here, is gonna be to learn more about what it is that they... That they're doing. Is it a fit for how we can help? And if not, maybe I can get them in touch with somebody that I think can.
Ben: Yeah. That's fantastic. Obviously with the conversation of... We're happy to facilitate that. We're... Hopefully we can have you back at some point where we can hear more about what that looks like, with this question of the digital divide and how everyone can play a role and doing as much as possible. George Heckman asked, what is the role of state and federal sponsored middle mile initiatives like Golden State, Scenic in California?
Offir: So the ones that I'm learning about now are to connect member communities together into a cohesive ring, I should say. And so, back in the days we had this term little sonnet. I'm sure some of you guys remember. It's like, it's a ring, literally a ring. And so those state, and they're also multi-state. There's actually several initiatives, other... Beyond the ones that you just mentioned that are multi-state middle mile initiatives. And their objective is to connect all the members in those states. So all the communities that are members. So whether you're a power co-op, I'll just use that as an example. Sometimes there's co-ops for co-ops. And so they'll connect all the co-ops in a two or three state region. And bring together the total cumulative aggregate, traffic consumption of all those subscribers.
Offir: We're talking about millions of subscribers now. To drive down costs, to improve competition, play more on a level playing field, to deliver better and faster services and then act as intermediaters, whether it be data warehousing, IXs. If you want to talk about IXs, that would be the impetus for an IX. When I've got 10 million subscribers, on a distribution ring in three states, bang, that would be a good argument for IX, local IX.
Ben: Johannes asked a question where they said, what kind of help do you think most states need to manage bead funding? Well, especially after the questions or the discussions at Mount Connect. I wanna tie into this earlier on, you described the 1 billion on Middle Mile as inadequate. And as you know, BEAD funds can be spent on middle mile too, as long as it's connected to the last mile network. Which should states, do on spending on middle mile versus last mile, and then tying in Johannes question, what kind of help do they need to manage that funding effectively?
Ben: Well, so I am, I think that, and this might piss some people off.
Ben: You like those moments.
Offir: Yeah. So I am a... I... When it... At the state level, at the federal level as well, I don't think the best use of BEAD funds is to simply over build, over build, over build, over build. I think at the state level, there should be a government backed initiative to develop open access lanes of transportation. 'Cause that's exactly what it is. There are lanes of transportation for information as opposed to vehicles, that should be open access. And so I... There's no... There is some call out, for open access in the middle mile section of the BEAD grant. But who's gonna lead that? That's a big question that's yet to be answered because anybody that leads it is typically gonna be a centralized corporation. And this infrastructure is critical and it's so critical. It's just as critical as water is. But private corporations don't operate in water utilities. Those are typically, at least, they're typically state backed, or municipal backed utility operations. And I believe that at the state level and certainly at the national level, those should be federally funded, state backed, utility operations. Yeah. And they should be open access because why spend all this money...
Offir: To overbuild something when you can spend the money once you put the fiber in the ground and then everybody can use it and pay a fee.
Ben: But just to clarify, you mean this is as separate from BEAD, these open access highways, how do you view this exactly?
Offir: Well, so it's no different than your federal interstate system. You've got federal highways. You've got State highways, State roads. You have municipal roads, municipal highways, it's the same concept. Is that anybody can use those roads and we pay a fee to use it in our taxes. A similar concept not the same, but a similar concept could be applied to open access fiber infrastructure, fiber utility infrastructure throughout the nation. Now as it relates specifically to BEAD, I don't know, it may be too late for BEAD because at least this round. Because I don't think there's enough of a push or enough of a directive for open access middle mile networks that span beyond maybe one or two states or a couple of really hyper local regions simply because there's not enough money. You're talking about building networks state to state and interstate and then municipal, distribution and all that stuff. So that's a lot.
Ben: I have a couple more questions I really want to squeeze in, and then I'll do a couple of quick fire questions. We're almost out of time. We have five more minutes.
Offir: All right.
Ben: This is a question from George, who says, many states from California to North Carolina to West Virginia have proprietary fiber networks connecting schools K through 20 and sometimes other anchors like libraries, and now have been given legislative permission to extend middle mile from these to help connect residents. I suppose that's not less of a question, more of a comment. Can I get your thoughts on... Do you wanna comment there?
Offir: So it's... Can you say it... I just want to make sure I understand it. So it's library systems, you said in school districts?
Ben: It sounds like it's connecting schools and other anchor institutions is essentially the gist of that, I think.
Offir: Yeah, absolutely. Yeah, no if...
Ben: Do you think this is like a good idea to have State-led middle mile efforts here?
Offir: Absolutely, yeah, it just goes into what I said before, assuming they're open access. Right. Look, there are state municipal networks out there. But if we're going to take federal money, BEAD money to invest in middle mile, something like that, I think it should be used in an open access model.
Ben: Mani said, Offir, it is great to hear about your personal professional passion to enable affordable access to all citizens/locations. We have built an adaptive planning engine to optimize the private public partnerships model. Would you consider providing your perspective offline?
Offir: Offline yeah, absolutely. [laughter] And that was who?
Ben: That was Mani Vanan. I don't know if I'm pronouncing that correctly but you should...
Offir: Yeah, Mani, you can reach out. I'm easy to get a hold of. Is my contact information going to be at the end of this or I can just drop you a DM Mani with my email address and you can reach out to me directly and we can set something up.
Ben: Great. And here's a couple of rapid fire questions as we begin to kind of wind down. BEAD and the role of states in high cost... Excuse me, BEAD in the role of states in high cost definitions. Can I get your thoughts on this?
Offir: Well, I definitely think there needs to be a high cost threshold consideration. And some sort of waiver, I think, for the folks that are going to be applying for these grants, because there are going to be situations where it's just completely unrealistic to expect to fund the internet service for a very, very, very small population of people that has an unproportionately large amount of investment required. So I definitely think there is... I know that there is a high cost threshold. I don't know what the formula is, but it's needed. And the waiver, that's the key, it's like you have to be able to get a waiver. Okay. You don't have to build to that house or to that community or whatever, so that. But you can still continue with the project so that you can deploy fiber to everybody else. That makes sense. Yeah, I agree.
Ben: Any thoughts on ACP, Portable Connect?
Offir: No, I'm not familiar enough with it to really comment on it, so I probably would defer. [laughter]
Ben: All right, fair enough. And given what was discussed at Mountain Connect, that's where I'm kind of couching this from. Do you have any thoughts about wireless or any thoughts on the discussion about wireless and WISPs versus fiber? Not to cause a fistfight at the very end, tail end of this, but if you could just share some of your reflections.
Offir: Like I said earlier, there are call outs for WISPs. WISPs are on the table, wireless protocol for delivery. Fiber, just because of the speed and the current technology around fiber, obviously, I think that's a preferred method of deployment. But there's... WISPs can get into the fiber to the home business. I mean, we have many, many operators that we work with that originally started out as wireless... Excuse me, as wireless, then went into coax and now are in fiber. So it's an evolution. As I mentioned earlier, to solve this digital divide, we need every arrow in the quiver, not one, every arrow. So wireless, coax, any technology that will deliver high speed internet to every home in America. That's so, a big advocate for it. We support the wireless community. We enjoy working with the wireless community. And I'm excited about what BEAD has to offer them because they're some of the most mature, independent operators in the country are wireless ISPs. And they're the most... In the most cases, they're the most rural. They've got towers on grain silos and all over this nation. So we're big advocates for wireless.
Ben: I'm going to apologize real quickly before I ask this next question, but I have to, he's my boss, so I do have to ask the question. Offir, can we talk about the elephant in the room? It took me way too long to really understand that joke. Bit of a shame to admit, but there you go. [chuckle]
Offir: There it is right there. [laughter] He's always on my shoulder. The elephant is my favorite animal. They're loyal creatures. They're soft and tender, but they'll steamroll right over you if you get in their way. And that's why the elephant is my favorite animal.
Ben: Wow. Well, that's actually a really great answer to that question. Offir, thank you so much for spending this last hour with us on behalf of the Broadband.io community. Really appreciate you giving up that hour. I just want to take a second to call out that next week on August 16th, we have our next episode of Where's the Funding? This is episode eight with Darren Farnan, who will be a guest. It'll be on matching funds for rural electric cooperatives and telcos. And then on August 25th, we have an Ask Me Anything with BJ Tanksley, who is the Missouri director of broadband development. Offir, again, thank you so much for your time. We really appreciate it, and we hope to see you around the community.
Offir: Oh, you will indeed. You saw me this week [laughter] and I'll be at Fiber Connect. Fiber Connect, we host a big event at Fiber Connect. And we've got a booth there, so come and stop by and say hi.
Ben: Will do. All right, everyone, have a nice day.
Offir: Take care.
Ben: Have a great weekend. You too.
Offir: Signing off, alrighty.