On this episode of Connected Nation, we focus on the question of how to effectively bring world-class internet access to smaller cities and rural areas across the US.
Learn how a new joint venture leveraging Internet Exchange Points may finally fill critical gaps in the system – that will not only speed up the internet in all corners of the country – but make it more affordable AND equitable.
IXP site - https://connectednation.org/ixp/
The 125 “target” locations for IXPs - https://connectednation.org/wp-content/uploads/2023/01/CNIXP_target_location_list.pdf
Jessica Denson, Host (00:06):
This is Connected Nation, an award-winning podcast focused on all things broadband from closing the digital divide to improving your internet speeds. We talk technology topics that impact all of us, our families, and our neighborhoods.
On today's episode, we focus on the question of how to effectively bring world-class internet access to smaller cities and rural areas across the us. Learn how a new joint venture leveraging internet exchange points may finally fill critical gaps in the system that will not only speed up the internet in all corners of the country, but make it more affordable and equitable. I'm Jessica Denson, and this is Connected Nation.
I'm Jessica Denson, and today my guests are Hunter Newby, the owner of Newby Ventures and Brent Leg, the executive Vice President of Government Affairs for Connected Nation. Together, the two have been leading the development of a unique approach to tackling the digital divide in America. Welcome, gentlemen.
Hunter Newby, Newby Ventures (01:10):
Thank you. Thanks for having us, Jessica.
Jessica Denson, Host (01:12):
I'm excited to get into, uh, what we've got going on with these internet exchange points. I know some people know what they are, so people have no idea, but it's pretty exciting what you two are working on. So, um, we will get to it in a moment, but first I'd like to begin with you today, hunter, and give our audience a little background on you. You're really known as quote, a mover and shaker in the telecommunications industry. <laugh>, in other words, you have a really, a history of thinking outside the box. Share a little bit about your background on how you got that reputation, so to speak,
Hunter Newby, Newby Ventures (01:45):
<laugh>. Okay. Well, thanks for having me. Uh, it's a pleasure to be here, mover and a shaker. Um, I, I'll give you a brief, uh, snippet of my background there. It can go off in lots of different directions, but for the most part, I've been, uh, in the network neutral infrastructure space for 25 years. So what does that mean? So carrier neutral and network neutral are kind of terms that are used, uh, interchangeably. Um, and basically it just means that, um, that the, the assets of the infrastructure is not owned by a carrier or network operator itself, and that's the definition of neutrality. Um, and myself with a group of people, uh, back in the late nineties, um, at a particular building in New York City, uh, they addressed 60 Hudson Street, which is what it's known as, um, started, uh, the first network neutral interconnection facility, um, in that building, which is one of the first of its kind anywhere in the world.
Um, and effectively what it is, is that, um, you know, we were a landlord, two network operators not being one ourselves. So we were unbiased and we treated them fairly and equally, and we provisioned interconnections between them without the need of a local exchange carrier or last mile local loop, as it's called in the industry. So that was innovative and pioneering at the time. No one had ever seen or heard of it before. Um, and for the most part, everything that I've done for the past couple of decades plus, um, it's just expanding on that same philosophy and business model in many deals and ventures that I've been a partner in, uh, a founder of an investor in, um, et cetera, and leading up to today and working with Connected Nation.
Jessica Denson, Host (03:31):
And, uh, why do you think that that was something that hadn't been done before this, this carrier neutral idea?
Hunter Newby, Newby Ventures (03:37):
Um, it's always about necessity and timing, right? So the telecom act in 96, uh, and, and before that really, um, clacs competitive local exchange carriers that were building their own physical fiber, um, infrastructure, uh, separate and apart from the incumbents, uh, you know, during the eighties, let's say, um, mid to late eighties, the, the combination of those two things led to the necessity of all of those disparate physical networks, uh, to have a place to come back together again for the purposes of interconnecting to each other, because no one single network goes everywhere. Um, and from the beginning, the, uh, the networks congregated sort of naturally, uh, organically, uh, two common addresses in major cities. And those buildings over time became known as carrier hotels. It's just a term that kind of means where all the carriers located in different rooms on different floors in the buildings.
Um, and then in order for them to get interconnected to each other, they would run cabling between each other, um, or in a lot of cases, just a local exchange carrier would build into the two separate rooms that these long-distance carriers sometimes were in, um, or other just network operators that are physically disparate and they needed to get connected back to each other. Um, and then the advent of this, uh, you know, the concept of a meet me room, it's another term in the industry, um, you know, or this network neutral interconnection facility was when the building would reach a certain critical mass of networks, um, that all needed to get connected to each other. And it just made sense that there would be one room where they would all build two, and then the proprietor, let's say, of that room, um, would be neutral, not a network operator itself, um, and then create a whole process.
Um, this is what we did, you know, really what I sat down and figured out, and over the course of about two weeks <laugh> way back when was about contracts, uh, service orders, uh, product names, pricing, um, the whole anatomy of the business of network neutral interconnection. Um, and then that model was born of that necessity to connect all these disparate networks in different rooms on different floors, you know, in 60 Hudson streets, a million square feet, right? So that's a big building by any standards, but certainly in most cities in America mm-hmm. <affirmative>, and as one of one of many in Manhattan of that size, and in New York City in general. So it's quite challenging to do cable pulls multiple times in a building that size. Uh, and there were a couple others that I had experience with, like one 11 eighth Avenue in Manhattan and Chelsea.
And, uh, you know, one floor plate was a whole city block. It was huge. So the efficiency, it just made common sense, uh, for network operators that were in one particular suite to not move all of their equipment, but just to extend a demarcation point to a common room for the purposes of having proximity to physical proximity to other networks as and when they needed to get connected to them to make that request to the, you know, proprietor or a landlord of that room to say, Hey, I am this network at this panel, and I want to connect to that network at that panel. And then they'll give their permission, uh, and then the interconnection would be run between the two without the need of a third party network, per se. In between that, that's how it evolved. That's how it manifested. Um, at first it was just an idea, um, but then it took hold and it stuck.
And the economies of scale, the cost savings, the, the scalability, um, the wholesale revenue opportunities that came from an aggregation point like that. Um, you, there's many analogies I can think of. Airports are really good ones, like big international airport. Um, you have lots of different airlines. You have lots of different flight times, and the pricing is, you know, the best. Uh, versus if you're out in places you know, very far away that don't have any airport at all, and maybe not even a regional airport, you got three flights a day. Um, and those are the places that really need the help because it helps drive economic development and growth. And there's parallels, uh, to that analogy to what we're doing together with the connected nation building internet exchange points to bring the internet to these places that don't have it is really to establish a physical, uh, building in a room where an internet exchange can reside that brings all these different content and cloud and gaming effectively, like routes, um, to that room localizing the internet, reducing the cost and the latency, the time, uh, it takes to get to the quote unquote internet, uh, which is the current state of affairs in these, you know, more rural and remote places.
Jessica Denson, Host (08:30):
Yeah. And we'll break that down a little further as we continue our discussion, but, uh, hunter, our Newby ventures, excuse me, I'll sit. Hunter Ventures, Newby Ventures. What is the, the goal of that company and how long has that been around? That's your latest and greatest, am I right?
Hunter Newby, Newby Ventures (08:46):
Yeah, so I formed Newby Ventures, which is, um, it's effectively my family office fund. Um, I had several exits over the years, formed it in 2017, and it's really the holding company, uh, for my directed investments into the various deals that I, that I'm in, and the, the deals that I'm in. Um, they range from minority passive investments to majority control investments. Um, but, you know, everything's very selective. Uh, I stick to my lane, so to speak, <laugh> and I, I, I stay in my lane. I stick to my knit. I, I invest in things that I know well that I can bring a lot of value to based upon my knowledge, experience, contacts, expertise, know-how everything, um, in addition to capital. And typically when I'm investing in a deal, I'm attracting other capital to invest alongside, um, depends on the size of the deal. Um, I've done single site, um, ventures where I just, you know, partner with someone and buy a Target asset property land to build an interconnection facility, let's say. And then that, that person I partner with is really the day-to-day, you know, the CEO or whatever, and then build a team from there. Um, and some of those have gone on to become really big, um, and I've exited from them. Um, some were single site, I've had, um, you know, different transactions. Um, and a couple of them I'm still a partner in. Um, and that's kind of what I focus on the majority of. And that's what the purpose of Newby Ventures is.
Jessica Denson, Host (10:17):
Gotcha. Well, not to, uh, be overshadowed here. Brent Leg has a deep history in the industry as well, with more than 15 years of Connect Nation. And, uh, Brent, I'd love for you to share some of your background, um, and explain, uh, a little more about Connect Nation's mission and, um, how it relates to the work that you do.
Brent Legg, Connected Nation (10:38):
Uh, sure. Jess, I guess so, uh, you know, when you think about Connected Nations mission, we've always been sort of the bridge, uh, between, uh, the, the telecom industry and government, right? Government has been working on the issue of closing the digital divide now for, uh, for many years. Um, but oftentimes they don't know how to speak telecom and the telecom universe mm-hmm. <affirmative> doesn't know how to speak to government. And so we've always been the bridge between the two. Uh, my role in the government of fear space for the organization, which is really the only role that I've ever played with the organization over the last 15 years, has been to help, uh, public policy makers think through, uh, how to, um, pass and then implement good broadband policy, um, and to help the telecom industry understand how they can shape, um, uh, public policy in a way that actually benefits people on the ground in underserved and, and unserved communities, uh, across the us.
And so my work involved, uh, a great deal of work around broadband mapping that is mapping where service availability is and isn't, uh, provided by last mile service providers, uh, to working on issues surrounding school connectivity. How do we improve bandwidth and lower prices and improve performance, um, for school districts that use the E-rate program to, uh, to get a discount on the cost of their services. How do we make that program work more efficiently and effectively for the school districts that take advantage of it? Um, so education, uh, public policy, um, broadband mapping, um, building relationships with, with state, uh, decision makers and local decision makers. That's been really my focus. And so where that I think naturally intersects with the work that Hunter does is, you know, the lack of neutral internet exchange points in communities across the country is a failure of public policy. And so how do we, how do we figure out how to fix that? That's what our joint venture is really all about.
Jessica Denson, Host (13:10):
Yeah. And, um, uh, Brent, I work with Brent. Uh, we are colleagues and, uh, just for us, for our audience sake, I want them to know that you tend to be very humble in the great work that you do. And so, just to brag a little bit, uh, Brent has really, uh, shaped a lot of policy that has helped thousands, if not millions of people. So, um, you know, you've done some really great things in your career, and I just want the audience to be aware of that, that it, it really comes from an altruistic place of helping more people. And so, um, I just, just a little shout out to you, Brent, because I do have the pleasure of working with you directly. Um, so I thank you for
Brent Legg, Connected Nation (13:50):
That. And that's, that's what our organization is about, right? That's why we exist as a nonprofit to help people. So yes, uh, the joint venture that we've formed with Hunter is, is really just, uh, highlighting, uh, uh, an issue that needs to be addressed and then working together to address that issue for the purpose of helping rural communities that have been frankly left behind. Um, we've gotta fix this problem. It's another aspect of the digital divide that needs closing,
Jessica Denson, Host (14:21):
Uh, uh, com. I completely agree. Of course. Um, and Hunter, why did you, on your side of things, seek to work with, uh, work with the nonprofit and, and what brought you on your side from your point of view Connected Nation and Newby Ventures together for this joint venture?
Hunter Newby, Newby Ventures (14:39):
That's a great question. So it's not that I sought it directly. Uh, we were introduced through a mutual friend, and I had heard of Connected Nation, but, you know, it was not very clear to me what Connected Nation was or did. Um, I never really dealt with, uh, rural anything. Um, and then I did have a couple of deals, um, one that I built, um, a long haul fiber route from Miami to Atlanta, and I built 11 modular, uh, regeneration, amplification, colos, co-location facilities on that fiber route. And they were spaced every 60 miles. So I did end up building buildings in rural places like Barnesville, Georgia Fargo, Georgia, and some other places in Florida. Um, and I'm still in a deal in Canada, um, in Moncton, new Brunswick, which is a small town, but it has to do with transatlantic subsea, um, networks. So I was, I had exposure to rural in that regard, small towns.
Um, and it was really my thinking from coming from the big cities, coming from, you know, New York and Atlanta and Chicago and that sort of thing. Um, how, how do I distribute these physical air neutral interconnection facilities out of the major cities to places where they're not? And that's always been on my mind. And that sort of equates to the definition of rural, right? Um, and then you have to sort of follow the fiber routes and look where fiber is and isn't. And, and that's kind of how I approached it. Um, and then knowing after meeting Connected Nation, knowing what their mission is, um, yeah, I was, I was very intrigued by that and, and really, um, drawn to it. I, uh, cuz I'm just trying to help, right? That's just what I want to do. <affirmative>. I, I want to help solve interconnection problems. It's like a big puzzle.
And I enjoy solving puzzles, the bigger the better, right? <laugh> and, uh, I've just been doing that across the country. Um, and that one deal up in Canada, um, for 20 plus years. So, getting to know Connected Nation and, you know, trying to level set with them from the beginning to just ask them what carrier hotels they'd been to, what MeetMe rooms they they'd been to. Cuz I've, I know them pretty much all, I've owned many of them. <laugh> built, design, built, operated, many of them. Um, I was a little bit surprised and shocked, um, when they said, what's a carrier hotel and what is a MeetMe room as network elements? They're critical. They are the underpinning of everything, uh, including the internet, which is one of many different kinds of networks. Um, and it just struck me that, that, that here's the preeminent no, uh, nonprofit for rural broadband in America.
Really putting their lives out there, their whole careers dedicated to this, you know, genuinely, honestly committed to solving this problem and not having a full comprehension of how it all works. And I understand why, because even in, in my industry, the intricacies of MeetMe rooms and, and the interconnection business is lost on many people that are in the broader data center business, which is a very overused term. Um, and that they don't really understand interconnection either. So I, I wanted to help, uh, work with them to educate them about it and then see if, um, you know, through that we might be able to find a way to work together to help address and solve this problem. And I, I had some experience, okay, it turned out to be very valuable experience, um, in going to Washington DC during the era, right? The, the broadband stimulus in the 2008, 2009 timeframe, um, for the long haul fiber route that I was, uh, trying to build, um, in, in short to link the submarine cable landing regions in the United States and build neutral internet exchange points, but we call them neutral co-location facilities every 60 miles, which is the distance of amplification of light on long haul fiber, which seemed very convenient from a physics perspective.
And I tried to explain this, you know, with, with lobbyists in DC running around, meeting all the congressmen and senators and getting letters of support and all that sort of stuff, and applying, um, you know, for, uh, these funds through N T I A in our us. So I had experience with that. Um, and there's not enough time on this <laugh> podcast to explain all the details, but it wasn't alien to me entirely. Um, but that is what Connected Nation does and spends a tremendous amount of time on. And you're right, Brent is an expert in this to a level I'll never be, and nor do I, I I want to be, because <laugh>, I have Brent and Brent's the expert <laugh>. And that's why coming together that, to get to the, the, the short of it in these rural places is it, is the, the onus of the state government to be the first dollar in at risk to solve this problem.
Because private equity, as I know, cause I've dealt with 'em for more than 20 years, um, they don't, they have amnesia. They love it where it is and exist and it's working, and they want to buy it and bind it and, and squeeze and, and make money <laugh> mm-hmm. <affirmative>, when, when, when you go to a place where it doesn't exist, they don't have the same belief that it's going to ever exist. And that doesn't help the states that don't have it. And they need the solution. So going with Connected Nation to the states and the federal government to propose the solution and say, look, I've been doing this for 20 years and it works great in these big cities, and here's proof, and we could bring this to these rural places and do the same thing, solve the problem, bring the internet to them, but you've gotta be the first dollar in, not forever dollars, but just the first dollars in to create the inception. And then from there, private industry will follow as it always does, where there's opportunity, um, telling that story. So telling the capital story, telling the, the network interconnection industry story through Connected Nation. I mean, there's no other way it could be done, to be honest.
Jessica Denson, Host (20:42):
And tell me if I have this right, because I, I know some of the people who listen to this podcast are not as technically savvy as you or Brent or some, even some other people we have on our staff. And I'm one of those people <laugh>. So you kind of touched on it early on of what an internet exchange point actually can do and, and what it is. And that is, and my understanding is it is a physical place where multiple carriers can come in, multiple groups can come in, providers, um, I, I dunno, businesses, uh, and, and actually connect. Whereas say someone lives in, um, Madison, Wisconsin, and it's a smaller Madison, um, Indiana, it's a smaller town versus Chicago, where Chicago might have a big exchange, Madison doesn't. And so Madison has to go all the way up to Chicago and back, right? Mm-hmm. <affirmative>. So if you're closer, you have better everything. Uh, uh, Brent, uh, can you talk about that a little bit? Like why does it matter that we even have these close to us? Is it okay that they're still in the big cities, or is it really needed in rural areas?
Brent Legg, Connected Nation (21:49):
Well, I think, uh, that's exactly the, the problem that we're trying to solve. They are needed in smaller, uh, communities across the us. Um, and that's, there has essentially been, uh, a market failure to develop them. Uh, mainly because, as Hunter said, uh, the companies that invest in these types of facilities, um, believe that they work in major metropolitan areas, but are very risk averse when it comes to spending their money, uh, to do this in smaller cities and towns. And, uh, hunter knows, uh, as being a veteran of the industry now for, uh, 20 plus years, um, that, uh, this absolutely can work in smaller cities and towns across the US and that actually the lack of these facilities are holding those communities and the regions that surround them, holding them back. Um, and so, uh, yes, Jessica, your, your, your understanding actually is, is is quite good.
It's coming a long way. I'm maybe way, maybe, uh, uh, may, maybe we've done a good job of, of explaining this. Um, uh, I mean, essentially an internet exchange point is a, is a data center like facility. And as Hunter says, we, we try to avoid using the term data center because we're not in, uh, this space to, to build storage and compute data centers. We want to build interconnection facilities to bring local ISPs and content networks and cloud applications and, um, middle mile networks that provide transport and wholesale, um, uh, internet access companies or what are called IP transit, uh, companies together, uh, to meet locally in exchange traffic locally and keep as much traffic local as possible, rather than sending that traffic far away to the nearest internet exchange point, which may be hundreds of miles away. In the case of Alaska, they back haul all of their traffic to Seattle and Portland to be exchanged with other networks, which, wow, in the case of Fairbanks, Alaska's second largest city in Alaska is 2000 miles away from Seattle.
So that creates, uh, very high latency numbers. Um, and, uh, you know, latency is essentially the time that it takes for a packet of data to be sent, uh, to a, uh, remote location and, and to receive a response that that information was, uh, received. And, uh, that means that if you're involved in, in eSports in gaming, if you're involved in, you know, uh, in, in participating in an augmented reality application or virtual reality, or the metaverse that's coming, right? Um, and you're interacting with these things online, that the longer that it takes, um, that packet of data to be, uh, to be sent that latency, uh, if that latency value is not low, then your experience online is going to be less than desirable. And the truth of the matter is, you know, Silicon Valley and other places now across the globe are developing software and, and, and applications to ride on ultra high bandwidth, ultra low latency connections to the internet that happen to be in large, major metropolitan areas.
Well, if you're on a farm in rural, uh, South Dakota, um, you're probably not going to have the same internet experience that you are as if you're in Chicago or New York, or, uh, the Washington DC area, or Atlanta. And it's part of our mission to, uh, to address that aspect of the digital divide too, and to keep it from growing. And we're very concerned that rural areas will indeed be left behind their major metropolitan, excuse me, major metropolitan counterparts, um, if we don't find a way to bring network interconnection and cloud services and, and, and content, uh, closer to rural areas to, and that's why we've identified 125 locations across the US where internet exchange points are, are needed.
Jessica Denson, Host (26:10):
And, uh, hunter, if you could, the, those 125 target locations, uh, there's 14 states that don't have carrier neutral facilities. Um, why is that so important? Uh, how, why are these target locations? Why were they chosen? Uh, what makes them unique? And are are those that were not part of this list? Are they even in consideration or would they be considered?
Hunter Newby, Newby Ventures (26:35):
So the 125, um, was created out of, you know, deep diligence that was done. And it was a combination of the work that Brent and Connected Nation did. And what I brought, um, from what I know, so it isn't that there's a lack of carrier neutral facilities, um, in, in the 14 states per se. It's that there isn't an internet exchange. So let's talk about the, the definition difference, cuz the semantics is really important. So, um, an internet exchange point is a physical place. It's like a room we're building, you know, that houses an internet exchange. And the internet exchange is actually, um, it's an ethernet switch. And I'm gonna keep it, I'm gonna try to oversimplify it for the audience. Okay? An ethernet switch in the OSI model is at layer two. Ethernet people are generally familiar with because of an office land WAN environment or an ethernet port on a computer or whatever.
Um, so for the most part, people have heard of ethernet. Um, but it's a, it's a protocol. It's a transport protocol that's actually become, you know, carrier grade. Many years ago there was a time <laugh> and I was actually in the industry in telecom when ethernet and internet protocol were new and they were considered risky and garage technology. And now everything runs on it. So it's robust. Now, there is a resource out there, um, that's called peering db. Uh, it's a database that's online, and it is where every internet exchange and facility, so an internet exchange, the switch, a facility, which would be, uh, an internet exchange point, and every as number autonomous system number, which is, uh, an acronym or name used as s n for IP networks like Google or Amazon or Microsoft or Yahoo or whatever, they all have a number. The a number, that number is associated with that network.
Those ass connect to internet exchanges, which are those ethernet switches for the purposes of passing IP traffic to each other on a vlan virtual local area network basis. And those switches reside within ips, which is a room within a building that is built in condition with power cooling, security, et cetera, for the purposes of housing, the ancillary equipment necessary to run the internet. So the whole internet works on what I just described. That's how it actually works, the anatomy of it. And you have to understand that cuz most people just have an iPhone or whatever and they just click on a link and it works. They don't actually understand what's behind it. The, the network infrastructure, let's call it the bones, right? The skeleton of the superstructure, and I'm describing that to you. So the I X XP is a building and, uh, connected nation, I X P is a joint venture to work pre primarily with, predominantly with universities to get land.
There's also one city that we've, we've worked out something with, um, there could be others in the future, uh, where we get the land that we're then going to build this ixp on, that then acts as this hub in a neutral sense for fiber networks, starting with the university itself to build into this facility and then to connect to the ix, the internet exchange, which is that switch that's inside the building. And then for them, to them the school to publish their AS number on peering DB so that the rest of the internet community knows that network is there. And then that would attract eventually over time, you know, YouTube, Netflix, and a w s, which as I've learned is the definition of the internet <laugh> by most of these schools. That's what they think the internet is, cuz that's where the majority of the traffic on campus goes to.
That's fine. And we are able to bring that internet exchange switch into this building and have a distributed link back to an existing exchange city and import effectively all of that content that the, the school wants to see, uh, the students, the campus, the whatever. Um, and then that is the very beginning of this chain reaction where eyeballs meet content, cloud gaming, and then after it's established all these other networks that are local, the local wire, you know, fiber to the home, the wireless, you know, ISPs, mobile operators, you name it, anything, it's neutral, it could be any kind of network will want to physically locate in there for the same benefits. And Brent mentioned them for proximity and access to other networks so that they can get, um, network services, transport and transit cloud, whatever, at competitive rates and on mult from multiple providers.
So competitive service, competitive rates is a, it's a marketplace and they, you know, I've been building these types of marketplaces for over 20 years. It works, it works fabulously wonderfully. I've built facilities that ended up with, you know, over 700 networks in one room. Um, you know, it's, it's, uh, it's the most economical, um, the, the highest quality service, uh, that you could possibly find once you have the, the neutral real estate setting established. Now, why the 125, as Brent stated, um, the, the peering DB data that was extracted, um, you know, through this API that I had my developer build, um, originally was meant to map the original cities that I focused on in, in a series of articles I wrote 20 years ago about meet me in, meet me in New York, meet me in la, meet me in Chicago, whatever, and I wanted to map the internet exchanges of North America to that original series.
And I started to do that. And lo and behold, the largest internet exchanges are in the very same meet me rooms I featured 20 years ago. Wow. How did I know? So it, it's, it's a, it's this evolution. So now I took the inverse of that data. So if I know our internet exchanges are, I could find out where internet exchanges are not, and that's where the list comes from. And it started at the state level. So we were able to map internet exchanges by state, and that's how we were able to determine that there's 14 states that lack even one internet exchange in the entire state. And that you could draw a straight line to economic development and, you know, job growth and business attraction and business and, and people retention. The states that lack the and internet exchange in their own state are lower on the list, um, in terms of, you know, GDP at the state level. Um, and then, you know, you could just extrapolate that to education and everything else because today everything is running on networks. Uh, you know,
Jessica Denson, Host (33:49):
Yeah. I think that anybody who, uh, would've questioned that before the pandemic can, doesn't question it any longer. I know I dealt with a lot of journalists, a lot of people who were, who called having access a privilege <laugh> rather than an luxury, rather than something that was needed. I think there's a very much a different, um, approach to it now, um, speaking of which, that leads us to making this a reality. Um, and the next steps. And there was a huge infrastructure package that had billions of dollars for broadband, um, for digital equity, for digital inclusion, all kinds of things that relate to this. Brent, I would love it if you take us through the next steps in what's going on with funding, where we're kind of looking for Middle Mile and kind of explaining that landscape to our audience.
Brent Legg, Connected Nation (34:41):
Absolutely. I'll do my best anyway, <laugh>, it's a, it's a complex, convoluted, uh, system of programs and, uh, and funding streams. But, uh, I'll, I'll do my best to describe it. So, um, Congress passed, um, uh, a large piece of legislation. A lot of people know about the infrastructure Investment and Jobs Act, uh, which included, uh, billions of dollars of funding for broadband, uh, and related programs. Um, that, uh, bill included two primary infrastructure programs, uh, around broadband called the Enabling Middle Mile Broadband Infrastructure Grant Program, or E M M B I, uh, which is, uh, as the name suggests, to build out middle mile infrastructure, including carrier neutral internet exchange facilities, uh, in communities that do not have them. That was a billion, um, and applications were due for that program in September of last year. Uh, we applied for, uh, our first grant, uh, to build five carrier neutral IBS in Lexington, Kentucky, um, Stillwater, Oklahoma, uh, Starkville, Mississippi, uh, Wichita, Kansas, and Albuquerque, New Mexico, uh, in partnership with, uh, four large public research universities, um, and, uh, the city of Albuquerque in Kirtland Air Force Base.
Um, we're still waiting to hear, uh, back, uh, about whether or not that grant will be, uh, approved by N T I A, the granting agency within the US Department of Commerce. Uh, but we're hopeful to hear something on that soon. And then there is the much larger coming program called the Broadband Equity, uh, access and deployment grant program, or the BEAD program, which is much larger, 42.45 billion. Um, that will be, uh, administered by N T I A, the same agency at the Department of Commerce, but funneled down through the state broadband offices. So one of the, um, most significant developments after the passage of the infrastructure bill, uh, was that most states now actually all states now, uh, have created, uh, a state broadband office to administer these, this funding, uh, and hired a state broadband director and staff, uh, to, to channel the money into places where it's needed the most.
Uh, each state received a 5 million planning grant from N T I A to essentially get their offices up and running. And now that they've received that money, um, they're under a 270 day, uh, shot clock, uh, to produce what are called bead action plans, and to submit those bead action plans, uh, back to, uh, to N T I A on on essentially how they're going to address the unserved and underserved areas, uh, within their state. So, uh, we're in the process of, of engaging state broadband offices to have a conversation around, uh, you know, have you thought about, uh, where your, uh, existing, uh, interconnection facilities are in your state? Is there a need to enhance them? Our belief, of course, is that in 43 states and four US territories, there actually is a need to enhance the existing footprint of those facilities. Uh, and that's what we're working to, to achieve right now.
And then there are several other steps related to the BEAD program. Uh, one key date, though is that on June 30th, N T I A is going to take the data reflected on the F'S new National Broadband map and the associated challenges that have been filed to that data, and ultimately determine how many unserved locations there are in each state, and then allocate the 42.45 billion, um, from the bead program to the states based on those numbers of unserved locations. Uh, so June 30th is a big date. Uh, many states will have, uh, you know, 700 million to, uh, to over a billion dollars, uh, to spend out of the bead program. Uh, the latest projections are that the state of Texas is gonna have more than 3 billion to spend, uh, in and of itself, uh, on, on these issues. Uh, so there's a lot of money at stake. Um, there's a lot of need out there. And, uh, we're hoping that state broadband offices will listen and, and think about setting aside maybe, you know, one to 2% of their beat allocations to fix the network interconnection issue by building carrier neutral ips in cities that do not have them.
Jessica Denson, Host (39:33):
And if a state or local leader would want to get in touch with you, how, how should they do so?
Brent Legg, Connected Nation (39:39):
Well, we've set up an email address. Uh, it makes it very easy, uh, for, for people to reach out, uh, that is ixp connected nation.org. Um, and there's also a, a form on our website, uh, uh, that they can fill out, uh, in the, the email from that form, um, comes to the same place. So connected nation.org/ixp, uh, is how you find that contact form. So, uh, we're urging communities that are either on the list and want to know more about our plans or communities that aren't on the list, but have a strong desire to see one of these facilities located in their community and are willing to get behind it, uh, to reach out to us and let's, let's have a conversation. Um, it will be difficult. I, I think, frankly, to hit all 125 locations, we've identified that there's a need. Uh, so communities that are raising their hand and saying, Hey, we want you to come here. We're on your list, or, Hey, we're not on your list, but you need to be here and these are the reasons why, uh, we, we want to talk to them. And, and frankly, that raises the priority, um, uh, on our list. Um, so, uh, we encourage people to reach out to us and have those conversations.
Jessica Denson, Host (40:50):
Yeah, and I'll include, uh, a link to the webpage and to the contact form in the description of this podcast as well. Hunter, in, in your perfect world, what would come from building more internet exchange points across the US and, and is there a magical number of how many we should really build right now?
Hunter Newby, Newby Ventures (41:09):
Great question. So in a perfect world, the first and foremost, the definition of success for me is that just working with Connected Nation is that we're educating everyone, um, about what the real problem is and what the solution is and the broadband problem. The rural broadband problem and the digital divide, the problem is not broadband and it's not fiber. Obviously, many hundreds of millions of billions of dollars have been spent on building more and more fiber, um, and the problem's still there. So that's not the problem. It's part of it, but it's not the only part. Um, the more that grant money that goes into building Fiber Last Mile to the home only increases the speed that people use at the home that creates a larger back haul problem. And that back haul bill to the last Mile provider, uh, is so large that the more grant money they take, the faster they go out of business.
So by building internet exchange points, or at least educating people that the lack of a neutral internet exchange point and internet exchange locally distributed in all of these places is the solution is the first step. Now, whether or not Connected Nation I X P can be the one that actually goes out and builds all of them is another story. And if we could get all of them that we've shown here on this list 125, that would be incredible. Um, how many are needed beyond that is a really good question. And I think we have to take it a step at a time to see how far we get in this first, you know, phase that we're going at. And then, uh, who else is gonna step up to fill gaps? Cuz you know, this is not, uh, an alien concept to people coming from the big cities, it's just that they've never tried to go into these, um, you know, rural markets.
Um, and we're leading the way now as Connected Nation I X P, um, which should probably inspire others to try to do the same. And that's okay cuz there's a lot of places and we probably can't do 'em all by ourselves. Um, but I think the future's really gonna dictate, uh, to all of us what that ultimate number is so that we could just eliminate any place where the internet isn't by having one of these built, whether it's by us or someone else. Um, and that I could tell you, um, from experience looking at, uh, one particular application and it's the applications really that are gonna dictate the need. And I think it's mostly related to latency, but, um, the one application that I'm aware of is Connected Car. And Connected car is a term, it's not autonomous driving vehicles. Connected car is a term meaning that the car has a network connection where every device that is gets into the car syncs with that car's network.
And the car companies, um, have become aware of this, you know, and are very interested in collecting data from all the devices that get into these cars. And they had an industry target of Sub one millisecond in terms of the collection of the data from the devices, the phones, the iPads, whatever. Um, I could tell you that sub one millisecond equates to 50 miles, that's the distance light travels. That's what sub one millisecond equates to in time and latency. And if they want to collect the data from the devices in the cars at a sub one millisecond or 50 mile interval, and I've done the math that would require something equivalent to, or similar to what we're building as connected nation. I X P, um, every 50 miles and I've checked the total square miles of the whole United States, that would require 22,000 of these.
Wow. Yeah. So I'm not saying that we're trying to build that, I'm saying that I know that car companies want that, that's their goal. And I think they woke up to the reality that these facilities don't exist everywhere and that the way that they want to collect the data process, the data, repackage the data, you know, in, in sub one millisecond speeds in major cities within proximity to a major city. Sure. Outside of that, no. And you know, the mobile operators obviously play a role in this and the way they architect their networks and how they back all their IP and what they do at the tower and that sort of thing, and that's their way tried and true and, you know, getting them to change is a, is you know, whatever. If it's even possible, it's probably gonna take a while. There's a design that would need to be deployed and it would take time to build all this and get all the fiber re-engineered designed in and all the routing, the layer 1 23 routing done.
Um, but if that's the outside, we're looking at 125 just so that, you know, cities that aren't insignificant at all, like Lexington and Wichita, that they get the benefits today that the big cities have, that they're not left out and they're not passed over. This is the missing piece. They've got fiber, um, they just don't have a neutral meat point locally in their city to the, for the content and cloud and gaming and whatnot to physically locate in, in that city to serve what they call the internet locally from there. That's what we're trying to accomplish. 125 is the right number for that in this phase today now, but, you know, could it go north of that? Absolutely. Um, how far north? Well, like I said, in an extreme case at a very small form factor, neutral interconnection setting based on what the connected car guys want, um, you're talking about many thousands of these, um, that would be required for that type of latency.
Jessica Denson, Host (46:52):
Well, let's see. Well, I would challenge anyone to have listened to this discussion and feel like they didn't learn something. Cuz I have learned multiple points. I didn't know about Car Connect, I didn't know, uh, things about the I xp. So, um, I hope, uh, our audience feels the same way. Um, I could talk to you all day, um, but I'm gonna leave you both with one final question that I'd like you both to answer. Um, any words or wisdom about the importance of internet exchange points that you would like to leave, um, our audience with final thoughts on why this matters? Brent, I'd like you to go first and then Hunter, you could wrap us up.
Brent Legg, Connected Nation (47:27):
Well, I think, uh, all mayors and county executives and city council people and state legislators and, uh, members of Congress all the way up and down government right, need to think about the communities that they serve and does the community that they serve have, uh, a neutral interconnection facility, an internet exchange point, uh, serving their region. And if they don't, they need one. And for all the reasons we've described here on the, uh, on the podcast today. Um, and so it's really incumbent upon them if they care about the digital divide. They care about, uh, preserving their community's future as it relates to the evolving nature of technology and the internet itself. Uh, and they want to ensure that their community isn't left behind. Uh, internet exchange points are going to be critical to ensuring that those communities are not left behind. So we encourage them, uh, especially to reach out to us and become engaged on this subject.
Uh, help us educate, frankly, state broadband offices, uh, many of which, uh, do not actually understand this issue themselves. And we've got a challenge, uh, educating them and helping them understand why, you know, backhauling traffic two or 300 miles, uh, isn't good enough, um, and will not sustain the communities that have to do that for very long. Um, that's the challenge that's before us. This is not a, um, uh, an easy topic to explain or discuss. Uh, so we have, uh, we have an uphill climb as it relates to that, but, uh, the net takeaway is that if you're a leader in a community and your community does not have an internet exchange point, your community needs one. And, and we'd love to work with you to make that a reality.
Jessica Denson, Host (49:17):
Hunter Newby, Newby Ventures (49:19):
So I'll, I'll add to everything that Brent said, and I'll say, uh, a couple things. So the internet exchange, the IX and the internet exchange point I X P, um, R and have been critical network infrastructure elements for, you know, two decades. Internet exchanges were fledgling and, and nascent, you know, back in the beginning, uh, you know, 20 plus years ago, but they've really grown up and become robust. But with that said, this is the first time in our broadband infrastructure grant history in the United States that the terms internet exchange and internet exchange point were actually defined in a grant as being network elements and grant eligible. So <laugh>, that's incredible. Um, I'm very happy that it's, we, we've reached this point, but it's the first time it's new. So there you go. As far as presenting this as, uh, the missing piece that really helps solve, uh, the rural broadband problem, they are defined elements.
Um, they're tried and true. They work, the are known and established to those that are in the industry. Um, but I'll finish with this. Not all internet exchanges are equal in function and service, uh, in robustness. Um, it very much has been historically a homegrown type of thing, uh, community element where a person or a few people in a town that understand ip, you know, and, and, um, networking will start a venture to, you know, provide one of these, uh, to their town. And I commend all of them. I've started a few myself. I've been a partner in many. Um, and that's really been the case. Um, it's always a local guy or people local group, um, that cares about the internet and wants to help their town, and I always wanted to help them. Um, and I continue to, and there are a couple of organizations in the world that have really made a business out at this one in particular that has taken this to, um, a global scale.
And, um, they are, uh, professionals in every aspect of what they do. Um, and that their, uh, role in their position in the global internet infrastructure is understood and well-defined. And they are, they are used by, or they have, their clients are the largest content and cloud and gaming companies and many enterprise companies, the largest in the world. Um, so when these communities, the mayors of these cities and, and the governors look at this problem, they have to understand that just getting an internet exchange, um, to check a box, um, although that might be good to not have a zero if you're one of the states, unfortunately that doesn't have one, it might not actually solve the problem. It just might be you checked a box and said we had got an internet exchange. You really need to know that the people that you're working with are bringing the level of quality and service, um, the, the, the pricing, the contract terms and conditions that the internet community, um, will accept and, and use and rely upon.
Um, because that's ultimately the win is to bring the internet to your city or your into your state and to the cities in your state. Um, and that is, is a, is a formula, um, that, uh, that you have to get that right. And like Brent said, I know a lot of this is confusing and it's technical to people and it's a lot for them to learn. And I'm pretty sure that mostly people are gonna look to what others are doing and feel, find comfort in someone else did it, and I can follow what they did. Um, and that's what I'm really trying to do. I'm trying to help Connected Nation fulfill their mission by bringing what I know and all the people I know and how all this stuff works, um, to them, uh, so that they can bring it to the people that they deal with, um, at, at the local state, federal level, to just help them learn, um, you know, and save time to get this problem solved once or for all so that we no longer have to talk about it.
Jessica Denson, Host (53:38):
<laugh>, that would be great to finally close the digital divide and, um, I can imagine a lot of state and local leaders, you get elected to a position but are expected to know these things. So yes, come to us, uh, as you've heard today, uh, Brent and Hunter collectively know so much, and I, I know from, from, uh, talking with them in the past that it's just a tip of the iceberg, what they've shared so far. So again, gentlemen, thank you so much for joining me today. I really appreciate your time.
Hunter Newby, Newby Ventures (54:07):
Brent Legg, Connected Nation (54:08):
Thanks for the opportunity, Jessica. Your, uh, your podcast is reaching a lot of folks and we hope that this will be an interesting topic, uh, that engages them too. So thanks again.
Jessica Denson, Host (54:18):
I I'm sure it is. I've been, I've been very much engaged myself today. I've, like I've said, I've learned so much in just a short amount of time. So thank you gentlemen.
Again, we've been talking with Hunter Newby, the owner of Newby Ventures and Brent Leg, the Executive Vice President of Governor Affairs for Connected Nation. They're leading the joint venture to bring internet exchange points to more mid-size cities and rural areas across the country. You can head to connected nation.org/ixp. To learn more or to ask to contact Brit or Hunter, I'll include a link to the webpage and the description of this podcast. I'm Jessica Denson. Thanks for listening to Connected Nation. If you like our show and wanna know more about us, head to connected nation.org or look for the latest episodes on iTune iHeartRadio, Google Podcast, Pandora, or Spotify.