Industry Spotlight: Hunter Newby and Connected Nation

With us today for a chat is industry evangelist and entrepreneur Hunter Newby.  Hunter is always busy with something in the world of data centers, meet-me rooms, and network-neutral interconnectivity, and evidence of his unique touch is spread throughout today’s modern infrastructure.  Today he joins us to talk about his latest ambitious joint venture with Connected Nation, which is looking to bring internet ecosystems not just out of the core but beyond the edge and into range of hard-to-reach rural communities.

TR: Who are Connected Nation, and how did you get involved?

HN: I first met with Connected Nation back in 2017. They’re a national 501(c)(3) focused on rural broadband based in Kentucky. They are the number one nonprofit for rural broadband, advocacy grant writing, and broadband mapping in the whole country. Prior to being introduced to them through mutual friends, I’d never in my whole career ever approached them, because rural broadband was like another world from carrier neutral interconnection in major markets.  I wanted to try to get to know them, so I just asked what carrier hotels or meet-me rooms they’d been to, and they responded, “What’s a carrier hotel?” And at that moment I realized that this is the problem with rural broadband in America.  The guys that are the best at, and responsible for, fixing the rural broadband problem don’t actually know how network interconnection works; that is to say how critical the physical layers of the internet work to drive the economics and performance of the larger broadband market, and by extension, their mission. I showed them 325 Hudson Street, which was a deal I was a partner in at the time, and explained the general idea that in this meeting room you can access wholesale rates for anything.  Then we began talking about how we could build such things outside of big cities, like in rural America.

TR: How did that turn into an actual business opportunity?

HN: The governor of Iowa hired Connected Nation to pilot a program to improve bandwidth and lower pricing for about 40 K-12 school districts in the eastern part of the state.. They asked me to help and I read the E-rate RFP that they facilitated—something I had never done before in my career. And I instantly realized what’s wrong with E-rate. None of the schools that use E-rate as a subsidy know how, or more specifically “where’, to physically buy transit. They’re all just on this rinse-repeat program that was set up a long time ago where they typically buy transit from the school DMARC.  That means there’s always going to be a local loop in the process, which means that they’re hostage to that infrastructure.  They’re too distant from any potential core to access economies of scale rates. I’m not saying that’s for every single school, as there are some that have figured this out on their own, but this group of school districts didn’t know. So, we made some adjustments to the E-rate RFP.  We wrote it in such a way that the schools could bid out WAN access transport circuits from their DMARCs – the elementary school, middle school, high school, or a hub if they had one – to a common address that we had identified. And by doing that, we aggregated 100Mbps here and 100Mbps there until it became 20Gbps at the wholesale neutral interconnection point. We were able to attract three very large wholesale IP transit providers who bid $0.35/Mbps, whereas the school districts at the time had been paying at least $3.85/Mbps. This was in 2018, and then we started to think about how we could do that across the country.  That’s how it all started.  I didn’t just want to do it on paper, however; I wanted to actually build the facilities to make it all possible.

TR: What exactly are you building?

HN: The concept begins with bringing buyers to a meet point that then creates a wholesale environment.  What is needed is not just aggregate buying to create a lower rate per meg for transit, but to introduce an internet exchange — a Layer 2 switch. The switch fabric which will attract content providers, cloud providers, gaming providers, etc., who will be able to see a port with an AS number on it in a location and then track the amount of traffic coming from that port. Over time, they see X number of gigs coming from it and want to put a cache, servers, or a router there. This is the natural progression of all interconnection facilities.  But you can’t do step two before you do step one. And step one is you need to establish a neutral facility and that Layer 2 switch, and then you get a profile page on PeeringDB.  People in that world pour over the information in PeeringDB daily to build better networks, to create route optimization, and to reduce operating expenses.

TR: What you are saying is that many of the necessary infrastructure pieces are already in place to promote rural broadband development, it’s just the place for a neutral ecosystem to develop that is missing?

HN: That’s exactly it. They have literally had it all in front of them, but they just didn’t know how to put the pieces together because they were missing a very important piece: the Meet Me Room.  At the end of the day, it’s a small modular building that’s purpose-built with the right security and air conditioning and power.  It’s not multi-megawatts or hyperscale, a starter kit is a 350kw thing.

TR: How did you get the actual venture started?

HN: We talked about forming a venture and what the best way to proceed would be. Then, of course, COVID happened and everything kind of went dormant for a while. But we kept working on it. On the surface it might sound easy because it’s just a bunch of words like peering and interconnection and internet exchange. When you actually think about the right corporate structure, the legal structure, and the capital structure for neutrality and scale, it can get complicated if you don’t know how it all works.  The joint venture that was formed between one of my entities and Connected Nation is called Connected Nation Internet Exchange Points (CNIXP). I originally intended to buy land and put the buildings on it, but I decided that the more strategic approach is to work with local community anchor institutions. As part of the announcement of our joint venture we disclosed who we’re working with already: four flagship state universities and the city of Albuquerque, New Mexico.  My participation through Connected Nation is really to help fulfill their mission as an American nonprofit solving the rural broadband problem. I’m trying to teach people that the primary problem isn’t broadband, the problem is  a lack of neutral interconnection real estate.

TR: Which pieces of this ecosystem belong to which entities?

HN: CNIXP gets the ground lease from the university for 40 years. CNIXP designs, builds and owns the building, and owns and operates the colo business. Then we also have a partnership with DE-CIX, which is the largest Internet Exchange (IX) platform operator in the world.  They’re the best at what they do—better than anyone else on the planet—and we have a partnership with them to operate a combination local and distributed IX, which is in very simplistic form an ethernet switch, in each of our buildings.  CNIXP is a landlord and then the relationship with DE-CIX is a switch IX business.

TR: What does partnering with local community anchor systems look like on the ground?

HN: In this case they’re giving us two acres of land under a 40-year ground lease. They become the anchor tenant and we provide them with colo space and a port on the IX, and then they’ll publish their AS number on PeeringDB as being a member of that exchange in that facility.  In the case of these four large universities, the campus IP traffic—from literally tens of thousands of students, faculty, and staff—would be presented to the internet exchange first, and that would attract the content, gaming, cloud and A.I. that the schools are already interacting with, but over currently the public internet.  Many of those content, etc., entities will eventually want to localize that traffic to their campus, eventually, to reduce latency and costs and the universities want that too.  These universities obviously have fiber access today, and in some cases, campus-wide conduit and duct systems.  But the “internet” itself is generally very far away from where they are. Universities often feel like it’s their responsibility to step up as technology leaders of their states. That’s their job, and they have land development experience in the form of research and technology parks.  So working with them on this basis is an accelerant to their plans.

TR: How much of the country similarly far away from the internet by this measure?

HN: I had my developer write an API in to PeeringDB to extract this data to just map the largest internet exchanges. Lo and behold, the biggest internet exchanges are in the very same Carrier Hotel Meet Me Rooms I featured, and essentially predicted they would be, 20 years ago in my “Meet Me in…” research.  Networks go to where networks already are.  But then I looked at the inverse of that PeeringDB data and mapped it by state.  What I learned was that 14 states and 3 territories in the United States do not have a single IX, which means that, aside from private caches, the “internet” is actually not in those places. Every day, every bit of data has to leave the state to go to an exchange point and then come back. That research is helping Connected Nation help the governors and state broadband offices understand why certain states (and regions of states) are behind others in terms of economic development.

TR: How many do we need and how do you decide where to go first?

HN: Connected Nation has access to a tremendous amount of data: GIS data, demographic data, the rate that every school district in the whole United States pays for transit, a whole myriad of broadband-related data (supply and demand).  You have to remember, these guys have been at this for over two decades; believe me when I say they can put some fine points on defining the Digital Divide in any particular area of the country.  Then you need fiber location/mapping tools and my knowledge of how and where to access that fiber.  Then you have to know the people of those companies and have relationships with them to be able to execute.  Based on all of that due diligence, we’ve identified 125 cities in the United States that are of a certain population size that are devoid of an Internet exchange entirely. Out of those 125, many already have inbound demand requests to Connected Nation to come there and help them fix their problem. That’s where we start. 

TR: Thank you for talking with Telecom Ramblings!

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Categories: Industry Spotlight · Interconnection