PROVO, Utah, September 11, 2015 – Utah is uniquely hospitable to entrepreneurship, and its deepening roots in software and search analytics have enabled it to become a significant technology hub, said Gov. Gary Herbert and a host of entrepreneurs, venture capitalists and national journalists participating in the first annual Startfest here.
The startup festival last week featured more than 200 speakers and panels, including CEOs or top executives from Domo, Qualtrics, Pluralsight, Maritz CX, MX, Oracle, Vivint and a score of VCs.
“Utah, in a lot of ways, is a stronger and vibrant community than Austin, Texas; or Boulder, Colorado; and yet they get an insane amount of press,” said Clint Betts, the founder of the publication BeehiveStartups.com, which hosted the event.
Timed to coincide with Provo’s annual “Rooftop Concert Series,” showcasing local bands, and the smartphone-focused Pocket Film Fest, the event also concluded with a Google Fiber-sponsored “hackathon” devoted to helping develop applications for Gigabit fiber connectivity.
Cheerleader-in-Chief Gov. Gary Herbert
“I see Utah rising like cream to the top,” said Herbert, governor of the 33rd largest state since 2009, and who is running for re-election in 2016. He kicked off the panel programs on Tuesday, September 1, with a speech followed by a question and answer session with Betts.
“That doesn’t mean we don’t have challenges, but we are on the right road and going in the right direction,” said Herbert.
Herbert said his job is being a cheerleader for the state: “Mainly, it is making people aware that if you invest in Utah, your chances of success are greater than elsewhere.”
As the newly sworn-in chairman of the National Governor’s Association, Herbert has the opportunity to frequently tout the state. He told of an interaction in which Rhode Island Gov. Gina Raimondo asked him, “What is it about Utah?”
But Herbert got some pushback on his boosterism from Betts, particularly regarding the controversy over Zenefits, an online benefits company. Herbert’s insurance commissioner told the San Francisco-based company in late 2014 that its free business model was illegal in Utah. After pushback from local techies, and from the governor himself, the Utah legislature passed legislation in March 2015 overturning that ruling.
Telling the Qualtrics Story
Within Utah’s technology ecosystem, there are five billion-dollar companies, based on market capitalization. Most are in software or search analytics.
They are Qualtrics, a leading online survey tool; Domo, a “big data” analytics engine; Pluralsight, an online educational platform, and InsideSales, a lead-generation tool. Vivint, a major home automation company, and which also includes wireless and solar divisions, weighs in with roughly a $2 billion market capitalization.
In an interview at the festival with TechCrunch journalist Sarah Buhr, Qualtrics CEO Ryan Smith recounted its founding story. Going to college in Los Angeles, Smith dropped out when he learned that his father had cancer with a prognosis of three month to live.
He came home to Provo, where his father was a professor of marketing at Brigham Young University, to spend time with his dad. Smith brought his technical skills to online surveys, and soon Qualtrics was born. His father, who outlived the terminal diagnosis, and his brother, a former Google executive, constitute the company’s core leadership together with Smith.
In part because venture capital in Utah has been hard to come by recent years, Qualtrics financed itself by bootstrapping. Indeed, the company had obtained to $50 million in revenue before it received any serious funding offers.
Then, all of a sudden, everything was on the table, said Smith. The company got an offer that might have led the family to sell the company. Or it could continue on its organic growth path. Or it could take on new capital investment.
He faced the dilemma of successful entrepreneurs: “There is nothing wrong with the business, it is scaling beautifully, and yet there is a multi-billion opportunity,” said Smith. Fundamentally, he wanted to control his destiny – but without turning his back of what the company could become.
“My goal at Qualtrics is to write my own story; I don’t want others to write it for me.”
He decided to take the investment. One year ago, Qualtrics brought in $150 million in venture capital, a sum that bumped Utah last year to sixth in the nation for venture capital.
“I believe you can do this in Utah,” said Smith, referring to his intent to grow the company further and further. “There are probably five to six really big companies with founders who have the ability to write their own story. They haven’t sold out yet, and they want to do something big.”
And the upside? Everyone is still only “in the third of fourth or fifth inning,” he said.
College Friends and Fellow Entrepreneurs
Josh James is CEO of Domo and one of Utah’s most successful tech executives. He built Omniture into an analytics powerhouse and then sold it to Adobe for $1.8 billion in 2009. The division remains based in Utah, with the high-profile Adobe building overlooking the booming City of Lehi in Utah County.
James took the stage with his friend and former BYU college friend Jeff Kearl, now CEO of the lifestyle/clothing company Stance. Previously, Kearl played a key role in founding Skullcandy, the headphone and peripheral manufacturer based in Park City, Utah.
Both James and Kearl are bullish on Utah, although Stance is based in San Diego to be closer to surfing. Their wide-ranging “conversation among friends,” moderated by Greg Warnock of Mercado Ventures, touched on everything from the unique peculiarities of Utah’s business culture to Kearl’s past antics in arbitraging frequent flyer miles from Kellogg’s waffle packaging.
James, for example, addressed the need to actively court tech talent from out of state.
“We give them the red carpet treatment,” said James. “We send flowers to their spouse. We make sure to carve out at least an hour to show them real estate” – so they can see how much of home they could buy in Utah, versus Silicon Valley. “We invite the smartest engineers to spend time talking, and shield them from the ones that don’t come across that way.”
That morphed into a discussion about building a corporate culture that will be valued by all-import tech-savvy millennials.
“Work is different today than 20-30 years ago, when we went to factories and produced things. Then on Friday it was over,” said Kearl.
‘The information age created a bunch of companies with computers and conference rooms. It has shifted the activities that happen in the day. This is a different type of work: social dynamics are much more different, and the millennials punctuate this.”
“I don’t want to call someone at 9 p.m. at home and have them not take my call,” said Kearl. “Yet if I am going to ask [24 by 7 availability], I have to create a workplace that allows employees to go to their kids’ activities, or to go out for a surf.”
“We just say, ‘life is holistic,’ so let’s work together and not break [work and home life] apart.”
Leading From the Front: Nike, Apple, Vivint
Jeff Lyman, Chief Marketing Officer of Vivint, spoke about the need for companies to “lead from the front.” Formerly with Nike, Lyman told the story of Steve Prefontaine, the legendary University of Oregon runner and who became the model and muse for Nike’s aggressive approach to business marketing.
Lyman said most distance athletes, runners and bicyclists, race in a pack. Not Prefontaine. He had the courage to break out the pack early: To dominate the race from beginning to end.
That’s what Nike began to do with marketing more than a decade ago. It stopped viewing the shoe sale as the completion of a marketing campaign. Rather, the sale was the first point of contact in the cycle of digital communication with the customer.
“Nike was reinventing itself and the relationship with the customer,” he said. “It was not marketing to you, but bringing you in and building loyalty.” That’s led to a database of 60 million “members.” Yet it’s acquired that at fraction of the cost of competitors.
Apple showed the same courage in launching the iPhone without a keyboard, in dropping the traditional clamshell design, and abandoning conventional web browsing technology. Those choices, he said, put Apple five years ahead of any other phone.
Vivint has done that for home security and automation, he said. It has reconfigured the entire value chain: product, sales cycle, installation, customer service, home automation and filed service.
For example, CEO Todd Pedersen was dissatisfied with Honeywell wall monitors. Yet, said Lyman, board members told him: “Stay back in the pack; don’t take the risk. Let’s just keep doing what everyone else is doing.”
Bucking that advice, the company has tackled each element of the value chain to become a leader in the smart home platform. The company sees 80 percent of security service subscribers signing up for smart home services (versus a 45 percent industry average), and obtains $63 in month recurring average revenue per user (versus a $39 industry average), he said.
Finding an Oracle Home in Park City
In a “fireside chat” late on Tuesday, Oracle Chief Information Officer Mark Sunday talked about his company, and why Sunday has chosen to make Utah the base for his work at the company.
First Sunday worked for 7.5 years as the top technology officer for Tom Siebel and his database company Siebel Systems. Acquired by Oracle in 2006, Sunday has since run the technology show at Oracle, a Redwood Shores, California-based software giant with nearly $40 billion in annual revenue.
His secret for longevity at these tech giants? “You always put the company first,” said Sunday, speaking in the second person about himself, even “when it hurts you personally.”
Sunday extolled the vision and corporate leadership of Larry Ellison, whom combines the attributes of “the vision of where things are going; being willing to make the ‘bet the company’ call; and the ability to instill direction into the company culture.”
As an example of a “bet the company” move, he recounted Ellison’s decision, after only six days of review, to buy competitor Sun Microsystems when others had passed over such an opportunity. In recent years, Ellison has instilled a much stronger uniformity throughout Oracle than in its “early decentralized days.”
Sunday said there were many benefits to being located in Utah. Siebel Systems faced power shortages in California in 2001, and sought a backup facility within a day’s drive of Silicon Valley.
Salt Lake City outclassed Las Vegas, Phoenix, Portland and Seattle. It didn’t hurt that former Utah Governor Mike Leavitt used the invitations to the 2002 Salt Lake Winter Olympics to entice Sunday to make that move.
“I live in Utah because I choose to live here,” said Sunday. “While I am not part of the dominant faith here, it has been a great experience here for family. I don’t know a single person here” for whom that hasn’t been the case, he boasted.
Living in Park City, a ski resort, has also broadened his professional horizons. “When I moved to Utah from San Francisco, I thought it would be like moving to Fiji: A great place to live, but my professional network would end.”
Instead, he said of his family’s experience, “We made connections that we never would have made had we lived in California.”
‘This is the Place’ for Tech Startups
USA Today reporter Jefferson Graham led a panel discussion on Wednesday about “Silicon Slopes: What is Driving Utah’s Tech Success?” It included the CEOs of Health Catalyst and Pluralsight, plus Betts.
“It’s hard to put your finger on what makes Utah so unique and special,” said Betts, although he and the others did highlight a dedicated workforce that prizes education and initiative, particularly in Utah County around Provo/Orem. It is home to both BYU and the large public Utah Valley University. It was also the birthplace of the once-formidable technology companies Novell and WordPerfect.
Beehive Startups hosted a major tech event in January in Salt Lake City, yet 70 percent of the attendees came from Utah County. That’s led the company to move its main event to Provo.
Even one of the early challenges formerly faced by Utah-based entrepreneurs may have proven to be a blessing, said Pluralsight CEO Aaron Skonnard. Rather than building up venture-backed companies into which revenues would eventually flow, “we took a very different approach – although common for Utah – rooted in the fact that we haven’t had much venture capital. You are forced to produce cash-flow early on.”
Still, for vibrant tech startups, it is “easy to feel trapped inside the state when everyone is flying over,” he said, particularly when “you don’t have a good PR strategy; you don’t have a wake to make noise.”
But things have definitely changed over the past two to three years, said Skonnard: “More and more investors are paying close attention to Utah and more actively. And if you fast forward 10 years, things will change even more. There will be a lot of companies, with a lot of wealth and success, and that will feed into more and more awareness in the West and in the East.”
Drew Clark is the Chairman of the Broadband Breakfast Club. He tracks the development of Gigabit Networks, broadband usage, the universal service fund and wireless policy @BroadbandCensus. He is also Of Counsel with the firm of Best Best & Krieger LLP, with offices in California and Washington, DC. He works with cities, special districts and private companies on planning, financing and coordinating efforts of the many partners necessary to construct broadband infrastructure and deploy “Smart City” applications. You can find him on LinkedIN, Google+ and Twitter. The articles and posts on BroadbandBreakfast.com and affiliated social media are not legal advice or legal services, do not constitute the creation of an attorney-client privilege, and represent the views of their respective authors.
Broadband is Affordable for Middle Class, NCTA Claims
According to analysis, the middle class spends on average $69 per month on internet service.
WASHINGTON, November 22, 2022 – Even as policymakers push initiatives to make broadband less expensive, primarily for low-income Americans, broadband is already generally affordable for the middle class, argued Rick Cimerman, vice president of external and state affairs at industry group NCTA, the internet and television association.
Availability of broadband is not enough, many politicians and experts argue, if other barriers – e.g., price – prevent widespread adoption. Much focus has been directed toward boosting adoption among low-income Americans through subsidies like the Affordable Connectivity Program, but legally, middle-class adoption must also be considered. In its notice of funding opportunity for the $42.5-billion Broadband Equity, Access, and Deployment program, the National Telecommunications and Information Administration required each state to submit a “middle-class affordability plan.”
During a webinar held earlier this month, Cimerman, who works for an organization that represents cable operators, defined the middle class as those who earn $45,300–$76,200, basing these boundaries on U.S. Bureau of Labor statistics for 2020. And based on the text of an Federal Communications Commission action from 2016, he set the threshold of affordability for broadband service at two percent of monthly household income.
According to his analysis, the middle class, thus defined, spends on average $69 per month on internet service. $69 is about 1.8 percent of monthly income for those at the bottom of Cimerman’s middle class and about 1.1 percent of monthly income for those at the top. Both figures fall within the 2-percent standard, and Cimerman stated that lower earners tended to spend slightly less on internet than the $69-per-month average.
Citing US Telecom’s analysis of the FCC’s Urban Rate Survey, Cimerman presented data that show internet prices dropped substantially from 2015 to 2021 – decreasing about 23 percent, 26 percent, and 39 percent for “entry-level,” “most popular” and “highest-speed” residential plans, respectively. And despite recent price hikes on products such as gas, food, and vehicles, Cimerman said, broadband prices had shrunk 0.1 percent year-over-year as of September 2022.
Widespread adoption is important from a financial as well as an equity perspective, experts say. Speaking at the AnchorNets 2022 conference, Matt Kalmus, managing director and partner at Boston Consulting Group, argued that providers rely on high subscription rates to generate badly needed network revenues.
Federal Communications Commission Mandates Broadband ‘Nutrition’ Labels
The FCC also mandated that internet service provider labels be machine-readable.
WASHINGTON, November 18, 2022 – The Federal Communications Commission on Thursday afternoon ordered internet providers to display broadband “nutrition” labels at points of sale that include internet plans’ performance metrics, monthly rates, and other information that may inform consumers’ purchasing decisions.
The agency released the requirement less than 24 hours before it released the first draft of its updated broadband map.
The FCC mandated that labels be machine-readable, which is designed to facilitate third-party data-gathering and analysis. The commission also requires that the labels to be made available in customers’ online portals with the provide the and “accessible” to non-English speakers.
In addition to the broadband speeds promised by the providers, the new labels must also display typical latency, time-of-purchase fees, discount information, data limits, and provider-contact information.
“Broadband is an essential service, for everyone, everywhere. Because of this, consumers need to know what they are paying for, and how it compares with other service offerings,” FCC Chairwoman Jessica Rosenworcel said in a statement.
“For over 25 years, consumers have enjoyed the convenience of nutrition labels on food products. We’re now requiring internet service providers to display broadband labels for both wireless and wired services. Consumers deserve to get accurate information about price, speed, data allowances, and other terms of service up front.”
Industry players robustly debated the proper parameters for broadband labels in a flurry of filings with the FCC. Free Press, an advocacy group, argued for machine-readable labels and accommodations for non-English speakers, measures which were largely opposed by trade groups. Free Press also advocated a requirement that labels to be included on monthly internet bills, without which the FCC “risks merely replicating the status quo wherein consumers must navigate fine print, poorly designed websites, and byzantine hyperlinks,” group wrote.
“The failure to require the label’s display on a customer’s monthly bill is a disappointing concession to monopolist ISPs like AT&T and Comcast and a big loss for consumers,” Joshua Stager, policy director of Free Press, said Friday.
The Wireless Internet Service Providers Association clashed with Free Press in its FCC filing and supported the point-of-sale requirement.
“WISPA welcomes today’s release of the FCC’s new broadband label,” said Vice President of Policy Louis Peraertz. “It will help consumers better understand their internet access purchases, enabling them to quickly see ‘under the hood,’ and allow for an effective apples-to-apples comparison tool when shopping for services in the marketplace.”
Midterm Control of Congress Remains Uncertain, But States Got Answers to Broadband Votes
Alabama, Colorado, New Mexico, New York, Kansas and Pennsylvania had broadband-related measures on the ballot.
As voters went to the polls on Tuesday, November 8, 2022, broadband-focused initiatives and candidates could be found up and down the ballot all across the country.
Alabama voters cast their ballots to decide on a state Constitutional amendment known as the Broadband Internet Infrastructure Funding Amendment. The measure sought to amend the state’s constitution “to allow local governments to use funding provided for broadband internet infrastructure under the American Rescue Plan Act (ARPA) and award such funds to public or private entities.”
That measure passed, garnering a “Yes” vote from nearly 80 percent of Alabama voters. With 73 percent of the vote counted late last night, 922,145 “Yes” votes had been tallied with 251,441 “No” votes.
Also in Alabama, Democratic U.S. Rep. Terri Sewell won her re-election bid to represent Alabama’s 7th congressional district. Sewell, whose district covers a large swath of the Alabama Black Belt, “spent much of her past two years in office bringing American Rescue Plan Act funds to rural Alabama, dedicated to healthcare, broadband access and infrastructure building,” as noted by The Montgomery Advertiser.
The Centennial State is not listed as one of 17 states in the nation with preemption laws that erect barriers to municipal broadband because nearly every community that had a vote has passed it to nullify it. But more communities had to go through that unnecessary process yesterday due to the law known as SB-152 that bans local governments in the state from establishing municipal broadband service absent a referendum.
As of spring 2022, 118 Colorado municipalities, 40 counties and several school districts have opted out of SB-152.
Now Colorado can add to that list.
In Pueblo County, nearly 48,000 ballots were cast with 34,457 or 72 percent, voting yes to opt out of SB 152 while 13,087 (28 percent) cast a “No” vote.
In the City of Pueblo, the county seat, Mayor Nick Gradisar told The Pueblo Chieftain that his city was not looking to build a municipal broadband network but rather to pursue a public-private partnership to bring ubiquitous high-speed Internet service to the city in a way that does not “just allow (broadband companies) to cherry pick the ones that can pay the most.”
Meanwhile, in the City of Lone Tree, one of about a dozen communities located in Douglas County, voters there overwhelmingly approved opting out of SB-152 with over 83 percent of voters casting a “Yes” ballot.
According to the city’s website, the ballot question was put to voters to enable the county to extend broadband infrastructure into Lone Tree. The website goes on to explain what opting out of SB-152 would mean for city residents and businesses:
- Along with providing support for the County’s efforts, voter approval opens a range of opportunities to improve broadband access or services. Approval would allow the conversation to begin, while not binding the City to any specific actions or timelines.
Similar to the Constitutional question voters decided in Alabama, a ballot question in New Mexico asked voters to modify the New Mexico Constitution to ensure the easy flow of broadband funding. A 1900s era portion of the state’s constitution restricts “lending, pledging credit, or donating to any person, association, or public or private corporation.”
The proposal, which was approved by the New Mexico state legislature last February, passed with a 65 to 35 percent split in favor of adding an exception to the state’s anti-donation clause that will allow the state legislature to appropriate state funds through a majority vote in each chamber for infrastructure that provides essential services such as water, sewer, electricity, and broadband.
Bipartisan Support for Expanding Broadband Access
Yes, one day after the election and it was still unclear which party will control Congress, even as political analysts pontificate on what happened to the “Red Wave.” But, this much is clear: for successful candidates in both parties, at the federal and state-level, expanding access to broadband has become a bipartisan issue.
In New York, Republican State Sen. Dan Stec won his bid re-election, building on his first victory in 2020 when he campaigned for better broadband and mobile phone service. In North Carolina, Renée Price, a Democratic state representative, was elected by a wide margin. During the campaign, Price said her priorities are funding a range of initiatives and that she was particularly focused on increasing access to broadband.
Meanwhile, Republican Congressman Rick Allen was re-elected to represent Georgia’s 12th Congressional District. Allen said he would “continue to fight for the priorities of the 12th District like securing funding for Fort Gordon and the Savannah River Site, expanding rural broadband, and supporting our farmers and rural America.”
In Kansas, where Republican Congressman Mark Alford was elected to represent Missouri’s staunchly conservative 4th Congressional District, Alford told The Kansas City Star that as he campaigned “’on just about every back road of the district, all 24 counties,’ he heard that the No. 1 issue in the district is lack of rural broadband access.”
Over in Pennsylvania, where Democratic candidate Josh Shapiro won the race to be that battleground state’s next Governor, Shapiro’s campaign told Spotlight PA “he will prioritize expanding quality and affordable access to broadband in rural regions of the state by supporting the newly created Pennsylvania Broadband Development Authority, and establishing comprehensive subsidies for low-income households with high [I]nternet prices.”
And finally, in Texas, where Republican Gov. Greg Abbott fended off a challenge from Beto O’Rourke, in the less sexy race for State Comptroller, Republican incumbent Glenn Hegar won his re-election bid in which he touted his record championing the expansion of broadband in the Lone Star State.
Eye On State Legislatures
States are now beefing up or establishing state broadband offices to award billions of dollars for the deployment of new or expanded broadband infrastructure thanks to an historic infusion of federal funds from the American Rescue Plan Act (ARPA) and the Infrastructure Investment and Jobs Act (IIJA). With those bills already passed and the midterm elections behind us, most of the action on the broadband front will rest in the hands of state lawmakers.
The National Conference of State Legislatures notes that “with roughly 9 out of 10 adults in America using the Internet, many consider it to be a necessity of modern life,” which is why there are numerous pieces of broadband-related legislation that was enacted or is pending in the 2022 legislative session.
- In the 2022 legislative session, 43 states, the District of Columbia and Puerto Rico have pending and enacted legislation addressing broadband in issue areas such as educational institutions and schools, dig once, funding, governance authorities and commissions, infrastructure, municipal-run broadband networks, rural and underserved communities, smart communities and taxes. Twenty-six jurisdictions enacted legislation or adopted resolutions: Alabama, Alaska, Arizona, California, Colorado, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Mexico, New York, Oklahoma, Oregon, South Dakota, Tennessee, Utah, Virginia, Washington and West Virginia.
Authored by Sean Gonsalves, this article originally appeared on the web site of the Institute for Local Self Reliance’s Community Broadband Broadband Networks Project on November 9, 2022, and is reprinted with permission.
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