Investing in connection: How Mac Mountain helps businesses build better broadband

On this episode of Connected Nation, we talk with leadership from Mac Mountain. 
A recently launched company that's taking a unique approach to expanding broadband by helping other businesses grow. 

Listen and find out how the model works and what led to this non-traditional approach to expanding access to more homes and businesses.

Recommended links: 

Mac Mountain Website

Alex Rozek LinkedIn

Scott Sampson LinkedIn

Chapters

• 1:30 What led Alex to Mac Mountain
• 8:03 Alex's history with Blueprint Broadband CEO - Scott Sampson
• 14:33 Mac Mountain business model
• 24:30 New home greenfields vs. rural brownfields
• 29:55 What is Mac Mountains foot print?
• 31:54 Is AI future proof?
• 37:59 How Mac Mountain creates partnerships that build broadband subscribers
• 42:45 The one thing Alex wants the audience to take away from this episode

Transcript

Jessica Denson, Connected Nation (00:08):
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 and impact all of us, our families, and our neighborhoods. On today's podcast, we talk with leadership from Mac Mountain. It's a recently launched company that's taking a unique approach to expanding broadband by helping other businesses grow. We'll find out how the model works and what led to this non-traditional approach to expanding access to more homes and businesses. I'm Jessica Desen, and this is Connected Nation. I'm Jessica Desen, and today my guest is Alex Ic, founder and CEO of Mac Mountain. Welcome, Alex. 

Alex Rozek, Mac Mountain (00:56): Hi. Nice to be here. 

Jessica Denson, Connected Nation (00:58):
<laugh>. Hi, nice to meet you. Our audience won't know it, but I had to do that open several times because I've been on vacation for a couple of weeks, <laugh>, and I'm trying to get back into the podcaster seat. Um, I appreciate you being my first victim this time around. 

Alex Rozek, Mac Mountain (01:11):
No problem, no problem. 

Jessica Denson, Connected Nation (01:13):
Um, uh, I like to begin most of my interviews with a little background on the guest. Um, before we get into the topic of Mac Mountain, I wanna know a little more about you. Um, talk a little bit about your background, your professional background that you wanna share with us that led you to Mac Mountain, Alex. 

Alex Rozek (01:30):
Sure. Um, and thanks for having me on again. Uh, my background, it, it's sort of interesting. I started, uh, sort of like a, a very big funnel, uh, looking at lots of different businesses. Uh, I ran a partnership, an investment partnership, uh, for a long time. I started back in around 2007, an excellent time to start an investment partnership for those of you who remember when the great financial crisis was. 

Jessica Denson (01:55):
Mm-hmm 

Alex Rozek (01:55):
<affirmative>. Uh, and, uh, luckily, uh, uh, you know, learned a lot through that period of time. Saw, looked at a lot of businesses and, and, and actually it was a very interesting time to, to, uh, to have a investment partnership with a very broad mandate because, um, and of course, you, you as an investor, you like it when markets are moving around a lot. It's really tough when they're kind of just going in one direction. Uh, so, uh, saw a lot of things and, and, and mostly followed, uh, cable and followed telecommunications quite a bit. Uh, we did other things as well, but always had an interest in it. Uh, and always had an interest in utility like businesses, uh, especially as, uh, you know, cable was maturing and, and telecom was maturing and over the top and all of that. Um, it, it kind of one thing led to another back about, uh, a little over a decade ago, uh, started, uh, with another investor, a, uh, a small company, uh, that we built into a, a bigger company, uh, that was public actually, and for about a decade around that.

(03:03)
Uh, and it was involved in a number of businesses as well. Uh, it was involved in outdoor advertising, insurance, uh, real estate investments, uh, other types of investments and, and broadband. And over that decade, uh, you know, now not just following the industry as a passive investor, but actually participating in the industry as an operator, I learned a lot. We acquired, uh, broadband businesses. We started broadband businesses. Um, and, and, you know, everything from, uh, the type of software on the backend we would use for the, for the B-S-S-O-S-S to, you know, different ways of actually, uh, building networks. Um, uh, and, uh, and then of course, growing. And about, uh, uh, I'd say, uh, you know, a little over a year ago, uh, maybe two years ago, it sort of made the decision to jump full-time into broadband. Uh, and that's Mac Mountain. So that was my journey, uh, to Mac Mountain.

(04:03)
It is, I, I kind of think of it as almost like a, almost like a funnel, like looking at, you know, spending, uh, uh, you know, more than, uh, 14 years kind of looking at all kinds of different businesses, uh, then narrowing it down to a few in an operating company, uh, and then really narrowing it down to one in, in broadband. And, and I sort of arrived at that for a very simple reason. Of all the businesses that I've looked at, and I haven't looked at all of 'em in the world, but <laugh>, of all the businesses that I've looked at and the ones that I understand, I believe that, uh, broadband today offers the best opportunity for return on invested capital of all of 'em that I've seen, and in, and in many ways, um, it's, it's, uh, you know, people kind of look at things and they say, well, you know, there's all these other big operators out there. How will you ever, uh, you know, what's left to do? It's all done. And, and I actually think that's, they're really not true. And there's, there's quite a bit on the frontier, uh, to do in, in broadband and network building and operating. And, and that's why we kind of arrived at the, uh, unique partnership model that we have today. 

Jessica Denson (05:09):
Today. Yeah. Those people without access right now would definitely say there's a lot more to do, <laugh>. Oh, 

Alex Rozek (05:14): For sure. 

Jessica Denson (05:14):
Yeah. Yeah. Yeah. It, it strikes me before we move on to Mac Mountain, it that, uh, ha being an entrepreneur or a person who invests in companies like that and tries different things, that you have to be a little comfortable with taking a few risks, don't you 

Alex Rozek (05:28):
Think? Sure. Yeah. No question. Uh, but it, there, it's not risk for risk sake. I think it, it's risk. Uh, you'll, you'll, there's always something that you'll not know, right? There's always a, um, you'll never, no matter how much work you do, you'll never get a hundred percent. You have to use your judgment, get as much as you can to make a, a good decision on the, uh, on the broadband side, I think there are a number of things you can do to mitigate the risk. And if selecting your market properly, understanding what the competitive landscape is, other options, pricing costs, and then having some differentiated way of, of delivering, uh, uh, the ultimate network, uh, I, I think you can really, really mitigate those risks. And then you can also, by doing that, pick your spots and find places with extremely attractive returns and, and long term returns.

(06:26)
Um, so that's, that's what we do. I mean, it's not, um, we don't have any particular technological edge. I don't have a special, uh, magic router, uh, that, uh, you know, <laugh>. We're not using some new wave of, of millimeter wave that goes through anything or anything like that. It's, it's, it's not that. It's, it's market selection, it's structure. Um, it's, you know, a really good team of people that understand how to, uh, uh, you know, design, build, sell, and operate with an emphasis on sell and customer service. Um, and do all of that, and then be able to find markets and opportunities where you can deploy that, that, that's, I think, if that's the secret. Um, you know, that aligned with our partnership model, I think is, is how to be successful and to mitigate those risks. 

Jessica Denson (07:19):
Well, let's dive deeper then into that. I, I've interviewed, uh, Scott Samson several times, people who've listened to the podcast over the last six years. I've heard him <laugh>. Uh, he's one of my favorite interviews, actually. He's a very, he's a big personality, uh, as you know. No, 

Alex Rozek (07:32):
Not Scott. No, no. I, we must be talking about a different Scott. No, <laugh>. 

Jessica Denson (07:36):
Scott's great. Um, yeah, when I, or when I was told about Mac Mountain, um, I was asked, do you want to interview Scott again? I'm like, I've interviewed him so many times, but this way we could talk about him so <laugh>. Sure. But, uh, he's worked with Fiber Fast Homes previously and now leads Blue Blueprint Broadband, and now works with you on Mac Mountain. Uh, tell me how you two are working together. How, how it came together, how, how, you know, you, your two worlds collided, I suppose, <laugh>. 

Alex Rozek (08:03):
Sure, yeah. So that was back at the public company. Uh, we, I met Scott because, uh, we had acquired a small wireless, uh, company in Arizona. And I spent, uh, a number of days with the, with the seller driving around, uh, Arizona City and, and different places between Tucson, Phoenix, uh, looking at the a hundred, 200 polls that he had, uh, with equipment on him. And I, I was familiar with it, but, you know, after, after doing that for a number of days, and I, you know, I could look at the company, I could look at the financials. I, I didn't, I have no idea if those were actually radios on those polls, or if it was like a, you know, a lunchbox with tinfoil on it, I, I wouldn't even know. And, and what I really needed was somebody with experience in the operations and equipment and, and understanding how these networks are built and how they're deployed.

(08:58)
Somebody with a a functional expertise could come and, and do some diligence. And, uh, we were very lucky to, uh, uh, find Scott. Scott, uh, delivered expertly. Uh, he was able to come out, he do the, the actual technical diligence on the network. Pretty much every risk that he identified he was right about. And, uh, and, you know, we ended up doing the deal and, and fixing a lot of that stuff. And he was so good, uh, that we hired him. And then, uh, he started as a consultant, and then we hired him. And then, uh, he was, he was doing so well with that. We had this opportunity with a home builder. We had, uh, invested with a home builder as a large national production home builder, uh, at the time was private. And we had done a number of different land banking deals with them, uh, over the years, pretty much every year actually, that of our public company, uh, was around, we would do some, some deal, uh, or another with them.

(09:54)
And, uh, and it kind of got to the point where we were sitting around talking and, and, uh, the owner of the, that business is a good friend of mine. He started from scratch, a great entrepreneur himself, and he said, uh, you know, we kind of identified that, it's funny how, you know, bill build a brand new house and, and a person will walk into their brand new H Home and their water works and their power works, you know, if they have gas, the gas works, and then there's no internet. Yeah. <laugh>. And, uh, and, and then they end up having, you know, get a flyer from like, the sales manager says, you know, call, call at and t or call Comcast or someone. And, and they would call 'em, and then they'd say, well, we're not gonna be in your neighborhood for a few weeks.

(10:33)
You know, we gotta wait until more home sales pickup up, or something like that. And, you know, it was a, it was a major point of pain for the home builder. 'cause you know, the home, the homeowners frustrated. And so, why, why don't I have internet in my house? And, um, and so we kind of came up with this idea of partnering with the home builder. And Scott comes into this, uh, we, we partner with the home builder. Uh, we put fiber in the house as it's being built, just like you would put in with low voltage or, or any other sort of utility. And, uh, and, and, and partner with the home builder in that case, uh, e even more so in many cases, the home builders that we were working with at the time, uh, also controlled the HOAs. And there were a number of different amenities that they have in those neighborhoods.

(11:17)
It could be a pool or amenity center, a long care or something like that. And they, uh, would just roll a lot of these things into the HOA fees. And so we put fiber in there and, and it really took off. The homeowners loved it. Uh, it was a major selling point for the division presidents, um, in, in these different areas. And before we knew it, we had this, uh, this pretty big opportunity. Uh, Scott was perfect for that. Uh, Scott, uh, had the, in my opinion, the unique ability of, of having the technical expertise on the telecommunication side, and then also being able to really understand just the functional, you know, getting out there with the crew and what it's like to be on a lot as the house is going vertical and talking with, uh, the builders or the, or the division presidents, uh, and, and trying to be efficient about getting that conduit into the house, and just knowing all the little particulars.

(12:13)
And, uh, Scott, uh, that's how we started that business. Basically. He, he was a CEO, uh, he, he, he took it off, uh, from, from nothing, uh, in a few years at about a quarter million, uh, homes under contract and, and backlog, uh, where we would do these master services agreements with the home builders, and then later on, developers who control the lots. And, uh, and that was, uh, it just really took off. Uh, and, and in many ways was the inspiration for Blueprint Broadband. Today, Mack Mountain, uh, blueprint Broadband is a, is a subsidiary of Mack Mountains, uh, focused on developers and home builders. But really, uh, you know, I think about that as a partnership with Scott Sampson. And that, again, I, I'm gonna keep saying that because I think that the idea of partnership is what is, is one of the main differentiators of our business model.

(13:07)
Um, you know, and that, and so that's, that's how we got Scott and, and then, and, and working with Scott now for, uh, I think it's, uh, uh, six years. But, you know, it seems like forever in a good way. Uh, we just, we kind of finish each other's sentences and, uh, we're looking at deals all the time. And, and he's, uh, he's, I've never seen a guy work harder. Uh, he's always on the road. Um, and so, you know, really appreciate that you've talked to him because honestly, podcasts like this, uh, bring a lot of potential interest in from new partners. 

Jessica Denson (13:39):
That's great. Yeah. It's, it's, I always, I always hear from somebody like, heard Scott again, <laugh>, he loves Scott. Yeah. He's just, um, he is a, a, um, a tornado almost like, of just, mm-hmm. I don't know how to explain it. Almost Joy <laugh>, I dunno. Yeah. I, I could see business owners and, um, these, these home divisions really wanting to work with him because it's just natural for people to work with people that they like. And Scott is affable and easy to like, <laugh>. Um, 

Jessica Denson (14:06):
It's 

Jessica Denson (14:07):
Great. Yeah. So let's, so so you've taken that experience that you've had, and now you're putting it into Mac Mountain, and now you're gonna allow other businesses, if I understand your, your model, right. To tap into that experience that you've had. Right. Talk about it from your point of view. What, what is different, you know, uh, how this model will work and how it can help other ISPs or other groups? 

Alex Rozek (14:33):
Yeah. So a a lot of it was one of the big sort of epiphanies I had. I moved to Woodstock, Vermont back in 2018. We start, uh, we started having kids. I kind of came at having kids, uh, later in life. And, uh, and, and now we've got a, uh, I've got a 3, 4, 5, and a 7-year-old 

Jessica Denson (14:53):
Oh, wow. <laugh>. 

Alex Rozek (14:53):
And, uh, and when we had, yeah, it was, it was quick, and then it was, it was quick. We started having kids. We were much older. Uh, I'm, I'm 46, so that's kind of where I was in my life when we started having kids. And then, and then COVID happened, you know, uh, and so, uh, you know, so, so you're home and, and, uh, and we had two kids, quick succession and, uh, uh, and, and Ashley is, is wonderful to, uh, I, I feel, you know, really lucky to be able to work from home and, uh, to be with them. And, um, part of that working from home is the really interesting point. When I moved to Woodstock, uh, the only thing available to me on my road, there's more dirt roads in Vermont than there are paved than, and the only thing available to me was DSL.

(15:35)
Oh, gosh. I think I was getting maybe a, I think a million and a half on a good day down, uh, you know, maybe, uh, maybe half of that or up. I mean, I would try to open up, uh, you know, just email and I couldn't open up email, uh, or it would take forever. Oh my gosh. So I used to have to go down to Li Library in town and, uh, do work there. And then of course, if I took a phone call, I would have to step outside of the library. And so, uh, what happened was, there was a, what I learned about how they, eventually, we got fiber, and it was a municipal network. And what the municipality did interesting, uh, that I hadn't seen before and, and to, and I think they did it with some success, was they funded the entire build with tax-free revenue bonds.

(16:19)
And the municipality itself didn't have any employees. They still don't, to this day. Uh, it's, uh, it just technically owns the infrastructure and the, they contract with an operator to do everything, not to just do the construction, not to just do the operations or, but, but literally to do everything. And actually, that's a model that has now been, uh, deployed across all of Vermont, uh, where, uh, you know, a lot of these homes are, you know, maybe, uh, there's like five homes per mile or something. It's, it's not very dense. Vermont is, uh, I think next to Wyoming, the least populated state. Uh, and I mean, that's, you know, why a lot of people like living in the mountains and, and it's beautiful. Uh, uh, we're only a couple hours from Boston and we go back and forth all the time. But, um, uh, but we're here full time.

(17:12)
And the infrastructure would not be possible telecom infrastructure without that low cost of capital. Uh, because the way it works is, you know, let's just say if, uh, you were to go into the, into the public markets and issue bonds, you know, maybe the, the public markets for, you know, a pre-construction fiber build for a network might, uh, just for argument's sake, let's say that might charge like 12% or something like that. Uh, well, you know, if it's tax affected after tax, you might only get 6% if that's a normal, a normal bond. But if you are a, uh, if you're a municipality and you own the infrastructure, you can qualify for tax-free revenue bonds or tax-free bonding, which, uh, allows you to say, issue the bonds at like 7%. So it's a lower interest cost for the issuer, which is, in this case, the municipality.

(18:07)
And it's, uh, actually technically a better return in that scenario to the investor because, um, it's tax free. They're getting an extra a hundred basis points, and it's the exact same risk, right? It's the exact same underlying infrastructure. Mm-hmm <affirmative>. It's, it's a fiber utility. And, and I found that fascinating. And it's, uh, it's actually, you know, a, a great argument could be made that, following that model, you really wouldn't need any government funding, uh, or very little because, uh, these, these networks do produce revenue. I, I, we, we, I I can promise, and I'm sure I'm not gonna, I'm not gonna, uh, uh, get any arguments from your listeners here that, uh, and I always say this, that believe it or not, this internet thing is gonna be big <laugh>.

(18:51)
I, I, I think people are gonna use it. I think if you bring good internet to an area, you'll get subscribers. Uh, and, uh, I say that kind of just as a joke a lot. That is a tagline for the business should be like, this internet thing's gonna be gonna be huge <laugh>. I love it. And so, yeah, so, so the revenue, you know, the revenue works that out. I mean, it, it's really interesting when you think about that model. You have a partnership, right? You have a partnership between the infrastructure owner and the operator, and you've separated them. And what you've also done is created a funding mechanism for the CapEx, which is, you know, everybody loves the cash flows of this business. You can, you can, you can look at any, you know, network that's built and has a decent take rate and say, oh, that's a, you know, a beautiful business, all the cash flows.

(19:39)
But, you know, the, the, the hurdle you get to get there is the heavy CapEx upfront. And so if you can structure it in a way where these investors get a decent return and can actually own the infrastructure, you can set up sort of a repeatable funding mechanism. Um, it, you know, and, and this is being done all over the place. So this is the, you know, they didn't invent this. This is, there's now an a BS market that's going, uh, for these, these at certain sizes. Uh, there are special purpose vehicles. We're kind of following that exact same pattern, but I think just maybe deploying it a little bit differently. So the whole point is that Mac Mountain has an operating subsidiary called Light Craft. Light Craft is where we house the employees and all the systems, all the, the heavy fixed costs. And this is what I, something that I learned from, uh, sort of a mistake that I made in, in the first time we did this, we acquired a bunch of different businesses, and they all had their different, they all had their own finance department.

(20:43)
They all had their own marketing department. They all used a different BSSO assess. They all had different, you know, procurement they had. Yeah. Mm-hmm. And then after you, after you do that, you go, oh God, why, why don't we, that we could, we could save so much money here if we could just kind of scale this and do this all together. And when you do that after the fact, it's very complicated. It's expensive. You've got, you know, this guy in that department doesn't like it. <laugh> the way, you know, he uses QuickBooks and she uses Sage Intacct, and like, I don't want to, you know, and so, so, uh, having learned that the hard way, we said, we're gonna start from scratch with, you know, one set of operating tools. We're gonna, we're gonna be able to use that. And then that scales very nicely. So Light Craft takes those heavy fixed costs, whether they're systems or, or people costs sort of out of the individual business, and then deploys them across a number of different assets.

(21:38)
Whether those assets are in rural Brownfield builds or in New Home Greenfield Built, we can really deploy that and spread those costs around. And then you can not have to sort of staff for peak. You can staff, you know, as you use it, it's almost very much like, uh, a, I would say like a, a law firm model in a sense. You can, you can, you can bill your hours to the client. Uh, it's great for the client. They end up paying a lot less because you're not having to staff a, a group of people that are sitting around, uh, you know, with nothing to do. Once the construction's done or, or the design is done, they can move on to designing a different project. Uh, and as you can imagine, a lot of the internet business can be managed, uh, remotely. <laugh> mean, there's a, what, what's, you know, the, it's funny how that works.

(22:25)
You can't necessarily do that with like a water treatment facility. You know, you can't do it with a nuclear power plant, uh, or you shouldn't. Um, but, but you, you can do it with the internet. So, uh, you know, that was another thing that I learned with Scott when we were, uh, setting up new home, uh, uh, developments in different towns. We started in Florida, had one in Jacksonville and Orlando and Tampa, and then went in South Carolina and Georgia, and Mid-Atlantic around Washington, dc Um, you know, it, it was actually surprising to me how little money it cost to set up a network in one of these places. And, and the entire knock was being run in the cloud. And, uh, and we can, we can manage a lot of the operations and the design and the sales and customer service without having a staff in that particular market. And so, um, you know, again, if you're, if you're gonna go build like a whole city, this won't work. But if you're going to do, um, a new home development, or you're going to do one particular area in a rural market, it does work. And, uh, and so that's the partnership model. That's, I'm, I sort of, uh, spilling all the secrets here. But <laugh>, to be honest, I don't think, uh, I, I think the market is far big enough that we're not gonna, not gonna worry about finding opportunities. 

Jessica Denson (23:41):
And, and there's a, there is a lot of, uh, potential out there for sure. A lot of places that need help, um, that's right. Are within this, I got a co I have several, several follow up questions to what you said there. You hit a lot of my points that I had that I was going to, uh, talk about. But, um, some things that a little more, if you could expand upon a little bit. So a couple things. One, you know, what is your, what is gonna be the footprint? Is it gonna, is it a national footprint? Is it an East Coast footprint? Is it big and small? ISPs, is it co-ops? Is it, 'cause you talked about the ver Vermont, the ver the Vermont model mm-hmm <affirmative>. Um, you know, so are you helping municipalities only or is it all over the place? You know, like what is your, what is your footprint print, and who are the groups that you're really going for? 

Alex Rozek (24:30):
That's a great question. So I, I, I kind of, I kind of put it into, uh, two buckets, rural brownfields and new home greenfields. So the, the footprint is more about who we're partnering with than it is geographic. Now, obviously, there, there's some geographic, uh, aspects to that in the Brownfield. You're not just gonna go, you know, do, uh, one neighborhood right outside of Decatur and then another one, you know, near, uh, new Orleans that this wouldn't make any sense. Um, but, so I would say that Brownfield, as of right now, are really more in New England now. We are looking at some opportunities in Alabama with a partner. Uh, and, and I'm sure others will come up there. Actually, there was another Brownfield that we're looking at in Ohio. And when I say Brownfield, I, I mean, just to be clear, uh, you know, your traditional sort of looking at a market, who are the competitors? What are they charging? What, uh, you know, is there an opportunity here? Uh, and, uh, uh, why I like Vermont as a market to start is that literally on my road, I have two options. I could get DSL and DSL phone will run about 230 bucks a month, <laugh>, or I could get one gig fiber, and it's about 130 bucks a month. So that <laugh> that's what I mean, is like a market 

Jessica Denson (25:52):
No brainer. 

Alex Rozek (25:53):
That's not a hard decision. Yeah, exactly. So, so that's like, believe it or not, there are lots of opportunities like that in rural, especially where you don't have very much home density. And, you know, that's where the partnerships with the municipalities come into play. Now, um, uh, in the Greenfield, that looks much spottier, right? Mm-hmm <affirmative>. So if you look at our Brownfield builds right now, brownfield and these municipal networks are really today, Vermont, New Hampshire, and Maine. Uh, we're, look, like I said, we're looking at some other ones, but, um, no doubt we have, uh, quite a bit of opportunity in just those areas. And, and I'm sure as new things, um, come up, we'll take a look at 'em. But, uh, and that's just a function of some of the earlier companies that we have, uh, uh, financed and that we have invested in. That's kind of where their was.

(26:43)
And of course, obviously I live here, so that's how I found them. <laugh>, uh, you know, I I, I, I run into those companies more here than I do, you know, if, if they're in like, uh, Idaho or something. So, um, I, uh, uh, but we have, but having said that, we've looked at some in Montana and out west as well. Um, the, uh, the Greenfield are a function of partnerships with home builders and developers. That's like Scott's, Scott's business. Mm-hmm <affirmative>. So that's Blueprint Broadband. And, and we're partners with Scott in that. And that's where the, we go out and would meet with a large national production home builder or a large developer, like just doing master plan communities. And, uh, we, you know, we, it is a really simple model. We actually changed, the model we used to use at the old company was a, was a, a door fee.

(27:33)
So you pay X amount of dollars once, and, uh, and then, you know, uh, if that home builder, uh, the home buyer, excuse me, takes the house and takes certificate occupancy, and that home is now served with our fiber, you know, we, we pay the home builder or the, uh, developer a one-time fee, and then we would just have that contract in the HOA or, or, you know, have it sometimes they aren't bulk contracts, we just have them forever. Um, in the case of Blueprint, the models change. We, we said, okay, let's just take like a round numbers. They say we had a a hundred dollars onetime door fee, or how about we just split it? Why don't we just say, instead of a onetime fee, why don't we just say, we'll split half the CapEx with, with half the cash flows. So if you kind of just run the numbers out on that, you say, well, let's just assume, you know, one year of revenue from a subscriber's, a thousand dollars, and, and let's just say that very conservatively ought to produce $600 a cash flow.

(28:35)
Mm-hmm <affirmative>. Uh, that's $300 to the, uh, developer and $300 to blueprint, you know, and forever. And, and what we've noticed is that generally speaking, these, uh, cash flows from these networks, they tend to grow, uh, a few hundred basis points higher than the revenue growth. So, uh, you know, it doesn't sound like much, but let's just say you had $500 a year in cashflow, or, or today if it were growing at 7%, that's a thousand dollars, uh, you know, 10 years from now and, and continuing to grow. And, you know, we kind of take the position that whoever moves in that house is gonna use the internet.

(29:12)
Yeah. And of course, we like, we like, right? It's like, you know, they're gonna use water and, uh, and, uh, and, and it's, it's fiber. So we've, we believe that it has, you know, it's future proof. So we'll be able to continue to increase data speeds to that house and switch out the equipment at the head ends on as we need to, to support the growth of the data over that similar, that same, uh, that same network. And so, you know, when you look at that, it's a very attractive utility, and you're splitting it with your, your partner, the developer or home builder. They're naturally aligned with you to try to keep costs down so that they, they can share and more of the cash flow. And, and that's really the great partnership model there. So the footprint is more about who the partners are. 

Jessica Denson (29:55):
Mm-hmm 

Alex Rozek (29:55):
<affirmative>. And, and that's who we want. Because those, you know, at some point, I, I, I don't know when, but it's, it's sooner than later. We will have most of the country have fiber, right. Or, or have very good internet. Right? I mean, it'll look a lot like Asia and Europe. Uh, it, it'll take some time. It's not gonna be next year, but it's also, you know, it's not gonna be, when my kids are graduating college, it's gonna be much sooner, sooner than that. I think. Um, I, I think at that point, really the only growth you're gonna have is from new home construction. Uh, so, you know, in a way, our entire business model is kind of in phases, right? It's some acquisitions, very, very few acquisitions, but acquisitions to start, we have made some 

Jessica Denson (30:36):
Mm-hmm <affirmative>. 

Alex Rozek (30:36):
And then, uh, that gives you kind of immediate cash flow. And then you've got Brownfield builds where you can deploy cash over the, say, the next six to 12 months. Our projects right now are about that period of time, we can start them now. They should be done within a year, uh, based on their size to generally speaking. And then the greenfield builds are more like 18 months to 24 months. Those are, you know, by the time you ink that deal, uh, the developer takes possession of the, the lot might actually do the development of the lot, might sell it to a home builder. A home builder goes vertical, starts selling homes in that neighborhood. You know, that takes some time. Mm-hmm <affirmative>. Um, and, and so that's why I say even like the, the near term deals, there might be year and a half or two years away. So if you can generate cash from the companies you control now, and you can put that into the brown fields, that, that, that can generate more cash, you can put that into the green fields, and then you can continue to recycle those cash flows for yourself and for your partners and, and generate really good returns. 

Jessica Denson (31:36):
Um, you mentioned being future proof, uh, which, you know, everybody talks about AI and, um, it's, it's hard to even imagine what the next emerging technology will be. Uh, is that the pain point that you're hearing from a lot of people, is like, we wanna make sure that we're not having to come back and do this again. 

Alex Rozek (31:54):
Well, I, I just noticed that myself. I lived in Boston for 14 years mm-hmm <affirmative>. And we had, you know, uh, cable, that was all, uh, all that was available to us in Back Bay. You notice little things like, uh, you know, when I had my first, my first, uh, kid, uh, and, and we had dogs before that. So <laugh>, you know, whatever, whatever number of pictures are on my iPhone, it's like, it's like dogs and kids, right? Right. And

(32:20)
You're constantly taking pictures of 'em. It's just a ridiculous number. 'cause they're unlimited. I, I would notice these funny things. Like I would take pictures of, you know, whatever, and, and then try to go on like iCloud and see 'em, and they were never in there. And, and, and it was because like, it just took so long to upload from the, if I turn the phone off and put it on, you know, uh, wireless or something, they would, it would load up. Uh, but the, the coax at my, at the brownstone we lived in was, uh, it was just really slow, the upload speed. Uh, when I am here in Vermont, we have fiber. It's instant, you know, just like you take a picture, it's in the cloud, you can share it. Like, it's just, it's just interesting the, the little things. Like I am, obviously, I work remotely, so I'm constantly on, uh, yeah. 

Jessica Denson (33:06):
I work remotely as well, so I can, 

Alex Rozek (33:07):
Yeah. You know what I'm talking about video calls, like, that'd be completely impossible. And I can, it's, it's, I can always tell when there's that one person that's on the call and they have a really bad internet connection, <laugh>. Yeah. And they're like, their phone, you know, their video's, uh, freezing. And it's like, oh, yeah, I lost that last few words. It's like, it was like always one of those people, right? That mm-hmm. That's still on a bad connection. You feel bad for 'em. And a lot of times they're in the city. Uh, and, uh, for me, I find that, uh, to be the case. And so it's just interesting that, um, you know, not even, we're not even talking about ai. I mean, we're talking about like basic, I've got nest cams because we wanna watch our kids, you know? Right. I can make sure that like mm-hmm.

(33:47)
You could see into the, into the kids' room, uh, or you know, like, and if you don't have a good enough internet connection, they really don't work on, you know, just having video in the house, uh, or anything that's going up to the cloud. And, and for sure, I mean, like I said, I have four kids, so we're at Disney plus all the time. <laugh>, you know, uh, there's nothing worse than, you know, you're trying to put on, uh, you know, uh, Incredibles or something like that. And if you had to wait for it to buffer, you're like, oh, well, you know, uh, so it's just nice to be able to have that on all the time. I do think, as someone who, um, is trying out new stuff all the time, I'm, I'm fascinated with all the changes that are coming on right now with ai. I mean, I, I use it every day. I don't think I've used Google in like six months.

(34:37)
Yeah. <laugh>. It's just, it's just a weird thing, not, not on purpose. Mm-hmm <affirmative>. Just now it's just constantly, I'm just going into AI to ask for something, or to have it do something or help me write something or help me work on a spreadsheet, um, and find it I immensely useful, uh, uh, and, and increasingly so. So I have no idea what that's gonna look like in even a year. Forget about like five years from now. So with the amount of bandwidth that people, I just, I, it's hard to imagine. I think the numbers that I've seen are something like 30% year over year on average increases in data utilization. Uh, so 

Jessica Denson (35:15):
It's crazy. Yeah. It's, it's like, right? 

Alex Rozek (35:18):
I 

Jessica Denson (35:19):
Mean, it's like, it's Yeah. Like rolling downhill <laugh>. 

Alex Rozek (35:21):
Yeah. It, it's, it's, it's hard to imagine because I think, I think I could be wrong sort of ing these numbers, but I think I'm directionally right. I mean, on wireless, you know, mobile, I think average users maybe like 17 gigs a month or something like that. Uh, on, on wired home use, it's like 700, uh, you know, getting close to like a terabyte, right? Mm-hmm <affirmative>. I mean, it's, it's, it's massive. And, and you're like, well, what is that? And it's like all the apps you're using, I mean, how you got your watch, your, your phone, your, your iPad, all the apps that are on there, it's streaming video. It's each person Yeah. For each person. Yeah. They're watching. Exactly. All the social media video games are a big one. I mean, I, I think, uh, and, and they're just more and more applications all the time as they become more useful.

(36:12)
So, you know, again, I just say there aren't, there's only like four or five sort of pipes at most that are coming in and out of anyone's home on any given day. There's, you know, like water, electricity, sewer, <laugh>. Yeah. Uh, you know, gas, maybe if you have gas, uh, and, and then, and there's pipe that brings ones and zeros in. And I mean, there's only one of those pipes you're using 30% or more of that every year. You're not using 30% more water every year, or 30% more electricity. You're probably getting, using less electricity. If anything, it's becoming more, um, efficient. So, you know, like in a short, what are we gonna be using multiple terabytes of data on average in, in a short amount of time per month? I mean, yeah. It's not unrealistic. I, I just don't know what's gonna be on that. Is it gonna be, you know, a, a, an AI that does everything for you from your shopping to your travel to your <laugh>? Yeah. You know, talking to other, to 

Jessica Denson (37:10):
With people. Yeah. <laugh>, 

Alex Rozek (37:11):
I have no idea. Um, I some distributed compute model that, you know, people not gonna earn money at home if they make their computers available to do. Yeah. I, I just have no clue. 

Jessica Denson (37:21):
Yeah. 

Alex Rozek (37:21):
Um, so, 

Jessica Denson (37:22):
Well, um, I, I can understand why you and Scott are, are, uh, partners, because <laugh> you also, you, you, you also have a lot of that same energy to you. And when you talk about this, you get excited and it's easy to see why people would be drawn to work with Mac Mountain. Um, I, I just have two more questions and I'm gonna let you go for the day. Uh, one, um, your website says partnerships that build broadband subscribers. So you've talked about how you help set up and work with that. How do you help, um, is that part of the light craft side of things that you help build those subscribers for these businesses? Absolutely. 

Alex Rozek (37:59):
Yeah. I, I chose those words very carefully. One of the big things that I see in my opinion, a mistake that's often made is people in the broadband business, um, are, it's obviously a, a business that has quite a men a a number of engineers, which is a good thing. But people forget that. Uh, and, and I always say this, it's funny, people I'll hear hear people describe broadband networks and like, they describe it in how many miles of fiber there are or, or in how many passings 

Jessica Denson (38:30):
Mm-hmm 

Alex Rozek (38:30):
<affirmative>. And, and I'm always like, why does that matter? If you really think about it, like if you own ice cream truck, would you care how many homes it passed a day? Or do you care how many homes bought ice cream <laugh>? Right? Like, like that's all that really matters. Like, if the guy comes back and he is got all the ice cream and you drove around in donuts a hundred miles, like that doesn't matter, right? I mean, you could do the same thing of fiber if you don't have any customers, it doesn't matter. And so I think the customer needs to be the most important thing that you focus on, because if you're not focusing on getting broadband subscribers, you, that's where a lot of things go really wrong. Where for whatever reason, now that's the market selection or costs, or, you know, over-engineered or whatever, you end up with a low take rate or a low number of subscribers, that means a low amount of revenue and you don't cover your costs and you get a bad return. Um, and then, and then, you know, if you do a, a bad enough, you, you blow up. Um, the, so the key there being broadband subscribers. So if there's something that we focus on, it's delighting the customer. And there's a lot that goes into that, um, from, from marketing, customer acquisition to, um, we, we call it customer lifecycle management. But to answer your question, all the operations are in light craft. The company is Mac Mountain. So the Mac Mountain, think of it as like the Mack Mountain's, the holding company. 

Jessica Denson (39:53):
Mm-hmm 

Alex Rozek (39:53):
<affirmative>. Uh, and then you have, uh, you know, the operations, uh, that make it go inside. We just wanted to name that differently because, uh, for a couple different reasons, just to, we use a lot of different names for things, you know, whether it's Blueprint Broadband or Light Craft, or our, our first, um, special purpose vehicle is Pioneer one, just so that people know we're what we're talking about. We're talking about something different. Like, so I try to, when we're talking to home builders, I want them to have a brand geared towards home builders and developers, blueprint Broadband, that is really for them. If we, we also operate a lot of other brands. For instance, up here in, uh, new England, we might work with multiple communication union districts. They all have their own brands, and we will operate through them. No one will ever have a Mac Mountain internet account. 

Jessica Denson (40:44):
Gotcha. 

Alex Rozek (40:44):
Uh, but, but they would, they wouldn't know it. But it's all being operated by Light Craft, which is part of Mack Mountain. So Mack Mountain, I think is just more of like the, the vision, uh, and, and light craft's more of the execution. Um, and so, yeah. Yes, when I say partnerships, we're partnering with all those people that I've talked about, and then of course with investors who like the returns, but maybe don't have a business that could actually do all of that. And so that, if that's, that's what we bring to the table, 

Jessica Denson (41:12):
That's, I think that's, I think it's a great model. And I know, um, and you, you may be getting into this already or may not, but I know a lot of small, I've talked to a lot of smaller ISPs that struggle with some of that, that other stuff that you need to do to build your subscribers and that kind of thing. So, uh, I could talk to you all day. In fact, you, me, you, me and Scott all need to get together. <laugh>, <laugh> Sure. Have a barbecue or something. <laugh>, yes. But 

Alex Rozek (41:36):
Know where we like to go. Secret about Scott. 

Jessica Denson (41:38):
Oh, what's that? 

Alex Rozek (41:39):
Scott Prob, I don't know if this has come up. So you ask him next time you talk to him, and I, I'm very open about this, but, but I don't know if he, if he offers this about himself as often as, as I do. I'm a huge Disney fan. Uhhuh, so I grew up a big Disney fan. Uh, I take, I, I I, I kind of joke that kind of the reason I had kids was so I could have an excuse to go to Disneyland on a regular basis, was otherwise I'd just be there by myself. Uh, and, uh, and so, no, I mean, I love it. And, but Scott loves it too, so, 

Jessica Denson (42:08):
Oh, I 

Alex Rozek (42:08):
Only bring that up because I was gonna say, if we, you know, he's in Colorado, we could, 

Jessica Denson (42:12):
I'm in Vermont, so Orlando 

Alex Rozek (42:13):
Just, we, we could go to Orlando. We could, we could just for no, for no good reason. We just head out to Anaheim. Uh, maybe do it. We could meet out there sometimes. But yeah, ask Scott about that. 'cause he and his wife is a huge, or a huge fan, 

Jessica Denson (42:24):
And Oh, I, I've never been to Disneyland. I've been to Disney World, but never Disneyland. Okay. So it might need to happen. Okay. 

Alex Rozek (42:30):
Well, Disneyland, we'll have to, we'll put that on the agenda. So 

Jessica Denson (42:32):
Yeah. I love it. Well, finally, what is the one thing you'd like our listeners to take away about Mack Mountain today? Um, you know, the one thing you want them to walk away thinking. 

Alex Rozek (42:45):
I love that you mentioned a lot of small ISPs looking for opportunities. I imagine you probably get of your listening base, you know, many of them listening to this sort of podcast. So, uh, whether it's a small ISP or a, uh, in the case of a small ISP, you know, often, uh, you'll see, uh, they, they might feel like their options are limited if they wanted to grow, uh, there was, uh, you know, they can sell or they can take on a lot of debt. And if those options are unattractive and they're interested in a more of a partnership model, I think that's something that, uh, uh, they should give us a call because that's, that's exactly what we're doing. I mean, um, uh, blueprint Broadband is a startup partnership. A partner in that is Scott. Uh, and we're looking at some other partnerships right now.

(43:37)
Same thing, whether it's a home builder or a developer, or a municipality or a small regional internet service provider, there's another path. And that's partnership where we try to figure out how to, uh, you know, split the costs and then split the cash flows. And if that's attractive, you know, we'd love to talk to you because there is great value in the local knowledge and the, um, you know, the small customers, I see it up here. Uh, you know, you can start from that base and with the right partner scale nicely and, uh, and, you know, run faster together than you can on your own. So that, that's what I think I'd want people to just see is that, you know, we, we can be a, a really good solution, uh, and a good partnership for the, for the right, uh, for the right people. And uh, and that's how we think about things. 

Jessica Denson (44:28):
Well, that's a great place to leave it, and I'll include a link to the company's website in the description of this podcast as well as to your LinkedIn and Scott's LinkedIn so people can follow you guys. 

Alex Rozek (44:38):
Great. <laugh>, that's awesome. Thank you very much. 

Jessica Denson (44:40):
Yeah, thank you again for taking time today. I've really enjoyed talking with you, Alex. 

Alex Rozek (44:44):
Likewise, 

Jessica Denson (44:50):
Again, we've been talking with Alex Ick, founder and CEO of Mac Mountain. And again, I will include a link to the company's website in 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 connect to nation.org or look for the latest episodes of Connected Nation on iTunes, iHeartRadio, Google Podcast, Pandora, or Spotify.