Bristol Virginia Utilities: Case study of a successful municipal fiber-optic overbuild Wes Rosenbalm, PE President & CEO
Our motivation Fiber-optic infrastructure originally developed for internal communication Substations for SCADA (Supervisor Control & Data Acquisition) Initially deployed broadband applications to local schools and government First VoIP business hooked up in February of 2001 Survey of customers in 2001 showed demand for broadband access, better quality & price stability 97% of residents satisfied with BVU service 91% of businesses think BVU should provide telecom 86% of businesses think fiber-optics will or may enhance economic development Up to 72% of residents and 78% of businesses say they would switch to BVU for telecom services Inability of private industry to economically justify a fiber- optic overbuild
Why FTTU (Fiber-to-the-user)? Provides highest bandwidth capability available Future-proof No line of site issues The cost differential between fiber and HFC was only about 20% BVU’s entry into telecom happened during a downturn in the industry when equipment had become more affordable Power line carrier was not a viable alternative Voice, video & data ready
Expected benefits Boost economic development Lower prices and increased bandwidth allow current businesses to stay competitive Fiber-optic infrastructure will attract high tech companies Provide access to cutting-edge services and future technology Controlling home devices Improve quality of current voice, video and data services FTTU has no active electronics so no interference Local presence & local customer support Introduce competition to Bristol, VA and lower service costs CATV competitors in the area have already lowered rates Improve the quality of life for our customers/citizens Provide access to new technology & services Save them money & make advanced technology more affordable
Legal challenges 1999: State law prohibiting localities from offering telecom. Early 2001: BVU filed judgment to declare the statute invalid. On May 16 th the statute was declared unenforceable session: SB 245 authorized localities to provide telecom services. December 2002: Charter obtained permanent injunction which enjoined BVU from offering CATV under “Dillon’s Rule.” 2003 session: SB 875 passed, authorizing BVU to offer CATV. BVU began offering all services July 1, 2003
What services can BVU provide? Cable Television Analog Digital PPV Video on demand HDTV Personal video recorders Phone & Long Distance VoIP Dial tone & LD Calling features Calling cards Toll-free numbers Video conferencing High Speed Internet Dedicated synchronous connections Web hosting Server co-location Firewall Utility Applications Remote meter reading SCADA Load management Traffic light control Smart appliance control Other Applications Home security Telemedicine Video arraignments Distance learning
How are we doing? BVU has over 3,400 OptiNet customers (out of approx. 10,000 homes/businesses passed) BVU is meeting and surpassing year-end 2004 revenue & customer goals now 2,525 phone customers with 800 pending FYE 2004 goal: 3,427 2,239 cable customers with 789 pending FYE 2004 goal: 2,989 1,417 high speed Internet customers with 343 pending FYE 2004 goal: 1,353—have already exceeded goal High speed Internet penetration: 63% of cable customers 1,056 dial-up Internet customers Long distance penetration: 83% Calling feature penetration: 62%
BVU helps bring broadband to SW Virginia Federal EDA grant for $1.6 million to construct a 51 mile fiber-optic extension from Abingdon into Russell and Tazewell Counties Virginia Tobacco Grants for $2 million will allow BVU to: Deploy fiber-optic connections in Abingdon Partner on a fiber extension from Abingdon to Richlands through Lebanon Lease a fiber-optic backbone from Abingdon to Washington, Smyth & Wythe counties Install fiber-optic lines to businesses in Grayson County Install a fiber network to the Mendota community in Washington County BVU has already invested $30 million in its infrastructure in Bristol, VA Next steps
Robin Griswold, BVU residential customer Was able to use the savings from her BVU phone services to upgrade to high speed Internet and is still paying less than she was previously for phone & dial-up Internet. Dr. Steve Greiner, President, Virginia Intermont College VI will save over $18,000 on cable television service alone this year, which allows them to provide a quality education to their students at a more affordable price. Eric Clark, BVU residential & business customer, Director of the Bristol Area Boys & Girls Club Eric is saving $50-$60 per month at home, and nearly $200 per month at work on his communication services. He was also able to justify upgrading to high speed Internet at home due to the cost savings he receives.