2010 Annual Report

BVU OptiNet, a nonprofit division of Bristol Virginia Utilities (BVU), serves residents, businesses, schools, and public agencies in areas of southwestern Virginia, including the city of Bristol. When it launched in 2003, it was the nation’s first community fiber-to-the-home (FTTH) network to offer a “triple-play” package of services—phone, television, and internet—to customers.

The network got its start in 1999, when city-owned BVU built a data center and began using fiber optic technology for government communications. At the time, BVU hoped to identify a provider to offer broadband services to local residents and businesses, since Virginia law prohibited the city from doing so itself. It soon became clear, however, that establishing an independent, nonprofit telecommunications authority was the best solution.

BVU recognized that access to fiber would be a critical factor in bringing jobs to Bristol and surrounding areas, and its foresight has paid off. In 2007, defense contractor Northrop Grumman and information technology firm CGI expanded their offices in nearby Lebanon, Virginia, part of OptiNet’s service area, and hired 700 new employees.

BVU faced many legal obstacles in creating a FTTH network, including an injunction by the local cable provider.

Location

Bristol, Va.

Maximum Download/Upload Speed*

100 Mbps/25 Mbps

Subscribers*

9,500

*As of July 1, 2011

Cedar Falls Utilities (CFU) provides water, electricity, natural gas, and cable television and Internet access to the residents of Cedar Falls, Iowa. Founded in 1913 as a municipally owned utility company, CFU began offering broadband in 1996 after a community referendum in 1994 showed that the public favored adding the service as infrastructure for the city’s economic development and to help improve residents’ quality of life.

CFU is currently updating its system by constructing a fiber-to-the-home network that will reach most areas of the city by 2012.

CFU has not encountered significant legal obstacles in developing its network.

Location

Cedar Falls, Iowa

Maximum Download/Upload Speed*

100/100 Mbps

Subscribers*

10,000

*As of July 1, 2011

Chelan County PUD provides retail electric, water and wastewater to the residents, businesses, schools and institutions, and government of Chelan County, Wash. In 1999, it began to build its fiber-optic network. The fiber system provides wholesale broadband access to approximately 70 percent of the county.

The district’s fiber network provides opportunities for the community that would not otherwise exist. For example, the network provides doctors at Lake Chelan Community Hospital access to world-class medical specialists, which has literally saved the lives of local residents.

As a public utility district (a nonprofit entity created in 1936 by the voters of the county), Chelan County PUD is barred under state law from selling directly to retail customers. To accommodate those restrictions, Chelan County PUD operates as a wholesaler and delivers services through a network of 12 Internet service providers, which offer various packages and prices.

Location

Wenatchee, Wash.

Maximum Download/Upload Speed*

1 Gbps (1024 Mbps)/1 Gbps (1024 Mbps)

Subscribers*

Approximately 10,000, through 12 service providers

*As of July 1, 2011

EPB Fiber Optics is part of EPB, an agency of the City of Chattanooga founded in 1935 to provide electricity to the region. EPB now serves metropolitan Chattanooga, Hamilton County, and surrounding areas of Tennessee and northern Georgia. In 2000, EPB established EPB Telecom (now EPB Fiber Optics) and began offering communications services to its business customers; over the next few years, EPB Telecom expanded to include Internet services and a fiber optic system.

In 2007, EPB developed a plan to offer fiber-to-the-home (FTTH) services to all customers; the plan was approved unanimously by the City council with strong public support. In 2008, EPB secured a bond to begin construction of the fiber network for a smart grid, which will increase the efficiency and reliability of the electrical system and, as a secondary benefit, carry broadband services.

EPB offers all customers—business and residential, urban and rural—the fastest Internet, television, and phone service available, a source of great community pride. Recently, for example, a group of local entrepreneurs created a summer internship program, Lamp Post Lab, to attract college students to Chattanooga to answer the question, “What do you do with the fastest Internet connection in the world?”

EPB Fiber Optics has faced numerous lawsuits. The Tennessee Cable and Telecommunications Association sued in 2007, and Comcast joined a year later. As private companies have done in other communities, they alleged that EPB was cross-subsidizing its “triple-play” Internet-TV-phone offering with revenues from its power services. EPB won both of these lawsuits.

Location

Chattanooga, Tenn., Hamilton County, and surrounding areas

Maximum Download/Upload Speed*

1,000 Mbps/1,000 Mbps

Subscribers*

27,971 residential, 2,800 commercial

*As of July 1, 2011

The City Council of Salisbury, N.C., voted to establish a “fiber-to-the-home” broadband network in 2008, responding to years of public frustration that important areas of the city still lacked high-speed Internet. At the same time, they hoped to capitalize on the creation of a biotechnology research center in the nearby town of Kannapolis by billionaire David Murdoch. An investment in broadband infrastructure, they reasoned, would attract new economic opportunities for their community.

Salisbury had taken its first official step toward establishing a community network in 2006, when the City council authorized a feasibility study. In 2008, Council members visited Wilson, N.C., which had recently created its own fiber-optic network; that visit influenced Salisbury to begin construction of a fiber-optic network in 2009. Fibrant launched a beta version of its service in November 2010, and officially opened for business in December 2010.

Throughout the construction process, the City Council worked hard to push back against proposed state legislation aimed at making it more difficult for local governments to create municipal networks. Supporters of municipal networks were initially successful and defeated two anti-community network bills, but in 2011 the opposition finally succeeded and the North Carolina legislature adopted legislation that imposes significant financial and procedural restrictions on community networks. The networks in Salisbury and Wilson have both been exempted from these restrictions.

Location

Salisbury, N.C.

Maximum Download/Upload Speed*

1 Gbps (1024 Mbps)/ 1 Gbps (1024 Mbps)

Subscribers*

Over 1,000

*As of July 1, 2011

Highland Communication Services got its start in early 2007, when the city manager of Highland, Ill., recommended that the City Council consider building a publicly owned fiber optic network to expand the choice of phone, television and Internet services available to local residents and businesses. The city manager surveyed community residents and found substantial interest; as a result, the city council commissioned a feasibility study.

Two years later, in April 2009, the public voted overwhelmingly to approve the findings of the study and authorize development, using bonds backed by revenues from the city’s public electric utility. Construction of the fiber network began in March 2010, and the first customers received service in February 2011. Development will continue over several years, depending on the availability of financing.

Highland Communication Services has not encountered significant legal obstacles in developing its network.

Location

Highland, Ill.

Maximum Download/Upload Speed*

100 Mbps/100 Mbps

Subscribers*

Approx. 100

*As of July 1, 2011

In 2002, the borough of Kutztown, Pa., launched the state’s first fiber-to-the-home telecommunications service, Hometown Utilicom. The system’s planners hoped that, in addition to improving the quality and range of services available to the borough’s 5,000 residents and local businesses, the new network would save the government money and generate revenues for the community.

Aggressive pricing by incumbent providers has been a challenge for Hometown Utilicom, but lower across-the-board rates have meant savings for local customers—an unintended benefit of the competition the new network brought to the market. Hometown Utilicom also provides Internet services to the borough government, saving roughly $80,000 per year. The system is currently being upgraded to enable 100 Mbps symmetrical service to all subscribers.

In 2003, the Pennsylvania legislature adopted a bill prohibiting similar networks, but Kutztown was able to proceed.

Location

Kutztown, Pa.

Maximum Download/Upload Speed*

8 Mbps/8 Mbps

Subscribers*

1,389

*As of July 1, 2011

Affiliated with the local, publicly owned Lafayette Utilities System (LUS), LUS Fiber was formed in 1988 as a way to improve the operations of the system’s electricity, water and wastewater facilities. In 2004, seeing the potential to serve the community in a new way, the city of Lafayette proposed establishing LUS Fiber as a “fourth utility.” Voters approved a bond issue to finance the fiber network in 2005; construction began in 2008; and the first customers got service in early 2009. The system was completed in 2010.

LUS Fiber now offers high-speed Internet, video and phone services to the entire city of Lafayette, including the local University of Louisiana campus. Within the system, subscribers can connect with one another at 100 Mbps speeds, enabling, for example, businesses to upload and download large files in a flash, or professors to stream classes online to students. The fiber network has also become a key selling point for economic development; Southern Business and Development News recently included Lafayette on its list of Ten Places in the South Where Digital Media Has Clustered and specifically cited LUS Fiber as an asset for technology-intensive businesses.

Development of the system was significantly delayed by lawsuits filed by private telecommunications and cable TV providers and by state legislation that threatened its financial viability.

Location

Lafayette, La.

Maximum Download/Upload Speed*

100 Mbps/100 Mbps

Subscribers*

More than 10,000

*As of July 1, 2011

The Utah Telecommunication Open Infrastructure Agency, or UTOPIA, was established in 2002 by 16 Utah cities that collaborated to provide fiber optic infrastructure for residents and businesses. The cities created the network and own it, but an open access model allows private-sector telecommunications companies to use the network to offer high-speed Internet, phone and television services.

In 2011, UTOPIA began a major growth campaign to expand the network further into its member cities. Part of this growth is financed by $16 million in federal stimulus funds through the American Recovery and Reinvestment Act. The expansion will add nearly 400 institutions—schools, healthcare providers, public safety agencies, and governmental facilities—in eight cities of the UTOPIA network.

UTOPIA has encountered legal challenges from incumbent providers.

Location

West Valley City, Utah

Maximum Download/Upload Speed*

10 Gbps/10 Gbps

Subscribers*

Approximately 10,000

*As of July 1, 2011

Like many small towns in Minnesota, Windom, a community of 4,800 residents, has long owned its electric and telephone infrastructure. Since 1984, the city has also operated its own cable TV system. By 2002, that system had become obsolete, and residents voted to replace it with a fiber-optic system that could deliver telephone, cable TV and high-speed Internet.

The decision to build their own municipal network was fueled in part by local frustration with the incumbent provider, which had recently bypassed Windom for DSL service. In stark contrast to the incumbent provider, Windomnet has been very responsive to local needs. For example, Fortune Transportation, a trucking company on the outskirts of town, was considering closing their Windom office and leaving the area. Although Fortune was a mile outside the municipal provider’s service area, Windomnet expanded its network to reach the company in 30 days.

Windomnet has not been challenged legally or legislatively, but the system has been heavily marketed against by the incumbent provider.

Location

Windom, Minn.

Maximum Download/Upload Speed*

1 gbps (1024 mbps)/1 gbps (1024 mbps)

Subscribers*

1,100

*As of July 1, 2011