Transcript Bristol Virginia Utilities:

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 fiberoptic overbuild
Why FTTU (Fiber-to-the-user)?
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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 16th the statute was declared unenforceable.
• 2001 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
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Analog
Digital
PPV
Video on demand
HDTV
Personal video recorders
• Phone & Long Distance
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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
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Remote meter reading
SCADA
Load management
Traffic light control
Smart appliance control
• Other Applications
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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%
Next steps
• 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
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.