Muni fiber networks bounce back

“The $40 million will come to a quasi-public institute — the Broadband Institute — which has the ability to do things that a line agency could not in terms of interacting with the private sector,” Dubendorf said. “We will find places to invest at places where public dollars can be spent and not have to be replaced every three years.”

Bristol, Burlington and others are paying their way by selling triple-play services to residents and showing a local economic payoff. Bristol's OptiNet has a 65% penetration rate, or about 9000 customers, who pay about $10 less per month than the local cable rates for basic cable. BVU estimates its business and residential customers have collectively saved more than $9.7 million between 2005 and 2008 over what they would have had to pay incumbents.

But the bigger payoff is in economic development, Rosenbalm said. BVU's 800-mile fiber network, some of it built in partnership with the Cumberland Plateau Co. — a company 50% owned by BVU — has helped lure two major new employers to the region, bringing 700 new jobs. Defense contractor Northrop Grumman came in 2005 with 400 jobs and specifically cited BVU's available infrastructure as a key reason for the decision to put its new facility in Russell County, Va. CGI, an IT and business process services firm, opened its new facility in late 2007, also in Russell County, and is served by CPC Optinet, the BVU partnership.

“We had two very good success stories that happened with Northrop Grumman and CGI, which brought in 700 new jobs with average salaries of $50,000,” Rosenbalm said. “The average salary here is $24,000 to $27,000. And we have a couple other deals we are looking at internally.”

The BVU network's success is particularly significant because Bristol was in bad financial straits before it was built, Baller said. “All of its major industries were cratering at the same time; downtown was boarded up,” he said. “Think what it means in a town of 18,000 to see 750 to 1000 high-paying jobs move in, paying twice the local salaries. Think of what that does to a community where each of those jobs generates income that is buying soccer cleats and haircuts and building materials and homes, pushing property values up, raising the tax bases, generating dollars spent in the local economy so someone else has a dollar.”