Connecting Tobacco Country

When several tobacco companies were required to pay states a large settlement in the late 1990s, some states put that money in general coffers. But Virginia instead opted to use it toward economic development projects to help people in tobacco farming areas generate new revenue sources.

One of those projects was the construction, from 2004 through 2006, of Mid-Atlantic Broadband Cooperative, a fiber network covering a large part of the state that provides wholesale connectivity to a wide range of service provider members. Today that project has achieved some significant success stories — including helping to attract two major employers to the area, in part because of excellent communications capabilities.

That's especially good news for a region that has seen significant unemployment with the decline of the tobacco industry. “We had three factories shut down, and in some towns the unemployment was higher than the population because people would commute in,” said Tad Derisa, general manager for MBC.

One of the employers investing in the area is Swedwood, a manufacturing unit of furniture retailer IKEA. Swedwood built a manufacturing facility in Danville that has created more than 600 jobs. A significant appeal of the Danville location was economical high-speed connectivity to company headquarters in Sweden.

The MBC network is fortunate to have diverse connectivity to a major Internet exchange point in Ashburne, Va., to which Swedwood's Sweden-based service provider — along with 190 others — already has connected. Danville, which operates a municipal broadband network, purchased connectivity to the Ashburne Internet point from MBC, which it resells to Swedwood. The net result, Derisa said, is that Swedwood was able to purchase connectivity to Sweden for less than the local incumbent telco (one of the major U.S. carriers) would have charged for DS-3 connectivity.

Another MBC success story is a data center for a major U.S. IT company. The company has bought circuits from three different Tier 1 carriers, which are purchasing wholesale connectivity from MBC. To ensure geographic diversity, connections to two different Internet exchange points were made. The IT company already has hired more than 40 high-tech employees for the data center and plans to eventually double that number.

To support the data center installation, Derisa said, “We had one and a half miles of fiber to build with a railroad crossing.” The client needed an OC-3 circuit within 45 days — and was delighted when the circuit was turned up in 36 days. “They're not used to a rural mentality that says, ‘You've got a project; it's done,’” Derisa said.