Broadband Boosts Economic Growth in Bristol
By Cathy Swirlbul
Public Power magazine
March-April 2007
Bristol, Va., a community of 18,000 residents in southwest Virginia, is home to the Bristol Motor Speedway for NASCAR events and the Country Music Alliance Museum. The city is one of the first entities in the nation to offer voice, data and video to residents via fiber-to-the-premise (FTTP) technology. All this was made possible by Bristol Virginia Utilities’ (BVU) 800-mile and growing broadband network run by the utility’s OptiNet division. The network has been funded with revenue bonds and grants from the Virginia Tobacco Commission’s technology committee.
“Our City Council and board understood that we needed to have these services,” said Wes Rosenbalm, BVU’s president and CEO. “Since we are a third-tier city, we knew it was going to be some time before the market made an investment in our community. We had to take matters into our hands and give ourselves another chip in the economic development game. This was also an opportunity to improve our citizens’ quality of life.”
The broadband network will soon make a big difference in the region’s economy, which has been lagging in recent years with the decline of the agriculture, coal mining, tobacco and textile industries. CGI Inc., a software developer, and Northrop Grumman, a data backup service provider, are building data centers in nearby Russell County. These two companies employ about 700 people with an average salary of $50,000, which Rosenbalm said is extraordinary for their community.
“Both companies have attributed a part of their location decision to the fact that they can get redundant broadband service with both Verizon and OptiNet in the area,” said Jerry Brown, Bristol’s director of economic development. So far, Bristol has used the network as a tool to retain the region’s current employers. “We wanted to have the network up and running for a few years before we marketed it to outside companies,” Brown said.
The network began serving municipal offices five years ago and the private sector just three years ago. OptiNet currently serves 7,400 customers, 900 of which are businesses.
“I don’t think there were any companies planning to leave the region, but several saw the network as a strong reason to stay,” Brown said. “Our region has a diversified manufacturing economy with everything from auto parts to software development. Some of our companies purchase raw materials over the Internet on an hourly basis. Others have several locations in the region that must be interconnected.”
Bristol’s economic development committee recently hired a public relations firm to help market the network. The city is also negotiating with two new companies that may locate in the area.
Although the region is just beginning to enjoy the economic benefits of the network, it was a hard-fought battle with area incumbents to build it in the first place.
Bristol’s broadband quest began in 1999, when the utility linked its electric substations through a network. Two years later, BVU made plans to connect schools, government agencies and eventually businesses and homes. The state Legislature threw water on their plan when it banned cities from providing retail telecom service. Bristol hired telecom lawyer James Baller to challenge the Virginia law in court. Baller argued that the law violated the federal Telecommunications Act of 1996, which prohibited states from preventing “any entity” from providing telecom service. A federal district sided with Bristol.
“Applying the rationale of the Bristol decision, the U.S. Court of Appeals for the Eighth Circuit reached a similar result in a case involving a Missouri barrier to municipal entry,” Baller said. “Although the Supreme Court of the United Stated overruled the Missouri decision in 2004, the Bristol case gave us a critical three-year window to get numerous municipal broadband systems on stream and to develop a strong coalition of municipal broadband supporters.”
“We have raised the profile of Bristol from an economic development standpoint,” Rosenbalm said. “We have companies calling us to inquire about the area because we’ve received a considerable amount of media coverage about our state-of-the-art infrastructure.”
