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Open Access

In Danville, Virginia, an Early Adopter of Open Access Seeks to Prove the Business Model

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Postcard depicting Danville, Va. from the Boston Public Library used with permission

July 14, 2020 — The United States’ first municipally owned open-access fiber network continues to revitalize the business sector of Danville, Virginia.

Opportunities exist today in Danville and surrounding counties that never could have before, thanks to the city’s open access network, known as Network Danville or nDanville for short.

nDanville is a city-owned open access network consisting of approximately 150 miles of fiber optic cables, which provide Gigabit service to three communities in southern Virginia.

As a result of the network, Danville has transitioned from being known for having the highest unemployment rate in Virginia to being ranked as one of the top digital cities and business destinations in the nation.

“Today, the nDanville network connects hundreds of businesses, has sharply reduced costs for local government, health care providers and local schools, and has introduced more competition into the telecommunications marketplace,” said Joe King, city manager of Danville until 2015, in an interview with Community Networks.

Danville paved the way for open access

At the time of its development in the early 2000s, “nDanville was a visionary project,” according to the network’s designer Andrew Cohill, CEO of consulting firm Design Nine.

In the 1990s, Danville’s economy began to stagnate as the city’s two primary industries, textiles and tobacco, faced adversities. The use of tobacco declined and textile manufacturers began outsourcing labor to save money.

Postcard depicting tobacco auction in Danville, Va. from the Boston Public Library used with permission

The city was stuck in a duopoly, dictated by two incumbent providers: Verizon and Comcast.

City leaders, economic developers and regional organizations were tasked with creating a model for a public network that would not compete with the private sector.

Other Virginia cities were struggling with lawsuits at the time for this very reason, as Virginia is one of many states that have laws imposing some form of restrictions against municipal broadband.

After much deliberation, leaders decided to utilize an open access model.

nDanville paved the way at a time when open access networks were an untried model in America.

Proponents see open access as a better business model

Open access networks utilize an alternative business model than traditional telecommunications networks, aiming to generate competition to better serve users and overcome incumbent monopoly control.

Unlike more common vertically integrated network arrangements, meaning that one company owns, operates and provides services on the network, an open access network utilizes a horizontally layered business model.

In an open access network, the owner or manager of the network does not supply services for the network. Instead, services are supplied by independent internet service providers.

There are two different models utilized by open access networks: a two-layer model or a three-layer model.

In the two-layer open access model, one entity is the network owner and operator, while multiple service providers deliver services over the network.

nDanville utilizes the three-layer open access model, in which the network infrastructure is owned by one entity such as a company, community-owned enterprise or municipality, the operations and maintenance of services are run by a second company, and the internet service providers selling their services to subscribers compromise a separate third company. In almost all cases, multiple companies operate in the services layer.

Generally, the network owner funds the construction of the infrastructure, the operator oversees construction and maintenance and the providers provide internet service to end users.

The open access network owner remains neutral and offers standard pricing to internet service providers on its network.

Unlike other broadband business models, open access networks offer unique opportunities to benefit all stakeholders and most importantly customers, as competition generated between independent service providers ensures lower prices and higher quality of service for subscribers.

Building open access networks benefits incumbents and internet service providers by lowering the barrier for entry into the market, alleviating the capital heavy infrastructure building process.

Utilizing an alternative business model to the one utilized by incumbents alters the underlying costs, revenue and income potential for the network.

nDanville’s slow and steady growth has proven successful

Because Danville already had ownership of a municipal electric plant, nDanville’s fiber network is operated as a city-owned utility.

This gave the city an advantage to transition with ease, eliminating the negotiation process necessary for pole attachment fees and minimizing overall costs.

Postcard depicting a mill in Danville, Va. from the Boston Public Library used with permission

The city loaned itself enough capital to build a municipally-owned open access fiber network, borrowing a $2.5 million loan from the Danville’s electric utility fund.

The original loan borrowed to initiate building the network was paid off in three years, with 6 percent interest by revenue generated by the network, nDanville then-Network Manager Jason Grey said in an interview with Muni Networks

No Danville taxpayer money has been collected for the construction of Danville’s open access network, he said.

The network was rolled out in three phases to gradually begin serving the city.

The first phase, which launched in 2004, connected 17 Danville public schools to the fiber network to ensure students and teachers had necessary digital technology resources and skills.

The second phase began in 2007 and brought greater bandwidth, speeds and accessibility to businesses located in Danville.

“School and business connections were instrumental in showing that the network over time could pay for itself,” Cohill said.

Today, nDanville passes more than 1,000 business locations. Current customers have access to 100 Mbps fiber connections, capable of delivering up to 10 Gbps connections upon request, according to Cohill.

nDanville is now in its third and final phase, aimed at bringing fiber to the home. As the COVID-19 pandemic forces many individuals to complete work and school from home, supplying fiber to the home is more necessary than ever.

The network began going residential in 2011. After the city initially rejected a more ambitious plan to expand the network more rapidly, the city began offering residential service by connecting 250 homes.

nDanville’s network is continually expanding, utilizing revenue generated each year to continue to build fiber to the home infrastructure.

Now, more than 16 years later, advocates say that Danville’s slow, steady approach has paid off.

The business sector calls nDanville an asset to local commerce

Serving business was a high priority of nDanville. Danville was hit hard by the demise of the tobacco industry and the loss of manufacturing jobs, which put a strain on the local economy.

City leaders knew the capabilities associated with fiber infrastructure, as fiber was already being deployed to about 500 properties in the city’s business and industrial parks before nDanville was born.

Postcard depicting the central business district in Danville, Va. from the Boston Public Library used with permission

Expanding the network effectively transformed the city from a withering tobacco and textile town to a modern global manufacturer, allowing Danville to make a comeback after losing its traditional economic base.

The network aids local and global businesses alike by dramatically reducing the cost of telecommunications.

On average, open access networks aid businesses by achieving price reductions of up to 70 percent. This allots more capital for entrepreneurs and start-ups to invest in the core of business.

The network is also equipped to handle mounting bandwidth demands, giving businesses growth capacity.

The economic development of Danville may have stalled at the turn of the twenty-first century, if the city had continued to rely on the services of incumbents like Verizon and Comcast. 

“As nDanville grew to connect more businesses, the economy began to rebound as well. The most visible results of the network are the companies and jobs that have come to Danville in the past two years,” Cohill wrote.

The city of Danville was able to curb an oncoming economic slump by building an open access network, which effectively altered industry.

The prowess of nDanville makes Danville an attractive site for global manufacturers, who are impressed with the resources that the city has to offer.

Today, the region is one of the top 25 locations in the country for business, exemplified by Zeyuan Flooring International, a wood floor manufacturer, choosing Danville over Los Angeles for its first U.S. facility in 2013. The arrival of the company produced 100 local jobs.

A growing list of companies have expressed interest in utilizing the city’s broadband since it began the fiber to business push.

Continually expanding network infrastructure will likely continue to create jobs in the city.

Principles of open access networks promote equity

A 2004 Danville briefing paper written by King detailing the goals of nDanville stated that “the private sector should take the lead in deployment and operation of broadband networks and services in Danville.”

“The city should facilitate and support this through policies and regulations that encourage private sector investment, competition, and innovation,” King continued.

Open access networks embody the values of universal service by attempting to offer equitable access to underserved areas

Further, these networks level the playing field, ensuring that small and large providers alike can compete to offer services.

Open access networks represent public-private partnerships, indicating that it will take cooperation and effort from both to close the digital divide.

Contributing Reporter Jericho Casper graduated from the University of Virginia studying media policy. She grew up in Newport News in an area heavily impacted by the digital divide and has a passion for universal access and a vendetta against anyone who stands in the way of her getting better broadband.

Open Access

Financing Mechanisms for Community Broadband, Panel 3 at Digital Infrastructure Investment

Panel 3 video. Join the Broadband Breakfast Club to watch the full-length videos from Digital Infrastructure Investment.

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Video from Panel 3 at Digital Infrastructure Investment: Kim McKinley, Chief Marketing Officer, UTOPIA Fiber, Jeff Christensen, President & CEO, EntryPoint Networks, Jane Coffin, Chief Community Officer, Connect Humanity, Robert Wack, former Westminster Common Council President and leader of the Open Access Citywide Fiber Network Initiative, and moderated by Christopher Mitchell, Director, Community Broadband Networks, Institute for Local Self-Reliance

For a free article summarizing the event, see Communities Need Governance Seat on Broadband Builds, Conference Hears: Communities need to be involved in decision-making when it comes to broadband builds, Broadband Breakfast, November 17, 2022

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Open Access

In Video Session, Christopher Mitchell Digs Into Community Ownership and Open Access Networks

The conversation dealt with open access networks, and whether cities are well-suited to play a role in developing them.

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Screenshot of Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance.

September 29, 2022 – Community-owned, open access networks protect communities against irresponsible network operators and stimulate innovation, said Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, at a Broadband.Money Ask Me Anything! event Friday.

“AT&T, Frontier, these companies have a history of failing to meet community needs,” said Mitchell. “If I had a choice between open broadband fixed wireless and fiber from AT&T, I’d be really, you know, checking it out.”

“[AT&T] is a company that will sell your data at the first opportunity, it’s a company that will raise your bill every chance it gets,” Mitchell added.

ILSR’s director said that in communities in which local ownership isn’t possible, such as in a town with a deeply corrupt government, there still exist contractual provisions that can maximize local control.

A right of first refusal, for instance, gives communities the option to purchase their local network if the original provider chooses to sell. Mitchell also suggested communities write performance-based contracts that institute penalties for network partners who fail to meet clearly outlined performance benchmarks.

Conversation entered realm of open access discussion

The wide-ranging conversation also dealt with the issues of open access networks, and whether cities are well-suited to play a role in developing them.

 “The cities are the custodians of their rights of way – they need to be, they must be,” said Drew Clark, editor and publisher of Broadband Breakfast. Because of the cities inherent role as custodians of their rights of way, Clark said that open-access networks provide cities with the opportunity to own the infrastructure portion of their broadband networks, while still offering private companies the ability to serve as network operators or application service providers.

Mitchell agreed that open access networks can be critical to broadband innovation. “We need to have millions – ideally tens of million – of Americans in thriving areas that have open access to kind of see what we can do with networks,” he said.

“Maybe a lot of those ideas won’t work out, but I think we don’t want to foreclose that path.”

In addition to overseeing digital infrastructure projects, communities can promote digital equity by utilizing established, trusted community-based institutions – such as food pantries or faith groups – to boost digital literacy and distribute devices, Mitchell said.

Mitchell added that these efforts must be ongoing: “This is more about building connections now.”

Broadband.Money is a sponsor of Broadband Breakfast.

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Funding

Anticipating Launch, Yellowstone Fiber to Seek Federal Funds for Rural Broadband

With service beginning in late September, non-profit fiber ISP aims to serve rural Gallatin County

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Photo of Greg Metzger in July 2022 from Yellowstone Fiber

BOZEMAN, Montana, July 27, 2022 – Officials at the non-profit internet entity Yellowstone Fiber announced Thursday that they would pursue federal broadband funding to expand network construction in rural areas of its footprint in Montana.

Because every state is poised to receive a minimum of $100 million to expand broadband infrastructure under the bipartisan Infrastructure Investment and Jobs Act, officials at Yellowstone Fiber believe they are well-suited to obtain funding to connect homes, businesses, farms, and ranches to high-speed fiber internet in the sections of the Montana’s Gallatin County north of Bozeman.

Although Yellowstone Fiber is just going live with its first customers in September – and began offering pre-sales in late July – the new fiber entity believes that the availability of funding through the Broadband Equity, Access and Deployment program of IIJA offers a unique opportunity.

As with all states, Montana will receive a minimum of $100 million to expand high-speed broadband infrastructure to the nearly one-third of state residents who currently lack access.

Speaking about the impending launch of services on Yellowstone Fiber, CEO Greg Metzger said, “This is an important milestone for Yellowstone Fiber and we’re enormously excited to announce we’ll have the network live in a matter of weeks.”

“For decades, people in rural Montana have been limited by slow and expensive internet service and empty promises by cable providers. Today’s announcement signals we’re serious about connecting rural Gallatin County to high-speed fiber and the limitless possibilities that it brings,” he said.

Yellowstone Fiber is building an open access network, which means that Yellowstone builds, owns, and operates the fiber infrastructure, then leases space on its high-speed fiber to service providers, including Blackfoot Communications, Skynet Communications, Global Net, TCT and XMission.

In an interview, Metzger touted the role that open access networks play in enabling free market competition, including better prices, service, and reliability.

Metzger, an entrepreneur who previously manufactured plastic deposit bags for banks, sold that business and bought a furniture company in Montana.

Although he said he would rather be playing golf, when he stumbled across a new funding mechanism, he decided to create a non-profit entity designed to serve his community with fiber optic network services.

Yellowstone Fiber was formerly Bozeman Fiber, and was created in 2015 as an economic development initiative to address the lack of true high-speed broadband in Gallatin County, Montana.

A group was formed including the City of Bozeman, Gallatin County, the Bozeman School District and business leaders and funded by eight banks with a Community Reinvestment Act-designated loan.

This $4,000,000 was used to create a fiber ring connecting anchor tenants including the city, county and the school district, and also servicing the Cannery district and downtown Bozeman.

Anchor operations began in the fall of 2016, and commercial operations in February 2017. In 2020, the network formed an operational partnership with Utah-based UTOPIA Fiber to bring fiber-to-the-home services to every address in Gallatin County.

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