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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.

Former Assistant Editor 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. She has a passion for universal access and a vendetta against anyone who stands in the way of her getting better broadband. She is now Associate Broadband Researcher at the Institute for Local Self Reliance's Community Broadband Network Initiative.

Open Access

UTOPIA Fiber Pushes into Southern Utah

The expansion will bring fiber-to-the-home to residents of two additional Utahn cities.

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Roger Timmerman, executive director of UTOPIA Fiber

WASHINGTON, January 6, 2022 – Community-owned fiber optic network UTOPIA Fiber announced in a press release Wednesday that it will implement fiber-to-the-home service in the Utah cities of Cedar Hills and Santa Clara.

The expansion into Washington County’s Santa Clara marks UTOPIA Fiber’s first expansion into southern Utah.

“We’re really excited to continue our momentum in Utah County and to venture into southern Utah where Santa Clara will become the first all-fiber city in Washington County,” said Roger Timmerman, executive director of UTOPIA Fiber.

This move marks UTOPIA’s 18th and 19th city expansions and comes with a $12 million price tag. Just last month, UTOPIA completed its network in Payson City, Utah. The telecom provides business services in 50 cities.

In all its serviced cities, UTOPIA offers residential speeds of up to 10 Gigabits per second and business speeds of up to 100 Gigabits per second – both the fastest respective speeds offered in the U.S. In total, the network provides fiber availability to more than 130,000 businesses and residences across its 50 serviced communities.

In its press release, UTOPIA promoted its expansion by citing research showing that residential and commercial property values increase when they are served by a fiber network. It added that its open access model, which allows infrastructure sharing with other providers, “protects a net-neutral internet without throttling, paid prioritization, or other provider interference.”

UTOPIA Fiber is a Broadband Breakfast Sponsor.

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Open Access

Experts Debate Merits of Open Access Models on Broadband Breakfast Live Event

Keller and Heckman Partner Jim Baller says model could lead to a race to the bottom, but UTOPIA CEO disagrees.

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Screenshot from Broadband Breakfast Live Online episode on December 15. Drew Clark (top-left), Jim Baller (top-right), Roger Timmerman (bottom-left), Dwight ‘Doc’ Wininger (bottom-right)

WASHINGTON, December 16, 2021 – Though open access projects are finding success in some parts of the country, some experts remain unconvinced that the model will prove viable for most communities.

During the Broadband Breakfast Live Online event on Wednesday, UTOPIA Fiber Executive Director and CEO Roger Timmerman and Jim Baller, partner at law firm Keller and Heckman LLP partner, debated the merits of the model that allows service providers to use the same infrastructure.

Timmerman, whose UTOPIA Fiber operates an open access model in Utah and southern Idaho, said his company has seen success with open access fiber infrastructure being a sustainable and scalable model to meet whatever demands future technology may place on consumers and businesses.

Sixteen internet service providers use infrastructure built and leased by UTOPIA, a sponsor of Broadband Breakfast, to offer residential areas up to 10 Gigabits per second symmetrical speeds.

But Baller said he is concerned that shared infrastructure will just force providers to engage in a price war that will lead to a race to the bottom. He painted a picture of an open access model whereby wholesalers who lease their infrastructure to internet service providers find themselves in a kind of purgatory where no one is making any money – the wholesaler is unable to compel ISPs to raise their prices, and the ISPs feel they can only compete by undercutting their competition. He described the situation as “open access run amok.

“I would love to see open access work, I just urge caution, because you need to do hard analysis in a particular market,” said Baller. “Open access may not be something that is possible up front, but it can be over time.

“You have to look at the numbers very carefully and assess what the circumstances are and make your decision based on what is in front of you,” he said. “There is no one size shoe that fits all in these circumstances.”

In response to the criticism that open access will drive prices into the ground, Timmerman said that the largest provider in UTOPIA’s network is also the most expensive. “It has not been a race to the bottom, it has actually been the opposite,” he said.

Timmerman added successful providers are ones “that can differentiate themselves on quality, reputation, consumer privacy,” and added that the nature of the model allows them to do so at a low barrier to entry.

Timmerman described how UTOPIA has been able to “raise the bar” on their standards for accepting ISPs to partner with, and how they have had to “beat [companies] off with a stick,” due to increased interest in working with UTOPIA.

“We want well established, successful companies because we have a lot on the hook – I cannot afford to put [these] assets at risk with some fly-by-night company. We work hand in hand with providers on quality and reputation to make sure that we both win and make sure that cities and participants win.”

For his part, Timmerman conceded that there is no “one size fits all model,” but argued that most communities’ needs can be satisfied through the framework of an open access build.

“We have had a lot of conversations with communities; what [communities] have to bring to the table and what their needs are, and how we might fill all those roles and deliver a successful system.

“The more a city wants and dictates into a project, the more skin in the game they may need to have,” Timmerman added.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the December 15, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, December 15, 2021, 12 Noon ET — How Public Private Partnerships Represent an Opportunity for Broadband Deployment

In the past two years, public and private entities have greatly increased their collaboration to expand broadband access for Americans. In the wake of the coronavirus pandemic, the telecom industry has been forced to find innovative solutions to connect households to essential online services. In this Broadband Breakfast Live Online event, we will explore the factors driving public-private partnerships in telecom and look at where such partnerships can take us next. Various economic and business forces underlie these partnerships. We’ll also discuss the urgent need for these partnerships in the fight to connect the country.

Panelists for this Broadband Breakfast Live Online session:

  • Jim Baller, Partner, Keller & Heckman
  • Roger Timmerman, CEO, UTOPIA Fiber
  • Dwight ‘Doc’ Wininger, Director of External Relations, Allo Fiber
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Jim Baller is a partner at Keller & Heckman. He was founder of the US Broadband Coalition, a diverse group that fostered a broad national consensus on the need for a national broadband strategy and recommended the framework that was subsequently reflected in the Federal Communications Commission’s National Broadband Plan. A consultant to Google’s Fiber for Communities project, he is also the co-founder and president of the Coalition for Local Internet Choice, an alliance that works to prevent or remove barriers to the ability of local governments to make the critical broadband infrastructure decisions that affect their communities.

Roger Timmerman has been serving as UTOPIA Fiber’s Executive Director since 2016 and has been a technology management professional in telecommunications and information technology for over 15 years. Roger has been designing and building networks throughout his career in various roles including Vice President of Engineering for Vivint Wireless, CTO for UTOPIA Fiber, Network Engineer for iProvo, and Network Product Manager for Brigham Young University. Roger earned his Bachelor of Science and Master of Science degrees in Information Technology from Brigham Young University.

Dwight ‘Doc’ Wininger (pronounced WINE-ing-grr) has worked on telecommunications policy issues since the 1980s, first as Executive Director of the Nebraska Public Service Commission and then for a variety of private sector providers and consulting firms. He has worked on fiber optic deployments in multiple states and has been a featured speaker at various conferences on rural broadband deployment. In his current position, Wininger is responsible for local, state and federal government relations for ALLO Communications and is also heading up market development for the company’s expansion into the State of Arizona.

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Drew brings experts and practitioners together to advance the benefits provided by broadband. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative, the Partnership for a Connected Illinois. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter and Facebook

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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Open Access

UTOPIA Fiber Completes Payson City Project and Publishes Results of Customer Feedback Survey

UTOPIA customers deep in red states favor net neutrality by a wide margin.

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A photo of a fiber installer courtesy UTOPIA Fiber

November 29, 2021 – UTOPIA Fiber announced the completion of a fiber-optic internet network in one of its original 11 cities of Payson, Utah, on November 22.

All 20,000 residents and businesses in Payson City, Utah, have access to UTOPIA’s all fiber, open-access model, according to UTOPIA Fiber. Payson is the eighth of the original group of 11 cities to finalize its broadband infrastructure deployments.

“The original cities were visionaries before their time,” said UTOPIA Fiber Chief Marketing Officer Kimberly McKinley. “We need to give a lot of credit to Payson. Back in 2002, 2004, when UTOPIA was getting off the ground, they saw the benefit of our model.”

“They saw the vision and where the future was headed almost 20 years ago.”

Today, UTOPIA Fiber is deploying broadband infrastructure in 17 cities across Utah and southern Idaho. UTOPIA Fiber Executive Director Roger Timmerman said that the three remaining original cities will have their projects completed by the end of 2022.

UTOPIA’s model is entirely funded through subscriber revenue, at no cost to taxpayers. Based on UTOPIA’s recent surveys, the subscribers in question view the service as a worthy investment.

Annual customer feedback survey

Also, on Oct. 27, UTOPIA Fiber released the results of their annual customer feedback survey. Among other statistics, UTOPIA Fiber reported that the number of customers working from home had increased by more than 230 percent since the outset of the COVID-19 pandemic.

Additionally, while legislators around the country squabble over how to define broadband – whether it ought to be 100 Megabits per second (Mbps) download and 20 Mbps upload, or 100 Mbps symmetrical, nearly half of UTOPIA’s customers purchased speeds over 1 Gigabits per second, which is 10 times faster than 100 Mbps.

Customers need faster speeds to address the myriad services that simply did not exist in the past, many believe. For example, 68 percent of customers are subscribed to a streaming service that did not exist three years ago, and the use of home security connected to the internet rose by 71 percent since 2018.

And 83 percent of consumers stated that they were glad they had invested in UTOPIA, 76 percent stated it had improved their quality of life, and 75 percent said their community is better because of UTOPIA.

In addition to high levels of customer satisfaction, UTOPIA also found that consumers were strongly in favor of net neutrality policies, with 92 percent of respondents indicating as much.

“A few years back we saw an influx of customers that came over to the UTOPIA system because that our providers are net neutral,” said McKinley. “I think that that speaks to people who want more privacy and control over their user experience. I think that is what we’re seeing at UTOPIA Fiber.”

Despite being generally favorable toward the practice up through the Obama Administration, net neutrality was struck down in the U.S. in 2017 by the Trump Administration’s FCC led by Ajit Pai. Though conservatives have historically portrayed net neutrality as an example of government overreach, McKinley argues that Utah is an example of why this issue should not be a partisan one.

“[This data] shows that people do not want to be beholden to big telcos who have control of their entire user experience. I think our survey proves more than anything that this is a bipartisan topic, and this is not a blue versus red discussion,” she said. “[Consumers] just want better.”

UTOPIA Fiber is a sponsor of Broadband Breakfast.

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