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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.

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

British Telecoms Are Aligning with Emerging U.S. Position on Open RAN Adoption

Open RAN adoption is said to save telecoms money and boost security, as providers are forced to move off Huawei.

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Howard Watson, chief technology officer of BT Group

October 18, 2021 – Howard Watson, chief technology officer of telecommunications company BT Group, spoke on Wednesday at the Broadband World Forum about the future of the UK’s network infrastructure, including removing Huawei’s equipment from their networks and developing open radio access networks for wider use.

Speaking at the opening session titled “Building an innovative converged network infrastructure for the UK,” Watson discussed the challenges and possibilities for offering fast, secure broadband and offered O-RAN as a solution for wider connectivity.

Watson discussed utilizing open RAN to facilitate greater interoperability between vendors’ equipment, as it opens the market to more technologies due to its open configuration. The concept advocates for a more open radio access network than provided today, which is held by fewer vendors.

The Federal Communications Commission has pushed for ways to develop open RAN to minimize network security risk, as the movement has gained significant momentum since Huawei was banned over the past 18 months. FCC Acting Commissioner Jessica Rosenworcel has described open RAN as having “extraordinary potential for our economy and national security.”

“When customers go back into the office, the infrastructure they left behind must have key growth” Watson said, referencing the shift in office culture toward remote work during the COVID-19 pandemic.

“Expectations of customers change,” Watson said, adding that “they expect broadband to be always on, they expect high bandwidth.” Above all, “they expect investment no matter the cost.”

BT is seeking to deploy to 90 percent coverage in the UK by 2028.

On the sidelines of his keynote address, Watson noted BT’s progress in limiting Huawei products to 35 percent of an operator’s fiber access footprint by 2023. The UK government requires that Huawei’s equipment must be removed entirely by the end of 2027. The UK considers Huawei a “high risk” vendor for its network infrastructure.

However, BT is waiting for Huawei’s equipment to grow old before replacing it, Watson said. “Our intention is to ensure that we get the full economic life out of the Huawei [products] that we have deployed,” he said. He said BT believes the products can be used until 2031 or later.

“We’re in talks with government about that timeline” Watson said.

Panel discussion about European fiber investment

Watson said that “densification” happens in areas that are fiber rich, so “providing fiber to smaller cell sites is naturally an evolution.”

He said that BT is looking at a range of alternatives including Wi-Fi solutions to getting 1 Gigabit per second (Gbps) capability to household through open architecture-based solutions.

In addition to Watson, a panel focused on the investment parameters for fiber investment featuring officials from Macquarie Group and Eurofiber.

The panel focused on investment challenges and strategies for broadband infrastructure investment and  discussed an opportunistic vision for broadband deployment. Speaking of more mature market with a history of broadband adoption, Macquarie Managing Director Oliver Bradley asked how providers could transition to more efficiency and maximizing the value of an existing network.

Among the principal drivers for investment include co-investing and deregulation, he said.

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Open Access

UTOPIA Fiber Goes to Court in Utah Over American Fork’s Build Permit Refusals

Fiber builder says it has been denied permits that have harmed it and its customers, despite an existing city agreement.

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Photo of Twin Peaks in American Fork, Utah, by Bryant Olsen used with permission

October 13, 2021 – UTOPIA Fiber filed a lawsuit Wednesday against the city of American Fork in Utah for breach of contract after the city allegedly denied build permits to the fiber builder despite there being an existing contract between the two parties.

The fiber provider, which runs an open network on which private telecoms rent space on to provide services, alleges the city had approved some permits that only allowed it to construct backbone transport lines through the city connecting other cities, but denied it key permits that would have allowed it to extend services to UTOPIA Fiber customers inside the city. Those services include connections to American Fork’s public schools.

In July 2020, the city allegedly terminated the 2018 rights-of-way agreement with no explanation, the lawsuit claims. It also alleges that the city specifically discriminated against UTOPIA Fiber by adding additional scrutiny to its permit requests when it believed no such scrutiny existed for other providers.

Broadband Breakfast attempted to make contact with the city, but a phone call was not answered and a voicemail message was not returned by the time of publication.

“American Fork’s refusal to approve permit requests by or for UTOPIA for service laterals for customers within American Fork has harmed UTOPIA, its customers, and the private ISPs who wish to offer services within American Fork using UTOPIA’s Network,” the lawsuit said. “In some cases, UTOPIA has been forced to buy capacity from other network providers that are allowed to install infrastructure in American Fork, so that UTOPIA can fulfill existing contracts with its customers.

“In other cases, UTOPIA has been forced to cancel existing customer orders for connections within American Fork and has lost significant revenues as a result,” the suit added. “UTOPIA has also recently been forced to cancel or reject over a dozen additional customer orders because UTOPIA is unable, due to American Fork’s conduct, to obtain the permits needed to fulfill those orders, and again lost significant revenues as a result.”

In a press release, UTOPIA’s executive director Roger Timmerman said the lawsuit was a “last resort and not an easy decision to make.

“It is our hope that with judicial review, American Fork City will reverse its policies, work within the boundaries of the law, and ultimately, act in the best interest of the people and businesses in American Fork City by allowing them access to the increased options UTOPIA Fiber provides,” Timmerman added.

UTOPIA Fiber is asking the U.S. District Court for the District of Utah to force the city to pay the company damages sustained as a result of the alleged actions, to find the city violated the law with respect to its actions, and to force the city to cease the alleged “discriminatory and preferential actions” against the company.

UTOPIA Fiber, a sponsor of Broadband Breakfast, has designed, built, and operated more than $330 million worth of fiber projects in the state since 2009.

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Expert Opinion

Mike Harris: Investing in Open Access Fiber Optics is Investing in the Future

Chattanooga’s municipal broadband network has delivered $2.7 billion in social and economic benefits during its first decade.

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The author of this Expert Opinion is Mike Harris, the co-founder of SiFi Networks.

In the United States, most Internet Service Providers are privately owned companies who have established copper network infrastructure exclusively for their own use, forcing customers into often unreliable, unsustainable internet package deals. But in 2010, the small city of Chattanooga, Tennessee invested in an early publicly owned fiber optic network.

As the co-founder of open-access telecom company SiFi Networks, I believe that investments in similar open-access infrastructure will help bridge community divides and futureproof a city’s economic and social prosperity.

According to a study by Bento Lobo, department head of finance and economics at the University of Tennessee, Chattanooga’s municipal broadband has delivered over $2.69 billion worth of social and economic benefits during its first decade. With a population of just 185,000, imagine the potential savings for a city the size of New York.

So, how did Chattanooga achieve this and what were the city’s motivations?

Motives behind the madness

In 1969, Chattanooga was dubbed America’s dirtiest city. A post-industrial wasteland, it entered the late twentieth century with a stagnant economy, declining population and high levels of unemployment following the closure of its large manufacturing factories. It’s not surprising that decades later publicly owned utility company, EPB, chose to invest in its residents’ future.

EPB began replacing the underground copper wiring — originally established to exclusively handle telephone calls — with fiber optic cables feeding connectivity to the entire community. Fiber optic networks are vastly superior to copper because they can transport data using photons travelling at the speed of light. Previous infrastructure uses electrons capable of less than one per cent of that speed.

Where before Chattanooga was perceived as an underdeveloped, low-income area, suddenly businesses were moving in, employment was growing, and more adolescents were graduating from high school. Is it about time for other cities to follow suit?

Why other cities should follow suit

Internet connectivity is a human right much like water, electricity and gas utilities. Yet 21 million U.S. citizens are still living without reliable broadband according to the Pew Charitable Trusts. Research also shows that 40 percent of schools and 60 percent of healthcare facilities outside metropolitan regions lack internet download speeds of at least 25 Megabits per second (Mbps) and upload speeds of at least 3 Mbps. This is the acceptable speed defining a reliable broadband connection.

As the Chattanooga model demonstrates, the solution is the establishment of fiber optic infrastructure. With fiber networks, EPB offers residents and businesses gigabit speeds of up to 1,000 Mbps, or 1 Gigabit per second. In hindsight, with this capacity Hamilton County was well equipped to deal with the 75 percent increase in total volume of bandwidth being used per day during the pandemic, with residents being forced to work and educate from their homes.

These gigabit speeds also allow for a high degree of network responsiveness necessary for establishing a smart grid system. Most US cities use standard grid systems, which rely on consumers informing a service when they have a power outage or system failure.

Smart grids establish a two-way communication network using digital devices and automation so that service providers are notified immediately when problems occur. EPB’s Hamilton County smart grid, for example, can quickly re-route power around storm damage decreasing outages by 40 per cent in minutes, according to Lobo’s study. He estimates Chattanooga’s consumers will save $20.6 million per annum simply from avoiding spoilage and loss of productivity due to power outages.

Saving money, saving livelihoods

EPB has more than proven that fiber networks are a socioeconomic investment benefitting everyone, not just those lucky enough to live in a fiber area. Better, faster connectivity will enable businesses in all neighbourhoods to thrive, creating job opportunities. During the ‘gig decade’ (2011-2020), EPB’s fiber network directly supported the creation or retention of approximately 9,500 jobs in Hamilton County, luring the migration of global corporations like Volkswagen. The U.S. Bureau of Labor Statistics has reflected this, stating Hamilton County’s unemployment rate being 4.7 percent as of November 2020, compared to the U.S. overall percentage of 6.7.

Chattanooga at night

The social benefits don’t stop here. A study by South Australia’s premier, Jay Weatherill, correlated gigabit networks with improved support for police and fire communications, wastewater management, traffic control and medical diagnostics. These are all features of SiFi Networks’ FiberCity and if Chattanooga has demonstrated anything, it is that fiber networks improve residents’ quality of living above all else.

FiberCity — the next step?

Chattanooga has demonstrated the importance of staying connected. To this end, becoming a SiFi Networks FiberCity could be the next step for cities across the US.

Privately financed networks, like SiFi Networks’, are often the best option to guarantee necessary funding for construction, maintenance and expansion of fiber infrastructure. Municipalities wouldn’t have to rely on taxpayer’s dollars, which can instead be diverted to healthcare, education and other social entities. During a period of continuous technological evolution, FiberCities have one simple mission: to combine advantages of Chattanooga’s gigabit speeds with futureproofed smart city services across the U.S.

Mike Harris is a successful entrepreneur and technologist, having previously founded Total Network Solutions Ltd in 1989, which he later sold to UK telecoms giant British Telecom in 2005. He subsequently co-founded SiFi Networks and is a current investor in the company. He is also the chairman and owner of the New Saints Football Club in Wales, UK. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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