Bristol, Virginia


Bristol is one of the few communities in the world with a political boundary running down its spine. Lying to the south of the center line on State Street is the city of Bristol in the state of Tennessee. On the north side is a different city with the same name: Bristol, Virginia.

Bristol is nestled deep in Appalachia, a mountainous rural region of the American Southeast known for coal-mining, tobacco-growing and their traditional companions: poverty, poor education and lack of opportunity for bright young minds. The city's per-capita income in 2007 was only $20,000 compared with the Virginia average of more than $41,000 and the US average of nearly $39,000. Bristol is proud of its reputation as "The Birthplace of Country Music" and as home to a 160,000-seat NASCAR car racing venue known as "The World's Fastest Half-Mile." But Bristol's leaders knew that a proud history and the ability to attract fans on race day are no foundation for prosperity in a 21st Century community.

Electric Legacy, Broadband Future

Like many rural American communities, Bristol Virginia owns and operates its own electric company, Bristol Virginia Utilities (BVU). City-owned and cooperative utilities are a legacy of the last wave of rural development in the United States, which focused on electrification. In 1998, Bristol's city council voted to allow BVU to construct a fiber-optic backbone to improve communications and control among its eight electric substations. The business case was straightforward and the implementation successful. By 2000, BVU had extended the network to local schools and government offices to support telephone, data and broadband Internet, which reduced the city's operating costs and expanded the capabilities available to users. It also spurred demands from local businesses and real estate developers to provide service to them. So, in 2001, the council and BVU agreed to begin offering fiber-to-the-user (FTTU) service, branded OptiNet, to all residents and businesses.

Private-sector carriers were quick to challenge the move. One incumbent objected to the Virginia public utility commission, which regulates communications, stating that Virginia law barred municipalities from offering retail telecommunications services. Such a law was indeed on the books but, in Bristol's view, had been rendered invalid by passage of the federal Telecommunications Act of 1996. Only after Bristol sued the state did the Virginia General Assembly pass legislation in 2002 overturning the old law. As BVU prepared its commercial launch later that year, the incumbent cable TV operator claimed that the utility lacked the legal authority to provide television service. A court agreed. BVU returned to the Assembly seeking legislative and charter changes, which were granted in 2003. But later that year, the company's chief financial officer was back in the state capital testifying before a commission on the issue of cross-subsidies. The incumbent had accused BVU of charging phone rates that were below its costs and making up the difference on other services. The commission ruled against the complaint. Finally, after three years and $2.5 million in legal fees, BVU had won the right to deliver retail communications.

Financial Success Spurs Growth

As it turned out, the private sector was right to fear competition from BVU. Market research conducted by the company in 2001 suggested that 70% of respondents might switch telephone and television service from the incumbent operator, while half might switch Internet service. By August 2008, BVU's OptiNet FTTU service had captured more than 62% of the available residential and business market in its service area, thanks to effective marketing to electric customers with whom BVU already had a relationship. Despite millions of dollars of investment, OtpiNet had reached financial self-sufficiency on $16 million in net revenues in the 2009 fiscal year. A 2008 study conducted for the BVU Board determined that OptiNet customers, while enjoying the bandwidth bonanza of FTTU, had saved nearly $10 million over incumbent competitors' rates or special offers since the start of service.

The OptiNet service area was no longer limited by the city lines. BVU entered into partnership with the Cumberland Plateau Planning District Commission in 2003 to build CPC OptiNet. Managed by BVU, the network began with a 45-mile fiber-optic circuit reaching to Richlands, Virginia, funded by grants from the US government and the Virginia Tobacco Commission. It grew gradually to 200 miles across four rural counties with the help of additional grants. (The Tobacco Commission distributes money paid to the state by US tobacco companies following the 1998 settlement of the largest class-action lawsuit in US history.) BVU's success in designing, building and operating the network led it to establish a business unit called BVU FOCUS, which stands for Finding Opportunities for Communities throughout the United States. BVU FOCUS offers consulting and management services to other entities that seek to build advanced telecom networks. The unit's first customer in 2007 was MI-Connection, a telecom co-op owned by two communities in the state of North Carolina. Under BVU's management, the $80 million network grew its customer base nearly 5% in its first year and exceeded budget by 27%.

Creating a Broadband Culture

While the struggles of OptiNet make an exciting story, Bristol did not become a fiber carrier in order to win competitive battles with business. The city council's goal was economic and community development and, though the network is still so new, early results are positive. BVU's extension of the network convinced two major companies – CGI and Northrop Grumman – to build multi-million-dollar facilities in a regional business park during 2007. Since the network extension was completed in 2007, 185 businesses in the four-county service area have become customers and two new industrial parks began construction. Recent media reports indicate that business growth resulting from the broadband build-out has created 1,220 jobs in seven coal-producing counties worth $37 million in annual payroll, and attracted $50 million in new private investment. The new jobs entering the area are paying about two-thirds more than the normal weekly wage. To leverage this success, Bristol has launched a marketing campaign called AccessBristol, which makes its 1 Gbit broadband capacity the centerpiece of business attraction.

The entry of these major employers into the region has sparked a multi-level effort to develop a local knowledge workforce. Both CGI and Northrup Grumman discovered that it is difficult to attract outside employees to the region because payrolls are scaled to its very low cost of living. No matter what the arithmetic, employees resist accepting a reduction in salary as part of a move to a new area. The University of Virginia at Wise stepped forward to create the first undergraduate software engineering program in the Commonwealth, while three community colleges have joined forces to offer advanced technology classes.

These efforts are not occurring in a vacuum. Northrup Grumman's decision to locate a data center in southwest Virgina was not random; it was part of an outsourcing contract with the Commonwealth. A Southwest Virginia IT Task Force lead by Virginia's Secretary of Commerce brings together major area employers with state, county, educational and nonprofit organizations to identify requirements, develop programs and monitor their progress. In addition to the educational programs, projects include a "Return to Roots" campaign that seeks to attract highly skilled former residents to return to Southwest Virginia. Thirty percent of employees in Northrup's data center are locals and the percentage is expected to rise as the University graduates its first software engineering majors.

Bristol is also using the now 800-mile network to build quality of life and create opportunity for the next generation. Virginia High School in Bristol has nearly one computer for every student and relies on the rock-solid, high-speed access provided by the network to conduct all of its state-mandated standardized testing. BVU OptiNet has partnered with the Mount Rogers Regional Adult Education program to offer online access to preparation courses for the GED, a set of tests that give passing students the equivalent of a secondary school degree. The fiber network now links local, county and university libraries, giving residents access to more than 1.8 million items, as well as rural health clinics and city hospitals. The Bristol SeniorNavigator program provides online access to a database of services for seniors, adults with disabilities and their caregivers through libraries, community centers and senior citizen housing. Programs like these aim to power deep cultural change in Bristol, which will ensure that the hard work and innovation of its current generation of leaders pays dividends far into the future.

Population: 17,500

Labor Force: 8,120


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