There’s a new competitor in town – It’s the town!

Hey service providers, there’s a movement afoot in small town America that you should be aware of.  The town itself sees a profitable opportunity in providing broadband telecommunications and entertainment services to the community.

It’s happening now in Greensboro, AL.  This small town (population 3,500) was looking for ways to revitalize its economy by attracting new businesses and it came up with its own utility company – the Greensboro Telecommunications Utility (GTU).  In the broadest sense, they are an Independent Operating Company (IOC) but in reality they are much more. GTU has been awarded franchise licenses within Greensboro to offer telecommunications, cable and ISP services.  They are a competitor to those that already serve these customers.

Let’s look at how it works.  A group called Optelica Communications  met with the town to discuss opportunities to provide these services via fiber-to-the-home technologies and participate in a revenue sharing model.  In this model, the GTU owns the equipment that is put in place at the end customer.  Optelica is responsible for the planning, building and management of the equipment in return for a percentage of the revenue.  Services are expected to be launched by year-end, with a full rollout in 2004. GTU and Optelica expect fiber optic installation to cost roughly $5 million.  Income to the town from new and existing customers is projected at $1.5 million per year.  This is a far cry from the current cable annual franchise fee of $5,000 they earn today.

From a technology perspective, Full Service Access Network-compliant equipment will be deployed for the fiber infrastructure. Fiber is viewed as a future proof technology that will help Greensboro stay on the cutting edge going forward.

Taqua has already been selected to provide the backbone for the voice infrastructure.

Services are planned in four categories:

•  Local and long-distance telephone services. Digital Cable TV services. High-speed Internet access services. Home security services.

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The features are expected to equal current offerings yet provide additional value-added functionality.  Prices are expected to be at least 15% less than current services, too. GTU’s plans also include development of specific services to support vertical markets, such as law enforcement, government, education, and healthcare.  Voice services will begin as standard TDM  voice, but will transition to IP-based offerings going forward.

The next step is expansion.  An event is being planned to bring in other small town governing organizations to get them excited about this opportunity and potentially create pockets of technology-advanced small towns across many states.  This is all about competition.  Giving the customers competitive choices and pushing the larger players to offer more.  Of course, these are small customer counts taken on a one-by-one basis.  But if hundreds of towns sign on, the current incumbents may need to take notice of an underserved market.