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City
looks to broadband to grow economy
by
John Peters
For Virginia Business
January 2004
Not
many cities straddle two states, but in Bristol the
Virginia-Tennessee line runs right through the middle
of downtown. In just a few blocks things can change,
particularly for businesses with the two states offering
different tax structures and amenities. These days,
companies are tempted to cross the border to take advantage
of something that Bristol claims no other city of its
size offers — a $30 million fiber-optic network.
Bristol isn’t the first Virginia city to install
a fiber-optic system, nor is it the smallest place with
one. The big difference, say city officials, is that
Bristol Virginia Utilities will run the fiber optic
right up to a resident’s home or business, giving
them the benefit of high-speed broadband Internet, cable
and telephone all going through a single line. That
gives the city a leg up in attracting new businesses
and residents, says Jerry Brown, director of economic
development for the city of 18,000 people. “We
see it as a major tool for anyone who needs broadband
capability,” he says.
The system, fully launched last summer, has shown it
can turn heads. Cross Stone Products, a maker of decorative
metal containers, moved its 30-employee operation to
the Virginia side of Bristol two years ago in part to
get access to the high-speed network. “When we
made that decision we were involved quite heavily with
some major retailers in the United States,” says
Larry Bays, company controller. The company needed the
ability to exchange detailed images of products with
potential customers, he says.
Bristol’s network will help keep existing businesses
in Bristol, says Jim Kelly, Vice President of Operations
for Bristol Virginia Utilities’ OptiNet Division.
“Businesses are always looking for high-speed,
high capacity Internet access at competitive prices,”
he says. “Prior to this, a company (in Bristol)
that wanted high-speed Internet access had to buy a
full T-1 connection ... at about $1,400 a month.”
Now, he says, the same service can be purchased from
BVU/OptiNet for $800.
Both Bristols, though, are better known for their mountain
views and NASCAR races at nearby Bristol Motor Speedway
in Tennessee than for high technology. Yet, increasingly
more towns and cities in rural areas are embracing broadband
as a way to entice new businesses to replace jobs lost
from declines in the textile and furniture industries.
Telecommunications experts offer a word of caution,
though. With technology changing quickly, systems can
become outdated and are no guarantee of success.
Still, many localities wouldn’t get a second look
from prospective tenant companies if they didn’t
have broadband access, says Rick Richardson, director
of communications for the Virginia Economic Development
Partnership. “That extends not only to ones you
would associate directly with the Internet, but also
with manufacturers who would have in the early days
been content with water, sewer and highway access. Now
broadband is part of that. The fact that a community
like Bristol has such a system is clearly an advantage.”
Unlike many localities in the Southwest, Bristol’s
economy is not dependent upon the struggling coal industry.
Nor was it overly dependent upon the textile and furniture
industries. In fact, its economy is actually quite diverse,
with 34 percent of local workers employed in the retail
and service sector. Manufacturing accounts for 23 percent
of the local job market, while the trade and professional
sector makes up 18.5 percent. With this mix, Bristol
is home to everything from Bristol Compressors —
an exporter of compressors to the Middle East —
to The United Co., which started out in coal and gas
and later diversified into real estate and financial
services.
Joblessness in Bristol is a concern, but not nearly
as much so as in other Virginia localities. The unemployment
rate for the city for 2002 was 4.3 percent, while neighboring
Washington County, where much of the city’s work
force lives, stood at 6.4 percent. While the jobless
rate spiked in 2003 to as high as 7.7 percent it’s
still lower than many surrounding counties, such as
Dickenson, which in 2002 had a rate of 15 percent.
In this far-flung area of the state — which has
seen its share of factory closings along the I-81 corridor
— the city of Bristol and Washington County are
among the most prosperous localities, with an average
income of $24,296 a year. Nevertheless, Bristol officials
are trying to gauge what they need to attract new companies
and residents. “We realize new companies we attract
are going to be smaller companies. There aren’t
going to be many (new industries with) 300 to 500 employees,”
says Brown. “We’re a very small city, with
not a lot of land. We can’t attract tremendously
large facilities.” Companies of anywhere from
five to 100 workers would find it easier to get a site,
he says.
With the need for broadband access nearly ubiquitous,
city officials aren’t focusing on any particular
sector. “People say we’re trying to attract
high-tech firms, but if you’re not high-tech,
no matter what you’re making, you’re not
in business any longer,” Brown says. “It
could be a firm doing quite a simple task, like selling
a product over the Internet that requires them to have
broadband capabilities. Or it could be a software development
firm.”
State officials support the importance of broadband
in rural areas. Michael W. Schewel, Secretary of Commerce
and Trade, points out that firms with customers and
office locations flung across the country must be able
to exchange data, business plans, all sorts of information.
“Those are not necessarily businesses we think
of as technology businesses, but good, inexpensive access
to high-speed broadband is essential for those types
of businesses.” And Bristol’s fiber optic
system is a major reason behind his office’s recent
move to begin marketing Southwest Virginia’s broadband
capacity. “That gives Southwest Virginia a real
competitive advantage and is one of the things that
distinguishes that region of the state,” says
Schewel.
The fiber network was financed with revenue bonds and
internally by Bristol Virginia Utilities. It was a long
time coming, according to Wes Rosenbalm, president and
chief executive officer of Bristol Virginia Utilities.
Hired in February 2001 to bring the fiber-optic system
to completion, Rosenbalm guided the program through
two lawsuits and two changes in state law to get it
up and running. Private-sector telecom firms objected
to competing against a publicly owned network but lost
their court challenge. Hired in February 2001 to bring
the fiber-optic system to completion, Rosenbaum guided
the program through two lawsuits and two changes in
state law to get it up and running. Private-sector telecom
firms had objected to competing against a publicly owned
network but lost their court challenge.
Bristol’s other attractions predate the broadband
network. The Bristol Motor Speedway just across the
Tennessee state line has two major NASCAR races a year
in addition to several smaller events. With more than
a million annual visitors for the races, all the region’s
hotels and restaurants are full several times a year.
Being the birthplace of country music doesn’t
hurt either, says Matt Bolas, vice president of the
local chamber’s convention and visitor’s
bureau. The city has the Birthplace of Country Music
Alliance Museum and a number of country and bluegrass
concerts that draw tourists to the city, as does nearby
Barter Theatre and the annual Virginia Highlands Festival
in Abingdon. All total, those attractions bring nearly
400,000 people to the city every year.
Improving the area’s quality of life are opportunities
for outdoor recreation and education. There’s
hunting, fishing and boating available at numerous area
lakes and hiking along the Appalachian Trail. East Tennessee
State University offers a medical college 25 miles away,
and there are other colleges in the region, including
Emory & Henry College, a private liberal arts school
in Emory.
Still, economic development officials view the fiber-optic
system as their main attraction. “If you go back
to once upon a time, if you didn’t have the railroad
through your town, you were at a disadvantage,”
says Rosenbaum. “Now, it’s the interstate.
We equate the fiber optic system to that, the new interstate.”
And, he adds, Bristol is in the fast lane.
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to Virginia Business - January 2004
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