Folks in Soap Lake, Wash., never had telephone service. Then their county-owned electric-utility provider stepped in. Phone service is due to be delivered this week-along with high-speed Internet access and the promise of a large menu of digital TV channels plus video, music and games on demand, and interactive TV.
“Incumbent telecommunications providers are mostly investing in urban areas-that’s where they get the greatest return,” said Donald Goddard, manager of the Grant County Public Utility District. “We were told that we’d have to wait until they were ready to come to us. So the people in the county decided to go forward on their own.”
This decision was made easier by the fact that the utility had excess transmission capacity-as did other public utilities in the state. Fiber-optic cables had initially been installed to get control over dam substations and automated meter readings, as required by the state. There was more than enough capacity for that purpose.
Other public utilities around Washington state also decided to take matters into their own hands-which made traditional providers take notice. In fact, Verizon filed a lawsuit against the Douglas County Public Utility District challenging the deployment of its Douglas County Community Network.
“There were some questions about whether we had the authority to do this-so we and 28 brethren [public utility districts] went to Olympia to propose legislation clarifying our authority,” Mr. Goddard said.
Gov. Gary Locke signed Senate Bill 6675 into law on March 23, 2000, officially allowing the state’s public utility districts to provide wholesale telecommunications services across fiber-optic networks. Verizon dropped its lawsuit. And a consortium of 18 public utility districts established NoaNet (the Northwest Open Access Network), which leases power from the Bonneville Power Administration (an agency that is similar to the Tennessee Valley Authority). That effectively connects their individual networks, which span Washington state, much of Oregon and parts of Idaho and Montana.
Grant County started a pilot program with its local Zipp fiber network about a year ago. Right now 1,000 homes are connected. The goal is to have 40,000 on the local network during the next three to five years.
The public utility district has also been busy signing up service providers.
“Our goal is to have multiple providers competing for our customers’ business,” Mr. Goddard said.
Neither of the two cable TV operators that service Grant County-Northland Cable and USA Media-was interested in participating.
But Grant County has signed up the Benton Rural Electrification Agency, which will provide digital TV, video on demand and high-speed Internet access (using software developed by Myrio Corp.) as well as telephone services. Two other ITV service providers are Spark Interactive and Video Internet Broadcasting. According to the public utility district’s telecommunications engineer, Jonathan Moore, Episode Media is also interested.
“The fiber optics can support up to 10 different cable companies,” Mr. Moore said.
Greenwood, Ind.-based Spark Interactive became interested in making Grant County its first deployment after meeting public utility district delegates at an informal gathering of utility providers in Memphis about a year and a half ago. To date, company President Bill Dever said, Spark has built a satellite farm and headend, bought equipment from Harmonic and invested a couple of million dollars deploying an ITV service, which will offer up to 200 TV channels, including music, games and movies on demand.
In tandem, locally based Video Internet Broadcasting is in final negotiations to secure a package deal from Canal Plus that would include its MediaHighway and MediaGuard ITV solutions, content and set-top boxes customized for public utility district delivery. Video Internet Broadcasting plans to offer three television options to its customers: a base package of 25 channels (15 local, 10 satellite drop), plus high-speed data; basic plus (40 channels, including video on demand); and premium-150 channels with video on demand.
According to Video Internet Broadcasting President Kelly Ryan, talks are also under way in Spokane, Wash., with NBC affiliate KHQ-TV and ABC’s KXLY-TV and in Seattle with PBS affiliate KCTS-TV.