In Virginia, Danville's open access all-fiber network, nDanville, currently serves only businesses and large clients. In the early summer, Danville Utilities decided to recommend expanding the network to between 2,000 and 3,000 residential homes with a 10 year, $2.5 million loan.
As Danville Utilities operates the network purely on a wholesale basis, it would not provide services directly. From an article leading up to the decision:
Danville Utilities would run the broadband services to the homes, to a box mounted on the house, and the user would pay a monthly service fee of $8.80 on their utility bill for the box. Gamewood would bill customers for the actual services provided, and pay the city 20 percent of those charges as an access fee for the cable.
Gamewood, a company that would have provided IPTV services on the network, had attempted to measure subscriber interest by mailing a postcard to 1000 local residents. The response failed to persuade at least one city council member, who demonstrated a total lack of understanding of the situation.
Luther bluntly said he had “no faith” in the numbers, and said he is convinced “nDanville is not going to fly.”
“If they want to build it, let Gamewood built it,” Luther said.
Of course, a private company is not interested in an investment that takes 5 years to break even. Even if it were, it would have little incentive to open the network to competition as nDanville does.
Ultimately, the City Council neglected to fund the project - perhaps an unsurprising decision in a time of economic woe. However, for a community like Danville, one wonders how it will recover without access to better broadband than last-generation cable and DSL services that are commonly available throughout the region.
The local paper editorialized in favor of the decision, but noted that the public power utility should continue expanding the network for commercial subscribers.