Background

Grant County Public Utilities District (GCPUD) first started investigating building out a countywide fiber optic system in March of 2000 when Washington State Governor Gary Locke signed Senate Bill 6675, allowing Washington’s public utility districts to provide wholesale telecommunications services.

Up to that point, Grant County did not have access to advanced telecommunications services due to the county’s sparse rural population (2,600 square miles of land with fewer than 28 people per square mile), which prevented the local ILEC (Qwest) from investing in this area.

For years, GCPUD had maintained fiber optic lines between substations, hydroelectric facilities, and administrative buildings as a mode of communication. GCPUD determined it had enough excess capacity to warrant extending those lines to businesses and residents throughout the county. Costs to run fiber to the home and business had dropped sharply over the previous year, enabling GCPUD to take the lead and install more than 50,000 miles of fiber optic cable to 37,000 homes, businesses, farms and public utility buildings by the end of 2005.

Process

GCPUD connected its first customer in July 2000 during its initial pilot program of 100 homes and 50 businesses. It officially rolled out the ZIPP Network in the spring of 2001.

ZIPP Network conducted two primary research studies. The first study, conducted prior to the start of the buildout, indicated that 20-40% would switch to the ZIPP Network. The second study, conducted after the initial ZIPP Network deployment (December 2001 and early 2002), found that 60-80% were interested in switching. Keeping up with demand for the network became critical.

Today, ZIPP Network has over 1,600 customers connected.

Marketing

GCPUD hired a consultant to create the ZIPP Network brand image and correlate that image with press releases and marketing materials. Initially, GCPUD spent $50,000 to brand the ZIPP Network (logos, press releases, Website, stationary, etc.).

GCPUD’s marketing mix includes the following:

• Direct mail marketing. GCPUD includes information about the ZIPP Network with each customer’s monthly utility bill.
• Door-to-door marketing. In the summer of 2002, GCPUD plans to hire local students to promote the ZIPP Network door-to-door. GCPUD will remain vendor-neutral by distributing vendor information packages to potential customers. Key message strategies will include (1) availability of high-speed Internet, (2) choice of providers, and (3) automatic meter reading.
• Hands-on demonstrations. GCPUD has purchased a “technology trailer” that travels to neighborhoods, county fairs, classes, and elsewhere to allow residents to experience the speed of the its fiber optic network first-hand.
• Neighborhood block parties. Prior to deploying in a neighborhood, GCPUD arranges a “block party” and schedules the traveling technology trailer to attend. Service providers also attend the block parties to talk about their services and sign up customers.
• Weekly “Teen Night”. GCPUD has developed a weekly “Teen Night” at the local high school where teens can participate in online gaming, watch videos, design Websites, etc.

Services

Designed to spur competition among service providers and deliver value-added community benefits, the ZIPP Network offers residents of Grant County more choices for cable TV, Internet, and telephone service. Today, the ZIPP Network includes 9 Internet providers, 1 telephone provider, and 2 cable TV providers. GCPUD expects more providers to enter the system within the next five years.

Challenges

GCPUD continues to experiment with a variety of methods to increase penetration rates for the ZIPP Network. Initially, GCPUD deployed the ZIPP Network in neighborhoods based on their proximity to fiber and ease of building out. Penetration in initial deployment areas averaged around 20-25%, with some neighborhoods experiencing a switch rate as high as 40% and others as low as 15%.

GCPUD realized it needed to achieve at least 35% penetration in each neighborhood to meet its financial commitments and demonstrate success. It decided to prioritize its deployments based on demand rather than ease. Now, GCPUD requires at least 35% of a neighborhood to sign a petition prior to considering the neighborhood for deployment. Individuals who call GCPUD asking when their neighborhood will be built out become “Hub Advocates.” They then take on the responsibility of contacting people in their neighborhoods and getting them to sign a petition indicating support for the ZIPP Network.

Today, GCPUD has over 300 Hub Advocates and more than 29 neighborhoods that have turned in petitions. Nineteen neighborhoods (those with the highest signing percentages) have been selected as deployments in 2002. GCPUD realizes that 19 neighborhoods is an aggressive deployment for 2002, but is willing to do everything in its power to hit its financial targets. GCPUD is able to deploy approximately 5,600 homes per year depending on availability of crews.

Results

At long last, ZIPP Network has brought advanced telecommunications capabilities to a rural community in which some residents—even in this modern age—still did not have telephone service.

Grant County residents pay $40 per month (plus a small installation fee) for 5 Mbps of dedicated bandwidth delivering cable TV, telephone, Internet, and automatic meter reading services. The average homeowner typically spends roughly $85 a month on these same services.

Some might question whether a fiber optic buildout in a rural county is worth the price. Governor Locke believes such communities cannot afford not to deploy advanced telecommunications infrastructures. He said, “In today’s world, many businesses will not even consider investing in a community that does not have high-power fiber optic cable, digital switching, and other infrastructure necessary for in-line communications.”

Terry Brewer of the Grant County Economic Development Council agrees. “We anticipate that the high-tech industry and other advanced system users will look closely into locating in Grant County,” he said. “The low cost of utilities paired with the best fiber technologies in the state will be a deciding factor for many of these companies.”