Background

Located midway between metropolises Dayton to the north and Cincinnati to the south, the small town of Lebanon, Ohio offers residents the best of two worlds—the peace and tranquility of country living combined with the convenience and cultural benefits of urban cities just thirty miles away in either direction.

Still, such close proximity to two major cities represents a challenge for the town, whose small local businesses struggle to compete with larger organizations in Dayton and Cincinnati.

Initially prompted by increasing community dissatisfaction with the current cable TV service provided by Time Warner, Lebanon began to investigate building its own broadband telecommunications network several years ago. As the town already owned and successfully operated a municipal electrical utility (earning it a favorable reputation in the community) Lebanon’s entry into the telecommunications market seemed only natural. Convinced of a municipal MetroNet’s ability to promote local economic development and give local businesses the competitive edge they needed, Lebanon decided to proceed with the project.

Process

In 1998, Lebanon began the deployment of a Hybrid Fiber Coax (HFC) system with an initial $6 million-buildout funded through utility system reserves and non-taxable municipal bonds. Simultaneously, the city launched its own cable TV service, which achieved a 31% penetration rate its first year and currently maintains a 40% share of the cable TV market.

Lebanon’s commitment to outstanding customer service accounts for much of its business. Lebanon offers customers unparalleled 24x7 assistance, responding promptly to service requests and allowing residents to schedule a service appointment at a specific time rather than sometime within a three-hour window. Customers also receive a single bill for all of the services to which they subscribe. Such quality service has resulted in a loyal customer base, surprisingly resistant to competitive promotions and price wars.

Challenges

While Lebanon’s entry into the retail cable TV market was well received among residents, it prompted severe backlash from private industry concerns who filed multiple lawsuits against the city. Despite these setbacks, Lebanon continued to build out its network, triggering an aggressive promotional campaign—consisting of door-to-door sales and slashed prices—by Time Warner against the city’s service.

Unable to purchase programming from content providers at rates comparable to those secured by Time Warner, Lebanon has already had to raise its rates once and may have to do so again. Claiming unfair competitive advantage, Lebanon has asked the Ohio State Attorney General to look into the matter.

Services

In addition to cable television service, Lebanon also provides the following services:

High-Speed Internet

High-speed Internet access is provided by locally-based, Go Concepts, Inc., who leases capacity on the network from the city. Lebanon’s HFC system supports downstream speeds of up to 10 Mbps and upstream speeds of up to 4 Mbps.

Telephone

To date, Lebanon has borrowed $1 million to get its telephone service off the ground. Through a partnership with Cincinnati Bell, it expects to begin offering service by the first of June. Once telephone service is up and running, both Cincinnati and Dayton will qualify as local instead of long-distance calls, along with all the areas in between.

Even with a minimal amount of marketing, over 700 people have already signed up for telephone service.

Results

Consistent with the city’s objectives, Lebanon’s MetroNet has positively impacted the city’s economy and enhanced its quality of life. Lebanon’s network provides local businesses with opportunities they previously did not have by enabling them to purchase affordable advertising on popular national networks as well as on the public access channel.

Furthermore, the network provides residents with improved services and promotes a sense of community spirit by providing cable subscribers with a variety of local programming on its public access channel—from city council meetings, to high school sports, to the annual Christmas parade.