Background

Anticipating potential revenue losses due to electric utility deregulation, Newnan initially explored installing a fiber optic system as a utility monitoring tool for its public utility company, Newnan Utilities.

Process

Newnan Utilities deployed an OC-3 fiber optic ring in 1993 in order to join the Municipal Electric Authority of Georgia’s (MEAG) 120-mile network of local communities interconnected by a statewide fiber backbone. This allowed Newnan Utilities to better manage electricity and water usage for the city.

Soon after, Newnan Utilities began to investigate the possibility of diversifying its business and expanding its fiber optic infrastructure to provide advanced telecommunications services to the community. In 1995, the utility company deployed a 100-MB fiber ring to serve local businesses with high-speed data connections. Its first customers included local schools, hospitals, and businesses with multiple facilities.

Later, Newnan Utilities added a third piece of infrastructure—an OC-3 fiber ring designed to provide local dial-tone service for Newnan Utilities customers. At this time, ITC DeltaCom and Globe Telecommunications placed a remote switch in the utility company’s Central Office.

In 1996, Newnan Utilities approached the local cable TV provider about establishing a public-private partnership to build a countywide network to provide cable TV service. The cable TV provider declined, so Newnan Utilities decided to pursue the project on its own, investing $12 million (financed through a municipal bond and revenues from the electric utility) into a fourth piece of infrastructure—a Hybrid Fiber Coax (HFC) system.

As with many municipal utilities throughout the nation, Newnan did not have a formal marketing plan, but it did sent representatives door-to-door in March of 1997 to sign up residential customers. By the end of 1998, the network passed 12,000 homes. In 1999, Newnan Utilities continued to expand its HFC network and began selling to customers in the unincorporated areas of Coweta County. Today, total revenues would enable the network as it is now to become self-supporting, but continued buildouts currently require additional investment.

Challenges

As with other municipalities entering the retail service market, Newnan’s cable TV service initially sparked considerable controversy, prompting the local incumbent to file a federal court injunction against the city’s service. The injunction was later dropped. However, the incumbent continued to oppose the city’s service—this time by offering rebates of up to $300 to switch. Newnan Utilities subsequently lost 225 customers to the incumbent. Of those, most have now returned to the city-owned system.

Although Newnan Utilities has already deployed four separate infrastructures to meet its ever-increasing needs, it now faces the possibility of deploying yet another piece of infrastructure. Newnan would like to move toward an open network model, enabling multiple competing service providers to offer services over its network. However, its current HFC system lacks the capacity to support multiple service providers in each service category.

Services

High-Speed Internet

Newnan Utilities’ HFC network provides high-speed Internet access to both business and residential customers. For business customers whose needs exceed that of a cable modem, Newnan Utilities also offers Internet access over its 100-MB fiber data network. Rates start at $250 for installation and $80 per month for access.

Cable Television

Newnan Utilities’ cable TV service has enjoyed considerable success, achieving a 55% adoption rate its first year, escalating to a 75% adoption rate after four years.

Home Automation

Newnan Utilities has recently added home automation service provided by NuHome.

Automatic Meter Reading

Automatic meter reading saves Newnan Utilities approximately $100,000 annually in labor costs.

Telephone

Newnan Utilities currently leases its network to a single local and long-distance service provider, Globe Telecommunications, earning the city $500,000 in revenue each year.

Results

Consistent with the city’s goals to enhance its quality of life and promote local economic development (an endeavor to which Georgia State Senator Sonny Perdue said “telecommunications is key”), Newnan’s network plays a major role in the city’s economic development plan called Vision 2020, which involves marketing Newnan and its broadband capabilities to statewide economic developers. Thus far, Newnan’s network has attracted several firms to the community and has helped spawn several others. This type of long-range vision has placed Newnan ahead of adjoining communities by 10 to 15 years.