A West Virginia firm announced today its strategy to build and manage wholesale fiber-to-the-premises networks for clusters of small towns and counties throughout the state.

iTown Communications, a two-year-old company based in Vienna, Va., intends to pursue what it calls a "three-way public/private partnership" called "West Virginia First," using long-term debt to build and manage wholesale FTTP networks for the delivery of triple-play services. The networks will be owned by separate ad hoc holding companies in each community cluster, directed by a mix of private and public representatives. iTown will operate the wholesale networks through management contracts with each holding company.

"It's a private company with public interest objectives," said Sandy Fain, iTown's vice president of marketing, referring to the holding companies. "The intent is to create an access company that's financially viable in the sense that it's self-supporting. iTown will have a subsidiary that will manage that company soup-to-nuts."

iTown will group small towns and counties into clusters to attain economic justification for the networks that might otherwise be unattainable by the individual towns themselves. Participating county and municipal governments don't have to operate or finance the networks, but they must agree to be "anchor tenants" on (or initial customers of) the networks.

"We can aggregate demand and syndicate costs across these entities so that each entity does not have to bear the full burden of all the operating costs," Fain said. "In the modeling that we've done, if we can develop a cluster as small as a population of about 25,000, we believe we can prove in the network."

While the West Virginia First networks will be wholesale, allowing multiple service providers (including incumbents) to compete to offer services over the network, iTown itself will also create an as-yet-unnamed retail subsidiary to provide triple-play services over the network, ensuring the presence of at least one service provider on the network in the event that no other private providers show an interest--a hazard Fain said he's seen in other municipal wholesale networks. Fain acknowledged that some service providers may be leery of competing with a subsidiary of their infrastructure supplier, but he maintained that iTown's retail subsidiary will be subject to the same prices and terms as any other service provider on the network. Also, he said, if iTown were to give preferential treatment to its retail subsidiary, it would incur the wrath of the holding company that owns the network, which will have its own board of directors, including representatives from participating cities.

Though iTown will not name its preferred suppliers of FTTP equipment, its wholesale networks will employ active, not passive, architectures based on gigabit Ethernet and IP technology, Fain said.

The first two targets in iTown's crosshairs are the Beckley-Bluefield and Wood County clusters, which have both shown some initial interest in working with iTown. The city council of Bluefield, W. Va., a town of about 11,000 in the southern part of the state, has already voted to proceed with a third-party feasibility study of iTown's proposal, which will be reviewed by independent consultants. The Beckley communities made similar agreements, Fain said. iTown still awaits approval from surrounding counties in the cluster.

Wood County, which contains about 87,000 people on the state's Western border, has also agreed to participate in a feasibility study, as has the city of Parkersburg, which is located in that county. To proceed with the study of that cluster, iTown awaits a green light from the city of Vienna, where iTown is based.