OptiNet Communications, the broadband arm of Bristol Virginia Utilities, faces the dual challenge of being a community utility for 60 years and entering an entirely new business of broadband, said Robert J. “Jim” Kelley, vice president of operations.

OptiNet has just under 400 miles of fiber optic cable and eight points of presence. The company provides fiber to the user. The company delivers Ethernet services over virtual local area network using 802.1 p/q for L2 quality of service (QOS) and IP TOS/DiffServ for L3 QOS. This infrastructure is designed and built to support existing and future broadband applications, so the highly scalable network offers ubiquitous service delivery and highly scalable offerings that are easily customized to business requirements.

The incumbents will try different tactics to deter municipal operators entering telecommunications, Kelley warns. In OptiNet's case, for example, there were charges that the regulated utility was subsidizing unregulated OptiNet. OptiNet had to go through the time and expense of showing that wasn't the case.

The telecom and cable industries have powerful lobbies, Kelley said. Regulations require a feasibility study, public hearings, full cost-accounting to prove there's no cross-subsidization and that all proper taxes and fees are being paid, in addition to a public referendum. The incumbents will make new market entrants jump through all these hoops.

“Make no mistake, they know their business, and you must know yours when you go up against them,” Kelley said. “Service, pricing and time-to-market are three major advantages that municipals have going for them.”

The local incumbent cable provider raised rates 49% between January 1999 and December 2001 and then another 70% since OptiNet started service in 2002, helping to shift many customers to the new provider, Kelley said. The advanced services, along with the superior customer service, are other important factors that have attracted and retained customers — OptiNet's churn rate is only .5%.

The hosted IP PBX is one of the more popular services, but only one of many that OptiNet offers. Voice services include calling features, operator services and local and long-distance phone service. Video services include analog and digital television, HDTV and digital video recording. Broadband services include asymmetric and symmetric Internet access, transparent LAN service, SecureNet firewall, disaster recover, Web hosting and remote office capabilities.

Personnel is one of the biggest start-up challenges, Kelly adds. The new telecom provider must determine the positions to be filled, the skill levels needed and where to find people. To get the right people, the company might have to break from traditional pay scales.

Skilled personnel include network engineers, service technicians, help desk, provisioning, order management and customer service personnel. Kelley recommends looking across a vast array of industries to find the right people. OptiNet filled its needs by looking at prospects from local hospitals, universities and community colleges, competitors, contractors and the internal staff of the regulated utility. Some had four-year degrees, some two-year degrees and had various technical certifications. On-the-job training is essential, Kelley said. The customer service representatives need to be cross-trained on all services because the person who calls in about one service is likely to ask about another. By vigorously training its customer service representatives, OptiNet currently clear 75% of all telecom trouble calls, but that's still below Kelley's goal of 85%.

Another important element in keeping customers happy and maintaining the integrity of the network is to start with the right equipment in the first place. Kelley advises telecom operators to include acceptance testing as part of the contract with any vendor. The provider must take a proactive approach in setting the testing parameters and include penalties for non-performance.

“Never put a piece of equipment into a production network without proper testing,” Kelley said. “It will come back to haunt you. Establish a good relationship with your vendors. This can be the difference between great success and just getting by.”

OptiNet built a complete optical network because maximizing bandwidth provided the company the best infrastructure for fending off future competition, according to Kelley. The network is based on G.983 PON, which was the only viable solution in 2002. The network features low operating costs.

PONs are ideal for serving general voice, data and CATV services to business and residential customers, Kelley said. Private Ethernet works better for transparent LAN applications and high-bandwidth, QOS-dependent IP services.