Models for Infrastructure Sharing: United States

Editor’s Note: This Practice Note is an excerpt from a discussion paper entitled Extending Open Access to National Fibre Backbones in Developing Countries prepared by Dr. Tracy Cohen and Russell Southwood for the 8th ITU Global Symposium for Regulators[i].

The MBC Cooperative: United States

The Mid-Atlantic Broadband Co-operative (MBC) covers a rural part of the U.S. state of Virginia.  It was set up in 2000, in response to a range of socio-economic problems caused by changes in the global economy. Entire industries such as tobacco, farming, textiles, furniture -- manufacturing, in general -- were disappearing, leading to thousands of job losses. The workforce had low education levels and older skills that were no longer required.  Due to the region’s geographic position and rural character, there were no competitive telecommunication carriers and services were expensive. Moreover, the existing carriers had no plans to roll out widespread broadband access in the region.

The idea for MBC was part of a broader economic development response to these circumstances.  It brought together business leaders, representatives of the nearby Virginia Polytechnic Institute and State University (Virginia Tech), and the Virginia Tobacco Commission.[ii]  This broader strategy aimed at transforming the regional economy by creating a unique competitive advantage. The result was a development plan with four key pillars: (1) building an open access telecommunication infrastructure, (2) strengthening the human infrastructure; (3) establishing the conditions for innovation, and (4) improving regional development capacity.

The initial hurdle to overcome was how to get 20 counties and four cities -- each with its own agendas, ideas and different levels of knowledge of telecommunications -- to work together.  Each of these local governments had to be persuaded that it would be better and more cost-effective to build a single network rather than patch together both the funding and construction required for multiple networks.

Eventually a single entity – the Mid-Atlantic Broadband Co-operative – was set up to manage the project, oversee construction, and provide the same infrastructure and network connections for each county and city.  Funds totaling USD 48 million came from the Virginia Tobacco Commission (USD 42 million) and the U.S. federal government (USD 6 million). These grant dollars were used to offset the debt service payments on the capital costs, thus making it easier to deliver a cost-effective service.

The network was designed to connect all business and technology parks, providing an incentive for inward location to the area. MBC operates solely as a wholesale carrier.  It offers backbone services that anyone can use, including existing carriers such as Verizon and Sprint.  MBC offers dark fibre and transport services in layers 1 (physical) and 2 (transport). Its philosophy is to make it easier for other service operators to serve the end user. MBC has laid over 1,100 kms of fibre and has 20 nodes that it calls “multi-media service access points” with OC-48 and OC-192 backbone rings. Any service provider can sign a collocation agreement and put its equipment into one of the MBC facilities. The agreement gives collocators 24-hour key card access and lockable equipment cabinets upon request.  Security cameras also are provided for remote monitoring.

In return for obtaining rights of way, MBC gave fibre strands to the local governments for municipal uses – including, for example, traffic sensor services.  MBC has provided 12 strands of fibre for public sector use in this way.  In order to connect its network nationally and internationally, MBC has links to tier one ISP data locations and is able to arrange cost-effective international transit for its users.

In the United States, several companies provide towers for mobile providers to rent -- another pragmatic form of sharing.  However, in this instance MBC has erected its own towers, which are connected to its fibre backbone, to create an incentive for mobile providers and wireless ISPs to supply both voice and broadband services, since MBC charges much lower than competing tower companies do.  Telecommunication companies join MBC as co-operative members, while it provides open access to its network, regardless of carrier, needs or competitive position.  Member companies share the profits of MBC through annual “capital credits,” which allow profit redistribution within a co-operative structure.

Counties & Cities in Virginia’s Mid-Atlantic Broadband Co-operative (MBC)

Southside Virginia Coverage

Source: www.mbc-va.com/networkCVA.php



[i] For more information about the GSR, see www.itu.int/ITU-D/treg/Events/Seminars/GSR/index.html;
Direct link to GSR Discussion Papers 2008 at: www.itu.int/ITU-D/treg/Events/Seminars/GSR/GSR08/papers.html

  [ii] The Tobacco Indemnification and Community Revitalization Commission is its full title and it redistributes money to the local authorities in its area that is given by the tobacco companies as a result of Court action over the dangers of tobacco products.

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