Open Access Network in Mount Vernon, Washington Created More Jobs and Government Savings

Mount Vernon, Washington, started building their own fiber optic network in 1995 and over the past 18 years have continued to add incrementally. While the network started as a way to connect a few municipal facilities, it has since expanded to nearby Burlington and the Port of Skagit. The network now serves government, schools, hospitals and clinics, and a broad range of businesses in the area.

We spoke with community leaders from Mount Vernon for our 38th episode of the Broadband Bits podcast. Mount Vernon owns the network and operates it out of the Information Systems office.

The network required no borrowing or bonding because initial funding came from a state Community and Economic Revitalization Board (CERB) grant. Since then, Mount Vernon has used revenue from the network and creative cost sharing with partners to expand throughout the city. When expanding into Burlington and the Port of Skagit in 2008, city leaders received a county sales tax grant to fund deployment.

The Mount Vernon School District became a partner early in the evolution of the network. According to Kim Kleppe, Information Services Director, K-12 schools do not pay a monthly fee to receive up to 1 gig of capacity for their 10 facilities. He estimates the current costs of a dark fiber connection for one facility at $700 per month. Total savings are astronomical, allowing the schools to dedicate significant dollars toward other expenses.

Mount Vernon city government saves over $100,000 per year and nearby Burlington saves over $52,000. The network has never been in debt and maintains a reserve.

Mount Vernon's network is an open access model on which ISPs serve customers via the city's infrastructure. Subscribers pay a one time fee to the city to be connected. Onging revenue comes from the ISPs, who pay to the city a percentage of what they collect in customer connectivity fees. Currently, eight different providers offer services via the Mount Vernon network, providing ample competition.

Like other communities we see that choose the open access model, Mount Vernon acknowledges that they could take the next step and provide retail services but they choose not to. Kleppe tells us that Mount Vernon wants to let the private sector do what it does best - provide retail services - while the city offers the infrastructure.

Healthcare, aerospace, engineering, banking, technology, and legal data services are a few high bandwidth industries with locations on the network. Jana Hansen, Community and Economic Devlopment Director, believes the fiber optic network is a key element in bringing new companies to Mount Vernon. Hansen decribes the network in the Port of Skagit as a "tremendous success" and notes that businesses have re-located from Seattle to the Skagit Valley. While those businesses often cite quality of life as a driving factor, Hansen believes Mount Vernon, Burlington, or the Valley would not have been considered without the fiber network.

Jana Hansen shared these thoughts from a business that moved to Mount Vernon from Seattle:

As a Seattle law firm with an integrated information security business for the past twelve years, our Pioneer Square office lease term was ending, and we needed new, larger, space. As we began the process of evaluating our options, we came to realize the significance of the fact that our customers are national, or international, and that less than ten percent of our revenues for the past three years came from Washington. This meant that as far as our customers were concerned, we could relocate our offices anywhere, provided that our new location met three important criteria: (1) access to tech-savvy workforce pool; (2) dependable high-speed business-quality internet; and (3) reasonable proximity to air transportation. Skagit County, and Mount Vernon in particular, meet and exceed all of these. MV’s location astride I-5 means that our employees can live from Bellingham to Everett and still face a much shorter, and more comfortable, commute than if they lived in Bellevue and travelled to downtown Seattle during rush hour. This huge area is filled with energetic, technically sophisticated potential employees who appreciate the opportunity to avoid the morning grind. Secondly, Mount Vernon’s ahead-of-its-time fiber ring means affordable, dependable internet access of the highest quality. We are accustomed to paying thousands of dollars per month for bandwidth. Not only will we pay less in MV (for more capacity), but fiber optic circuits are more reliable and flexible than the older data lines we have been required to use in Seattle. Finally, the improvements to conveniently located Bellingham’s airport over the past few years have opened up routes all over the country, and more are on the way. I suppose there are other places that would also meet these three criteria, but none of them match the most important reason of all that we are moving to Mount Vernon: quality of life. No traffic concerns, affordable cost of living and housing, great schools, proximity to major metropolitan areas (Seattle and Vancouver) without the negative points, equal proximity to all that outdoors and nature offer, and, of course, friendly and helpful people who are a pleasure to interact with. We couldn’t imagine moving anywhere else. For these reasons, we’ll be opening our offices in Mount Vernon this Spring.
Update: Some have asked (rightfully so) for more information about the grants involved in building this network. IS Director Kim Kleppe sent this to Christopher to explain more about the financing:
We had two grants helping to fund various parts of the project. The first one was actually 2001 for $500,000 and the second one in 2005 we received $367,506. Other than that we had a lot of partnerships to help extend and push out various demarcation points and this would be hard to calculate. A lot of the areas we built around were built based on where are facilities were - for example our wastewater pump stations which really covered a lot of area which was partially funded by that utility and where other partners like the Schools, County and Hospital sites were located sharing costs for the build. It was built based on both vision for needs for both public and private needs and is still a growing process, but no debt was incurred and not much of a budget to work with.
The lesson we take away from this is that most communities have many opportunities to make investments like this. Local officials need to be creative and determined. Opportunities rarely surface themselves, they are created by building relationships and coordinating infrastructure efforts.