Southwest Virginia Job loses 2010-2020.
Southwest Virginia Job loses 2010-2020.

Bristol Virginia Utilities Update for 2009, 2019

by Lewis Loflin

Bristol Virginia has been ranked as one of the top seven "intelligent" communities in 2009. But in 2019 this has done nothing to reverse poverty or population decline.

The idea was install cheap, taxpayer subsidized broadband and the jobs will come. There is zero proof of this claim in 2019. Much of the management of BVU have been sent to Federal prison on a number of charges.

The rest of this stand as a historical record - I told you so.

To quote

Bristol is located in a rural, low-income region whose traditional products - tobacco and coal - are in major decline. Starting in 1998, Bristol fought incumbent telecoms in court and the state legislature to win the right to deploy a fiber network called OptiNet. It was conceived as a backbone serving government and schools but grew into a fiber-to-the-premises network for business and residents in Bristol and four neighboring counties.

With a 62% market share, OptiNet has saved its customers an estimated $10 million. It has also attracted more than $50 million in private investment, including the region's first technology employers, and improved rural education and healthcare by connecting local providers to leading institutions.

Update 2019: there is still no proof of any $50 million in private investment. All efforts to verify this have proven futile.

The above statements are largely false. When I asked just what that the $50 million private investment was, they couldn't tell me. There has also been zero job growth in Bristol outside of BVU itself, and that wasn't much.

BVU got another $3.9 million dollars from the Virginia Tobacco Commission. The hope to construct a 49-mile expansion for lines running through Washington and Smith Counties. This is also being used to install a backup system for "redundancy" of data for customers.

To quote Stacy Bright BVU (who later went to prison) executive vice president and chief financial officer, "This would allow us to provide redundant [fiber-optic] routes for all our customers, but especially Northrop Grumman and CGI-AMS. This would assure them of no down time and - in a data-driven world - without a backup they don't work."

Now I've met Stacy and she is fine person, but Northrop Grumman and CGI-AMS did not locate in Russell County because of BVU. Northrop Grumman and CGI-AMS located in Russell County because the lucrative state contract they managed to get from the Virginia under now Senator Mark Warner required them to locate there.

In fact this is part of a massive corporate welfare scheme for this state outsourcing contractor. Note as of 2011 the almost 1000 new high tech jobs promised since 2005 turns out to be about 200 and the additional corporate we has come to between $10-$15 million. They cost a number of local state workers their jobs and pay far less.

Update 2019: The promised jobs were bogus from the start. We got a data center that hires few people and a low-paying call center paying a pathetic $11 an hour in Russell County. Just a fraction of the 1000 high paying, high tech jobs they promised.

What we have in 2019:

Russell County population 28,897 in 2010; in 2018 26,748; a -7.5% population decline, a 20.2% poverty rate.

In fact after spending perhaps $100 million on fiber optic in Southwest Virginia BVU has failed to produce a single private sector job they can document other than call centers we got before spending the money. One call center in Abingdon, Virginia that was moved into a government subsidized "business incubator" pays a whopping $8.50 an hour. Then they relocated again.

See Cable Ready Socialism Main Page. Ref. BHC September 29, 2009

Update 2019: BVU to its credit has great electric rates.

As a final note announced October 1 electric rates might be coming down for Bristol BVU customers because of a rate drop at TVA. This drop in TVA's fuel surcharge (due to higher rainfall of over 3 inches above average) will offset an average 8 percent increase in its base electric rates. A residential customer using 1,000 kilowatt-hours of electricity a month, the base rate change represents a $5.52 average increase. The fuel cost equals about $7.36 in savings, resulting in an average net savings of about $1.84 a month, according to TVA. The cost of 1,000 kilowatt-hours is $80.49.

Some may say this is very cheap compared to other regions, but not when wage scales hover at or below adjusted minimum wage.

As for Southwest Virginia customers of Appalachian Power, you just lost out. The Virginia State Corporation Commission in August allowed 7.7 percent increase in fuel adjustment costs. For 1,000 kilowatt-hours one can expect to pay about $7.16 more a month under the new rate. AEP is a private company while TVA is government owned and has far more hydropower generation than Appalachian Power. AEP is seeking another 14.5 percent increase due to environmental regulations that will add another $15 per 1000 kilowatt hours.

As of 2011 controversy still rages over utility rates as state regulators fight to assure monopoly profits for power providers while caving in to demands from environmentalists for more costly "Green" power production. The average citizen is often the loser.

Back to History, Causes of Poverty in Southwest Virginia

Yes we have broadband and spent millions.

To quote LENOWISCO Broadband Study Warned against Call Centers (PDF file):

"The region has been replacing traditional (better paying) manufacturing jobs with (low paying subsidized) call center jobs, which provide limited advancement and work opportunities. Call centers represent the factory floor of the Knowledge Economy; they are an important part of a diversified economic development strategy, but the region must be careful not to rely too heavily on them, as the work is easily moved to other regions and/or other countries."

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