Citizens Telephone Cooperative of Floyd is pulling the plug on a costly failure to become a player in wireless broadband Internet Service. The phone company will shut down its mobile high speed service in Christiansburg, Blacksburg and Radford on April 30 after spending — and losing — a lot of money on the failed project.
"We agonized over making this decision, frankly," Citizens General Manager Greg Sapp, said in making the announcement.
The agonizing decision is the latest setback for Citizens, the cooperative that tried to be many things to many people while — some say — forgetting its roots in Floyd County. Deployment of the wireless service was expensive and the company never came close to meeting its goals for a subscriber base, signing up less than five percent of available customers.
This web site reported in May of last year that Citizens’ wireless broadband deployment in Montgomery County was in trouble. Verizon, the area’s dominant wireless carrier, offers its version of high-speed wireless service for less and even provides the service in Floyd County — which Citizens apparently never had in its plans.
In many ways, Citizens is a shining example of what a small, locally-owned telephone cooperative can — and should — be. It provides good phone service, an excellent level of high-speed wired broadband Internet service and decent wireless phone service that piggybacks on Verizon cell towers.
But the company is also victim to ambitious plans that could not always be fulfilled by reality. A promise to roll out fiber to the home service countywide four years ago is way behind schedule and its television over phone lines (IPTV) service does not deliver high definition broadcast signals and is still not available to many Floyd County residents. Perhaps the hundreds of thousands of dollars that Citizens spent in Montgomery County could have been put to better use in Floyd. Perhaps then the citizens of Floyd County would not pay more for telephone and Internet service than our neighbors in nearby counties.
Or perhaps the employees of Citizens would feel more secure in their jobs. The company currently employs 56 people, has reduced staff through attrition and avoided mandatory cutbacks that were threatened last year but some employees say the threat is still there if conditions do not improve. Also, Citizens has outsourced some services that once were local.
(Updated on March 1, 2009)
I’m sure it must have been a painful decision for Citizens to pull the plug on this really exciting project.
I feel the same way about their IPTV project. It is incredibly cool from a technical point of view to get your video over Internet packets and it can cut out all sorts of archaic wiring, appliances, and business models. But when the service finally arrived, the content was just another overpriced smorgasbord of a hundred mainstream channels–something that could only compete with cable or satellite on price instead of quality.
We get all our video over Internet and DVDs, but it’s either YouTubes (of friends’ projects and lives, news events, or how-tos), Netflix (you can stream thousands of movies for $5/month) or stuff we check out from the Floyd library. And it’s not just video–we use our broadband connection from Citizens for our long distance conversations (Skype), our socializing (FaceBook, blogs), our education, our political action, gaming (Luke and Jake have their favorite multi-user role-playing games), our literature (I read a lot of downloaded PDF texts and grab audiobooks for long drives), our music (a Napster subscription gets us most mainstream music and local artists have their own sites), and our work (using GoToMyPC I can sit at any web browser in the world and earn my living). Citizens has opened up the entire world for us, but that world is too large for them to control or perhaps even to add content to.
Maybe Citizens can run a core business of supplying fat pipes of Internet to customers in its geographic range, and fence off a division for developing new businesses like IPTV, wireless, and content services. Then they could report to coop members that they had invested, say 10% in new businesses and report the return on investment for each business. Though I support the ways they have invested my subscription fees in the past, I recognize that they are in an ultra competitive market and as this depression deepens, coop members are going to get more and more price conscious.