Out on a point of pristine Albemarle Sound shoreline, developers imagined a mixed-use, environmentally sustainable community—sidewalks instead of traffic, cottages instead of McMansions. Called Sandy Point, the development was supposed to attract vacationers, retirees, and businesses to economically struggling Chowan County in northeastern North Carolina.

Sandy Point,” the developers wrote, “will also create opportunities for people with mobile talent.” The so-called Creative Class would come to Sandy Point, they continued, because when you can work from anywhere, why not work from one of the best places in the state?

Sounded great—until the developers realized there would be no broadband internet.

In 2013, broadband internet is the fourth basic utility along with electricity, water, and sewer, says Nick Didow, a UNC marketing professor who works on economic development projects in rural North Carolina. People expect to have high-speed internet. But Chowan County, like many other rural areas, still functions on dial-up and slower-than-broadband DSL. Without good internet access, the developers wouldn’t be able to sell home sites. Plans for Sandy Point ground to a halt.

Didow first came to Chowan County at the request of the town manager of Edenton, the county seat. A small, historic town with a few thousand permanent residents, Edenton wanted to add the modern touch of a public Wi-Fi network. Didow and his business-school students did an analysis—the network wasn’t feasible. There wasn’t any fiber-optic infrastructure in Edenton, and what the local telecommunications provider would charge to build the network was simply too much.

Didow realized that someone had to bring broadband internet to the struggling rural parts of North Carolina. Without it, he says, the economy can’t develop. And it’s not just about business growth and home sales: limited or no broadband also means no connectivity for emergency services, hospitals, or schools.

For years, a nonprofit called MCNC has been connecting North Carolina schools to its N.C. Research and Education Network by leasing cable from private providers, says CEO Joe Freddoso. MCNC bands all the public schools in the state together to purchase internet services collectively, which reduces the price for rural schools. But the schools’ need for bandwidth quickly outstripped what the limited broadband infrastructure could provide. The cost of putting in more fiber-optic cable was too high to make rural markets attractive to internet service providers. “They just weren’t going to build more cable,” Freddoso says.

He and Didow both came up with the same solution: apply for Recovery Act funding to build fiber-optic infrastructure in underserved rural areas, then sell it cheap to private service providers. They worked separately at first—Didow and his UNC students in the 22 counties in the northeast, Freddoso and MCNC in the southwest—and then together to plan a statewide fiber-optic network.

The federal government wanted to fund broadband projects in the most economically struggling areas, so Didow and his students identified poverty and unemployment rates in rural N.C. counties. They and MCNC studied today’s bandwidth needs and projected how they will increase with development. They designed a network with enough capacity to support rural North Carolina’s needs for the next 50–100 years.

The project now known as the Golden LEAF Rural Broadband Initiative was approved—more than $100 million in Recovery Act money, $24 million from the N.C. Golden LEAF Foundation, and millions in private funds raised by MCNC. Contractors started building in 2011. Now, in the summer of 2013, the newly completed network spans 1,300 miles through 69 counties and reaches into all four corners of the state. Schools, EMS departments, health care providers, and libraries across the state are linked up to it.

I was at a conference last summer,” Didow says, “talking to a middle-school principal from the western part of the state. He said, ‘You wouldn’t believe what happened the other day. These people dug a trench, and they plugged our school in—we’re on the internet!’” For the first time. In 2012.

Getting broadband internet to individual homes, like the planned homes in Sandy Point, is the next phase of the project. For that, MCNC is selling the “dark cable” of the network—bundles of fiber-optic cable that haven’t been turned on yet—to internet service providers and other telecommunications companies.

A mile of fiber costs at least $30,000 to build—and much more if conditions aren’t ideal,” Freddoso says. “We’re selling it for, at most, $750 per mile. Buy enough, and the price comes down to about $325.” They’re working out agreements with half a dozen N.C. providers, and are in talks with 15 or 20 more. The money from the sales will be used to help maintain the network in the years to come.

“Even if you’re selling at very low prices, there’s still got to be a market,” Freddoso says. “The challenge is helping private companies identify those markets.” Didow and MCNC are doing that by analyzing demographics and projecting how internet access and development will increase demand for high-speed broadband service.

Several years ago, there wasn’t much hope for many rural homes and businesses to get high-speed internet, Didow says. “But now, it can be done. We have taken a major step toward closing the digital divide in North Carolina.” North Carolina’s new fiber-optic network has been identified by the White House as an outstanding example of using broadband stimulus funds to help improve the United States’ infrastructure.

Nick Didow is an associate professor in the UNC Kenan-Flagler Business School and a faculty fellow at the Frank Hawkins Kenan Institute of Private Enterprise.