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Is Municipal Broadband Right for You?

Everybody's doing it. Should you? State and local CIOs take you through their decision-making processes.

Gary Cavin, the CIO of Columbus, Ohio, has heard all the hype about municipal broadband. Every city from Independence, Ore., to Brunswick, Maine, seems to be planning or piloting wireless Internet services for their communities as a new utility, just like gas, water and electricity.

Now, Cavin is considering a municipal Wi-Fi rollout across his city’s approximately 225 square miles, and the big question weighing on his mind is, What is the best implementation for my community? But it’s impossible to rely on track records to help make a decision since most of the biggest and most publicized projects aren’t finished yet.

“I’ve already recommended to the mayor that we do a tremendous amount of due diligence before plunging into municipal Wi-Fi,” Cavin says.

The CIO’s question is the same one you should be asking about your state or municipality: Just because the town next door has installed communitywide broadband, does that mean it’s right for you? Currently, about 400 municipalities around the country are undertaking broadband experiments, with a few dozen, such as Philadelphia, doing full-scale networks, according to Free Press, a nonprofit group that favors municipal wireless projects. What type will work best for your businesses and citizens?

StateTech sifted through many of the projects to come up with some sound advice. Above all, remember that your first steps into broadband don’t have to be giant leaps.

“You don’t have to get fancy,” advises Thomas Asp, principal engineer and analyst, Columbia Telecommunications, a consulting firm based in Columbia, Md. “Mundane solutions are often the most effective. A lot of great success stories have been built without a lot of money.”

Here are some critical steps to get you pointed in the right direction:

Let Need Drive Technology

CIOs and municipal leaders must consider the needs of their community. In 2000, with annexation looming in Fort Wayne, Ind., the city was expected to grow from 185,000 residents to 250,000 in six years. Mayor Graham Richard knew the city needed to step up its broadband efforts to create a more efficient government. What’s more, Fort Wayne was considered a high-wage, low-skill manufacturing town, but those jobs were slipping away, and Richard needed to attract new businesses and offer more career training to residents.

Richard lobbied Verizon to make Fort Wayne its first FTTP (fiber to the premises) technology customer in the Midwest. Verizon agreed and built a fiber network to more than 128,000 homes and businesses. But Richard has even bigger plans. He created the Innovation Initiative, which includes iTeams in education, medical and other sectors to educate and promote broadband use in all facets of life.

The results have made the town more attractive to businesses and residents. “Broadband and [FTTP] make Fort Wayne more competitive in retaining and gaining jobs,” Richard says, as well as improving services and the quality of life for residents.

Closing the Digital Divide

In Philadelphia, 90 percent of affluent households have Internet access. But only 15 to 25 percent of low-income homes have connectivity, according to former CIO Dianah Neff, who left the position in August. What’s more, many low-income residents who have Internet access available in their communities can’t afford it. “We do have a digital divide in Philadelphia,” she says.

It was a leading reason why the city began its $15 million “Wireless Philadelphia” (WP) project in 2004, a municipal wireless Internet service that would make the city’s 135-square- mile area the largest Internet hot spot in the United States. In addition, the plan would boost economic development and tourism in the city, and reduce government costs.

The project began with a pilot program in the Love Park neighborhood in June 2004. About 1,200 residents registered for the service. The pilot expanded to two more low-income neighborhoods and two tourist hot spots. “Two-thirds of the people using free wireless hot spots are visitors,” Neff says.

The project is far from finished. In August, WP launched a proof-of-concept project that covers 15 square miles to further test the network. “That’s a go or no-go point in our contract,” she adds. “We have a right to cancel at that point,” if the network falters and problems can’t be cured. If all goes as planned, wireless broadband will roll out citywide by fall 2007.

Consider Economic Survival

For some cities, broadband means survival. The city of Princeton, Ill., with 8,000 residents, lost 500 jobs in August 2003 when the city’s largest employer, Harper-Wyman Co., shut down operations. Princeton residents were soon leaving the city.

The city reached its tipping point just two months later when Ingersoll Rand Co. threatened to close its Princeton operation and take 400 jobs with it. “They said we didn’t have the telecom infrastructure to operate here,” says Jason Bird, superintendent of electric and telecommunications. Even the cable and phone companies didn’t offer broadband at the time.

The city came up with an immediate plan. Bird’s crew laid 12 miles of overhead fiber cable on city-owned poles in six weeks, providing broadband to the manufacturer. “We also decided we didn’t want to be the ISP [Internet service provider],” he recalls. A request for proposal (RFP) yielded four responses. Bird chose a local ISP that already had 700 dial-up customers, “the number we thought we needed [to convert to broadband] to be successful.”

Now Ingersoll Rand has decided to stay and will invest $6.5 million in its Princeton facility. What’s more, Bird says Princeton has improved the quality of life for its residents, and promoted economic development and competition in the city. The city funds its entire telecom budget with revenue from broadband subscribers. “Any municipality that wants to survive has to have some type of telecom project in their community,” Bird says.

Different Circumstances, Different Solutions

It’s just common sense. A rural town surrounded by mountains will probably need fiber or satellite connectivity. A well-populated city could more easily offer Wi-Fi. Cable services can offer 850 megahertz to 1 gigabyte of connectivity. Connecting broadband over power lines is inexpensive because electricity is already coming into every home, but it also has limited frequencies, and electromagnetic signals don’t go through a fuse box and would have to be configured around it.

Broadband can also be offered over copper phone wire lines, such as those used for DSL (Direct Subscriber Line) or T-1 lines. Wi-Fi is very popular, but it offers very narrow bandwidth. With speeds of 1 to 2 megabytes per second, it can be difficult to send and receive video, for instance. On average, one square mile of Wi-Fi connectivity requires 20 to 45 access nodes. Broadband via satellite modem is available for the most remote users, but the technology is more costly than other options.

It’s also important to monitor the needs of the community. Are residents predominantly novices, infrequent browsers or power users who require plenty of bandwidth?

Tally Up Existing Infrastructure

What does the locality bring to the table? Does it own the electric poles or antenna towers, or have attachment rights to those poles? Leasing access to these structures can add thousands of dollars to the budget laws. Also, take a full inventory of the fiber or wireless assets the city may already have. Park districts, schools and emergency response may already have limited broadband capabilities on which to build.

Write Your Own RFP

Many municipalities are hitting snags in writing their RFPs, says Alan Shark, director of the Public Technology Institute, a nonprofit technology research and development organization based in Washington, D.C. Some city leaders blindly copy other cities’ RFP requirements or make unreasonable requests, such as expecting the vendor to carry all the risk.

“[Municipalities] are copying each other, and I don’t think that’s healthy,” Shark says. Pre-meetings with departments, stakeholders and vendors to discuss expectations would save time and prevent misunderstandings in the RFP process, he says.

It also helps to allow for alternate RFP responses, says Philadelphia’s Neff. Vendors may have smart suggestions. In Philadelphia’s case, three of 12 proposals had alternative approaches, such as asking for ownership of the network if they fund and build it, which the city eventually agreed to.

Choose a Business Model

Public/private partnerships are emerging as the preferred business model. Costs and responsibilities are shared with a telecom vendor or a nonprofit organization created to operate separately from the municipality, which mitigates risk for both.

The city of Corpus Christi, Texas, is developing Wi-Fi connectivity for its entire community. To keep interests and costs separate from other city businesses, the city established a nonprofit organization to run the wireless system and anything that supports that network. This keeps the operation “taxpayer neutral.” The city maintains control because it chooses the board members, says Leonard Scott, Wi-Fi project manager. He is also negotiating with EarthLink to manage the retail business end of the Wi-Fi system.

Philadelphia also set up a nonprofit organization to oversee the network, and partnered with EarthLink to fund, develop and run the system under a wholesale model. However, EarthLink cannot create a monopoly and must open up the network to other ISPs.

Other business models include the open-access model, in which fiber is built into the government infrastructure, but is open to private enterprise. Many planned communities offer broadband to every home, and that cost is included in the homeowners’ association monthly fee. In a private enterprise model, private-sector companies offer broadband, letting the private sector offer the service.

Seek Funding From Many Government Agencies

Business partnerships can help fund broadband initiatives. Other funding sources, such as E-Rate, a government grant offering discounts on telecommunications services and Internet access for schools and libraries, also can help.

The federal government can contribute funds when broadband is used by the city’s transportation department or by emergency vehicles. In the city of Tucson, Ariz., emergency response teams wanted wireless broadband for full-motion video and two-way communication, so that ambulances and hospitals could communicate en route. The Federal Highway Administration granted funds for the project.

Remember, It Takes Time

All CIOs who delved into broadband agree that the process takes time. “Add nine months to the process to overcome political and legislative hurdles and build that into your model,” Philadelphia’s Neff suggests.

“Nothing is overnight,” adds Corpus Christi’s Scott. “Everything you get into is not what you expect it to be.”

STATE BARRIERS TO THE BROADBAND MARKET

As cable companies and phone companies expand their services to include Internet and Voice over Internet Protocol access, they are crossing into a largely unregulated area called information services. As an information service, cable Internet access is not regulated a cable service. Similarly, it’s not clear how Internet Protocol-enabled services, such as IP video, will be regulated when offered by traditional cable or telephone companies.

“The old regulatory stovepipe structure doesn’t fit,” says Sean Stokes, attorney for the Baller Herbst Law Group in Washington, D.C., which has represented many cities in broadband legal cases.

Many state legal cases have prompted rules either for or against municipal broadband offerings. Pennsylvania became a rallying point for municipal entry when, in 2004, it passed a law preventing municipal broadband projects where private sector incumbents, such as Verizon, were willing to provide it. Philadelphia was later granted exemption from that law.

Other state battles have been fought in Bristol, Va., Lafayette, La., and Portland, Ore. Those that have been decided have been in favor of the municipality. At the federal level, both the House and Senate have drafted legislation favorable to municipal provision of broadband, but no federal laws have been handed down yet.

Stacy Collett is a business and technology writer based in Chicago.

Oct 31 2006

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