Santa Monica CIO Jory Wolf spurred savings by deploying a municipal fiber network.
PHOTO CREDIT: MAX S. GERBER
Government IT leaders who question whether they have the budget or wherewithal to build and operate their own fiber networks need only to look at the success in Santa Monica, Calif.
In 2002, city officials began laying their own fiber for city buildings, the local school district and the community college when they realized it would increase bandwidth, improve services and save millions of dollars spent on leased telecommunication circuits.
The strategy was simple: Make a small initial investment to begin building the network, bring some telecom services in-house, and use the savings to bankroll the rest of the project. For example, Santa Monica invested $530,000 to build the backbone. As each building was connected, the city canceled its monthly leased-line subscriptions. The return on investment was immediate: The city saved money, and bandwidth increased from 128 kilobits per second to gigabit speeds.
“Every time I connected a building to the network, I eliminated a $400 to $600 subscription, and before I knew it, I had the whole thing built and was saving about $700,000 a year,” recalls Santa Monica CIO Jory Wolf.
The city reinvested the initial savings to build the rest of the network; connect the remaining city, school and college facilities; and deploy voice over IP to eliminate monthly phone bills from its carrier. From those additional savings, the city built a second fiber network and added new services, such as Wi-Fi hot zones for residents and wireless networks dedicated for public safety, says Wolf, who believes his implementation strategy can be emulated in other municipalities.
Santa Monica is among a growing number of cities, counties and state governments that are deploying their own fiber networks to provide the broadband their communities need and to help stimulate their economies. For example, Iowa has invested $230 million since 1990 to build and enhance its statewide network, which provides phone, Internet and videoconferencing services to state and federal government agencies, schools, colleges, hospitals and libraries.
In Utah, 14 small cities that felt incumbent service providers weren’t meeting their broadband needs rallied together to build a network that in 2005, began providing high-speed Internet, as well as phone and television services to residents and businesses. The group financed the project through municipal bonds and signed on five service providers that are offering telecom services to the community.
“The cities are united in their conviction that their economic futures are intimately connected to the quality of telecommunications infrastructure that they could offer their businesses and residents,” says Roger Black, deputy director and chief operating officer of the Utah Telecommunication Open Infrastructure Agency in West Valley City, Utah.
When implementing fiber networks, the amount of fiber cities, counties and states have will determine the type of network gear they need. “If the fiber count available is not sufficient, then they need to consider Wave Division Multiplexing [WDM] to expand the number of connections available over their limited numbers of fiber pairs,” Wolf says.
WDM technology expands the capacity of fiber networks by splitting up the different wavelengths of light, which creates different networks on the same fiber. Santa Monica implemented Course Wave Division Multiplexing equipment so the city could support up to 16 separate networks on its fiber. Dense Wave Division Multiplexing (DWDM) can support even more networks.
If a government has enough fiber, then it doesn’t need WDM equipment. Maryland’s Montgomery County, for example, has plenty of fiber and, in the past year, has begun refreshing its networking gear from traditional Asynchronous Transfer Mode (ATM) equipment to Metro Ethernet equipment, which is cheaper, easier to maintain and provides between 10 megabits per second and 1 gigabit per second to each building.
Montgomery County began building its FiberNet network in the late 1990s. After the first 120 sites, service rollouts lagged because it cost $60,000 to $100,000 to install the ATM equipment to each site. In contrast, installing Metro Ethernet equipment costs only $3,000 per site for the electronics, and as a result, more county agencies and schools are taking advantage of the fiber network, says John Castner, manager of network services at the county’s Department of Technology Services in Rockville.
As part of the technology upgrade, the county is deploying Multiprotocol Label Switching (MPLS) to ensure security. MPLS makes it appear that each county agency or educational institution is on its own network and prevents traffic from different agencies from crossing paths, he says.
When providing telecom services, IT departments must decide whether to manage network operations and provide customer service themselves or outsource those functions, says John Gillispie, executive director of the Iowa Communications Network (ICN), which serves government, education and health-care organizations.
ICN explored bringing the work in-house, but while operating expenses would be lower, the organization didn’t have the capital to purchase and maintain equipment, such as trucks and testing equipment. “It’s not cheap to run network operations,” Gillispie says. “You have to be prepared to respond to problems at 2 a.m., and you have to invest capital dollars in necessary equipment.”
IT departments need to listen to customers’ needs and offer the services they want. In Iowa, customers want more pure Ethernet services and fewer frame relay offerings, prompting ICN to bolster its DWDM network to include Ethernet-over-optical technology, increasing pure Ethernet capacity, Gillispie says. “Telecommunications isn’t static. It changes constantly. You don’t make one investment and walk away,” he says.
If communities build networks, success isn’t automatic. Quincy, Fla., built a fiber network in 2003 to offer broadband services to residents. But the service, called NetQuincy, has faced financial difficulties as subscribers have dropped from about 1,100 in 2005 to about 320 this year. The City Commission has threatened to sell the service but is giving the new IT director, Ray Eaton, time to turn the business around.
Before Eaton came on board last year, NetQuincy made several missteps, including insufficient marketing and billing problems. Hundreds of subscribers received Internet service but weren’t billed for months. When subscribers were billed, they were hit with one big bill for all the months of service. Many canceled their subscriptions as a result.
Eaton is confident he will succeed. He’s improved the billing process and overhauled the work-flow process. To attract new subscribers, he’s signed on third-party service providers to also offer phone and cable television services. Eaton believes he can offer the three services ‑ phone, TV and Internet — at a lower price than competitors can.
He’s also stepping up the marketing, which includes press releases and, in the future, public service announcements on TV. “We have to let people know what we’re doing here and insert it in as many news cycles as possible,” he says.
Two issues governments can’t avoid are political debates about community-owned fiber networks and pressure from incumbent service providers who think that government is encroaching on their turf. The question is whether taxpayers’ dollars should be used to compete with the private sector.
John Castner, manager of network services in Maryland’s Montgomery County, shares the following tips on assembling your fiber network and keeping it up and running: