More than two years after the Telecommunications Act of 1996 was signed into law, cities have tested the competitive waters created by the landmark legislation. A key provision of the act cleared the way for municipal utilities to provide telecommunications services, and cities across the nation, facing revenue slumps and fierce competition for new industry, are forging partnerships with the private sector to bring high-speed, high-bandwidth network capability to their communities.
Building Public/Private Partnerships
Cities operating their own electric utilities are positioned to enter the telecommunications arena. Many have already replaced decades-old copper-wire communications systems, used to monitor and control their electric facilities, with fiber-optic cable. With fiber-optic cable costs coming down, cities have put extra capacity into the ground, which, under the Telecommunications Act, they can lease to private-sector communications companies.
Several cities are already reaping the benefits of such strategic planning. The city of Anaheim, Calif., home to Disneyland and a growing corporate base, installed extra fibers when it replaced its 30-year-old copper communications system with a 50-mile, 96-fiber ring. The city kept a third of the fibers to operate its public utilities department's communication system, but it leased the remaining 60 fibers to FirstWorld International (formerly SpectraNet International), a San Diego-based private telecommunications firm.
FirstWorld is under contract to use the leased fibers as the backbone of its
Universal Telecommunication System, a broadband network that will ultimately provide voice, data and video services to the entire Anaheim community. FirstWorld will operate an open-architecture, neutral network, allowing communications providers to offer competitive services at a lower cost.
Under the $75 million first phase of the project, expected to be completed in December, selected city facilities and large businesses will be connected to the network. Based on the results of a feasibility study in 2000, a second phase, estimated to cost up to $200 million, would extend the network to all residents and remaining businesses in Anaheim.
A few miles north of Anaheim, the city of Burbank, the hotbed of the television industry, has used its fiber backbone to meet the high-speed, multimedia demands of local entertainment companies. The city has kept two-thirds of its 12-mile, 240-strand fiber backbone for internal use, but it is leasing the remaining third to entertainment giants Disney and Warner Bros. and telecommunications carrier companies like ICG.
"We've tried to address the unmet, unique needs of our industries that go well beyond the bandwidth and speed capability of standard telephony science," said Fred Fletcher, assistant general manager of Burbank Water and Light. The city leases dark fiber to Disney and Warner Bros. for their wide-area networks, which the companies use extensively for special-effects development.
Other cities with infrastructure in place are now looking to establish those same types of partnerships. In Longmont, Colo., a Denver suburb, city
officials continue to meet with several potential service providers to negotiate a partnership for developing and delivering competitive communications services to the community over the city's new 17-mile fiber network.
Economic Development Tool
For years, cities hoping to attract new businesses brought traditional marketing cards to the table: location, transportation and available work force. Today, the reliance of American industry on information technology has made telecommunications an equally critical criterion.
Anaheim used its fiber backbone to help lure MedPartners, the nation's largest physician-management company, to town. The Birmingham, Ala.-based company, with daily operations involving large amounts of data transfer, was looking for a strategic location that could support those needs with a high-speed, high-bandwidth fiber-optic ring.
"It was an economic-development specialist's dream," said Anaheim official Ray Merchant. "Our move into telecommunications clearly allowed us to meet their technology needs."
Economic development spurred by improved service was a motivating factor in Longmont's decision to pursue telecommunications. Located near the high-tech industries of Denver