One Fell Swoop

Chicago takes the concept of a public/private partnership to a new level with CivicNet

by / February 10, 2001
An unfortunate paradox of IT is that as quickly as technology solves problems, it creates other problems nearly as fast.

Jurisdictions have relied on IT to help them re-engineer back-end business processes, improve workflow, share information
and increase efficiencies in a wide range of departments. And as electronic government matures, technological advances will help jurisdictions move more services and more transactions online.

The rub is that those very same technological advances give rise to a slew of new problems for jurisdictions. Those advances create a corresponding evolution in the scenariosthatgovernmentofficialsfind themselvesworking in, and officials have to devise new methods for confronting new problems.

Chicago has spent approximately one year developing its Technology Action Plan to set a strategy for solving the high-tech issues the city is facing. One component of the plan is the creation of CivicNet, a fiber-optic network that, ultimately, will reach all neighborhoods of the city.

Chicago, like other cities, is wrestling with intertwined dilemmas brought on by the transformations technology is creating in the private and public sectors. As business evolves into e-business, the needs of New Economy firms change. These firms need infrastructure that is suited to their demands: high-speed Internet access and data transmission. As a result, stimulating citywide economic development requires getting the right kind of infrastructure in place throughout the city.

This connects directly to another dilemma: Not all areas of a municipality can support high-speed Internet access because of the digital divide. Traditionally underserved areas cant hope to land new businesses when telecommunications companies concentrate their efforts on profitable areas of a municipality.

The digital divide connects to another problem: lost potential. How can people living in underserved areas hope to increase their high-tech skills if local schools arent wired? High-tech businesses need qualified personnel because the proper infrastructure, by itself, isnt enough to help businesses grow.

Weaving the Threads

Rather than attacking these problems individually, Chicagos leaders decided that the holistic approach of the Technology Action Plan would have a better chance at eliminating some of the problems the city faces.

"I believe you have to look at things quite differently," said Richard Daley, mayor of Chicago. "You cant look at things in the old ways that people have set down historically, especially with technology changing so rapidly."

Daley and his Council of Technology Advisors, who brainstormed the CivicNet initiative, created a digital infrastructure to stimulate economic growth and serve the citys residents.

The idea behind CivicNet is to combine the telecommunications spending of Chicagos major local government agencies into a single contract that would be offered to telecommunications companies in exchange for building CivicNet by installing fiber-optic cable throughout Chicagos neighborhoods.

Chicago has created "anchor tenants" in city neighborhoods to spur the creation of CivicNet. The city and participating agencies -- Chicago public schools, the Chicago Park District, Chicago city colleges, the Chicago Housing Authority and the Chicago Transit Authority -- own 1,600 buildings scattered throughout the city that serve as anchor tenants.

In addition, the participating entities spend a combined $25 million a year on voice and data communications, which allows them to dangle a $250 million carrot -- $25 million per year over 10 years -- in front of interested vendors eyes.

Lastly, the participating agencies would provide "right-of-way" access to vendors, such as tunnels, or alongside rapid transit lines and inside conduits, which would help make it cost effective to take high-speed fiber-optic cables to city neighborhoods.

"Sometimes, the public has such a negative attitude about government -- federal all the way down -- that they expect government to be the caboose of a train, not the engine," Daley said. "My role as the mayor is to try to be more of the engine and not the caboose. Rather than build a network just for the government, CivicNet will build an infrastructure that everyone can use."

All Together Now

CivicNet has been in the works for some time, said Doug Powers, CivicNet project manager, adding that the concept started taking shape about a year and a half ago. In addition to aggregating the telecommunications needs of city entities, CivicNet also seeks to aggregate the needs of nonprofits, community organizations, private schools, universities and businesses in the private sector, he said.

"Were trying to do two big things," Powers said. "One is to increase the opportunities for business for the companies that were asking to partner with us. In one respect, were asking companies to do more in Chicago than they would have done otherwise in terms of building out. Were asking them to consider spending more of their money to build out infrastructure here, and were trying to appeal to their own self-interest in doing that."

To succeed, Powers said, CivicNet needs more than one company or type of company, because the network consists of many different parts and service offerings. Chicago is hoping that a consortium of companies expresses interest in building CivicNet so city officials can avoid making a rash of deals with different vendors to get CivicNet built.

"We need to have a consortium of companies because were trying to make a broad range of things happen," he said. "We need a carriers carrier. We need telecommunications companies, service providers and applications providers, etc. It would be great if it winds up with a consortium with a lead vendor. But that may or may not be possible because what were sort of asking is, Can companies that compete with each other come together and work in some functioning relationship in which theyre doing the job together?"

This is perhaps the most innovative aspect of CivicNet, because while competing companies sometimes have to work with each other, they dont typically work together on the same project.

This could be a sticking point, Powers admitted, because in conversations with one particular telecommunications company, representatives wondered whether the city might not get CivicNet built faster if the city went about it the old-fashioned way: awarding contracts to individual companies for components of the network.

Powers isnt discounting that approach, but adds thats why Chicago released a request for information (RFI) detailing CivicNet. "We released the RFI to test CivicNets business case, and we really want to get the companies responses," he said. "Because weve got a lot of money that we have to spend every year anyway, and we have a lot of resources, theres got to be a way to make the package appealing."

Powers hopes that if Chicago is successful with its model of building CivicNet, other jurisdictions can adopt it and make it work for them.

Partnerships for Common Rewards

Chicago has traditionally pursued creating partnerships in designing methods to deliver services to its residents, said Steven Philbrick, first deputy CIO of the city, so CivicNet is a natural extension of that willingness.

While the city has taken pains to make sure that CivicNet will offer telecommunications companies sufficient financial incentive, officials have also ensured that the needs of community groups are not overlooked. The public/private partnership that underlies CivicNets creation offers plenty of potential to benefit the private and public sectors, especially those residents of normally underserved areas, Philbrick said.

"The traditional model of having to have the demand before the technology firms will build into these areas is killing a lot of the areas within the city," Philbrick explained. "Its not the citys job to throw out those traditional models. Its the citys job to help spur the entities out there to maybe shift how they view things."

Striking a balance between creating that shift and the fact that businesses arent in business to lose money is why CivicNet is based on creating anchor tenants, he said, adding that its extremely difficult for telecommunications companies to put money in the ground without having an idea of how much business to expect.

The New Economy has forced rapid changes in the business world, and that speed has translated into an increased pace in forging public/private partnerships.

"You dont have the luxury of trying to build those partnerships over a long period of time," Philbrick said. "You have to get a handle on things and move them forward much quicker these days. You have to go for more of the quick hits -- lets build toward the big picture and lets make sure we dont make mistakes along the way. But lets not hold off on making any progress. The worst thing that can happen is to sit there and do nothing and let things happen to the city, rather than the city helping drive things."

Chicago leaders stressed they knew full well that they couldnt create a network such as CivicNet by themselves. Creating public/private partnerships is the key to getting a project of this magnitude off the ground.

"If you try to do it with government alone, sometimes you have a much more narrow viewpoint," said Mayor Daley. "Especially with technology, because the real energy of technology comes from the private sector. So if theyre not with you and theyre not pointing you in the right direction, government could go in the wrong direction. The private sector has to be there."