Level of Gvt: City, State
Function: Telecommunications
Problem/situation: The city of Austin is planning a telecommunications infrastructure, but is faced with numerous choices.
Solution: A cooperatively built network could reduce costs and make the network available to more potential users.
Jurisdiction: Austin, Texas.
Vendors: Microelectronics and Computing Technology, Sematech, Southwestern Bell, Time Warner, Austin Cablevision, Cox Enterprises.
By Michael Burton
Special to Government Technology
Voting online, communicating with elected officials, or accessing electronic town halls might be several years away for most Americans, but for citizens of Austin, Texas, the reality may be much sooner, if the city's venture into building a broadband telecommunications network comes to fruition.
In March, the city of Austin released a Request for Proposal (RFP) to entice private telecommunications companies to help build Austin's piece of the National Information Infrastructure. By early next year, a contract could be awarded to build the network, making Austin the home of one of the largest public network services in the country. Potentially, Austin city officials see this network as providing a myriad of interactive and multimedia services to Austin citizens - from online shopping to cybermalls; from reading newspapers online to receiving video on demand.
THE SILICON VALLEY OF THE SOUTHWEST
Austin has a reputation of being the "Silicon Valley of the Southwest," with more than 350 software companies, and major computing consortiums like Microelectronics and Computing Technology (MCC) and Sematech. Surfing the Internet is also in here, with over 400 electronic bulletin board services, over 4,000 Usenet groups, and at least eight different Internet service providers to bring it all to your home.
Part of the reason Austin has more than its share of cyberspace gurus is due to the University of Texas at Austin, which ranks as the eleventh biggest user of the Internet in the nation. Numerous kiosks are set up on the sprawling campus of 60,000, where students can download everything from academic reports to an audio clip of the "Texas Fight Song."
By contrast, the city of Austin's interest in new media technology came late, more as a reaction to market and business forces than as a result of political insight. Early in 1994, a handful of telephone service providers (called competitive access providers, or CAPs) approached the city to build fiber-optic cables to the central downtown area.
In an effort to bypass Southwestern Bell, these providers offered certain big businesses - mostly telemarketing firms - special discount rates for connecting to the long-distance carrier of their choice. It was all perfectly legal, except the city staff found itself faced with companies that wanted to tear up city streets and use city utility poles for services that would not provide any use for the citizens of Austin. Each of these companies wanted to build different types of networks or access points that would be closed to the average citizen, and they wanted to do it through public rights-of- way. Some city staffers thought: "why build six `pipelines' of information when you can build one that everyone can have access to, not just select people who can afford it?" The city put the service providers on hold.
DEVELOPING A PLAN
The idea began to blossom when city officials discovered that the city's electric utility had already strung fiber along its electric cables to comply with Federal Communications Commission rulings to upgrade its own communication system. In a few months, a city working group presented a list of principles to the City Council for a telecommunications infrastructure that would reach every home, business and institution in Austin. With the city's cable franchise with Time Warner (owner of Austin Cablevision, the local cable company) set to expire on July 15, 1996, the time was ripe for a proposed "public information infrastructure."
The council formed a Committee for Telecommunications Subcommittee in early 1994 that developed a plan for all Austin citizens to have access to two-way voice, data, video and multimedia communications. In its Request for Information (RFI) issued in June 1994, the city said that this network would serve as a "transport medium for commercial service providers, a gateway to other service providers [like the Internet] and [would] form the backbone of Austin's communication infrastructure well into the 21st century."
OPPOSITION
Initially, the plan met with resistance from the city's business leaders. The local daily, the Austin American-Statesman (owned by Cox Enterprises, owner of Cox Cable), quickly editorialized that this plan would be bad for competition by providing another layer of government regulation. The local incumbent monopolies, Austin Cablevision and Southwestern Bell, also opposed the plan, saying the city should not get involved in what they believed should be a purely private venture. "To build something [when] you don't know if the people would use it or not, or are willing to pay for it, is very risky," said Lidia Agraz, public affairs director for Austin Cablevision.
In countering these critics, Marilyn Fox, the city's assistant director of financial services, said: "The city has not decided whether to `own' the network or not, but we do want to be proactive in managing our right-of-ways and proactive in managing competition to meet the community's needs. The question is, how do you do that?"
PUTTING THE PLAN IN MOTION
With the help of telecommunications and public policy analysts for the University of Texas and the Texas Department of Information Resources, the city released its analysis of the responses to its request for information in October 1994. The report concluded that "the city will best serve the public interest by working in partnership with private telecommunications enterprises" in constructing a citywide information network, which would allow "any user to provide information services just as easily as receiving them."
Local multimedia developers and designers - who are part of a $200 million a year business - have lobbied the city for an open, distributed platform for selling their products and services. With the city's infrastructure, these developers and artists would see thousands of new markets open up for their work.
Neither Austin Cablevision nor Southwestern Bell has plans to extend interactive video and information services to the area anytime soon. The cable and phone companies profit from the ownership of their wires to the home; they have no interest in offering other information providers access to that infrastructure. The city, however, has one office that does: the Electric Utility Department.
As the cost of providing telecommunications services becomes cheaper, more electric utilities are leveraging a precious commodity on the "information highway" - rights of way, utility poles, and transmission routes to the home. The cable and phone companies need that city infrastructure for their service connections. And utility companies want to keep control over their own facilities.
The electric utility operates a large and complex electrical grid that supplies power to all residences, owns the poles and underground conduit needed for such an infrastructure, and, since it is municipally-owned, cannot deny service to anyone by law. The late Susan Hadden, who taught at the University of Texas at Austin's LBJ School of Public Affairs, and advised the city on constructing a network that would be open and accessible to all, said "If the electric department installs fiber for its own use anyway, then why shouldn't it be used for this purpose?"
"There's a flaw in the debate over competition," Hadden said. "Many corporate players seem to be saying, `if we have competition in the [building of] the wire to the home, that's what we need. That's not what's vital. What we need [is] competition in the services provided to the home."
Yet some parties question the city staff's knowledge and expertise to build the network, and whether city taxpayers want or can afford it. Cost estimates range everywhere from $137 million to $1 billion to construct this network. National estimates in building a broadband telecommunications network average from $1,000 to $1,300 per household, if the network were built totally by a private enterprise.
But if it were cooperatively built by a government/private partnership, as Austin officials are suggesting, the cost would be much less. Also, if the city makes the network available to all potential users (and service providers) for a fee based on cost of service, then the cost of building it could be recovered in time (by charging a monthly service fee, for example).
Even if the city's electric utility does not build the infrastructure, said Paul Smolen, a city consultant for the project, they may become one of the biggest customers of the system. What city staff is looking at, Smolen said, is some sort of "shared conduit plan," to ensure lower entry costs for information service providers to buy fiber and/or bandwidth.
"The city of Austin would enter into agreement with 'information partners' in this venture," Smolen said, with open access and universal availability for bandwidth guaranteed as they are for streets, water, sewer, garbage collection, electricity, and libraries. Every citizen would be guaranteed a certain level of basic service, for instance: e-mail, telnet, and World Wide Web access. The city has already begun offering its own "home page" on the Web, which will allow Austinites access to information about the city council (including minutes of meetings), zoning cases, police department, public library, convention center, airport, and utility customer service.
By providing an open gateway to other content providers (video, multimedia, and information businesses), who would be free to compete against each other in an open marketplace, the city hopes to spawn new businesses, from companies providing movies-on-demand to news providers and database service firms. Most of the details of this broadband network will have to wait until the city analyzes responses to the RFP, due later this summer. If there is demand for the infrastructure, then the city will proceed with the plan to eventually provide virtually unlimited bandwidth to the home.
No matter who builds it, the creation of an Austin Telecommunications Infrastructure network would be one of the few such infrastructures in the nation, and might also propel large telecommunication and utility firms to offer similar information services in other cities, helping citizens connect to the future national information infrastructure.
Michael Burton is author of the biography of First Amendment champion John Henry Faulk entitled John Henry Faulk: The Making of a Liberated Mind.
