When government gets into the Internet business, things can get dicey. But Ohio has found a few ways to sidestep the ire of industry.
COLUMBUS, OHIO — A funny thing happened when Chattanooga, Tenn., set out to create the fastest municipal broadband service in the country: Telecommunications firms got angry and sued the city. Four times.
That was many years ago, but cities in Ohio have found out more recently that when a government entity wants to set up a high-speed network, dealing with telecommunications firms is still a tricky business.
“Access rights and all that, those we can overcome because we have the right of way, we have permits, we can do all kinds of things,” recalled Moez Chaabouni, former deputy chief information officer for the city of Columbus, Ohio, at a roundtable discussion at the 2016 Intelligent Community Forum Summit on June 14. “Probably the biggest hurdle we faced was organizations like AT&T, Verizon, Sprint. And I only mention these guys because they’re great at what they do, but they were incredibly opposed to us putting up anything in the downtown area, or anywhere for that matter, that was going to compete with their business.”
In Ohio, telecommunications firms lobbied the state government and went to the state CIO instead of taking the fight to the courts. But it was still conflict that the cities setting up broadband networks did not want.
But Columbus found a way around the problem, and government entities around the state have followed suit. Today Ohio has perhaps the biggest high-speed Internet network in the U.S., offering speeds up to 100 gigabits per second compared with common household connection speeds in the megabit range.
“There’s no connectivity issue in Columbus. There’s no connectivity in probably the vast majority of Ohio,” Chaabouni said. “The issue is accessibility to those connections.”
Here are three of the ways Chaabouni and his contemporaries in Ohio set up broadband networks.
Instead of trying to sell connectivity directly to businesses and residents, Chaabouni decided to pursue a new strategy. He went to Connected Nation Exchange, the for-profit arm of the Internet development advocate Connected Nation, and asked them to take the network off the city’s hands.
“We turned over these assets to Connected Nation Exchange and said, ‘Go ahead and market these to the private sector, because we cannot do it. We cannot go out and compete with the AT&Ts of the world, that’s not our business. Our business is fiber, dark fiber, infrastructure, getting to places where organizations cannot go in and drill and have conduit. We have the conduit, we have the fiber, it’s dark, it’s there, it’s ready to be developed, it’s high quality, go ahead and market it,’” Chaabouni said during the roundtable.
The city was still able to reap the benefits of having laid the fiber, but it was no longer acting as a direct competitor to telecommunications firms.
Dublin, a suburb of Columbus, took a slightly different approach. Rather than selling to citizens, that city decided to sell to the telecommunications firms themselves. That means attaching a revenue stream to the project, which could help justify the initial financing.
“If you put enough fiber in the ground that it will last for a long, long time, then the companies that want that fiber will have to lease it from you,” Dublin CIO Doug McCollough said. “So you can then go back to your public entity and say ‘We’re going to put [a] $5 million investment in, but we’re going to lease it for this amount back to the telecommunications carriers, and it will pay for itself.’”
In Dublin’s case, it’s a double benefit because the city doesn’t have to pay taxes on the money it gets from leasing the fiber to the telecommunications companies.
When Columbus handed off its fiber network, it made sure there was an asterisk in the agreement.
“All we [asked] in return is the ability to connect our schools, our libraries, our communities and our [services],” Chaabouni said.
And there was far more of the fiber than Columbus needed for all those purposes — according to Chaabouni, the city laid down well over 100 strands of fiber. It needed perhaps six to service its own operations.
Having such speedy Internet is extremely handy for public uses, for a number of reasons. With so many services becoming digitized, higher speeds allow many things to function better. Ervan Rodgers, CIO for the Ohio Attorney General’s Office, pointed to the routine police traffic stop as one example.
“We have officers that are looking up your information from the records … we need information at the speed of light, because lives are at stake,” he said.
There are other benefits than simply making the government run better. McCollough said telecommunications firms can’t complain when the government is using its own fiber network for what essentially amount to internal operations — so in a sense, using it for those purposes minimizes conflict.
“Telecommunications carriers have a very difficult time going to the statehouse and saying, ‘The city of Dublin has connected a 911 center,’” McCollough said. “Well, so what? They can do that, get out of their space. So we stay out of their space and they stay out of ours.”
Cities that have laid down fiber can then use the networks cooperatively to achieve efficiencies, and ultimately, cost savings. That’s what Gahanna, another suburb of Columbus, did with its own network.
“We, the city of Gahanna, the city of Whitehall and the city of Bexley, recently submitted for a million dollars in state capital dollars, and this was several years ago, that was to build a fiber extension from the city of Gahanna to those other two municipalities so we can continue to do municipal sharing,” said Tom Kneeland, Gahanna’s mayor. “And that alone is going to save us time, and it will actually have a very tangible financial return based on our ability to utilize resources in different cities for things like 911 service providing.”
The ultimate benefit to the city may also be the most roundabout one. Most of the roundtable participants described broadband as an economic development tool: By offering high-speed Internet, the city empowers existing businesses to do more and draws new businesses in. Those companies pay taxes, and they pay employees who also pay taxes. So at the end of the day, if broadband is indeed functioning as an economy booster, the city should see more revenue.
“Nothing says ‘relevance’ like a paycheck,” said Stu Johnson, vice president of Connected Nation’s Digital Works initiative.
Though businesses today often operate using Internet speeds far lower than Ohio’s best, McCollough said that companies who suddenly have access to faster connectivity — and perhaps other services — will find innovative ways to use it.
High-speed Internet can also serve as a convincing pitch for businesses the city wants to draw in, he said — or, perhaps, for those companies’ telecommuters. Done right, it might even lead to a snowball effect of economic development.
“What happens is you create a center of gravity,” McCollough said. “And when one company is able to do R&D with the supercomputer, three technology companies come in to serve them. And they may be consulting and contractors, but when they come in, two telecommunications companies come in to serve them.”
Transformation or otherwise, Ohio state CIO Stu Davis said high-speed Internet is a public service.
“It’s all about the public good at the end of the day, and if we can stimulate that activity then that’s really what the state is trying to do,” he said.
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