My kind of fiber-optic town

Th Acf1738

Chicago launches CivicNet, a partnership between the city's public and private sectors that will bring fiber to every neighborhood.

BY STEPHEN N. BROWN

Chicago has committed its political muscle to "fiberizing" the city. Douglas Power, an assistant commissioner of telecommunications in the General Services Department, told Lightwave, "Our objective is to get fiber down every street in the city...no redlining...we know it will take time." The first step came last November when the city issued a Request for Information (RFI) seeking private-sector partners to build CivicNet. Nearly 500 organizations got the RFI, and Power expected several responses by the Jan. 19 deadline. If there is sufficient interest from the private sector, a Request for Proposals will be issued this spring and construction may begin in late 2002. Robotic deployment of fiber in the city's 4-ft-diameter sewer system may dramatically reduce construction cost.

The city's government and business leaders may not be aware of it, but their advocacy of fiber infrastructure is a huge departure from "technological neutrality," the federal government's fiction that good telecommunications policy treats all telecom technologies as if they were equal. Chicago's preference for fiber does not mean the city will be a carrier or a telecom service provider. Instead, the city will offer its right-of-way and annual $35 million of telecom business to the parties that build the fiber network, which will promote citywide economic development, according to Power.

Real estate and office space are very expensive in downtown Chicago and much more affordable in the city's other commercial zones. Downtown is more attractive to businesses, because it has fiber rings for condominium use while the outlying areas have virtually none, a clear disadvantage for bandwidth-intensive businesses locating outside of downtown. The city is also interested in dynamically managing the real-time coordination of its 2,700 stoplights to match the ebb and flow of traffic on city streets and redirect traffic.

CivicNet's success might be assessed in many ways, but there is one measure that has to be used from the start: the price that users pay for their bandwidth. It would be wonderful for the city to say in 2007: "Since 2002, average megabits per second per user went up 40%, and the average price per user went down 20%." That would be a classic indicator of economic success-more consumption and lower prices. The opposite pattern would mean failure.

If CivicNet proves successful, it will buck the national trend, according to "Growth in the New Economy: U.S. Bandwidth Use and Pricing Across the 1990s," a study completed last summer by a senior economist at the FCC, Douglas Galbi, who makes the disclaimer that the conclusions are his own and not necessarily those of the FCC. Galbi's findings show why many CivicNets are needed across the country. He examined data on incumbent local telephone companies, new entrants in local telecom markets, and long-distance service providers with respect to the amount of fiber installed, interoffice circuit prices, and leased-line revenues. He concluded, "[T]echnology that dramatically reduces the price per megabits per second...is not the key to reductions in the price...that typical users pay... Bandwidth prices do not appear to have fallen significantly...in the second half of the 1990s... [The] ritual repetition...that competition has been dramatically driving down bandwidth prices for most users is not a view with much factual support." These findings imply that the private telecom sector is not the economic growth engine it claims to be and that the telecom sector is piggybacking on the cost reductions created by the cabling and components industry, which constantly improves its products. Thus, installing more fiber in metro and neighborhood markets is a prerequisite for bandwidth prices to decline.

Putting fiber down every street in Chicago is a good public policy, but CivicNet requires a political balancing of public and private interests, which is sure to affect technology planning. A good example of CivicNet's simultaneous appeal to both sides is Joel Mambretti, one of the chairpersons of the Mayor's Council of Technology Advisors. He runs Northwestern University's Center for Advanced Internet Research, whose mission areas, "advanced applications (including digital video)...advanced infrastructure and public policy studies" are a blend of the technical and the political. Mambretti's technical input into the city's RFI is clear. It calls for singlemode fiber-only, plenty of DWDM hardware and reads, "...this new model [of core backbone services] will be driven by the Internet Engineering Task Force's [IETF] architectural specifications, based on its vision of multiple autonomous networks using a common set of protocols, as opposed to the ITU's architectures based on gateways...and connection-oriented switching." In layman's terms, CivicNet is not going to work like today's telephone system but more like an Internet that provides voice, video, and data services without the present-day Internet's delays.

An IETF architecture may seem antithetical to the interests of the incumbent telephone company, Ameritech, a subsidiary of Texas-based SBC Communications, which has already made large investments in DSL technology. However, Ameritech has a long history of supporting public policy studies at Northwestern and provides support to the Center for Advanced Internet Research, which also receives funding from IBM and Cisco Systems. Also, Mambretti has a strong professional association with the incumbent: He co-authored a well-received book, "The Next Generation Internet" with Andrew Schmidt, Ameritech's chief architect of next-generation Internet services. Thus, the RFI has already made room for DSL technology: "The CivicNet core backbone will be interconnected with traditional communication services...tributary links will include DSL...[and] will provide capabilities supporting a high degree of asymmetry in traffic [a DSL characteristic]." But the technical specifications also say that "Gigabit Ethernet and 10-Gigabit Ethernet" services will be offered.

CivicNet's architecture is responsive to the interests of all players, a system reflecting technical and political planning. This dual consideration reappears in the physical design of CivicNet: It will have two separate conduits, one for the private sector and one for the public-a smart tactic because the expense of laying two conduits is hardly different than the expense of laying one, but the fiber count in each conduit may vary.

Two other factors may propel CivicNet to success. Since the infrastructure will be open to all comers, tenants like Ameritech avoid significant increases in its capital spending and an adverse effect on stock price. According to Paine Weber's Eric Strumingher, who last July testified to the U.S. Senate's Commerce Committee: "...the stock market...does not respond well to significant increases in [the] investment spending" of incumbent phone companies. "The investment community tends to focus on the reduction in near-term earnings...and sells the shares...[incumbents] are particularly vulnerable to this reaction...SBC is a case in point." Thus CivicNet looks like a good fit for any company wanting to keep its stock price up and its capital spending low, while using new infrastructure. In addition, federal legislation to create an Investment Tax Credit for fiber-optic deployment is again being pursued in Congress. Th Acf1738

Stephen N. Brown writes on public policy in telecommunications. He can be contacted by e-mail at policywork@aol.com or telephone: (615) 399-1239.

More in FTTN/C