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Fiber optics and the city’s can’t-do spirit

| Written by Becca | No Comments | Updated on Jan 9, 2006 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/fiber-optics-and-citys-cantdo-spirit/

Strib LogoWhen the Star Tribune recently asked Bill Beck, the city’s deputy chief information officer, why Minneapolis never even considered public ownership of a proposed city-wide high-speed information network, he insisted, "The city lacks the money, competence and ability to build and manage that kind of a network right now."

That is a remarkable admission. More than 100 U.S. cities, including five in Minnesota, already have decided they were competent to build and manage high-speed information networks. Few if any regret their decisions. Most recently, St. Louis Park opted for municipal ownership. At least a half-dozen other metropolitan cities, and consortiums of cities, are seriously considering public ownership.

Minneapolis,along with all other cities, owns and maintains a road network thousands of miles long, and an equally extensive underground network of water pipes. Why would it decide, without discussion or examination, that it is incapable of owning a fiber network?

Keepin mind that there are a number of possible public-ownership models. The city itself need not own the network. Moreover, the city need not deliver services. Public ownership of the roads, after all, does not mean public ownership of the trucks that deliver goods. The road network is open to all.

Which brings up another important consideration. Privately owned high-speed information networks are not open to all comers. The Federal Communications Commission (FCC) has ruled that cable and phone companies can keep competing service providers off their systems.

Giventhe FCC’s rulings and the increasingly concentrated nature of the telecommunications industry, one might argue that public ownership of the network is the only way to truly guarantee competition in the future.

It also is bizarre that Minneapolis should decide to rely on a privately owned information monopoly when it has had such a bruising experience with at least one of its privately owned information monopolies.

For nearly a decade, Minneapolis has been trying to persuade Time Warner to build a high-speed network to carry internal municipal information and communication traffic. In 1998, it proposed to trade some of its entitlements under the cable franchise agreement for the right to lease from the cable company a fiber-optic network connecting city departments, schools, libraries and other government sites. No agreement was reached, so in February 2000, Minneapolis solicited bids from other companies interested in building a privately owned network.

Eventually,the cable company agreed to build the network that the city wanted if the city would give up its claim to one-quarter of the cable network capacity. The company never followed through.

LastApril, the city asked for proposals seeking essentially the same network that it had proposed in 1998. What is the old adage? Fool me once, shame on you. Fool me twice, shame on me.

Minneapolis argues that whatever the shortcomings of its current initiative, to choose another path would mean years of delay. Well, in the six years our city has been trying to persuade the private sector to build a modern information infrastructure, scores of other cities already have built their own. In the past two years, Chaska and Moorhead initiated and built publicly owned, citywide wireless networks. It took Windom less than five years to move from a public referendum on a municipal telecommunications utility to a fiber-optic network that provides 100 mbps (megabits per second) connections to every home and business in town. That’s 30 to 100 times faster than those offered to Minneapolis residences today. St. Louis Park, which in 2004 approved and installed the kind of fiber-optic network Minneapolis wants to serve its internal information needs, will have publicly owned, citywide wireless this summer.

Minneapolis claims that it lacks the money to build a network. But other Minnesota cities with far less fiscal capacity have done so. By all indications, theirs has been a wise investment. St. Louis Park, for example, estimates that a 10-year payback on its fiber-optic network investment based on avoided costs for data connections. This is reduced to six years if telephone services are included. Over the life of the network, this will result in millions of dollars in savings.

Local elections are behind us. Several new City Council members will take office this month. They should immediately demand a full and public accounting of the reasons behind Minneapolis’ peculiar decision regarding our information future. They also should insist that, for the first time, the city hold public hearings about that decision and possible alternatives.

It is not too late for the city of Minneapolis to change its mind and decide that it is indeed competent to control its information future.

About Becca

Becca joined ILSR to work on American Voice 2004, then stayed on to develop the telecommunications initiative. She is presently focused on the financial and economic considerations behind municipal broadband efforts.

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