Santa Monica City Net - Institute For Local Self-Reliance

Santa MonicaCity NetAn Incremental Approach toBuilding aFiber Optic NetworkEric r stitute for Local Self-RelianceMarch 2014

Institute for Local Self eaguesattheInstituteforLocalSelf- eattheInstituteforLocalSelf- r.orgSince1974,theInstituteforLocalSelf- romlocalresources.2014bytheInstituteforLocalSelf- isithttp://creativecommons.org/licenses/by- ‐nc- ‐nd/3.0/.

Institute for Local Self deaccessdirectlytoanumberoflow- ganwithaninvestmentof ble.TheCity’snetworksavedsome 400,000inthefirstyearandultimatelyresultedin sinesseshasresultedinover 5millioninrevenues- ‐andgrowing- edistinctionisimportant- vingshasfundedmanypublicamenities,includingfreeWi- severalwaysofgettingrealtimeparkinginformation.

Institute for Local Self Reliance1West Los Angeles405Location in U.S.City ofSanta Monica10DowntownPierCity of Los AngelesPacific lsoconnectsomeapartmentbuildingswithlow- pulation: 90,000Households: 48,000Rental Occupied: 70%Owner Occupied: 30%City Budget: 521 MillionInformation SystemsDepartment Staff: 43

Institute for Local Self networkingconsistedofturtle- ‐slowdial- ing1.544Mbps).ThepublicInternetwastwoyearsold.E- ‐mailattachmentsbarelyworked.Webpageswiths i m p l eg r a p h i c sw e r eh a l t i n g l ys l o wb u ommunicationsActchanges,thenSenatorTrentLott(R- s,themunicipalities,andtheinvestor- 6,34percentalreadyhaddial- PublicElectronicNetwork(PEN)onFebruary21,1989, ntaMonica Santa Monica College The City of Santa Monica Santa Monica-UCLA Hospital Santa Monica-Malibu Unified School District Saint John’s Health Center MTV Networks RAND Corporation Activision Blizzard Inc. ET Whitehall (Shutters on the Beach and Casadel Mar) Universal Music Group Yahoo! Rubin Postaer & Associates Ascent Media Group and Loews Lionsgate Entertainment overoperaingcostsforitsinternaltelecommunica- ach4,000injustovertwoyears.ThePENfeaturede- suredanyonecouldjoinin. nedcostforleasedvoiceanddatalinesthatgrewbeyond er.Used with permission from Dada Design and ISD

Institute for Local Self - ‐of- localbusinesses.(See“Right- ‐of- document. work.” sandassets.Importantly,itdidRight- ‐of- ‐WayConcerns(ROW)Prior to the 1996 Telecommunications Act, access to the ROW was more predictable because few firms were buildingnetworks. Transitioning from a regulated monopoly approach toward encouraging competition meant more firms in theROW and a greater reluctance for firms to engage in joint trenching as it would mean revealing their investment plans tocompetitors. Santa Monica’s Telecommunications Master Plan explains:“All of the applicants seeking to install conduit and fiber cable are companies that have been certificated ascompetitive local exchange carriers [CLECs] by the California Public Utility Commission. Thus, these companiesmay, as a matter of law, utilize the dedicated rights-of-way in the City to deliver their services. The City may,however, regulate the time, manner and place of entry by the CLECs, as with any other carrier.”Each new network could tear up the street, reducing its quality and lifespan while also disrupting traffic and access tolocal businesses. Santa Monica’s Telecommunications Master Plan recommended the City install a network withexcess capacity that would allow the City to serve those businesses and lease fibers to other ISPs that would alsocompete for subscribers.“A fundamental objective of the City with respect to telecommunications is the development of extensiveinfrastructure that can enable service through a network of conduit. The provider of the service is of lessersignificance than the presence of the network infrastructure because any number of providers could make use ofthe network of conduit once it is in place. The infrastructure cost, the difficulty in getting conduit installed, thedeleterious effect on the City's street system and the inconvenience to the public as the ROW is repeatedlyentered all support the value of logical, economical and well-planned infrastructure as a City priority.”

Institute for Local Self departmentworkedwellandwaysitcouldworkbetter.” ISdatabase.9Working with conduit in a formanagingPublicRight- ‐of- cost- examinedthreeoptions:1. Donothing- ers.”112. tesandconduitforleasetootherswherepossible.3. FullServiceNetwork–ahybridfiber- lehadbeenratedas“adequatetogood.” hetechnologycyclesofGTEandCenturyCable.” ethemodelspredicteditwouldcost xistingproviderswould

Institute for Local Self horfacilitieswasexpectedtocostapproximately ertainty.” pensive.” leasingfromthecablecompany. lFiberNetworkBenefitsSome of the anticipated benefits of the MFN, asidentified by the 1998 Plan: ewfeatureswhilereducingcost 79,000peryear - entralizedandmoreefficientITservices hools rs 0Mbps Reducingannualdatachargesto13municipalfaciliiesby cions ofvideoconferencesandvideosurveillance Greaterflexibilityinshelteranddisastermanagement Improvedtransitsystems Connecionwithnearbycommuniiesinregionalnetwork nt,publicsafety,publicworks,re- theCityManager’soffice.

Institute for Local Self atcontributetoahigherquality- ‐of- als.” vemultipleprioritiesandforward- ityrequestedPacificBellplacetwo4- k?Committing to building a fiber network ratherthan continuing to lease from existing carrierscan seem daunting, especially when thosecarriers frequently argue that the knowledgerequired to operate a network is too specializedfor a local government. The Working Groupdisagreed with such claims, noting:“The fiber ring itself, will require virtually nomaintenance. Emergency restoration is important,of course, even when the redundancy and safetyof a ring is achieved in Phase III. Cities that do notown their own electric utility, like Santa Monica,should consider retaining an engineering firm toperform that function. There are firms that contractto provide similar services to CLEC's, institutionalnetwork operators and others.The electronics should be covered by an on-goingservice contract with the manufacturer thatspecifies a response time. Four hour service isusually acceptable, particularly when the fiber ringis in place. The cost of this maintenance, based oncurrent pricing, has been included in MCG's costestimates. However, the City will need a trainedindividual to handle routine network administrationand simple moves, adds and changes.In addition, if the City decides to lease conduitand/or dark fiber to third parties, the managershould be responsible for administering theprogram. This would hold true, even if the Cityhires an outside firm to provide networkmanagement services. The City needs aknowledgeable network manager who is employeddirectly by the City and responsible only to it.The financial models used to cost the networkassume that a manager is hired at a total annualsalary of 75,000 (including benefits).”Wolf reflected on his results, “Cities that haveelectric utilities already have the assets,equipment and skill sets necessary to build,manage, and maintain low voltage fiber-opticnetworks. Santa Monica has demonstratedthat even cities without electric utilities cando the same by using a mix of internal andcontracted resources” (emphasis added).

Institute for Local Self Reliance7PlanOverviewInsKtuKonalNetworksA summary from the May 5, 1998 City CouncilMeeting:Institutional networks (I-Nets) connectcommunity anchor institutions—most oftenschools, libraries, and municipal facilities. Manyof these networks were built by cable companiesas part of their franchise obligations, offering freeor subsidized connections to public institutionsin return for access to the public rights-of-way.However this approach can perverselydiscourage building a network that isaccountable to the community and underminelong term savings.Locate the MFN route in consideration of (1)the location of City facilities needingconnection to a high speed network; (2) thelocation of other public institutions that coulduse the MFN; (3) the location of businessesand other telecommunications providers thatmight be interested in lease of capacity orbeing a partner in providing competitiveservices to the public and businesses of SantaMonica; and (4) the location of street repairand other City capital improvement projectswhich would facilitate the installation ofconduit to reach Santa Monica’s easternborder for the purpose of regional connection.topaynomorethan ollowingthedot- nstitutionalnetwork(I- viders.Franchise agreements commonly containrestrictions on the use of the network, such asnot allowing commercial traffic. Restrictions onwho can use the I-Net eliminate opportunities foreconomic development and collaborations withthe non-profit sector.Because the I-Net generates no revenue, somecable companies have been very slow to fix failuresor other problems. Many local governments havefound themselves at the mercy of a national cablecompany that refuses to upgrade capacity as localgovernment needs grow. Local governments thathad grown dependent on free services awoke to arude shock when the franchise ran out, andrenegotiations involved steep price increases , orwhen franchises were effectively revoked bychanges in state law.When local governments do not pay for thenetwork they depend upon, they have no sourceof funds to use in the same way that SantaMonica did. And securing new funds, even forthis essential need, can be challenging.Santa Monica used the franchise-providednetwork as a means to build a network that itcould control, so when the state revoked localauthority over franchise negotiations in 2006 (theDigital Infrastructure and Video Competition Act,or DIVCA), Santa Monica was not left in the lurch.Other cities in California and elsewhere have notbeen so fortunate, having to pay very high fees tocontinue leasing lines when their franchiseprovided I-Net was taken from them.

Institute for Local Self RelianceTheCitypaida 530,000one- eintheCity.Theongoingannualcostof ),generatingsavingsthatstartedat 400,000ayearandgrew. taMonica’sbusinesscase.Th

Santa#Monica#is#an#affluent#community# in# southern# d# #Santa Monica#home,#but#it#swells#to#300,000#on#weekdays# andcanpeakatover500,000onweekends. #a low# cost# without# incurring# any# debt.#