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SBC Would Like to Disconnect Broadband Plan ; Project Promises Lower Prices for High-Speed Data Users.

Posted on: Wednesday, 5 January 2005, 12:00 CST

SOUTH BEND -- City and business leaders say their plan to lay new fiber optic lines will bring lower prices and easier access to high- speed data users, a critical ingredient in growing high-tech jobs.

SBC, the area's dominant local phone company, begs to differ -- and is begging them not to follow through with the plan.

City officials envision running the broadband lines, which allow for a nearly infinite number of much faster Internet connections than copper lines, in an underground loop that will serve area businesses and large institutions. Some of the piping that will carry the lines already exists, holding wiring that operates city traffic signals. Work to install the rest next year will be funded by $600,000 the Common Council appropriated for next year's budget.

The plan calls for the city to then allow St. Joseph Valley Metronet Inc., a nonprofit group comprising representatives from area businesses and Project Future, the local economic development agency, to push fiber optic lines through the pipes and lease space in them to data users.

It's a service SBC already offers, using the infrastructure from its phone network.

Cleo Washington, attorney for SBC and a former Common Council member, says his company has no problem with competition, but it is unfair for the city to subsidize it. Government-owned telecommunication providers are exempt from paying taxes, have unfettered access to rights of way, can raise capital through the issuance of tax-exempt bonds and are not required to turn a profit, Washington said.

But Mayor Stephen Luecke says the city is not getting into the telecommunciation business. It will be St. Joseph Valley Metronet, not the city, owning the fiber optic lines. The city is merely entering into a reciprocal agreement with the nonprofit to allow it use of city pipes, or conduit, that will carry the lines.

In exchange, the city will get to use space in the fibers for departmental communications and traffic signals, in addition to growth in its tax base that the economic development would generate.

Gary Gilot, city public works director, said the city would have launched the $600,000 upgrade of its wiring network regardless of this project, so he does not consider the expenditure a subsidy for St. Joseph Valley Metronet.

Patrick McMahon, executive director of Project Future and a St. Joseph Valley Metronet founding officer, said a feasibility study that Project Future commissioned found the local broadband environment is restricted with respect to access and services, and is often noncompetitive in pricing.

"We found we are not a competitive location to any existing or new business expansion when business activities rely significantly upon effective movement of large quantities of information via electronic means," McMahon said.

Without the network, the city is losing out on drawing engineering and design centers, disaster recovery centers, banking and insurance processing, life science research and design centers, national/regional data centers, medical records centers and telecommunication support centers, the study found.

"Most people come in and say, 'We want direct access to multiple vendors that are competitively priced.' "

Teachers Credit Union uses five different telecommunication carriers, but they all rely on SBC infrastructure.

McMahon said Metronet organizers want to establish a "carrier neutral" broadband infrastructure, meaning no carrier would own it.

"It's not unlike a roadway system," McMahon said. "We don't ask the Fire Department to build roads just so fire trucks can drive on them."

Communities across the country are increasingly regarding broadband as a public domain, said Jeff Chester, of the Center for Digital Democracy in Washington. It's a concept that threatens the effective monopolies still enjoyed by the Baby Bells, the regional components of AT&T after it was broken up through deregulation, Chester said.

"It comes down to a philosophical and a political issue," Chester said. "Are we going to treat the Internet as private property under the control of the large telecom providers, or is it a public good?"

Washington said the plan exposes city taxpayers to risk.

"Who will be liable if there is a failure in the system?" Washington said.

But Chester dismissed that as a "scare tactic" that SBC and other phone companies have raised in fighting municipal broadband initiatives nationwide.

Washington also says cites lack the expertise and commitment to ongoing product development to meet the evolving technological needs of customers. While many communities have tried it, none have succeeded, Washington said.

Again, Chester scoffed.

"You can do it incredibly inexpensively today," Chester said. "This is what the Bells and cable don't want the public to know. Cities and nonprofit organizations can provide broadband service faster and better than telephone and cable companies can."

Staff writer Jeff Parrott:

jparrott@sbtinfo.com

(574) 235-6320

Source: South Bend Tribune

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