Fiber optics and the city's can't-do spirit
The City of Minneapolis owns the roads and the water pipes.
Why not own the fiber-optic network, as well?
By Becca Vargo Daggett
Minneapolis Star Tribune
Monday, January 9, 2006
When 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?
Keep in 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.
Given the 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.
Last April, 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
Becca Vargo Daggett is a
researcher on the New Rules Project for the Institute for
Local Self-Reliance, a nonprofit organization with offices
in Minneapolis and Washington, and is co-author of the
institute's report "Who Will Own Minnesota's Information
Highways?" Her e-mail is firstname.lastname@example.org.