Congratulations to the city of Santa Monica, for adding another award to their long list. On September 18th, city leaders announced that InformationWeek 500 named the city to the 2012 list of technology innovators. Santa Monica is among the Top 15 Government Innovators.
The award specifically acknowledges the Advanced Traffic Management System (ATMS) that uses Santa Monica's fiber network to improve traffic safety. From a Santa Monica Daily Press Article about the recognition:
The ATMS connects traffic signals, cameras, controllers and wireless devices on transit corridors through Santa Monica’s fiber-optic network. The entire system is managed in one room where traffic is monitored and controlled in real time. Traffic signals can be adjusted on the fly to deal with shifting traffic patterns during peak travel times, holidays, special events and traffic accidents.
Emergency vehicles can also trigger green lights, helping them move quickly through the city. The number of parking spaces available in city-owned lots and structures is also monitored and displayed on signs and on City Hall’s website. There are also Wi-Fi equipped parking meters that take payments by credit cards and cell phones.
A special website — smconstructs.org — provides the latest information on development projects, as well as road closures, detours and other impacts on traffic, according to the press release.
The city also runs parkingspacenow.smgov.net, which allows users to find a place to park their vehicles and provides information on all things parking related.
Santa Monica’s broadband initiative was nominated for the network’s ability to provide speeds of 10 Gigabits per second, achieve a 67% cost reduction, and the economic and technological growth opportunities that result from supporting companies along Santa Monica’s Tech Coast with a leading-edge broadband infrastructure.
The City of Santa Monica leases dark fiber and offers lit fiber to local businesses for affordable broadband at 100Mbps, 1Gbps, and 10Gbps speeds. Santa Monica's broadband model results in a reduction of construction costs for new broadband service, an increase in purchasing power of connected local businesses, and a broadband market expansion for Internet service providers that now may offer service to small, medium and large commercial buildings. The city also recently received honors as one of the Top 25 Innovations in Government by the Ash Center at the Harvard Kennedy School and a Significant Achievement Award from the Public Technology Institute (PTI) for the broadband initiative.
Santa Monica's approach to building community owned broadband that puts the community first has been wildly successful. They have not focused on providing residential connections, and likely will not in the future, focusing instead on meeting their municipal needs and businesses to spur economic development.
They can deliver up to 10Gbps to businesses that need it and they have connectivity throughout the City for whatever projects they choose to pursue. This includes free Wi-Fi in parks, controlling traffic signaling (prioritizing mass transit, for instance), and smart parking applications. On top of all that, their investments have saved more than a million dollars that would have been wasted on slower, less reliable connections provided by leased lines.
Arizona Avenue, the Mid-City area and the city's office district will all be getting makeovers if the City Council approves two contracts that will connect 40 signalized intersections to City Hall's centralized traffic control system.
The work represents the fourth phase in a five-phase effort to connect all of Santa Monica's intersections using fiber optic cables. Some signals will need to be fully replaced, while others can get by on smaller upgrades, according to the staff report.
Don't miss this hour long interview between Craig Settles and Jory Wolf, the brains behind Santa Monica's success.
Around 45 minutes into the interview, Jory Wolf talks about the ways the free Wi-Fi network promotes local businesses in partnership with a Buy Local campaign. I was thrilled to hear this as a colleague of mine at the Institute for Local Self-Reliance is a great friend of buy local campaigns because they are proven to help the small, independent businesses that contribute so much to communities.
If you want to learn more, particularly about how Santa Monica's approach has created many new jobs (that's right, smart public investments in broadband create jobs!) check out .
-Though the city provides Internet access directly, it also makes the network available to third-party providers on an open-access basis. “The incumbents have chosen not to use our assets,” Wolf says, explaining that larger providers are often reluctant to operate over networks where they cannot control the user experience and that their marketing and support organizations are not geared to using other companies’ networks.
However, other ISPs have shown interest in the network now that it is becoming successful. Currently, two ISPs offer services generally over the network, and other ISPs serve the Santa Monica offices of businesses that they deal with in other locations. Wolf says, “We have the opportunity to handle the business any way they prefer. … We’re not an obstacle; we’re an enabler. We don’t see ourselves as competitors, but as filling a void.”
City Net’s revenue from current business customers totals about $300,000 per year, enough to fund network operations and maintenance and to support an extensive system of free Wi-Fi hot spots throughout the city. Wi-Fi is now available at parks, beaches, libraries, public buildings and other open-space areas. On any given day, about 2,000 of Santa Monica’s 87,000 residents use the 27 Wi-Fi hot spots.
The city also has $190,000 of its capital funds remaining, which it uses as a revolving capital improvement project account. This account funds construction for network expansion, which is repaid by customers as the network is extended to their premises.
An indirect benefit of City Net is that it has forced competing networks to lower their prices. Wolf’s office estimates that nonparticipating providers have lowered their bandwidth prices by 20 percent or more, making bandwidth generally more affordable throughout the city. “If that’s all we had accomplished, we’d feel that we’d done what we intended,” Wolf says.
The program was selected for this award in the economic development category for the network's effectiveness in attracting technology companies to the city and supporting existing Santa Monica businesses with a leading edge broadband infrastructure, city officials said.
Santa Monica City Net's model is being replicated by the cities of Burbank and Long Beach, and is in review by Chicago and Calgary.
The City created a telecommunications master plan and built a fiber optic network that connected 59 buildings used by the City, Santa Monica-Malibu Unified School District, and Santa Monica College. Savings realized by this project enabled the City to construct its own municipal fiber optic network, Santa Monica City Net, to support traffic cameras, security cameras, real-time parking advisory systems, a traffic signal synchronization system, and real-time mass transit signs. The City also leases dark fiber and lit services to local businesses for affordable broadband.
The results of Santa Monica's advanced broadband initiative are a reduction in construction costs of new broadband service, an increase in purchasing power of connected local businesses, and a broadband market expansion for global Internet Service Providers that now offer service to small, medium and large commercial buildings. The program also supports an environment for local businesses to compete in the global economy with cutting edge network solutions.
The PTI is a national non-profit technology research and development organization based in Washington, DC, representing local governments. The PTI Technology Solutions Awards is a national program recognizing local governments that use technology to increase revenues, improve service to their community, save tax dollars, or improve management.
Craig Settles kicks off this event with a 45 minute presentation discussing what community networks should do to succeed financially and how they can go beyond simply making broadband access available to more people.
Bryan Sivak, Chief Technology Officer of the District of Columbia; Joanne Hovis, President-Elect of NATOA and President of Columbia Telecommunications Corporation; and Gary Carter, Analyst at City of Santa Monica Information Systems Department responded Craig Settles' presentation.
One of the key points is something we harp on here: if community broadband networks run in the black according to standard private sector accounting procedures, that is great. But it is a poor measure of how successful a community network is. Community networks create a variety of positive benefits that are not included in that metric and those benefits must be considered when evaluating such a network.
In fact, Burbank generates substantial net income for its general fund through leases, including to major Hollywood studios.
Burbank first laid its fiber in the late 1980s and began leasing in the mid 1990s, said Robert DeLeon, a senior electrical services planner in Burbank. It currently leases to 15 studios, such as Warner Brothers and Disney, or studio-related businesses, like post-production companies. Like Santa Monica, Burbank's main goal in leasing its dark fiber was to attract business. But at $200 per strand per mile, Burbank is currently making approximately $1 million that is being put back into the general fund.
Santa Monica's revenues from leases have been more modest, but the benefits of leasing go far beyond regular payments. The network increases economic development and improves the quality of life with free Wi-Fi in a variety of public areas. Further, the city no longer has to overpay for the data connections it needs for municipal functions.
Santa Monica is also leasing to 15 businesses that include hospitals, entertainment companies and new media outlets, among others, but is only making $270,000. It was never Santa Monica's intention for the leasing of dark fiber to be a major source of revenue, Wolf said.
Santa Monica - UCLA Medical Center uses city-owned fiber because the city has better customer service:
Though there are other options for obtaining a fiber optic connection, such as AT&T, Kacperski said the hospital decided to lease from City Hall because hospitals are community based and because City Hall has better customer service than private carriers.
As we have often maintained, locally owned networks win on customer service (and often reliability). Community networks may not always win on prices because massive incumbents can engage in predatory pricing by cross-subsidizing from non-competitive markets, but they can win on providing a better experience for subscribers.
Moving forward, Santa Monica is starting to go beyond simply leasing dark fiber to actually providing lit services to businesses who would prefer not to manage their connections.
Santa Monica has built an impressive fiber network to connect local government buildings, schools, parks, and local businesses. With local jobs dependent on massive media studios that require very robust connectivity, Santa Monica has responded by building an impress community broadband network. That network is now offering 10Gbps connections - if such a connection were available from the local cable company, I shudder to think what they would charge for it.
Our Santa Monica City Net and City WiFi (News - Alert) project will provide the equipment and connections required to expand the City’s free WiFi service that delivers Internet access to the public at our libraries, open space areas, community centers, homeless shelter, senior centers and animal shelters. In addition, our project will provide a connection to over 200 ISPs to obtain affordable broadband options to local businesses and increase the competitiveness of our country’s preeminent post-production companies and intellectual exports located in Santa Monica, Calif.
South Hadley, a small town in Massachusetts, may expand its modest fiber network (currently connecting schools, police, and town hall to others in town. Its municipal power company is evaluating options.
Baltimore City Paperran a column discussing the Monticello, MN, city-owned network and the attacks against it by TDS Telecom. This accounting of the history has some errant details, but I found it fascinating how far the Monticello story has spread.
When communities compare the costs of different technologies, they often get too caught up in the upfront costs and ignore the ongoing costs (operating costs, or opex). He offers an example of a modest wireless network:
It’s important to understand that while it costs a lot of money to create a broadband network, over a five-to-ten-year period, it costs even more to operate that network than to build it. Say it costs $1 million to build a wireless network. During the municipal wireless heyday, it was estimated to cost 20% of buildout expense to operate the network annually – to pay for customer service, maintenance, upgrades, etc. That’s $200,000 a year.
This is a great intro article for those who may not be used to thinking about the economics or business plans networks need.
For the rest of us, it is a strong reminder of how many networks start (and a good path for those who want to create a network):
Santa Monica, California, had a legacy PBX phone system and slow connection circuits from incumbents. The city pooled money it was already paying for voice and data services, using this capital to build a fiber network and implement new communication technology.
City CIO Jory Wolf states, “By switching to fiber we realized a $500,000 savings in data circuits and $250,000 savings in voice circuits, all of which stayed in our fund. Ongoing savings enabled us to provide our police with video streaming in their vehicles. We have excess bandwidth, so we provide (a) large number of sites with free wireless access.” Wolf said that the city is also selling companies fiber lines that haven't yet been turned on. “Our network budget is self-sustaining,” he said, “and I have $2.5 million in capital.”
I remember Tim Nulty saying that Burlington Telecom started the same way. They figured out how much they were paying each month for telecom as a city. They used that number to compute how much they could spend on a monthly basis for opex and debt repayment. From there, they designed a system to meet the budget - a gigabit network connecting all the public schools and local government buildings (with the capability for further expansion if needed). They started saving money on day 1 and radically increased their productivity. From there, they decided to bring fiber to every last person in the community.
Even if incumbent carriers can offer the kinds of speeds needed by community institutions (in Burlington, they couldn't), they may charge prohibitive prices that effectively make it unavailable. Settles has a great quote from Pulaski, Tennesee that touches on this:
Dan Speer, Executive Director of the Pulaski-Giles County (TN) Economic Development Council, declares that “the World Wide Wait is over in Pulaski. There’s a printing operation here that has to send large graphic files all the time to their corporate headquarters in Los Angeles. One company with offices on the north side of community and the manufacturing plant on the south side use the network to send large data files back and forth. Broadband makes this possible.”
The essence of the objection to municipal involved in communications is that public intervention will undermine the private sector due to the cost advantages uniquely available to governmental entities, thus creating a barrier to public entry. As we have shown, however, this objection fails in two ways: First, municipalities tend not to become involved in communications in markets characterized by effective competition; and second, where municipalities do become communications providers, private entry into the market tends to be stimulated rather than suppressed.