Published in IT/AV Report, Fall 2005

Can SuperMAN Save Metropolis?
By Scott Lehane

Wide area networking update.


Philadelphia Mayor John Street announcing Wireless Philadelphia’s plans to cover the city with broadband wireless access.

    These days, companies need reliable, affordable broadband access to support their voice, video and data communications, just as surely as they have access to electricity and water. Indeed, affordable broadband service has become an important consideration in choosing where to locate corporate headquarters, factories and other types of major business institutions.
    Many in the IT world are now beginning to worry, with the US slipping to 13th in the world in terms of broadband deployment (behind Korea, Japan, Singapore, Canada and much of Europe). Just a few years ago, the US ranked third in the world, but today it’s falling fast.
    It’s often at the city or municipal level that the economic effects of that decline are felt first. Local government officials are starting to sit up and take notice, by deploying their own broadband Municipal Area Networks (MANs) to provide an incentive for businesses to come to the region, or to stay.

Starts with the EDA
   "It usually starts with the local Economic Development Agency (EDA),” explained James Goldman, executive vice president and CTO of West Lafayette IN-based InfoComm Systems, as well as a professor and associate head of the department of computer technology at Purdue University. “What very often happens is either an existing company tells the Chamber of Commerce or the Economic Development Commission that they’re going to have to leave because they can’t get affordable advanced telecommunication services in this community, or a hot prospect that a community would love to have situate in their town says, ‘Well, I’m sorry, but we can’t consider your town because you don’t have the type of advanced telecommunications services we need at a reasonable price.’ So it’s usually then that the powers that be wake up and say, ‘We have to do something about this’.”
    InfoComm Systems has worked with numerous municipal governments and Fortune 500 companies to develop and deploy MANs, including 20 communities in Indiana, Michigan and North Carolina.
   "One of the communities that we’ve been working with the longest is Shelby County IN. They started out with a fiberoptic community network and they have since extended that to a new high-technology park called Intelliplex Park,” said Goldman.
    InfoComm Systems has developed what it calls MetroMorphosis, an all-inclusive process for municipal network development. “Although every community needs a unique solution, the planning process that they go through to reach that solution is fairly consistent,” explained Goldman. “So we formalized that process, breaking it into three distinct layers: strategic, tactical and operational.... By doing that, we allowed communities to do some of the work on their own....We were coming into these communities and they were at different stages of planning and frustration depending on how much work they’d done on their own, and we were able to say, ‘OK, it looks like you’ve done a pretty good job here and there; how about we come in and we’ll pick it up here?’”

Wireless Brotherly Love

    The city of Philadelphia is forging ahead with an ambitious plan to deploy a WiFi/WiMAX wireless mesh blanketing the city with ubiquitous broadband access. The goal is become the number one wireless city in the world.
    It’s not just big business that stands to benefit. “The Small Business Administration did a study in March of 2004 that showed that telecommunications costs were a higher percentage of the cost of doing business for small businesses and that low-cost access to high-speed internet capabilities would help spur economic development,” explained Dianah Neff, chief information officer for the Mayor’s Office of Information Services. “We estimate, based on a study that was done by Innovations Philadelphia and E-Consultants, which is an economic consulting company, that we could add as many as 3000 jobs to the city of Philadelphia by providing that lower cost of entry for new entrepreneurs to have access to affordable telecommunications.”
    The city, which is currently finalizing its request for proposals, plans to deploy WiFi (802.11b) transmitters on telephone poles and street lights, which will serve as the front-end gateway to the network. For the back-end, the transmission will be WiMAX, which offers a bigger pipe. The Wireless Philadelphia executive committee estimates that the network can be deployed across its 135 square miles for approximately $40,000 to $60,000/square mile, giving city-wide coverage for $7 to $10 million.
   "To deploy a wireless network, it costs about $20 to $200 per household passed, but to do DSL or cable, it’s $700 to $1500; for fiber, it’s about $2000 to $3000,” Neff explained. “So, if your goal is to provide low-cost, affordable broadband access, what’s available today doesn’t meet those requirements.”


Optibase’s MGW 5100 carrier-grade streaming platform is a key component in many telephone companies’ plans to deliver video as part of their triple-play services.

Outsourcing
    The city plans to outsource the design, installation and deployment of the network, as well as maintenance and support of the infrastructure. It is forging several public/private sector partnerships with companies, universities and institutions that want to ride on the network infrastructure with their own virtual private networks (VPNs).
    Philadelphia expects to support some 200 to 300 VPNs on its network in addition to serving its own internal communications needs, and overcoming the digital divide by offering “broadband speeds at dial-up rates.”
   "Only 58% of our households have internet access and through the surveys that we did, we found that 76% of the respondents said that cost was the number one reason,” said Neff. “Mayor John Street is committed to having forms of free access in public spaces, so in our squares and in our major parks such as Independence Park, there will be free wireless access. But if you want to be able to use it anywhere you go in the city or bring it into your home, there will be a cost. We’re looking at $10 to 20/month but until we select a final solution, we can’t tell exactly what that cost is going to be.
   "Also it will be an open network, so if you’re a company that does business on the internet and you want to use that infrastructure to deliver that service into the home, then this is an economic stimulus,” she added.

Biggest Incentive
    But perhaps the biggest incentive for Philadelphia is the money it can save on its own communications costs, and the benefits that wireless broadband can bring to the city’s field workers.
    Schools, libraries, fire departments, police stations, urban planners and engineers, social services, hospitals and EMS workers will all be able to ride on the network’s infrastructure. Currently, Philadelphia is paying millions per year for leased T1 lines for some 400 remote facilities scattered around the city, as well as slow-speed cellular data services for field workers. Neff estimates that, in its second year of operation, the network will be saving the city about $2 million per year in reduced telecommunication expenses.
   "If you have a water main break and you need engineering drawings in the field, you could have access to that over a broadband connection. You won’t have to get in your truck and come back to the Public Works station or the yard to print out copies. Now, that’s a tremendous opportunity to reduce time and costs,” she said.
    The network will also enable the police department and security agencies to install surveillance cameras in known trouble spots without having to run wires out into parks and other remote locations. In addition, parking meters and red-light cameras currently using land lines can migrate to the network.

One Size Does Not Fit All
    Worldwide, the Municipal Area Network is poised to become a major competitor in the broadband market, with major cities such as Albuquerque NM and Grand Haven MI, New York, Taipei, Calgary and Adelaide planning to launch some level of wireless service.
    But when it comes to the last mile, “One size does not fit all. It may be the perfect solution for Philadelphia, but that’s not to say that it would necessarily make any sense in Indianapolis or any other community,” explained Goldman. “You really have to look at the requirements and the current assets of every community and then decide what solution makes the most sense for them.”
    In fact, even most underserved rural communities often have the assets in place to deploy a broadband MAN. The major dark horse in the broadband market is the public-utilities sector, enabling smaller communities such as Holyoke MA, Allegany MD and Muscatine IA to enjoy the benefits of broadband.
    Many of these public utilities have built extensive high-end WAN infrastructures with dark or lit fiber for their own voice, video and data communications, and can use their rights of way to extend those services to local businesses and residents: everything from cable TV over fiber-to-the-home, to wireless broadband.


The utilities market is well positioned to offer broadband services in many rural areas.

Lots of Opportunity
    Kim Yackovich, director of business development, State & Local Government, Marconi, explained that there are many opportunities in this space for independent systems integrators, contractors, consultants and engineers. “If they’re looking for potential clients in this area, the idea is to look for areas that are underserved by the incumbent telecommunication providers, and talk to the local utilities about whether they’ve thought about extending services or even go right to the municipality. In particular, you want to look for the rural communities that have attracted large businesses.”
   "One of the reasons municipal utilities are very well poised to do this is that, typically, they are located in underserved areas. That was the whole start of the public-utilities market. It was started about 100 years ago with grants from the Federal Government to serve rural communities with electricity, water and some type of telephony services, and so by nature most of them are in rural areas. Those areas are less attractive to carriers and, typically, they don’t have the access to the services that a metropolitan area has or they don’t have access to them at a reasonable price,” said Yackovich.
    Marconi provides municipalities and utilities with systems integration services and technical support, as well as the backbone hardware for ATM networking. It has helped dozens of public utilities across the country get into the broadband MAN market with voice, video and data.
   "They all went about this in a similar fashion. They started looking at the ramifications of electricity deregulation several years ago and realized they’re going to be facing a lot of price pressure as well as risking losing some of their customers to competition,” said Yackovich.

‘What Are We Going To Do?’
   "So they asked themselves, ‘What are we going to do to mitigate that risk?’,” she explained. “One of the things they came upon besides competing head-to-head in the electricity business is offering telecommunications services, and that’s very attractive to them because it also supports their mission of economic development for their region, given that they are public entities. All of them have multi-service voice, video, data networks in place to support their electric and water distribution systems. So some of them use that same network to deliver telecom services and some of them have decided to build out a separate network, but they can use their right of way, and therefore get a bigger ROI.”
    Yackovich explained that the US Department of Agriculture’s Rural Utilities Service offers substantial grants to deploy broadband services in rural parts of the country, and Marconi offers a Grant Assistance Program to help communities and consultants prepare and file the necessary applications.
   "They all start out selling business connectivity. Typically, the first service they would offer is pure VPN. Then they start offering voice services. They start offering internet connectivity, broadband services and then expand those services to the residential market,” she explained.

Most Advanced Network
    Dalton Utilities in northwestern Georgia, home to 80% of the US carpet manufacturing industry, began to build its own ATM network in 1999 to support the 117-year-old utility’s electricity, natural gas, water and wastewater services. Recently, with consulting support from Marconi Broadband Routing & Switching Services, Dalton Utilities reconfig-ured the network to support a fiber-to-the-home broadband network.
    The utility now delivers voice, cable TV and internet services to residential customers over fiber and serves the area’s Fortune 250 carpet manufacturers with point-to-point data services over Internet Protocol (IP).
   "With natural gas customers three counties away and water production north of us at the Tennessee River, we needed to connect all of our facilities to a central control area,” said Chris King, telecommunications manager for Dalton Utilities. “We knew that our large industrial customers needed another means of data transportation than the ILEC [incumbent local exchange carrier] provided. And the incumbent wasn’t serving this area with the big pipes that we needed anyway.”
    James Salter, president of Atlantic Engineering Group, the contractor that designed and installed the utility’s fiber plant, said, “In the municipal last mile world, you won’t find a more advanced network in America than the one operated by Dalton Utilities.”
    The utility’s network features 10 Marconi ASX-4000 multiservice backbone switches in the network core. Designed to support more than one million virtual circuits (VCs), each ASX-4000 switch provides voice, video and data traffic management and signaling capabilities at rates up to OC-48 (2.488Gbps). These switches enable the network to support thousands of users, while enabling the utility to define and support differentiated service offerings and set Quality of Service standards for each.
   "Our first customer was the county school system,” King said. “Our second customer was the largest carpet manufacturer in our area. Our third customer was the city school system, and our fourth customer was another carpet manufacturer. Then we won the city and county government network. As a CLEC [competitive local exchange carrier], we consistently outbid the incumbent ILEC for business. And now our customer base ranges from five-employee operations to Fortune 250 companies.”
    Muscatine Power and Water (MP&W) in Iowa is another key Marconi customer that, in addition to electric and water services, has constructed a state-of-the-art hybrid fiber-coaxial (HFC) system to support its municipal area network (MAN).


‘Although every community needs a unique solution, the planning process that they go through to reach that solution is fairly consistent.’
—James Goldman,
InfoComm Systems

    The new communications system delivers high-speed internet access along with an array of residential services including cable TV and cable modems. MP&W plans to roll out many additional business and residential services, including local and long-distance telephone service, cellular phone service, home security systems, video on demand, teleconferencing, and real-time pricing of electric and electric/water remote meter reading.
    Other utility-based MANs that Marconi has contracted for include Holyoke MA, King County WA and a wireless MAN for Allegany MD.
   "The potential market is huge. There are about 1100 municipally owned public utilities in the US. And now, more recently, you see the municipalities themselves getting involved,” said Yackovich.

Empire Fights Back
    But the incumbent cable and telecommunications companies have monopolies to defend and they have begun to take notice of this growing phenomenon. Although they’ve been slow to roll out broadband services themselves, they have mounted an intense lobbying effort to put a stop to the deployment of MANs by going to the state legislatures.
    Shortly after Philadelphia announced its plans, the state of Pennsylvania passed a law banning municipalities, public utilities and city governments from deploying municipal networks that charge a fee.
   "The telcos are the oldest, deepest pocketed lobbying group. They’re pretty entrenched in politics and they know how to do things,” said Neff. “So this was all done in the dark of night. One of our attorneys was watching C-SPAN at the close of the legislature and he picked up on Bill 30 coming out of the House and moving over to the Senate. Otherwise, we wouldn’t have been aware of it and it could have been too late.”
    Wireless Philadelphia quickly mounted a grass-roots campaign to get the city’s wireless plans grandfathered but, according to Neff, “we won the battle, but lost the war.”
Eleven other states have passed similar legislation. Indiana has twice tried to pass a law, but failed both times.
    For InfoComm Systems’ James Goldman, “It’s not just for selfish reasons for my own business, but I think it’s very bad for the economic health of the states that it got passed in.”
For the incumbent telephone and cable companies, convergence is going to be difficult enough without facing competition from local governments and public utilities. Cable companies such as Comcast and Cox have announced plans to deliver telephony services bundled with cable and high-speed internet access. Meanwhile numerous telcos, including SBC, Bell South and Verizon, have plans to offer cable TV over DSL and HFC networks.

Sideshow
    With both monopolies threatening to eat each other’s lunch, broadband has become somewhat of a sideshow. “The incumbents refuse to invest, but they don’t want anyone else investing either,” explained Goldman.
    Until recently, the cable industry couldn’t efficiently offer switched (and therefore any) telephony services, and the telephone companies didn’t have the bandwidth for cable TV offerings. Now, voice over IP (VOIP) allows cable operators to offer voice, and advances in DSL and compression technologies such as H.264 (MPEG-4), as well as the extended penetration of fiber-to-the-neighborhood (FTTN), fiber-to-the-curb (FTTC) and even fiber-to-the-home (FTTH) give the telephone companies a chance to compete in the video distribution game.
   "What we see right now in the market, is that cable providers are starting to offer dial tone, which poses a great threat to telco providers worldwide, not only in the US. We see it all around the world. Telco operators face an enormous threat because they are about to lose their bread and butter,” said Amit Daliot, product marketing manager for Optibase IPTV. “Comcast just introduced a new challenge of providing telephone service to each one of their cable subscribers by the end of this year, so when you are Bell South and you hear such a thing, you are totally freaked out; you have to do something now.”
    Optibase’s MGW5100 carrier-grade streaming server is a key component in many telcos’ plans to offer video as part of their triple-play services. “SBC is already deploying IPTV triple-play services. BellSouth just finalized the RFP for triple play and its target is to start by the end of this year,” said Daliot.
    North Dakota-based DakTel Communications recently selected Opti-base’s TV streaming platform, the Media Gateway 5100, to deliver triple-play voice, video and data services to its subscribers in Jamestown ND over FTTH (fiber-to-the-home), with funding from the Rural Utilities Service.
   "It’s a full community where the telephone company has decided to stretch fiber to each one of its subscribers. It’s really amazing. You have 4000 subscribers watching 150 channels at DVD quality over their fiber,” said Daliot.

Start With a Clean Slate
    But laying fiber direct to homes and business is a very expensive proposition, even for the incumbents, and even with government grants. A major part of the cost is simply the expense of digging trenches and laying cables.
    So the battleground for FTTH has centered on real-estate developers who are starting with a clean slate, rather than the more expensive retrofitting of communities. FTTH is becoming increasingly common in high-end, green-field planned communities across the US, where builders can write clauses into homeowners’ agreements specifying that residents must get bundled services from the central network.
    This is a market that Optibase is also approaching. “The subscribers are not allowed to bring other services in, but they have everything and they’re paying a fixed price per month,” said Daliot. “And everything is high-end: it’s the best TV, the best high-speed internet, the best telephone lines. The services are bundled all together on a homeowner’s fee. So developers are starting to offer fiber to the homes in these communities in order to be more attractive in the market.”
    Similarly, in new high-tech parks and corporate real-estate developments, fiber is something developers are planning for from the outset. Increasingly, they are contracting with systems integrators to build in all the components for converged triple-play service to every building. Whether those services eventually are provided by an ILEC or CLEC, or by some public agency or utility, is almost beside the point.
    (Systems integrators, though, are usually unlikely to get work from a telco, and quite likely to get it from any of these other parties, so IT/AV Report readers’ preferences must be mostly apparent.) The race is on, and we can be grateful to those cities that have been spurred into action and thus make it a race. One that we all can win simply by, for example, taking advantage of free WiFi in a park.

Scott Lehane is a Toronto, Canada-based journalist and documentary film producer.

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