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City's Communications

Proactive Strategy for Cities' Fiber Optic Franchises or

"Lost Revenues to Out-of-Sight Administrative Costs"

The State of Washington continues to charge ahead in the multitude of fiber optics - increased bandwidth and cabling infrastructure deployments. After all don't all highways' bandwidth aspire to lead to Redmond's "Software Center of the Universe"?

Washington State freeways are being filled with bandwidth for whomever asks, franchises are multiplying for right-of-ways to buildings for revenue streams, Institutional Networks - connecting schools are passing your way and many millions of square feet of commercial buildings are asking for more bandwidth - fiber optics.

What does this all mean for Cities trying to sift through all the technical "mumbo-jumbo"? Wouldn't most cities rather focus on the proverbial issue of budgets, budgets, and budgets? Well budgets are exactly where the impact is, fiscal opportunities are being won and lost. It is now important to recover costs for administering and provisioning these communication infrastructures for your community. There may not be an interest (or understanding) in your community for communication infrastructure expansion but by the requirement of cities to comply with franchise requirements you may not have a choice. Therefore it is best you be prepared and revise your ordinances so you don't loose current franchise revenue opportunities. These ordinances are one way to offset the inevitable costs of administrating multiple requests for franchises from carriers who are requesting to dig up your property.

The Telecommunications Act of 1966 became law in February 1996 and makes for no longer a straightforward renewal process but instead multiple competing franchises must be allowed. In this era of the Internet ("you haven't seen nothing yet") the competition is "hot and heavy" between existing carriers and "carriers-to-be". This competition among carriers will (or may already be) driving multiple providers to your doorstep, wanting you to expedite their request for franchises. It is costing these carriers large sums of potential revenue for every day they are not gaining connectivity to your community.

Proactive Planning, "A Simple Seven Step Process"

  • First:
    Assess your needs comprehensively without restricting yourself - lead a community focus group. Identify community needs through a comprehensive communication master plan, not a "paper weight" but a living document. Identify partnering opportunities with private and other public agencies and/or municipalities.

  • Second:
    Provide an abundance of pathway for the future (empty/spare conduit), reducing the need to retrench later that is costly in disturbing plants and roadways. Cuts into the roadway will significantly reduce their life. There are examples of communities that require from carriers, pathway installed for their community's exclusive use wherever carriers dig.

  • Third:
    Identify administrative reimbursement opportunities. Develop ordinances that allow for annual charges instead of physical infrastructure. These annual charges will offset the hidden costs of negotiations, tracking and monitoring the infrastructure you have or are impacted by.

  • Fourth:
    Determine the actual cost of ownership. Too often what appears to be an advantage, in the long run can become a burdensome cost. Completely understand the short and long range implications of what is being "provided". Minimize long term agreements - we are in a very volatile period of telecommunication development and you don't want to be locked into long term agreements that you will likely resent.

  • Fifth:
    Maintain adaptable processes. Recognize we are in changing times and documentation/processes will need to be "living" to adapt to the unforeseeable future. Identify what these administrative costs will be and plan for them.

  • Sixth:
    Determine all of the costs to be recovered and your potential increased staffing needs - new requirements will require more knowledgeable staffing and more stream lined processes (note: there is a lot of money at stake for the carriers and every delay could cost them significant dollars in lost revenue).

  • Seventh:
    Select a design that is flexible and comprehensive, providing appropriate connectivity to your community - not just where the provider finds the best return on their investment. Choose purchasing policies wisely, if you purchase special deals from certain carriers, you dilute your buying power and minimize the incentive for carriers to upgrade existing services for the rest of the community.

I hope this helps to at least bring to light the issues to be "wrestled" with and the need to be proactive. With a little planning and foresight, your community as a whole can benefit significantly. What may seem like another headache can be turned into another benefit to living in your community. For further information contact, Chuck Lare at: chuck@lareassoc.com

Contact us at email: chuck@lareassoc.com
Phone: (206) 634-0401 Fax: (452) 952-1138











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