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Technology in Government
Committee on Technology in GovernmentBruce Lai, Policy
Fredy H. Kaplan, LegalSteve Hamill, Press
Carl Thelemaque, Finance
THE COUNCIL OF THE CITY OF NEW YORK
BRIEFING PAPER OF THE INFRASTRUCTURE DIVISION
Marcel Van Ooyen, Deputy Chief of Staff
COMMITTEE ON TECHNOLOGY IN GOVERNMENTHon. Gale A. Brewer, Chair
January 10, 2005
Oversight: Is Brooklyn Business Suffering From A
Broadband Gap?
Introduction
On Monday, January 10, 2005 in Dibner Auditorium, Polytechnic University, Downtown
Brooklyn, the Committee on Technology in Government will hold a hearing entitled “Is
Brooklyn Business Suffering From A Broadband Gap?” At this hearing, we will discuss
the following:
Is there a "broadband gap" for Brooklyn businesses?
Does city government have a role in closing this gap, if it does indeed exist? If
so, what role should city government play?
What can incumbent wireline broadband providers do to close the gap?
January 10, 2005 Page 1 of 36
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Is wireless broadband an affordable broadband alternative for small and medium-
sized businesses?
Those expected to testify include:
Agostino Cangemi, Deputy Commissioner, Franchise Administration and
Planning / General Counsel, New York City Department of Information
Technology and Telecommunications (DoITT);
Gil Quiniones, Senior Vice President, Infrastructure, New York City Economic
Development Corporation (EDC);
Donald Giampietro, Executive Director for Business Incentives, New York City
Department of Small Business Services (SBS);
Dianah Neff, Chief Information Officer, Mayor’s Office of Information Services,
City of Philadelphia;
Jonathan Bowles, Research Director, Center for an Urban Future;
Matt Stone, Co-Founder and Government Strategist, Civitium LLC;
Bernard Dushman, Vice President for Technology and Information Services,
Brooklyn Navy Yard Development Corporation;
Phaedra Thomas, Co-Interim Executive Director, Southwest Brooklyn Industrial
Development Corporation;
Chris Owens, former President, The Weeksville Society and former President,
Community School Board 13;
Peter Fontanes, National Chair and Founder, National Association of Hispanics in
Information Technology and Telecommunications;
January 10, 2005 Page 2 of 36
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Joe Di Geso, General Manager, High-Speed Internet Service, Time Warner Cable
of New York City;
Thomas A. Dunne, Vice President, Public Policy and External Affairs, Verizon
Communications;
Robert C. Atkinson, Director of Policy Research, The Columbia Institute for Tele-
Information;
Dr. Binay Sugla, Executive Director, Wireless Internet Center for Advanced
Technology, Polytechnic University;
Myron Uretsky, Professor of Information Systems, New York University;
Kirk Watson, President, Flushing Community Access Network Corporation;
Ann Barre, Managing Director, New York Wireless Access Coalition;
Dustin Goodwin, Board Member, NYCwireless;
Jeff Thompson, President and Chief Operating Officer, Towerstream Corporation;
Ron Sege, President and Chief Executive Officer, Tropos Networks;
Lou Slaughter, Chairman and Chief Executive Officer, GigaBeam Corporation;
Mohsen Garabagallo, SES Americom; and,
Dan Vaccaro, Orbital Systems.
January 10, 2005 Page 3 of 36
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What is Broadband?
Broadband “is a high data transmission rate Internet1 connection. … It is generally
accepted that the term is used to mean a connection of 512 kilobits-per-second (0.5 Mb)
or above for the final user and the FCC [Federal Communications Commission2]
definition of broadband is 200 kbps (0.2 Mb) in one direction, and advanced broadband is
at least 200 kbps (0.2 Mb) in both directions.”3 One of the characteristics of broadband
Internet access is that it is “always on”; that is, it does not tie up the phone line.4
Broadband technologies encompass “all-evolving high-speed digital technologies” that
provide consumers integrated access to voice, high-speed data, video-on-demand,5 and
interactive delivery services.6 Cable modem7 and Digital Subscriber Line (DSL)8 are the
latest in broadband technologies. Currently, these two types of broadband technologies
dominate the United States broadband market with cable modem service comprising 54
percent of all broadband connections and DSL comprising 42 percent.9
1 “The Internet, or simply the Net, is the publicly available worldwide system of interconnected computer networks that transmit data by packet switching using a standardized Internet Protocol (IP) and many other protocols. It is made up of thousands of smaller commercial, academic, and government networks. It carries various information and services, such as electronic mail, online chat and the interlinked web pages and other documents of the World Wide Web.” (http://en.wikipedia.org/wiki/Internet) 2 http://www.fcc.gov/. 3 http://en.wikipedia.org/wiki/Broadband_Internet_access. 4 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 4.5 “Video on demand systems are systems which allow users to select and watch video content over a network as part of an interactive television system.” (http://en.wikipedia.org/wiki/Video_on_demand) 6 http://www.fcc.gov/broadband/.7 See section entitled “Wireline Broadband Technologies” in this briefing paper for more information on cable modem service.8 See section entitled “Wireline Broadband Technologies” in this briefing paper for more information on Digital Subscriber Line (DSL) service.9 http://www.pewinternet.org/pdfs/PIP_Broadband_Report.pdf, page 2.
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Major Benefits of Broadband
Broadband has many benefits, including: (1) promoting overall economic growth (2)
enabling e-business solutions (3) helping businesses taking advantage of the Internet and
(4) reducing the cost of telecommunications services.
Broadband Promotes Economic Growth
Several studies over the last two years have been released projecting “the prevailing
economic benefits of broadband deployment,” ostensibly derived from a wider network
of broadband access nationwide.10 One study by the Yankee Group predicted $223
billion in cost savings with universally available broadband in the United States, while an
August 2002 study by Dataquest, Inc., a unit of Gartner, Inc., estimates that the
implementation of “true” broadband infrastructure could result in an incremental increase
in the United States gross domestic product by as much as $500 billion annually for each
of the next 10 years.11 A 2002 New Millennium Council study found that the broadband
expansion will potentially add 1.2 million jobs within the United States.12
Broadband Enables E-Business
According to a report13 by the Initiative for a Competitive Inner City14 (ICIC), a national
non-profit organization that promote economic development in inner cities, “companies
implementing successful e-business strategies are already enjoying dramatic reductions in
10 The Economic and Social Benefits of Broadband Deployment, page 7, The Telecommunications Industry Association (http://www.tiaonline.org/), October 2003.11 Ibid.12 Ibid.13 America’s Inner Cities Wired to Compete: A Report on Inner City Broadband Readiness and E-Business Technology Adoption, The Initiative for a Competitive Inner City (http://www.icic.org/) & The Boston Consulting Group (http://www.bcg.com/home.jsp), November 2002.14 http://www.icic.org/.
January 10, 2005 Page 5 of 36
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inventory and other costs, as well as revenue growth.”15 “Within its client base, The
Boston Consulting Group has identified successful e-business initiatives that have
resulted in as much as 50 percent inventory reductions, 25 percent revenue growth, and
15 percent cost reductions.”16 ICIC’s study estimated that:
Internet business solutions have helped increase revenues of United States
organizations by approximately $444 billion dollars over three years and will help
increase revenues by $1.5 trillion by the end of the decade;17
E-business solutions have yielded a cost savings of $155 billion to United States
businesses and are projected to yield an additional savings of another $373 billion
by 2010;18 and,
Half of productivity growth increases over the next decade will come from
Internet business solutions.19
Examples of How Businesses Use Broadband
“’Broadband makes businesses more efficient,’ says Tom Naklicki, operations manager
of the Greenpoint Manufacturing & Design Center.20 ‘One can purchase online,
communicate with accountants and lawyers online, complete banking transactions online,
receive and send time- and content-sensitive files online.’”21 For example:
15 America’s Inner Cities Wired to Compete: A Report on Inner City Broadband Readiness and E-Business Technology Adoption, page 3, The Initiative for a Competitive Inner City (http://www.icic.org/) & The Boston Consulting Group (http://www.bcg.com/home.jsp), November 2002.16 Ibid.17 Ibid.18 Ibid.19 Ibid.20 http://www.gmdconline.com/. 21 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 5.
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“Printing companies, for instance, are increasingly receiving high-resolution
digital files from clients via e-mail, and sending proofs back the same way. With
broadband, these often image-heavy files can be downloaded”22 quickly.
“Woodworkers, architects and other design-oriented businesses also use fast,
reliable broadband connections to receive orders in digital format and to transmit
multiple design options to their clients.”23
“Recording studios and audio mastering houses now transmit audio files – from
demos to finished recordings – to music companies and others involved in the
creative process. … Broadband makes it possible for technicians to work with
digital editing equipment and other sophisticated software programs that need to
be updated regularly.”24
“Animation and film businesses typically need large amounts of bandwidth to
upload extensive visual files and edit projects online.”25
“Businesses in the health care sector – from hospitals to HMOs – have been
streamlining their billing and claims services online,”26 resulting in substantial
cost-savings.
“In the air cargo industry, businesses at JFK Airport and other airports around the
country are already using broadband technologies – including wireless, hand-held
devices – to track freight shipments and book freight reservations online.”27
22 Ibid.23 Ibid.24 Ibid.25 Ibid.26 Ibid.27 Ibid.
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Broadband helps Businesses Take Advantage of the Internet
Traditional dial-up services that run at 56 kbps maximum (such as AOL and NetZero) are
extremely slow compared to broadband. Facilitating access to and promoting the use of
broadband may be a key factor to developing New York City’s business sector, as
broadband’s “fast, seamless connection to the Internet enables companies to reach an
infinitely larger pool of customers,”28 particularly customers in other parts of the country
and in other countries. Despite the recent dot.com collapse, the pool of customers on the
Internet is continuing to increase. The Pew Internet Project29 Internet tracking survey30 in
February 2004 recorded its highest readings ever on Internet users (in the United States)
who are e-shopping (65%)31 and participating in online auctions (23%).32 The survey also
found that 63% of American adults use the Internet, which amounts to 128 million
people.33
Broadband Reduces the Cost of Telecommunications
With broadband access, telecommunications services such as voice, data and video
transmission can be “bundled,” which enables “operators to offer more services to
consumers at lower prices, creating added efficiencies in both time and money.”34
Broadband also helps businesses take advantage of new technological innovations, such
28 Ibid, page 1.29 http://www.pewinternet.org/index.asp.30 “The results reported here come from a national phone survey conducted between February 3 and March 1, 2004. Some 2,204 adults (those 18 and older) were interviewed, of whom 1,371 were Internet users. The margin of error is plus or minus two points for the full sample and plus or minus three points for results drawn from the Internet user population.” (http://www.pewinternet.org/pdfs/PIP_April2004_Data_Memo.pdf)31 http://www.pewinternet.org/pdfs/PIP_April2004_Data_Memo.pdf, page 1.32 Ibid.33 Ibid.34 America’s Inner Cities Wired to Compete: A Report on Inner City Broadband Readiness and E-Business Technology Adoption, page 6, The Initiative for a Competitive Inner City (http://www.icic.org/) & The Boston Consulting Group (http://www.bcg.com/home.jsp), November 2002.
January 10, 2005 Page 8 of 36
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as Voice Over Internet Protocol35 (VoIP), an inexpensive way of providing telephone
service using cheaper digital technology. For example, if a business has a broadband
connection, they could get 500 minutes a month of calls to anywhere in United States and
Canada for only $14.99 a month.36
A Broadband Gap Exists in New York City
For Small and Mid-Sized Businesses Outside of Manhattan
Although 66.8 percent of all home Internet users in New York City have broadband
connections (fourth-highest percentage among U.S. cities),37 affordable, reliable
broadband service is not universally accessible, particularly outside Manhattan. Jonathan
Bowles, in a recent Center for an Urban Future38 report, writes:
“In New York, a vast number of businesses – particularly small and mid-sized
firms located outside of Manhattan’s office districts – still rely on super-slow
dial-up connections to access the Internet, and many are not hooked up to the
Web at all. But in many of the industrial parks and other low-density commercial
areas around the five boroughs, businesses continue to face extremely limited
options for obtaining broadband, and often find it downright impossible to access
a reliable high-speed connection. In these areas – including large parts of Hunts
35 “A technology for transmitting ordinary telephone calls over the Internet using packet-linked routes. Also called IP telephony.” (http://www.anadigics.com/glossary/v.html)36 http://www.vonage.com/. 37 Nielsen/Netratings (http://www.nielsen-netratings.com/news.jsp?section=new_pr&thetype=date&theyear=2004&themonth=8), Press Release, September 15, 2004. 38 http://www.nycfuture.org/content/home/index.cfm?CFID=13166408&CFTOKEN=67603881.
January 10, 2005 Page 9 of 36
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Point, Sunset Park, Long Island City, Williamsburg, Red Hook, the Brooklyn
Navy Yard, East New York and DUMBO – cable modem service still isn’t
available and DSL either isn’t accessible or is of extremely poor quality.”39
Example: Brooklyn Navy Yard
“The massive 3.6 million square foot complex houses roughly 220 businesses, is one of
the only places in the five boroughs to witness new industrial development in recent years
and has the capacity to accommodate growing companies in the decade ahead.”40
However, “the overwhelming majority of companies in the complex still can’t access
DSL”41 and “the infrastructure [i.e., conduit] to support T1 lines or cable modem services
hasn’t yet been installed in many of the 40 buildings in the Yard.”42
Infrastructure: Downtown Manhattan versus Brooklyn
In downtown Manhattan and a part of Brooklyn, the following graphic (provided by
Universal Access, www.universalaccess.net) shows two things: (1) the fiber lines of all of
the companies that provide telecommunications services in competition43 (or CLECs44)
with the primary companies that provide telecommunications services in New York City,
Verizon, Time Warner Cable and Cablevision, and (2) all of the fiber lit (or fiber
serviced) buildings served by the CLECs (the CLEC Fiber Buildings) and Verizon (Geo
LIT Buildings). A fiber lit or fiber serviced building means that the dedicated fiber
39 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 1.40 Ibid, page 9.41 Ibid.42 Ibid.43 Go to this link to see a list of these companies: http://www.nyc.gov/html/doitt/html/business/business_telecom.shtml. 44 “Competitive Local Exchange Carrier. A company that creates and operates communication networks and provides customers with an alternative to the local telephone company.” (http://www.google.com/search?hl=en&lr=&oi=defmore&q=define:CLEC)
January 10, 2005 Page 10 of 36
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connection has been run into that building, and all tenants in that building are able to
access the bandwidth of that fiber line. Notice the concentration of fiber lines and fiber
lit buildings in downtown Manhattan compared to northwestern Brooklyn, which
includes downtown Brooklyn.
The United States Broadband Gap
The United States is very far behind in terms of broadband adoption, ranking 11th in the
world.45 Currently, “39% of adult Internet users – or 24% of all adult Americans – have
[broadband] at home,”46 while “78% of Korean households subscribe to broadband, the
highest penetration rate in the world.”47 “In Japan, for as little as $10, consumers get
45 Availability of Advanced Telecommunications Capability in the United States: Fourth Report to Congress, pg. 40, Federal Communications Commission (http://www.fcc.gov/), September 9, 2004.46 http://www.pewinternet.org/pdfs/PIP_Broadband04.DataMemo.pdf, page 1. 47 http://www.manhattan-institute.org/html/_wsj-bringing_the_broadband_mi.htm.
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broadband service at 8,000 kbps [or 8 Mbps]” and “in Korea, consumers get 10,000 kbps
[or 10 Mbps] for the same price that we pay for 1,500 kbps [or 1.5 Mbps].”48
Why the Broadband Gap Exists
Antiquated Telecommunications Infrastructure
“A big part of the problem is that the copper wires that formed the backbone of the city’s
original telephone network more than 100 years ago remain the primary type of wiring
used to reach businesses and homes”49 in New York City. Modernizing the infrastructure
is not cheap. “Verizon is reluctant to spend significant sums when they believe … that
within a few years’ time, fiber optic technology will soon render all copper wiring
obsolete.”50 “While fiber optic trunks lay under the main streets and avenues of every
borough, it’s expensive to connect fiber over the last few hundred yards from under the
street to a firm’s office or an individual’s apartment building”51 – typically cost[ing]
between $50,000 and $200,000.52
Lack of Competition
Today, broadband is primarily provided by three companies: Verizon, Time Warner
Cable and Cablevision. Verizon’s DSL is available in most parts of the City. The
primary competition to Verizon in providing broadband service is Time Warner Cable in
most parts of the city (Manhattan, Queens, Staten and the western half of Brooklyn) and 48 Availability of Advanced Telecommunications Capability in the United States: Fourth Report to Congress, pg. 5, Federal Communications Commission (http://www.fcc.gov/), September 9, 2004. 49 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 12.50 Ibid.51 Ibid.52 Ibid, page 14.
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Cablevision in the parts of the city Time Warner Cable does not serve (the Bronx and the
eastern half of Brooklyn). However, Verizon still “faces little pressure from competitors
to improve their DSL service or upgrade their copper phone infrastructure.”53 As a result,
Verizon has focused on providing their more expensive T154 services aimed at businesses.
Because Verizon and the cable companies own extensive communications networks,
competitors are put at an immediate disadvantage, leaving most residents and businesses
with a limited choice in broadband providers. Wireless Internet Service Providers
(WISPs) are an emerging alternative in other cities. But because of the complexity of
entering the New York City market, particularly finding buildings or poles to place
wireless transmitters, very few WISPs have entered the New York City market as of yet.
Despite the fact that there are huge swaths of New York City that are yearning for more
broadband options, alternative carriers55 face “barriers that often put them at a
competitive disadvantage to Verizon.” 56 “For instance, every broadband provider but
Verizon must pay the city a franchise fee — roughly 5 percent of their gross revenues or
a minimum of $200,000 per year — to gain permission to open up city streets to install
cable, wire or fiber lines.”57 “In addition, Verizon’s legacy as the city’s local telephone
carrier means that it already has the equipment to support broadband networks installed
in most commercial buildings across the city. Other providers typically have to pay
building owners—sometimes in excess of $100,000—for the right to enter the property
and set up infrastructure needed to deliver broadband to customers in the building.”58
53 Ibid, page 15.54 See section entitled “Wireline Broadband Technologies” in this briefing paper for more information on T1 service.55 For a list of other broadband franchise holders in New York City, go to: http://www.nyc.gov/html/doitt/html/business/business_telecom.shtml. 56 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 15.57 Ibid.58 Ibid.
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“Verizon is operating on a much lower cost basis than everyone else. [Thus, a telecom]
company or investor can’t afford to go into the neighborhoods.”59
Demand Exists for Broadband but not a Critical Mass
Nationally, “according to the Yankee Group,60 70 percent of small businesses (firms with
between 20 and 99 employees) that have broadband responded that Internet access is
‘very important to the functioning and productivity of their business.’”61 However, in
New York City, only “’specific isolated companies who see the need to be on the Internet
and do business online, and who have a need to access appropriate technology,’ [says]
Sara Garretson, executive director of the Industrial Technology Assistance Corporation62
(ITAC).”63 Unfortunately, most businesses are “blissfully free”64 of broadband, says
Leah Archibald, former Executive Director of the Southwest Brooklyn Industrial
Development Corporation.65 Some of the reasons for this lack of critical mass among
small businesses in New York City include:
Costly Process of Identifying Appropriate Technology: Many of the CEOs found
no accessible source of information for understanding and evaluating technology
options for their businesses without having to spend a tremendous amount of time
doing research or incurring large expenses by hiring consultants.66
59 Ibid.60 http://www.yankeegroup.com/. 61 Ibid, page 3.62 http://www.itac.org/. 63 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 10.64 Ibid, page 11.65 http://www.swbidc.org/. 66 America’s Inner Cities Wired to Compete: A Report on Inner City Broadband Readiness and E-Business Technology Adoption, page 8, The Initiative for a Competitive Inner City (http://www.icic.org/) & The Boston Consulting Group (http://www.bcg.com/home.jsp), November 2002.
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Insufficient Understanding of the Value of E-business Practices: “’In many cases,
companies are led by executives who don’t understand the technology and don’t
easily use it on their own. This has a great impact on the degree to which the
company utilizes technology.”67
Cost, Cost, Cost : Broadband providers “have not yet lowered prices to a level at
which firms with low profit margins could justify the additional expense.”68
The Broadband Gap Requires First Mile Solutions
The Last Mile is Really the First Mile
One of the biggest obstacles to expanding broadband access is connecting individual
computers and/or local area networks69 (LANs) to high-speed fiber optic network
backbones owned by Verizon, Time Warner, etc. that connect their users to the Internet.
The distance between a network backbone and the computer of a user or a computer
network is often called the “last mile” because in computer network terms, the user is
considered the “last” part of the network. The “last mile”, however, is somewhat of a
misleading term. The connection between the user and the network backbone that
provides Internet access might properly called the first mile,70 as a network without users
has no value. In other words, broadband technologies are really “first mile” solutions.
67 Quote from Leah Archibald, former Executive Director of the Southwest Brooklyn Industrial Development Corporation, http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 10.68 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 10.69 A local area network or LAN is “A local area network (LAN) is a computer network covering a local area, like a home, office or small group of buildings such as a college.” (http://en.wikipedia.org/wiki/LAN)70 This term was mentioned to Council Member Gale Brewer and Committee Policy Analyst Bruce Lai in a meeting with John Gilbert, the Executive Vice President and Chief Operating Officer of Rudin Management, in August 2004.
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Types of Broadband Technologies
Broadband technologies can be grouped into two types of technologies: wireline, where
the data is delivered through some sort of wire (copper, coaxial cable, fiberglass, etc.),
and wireless, where the data is delivered on the waves of the electromagnetic spectrum.71
Some of the major wireline broadband technologies are cable modem, Digital Subscriber
Line (DSL), T1 and T3, fiber optic and associated FTTx systems, and Broadband over
Power Lines (BPL). Some of the major wireless broadband technologies are Wi-Fi,
WiMAX, microwave and satellite. Only Wi-Fi and WiMAX will be discussed in this
briefing paper because these two technologies are being deployed or scheduled to be
deployed on a large scale.
Wireline Broadband Connections
Cable Modem
Currently, cable modem broadband connections comprise the majority of broadband
connections in the United States.72 “Cable companies offer high-speed Internet service
by using a hybrid fiber coax, [which is] a technology that combines fiber optics and
coaxial cable. Fiber serves as the backbone of the cable broadband network, with strands
running out from the companies’ main fiber optic lines and terminating in nodes located
in neighborhoods throughout the city … Each node converts optical signals carrying data,
video and other information into electrical signals and redistributes them to homes and
businesses on coaxial cable, the same technology that delivers cable television service.”73
71 “The electromagnetic radiation spectrum [or radio spectrum] is the complete range of the wavelengths of electromagnetic radiation, beginning with the longest radio waves (including those in the audio range) and extending through visible light (a very small part of the spectrum) all the way to the extremely short gamma rays that are a product of radioactive atoms.” (http://whatis.techtarget.com/)72 http://www.pewinternet.org/pdfs/PIP_Broadband_Report.pdf, page 2.73 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 4.
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Cable modem connection speeds vary, but are usually 1.5 megabits per second74 (Mbps),
which is equivalent to about 30 standard dialup connections at 56 kbps, and can go up to
3 Mbps. Bandwidth is usually split 3:1 in favor of downloading (i.e., if total bandwidth is
1.6 Mbps, then download speed to the user will be 1.2 Mbps and the speed of uploading,
or sending data such as e-mails or files to the Internet, will be 400 Kbps). Because “users
in a neighborhood share the available bandwidth provided by a single coaxial cable line,
… connection speed can vary depending on how many people are using the service at the
same time.”75 Locally, residential cable modem service ranges from $45 to $85 a
month,76 while business-class cable modem service ranges from $60 to $530, depending
on the speed of the connection.77
Digital Subscriber Line (DSL)
DSL is the second most common broadband connection type, comprising about two-fifths
of the broadband market.78 “A big advantage of DSL is that it operates using twisted
pairs of copper telephone lines, which most businesses already have. A digital
technology that is offered by telephone companies, DSL transmits voice and data on two
different frequencies [on the same copper telephone line], allowing users to talk on the
phone and use the Internet at the same time.”79 DSL connection speeds also vary, but are
generally lower than cable modem, usually maxing out at 1.5 Mbps. Though the speed of
a DSL connection is generally more consistent, the quality of DSL service does fall if the
user is farther than 5.5 km away from a telephone exchange80 and “if the copper wires are
74 One million bits per second.75 http://en.wikipedia.org/wiki/Cable_modem. 76 http://www2.twcnyc.com/index2.cfm?c=internet/rates. 77 http://www2.twcnyc.com/index2.bus.cfm?c=new_bus/roadrunner#soho. 78 http://www.pewinternet.org/pdfs/PIP_Broadband_Report.pdf, page 2.79 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 4.80 http://en.wikipedia.org/wiki/Digital_subscriber_line.
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in bad shape.”81 That can often be the case in older buildings. Locally, residential DSL
service costs $35 a month,82 while business-class DSL service ranges from $40 to $235 a
month.83
T1 and T384
T1 connections are always rated at 1.544 Mbps (equivalent to cable modem and DSL
connections) while T3 connections are always rated at 44.736 Mbps (equivalent to 28 T1
lines).85 The bandwidth mentioned above is total and is equally split between “upload”
and “download.” 86 “Unlike DSL or cable modem users, who share a connection with
other users in the area and experience slower transmission speeds during times when
many people are online, T1 and T3 users enjoy fast service at all times over specially
dedicated lines.”87 The cost of a T1 connection ranges from $350 to $1200 a month,88
with a typical T1 connection costing $800 per month, while a typical T3 connection can
cost as much as $15,000 a month.89
Fiber Optics
“Fiber optic (or ‘optical fiber’) refers to the medium and the technology associated with
the transmission of information as light impulses along a glass or plastic wire or fiber.
Fiber optic wire carries much more information than conventional copper wire and is far
less subject to electromagnetic interference.”90 Fiber optic connections are usually rated
81 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 4.82 http://www22.verizon.com/forhomedsl/channels/dsl/package+price.asp. 83 http://www22.verizon.com/ForBusinessDSL/channels/bdsl/dsl/bdsl_home.asp?ID=business. 84 “In telecommunications, T-carrier is the generic designator for any of several digitally multiplexed telecommunications carrier systems originally developed by Bell Labs and used in North America and Japan.” (http://en.wikipedia.org/wiki/T-carrier) 85 From Matthew Rubenstein, Advisor to the Committee on Technology in Government.86 Ibid.87 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 4.88 Ibid.89 http://www.t1-t3-dsl-line.com/page/32/. 90 http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci212113,00.html.
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in "Optical Carrier" (or OC) units of 51.840 Mbps. Fiber optic connections usually serve
as network backbones for telephone service (e.g., long-distance telephone service) and
the Internet (e.g., connecting smaller networks together) and generally run at OC3 speeds
(over 150 Mbps, equivalent to 100 T1 connections) and up to OC192 (almost 10 Gigabits
per second91 (Gbps). Theoretically, a single strand of fiber can have a data rate of up to
40 Gbps.92
There is a growing movement to bring fiber to residents and businesses through Fiber To
The Home (FTTH) systems and Fiber To The Curb (FTTC) or Fiber To The Premise
(FTTP) systems, collectively known as FTTx. FTTH is a “type of Internet connection
involv[ing] the installation of a fiber-optic line all the way to your home. The connection
is high-speed; at the time of writing maximum potential downloads speeds of 100Mbps
are available, depending on the type of FTTH service you apply for.”93 FTTC (or FTTP)
is a “network where an optical fiber runs from the telephone switch to a curbside
distribution point [or in the basement of a building, otherwise known as the ‘premise’],
close to the subscriber where it is converted to copper pair.”94 “Most [fiber to the curb
or] fiber-to-the-premises projects use a technology called ‘passive optical networking,’
which allows download speeds of 622 Mbps and uploads of 155 Mbps. The technology
lets that bandwidth be split, so a single fiber could be shared by several homes [or
apartments].”95 Verizon has announced plans to deploy FTTH technology nationwide. It
91 One billion bits per second.92 http://en.wikipedia.org/wiki/Fiber_optics. 93 http://www.asahi-net.or.jp/en/glossary.html#ftth. 94 http://www.westband.net/information/glossary/. 95 http://news.com.com/Broadband+A+life-saving+technology/2009-1034_3-5261361.html?tag=nl.
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is offering its FTTH customers 5 Mbps download and 2 Mbps upload from $34.95 a
month and 15 Mbps download and 2 Mbps upload from $44.95.96
Broadband Over Power Lines (BPL)
BPL is also known as Power Line Communication (PLC). It is a “technology that allows
Internet data to be transmitted over utility power lines.”97 “With BPL, all you have to do
is plug a BPL modem into any power socket, and you instantly have a high speed
connection ... To do this, BPL uses a different frequency spectrum than the actual power,
so data and power can co-exist on the same power line at any given time.”98 BPL can
currently provide a combined bandwidth of 3 Mbps upstream and downstream. Because
BPL requires no extra infrastructure (while DSL and cable modem does), it is cost
effective to roll out – though amateur radio signals may interfere with BPL. “Trials of
BPL have begun in Manassas, VA; Allentown, PA; and Cincinnati, Ohio,”99 but BPL has
not deployed on a large scale anywhere in the world.
Wireless Broadband Technologies
Wi-Fi
Wi-Fi, short for "wireless fidelity", is the popular term for the high-frequency wireless
Local Area Network100 (LAN) standard 802.11 (the name given to this standard by the
Institute of Electrical and Electronics Engineers101). Wi-Fi technology operates in the 2.4
96 http://www22.verizon.com/FiosForHome/channels/Fios/HighSpeedInternetForHome.asp?promotion_code=&variant=. 97 http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci953137,00.html. 98 http://www.ugo.com/channels/tech/features/futureofbroadband/bpl.asp. 99 Availability of Advanced Telecommunications Capability in the United States: Fourth Report to Congress, pg. 23, Federal Communications Commission (http://www.fcc.gov/), September 9, 2004.100 A local area network or LAN is “A local area network (LAN) is a computer network covering a local area, like a home, office or small group of buildings such as a college.” (http://en.wikipedia.org/wiki/LAN) 101 http://www.ieee.org/portal/site/mainsite/menuitem.e0007c26eb2a454de38570e85bac26c8/index.jsp?&pName=home.
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gigahertz102 (GHz) and 5 GHz range offering data speeds up to 11 megabits per second,
much faster than cable, DSL and T1 connections. The transmission distance of Wi-Fi
“hot spots” are between 100 to 300 feet range, depending upon the environment. “An
interconnected area of hot spots … is known as a hot zone.” 103 Also, like DSL and cable
modem, Wi-Fi’s bandwidth is shared among users so the speed of the connection varies.
A Wi-Fi network can be susceptible to access by unauthorized users, but they can be
secured through the use of virtual private networks104 or VPNs.105 In Cerritos, California,
“the city's Wi-Fi broadband service … come[s] in three basic packages: an at-home
service for $39.99 per month with downlink speeds of up to 500 kilobits/sec and [up] link
speeds of 250 kilobits/sec; an in-town service providing the same speeds that start at
$4.99 per hour; and a business-pro package delivering both uplink and downlink speeds
of up to 1 megabit/sec for $249.99 per month.”106 While in Chaska, Minnesota for speeds
up to 3 Mbps, the City is charging $15.99 per month for residential service and $24.99
per month for business-class service.107
WiMAX
WiMAX is a commercial consortium’s108 brand name for the wireless Metropolitan Area
Network109 (MAN) standard 802.16 (the name given to this standard by the Institute of
102 “A gigahertz is a billion hertz or a thousand megahertz, a measure of frequency. … Radio waves sent at gigahertz frequencies usually travel in line of sight. Gigahertz frequencies or microwaves are also used in cellular telephones, microwave ovens, radar and other uses.” (http://en.wikipedia.org/wiki/Gigahertz) 103 http://searchmobilecomputing.techtarget.com/gDefinition/0,294236,sid40_gci929334,00.html. 104 “Secure VPNs use cryptographic tunneling protocols to provide the necessary confidentiality (preventing snooping), sender authentication (preventing identity spoofing), and message integrity (preventing message alteration) to achieve the privacy intended. When properly chosen, implemented, and used, such techniques can indeed provide secure communications over unsecured networks.” (http://en.wikipedia.org/wiki/VPN) 105 Opinion of Matthew Rubenstein, Advisor to the Committee on Technology in Government.106 http://www.fcw.com/geb/articles/2003/1208/web-cerritos-12-08-03.asp. 107 http://www.chaska.net. 108 http://www.wimaxforum.org/home. 109 “Metropolitan area networks or MANs are large computer networks usually spanning a campus or a city.” (http://en.wikipedia.org/wiki/Metropolitan_area_network)
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Electrical and Electronics Engineers110). WiMAX “operates in the 2-11GHz frequency
band over a theoretical maximum range of 31 miles with a theoretical maximum data
transfer rate of 70Mbps.”111 “The purpose of 802.16 is to standardize broadband wide
area wireless networking for both fixed and mobile connections, offering extremely high
bandwidth connections without requiring a line-of-site [LOS] communications between
the device and the broadcast antenna.”112 The need for LOS is a problem with most
current wireless technology, including Wi-Fi. WiMAX theoretically solves this problem.
Towerstream,113 a WiMAX vendor that offers service in New York City, offers a full T1
line (1.5 Mbps) for $500 a month, less than the average wireline T1 line by a several
hundred dollars, and 100 Mbps for $5000 a month – more than double the bandwidth of a
T3 at about one-third the cost.114
Emergence of Municipal Wireless Broadband Initiatives
Many cities around the United States and throughout the world are going with wireless
broadband technologies as their first mile solution of choice. Three major U.S. cities that
are going forward with comprehensive municipal wireless broadband initiatives are
Philadelphia, Pennsylvania,115 Atlanta, Georgia,116 and Los Angeles, California.117 Cities
with existing wireless broadband initiatives include: Spokane, Washington,118 Chaska,
110 http://www.ieee.org/portal/site/mainsite/menuitem.e0007c26eb2a454de38570e85bac26c8/index.jsp?&pName=home. 111 http://mobilepipeline.com/specwatch/80216.jhtml. 112 Ibid.113 http://www.towerstream.com/content.asp?home. 114 Ibid.115 http://www.phila.gov/wireless/. 116 http://netstumbler.com/2004/12/16/wi_fi_network_could_become_nations_largest/. 117 http://www.etopiamedia.net/ula/pages/ula0-5551212.html. 118 http://www.time.com/time/2004/wireless/story.html.
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Minnesota,119 Santa Clara, California,120 Corpus Christi, Texas,121 Rio Rancho, New
Mexico122 and Cerritos, California.123 Internationally, Taipei, Taiwan is planning to
create the world’s largest municipal wireless broadband initiative.124 Some of these
municipal wireless broadband initiatives end up being publicly owned and operated
networks, while others are public/private ventures. One of the main reasons for the
emergence of municipal wireless broadband is that wireless broadband has some
significant advantages over wireline broadband. Namely, it costs less and it is easier to
deploy.
Advantages of Wireless Broadband
Lower Cost
“’The best thing about wireless is its low infrastructure costs. … Instead of spending tens
of thousands—or even hundreds of thousands—of dollars to bring fiber into a building,
wireless providers can install the necessary equipment with an upfront cost of around
$1,000. After that, businesses should initially be able to subscribe to WiMAX service for
about $100 a month, with rates declining over time,’” 125 says Shivendra Panwar, director
of the New York State Center for Advanced Technology in Telecommunications126
(CATT) at Polytechnic University. The City of Philadelphia believes wireless broadband
can be deployed for $40,000 to $60,000 per square mile, and they plan to cover all 135
square miles of Philadelphia, which has a population of about 1.6. million, by spending
119 http://www.chaska.net/. 120 http://www.bizjournals.com/eastbay/stories/2004/10/25/focus2.html. 121 http://www.muniwireless.com/archives/000402.html. 122 http://www.technewsworld.com/story/38040.html. 123 http://www.fcw.com/geb/articles/2003/1208/web-cerritos-12-08-03.asp. 124 http://www.dailywireless.org/modules.php?name=News&file=article&sid=3241. 125 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 21.126 http://catt.poly.edu/.
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only $7 - $10 million for the initial deployment – with maintenance being $1.5 million a
year.127 At the upper end, that is about $6.25 per person to initially connect every person
in Philadelphia. The City of Taipei, Taiwan plans to spend $70 million to connect over
2.6 million residents over 105 square mile area.128 That is about $27 per person to
connect almost 90 percent of Taipei’s population. In comparison, the borough of
Brooklyn covers 72.5 square miles and has a population of almost 2.5 million.
Easier to Deploy
Because wireless does not rely as intensely on the existing telecom infrastructure and can
draw upon city assets such as its lampposts and building rooftops, it can be brought more
easily to areas of the city that are currently underserved by major telecom providers.129
Also, one of the major problems with wireline broadband technologies is digging into the
ground to lay the lines and that is about “80 percent of the costs.”130 “Wireless doesn’t
have that cost. All you need is fiber close by, which you have in New York.”131 The City
of Philadelphia believes:
“Individual Wi-Fi cells can be mounted on streetlights creating a self-organizing
and self –healing wireless mesh. From 8 – 16 units will be needed per square
mile and a single worker can install ten units per day. Wireless access is scalable
and connectivity is available as soon as units are installed.”132
127 http://www.phila.gov/wireless/facts.html. 128 http://www.dailywireless.org/modules.php?name=News&file=article&sid=3241.129 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 20.130 Ibid, page 21.131 Ibid.132 http://www.phila.gov/wireless/facts.html.
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Wi-Fi and WiMAX Complement Each Other
WiMAX can deliver connectivity to a corporate office, offering T1-level (or higher)
connection speeds and reliability. Then internally, a business could then deploy Wi-Fi
hotspots to connect all of its computers and users.
Issues with Wireline Broadband Technologies
Cable Modem and DSL
Besides the fact that cable modem and DSL are not available – or are unreliable – for
many businesses, the cost of business-class cable modem and DSL service can be
prohibitively expensive, particularly for many small businesses.133
T1 and T3
“While some businesses across the five boroughs continue to be stymied in their attempts
to get any form of broadband, in most cases, the problem is that companies can’t afford
the one option they do have for a high-speed Internet connection: a T1 line … they
typically cost several times as much and are out of the price range of the overwhelming
majority of small businesses.”134 A T3 line is generally too much bandwidth for a small
business and even farther out of the price range of most small businesses.
FTTH, FTTC and FTTP
Currently, Fiber To The Home service is being provided in number of communities
around the country by local governmental bodies135 and though the telephone companies,
133 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 8.134 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 2.135 For a list of municipalities that have implemented FTTH systems, go to http://www.ftthcouncil.org/dbfiles/techexchange/2004%20-05-19%20OptFiberCommunList.pdf.
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such as Verizon, are touting aggressive FTTH plans,136 it is unclear whether these plans
will actually come to fruition, particularly in the face of increasing competition by other
broadband technologies. The main problem rolling out is the expensive and laborious
process of digging up those streets to install fiber lines.137 Although FTTH may be in one
million homes by the end of the 2005,138 the cost of one installation of FTTH connection
can be up to $1,000.139 Thus, FTTH is viewed as a broadband technology for “new
estates and areas”140 – which New York City has very little of. “To a large extent, the
economics of wiring business areas outside of Manhattan just doesn’t add up for telecom
companies. Outside of midtown and downtown Manhattan, there are few high-rise office
buildings, and few of the large corporations that make telecom providers salivate.”141
BPL
BPL has the potential to provide broadband connectivity to every home and business, but
the technology is not proven on a large scale – and not even on a small scale.
136 http://www.businessweek.com/magazine/content/03_31/b3844001_mz001.htm. 137 http://news.com.com/Broadband+A+life-saving+technology/2009-1034_3-5261361.html?tag=nl. 138 http://lw.pennnet.com/Articles/Article_Display.cfm?Section=Articles&Subsection=Display&ARTICLE_ID=165752. 139 http://www.ugo.com/channels/tech/features/futureofbroadband/ftth.asp. 140 Ibid.141 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 13.
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Should the City of New York Help Close the Gap?
Reasons Why the City of New York May Consider Stepping In
Historic Role of Government in Spurring Technological Innovation
“Government almost single-handedly financed the research budgets of the technology
industry in the mid-20th century that led to some of the first breakthroughs in computing
technology. Government sponsored the original research that led to the Internet.
Government has been one of the primary buyers of the first generation of every new
computing technology.”142
Government Steps In When There is Market Failure
Robert Atkinson, Director of Policy Research and Special Projects at the Columbia
Institute for Tele-Information,143 says “’If the lack of broadband in certain areas is
because of market failure, government has a proper role to inject itself. The correct role
for government is to act as a catalyst. … It could nudge [private telecom carriers] to do
something in the Brooklyn Navy Yard or Red Hook.”144
More and More Governmental Bodies Are Stepping In
Besides the many municipal wireless initiatives already implemented or starting up all
over the country and the world, governmental entities are also moving forward with other
types of broadband initiatives, such as municipal FTTH initiatives. Some cities and
counties implementing municipal systems include Palo Alto, California,145 Kutztown,
142 http://www.governing.com/articles/12tech.htm. 143 http://www.citi.columbia.edu/. 144 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 17.145 http://www.pafiber.net/.
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Pennsylvania,146 and Grant County, Washington.147 In Utah, 14 cities are working
together on a project called UTOPIA, which will bring a 100% fiber optic network to
every business and household (about 140,000) in those 14 cities.148 In Michigan, the
state government created the Michigan Broadband Development Authority.149 Its mission
is “to expand broadband access for Michigan's citizens and businesses … [by] offer[ing]
organizations in the public and private sector low-cost financing for the acquisition of
hardware, software and services that will improve or increase their use of broadband
technologies.”150 Finally, “South Korea, Singapore and other Asian nations supercharged
broadband adoption starting in the 1990s by pouring billions of dollars worth of
government money into building high-speed networks”151 to spur economic development.
The Importance of Small Businesses in the Other Boroughs
Small Businesses Are A Significant Part of the New York City Economy
“Small businesses now account for the lion’s share of new jobs being created in the U.S.
and are likely to be increasingly important to New York in the years ahead, as large
corporations continue to shift jobs to the surrounding region and other, less expensive
locations. As it is, 98 percent of all businesses in the city have fewer than 100 employees
and 90 percent have less than 20.”152
146 http://www.municonsortium.com/press/muni_031003_kutz.shtml. 147 http://lw.pennnet.com/Articles/Article_Display.cfm?Section=Articles&Subsection=Display&ARTICLE_ID=133474. 148 http://www.utopianet.org/. 149 http://www.michigan.gov/cis/0,1607,7-154-28077_28233---,00.html. 150 Ibid.151 http://www.usatoday.com/tech/techinvestor/2004-01-19-broadband_x.htm.152 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 3.
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Economic Growth is Occurring Outside of Manhattan
“Some of the city’s brightest prospects for economic growth lie outside of Manhattan’s
central business districts (CBDs). Roughly 48 percent (102,000 firms) of the city’s
213,000 businesses are located outside of Manhattan. In addition, many of the sectors
with the greatest potential for growth in New York are heavily concentrated outside of
the CBDs – including health services, the arts, film and music production, air
transportation and food production.”153
Global Competition Is Around the Corner
“Small businesses face ever-intense competition in today’s global economy. Whether it
is a printing company in Long Island City or a recording studio in Williamsburg,
businesses in New York that do not have broadband will surely miss out on opportunities
for growth and find themselves at a competitive disadvantage.”154 “Spreading fast
Internet access in the United States is so critical to long-term economic might that
TechNet, a group of top U.S. tech CEOs, says it’s the 21st-century equivalent of landing
a man on the moon.”155
Broadband: A Civil Right?
Michael Copps, a current FCC Commissioner, said recently “each and every citizen of
this great country should have access to the wonders of telecommunications—whether
they live in the rural countryside or the inner city; whether they are high income or low
income; whether they have disabilities, whether they are young or old. I’d go even
153 Ibid.154 Ibid.155 http://www.usatoday.com/tech/techinvestor/2004-01-19-broadband_x.htm.
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further: I don’t think it exaggerates much to characterize access to telecommunications
in this modern age as a civil right.”156
Possible Broadband Policies For NYC to Adopt
Consider Municipal Wireless Broadband Initiative
New York City may consider exploring the possibility of developing a municipal wireless
broadband initiative. The types of municipal wireless broadband initiative it could
consider are:157
Free Community Wireless Network. This network would provide free wireless
access for citizens for economic development purposes, often in more historic
areas. Funding for this type of project would come from government funding,
foundation grants, and revenues from ads on the network’s homepage.
Private Consortium Model. The aim of this type of initiative would be to
profitably provide a wireless network to businesses, governments, and citizens,
focusing on quality of service and security as well as building a subscriber base.
This model would be funded privately with the possibility of obtaining federal
government grant monies like E-rate.158
Cooperative Wholesale Model. This type of initiative would provide network
connections for all government agencies at cost, thereby saving taxpayer money.
Excess capacity could be sold at wholesale to private providers who then sell 156 Speech by Michael Copps, FCC Commission, to Manhattan Hispanic Chamber of Commerce on October 8, 2004.157 This section is based on Civitium's (Matt Stone, Co-Founder and Government Strategist, Civitium) presentation at PTI's 2004 Metro Wi-Fi Summit: http://www.civitium.com/PTICC.ppt. 158 http://www.libraryspot.com/erate/whatiserate.htm.
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wireless services to businesses and individual consumers. This network would be
funded using local, state, and federal monies as well as through revenue earned by
selling excess capacity wholesale to wireless Internet service providers and other
broadband providers.
Create a Commission With All Relevant Stakeholders159
The City should consider establishing and funding a non-partisan, non-bureaucratic (that
is, not run by a governmental agency), public/private sector “commission,” with all
relevant stakeholders from government, the non-profit sector and the private sector,
including incumbent wireline broadband providers. The City of Philadelphia created a
Philadelphia Wireless Executive Committee,160 and the City of Los Angeles created a
Broadband Executive Panel.161 The objectives of this organization could be: (1)
identifying the relevant dimensions of this problem (2) identifying alternatives along with
their implications (3) developing a strategic plan for moving forward expeditiously (4)
identifying funding alternatives and (5) recommending both priorities and specific action
steps.162 This “commission” would need not be permanent, possibly in existence for one
year to eighteen months, and deliverables should be available for wider discussion within
a short period of time.163
159 This idea was proposed by Mike Uretsky, Professor of Information Systems, Stern School of Business, New York University.160 www.phila.gov/wireless/. 161 http://www.etopiamedia.net/ula/pages/ula0-5551212.html.162 E-mail from Mike Uretsky to Bruce Lai on December 28, 2004.163 Ibid.
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Conduct Survey of Broadband Connectivity in NYC
A survey of this kind could help government and the private sector, particularly
broadband providers, see where there are gaps in broadband. Additionally, this survey
could analyze what kind of potential demand for broadband in different neighborhoods,
helping the private sector target the right customers. Currently, the New York City
Council has introduced legislation, Int. No. 27164, that mandates a “a review of residential
and business broadband accessibility in the city of New York.”165 Passage of this
legislation might aid in the survey effort.
Educate Businesses about Broadband
As noted above, one of the reasons for the broadband gap in New York City is that many
businesses do not see the pressing need for broadband. Also, many businesses do not
have the knowledge and/or time to find the right broadband connection. Both City
government and broadband providers could implement marketing campaigns – possibly
through business intermediaries like industry associations, Chambers of Commerce, local
development corporations, and business improvement districts166 – on educating small-
and medium-sized businesses on the benefits of broadband and e-business technologies
as well as providing simple information about the availability of broadband, who to call
to get broadband service and what the rates for various services are.167 Also, city
government, possibly through the Department of Small Business Services, could provide
educational and technical assistance to “clusters of businesses that have common
164 http://webdocs.nyccouncil.info/textfiles/Int%200027-2004.htm?CFID=304399&CFTOKEN=47785191.165 Ibid.166 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 24-25167 America’s Inner Cities Wired to Compete: A Report on Inner City Broadband Readiness and E-Business Technology Adoption, page 11, The Initiative for a Competitive Inner City (http://www.icic.org/) & The Boston Consulting Group (http://www.bcg.com/home.jsp), November 2002.
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characteristics rather than to individual firms”168 through their Business Solutions
Centers169 that are in every borough.
Promote the Development of Clusters and Networks
One way to make broadband services affordable is to organize the buying power of
small- to mid-sized businesses, making broadband services – from DSL to cable to fiber
optics – economically feasible for both the broadband provider and the businesses
involved. Clusters170 (in close geographic proximity) and networks171 (not in close
geographic proximity, possibly organized by industry) could share the costs of buying
broadband services, whether it is for the cost of running a fiber lateral into an office
building or the sharing of a single broadband connection, like a T1 line, a DSL or cable
modem connection, or a Wi-Fi and/or a WiMAX connection.
168 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 3.169 http://www.nyc.gov/html/sbs/html/nycbs/. 170 The Greenpoint Manufacturing and Design Center (GMDC) is a model cluster, which shares machinery and equipment among companies’ programs, allowing small businesses to access state-of-the-art production technology without incurring the burdensome overhead costs that would result from purchasing and maintaining the equipment on their own account. (http://www.gmdconline.com/doc.asp?id=75&pid=204)171The New York State Education and Research Network (NYSERNET) is exemplary of a network that shares technology costs. NYSERNET has pooled the resources of many of New York’s colleges and universities to build their own private high-capacity fiber network throughout New York State, extending into New York City, with plans to build into Long Island, through Brooklyn and Queens, in the near future. To learn more about NYSERNET, go to: http://www.nysernet.org/.
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Reserving Bandwidth on Municipal Networks
Connecting to the City’s I-net
The Institutional Net172 (or I-Net) is the “backbone” of a municipal fiber-optic network
that serves multiple City agencies. However, with the large amount of bandwidth that it
has, I-Net could conceivably serve both City agencies as well as the general public,
including the many small businesses and nonprofit organizations that are a large part of
New York City’s economy. One way to provide this bandwidth is to use wireless
technology (e.g., Wi-Fi, WiMAX) to “beam out” a wireless signal to selected businesses
and nonprofit organizations, with I-net serving as the network backbone to an extended
municipal network. Of course, this may not be possible because allowing non-
governmental entities access to I-net might violate cable and broadband franchise rules.173
However, the City Council could change the authorizing resolution that allows
Department of Information Technology and Telecommunications to issue franchises so
that all future RFPs related to broadband will include stronger universal access
requirements.
172 “The Institutional Net or I-Net is an advanced telecommunications network that consists of high-speed fiber optic cables laid under the City that is able to transmit voice, video, and data at speeds far in excess of even T-1 lines. Right now, I-net provides, at virtually no cost to the City, high quality videoconference systems serving the Department of Education’s Citywide Training Network (CTN), the City's Court Judicial Systems and connections for computer systems operations and CityNet. New York City’s Institutional Network (I-Net) is provided for and maintained by the City’s franchise agreements with broadband and cable providers.” (Briefing Paper to the Committee on Technology in Government and the Subcommittee on Zoning and Franchises of the New York City Council, Oversight Hearing on February 10, 2004.)173 Testimony of Agostino Cangemi, General Counsel, New York City Department of Information Technology and Telecommunications, at an Oversight Hearing of the Committee on Technology in Government and the Subcommittee on Zoning and Franchises of the New York City Council, that took place on February 10, 2004.
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Utilizing Other Municipal Networks
Many municipal networks require an infrastructure that covers the entire city of New
York. It is possible for leftover bandwidth to be shared with businesses in underserved
neighborhoods. Some possible municipal networks, which could provide a network
“backbone” to a larger wireless municipal network for underserved neighborhoods,
include the fiber network that runs through the New York City’s subway system, the
Department of Education’s planned fiber network to connect all of the schools, and the
planned citywide mobile wireless network174 for public safety officers.
Encourage Build Out of Telecommunications Infrastructure
The City owns many rights-of-way where telecommunications equipment could be used
to install, expand and enhance the telecommunications infrastructure of New York City.
One way the City would promote the build out of the telecommunications infrastructure
to underserved areas, such as the Brooklyn Navy Year, Red Hook and East New York, is
to offer the private sector incentives to do so. Specifically, the City could reduce the
price of access to City-owned poles, for example, in underserved neighborhoods, while
leaving prices unchanged in high demand areas like downtown and midtown Manhattan.
Other rights-of-way that the City could use to promote broadband access are the rooftops
of municipal-owned buildings, the water mains and the sewers. Recently, the City sold
franchises for City-owned pole tops,175 including light poles, highway sign poles, and
traffic light poles. However, the franchises were not designed to promote wireless
broadband in underserved areas. To the City’s credit, the RFP (request for proposals) did
174 http://www.nyc.gov/html/doitt/html/miscs/rfp_mobile_wireless.shtml. 175 http://www.nyc.gov/html/doitt/html/business/poletop_rfp.shtml.
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offer incentives for companies to provide wireless VoIP to areas where many people do
not have a wireline (copper) phone service.
Move Towards E-Government Faster
By moving more City services on-line, such as applying for licenses and contracts as well
as paying fines, 176 as well as enhancing existing on-line services with multimedia
functionality, such as audio and video streaming and/or Geographic Information Systems
(GIS) map information,177 city government can improve the quality of services, lower
service delivery costs and stimulate broadband demand in New York City.
176 http://www.nycfuture.org/images_pdfs/pdfs/telecom.final.pdf, page 11.177 E-mail from Matthew Rubenstein, Adviser to the Committee on Technology in Government, to Bruce Lai on December 20, 2004.
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