Item 5-A
Council Meeting: 2/24/98 Santa Monica, CA
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Status Report on Telecommunications Master Plan,
Including Preliminary Conceptual Findings, and
Recommendation to Proceed with Finalizing the Master
Plan for City Council Adoption
INTRODUCTION
This report provides a status report on the Telecommunications
Master Planning effort and presents preliminary conceptual
findings of the Plan.
DISCUSSION
Overview of City's Telecommunications Master Plan
The City of Santa Monica is assessing its telecommunications
needs and interests for the future, taking into account recent
technological developments and the far-reaching changes brought
about by the Federal Telecommunications Act of 1996.
Technological advances are making it possible for the City to use
a broad array of innovative, two-way, interactive voice, data and
video communications. Santa Monica residents have embraced new
technologies for their personal and business use. The City's own
system of telecommunications has developed sophistication. The
City desires to be well-positioned to enhance the quality of
life, economic vitality and delivery of government services in
Santa Monica through the strategic use of telecommunications
technologies and infrastructure.
Technology advances and telecommunications deregulation are
altering the traditional roles performed by telecommunication
providers. Providers have begun to encounter competition to
their core services. Existing carriers and new carriers recently
certified by the California Public Utility Commission (PUC) have
been asking for greater access to the City's public Rights-of-Way
(ROW). Utility companies routinely trench in the streets and,
with the increase in use permits, the City has legitimate concern
over degradation of street pavement and disruption to the general
public. New ROW procedures are needed to achieve the proper
balance between facilitating the prompt entry of
telecommunication companies and minimizing disruption from and
the economic impact of multiple street cuts.
Within this context, the City initiated development of a
Telecommunications Master Plan to identify the current
telecommunications infrastructure; ascertain future
telecommunications needs and services; and determine potential
roles and partnership opportunities to help the City meet such
needs. The effort began with an analysis of:
(1) the uses of existing City rights-of-way for
telecommunications infrastructure and methods to
protect these valuable assets while encouraging
location of new technology within the community;
(2) the types of telecommunications systems that best
promote community objectives and the electronic
delivery of government and institutional services;
(3) public and business partnership models that promote
increased use of telecommunications technologies within
the community;
(4) how telecommunications providers might help the City
achieve these objectives; and
(5) financial models that clarify likely City roles in the
telecommunications arena.
The kinds of questions explored include: how the City might
encourage greater competition and consumer choice in
telecommunication services; what the City can do to promote
universal access and telecommunication literacy; whether the City
should construct its own fiber network or "loop"; how the City
might enhance the delivery of government services; and the role
of telecommunications to enhance the economic climate of the
City.
Working with Media Connections Group (MCG) and a City Council-
appointed community Telecommunications Working Group (TWG), staff
began the planning process in May 1997.
Community Needs Assessment
The master-planning process has been informed through extensive
public outreach. The TWG helped refine and structure a public
survey, a business survey, and additional contact with the
business and residential community through focus groups and a
public workshop. Also, staff and the consultants undertook
provider interviews to ascertain current and future bandwidth
capacity.
Public Survey
The major findings of the statistically valid random telephone
survey conducted by Godbe Research in August 1997, portray a high
degree of telecommunications connectivity in the Santa Monica
community today. A significant percentage of residents have and
use telecommunications and computer technology. Of the
households responding, 59% use computers, 30% have a fax, 20%
have a second phone line. Of households with computers, 78% have
modems and 58% use the Internet. These results are considerably
higher than the national averages. Further, 55% of households
report doing some work at home using a computer or telephone. Of
the sample, 59% subscribe to cable and/or Direct Broadcast
Satellite (DBS)service. For these respondents, program choice,
price of video and competent technical service are important.
One-fourth of the respondents have used the City's Library
catalogue services, 11% have used PEN, and 12% have used the
City's voice mail system.
Business Survey Results
A mailed business survey was conducted during fall of 1997. The
top 25 telecommunications businesses were visited and survey
instruments were sent to 200 additional businesses, with 70
surveys returned. The data provides useful information on the
application of telecommunications technologies by local
businesses. Of the business respondents, 80% have a Local Area
Network (LAN), 87% have their own telephone system and almost
40% use a second telephone carrier. In general, current needs
of these businesses for the installation and pricing of
telecommunication services are being met by existing providers.
Seventy-three percent (73%) of responding companies expect an
increase in voice circuit use over the next 5 years, 58% expect
existing providers to meet future voice and data needs, and 81%
believe that the future availability of digital voice and data
installed in a timely and cost effective manner will materially
affect local business.
Focus Group Messages
To further refine the inquiry, staff and consultants conducted
focus groups with the Chamber of Commerce Entertainment
Committee, Chamber of Commerce Business Technology & the Future
Committee, utility companies, and PEN Users Group, and Santa
Monica Unified School District (SMMUSD) Technology Advisory
Committee and Intercultural Advisory Council. Discussion ranged
from the need for increased bandwidth to refinement of how the
City delivers government services, including marketing
strategies, community outreach and adaptations to PEN.
Provider Interviews
Provider interviews were conducted with GTE, Pacific Bell,
Independent Fiber Network, Century Communications, DBOVS, AT & T,
SpectraNet, Tamkin Fiber Corporation, TCG and Sprint.
Public Workshop
A public workshop was held on February 9, 1998. Some 50
individuals, including representatives of businesses and public
institutions, as well as City residents, attended. Input from
this workshop helped refine the conceptual findings included in
this report and will be summarized for inclusion in the Master
Plan.
Planning Deliberations
Economic Models
The consultants undertook analysis of two economic models to
determine the appropriate role for the City to undertake: a
Citywide full-service network (cable TV; telephone; high speed
data services); and a City institutional network model.
Regardless of the network approach chosen, it is important to
note that the recommendations of the modeling component are in
addition to the services and telecommunication solutions offered
by the traditional private telecommunication providers.
Three potential roles for the City emerged:
1. Develop internal infrastructure, including City-owned
conduit with fiber linking its facilities on a priority
and cost-justified basis. The first phase of this
approach includes non-governmental institutions such as
facilities of the Santa Monica-Malibu Unified School
District and Santa Monica College.
2. Become a provider of external infrastructure as a
lessor of conduit and/or fiber to non-governmental
institutional entities.
3. Become a provider of a full-service network to
external, non-governmental institutional entities and
City residents.
In any of the above three options, the City might partner with an
established telecommunications provider. The partner and City
could jointly develop and provide the above assets and services,
subject to their economic and technical feasibility, under a
multi-phase agreement.
To determine the feasibility of a City-operated full-service
network, the consultants projected the most optimistic market
conditions and tested various business scenarios: cable TV, high
speed data, telephone. For the most favorable business
opportunity, cable TV, the model indicated a $35 million
investment would be required in the first two years to build a
network and operate a cable business. After a 10-year operating
period, the City would have accrued a loss of over $18 million.
As mentioned, this is the most optimistic of the business
scenarios and, given the magnitude of the loss, development of a
full-service network is not being recommended at this time.
Consultants and staff are recommending development of an
institutional network with leased conduit and/or fiber to non-
governmental entities.
Enhancements to Delivery of Government Services
Over the past few years, the City's internal use of
telecommunications technologies has grown significantly. The
City now operates and depends on a sophisticated local and wide
area network that connects staff at all City facilities for voice
and computer communications. The vast majority of this network
is currently leased from GTE at an increasing cost as the City
continues to implement advanced information systems. Like Santa
Monica, cities nationwide are looking at investing in advanced
telecommunications systems to support internal and external
applications and to ensure that future bandwidth needs are met at
reasonable costs.
The City has made significant investments in telecommunications
technologies, including to Geographic Information Systems,
Imaging Systems, client server software packages for Library
Catalogue and Circulation, Financial Management, Human Resources
and Payroll, E-mail/Document routing systems, telephone and voice
mail systems, and Internet access.
The City's network supports the electronic delivery of government
services. Through the City's Public Electronic Network (PEN) and
the World Wide Web site, government information, searchable
databases, interactive service request forms, business
transactions, conferences on local issues, and free local
electronic mail are available to the public. These services are
available through dial-up modems, the Internet and public access
terminals in libraries and other City facilities.
As a means to address Universal Access and in response to public
input, the plan will recommend expansion of the delivery of
government services through the use of telecommunications
technologies. These services include access to PEN conferences
via the Internet, a gateway for sending and receiving electronic
mail between PEN and the Internet, electronic calendars of local
events and expanding use of the City's Web site for presentation
of City programs, information and services, and for electronic
commerce. Additional terminals and touch screen kiosks are being
deployed to meet the increasing public demand for Universal
Access to these services and the Internet. In addition, staff
will continue to explore the suggestions provided during this
planning effort in order to expand and refine our outreach and
marketing to the community.
To support these services, high bandwidth fiber circuits have
been installed within City Hall and the Police Department wing,
with a link to the Civic Auditorium. The City leases an
additional fiber link between City Hall and the Main Library.
Maintenance and support services for these fiber circuits are
provided through contractual agreements approved by Council in
fall of 1997. These fiber circuits demonstrate the capacity of
supporting technologies now being implemented and provide
opportunities to deliver high bandwidth video and multimedia
applications to City facilities and the public as planned in the
near future, facilitating video conferencing, video training,
integrated voice and data applications, and full motion video and
sound. Other facilities in the Citywide area network now require
bandwidth upgrades to support new demands.
Benefits of Municipal Fiber Network (MFN)
Development of a municipal fiber optic network (often referred to
as a "fiber loop") has been identified as a key strategy to
provide the bandwidth necessary to support enhanced service
delivery and to give the City control over operating costs for
its internal telecommunications needs. Additionally, the MFN
would:
1. provide a secured and reliable private network for
supporting public safety and emergency response;
2. support additional public access terminals at
libraries, parks and City facilities;
3. provide advanced telecommunications connectivity to the
Downtown transit mall and corridors along the fiber
loop;
4. present revenue opportunities for the leasing of City-
owned conduit and fiber to telecommunications providers
and businesses in Santa Monica;
5. provide a foundation for promoting continued
investments in the City's telecommunications
infrastructure by telecommunications providers and
local institutions and businesses;
6. provide a framework to work with Westside Summit Cities
on regional telecommunications services;
7. present opportunities for sharing telecommunications
services with the school district and college, e.g.,
the Internet;
8. provide opportunities for the Multimedia Academy at the
college to partner with and promote a local multimedia
economy; and
9. extend infrastructure into strategic areas of the City
and provide the backbone to enable a broader network to
be developed if it is shown to be technically and
economically feasible.
The proposed municipal fiber network could be developed in
conjunction with currently planned public works projects over the
next three years, saving up to two-thirds of the cost of network
installation by piggybacking on trenching required for other
purposes.
The MFN should be viewed as a foundational network, harnessing
one-time opportunities in a coherent infrastructure plan and
setting the parameters for future infrastructure investment. MFN
serves several immediate objectives of the City and at the same
time lays the foundation for the evolution of a wider network
serving more customers, if deemed feasible in the future
telecommunications market. The City's exploration of strategic
public/private partnerships will yield important information
about what private sector providers will commit to further
develop the telecommunications network in Santa Monica and the
region. In short, immediate City business opportunities can be
realized and the business risk elements of the network can be
mitigated and minimized with this proposed approach to a network
venture.
Right-of-Way Management
The public right-of-way (ROW) is defined as the distance between
private property lines that contains the roadway, parkway and
sidewalk area of streets and alleys throughout the City. Under
the Telecommunications Act of 1996, public agencies are given the
duty, responsibility and authority to manage the ROW. With an
increasing number of telecommunications companies entering the
market in Santa Monica, it is critical that the City re-double
its efforts in managing the ROW effectively.
The ROW contains surface and sub-surface facilities, including
asphalt and concrete roadway pavement, concrete sidewalks, street
trees and other landscaping, fire hydrants, street light and
traffic signal facilities, traffic signage, bus shelters, and
underground utilities.
The goals of ROW management include protecting the public health,
safety and welfare; coordinating construction with pedestrian,
bicycle and vehicular traffic in the work zone; avoiding
repetitive street cuts whenever possible; minimizing private
business disruption; preventing unnecessary financial burden to
the taxpayers of Santa Monica due to street cut degradation of
the pavement; ensuring the long-term structural integrity, ride
quality and aesthetic properties of the existing infrastructure;
enhancing competition among telecommunications providers; and
promoting potential partnerships between the City and private
utility companies.
In conjunction with the Master Plan process, the City Department
of Environmental and Public Works Management implemented "Interim
Right-of-Way Management Standards and Policy Goals" in November
of 1997. These interim standards assist in ensuring complete,
accurate and clear utility installation plan submittals; timely
plan checks and permit issuance; proper trench repair techniques
to preserve pavement quality; coordination between the City's
capital improvement program and the private utility companys'
short-and long-range plans; and public notification.
The City is conferring with public and private utility companies
for the purpose of drafting "Final Right-of-Way Management
Standards" and "Future Policy Goals." As part of the process of
developing final standards and goals, the City has commissioned a
study of appropriate utility trench patching methods and
appropriate fee structures for utility permit plan check,
inspection and use of the public ROW. Final ROW Management
Policy Goals will also be refined by this process and will be
presented upon completion of the standards.
Antenna Siting Policy Direction
In conjunction with the Telecommunications Master Plan, the
antenna sections of the Zoning Ordinance have been reviewed and
the City is exploring several changes to the Ordinance in light
of the Telecommunications Act of 1996. Minor changes to the
parabolic and non-parabolic antenna sections will be necessary to
1) bring the Zoning Ordinance into conformance with the
Telecommunications Act, and 2) to revisit by-right versus
discretionary zoning approvals. In addition, updated antenna
permit instructions will be streamlined. Also, the City is
conducting an inventory of all public properties to determine
which properties may be appropriate for antenna siting. Based on
the results of this inventory, City staff will recommend to the
Planning Commission and City Council a policy on the use of
public properties for antenna siting.
Conceptual Findings - Initial Policy Recommendations
In summary, the following are key policy recommendations likely
to be included in the Master Plan.
The City should continue development of a municipal fiber
network (MFN) for the purpose of connecting key public
institutions (City, Santa Monica College, and SMMUSD). The
network should be tied to other public works projects
whenever possible to lower development costs and can be
expected to provide service to major City sites within 12
months. The MFN will support the continued development of
advanced voice, data and video services for the citizens and
businesses of the City and ensure that the City will
continued to be a leader in the use of modern
telecommunications systems to provide quality public
service.
Potential public and private partners for construction,
financing and operation of the MFN should be identified.
This effort should proceed while the MFN is under
development, as an independent project with its own schedule
and goals. The scope of partnership could range from lease
of excess City-owned telecommunications conduit and/or fiber
strands to full partnership in the development, financing
and management of the MFN.
Revised ordinances, policies and procedures that will lead
to better right of way (ROW) management should be adopted.
Driven primarily by the decision of the Federal government
to promote competition in the telephone market, the new ROW
procedures will achieve the proper balance between
facilitating the prompt entry of new telecommunications
companies and protecting the structural integrity of the
ROW, while avoiding unnecessary financial burdens on
taxpayers of Santa Monica.
Revised ordinances, policies and procedures that will lead
to better management of antenna sites located within the
City should be adopted. The advent of new cellular, PCS and
similar radio services by competing companies means that the
City must exercise tighter control over private antenna
sites and encourage the use of designated City-owned antenna
sites whenever practical. The new procedures are designed
to achieve the proper balance between facilitating enhanced,
efficient wireless services and preserving the unique
aesthetic qualities that make the City a desirable place to
live and work.
A policy statement should be adopted that encourages
Universal Access to modern telecommunications services,
taking the following concepts into account:
1. Encouraging priority access for special populations
such as the disabled or students.
2 Encouraging access at specific types of facilities such
as schools and higher education institutions,
libraries, and public facilities owned or controlled by
government.
3. Encouraging availability of user-friendly equipment.
4. Ensuring appropriate privacy and security for users.
5. Developing or promoting affordable pricing mechanisms.
6. Promoting fair and equitable regulation of
telecommunications providers.
7. Promoting interconnectivity, interoperability and open
access.
8. Encouraging the creation of opportunities for user
participation and interactivity.
9. Providing incentives or other mechanisms to promote
businesses and others to support the policies, such as
a special fund for those who adopt and take actions
consistent with the policies.
City staff will continue to expand upon the use of
telecommunications technologies for electronic delivery of
government services. Expected outcomes include increased
availability of government information and services, support of
community services, increasing public awareness of local issues,
promoting public involvement and sense of community, and
enhancement of City business activities through electronic
commerce.
BUDGET/FINANCIAL IMPACT
Preliminary estimates for the City fiber loop are $1.5 million-$2
million required over the next three years. These funds will be
considered in the context of preparation of the three year
Capital Improvement Plan as part of the FY1998/99 City budget
process.
At this time, the consultants and staff anticipate revenue
offsets will be realized through leasing conduit and/or fiber
that will become available through construction of the City fiber
loop. The consultants will estimate the magnitude of the offsets
in the final plan.
RECOMMENDATION
Staff respectfully requests to proceed with finalizing the Santa
Monica Telecommunications Master Plan for Council adoption.
Attachments (Available at the City of Santa Monica City Clerk's
Office or at any of the Santa Monica Public Libraries):
Exhibit A - ROW Management Standard and Future Policy Goals
Exhibit B - Universal Access Policy