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Proposed telecom bill would have “Katrina” impact

Some states, including Illinois, are looking at passing statewide bills that will give AT&T the ability to have one statewide franchise in order to put in Project Lightspeed or U-verse without having to negotiate with each municipality.

I think that is great. Pass HB 1500 in Illinois. Have a statewide franchise. But in exchange for a statewide franchise, there must be a mandate that every business and household has a network connection of no less than 1 Gbps by 2010. That would be my bargaining position for its passage. That would create a lot of good jobs in Illinois building network infrastructure as well as building Illinois into a competitor. Anything less is unacceptable.

When it comes to highways, we have many politicians claiming it's good to create road construction jobs. When it comes to information highways, no one wants to show their ignorance, so nothing gets done.

Would municipalities and their politicians give up all their negotiating rights in order to get a better statewide network infrastructure? Do they even realize what a good network infrastructure is? If they did, they would be where Fort Wayne, Ind. is today instead of being way behind and trying to argue about their “rights” to negotiate.

HB1500 has put a huge spotlight on the inadequacies of understanding a basic layer of municipal infrastructure - the network infrastructure. HB 1500 is the Katrina of Telecom in Illinois.
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Spotlight on unpreparedness

Ten years ago, broadband connectivity was not even on the radar screens of site-selection teams looking to locate corporate facilities. Today, it is one of their top three issues. Does your city or village council really understand that?

How many city and village councils have actually tried to upgrade their network infrastructures for their whole municipality in order to make the municipality more appealing for economic development? Upgrading network infrastructures should be a prime concern of all municipalities in the Midwest, yet most are not seeing it as important to their viability and only a few are past the talking stages if they have any concern at all.

How many residents out there can claim they can get a 30Mbps package today to their house? U-Verse (Project Lightspeed) has not even claimed that speed yet, let alone have it actually deployed anywhere. The initial U-Verse service offerings are 0.5Mbps, 1 Mbps, and 1.5Mbps.

Do you think that your municipality may be behind? Having a 30Mbps package available today to your house would be pretty impressive.

Not fast enough for you gamers playing or architects sending out CAD drawings to clients? How about a 50Mbps package today on fiber? How about a 200Mbps package coming up in the next year or so?

And the capability is not restricted to the north side of town or the new subdivision down the street. It is in the whole town. Where is this? “How about Fantasyland?” as Rodney Dangerfield once said in the movie “Back to School.”

Fortress Wayne

With packages on the low end that are 20 times faster than DSL and over 30 times faster than the highest speed U-Verse is offering on the high end, Verizon's service today in Fort Wayne (to every household) is not fantasyland. It's reality.

This is the model major cities should be looking at if they want to remain viable in the next 20 years. Forget partial solutions or guaranteed use of copper that you can eventually run 20 Mbps services on in a couple of years and only if you are on the right side of town. By the time you get that, they will be getting 1Gbps in Fort Wayne, Ind.

In talking to Graham Richard, the mayor of Fort Wayne, their 2000 initiative, “Wired and Inspired” that started all of this has paid off in securing people's jobs and even creating more jobs.

The Verizon investment was over $100 million, but they connected 128,000 homes and businesses. By doing that, they also created a solid network infrastructure where companies like ITT and Raytheon have expanded to create hundreds of good-paying jobs instead of moving out.

One salesperson that was facing relocation got to stay because he set up a remote office in his home with 30Mbps connectivity. His company's home office was so impressed with what he had configured that they made that the model for remote offices corporate-wide.

Too bad your community does not have that type of package available. As far as that company is concerned, your neighborhood is just too antiquated for their operations.

Face it, your politicians are antiquated

Let me ask one question. Who is going to be better prepared to compete in a global economy? The average worker that has a DSL line today at home - workers that will be able to move up to Project Lightspeed in Illinois and its maximum of 25 Mbps in three to five years - or someone in Fort Wayne who has 50Mbps today and will probably get 1Gbps in that same timeframe.

Forget that question. That is making the assumption that the Illinois worker CAN actually get DSL in their neighborhood today. That is not a given.

Did you know that in Naperville, Ill., the fourth largest city (about 129,000 population) in Illinois, only has a 63 percent penetration rate of DSL? They are not fully covered, and they haven't even made a decision on Lightspeed.

Forget Lightspeed, too, because that is also making the assumption that the resident in Naperville CAN actually get Lightspeed in their neighborhood. That will not be a given, either.

Compare that to the resident on the network in Fort Wayne today, the second largest city in Indiana with a population of around 252,000 people. It's already in place and you can get 50Mbps. TODAY.

Listen. Can you hear the property values crashing in Naperville? I can. Hear that sucking sound? That's the good jobs being sucked out of Illinois.

Ka-Ching. Ka-Ching. Don't worry. You won't hear that. That is the coffers for Illinois payroll tax revenues. You'll hear that from a distance - from other states.

Test your local politician

Here are some questions to ask public servants to see what they know:

• What is the difference between a gigabit and a gigabyte? (They are not characters on the Tele-tubbies).

• How much faster is 100Mbps than 1Gbps? (A trick question).

• What is their definition of a high-speed network? (If under 1Gbps, do not elect - they are of the horse-and-buggy party. 10Gbps or more - vote them in.)

• Forget Wi-Fi and ask them what the benefits are of fiber over copper connections?

• What is FTTH? (Its not Free Travel, Tips, and Hotel).

• What is FTTP? (Fast Track To Parties? Save the cocktails. Vote for someone else.)

Face it. The vast majority of your elected officials are antiquated when it comes to understanding the importance of a network infrastructure and what it means to economic development as well as regional sustainability. And remember, you put them there.

Remember that chart I had comparing the growth of St. Louis and Chicago after the Civil War? St. Louis was so far ahead of Chicago as far as population back then. Too bad its politicians made the wrong decisions. In 35 years, Chicago surpassed St. Louis, which is now about 344,000 people.

Restricting network infrastructures or keeping old ones in place will have the same effect. The only difference is that the growth in population and commerce could happen in 15 to 18 years and not 35 years this time. How long will it be before Fort Wayne surpasses St. Louis?

CARLINI-ISM: Municipalities should look at their network infrastructure as the foundation to build commerce. Without a solid one in place, there is not much to build on.

Copyright 2007 - James Carlini

Recent articles by James Carlini

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James Carlini is an adjunct professor at Northwestern University, and is president of Carlini & Associates. He can be reached at james.carlini@sbcglobal.net or 773-370-1888. Check out his blog at http://www.carliniscomments.com.

This article previously appeared in MidwestBusiness.com, and was reprinted with its permission.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC.

WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Comments

David Weitz responded 7 years ago: #1

I don't know if granting one company a monopoly is a good idea or not -- I'm personally skeptical. But I am very much in favor of providing the same standard of service for the person 50 miles south of Ashland as we do for the person 5 miles from the State Capitol building. I am served by a local telephone cooperative. DSL would cost me nearly $80 per month. If I lived just a few miles away and was served by a different company, I would be served for less than $20 per month with comparable DSL. All phone companies must be required to provide a minimum service for the same or very nearly the same cost - including small cooperatives.

We all need to function in the Information Age.

JAMES CARLINI responded 7 years ago: #2

UNIVERSAL SERVICE - was something that in exchange for granting a monopoly - the phone company would provide the same service level to everyone at the same price. So some in rural areas actually got subsidized by those living in a more densely populated area.

Some did not want that and said let's make it more competitive and open the field up to competition.

Well, where does the competition go? Not to the rural areas - there is not a good return on that. They provide services in the urban areas and people have choice (and price).

Now everyone seems to want to go back to "equal service." Do you go back to a monopoly? If not, why would anyone build state-of-the-art infrastructure in a place where they would not see the return as they would in a much denser area?

AND - what is minimum service today? DSL? T1? One Gigabit? With speeds changing so fast today, what should be the accepted minimum?

And if someone lives in Madison paying $20 a month, should they subsidize your phone bill so you only pay $20 a month?

The questions are complex.

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