CITY OF DAYTON TELECOMMUNICATIONS REPORT AND PLAN

Transcription

1 CITY OF DAYTON TELECOMMUNICATIONS REPORT AND PLAN

2 TABLE OF CONTENTS SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 EXECUTIVE SUMMARY AND INTRODUCTION REPORT ON MUNICIPAL NEEDS AND GOALS REPORT ON TECHNOLOGY AND INDUSTRY LEGAL REPORT RECOMMENDATION AND OTHER OPTIONS FOR TELECOMMUNICATIONS PLANNING Dayton Telecommunications Report i

3 EXECUTIVE SUMMARY In the past two (2) years, the nation has seen an unprecedented proliferation of telecommunications providers as a result of fundamental changes in: (1) telecommunications technology; and (2) the telecommunications regulatory structure. Communications is moving away from traditional analog delivery mediums (e.g. copper-wire and cellular radio communication) to an infrastructure that can support digital communications (e.g. fiber optics and personal communications systems). This movement has resulted in the re-wiring of the nation. Traditional telecommunications infrastructure will soon be obsolete, and must be replaced. In February of 1996, the federal government changed the way it regulates the provision of telecommunications service. The touchstone of the 1996 Act is competition. Local telephone service will no longer be under the control of a single provider. In theory, consumers will soon have the opportunity to choose among many providers of telecommunications service. Changes in telecommunications technology and regulation have affected local governments. The proliferation of telecommunications providers increases the strain on local government resources, while at the same time presents tremendous opportunities for economic and social development. The 1996 Act preserves, with certain limits, local government authority to manage telecommunications providers use of property through rights of way and zoning ordinances. In Ohio, local regulatory authority is limited only by the jurisdiction of the Public Utilities Commission of Ohio. Telecommunications planning is important to the City. Good telecommunications planning can enhance economic development, improve the quality of life in the City, promote development of the City s internal telecommunications infrastructure, and preserve and maintain the local rights of way. Through this Report, the City analyzes issues that are relevant to the telecommunications planning process. As a part of its telecommunications planning process, the City will assess the needs of the community and develop a comprehensive telecommunications regulatory structure. The City will also evaluate the existing telecommunications infrastructure in the City and consider leasing public property to telecommunications providers. Finally, the City will consider other types of telecommunications planning, including possible public/private partnerships. INTRODUCTION In 1996, in reaction to the Telecommunications Act of 1996 ( the 1996 Act ), the City of Dayton, Ohio ( City ) began an organized telecommunications planning process involving an organization-wide team with representatives from each of the relevant City departments. The City understands that telecommunications planning is important. Prudent planning with regard to telecommunications will allow the City to: Maintain control over public rights of way; Promote universal service in the community and access to technology for residents; Promote economic development through the deployment of competitive services and access to telecommunications infrastructure; Educate for a better informed constituency; Extend City services out to the community via electronic media; Enhance expanded municipal uses for telecommunications infrastructure and services; and Promote the City Commission Vision Statements Defined in Dayton Vision 2003 in several ways: Dayton Telecommunications Report 1

4 The Economy. Developing a robust telecommunications infrastructure will attract new technology-oriented businesses to the City. The administration of the City s proposed new Rights of Way Ordinance will be completed in a business friendly manner to encourage telecommunications providers to continue to implement new technologies that best serve Dayton businesses and residents. Education/Youth. A greater presence of telecommunications providers in the City will allow for greater sharing of information, experience and leadership between residents, City leaders and the City's youth. The youth of the community will have greater access to telecommunications, the tool they need to succeed in the 21st century. City Services. A developing and expanding telecommunications infrastructure will enable the City to provide increased and cost-effective services to its residents. Residents and businesses will be able to access City services from remote locations, if not directly from their home. Leadership/Quality of Life. With a well-planned telecommunications policy and active participation in the development of a strong telecommunications infrastructure, the City will be the regional leader in telecommunications and technology. Availability of telecommunications services from a number of different providers will improve the types of services available, thereby contributing to the improvement of the quality of life in the City. The City's telecommunications planning committee has been studying telecommunications planning since shortly after passage of the 1996 Act. The committee has focused on regulation of wireless providers and regulation of use of the City's rights of way. The primary goals of the committee have been to assure: Dayton and the region are well served in terms of telecommunications infrastructure and services. It is commonly understood that the promotion of a competitive environment in the provision of telecommunications services assures that the City obtain and maintain an on-ramp to the information superhighway. Fulfillment of the federal statutory requirements to provide access to the City's right of way on a competitively neutral, nondiscriminatory basis while not barring entry to existing and future service providers. Economic development resulting from the planned development of a telecommunications infrastructure that meets the needs of the City s businesses and residents. Protection of the general welfare and safety of the City's citizens and enhancement of the general quality of life in the City and region. Maintenance of control of the City's rights of way for safety purposes. Minimization of inconvenience to residents and businesses residing in and passing through the City by coordinating and minimizing the number and extent of street cuts and the attendant traffic interruption. Establishment of the City as a regional leader in technology and telecommunications reliant business and industry. Route diversity for telecommunications infrastructure to better guarantee telecommunications services are available in emergency situations. Dayton Telecommunications Report 2

5 Proper planning also enables the City to obtain compensation from telecommunications providers for use of the public rights of ways and ensures coordination between the municipal regulation of telecommunications providers in the rights of way and zoning and leasing of telecommunications towers and antennas. In addition, as part of its telecommunications planning process, the City hired Fredrikson & Byron, P.A., to assist the committee and to: Consult with City officials regarding their objectives for telecommunications planning. Study pertinent provisions of federal and state law relating to local governmental regulatory authority over telecommunications. Study pertinent provisions of the current Revised City Code of General Ordinances (R.C.G.O.) relating to telecommunications, including towers and antenna structures. Assist the City in developing legislation for the regulation of tower and antenna structure location and right of way management. Prepare a report to the City relating findings and recommendations for telecommunications planning. This Telecommunications Report and Plan ( Report ) summarizes the work that the City has performed on telecommunications planning, sets forth recommendations, and describes the City's ongoing telecommunications plan. It is the City's intent that this document represent current and future telecommunications planning initiatives. Because these initiatives will certainly change with time, it is fundamental that the planning process allow for change. The Report is designed to capture the City s current goals while encouraging change that promotes the ongoing goals of telecommunications planning. For example, in this Report we recommend the development of a telecommunications needs assessment to further promote the availability of telecommunications services and infrastructure in the City. Though this needs assessment is currently not completed, the City has issued a request for proposals for this purpose. It is expected that this document will be incorporated into the Report upon its completion. Further, as the telecommunications infrastructure is developed in the City and the goals of the telecommunications planning agenda are achieved, the City's goals will necessarily require revision. In this report we not only recommend a current course of action, but we posit potential future actions to address different economic, social and technical conditions as they change. Dayton Telecommunications Report 3

6 A. PROCESS As the first step in the planning process, Fredrikson & Byron asked the City to complete a municipal background information survey ( Survey ). The Survey requested information relating to Ohio law, the Dayton City Charter and R.C.G.O., existing agreements, and compensation for use of the public rights of way (towers, utilities, cable television, telephone, other providers). The responses we received from the City are reflected in this Report. Fredrikson & Byron, through its outside consultant, Charles Gramlich, also made a three (3) day visit to the City to meet with and interview various representatives of the City about their particular interests and needs from the telecommunications planning process. The results of these interviews also are reflected in this report. B. OVERVIEW OF THE REPORT The Need to Develop New Policy The recent proliferation of telecommunications providers has been caused by changes in the legal environment and significant changes in technology. The 1996 Act provides for an environment of competition in telecommunications service provision. The purpose of the legislation is to promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies. The 1996 Act has two, more broad, objectives: (1) To improve services to American consumers; and (2) To create an environment that promises to position the United States as a leader in the global telecommunications industry. The removal of federal regulatory barriers has spurred an increase in the amount of infrastructure being deployed, if not yet an increase in the choice the consumer has in terms of service providers. The movement from analog to digital transmission and storage essentially requires a re-wiring of the nation's telecommunications infrastructure. In order to reap the true benefits of digital transmission, industry providers are overbuilding and replacing existing, traditionally copper wire systems, with fiber optic technology that provides greater bandwidth and transmission speeds. The challenge presently is to provide a cost-effective solution to the last mile, or the wireline connection between the end-user and the nearest fiber optic hub. The use of fiber optic cable substantially expands the capacity available to telecommunications providers for providing multiple services over a single distribution system. New technologies potentially enhance the quality of life in the City and can provide the City and local institutions with additional resources. However, more users of public rights of way means an increased strain on public property through additional layers to the City's sub-infrastructure and a decrease in the useful life of City streets. Further, new wireless technologies require the use of more towers that are located closer together. Now more than ever, local governments need to develop sound telecommunications policy. Dayton Telecommunications Report 4

7 Legal Framework: Rights of way Regulation Federal Law Local rights of way regulation of communications providers is affected principally by three federal acts: (1) the Cable Act of 1984; (2) the Cable Competition and Consumer Protection Act of 1992; and (3) the 1996 Act. The Cable Act of 1984 requires that each cable operator obtain a franchise for use of public rights of way and allows municipalities to negotiate for public, educational and government ( PEG ) access channels and institutional networks. Under the Cable Act of 1984, local governments cannot collect fees in excess of five percent (5%) of the cable operator's gross revenues and must abide by the federal franchise renewal process. The Cable Competition and Consumer Protection Act of 1992 ( Cable Act of 1992 ) reaffirms the franchise authority of local governments and grants local governments the authority to regulate customer service and technical standards. The Cable Act of 1992 also prohibits exclusive cable television franchises and limits the liability of municipalities from suits for damages based on regulation of cable operators. The 1996 Act creates three spheres of federal regulatory authority over communications providers: regulation of telecommunications services; regulation of open video systems; and regulation of cable services. The 1996 Act bars regulations that prohibit or have the effect of prohibiting the ability of any entity to offer telecommunications services. However, local governments can impose restrictions, on a competitively neutral basis, to protect the public safety and welfare, manage public rights of way and require fair and reasonable compensation for the use of the City's rights of way on a nondiscriminatory basis. Open video systems ( OVS ) provide a platform through which telephone companies can offer video programming services to the public in competition with cable operators. Local governments can regulate OVS providers through regulations, such as fees and PEG access requirements, that are applied to all rights of way users on the nondiscriminatory basis but cannot require that OVS operators obtain the same kind of franchise as cable operators. For example, local governments cannot require the OVS provider to provide institutional networks or regulate bandwidth and other technical specifications of OVS. Under the 1996 Act, local governments cannot force cable operators to provide telecommunications services, require minimum technical standards or dictate the type of customer service equipment a cable operator uses. Dayton Telecommunications Report 5

8 State Law Telecommunications providers that seek to locate their facilities in the rights of way of an Ohio municipal corporation must obtain the consent of the municipality. Local regulation can restrict the construction, location, or use of rights of way as necessary to protect the public interest, health, safety and welfare. The Public Utilities Commission of Ohio ( PUCO ) has exclusive jurisdiction to supervise and regulate the rates and service policies of telecommunications providers. Local Law The City Commission has the authority to grant non-exclusive franchises for the operation of public utilities using the rights of way in the City. Legal Framework: Zoning Federal Law The 1996 Act expanded federal authority over zoning of personal wireless services. The 1996 Act preserves local zoning authority but prohibits restrictions that unreasonably discriminate between providers. The 1996 Act also prohibits local government actions that prohibit or have the effect of prohibiting the provision of service in a city. Further, local governments cannot regulate the operation, construction, modification, or placement of personal wireless service towers based on the environmental effects of RF emissions. Local governments must act on all requests for tower siting within a reasonable time and all denials must be in writing and supported by substantial evidence on the record. State Law An Ohio municipality's planning commission can regulate the height, placement and location of structures within the city, including telecommunications towers or other facilities. Local Law Currently, the R.C.G.O. contains provisions regarding siting towers, including a procedure for application for a conditional use permit or variance. Towers are permitted uses in industrial areas and conditional uses in agricultural-residential districts, the community business district, and the general business district. The City adopted zoning text amendments for the placement of telecommunications towers and for placement of antennas on existing structures Telecommunications Planning The telecommunications planning process incorporates a number of steps for the determination of the proper approach for each unique city. Initially, the City needs to assess its needs for telecommunications services. Second, a sound legislative structure must be developed to regulate the use of the City's rights of way and the proliferation of telecommunications towers. Third, policy can be developed to locate tower facilities on City property to capture additional sources of revenue. Fourth, the City can consider the potential ownership of telecommunication facilities. And finally, the City should develop partnerships with industry providers to assure the deployment of telecommunications infrastructure while using the partnerships to reduce costs associated with the implementation of its own telecommunications infrastructure. Assess Needs Initially, the City must consider what it wants and needs from the telecommunications planning process. The City should consider a needs assessment process in order to identify future community needs and interests related to telecommunications (as noted above, this aspect of telecommunications planning is in progress). The City should also consider undertaking a propagation study to determine appropriate sites and structures within the City for personal wireless communication facility siting. A propagation study would enable the City to lease identified sites Dayton Telecommunications Report 6

9 on City owned property for a reasonable and consistent price and shorten application processing time for City owned sites. The Planning Department is currently working with industry providers to promote location of facilities on existing tower structures, and, where feasible, on City owned property. A propagation study could further benefit this process. Develop Regulatory Structure: Rights of way The City should adopt a comprehensive rights of way ordinance that covers both OVS and telecommunications providers, as well as other users of the City's valuable rights of way. The ordinance should provide universal guidelines and principles to govern users of the rights of way. The particular terms of any provider's use of rights of way should be reflected in individual use agreements negotiated on a case-by-case basis. The goal of the rights of way regulatory process is to preserve and maintain a valuable public asset and develop a system to efficiently handle an increasing number of requests from telecommunications and other service providers. The master ordinance should balance the competitive interests of the industry and the City's interest in promoting economic development and access to a wide variety of telecommunications services against the City's interest in protecting the health, safety, and welfare of the community. The City should adopt a rights of way fee that is tied to the use and value of the rights of way and recovers administrative and impact fees. A linear foot fee can be based on zones (residential versus commercial) and/or vary depending on the type of road that is being used. City staff has recommended, and we endorse, the development of a construction fee schedule to recoup the costs that the cutting of streets causes and the associated degradation of the City's street and subsurface infrastructure. This can be accomplished in future amendments to the construction fee schedule. In terms of administrative costs associated with right of way management, we propose that the City recoup these costs in a compensation schedule that fairly divides the cost among right of way users. This can be accomplished with input from industry providers to determine the best way to recover these costs, whether it be a gross receipts fee tied to the revenues of each provider, or a linear foot charge similar to that to be used in the construction permit process. Develop Regulatory Structure: Tower Zoning The City adopted a comprehensive zoning text amendment to regulate the placement, construction, modification, and operation of towers and antennae facilities. The zoning text amendments for the placement of tower facilities ensures control of the tower proliferation that threatens property values, the aesthetic quality and the public health, safety, and welfare of the City. Further, the zoning text amendments for the placement of tower facilities attempts to harmonize the use of telecommunications facilities with existing land uses and the natural environment of the City. The zoning text amendments for the placement of tower facilities balances the competitive interests of the wireless telecommunications industry against the City's interest in protecting health, safety, and welfare. Consider Leasing Municipal Property The City should consider developing an inventory of municipal property suitable for location of communication towers and antennas, and should consider marketing these sites to the industry. Use of municipal properties for towers and antennas can generate revenue for the City, and can help control the proliferation of towers in less desirable locations. This can be accomplished by promoting the location of towers on City property as is the current practice, or, if the City chooses to be more proactive, by investing in a professionally engineered and constructed inventory of tower facilities to be leased to service providers. Consider Other Types of Telecommunications Planning The City can consider a needs assessment process to identify future community needs and concerns regarding telecommunications. This needs assessment could be conducted simultaneously with a rights of way audit. A rights of way audit can provide accurate assessments of the telecommunications facilities that currently are in place. This assessment, combined with an assessment of the community s current and future telecommunications needs, can provide the framework for an ongoing telecommunications plan that will help fulfill the City s long-range development goals. Dayton Telecommunications Report 7

10 The City can also consider municipal ownership of telecommunication facilities. City provision (which could take the form of a City/private industry partnership) of wholesale telecommunications services, voice services, facilities based telecommunications services, resale telecommunications services, video services, or data services (Internet access) could potentially benefit the community through lower rates for consumers. Municipal provision could also increase the quantity and quality of service available in the community. Before deciding to offer municipal telecommunications services, the City must engage in substantial market, legal, technical, and operational research, as well as consider the financial implications of such an undertaking. Currently, the City is preparing to enter into the provision of telecommunications service by implementing a communications network for the City's own organizational telecommunications needs. If the City finds in the future that its expertise in the development and management of telecommunications infrastructure is sufficient to add value to the businesses and residents requiring telecommunications services, and, if it is determined that existing telecommunications providers are not meeting community needs, the City should consider engaging in this service. However, at this time we recommend a wait and see approach. That is, if the needs assessment study, which is currently in the request for proposals stage, determines there is a significant need that is not being met, and if the City determines through the in-depth research mentioned above that this would be a cost-effective solution to community needs, it should further consider this opportunity. Additionally, we recommend the City take a partnership approach to the implementation of its own telecommunications infrastructure. Cities across the country are using the compensation and cost recovery aspects of telecommunications regulation to augment their own infrastructures while offsetting some of the significant investment required to develop a telecommunications infrastructure. This approach encourages at least two (2) positive outcomes. First, telecommunications providers are often interested in decreasing their own costs for doing business by replacing tax requirements with in-kind facilities and service contributions. Second, using this approach can possibly avoid the potential negative consequence of discouraging telecommunications providers from locating in a given city. Dayton Telecommunications Report 8

11 REPORT ON MUNICIPAL NEEDS AND GOALS Charles Gramlich spent two (2) days interviewing key City officials and departments regarding the City s telecommunications related goals and needs. In these interviews and in ongoing discussions, representatives of the City have expressed a number of needs and goals regarding telecommunications. ARTICULATED GOALS It is clear that the City sees its rights of way as an asset held in trust for the public. The City wants to protect this asset through effective and efficient management. The City realizes that it can use the a telecommunications regulatory structure as a tool for raising revenue. On the other hand, the City has learned that an advanced telecommunications infrastructure will attract advanced services and promote economic development. To this end, the City desire to enact a fair and well managed regulatory structure as a means to attract advanced providers to the City. With this in mind, the City has articulated four major goals for its telecommunications planning process and development of its rights of way regulatory structure: Goal One. Economic Development. The City would like to encourage economic development by adopting a rights of way and telecommunications plan and regulatory structure that welcomes new and expanding telecommunications, cable, and utility service providers who will provide advanced services to Dayton business and residential consumers. There is no doubt that economic development potential is enhanced by having available the broad range of telecommunications services needed by the business community. Businesses want to operate in cities that possess a high quality telecommunications infrastructure so that they can make full use of their investment in state of the art office technology. According to research sponsored by Partners for Livable Communities, small to mid-sized manufacturers all over the country emphasize the critical importance of good communications infrastructure. They cite the need for more and better telephone service, for cleaner signals, for faster internet access, and for rapid, reliable access to suppliers and customers. Just-in-time inventory control requires instantaneous communication with remote databases. Many companies also need advanced telecommunications infrastructure to handle their own internal communications needs. Goal Two: Universal Service. The Telecommunications Act of 1996 defines universal service as an evolving level of telecommunication services that the Commission shall establish periodically... taking into account advances in telecommunications and information technology and services. The City recognizes that every citizen needs to be included on the information highway. The National Telecommunications and Information Agency, initiated by Vice-President Al Gore, has stressed the need to assure that voice, video and data communication capabilities will be available to every household, business and industry throughout the United States. Further, the current administration has announced that one of its top priorities is to ensure that telecommunications infrastructure is in place to provide universal access to the broad band capabilities that are now available through fiber optics and digitization. The City of Dayton can promote universal service by educating itself regarding the existing telecommunications infrastructure in the City, the needs of the businesses and citizens of Dayton for advanced services, and the business and technical limitations on the provision of those services by telecommunications providers. The City can use all of this information to realistically approach regulation of users in the rights of way in a fair manner that encourages and rewards telecommunications providers that offer universal service. Goal Three: Local Government Telecommunications Infrastructure. The third goal expressed by the City of Dayton is preservation and enhancement of the City s telecommunications infrastructure. The City has been involved in an assessment of its own internal and telecommunications needs, and Dayton Telecommunications Report 9

12 its existing telecommunications infrastructure. The City wants to ensure that its own telecommunications infrastructure is adequate for the City s internal telecommunications needs in the 21 st Century. An adequate city telecommunications infrastructure can allow the City to provide expanded local government services, and to coordinate telecommunications services and infrastructure with other government entities, including adjacent cities and the county. The City s goal of protecting and enhancing the local telecommunications infrastructure also can promote education and involvement of the residents and business of the community in local government. The City is a tremendous repository of community information and services. With proper development of the City s telecommunications infrastructure, the City may be able to make access to government information available to residents directly from their homes (or from local kiosks within shopping centers and other community centers). Goal Four: Management of the Rights of Way and Zoning for Wireless Facilities The fourth goal of the City s telecommunications planning process is development of regulatory structures relating to users of the rights of way and relating to wireless telecommunications facilities. The City already has adopted zoning text amendments relating to wireless facilities. The City has articulated the goal of adopting a rights of way ordinance that protects the public rights of way while encouraging economic development and universal service, two of the other goals articulated above. Dayton Telecommunications Report 10

13 DISCUSSION OF NEEDS Existing Infrastructure. The City does not own significant telecommunications infrastructure. It receives access to conduit and poles from three (3) providers in the area. However, the City is in the process of designing a network system that will augment and/or replace the existing twisted pair copper wire system with a fiber optic backbone and twisted pair configuration. In order to implement this costly venture, the City is exploring numerous opportunities to develop business partnerships with telecommunications providers and users. The goal for the City s infrastructure development is to provide connectivity sufficient to serve employee and customer data communication needs at the lowest expense to the taxpayers. The City feels that there is sufficient capacity, with a few exceptions in downtown areas, in existing conduit for all future uses. The City may conduct, with the assistance of a consultant, a preliminary investigation of existing infrastructure to verify the capacity of the existing infrastructure. The City is in the process of analyzing its own internal communications needs. The consultant will review the City s existing and future communication needs for the Eagle MONARC computerized traffic signal system, as well as the potential tie-in of other City facilities or computerized traffic signal systems to insure sufficient capacity will be provided to meet those needs. The consultant also will review cable requirements for potential ITS applications including video surveillance, changeable message signs, freeway incident management, and roadway weather information systems. The Priority Board Chairs citizens group is not happy with the cable television service provided by TCI. TCI s system is 450 MHz and is not used to offer digital service. The system is just about channel locked. TCI represented that it is complying with FCC technical standards and NCTA customer service standards, but is experiencing subscriber loss. TCI collocates on the poles of others and does not own any poles in the City. The TCI local engineer quit to take another job and stated that he is not happy with TCI s performance since taking over the system in The City is not happy with TCI and has attempted to negotiate with Ameritech to overbuild the cable system. The City may send out an RFP for comprehensive franchise compliance review. Recommendation- It is important for the City to evaluate the existing telecommunications infrastructure in the City and the City s communications needs in connection with its decision whether to build or lease the fiber system. This decision has both regulatory and economic development consequences. Understanding the current telecommunications infrastructure will help the City to adopt and enforce a fair, reasonable, and efficient telecommunications regulatory structure. The City can also use the process to determine the City s communication needs and make the City an attractive place for telecommunications providers, and in turn businesses. Revenue Objectives Originally, the Budget Department saw telecommunications planning as a way to raise revenue, but has changed its view a little as it becomes more involved in the project. Despite the fact that there is not written contract with Ameritech, the City currently receives about $1 million annually from the company. The City does not have much information on right-of-way valuation. The City feels it should not directly subsidize private businesses. The Engineering Department feels that whether a provider should pay for the City s investment in right-of-way is a political decision. The Engineering Department feels that one (1) or two (2) cuts into the rights of way does not have a significant impact on the street. The Engineering Department believes that the revenues that the City currently generates through the permitting process covers the cost of administering the rights of way, but does not come close to recovering the cost to the City of maintaining streets and rights of way. Recommendation-We recommend that the City consider a compensation scheme that allows the City to recover costs associated with the use and management of the rights of way. This compensation initially could take the form Dayton Telecommunications Report 11

14 of in-kind contributions of network facilities and services from rights of way users. As the City s network needs are met in the short term, the focus of compensation can be shifted from facilities and services to monetary compensation. Payments from rights of way users could be earmarked for funding further development of the City s telecommunications infrastructures, which in turn can result in more efficient delivery of government services to the citizens and customers of the City. Economic Development The City feels it is more of a have not than a have when it comes to telecommunications infrastructure. The Economic Development Department is concerned about job and population loss. However, the Economic Development department has not thought much about telecommunications issues. Most of the growth in Dayton is in the suburbs and not the city proper. Recommendation- The Economic Development Department should be more involved in the telecommunications planning process. The City can use a fair telecommunications regulatory structure to attract advanced telecommunications providers. The City can use its State grant to build or lease advanced telecommunications infrastructure. These decisions have a direct effect on economic development in the City. An advanced telecommunications infrastructure will attract businesses to the City proper. Current Right of Way Regulatory Structure. The City s existing telecommunication regulatory structure is very informal. Money rarely changes hands, but the City receives free use of conduit (but not fiber) from utilities (e.g. about 25% of Ameritech s conduit is reserved for City use). The City has two (2) different permits for street cuts: (1) regular permit; and (2) special privilege permit. Regular permits are routinely issued after the fact on a group permit basis. The Engineering Department feels that the current ordinances that apply to street repair and street-cuts are sufficient and does not believe there is a lot of unpermitted activity in the rights of way. The Engineering Department believes that administration of any rights of way regulatory structure should be centralized. ICG is the only competitive local exchange carrier ( CLEC ) currently providing service in the City. There is no review of a CLECs qualifications to offer service. When ICG first began constructing facilities in the City, it obtained special privilege permits. Eventually, without any formal review of ICG s qualifications, the City began treating ICG in the same manner it treats Ameritech by requiring that the company obtain only regular permits for work in rights of way. The Public Safety Department realizes that it probably is time to formalize long-standing informal relationships with telecommunications providers. However, there is still resistance to this idea from many in City management that see the current relationships as beneficial to the City. All providers in the City work together and use each others facilities and the City is concerned about harming these relationships. Some City officials suggested that existing relationships should be grand-fathered if the City adopts a more formal right of way regulatory structure. The City is proud of the way it has aggressively managed the right-of-way by requiring that providers provide conduit and pole space at no charge to the City. Several City departments also stated that TCI is the weak link in cooperation among providers. Recommendation- The City should formalize its current right-of-way regulatory structure. Without a formal structure, it is doubtful that the City can comply with the Telecommunications Act of The Telecommunications Act mandates that local governments manage rights of way in a competitively neutral, non-discriminatory manner. Future competitive telecommunications providers will demand that they be treated in the same manner as existing providers. Without a formal structure, the City will have no justification for its treatment of existing providers. As a result, the City will have no basis for any restrictions imposed on future providers. The City is somewhat concerned that Ameritech will ask the City to remove facilities from the company s conduits. Without contracts evidencing its original agreements with Ameritech, the City will not be able to enforce these obligations. Dayton Telecommunications Report 12

15 We also recommend that the City use the rights of way administration process and ordinance to promote a business friendly regulatory scheme and to seek cost effective solutions to its own telecommunications needs. Current Wireless Regulatory Structure. The City recently adopted a telecommunications tower zoning ordinance. The City also indicated in interviews that it is negotiating with GTE for a phase out agreement to free up air space for Personal Communications Systems ( PCS ). To date, three (3) PCS providers (GTE, ATT Wireless, and Nextel) have expressed an interest in providing advanced service in the City. The City hopes to complete an update to its Comprehensive Plan by January It is anticipated that the update will address telecommunications issues. Dayton Telecommunications Report 13

16 REPORT ON TECHNOLOGY AND INDUSTRY A. EMERGING TECHNOLOGIES AND PROVIDERS New developments such as digitalization and fiber optics have ushered in a new era of telecommunications technologies. It is important to understand the basics of these technologies to understand how they may affect telecommunications in the City. A glossary of telecommunications terms is included in this Report. In addition to the terms in the glossary, there are technological terms that are particularly important for City representatives to understand. "Analog" is the established way of storing or transmitting voice, video, or data. The information is converted into electrical impulses that travel in a continuous wave which varies as the source varies. The information is converted into its original form (voice, video, or data) by electrical devices at the site of reception. Transmission can be done by wire or through the air. "Digital" is the new way of storing and transmitting voice, video, and data. The information is converted into binary code (ones and zeroes) and travels as electrical impulses in a discrete pattern. The information is converted into its original form (voice, video, or data) by electronic devices at the site of reception. Unlike analog, the digital format allows simultaneous transmission of multiple voice, video, and data signals and is not as subject to signal degradation. "Fiber optic" technology is the use of very thin and pliable cylinders of glass or plastic to carry light signals in bands of frequencies. Information can be carried by light in much the same way as information is carried by electronic signals over copper twisted pair wires used by telephone systems and by coaxial cable used by cable television systems. Fiber has wider bandwidth or carrying capacity than traditional copper twisted pair wire. Moreover, fiber has greater ability to carry signals without losing power. Many companies that never ventured into the area of telecommunications now seek to offer these services. Some of the telecommunications technologies and providers that are emerging are described in the next section. A well-prepared telecommunications plan should incorporate an evaluation of all telecommunication resources available to the City. Each telecommunications provider should be evaluated individually in terms of its potential impact on the City's overall communication needs. 1. Data Service Delivery As cable operators rebuild their systems and incorporate fiber optics and digital technology, they have the capability to offer data transmission at much higher speeds than the data transmission services currently offered by telephone operators. In addition, the telephone industry has developed a new technology, Integrated Service Digital Network (ISDN), a separate telephone line capable of accessing and running on-line services many times faster than a traditional telephone line. 2. Open Video Services As a part of the 1996 Act, Congress provided a video programming designation, "open video services" ( OVS ), for telephone operators seeking to offer video programming over telephone lines without a cable franchise. OVS providers can select up to 1/3 of the programming on the system. The other 2/3 of the programming must be provided by nonaffiliated programmers. Such operators will not be required to adhere to a cable franchise. However, the City may require the OVS provider to pay franchise fee, and make PEG access commitments. 3. Personal Communications Services Personal communications services, or "PCS", is a digital wireless mobile telephone technology. Its fundamental digital nature distinguishes it from cellular technology, which uses an analog signal that is converted to digital in transmission. PCS telephone handsets weigh less than cellular handsets. In the future, PCS users may also be able to receive facsimile Dayton Telecommunications Report 14

17 documents and use their PCS equipment for paging. While cellular towers are often several miles apart, PCS towers can be as close as 1500 feet. Accordingly, more PCS tower sites are required. 4. Wireless Television Systems Wireless television systems currently provide cable-like video programming services to many multiple dwelling units such as apartment buildings. Wireless television systems transmit microwave signals from local broadcast towers to small home roof top antennas provided by the service. The term wireless is something of a misnomer. Wireless telecommunications providers are not totally wireless. To provide service, wireless providers must use towers, satellite dishes, and in some cases underground conduit under the public rights of way to serve their customers. 5. Direct Broadcast Satellite Systems Direct Broadcast Satellite, or "DBS," is the newest video programming service to compete with cable operators and the most advanced in terms of availability and capability. Satellites high above the earth transmit television programming signals that can be received by satellite dishes. Unlike traditional satellite programming, the DBS signal is received by a small satellite receiver that is approximately eighteen (18) inches in diameter. Because of its small size, it can be placed in a variety of locations in most homes or businesses. The primary advantage of DBS is that it uses digital technology. Providers are able to offer higher quality television and greater quantity of channels. DBS providers offer a wide range of video programming services. Satellite dishes come closer than cable companies to providing programming on demand. They provide pay-per-view movies more frequently than cable services. Dishes also offer parents a limited ability to control the programming their children can access. There are drawbacks to DBS. It does not receive local or regional channels, so a subscriber may still have difficulty obtaining local news or weather. It also does not have the public, educational, and governmental access channels currently provided by many cable providers. Bad weather can cause signal interference. In addition, customers must invest in equipment in order to use this service, and in even more expensive equipment if they choose to see more than one channel at a time. Currently, unlike with most cable television systems, with DBS each television set in a home requires its own expensive converter in order to view different channels on different television sets simultaneously. DBS rarely uses the public rights of way. Thus, local governments lack regulatory power over DBS providers and stand to lose franchise revenues as DBS begins to erode cable television s stronghold on pay television services and threatens to someday replace cable services. 6. Internet The Internet is a system of electronic highways that allows a user to access computer systems around the U.S. and the world. Through the Internet, users can exchange electronic mail messages ( ), join bulletin boards to trade information on a variety of subjects, access home pages for schools, businesses and government agencies, and contact a variety of information sources around the world through their computer terminals. As the demand to download information and complex graphics increases, better connections with faster transmissions will be desired. Currently, many non-institutional Internet users connect to the Internet through a modem and a telephone line, a fairly slow connection. A modem has recently been developed that allows a cable subscriber to obtain Internet services via the cable system. Transmitting and downloading materials from the Internet via cable connections is much faster than via traditional telephone modems. Many new fiber optic network service providers are also offering faster Internet connections. 7. Digital Television In 1997, the FCC approved an allocation plan for new over-the-air frequencies for the provision of an improved television service called digital television (DTV). DTV will provide picture quality equal to a 35 millimeter photograph. DTV technology has been available for years, but has not been used because (1) the television sets using the technology are expensive and, (2) before digitalization, DTV broadcasts used too much megahertz analog channel space. Dayton Telecommunications Report 15

18 With the advent of digital technology, television broadcasters will be able to broadcast five (5) digital channels over the same space required for one analog channel. This will give broadcasters the power to offer the same quantity and variety of services to consumers over the air as are provided to subscribers through pay service, such as cable television and DBS. In addition, DTV will change the shape of the television screen to a broad "letterbox" style. When DTV sets arrive, they will probably co-exist with regular television sets for a decade or more. The FCC has issued a standard for the transmission of DTV. The standard allows transmission of one or two high definition television programs; four (4), five (5) or more standard definition television programs at a visual quality better than the current analog signal; many CD-quality audio signals; and the delivery of large amounts of data. 8. AT&T Satellite Phone Service Like PCS, AT&T satellite phone service will require radio transmitter towers in communities, although the towers will not be as high. 9. Competitive Access Providers Competitive Access Providers, or CAPs (also referred to as Competitive Local Exchange Carriers, or CLECs ), are telephone service providers other than the incumbent local telephone company. CAPs can fill the gaps in existing telecommunications services, provide telecommunications services like telephone at competitive rates, and generally provide bandwidth for companies needing network capacity and service. 10. Private Fiber Optic Networks Some locations with major institutions or businesses are seeing the construction of separate, privately owned fiber optic lines for data transmission among buildings. 11. Utility-Owned Fiber Optic Networks Public utilities (such as electric and gas companies) often have their own internal communications systems to manage their systems and track usage. Many such utilities are placing fiber optic lines in the rights of way and easements. Utilities can use these facilities as a platform for joining in telecommunications competition. B. POTENTIAL IMPACT OF TECHNOLOGY 1. Wider Range of Services/Economic Growth Telecommunications can enhance the quality of life. Good telecommunications facilities offer an almost infinite list of services that can improve the quality of a city's schools, health care institutions, businesses, and government. Such services can enhance the quality of life in a community by making available to every household a broad range of telecommunications services and benefits. Services available to residents are not only increased in terms of types available, but they are offered at lower rates in communities that maintain a competitive environment in telecommunications services. Economic development potential is enhanced by having available a broad range of telecommunications services needed by the business community. Businesses want to locate in cities that possess a high quality telecommunications infrastructure that allows businesses to run more efficiently and less expensively. Having a high quality telecommunications infrastructure assures that a particular city is not passed by as businesses increasingly seek communities with robust telecommunications infrastructures. 2. Increased Strain on Resources A variety of utilities and businesses place permanent facilities below the surface of public streets and sidewalks. These permanent facilities, including water mains, natural gas pipes, sewage systems, powerlines, high pressure steam ducts, telephone wires and cable TV system cables, cannot be easily removed, repaired, or relocated. As more telecommunications providers seek to enter the rights of way, adding even more layers to the substructure, public safety Dayton Telecommunications Report 16