Consultant says fiber-optic Web network project too big

Consultant says fiber-optic Web network project too big

URBANA – Local officials are waiting for word on a federal grant application to help build a high-speed fiber-optic Internet network, but a consultant hired to advise Champaign and Urbana councils thinks the proposed project here is designed too large and will have big problems with capital replacement in 10 years.

At a meeting of the Champaign-Urbana Cable Commission Wednesday, project organizers said there has been extensive questioning by federal officials about a local $28 million big broadband project. Mike Smeltzer, director of networking for the University of Illinois Campus Information Technologies and Educational Services, told commission members, "We've been getting a going-over ... and we see this as hopeful."

He said Thursday he is continuing to get questions by e-mail.

"They would not be spending this much time on our application unless they were seriously considering funding it," Smeltzer said.

The National Telecommunications and Information Administration has $7.2 billion in federal stimulus grants intended to create jobs and provide an advanced optic network for "underserved" residents. The agency defines "underserved" as areas with 40 percent or less access to a broadband network. Locally, that is mostly in north Champaign and Urbana.

However, the local project vision is much bigger, establishing a network to serve 137 key institutions, like schools, libraries, fire stations, government offices and organizations like the Don Moyer Boys and Girls Club. The network would be developed and operated through a consortium, known as UC2B, including the University of Illinois, Champaign and Urbana.

The group applied for more than $25 million in federal funding for a project to build seven rings of fiber-optic cable, and for grants to cover $5 million for public computer centers and sustainable broadband education and training.

Urbana would contribute $555,000, while Champaign and the UI would each contribute more than $900,000. A state contribution of $3.5 million also counts toward local matches for the purposes of the federal grant.

A report from Doug Dawson of CCG Consultants of Beltsville, Md, was released by Urbana officials Tuesday. Dawson was hired by the three-agency consortium to guide them on a "big broadband" grant project.

In a phone interview, Dawson said the consortium should develop a smaller fiber-optic project and expand it later.

Dawson said the local plans call for "far too many rings initially" and he recommends only one large ring for each city, initially.

He also said the local plan appears to have a "significant cash shortfall" of $160,000 to $200,000 per year, considering capital replacement costs. Another concern for Dawson is that the local proposal calls for "cutting edge technology" from a brand new vendor for network servers.

"It will have problems," Dawson said. "We believe that this is probably far too risky and we say this from experience."

But according to Smeltzer, many of the issues raised by the consultant have already been considered. For example, the consultant calls for a general manager "from day one," but Smeltzer said the consortium plan and intergovernmental agreement did specify a general manager, so that concern has already been addressed. Likewise, Dawson talks about the need for door-to-door sales to get homes and businesses to hook up to the network. Smeltzer said that was in local plans all along.

Smeltzer said the concerns about local costs have to be considered in light of receiving federal and state grants. He told cable commission members Wednesday that Champaign had already planned its own network to link fire and police stations and other city operations.

Champaign Information Technologies Director Fred Halenar said the city council approved setting aside some money for a phased project that could take five years, but when word came of the opportunities for broadband grants, the city decided to hold off on its own project. He said if the grant is approved, Champaign could save from $2.5 million to $4.5 million – even with the city's local match of $930,971.

"That is costing them less, not more," Smeltzer said. "Each local dollar invested ... is matched by one state dollar and eight federal dollars. There are not many programs that provide a 9-to-1 match."

Smeltzer said fiber optics is an expensive technology to deploy, but an inexpensive one to operate.

He said the plan calls for seven "rings" of fiber network across more than 66 miles. The lateral connections from the rings to the 137 "anchor institutions" will take about 99 more miles of fiber.

Getting fiber from the curb to the residential customers in the targeted area will take more than 36 miles of network construction, Smeltzer said.

"That adds up to 195.4 network miles and that is a lot of construction," he said. "On just the seven fiber rings, there will be 495 manholes of varying sizes. There will be many more installed in the fiber-to-home areas."

Halenar said a lack of long-term funding for infrastructure is "nothing new." Municipal sewers and roads are built with capital funds and then additional money is allocated in future years for maintenance and replacement.

"We think the network is going to be sustainable," Halenar said.

Bill DeJarnette, information services manager for Urbana, said schools, city departments and the county already have some data connections, but the biggest advantage in the future will be for economic development.

He said complex plans may have some difficulties, but there may be a number of ways of solving them.

Mike Monson, chief of staff to Urbana Mayor Laurel Prussing who has cooperated with Dawson and researched municipal fiber optic projects in other cities, thinks any issues can be resolved.

Prussing said Monday that her concerns are that the project be a benefit to the general population and that it break even, cost-wise.

According to Monson, a key issue will be the decision to go with the "cutting edge technology" on the network servers.

Monson also said another of the criticisms of the local grant proposal is that there are too many rings, making the project too costly. But he said that is also one of the benefits. If the federal grant is approved to build the network, the seven rings would cover most of the two cities.

He said the project would enhance local economic development by making it easy for businesses to hook up to get high-speed broadband.

BY THE NUMBERS

Local proposal details

3 — parties in a local broadband consortium, including Champaign, Urbana and University of Illinois.

7 — fiber rings covering more than 66 network miles in proposed local project.

137 — "anchor institutions," like schools, libraries, fire stations, government offices, etc, connected to the network rings by 27.9 miles of lateral lines.

110 — "underserved"* census block groups, with more than 4,050 households targeted for fiber optic connection with 64.8 miles by construction for the broadband network.

2,500 — other residential customers in those 11 census block groups to be served with another 36.4 miles of network construction.

195.4 — total network miles of high-speed fiber construction on the seven rings.

Network construction funding

$31.2 million — total grant applications for infrastructure construction, including:

$24.2 million — federal grant request;

$3.5 million — from Illinois grant; and

$3,352,149 — from local matching sources.

Public computing center funding requests

$1.25 million — total, including:

$992,173 — sought in separate federal grant request; and

$263,395 — from local sources.

Sustainable broadband funding requests

$3.7 million — for separate sustainable project, including:

$2.9 million — sought in federal sustainable broadband grant request; and

$786,605 — from local sources.

* NOTE: "Underserved" defined by the NITA as an area where 40 percent or less of households have broadband service.

Source: UC2B broadband project.

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