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Reason Foundation

A carrot, not a stick

Steven Titch
January 24, 2006, 1:32pm

The telephone companies, like oil and big pharma, are easy political targets. Until undone by his latest round of verbal miscues, even New Orleans Mayor Ray Nagin was enjoying good press by routinely complaining about BellSouth's opposition to the idea of a city-run taxpayer-financed wireless system. And if you want to see plain everyday government-sponsored vitriol, just pop over to archives and links at www.lafayetteprofiber.com or www.tricitybroadband.com, where municipal broadband activism has pretty much devolved into whining about the local incumbents. So it takes some chutzpah for a local official to pro-actively court a Baby Bell and outwardly show preference for a private enterprise approach to broadband over municipal ownership. But a nod must go to Mayor Graham Richard of Ft. Wayne, Ind., who upon learning that Verizon was set to roll out its FiOS fiber-to-the-home broadband platform in 50 U.S. cities, did much to make sure the company made his town was one of them. For the rest of the man-bites-dog story of a municipal leader who decided to "Forget Pork" and pursue commercial broadband alternatives, lets turn to the current issue (Jan. 23) of Network World.
For the record, Verizon says that Fort Wayne had topped its Great Lakes region deployment list all along. But Verizon credits the mayor with helping the network project run smoothly. The mayor aided Verizon by issuing permits quickly and holding a job fair so Verizon could hire employees. He knew there would be plenty of digging in streets and customer front yards -10,000 utility locations in all - so he helped facilitate communications with other utility companies as well as consumers. "That cooperation allowed us to move up our general availability schedules six to eight weeks," says Mike Millegan, North Central Market area president for Verizon. In return, Richard's city now has a fiber-to-the-home network that will allow the community to develop new services. Fort Wayne will use this network to conduct after-school online mentoring, connecting retired school teachers to after-school programs so they can help students with homework.
The story continues...
But the FiOS rollout goes way beyond consumers. For starters, Verizon hired 700 contractors in Fort Wayne to build the network and 200 permanent workers to run it. The mayor hopes to incubate start-ups and encourage larger companies to relocate to his city and invest more in Fort Wayne. High-speed bandwidth at affordable prices makes it easier for small companies to compete with larger ones.
The result is that FiOS FTTH, a six-month old service, is rolling out in Ft. Wayne while heavily hyped municipal systems launched as far back three years ago, such as Ashland, Ore., Truckee-Donner and San Jose, Calif., and Acworth, Ga., remain partially built, stalled and bleeding borrowed money, or not built at all. The report also comes as the Indiana Legislature debates a major telecom reform bill, which has drawn heated opposition because 1) it would place severe limits on municipal broadband initiatives and 2) it would create a statewide video franchise fee structure that would let phone companies like Verizon build FiOS anywhere in the state upon approval from the Indiana Public Utilities Commission. What must these "consumer advocates" make of Ft. Wayne, which flew in the face of their conventional policy wisdom, and now leads Indiana in FTTH?


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