Carriers chafe under city restrictions, fees on fiber digging
The battle between cities tired of torn-up streets and optical fiber companies trying to meet the demand for fast Internet access is intensifying.
Cities from New Jersey to California are limiting when and where streets can be dug up. The new skirmishes will likely mean many businesses will have to wait longer and pay more for broadband access for their offices in major cities. Carriers have filed lawsuits over what they believe are exorbitant fees and unlawful restrictions on digging. City officials say citizens are tired of traffic jams, and taxpayers shouldnt have to subsidize network builders.
"It is a tough problem. Speed to market is a key for all of us, and these agencies are very aware of that, so to get your permits to go forth in a timely manner, you pretty much have to concede to anything they want," said Bob Boyeson, rights of way manager at Canadian fiber builder 360networks.
Co-trenching, also called co-digging or co-location, is a growing practice. City officials ask fiber-optic carriers looking to wire buildings in their municipalities to share a trench. Companies are invited to advertise their ditch-digging activities to competitors, so everybody can join in. Once a joint dig is finished, the street is repaved and closed to construction for up to five years.
Carriers said they have been asked to share trenches in Albany, N.Y.; Baltimore; Boston; Dearborn, Mich., Minneapolis; Salt Lake City; and White Plains, N.Y. Also considering the practice, carriers reported, are Washington, D.C.; the California cities of Berkeley, Oakland, Palo Alto, Santa Clara and Sunnyvale; and some Los Angeles suburbs.
The trend worries fiber-optic carriers. Because digging opportunities are generally advertised locally, as well as on the Internet, there is no guarantee that all carriers know about the deadlines. As a result, some may plan to enter a given city only to find that the designated time for digging has expired. Even if co-trenching information does get out, the odds that all interested carriers will agree on the exact location of a trench are slim, since most extend fiber when customers order it. To lay fiber in a citys designated area, just in case, is "inefficient business," said Dave Johnson, an AT&T spokesman.
But cities said they are just protecting their taxpayers.
"Should our taxpayers subsidize free or reduced cost of access to the right of way? We dont believe they should, and if the company wants to come in and use the publics property, they ought to be able to pay the public a fair market price for that use," said Bill Irving, associate city attorney of Dearborn. What Dearborn considers a "fair share" is based on a complicated formula, ranging from 30 cents to $1 per foot of fiber going into the ground, or up to 4 percent of the revenue derived from that pipe. Thats in addition to paying to have the street repaved.
Companies Pay to Play
Most companies doing business in dearborn live with the deal. WorldCom, through affiliates, pays fees both per foot and based on revenue brought in by the fiber pipe. One company that challenged the setup as illegal TCG, now owned by AT&T ended up in court. While AT&T won the lawsuit, Dearborn plans an appeal.
Many more cities have instituted or are considering co-digging policies. Baltimore, for instance, just advertised for a 30,000-foot trench with room for up to 20 5-inch conduits, which translates into capacity that would start at around 4 petabits. The city advertised the dig, and already has three large unidentified carriers committed. Once the dig is completed, the street in question will remain paved for three years, said Cederic Crump, the citys director of operations. Future digs would have to go through a similar co-trenching procedure.
Carriers said they fear cities will require special payments from companies that miss digging windows. They are already being hit with special fees, they said.
"Some municipalities and it is worrisome are viewing our work as an opportunity to rebuild infrastructure we are not even affecting," complained Bill LaPerch, senior vice president of engineering and operations at Metromedia Fiber Network.
He said his company is laying a 10-foot extension of a fiber system into a building in a major city. Rather than being asked just to repave the part his company tears up for $35,000, he said, the unnamed city wants the company to repave the whole block at a cost of $750,000.
In Palo Alto and Albany, the municipalities decided to go into the fiber business themselves.
Albany officials asked 360networks to pay for six fiber conduits on top of the one the company has put in, said 360s Boyeson. "Most of these outfits agree not to resell it [fiber]. They use it for their own purposes. But often these cities are asking for so much capacity that they would be well beyond their realm of ever using themselves, so that makes you wonder," he said.
Palo Alto, which leases access to its fiber network to carriers, said the city-run backbone is very popular.
"We had about a 300 percent increase in customer requests from 1999 to 2000," said Leo Creger, Palo Altos telecom manager.