THE FAQs ABOUT INSTITUTIONAL NETWORKS
Local governments must have access to sophisticated communications capabilities to do their jobs well in the emerging Age of Information. One potential source of such capabilities is an Institutional Network, or “I-Net”, that a local government can obtain from cable operators as a condition of the initial grant, transfer or renewal of a cable franchise. This paper answers some of the most frequently asked questions about such I-Nets.
1. What is an I-Net?
An I-Net is communications system capable of transmitting video, voice and/or data signals over optical fiber, coaxial cable, or both, among governmental, educational and possibly other non-residential users. In the past, when cable systems were typically designed only to transmit television programming one way from cable operators to residential users, cable operators generally dedicated a limited number of channels to governmental and educational use or constructed stand-alone cable systems for that purpose. Today, cable systems are routinely being constructed as hybrid fiber/coaxial cable networks with sufficient capacity and two-way capabilities to accommodate I-Net requirements in a single integrated system. In some recent franchise agreements, local governments have obtained a number of “dark” optical fibers in addition to, or in lieu of channel capacity, and are furnishing the end-user electronic equipment necessary to “light” the fibers themselves. In communities that have sufficient demand and expertise to justify the latter option, it may be the most beneficial in the long term, as it can give the local government access to vast amounts of broadband capacity, as needed, at the lowest overall cost.
2. What applications can I-Nets support?
I-Nets can support a broad range of uses, including high speed Internet and Intranet access; large-file uploads and downloads; program and data sharing within and among city departments and offices; Geographic Information System mapping (including demographic, tax, zoning, utility, right-of-way, legal and other information in a single database that is searchable from any location); video conferencing; distance learning; vocational training; medical imaging; traffic control; environmental monitoring; management of water, sewer and/or electric utilities; remote meter reading; video arraignments and depositions; video surveillance and security; emergency services; advanced library services and cataloguing; computer assisted design and computer assisted manufacturing; city-wide or area-wide PBX-like 4-digit dialing; direct access to long distance providers, avoiding local access charges; and numerous other existing and yet-to-be imagined services.
3. What are the main benefits of fiber-based I-Nets?
Fiber-based I-Nets enable users to take advantage of the applications listed above, and others to come, at blazing speeds – typically more than 100 Megabits/second (about 4,000 times the speed of dial-up connections to the Internet using modems running at 28.8 Kilobits/second). They enable local governments to take maximum advantage of staff, equipment and other resources and can greatly reduce the costs of services, such as T-1 data lines, that local governments usually lease or purchase from outside providers.
Fiber-based I-Nets are more reliable than the Internet for communication of large amounts of information between or among users. As closed systems, they do not depend on Internet technology that breaks information into discrete packets, sends the packets over separate routes to their destination and reassembles them there – when and if they arrive. Because fiber optics are not conductive, they are not susceptible to interference from lightning and other forms of electromagnetic radiation. They cannot be tapped by eavesdroppers. They are also readily expandable – optical fibers have vast capacity and a long life expectancy (15-50 years). When more capacity is needed, a user can simply upgrade the end-user electronics, which are constantly improving.
4. Who constructs, owns, maintains and operates I-Nets?
The National Association of Telecommunications Officers and Advisors (NATOA) has recently conducted a survey to which 48 communities that have I-Nets responded. According to the survey, in 56 percent of these communities, the cable operator built all or most of the I-Net, in 13% a telephone company did so, and in 44% the local government itself built all or substantial components of the I-Net. In 44% of these communities, the cable operator owns and maintains all or a portion of the I-Net, in 19% a telephone company does so, and in 67% the local government owns and maintains all or a portion of the I-Net. Local governments generally consider operation of the I-Net as a function of government, even if they do not own it. Twenty-five percent of the responding communities share operations with a cable company and 19% do so with a telephone company or an electric utility.
5. Who can qualify as an institutional user?
Under Sections 611(b) and 621(b)(3)(D) of the federal Communications Act of 1934, as amended, a franchising authority may condition of the initial grant, renewal or transfer of a franchise on a cable operator’s agreement to designate channel capacity on an institutional network “for educational or governmental use.” This language does not limit potential users of I-Nets to units of government and schools, and the legislative history indicates that Congress contemplated that libraries, hospitals and even businesses could become users of I-Nets. In practice, however, I-Nets are generally available only to governmental and educational entities, including regional entities. A few jurisdictions make their I-Nets available to non-profit or government-supported entities. Notably, in some of its new proposals, AT&T Broadband and Internet Services reserves the right to make I-Nets available to commercial users.
6. Who pays for the construction of an I-Net?
Cable operators, local governments and users of I-Nets allocate construction costs in many different ways. In some cases, cable operators bear all of the construction costs. This was a common feature of older franchises agreements involving relatively modest I-Nets, and it now occurs primarily when a local government has substantial bargaining power and the cable operator is upgrading its subscriber network and can build or expand an I-Net for relatively little additional cost. In some cases, local governments pay the construction costs by building the I-Net themselves or by reimbursing the cable operator for its costs, usually on an incremental-cost basis. In still other cases, cable operators, local governments and I-Net users share responsibility for construction costs in some fashion.
Although franchise agreements sometimes state that the cable operator is providing an I-Net “free” or “without cost” to the local government, few truly do. Because a franchise agreement, taken as a whole, must ultimately make economic sense for the cable operator, cable operators will inevitably insist on offsetting concessions in other areas.
7. Who pays for the operation and maintenance of an I-Net?
As with construction costs, cable operators, local governments and users of I-Nets employ many different methods to allocate the costs of operating and maintaining I-Nets. As discussed above, local governments generally play a substantial role in operating I-Nets and bear the costs of doing so. Cable operators typically maintain the I-Net, particularly if it takes the form of channel capacity on the subscriber network, and charge their costs to the local government and/or users. Where the I-Net consists of the optical fiber provided by the cable operator and end-user electronics provided by the local government/or users, each entity is usually responsible for maintenance of the facilities it provides. User charges are calculated in a variety of ways, ranging from per capita charges to charges reflecting bandwidth used.
8. Are the costs of an I-Net subject to pass-through to subscribers?
Costs of I-Nets for which the cable operator does not otherwise receive reimbursement are generally subject to pass-through to subscribers, but this is a matter for negotiation between the cable operator and the local government.