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01-17-2006 - WI-FI (Wireless Fidelity) Wireless Internet SystemCity of West Covina Memorandum TO: Andrew G. Pasmant, City Manager and City Council FROM: Artie A. Fields, Assistant City Manager AGENDA ITEM NO. J=1 a00(0 DATE: January 17, 2001" SUBJECT: WI-FI (WIRELESS FIDELITY) WIRELESS INTERNET SYSTEM RECOMMENDATION: It is recommended that the City Council. direct City staff to research the cost of hiring a consultant to 1) Assist the City in establishing Wi-Fi Goals, and to 2) Identify an appropriate Wi- Fi (Wireless Fidelity) network for the City of West Covina. DISCUSSION: Councilmember Touhey requested that this item be agendized for City Council discussion and direction. What is Wi-Fi? Wi-Fi uses unlicensed broadcast spectrum, or airwaves, to deliver high-speed Internet access through a series of antennas positioned on telephone poles and other locations. Those antennas, in turn, are connected to the Internet. Depending on its location, each antenna can provide a coverage area with a radius of about 1, 000 feet. Cities across the nation are implementing wireless internet systems, known as Wi-Fi, to allow the public to have access to the internet from designated sections of the City and/or the entire City. Cities that have implemented these systems have done so for various reasons that include: ➢ Economic Development — Many cities believe that allowing residents to connect to the internet in shopping districts will attract patrons and to spend more time in restaurants, bookstores, and public places, thereby spending more money while they are in the City. ➢ Business Recruitment and Retention — Cities across the country are competing for business. Those cities that are most technologically savvy are said to have an edge over those that do not have progressive information technology systems. In addition, the wireless network technology can provide affordable internet access to small businesses that may not have access to such services at this time. ➢ Public Access — Seen as a low-cost solution to provide to providing broadband access to help citizens, schools, and community organizations make effective use of wireless technology to achieve their goals. ➢ Gaps in Service — Cable Modem Service is not available in certain areas of cities. As a result, users are left to utilize slower options for internet access. In addition, there are cities that have only one provider, such as West Covina. In West Covina, Cable modem service is not available for commercial use. The Wi-Fi programs often represent a less expensive alternative to cable modem services and are capable of providing service in underserved areas. Cities are simply not willing wait until the private sector to provide wireless internet to those areas that may not have it. ➢ Improved City Services — Expand communication options for city employees to communicate in the field. Provide greater productivity in City Hall by allowing consultants and public officials to make presentations from the internet when conducting City business. ➢ Revenue Generation — The fees generated from the fees are an additional revenue source to cities. • WI-FI Network January 11, 2006 There are a number of approaches that cities are using to implement wireless networks, they include: ➢ Service Cost — Some cities allow the public to log on to the network free of charge, while other cities charge between $10.00 to $20.00 a month to allow connection to the network. ➢ Start-up cost — If the private sector fronts the bill for the start-up capital, the cost can range from as little,as $250,000 for small designated areas to as much as $15 million to $35 million for citywide networks. The important note is that these programs are being developed with little financial cost to cities. ➢ Citywide vs. designated sites — There are some cities like Addison, Texas (population: 100,000), who have wired the entire city for a Wi-Fi Network, while other cities such as West Hollywood (population: 35,000) have wired certain areas of the city as a test pilot. ➢ City vs. Privatization or nonprofit - The private sector is aggressively pursuing cities to develop public/private Wi-Fi partnerships. The City of Philadelphia created a nonprofit for the purpose of funding and managing the procurement, design, development, and management of a citywide wireless network. The non-profit: will contract out a turn -key solution to the private sector through a Request For, Proposal. Contracting Wi-Fi programs to the private sector allows cities to avoid expending funds for start-up costs. As stated by Councilmember Touhey during the January 3, 2006, City Council meeting, if the City were to implement a Wi-Fi Network, it would serve as an economic development benefit for businesses, because high speed internet is not available to commercial users at this time. In addition, the Wi-Fi network would serve as an alternative for those residents in West Covina who are unable to access DSL service from phone companies. Staff can validate some of these concerns, because the City is unable to obtain high speed internet service at certain City facilities because the infrastructure is not available. Staff has conducted a cursory review of a number of Wi-Fi programs throughout the country. The advise that has been provided by those experienced in the area of Wi-Fi networks has been that the City should become familiar with all the options available and concerns regarding Wi-Fi Networks and develop specific goals for the City. While there seems to be some evidence as to the benefits of the Wi-Fi Network, there are scholars in the field that caution certain municipality involvement (See Attachment 1). This information will be taken into consideration as the City moves forward. In order to move forward as advised, staff will need to solicit consultants to determine the cost of their services. FISCAL IMPACT: If approved by the City Council, staff will contact several consultants to determine the costs to: 1) Assist the City in establishing Wi-Fi Goals, 2) Identify an appropriate Wi-Fi network for the City of West Covina, and 3) identify if a phased approached is more advisable. Staff will return with a request for a budget appropriation once a consultant and cost has been identified. Assistant t-iry manager Attachment Y: Administration: WI-FI Network • • Attachment 1 Reason Foundation Report A growing number of state and local governments are getting into the broadband and WiFi business, either by owning and operating broadband networks or developing the infrastructure. But governments making this move in hopes of attracting high-tech jobs and business investment to their regions are learning that publicly subsidized broadband services actually discourage private investment. A group of more than 20 scholars have joined together to detail the necessary ingredients for a sound broadband policy and to outline the steps needed for successful broadband implementation. The Municipal Broadband Compact Limiting the Role of Municipalities in Broadband Services Preamble The role of municipalities in the provision of broadband services is a subject of much debate. An increasing number of local governments are proposing either to build and operate broadband networks for residential and business use, or to develop broadband infrastructure for wholesale lease to commercial service providers. But to allow townships, cities, counties and even states to directly compete against the private sector undermines technological progress and violates fundamental principles of American free enterprise. As scholars and analysts specializing in broadband policy, we recently convened online to examine the issue. Empirical research and economic rationale guided our deliberations, as well as the recommendations that conclude this Compact. (The signatories are listed at the end of this document.) Findings Currently, a relatively small number of municipalities and public utility districts provide broadband services via cable modem or telephone lines. Proposals for such systems are pending in a variety locales; hundreds of other communities are actively considering publicly owned and operated wireless Internet systems or some form of "public -private partnership." Some elected officials seem to believe that government deployment of broadband will attract high-tech jobs and business investment to their region. Ironically, publicly subsidized broadband services actually discourage private investment: To the extent government assumes the role of service provider, there is less opportunity and incentive for a private firm to enter the market. Moreover, municipalities have largely proven to be incapable of keeping pace with technological change. There is no evidence of the "market failure" that might otherwise excuse government intervention in broadband service. Penetration rates and bandwidth supply are rapidly rising, while broadband prices are falling. Meanwhile, many — if not most — of the municipal systems that provide residential service fail to generate enough revenue to repay the public debt incurred to create them. Principles The following principles are necessary elements of sound broadband policy: Internet -based commerce must be allowed to operate according to consumer demand and market forces, unburdened by price controls, service mandates, access regulations, taxation or censorship. 2. Rules governing Internet use and electronic commerce should result from private collective action, not government edict. 3. Protection of private property rights is a necessary condition for the profitability and growth of the digital economy. 4. Government can best encourage broadband deployment by eliminating tax and regulatory barriers to broadband investment and market competition. 5. Technological innovation has rendered existing regulations wholly obsolete. Outmoded regulatory regimes threaten to undermine the affordability and availability of new products and services. 6. Municipal interference in broadband displaces private investment, distorts prices and forces taxpayers to subsidize services they may not use. Recommendations To optimize broadband deployment, we recommend the following: 1. Access to broadband can often be expanded by eliminating unnecessary regulations that delay, raise the cost, or even effectively ban the construction of new network facilities. 2. Municipalities and other local units of government should be prohibited from investing in, managing or operating broadband infrastructure and services. 3. Congress should restrict the authority of states to regulate and tax broadband infrastructure and services in the interest of preserving interstate commerce. 4. Telecom taxes and cable franchise fees should be eliminated to encourage investment in broadband services. Questions Public Officials Should ask about Government Broadband Services The role of government in the provision of broadband services is a subject of much debate. An increasing number of local governments are proposing either to build and operate broadband networks for residential and business use, or to develop broadband infrastructure for wholesale lease to commercial service providers. Based on research reports, broadband business, plans, and public debates over government provision of broadband services, we have developed a list of questions public officials should ask to make sure they fully understand the issue and any specific proposals. Answers to these questions will help make better policy decisions. General 1. What Problems Will a Government Broadband System Solve? • Is the need clear and well defined? • Is the process by which a government broadband system will solve the problem clear and direct? • How does a government broadband system compare to other means of solving the problem like targeted low interest loads, investment incentives, or special programs in. coordination with local entrepreneurs? 2. What Are the Specific Needs a Government Broadband System Would Address? • Are these needs today not addressable by the existing telecom infrastructure? • Will a state -sponsored system duplicate existing facilities and capabilities? • What is the effect on existing or prospective service providers? • If needs are not currently being met, will they be met by the telecom infrastructure of the near future and, if so, will a government system become redundant or outmoded at a later point in time? • If economic development or creating jobs is a key motivator, how will a government system expand opportunities beyond what the market provides? Is there a cost/benefit analysis comparing this strategy to other job creation strategies? 3. What Is it About Broadband That Makes it a Good Public Investment? • Are government officials prepared to enter and compete in one of the most dynamic of industries? • Isn't it usually the case that the discipline of running a profitable enterprise yields better financial and technological decisions? 4. Have Current Market Conditions Been Taken into Account? • How will the government broadband service compete with companies like Verizon, Sprint and Cingular rolling out new broadband wireless systems today? • Would it be better to first remove all the obstacles to private investment in telecom networks before the state steps into this dynamic and competitive marketplace? • What local, state and federal regulations and taxes would apply to the new government broadband system? • If the new system is exempt from such regulations and taxes, should policymakers consider a regulatory parity measure to level the playing field for all competitors? 5. What Is the "Business Plan"? • What are the total direct costs of the system — both capital expenses as well as operating expenses? • Who are the customers? • Who will have access? • What will the prices be and how will they be determined or adjusted? • Where do the revenues go? • Who are the managers? • .Who are the "shareholders"? • What are the limits on future activity of the party building and operating this network? • What are the controls on selecting vendors? • What is the nature and amount of spectrum required for the project? What is the availability? What is the cost? • If the government does acquire this prune spectrum, what is the crowding out effect on private competitors or would-be competitors? Financing/Costs/Budgeting 6. How will capital costs be funded at the beginning of construction? Will current government services be cut to cover the costs or will.the city incur a greater deficit? 7. If costs run over budget, will taxpayers be liable for paying excess costs? Is there any limit to taxpayer liability for these costs? 8. If operation of the system is outsourced to a non-profit entity, what percentage of that entity's revenues will be spent on operations? 9. If the city network users will be provided security software, how will that be financed? 10. How will capital costs be funded at the beginning of construction before customer revenues begin flowing? 11. What is the projected "up -take" in consumer adoption of the system? In other words, how many customers do you project will purchase or otherwise use the services? How many are private and how many government users. 12. If user revenues are insufficient to cover operational and capital costs, will taxpayers be liable for paying excess costs? Is there any limit to taxpayer liability for these costs? • • 13. What is the funding source for the operational and capital costs if revenues are insufficient? 14. If operation of system is outsourced to a non-profit entity, what percentage of that entity's revenues will be spent on operations? 15. Will all government Wi-Fi antennas be located on government property and structures? If on private property, will property owners be compensate or subject to eminent domain? 16. If the city is intending to utilize the wi-fi network for public safety purposes, what reliability factor is specified in the contract? If the wi-fi system fails, will the city maintain a redundant system for private or city or public safety use? If so, what is the ongoing cost of this redundant system? 17. How will the costs associated with network maintenance, network upgrades, or replacing the network when technology changes (eg., Wi-Max) be covered? Security 18. What steps is are being taken to ensure that a government Wi-Fi network does not interfere with existing private, personal, and small business Wi-Fi systems? 19. How will government monitor for illegal uses of the system and put in place safeguards to prevent hackers from compromising the network? 20. Is this to be an open network? closed network? or support both modes? 21. What security mechanisms are to be implemented? Will the intrusion detection, DoS mitigation, etc. be included? 22. Will government provide security software (anti -virus, personal firewall, etc.) or application software for users? Content/Free Speech 23. How will government ensure parental controls on its public network? 24. Does the plan comply with the Children's Internet Protection Act? 25. How will the city prevent illegal downloading and piracy of copyrighted material? 26. Has any planning taken place or funding set aside for complying with subpoenas from the RIAA about illegal music file sharing? Social 27. Realistically, how many people do you think will benefit from this system? To what extent is it redundant? 28. How will the government provide Wi-Fi capable devices to those who cannot afford them? If so, will it include security software (anti -virus, personal firewall, etc.) and/or application software for these devices? How will that be funded and upgrades be managed? 29. How will the government ensure that devices provided to economically underprivileged people are not stolen or sold to others? Small Business Impact 30. Many small businesses currently provide free Internet access as an inducement for visiting their premises. How does the government plan to respond when these businesses lose an important competitive tool? 31. Will the government reimburse businesses who must install special equipment to maintain the integrity of their existing systems in the case of interference caused by the city -owned system? Tech Support 32. Will customer support be carried out by government employees or outsourced? If outsourced, will support personnel be unionized and will offshore outsourcing be utilized? Does the city require that any level of benefits or healthcare be provided for support personnel? 33. How will the government deal with system breakdowns? Is the government capable of responding to maintenance and customer service requests as fast as the private sector? Is there any precedent for this? 34. How will the government or its contractor ensure the reliability of the system in the case of a disaster? Will back-up power be available? What specific plans exist to strengthen the system? 35. How will technical support be accessed, via the internet or telephone? What is the capacity for each mode? 36. Is there a cost and contingency plan related to vandalism? Technical/Compatibility 37. What steps is government taking to ensure that the wi-fi network does not interfere with existing private, personal, and small business wi-fi systems? 38. What design techniques or deployment rules will the government use to ensure that the system does not suffer from interference from existing systems? 39. How will the government deliver its wi-fi signal with sufficient strength to serve tall buildings and users further than 300 feet from antennas on city rights -of -way? What RF planning tools and techniques are used to plan the system for coverage and capacity? 40. How .will a government wi-fi system be interfaced to the wired network? . What is the capacity per unit area planned in the backhaul network? 41. What is the capacity of the government wi-fi system -- both system wide and at each antenna? How much will system capacity drop in the event of an overload? 42. Does the government plan to support voice over wi-fi on this network? What are the design constraints to provide acceptable voice quality (delay, jitter, QoS)?