Utilities Build Fiber Links

SAN MATEO (01/28/2000) - CITING DISSATISFACTION with the pace of access to broadband services, utility companies as well as local municipalities are building out the fiber infrastructure themselves for their business and consumer customers and constituents.

In some cases, utility companies are partnering with large telecommunications companies. Such is the case with MCI WorldCom and Northwest Iowa Power Cooperative (NIPCO), in LeMars, Iowa, with each leveraging the other's strengths.

"Power companies have rights of way and in many cases have fiber for other purposes, and it can be converted," said a policy official at MCI WorldCom, in Washington, who requested anonymity.

"[NIPCO] is part of the pioneer partners. Essentially, we are putting fiber in the ground, advanced switching capability, high-speed access to the Internet, and [eventually] voice over IP [capabilities]," the policy official said .

According to the official, the local phone companies are not providing the broadband that consumers are craving, so MCI and others are being "invited in."

However, in some instances, utilities are doing it all themselves. Glasgow Electric, in Glasgow, Ky., and Tacoma Power, in Tacoma, Wash., are two of many examples.

Both utilities have fiber infrastructures in place and are now in the midst of scaling broadband performance up to 1Gbps.

Tacoma Power launched its Click! Network telecommunications services in 1998.

"Businesses were not happy with telephone service. It was taking 18 to 24 months [to get hookups] for business lines in 1997," said Dianne Lachel, government and community relations manager at Tacoma Power. Neither US West nor Viacom, the region's telecommunications and cable providers, respectively, have supplied the infrastructure sought by the power utility, according to Lachel.

Lachel credits the deployment of broadband as the reason why Tacoma was able to keep two major employers in town: Total Renal Care, a health care company with about 1,200 employees, and the Frank Russell Company, a financial services company and Tacoma's single largest employer.

"These companies deal with a lot of data between offices and billing. Giving them broadband was an incentive to keep their headquarters in Tacoma," Lachel said.

Town officials of Westminster, Colo., also took matters into their own hands after finding that the standard telecommunications companies were not interested in applying broadband.

While digging a trench for a new water pipe, Westminster decided to put in the conduits for fiber, as well.

Westminster partnered up with ICG Communications, in Englewood, Colo., in a deal that gave the city 24 of the 96 strands of fiber for use of the conduit and gave to ICG the right to sell services over the remaining 72 strands.

Glasgow Electric Plant, another utility that opted to go it alone, is already selling quality of service to its business customers, according to William Ray, superintendent at Glasgow Electric Plant.

"Everybody picks their bandwidth. If you want to go faster, you pay more," Ray said.

Ray said that the utilities are the sleeping giants of the telecommunications industry.

"This is not a diversification. It is not electric power into a new business.

It is the evolution of the electric-power business," Ray said.

Nevada project loses steam

Three of the major vendors linked to a secret effort to deliver broadband services via fiber optic lines in Nevada last week confirmed that they are in discussions with each other, but differed markedly in terms of defining the ultimate scope of the project.

A spokesperson for Sierra Pacific Resources said its subsidiary, Sierra Pacific Power Company, does plan to lease dark fiber to business customers in the Reno and Las Vegas areas, but at the moment does not plan to make that fiber available directly to consumers. Nevertheless, a subdivision developer in the Reno area, Double Diamond Homes, said that Sierra Pacific is paying it to put in a second conduit in a residential building alongside an electric conduit.

"They tell you they are not sure what it [the conduit] is going to be, but it is obvious they are pursuing the fiber optic system," said Kraig Knudsen, project manager for Double Diamond Ranch, a planned community of 3,000 single family residential units, in Reno.

In addition, sources close to TeleCommunity, which plans to provide technology and business plan development for the project, maintain that the project is extremely broad in its scope, has been in the works for over three years, and includes support from Hewlett-Packard and Oracle.

An HP representative said that no dollar commitments had been made to anyone involved in the project, and HP did not want to speculate on the nature of the discussions with the companies in question. The representative also said that some non-disclosure agreements have been signed in order to continue the discussions.

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