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FAST & EASY THE FUTURE OF WIFI & BEYOND IN THE CITY OF LOS ANGELES

Prepared by the Mayor’s WiFi & Beyond Executive Advisory Panel

April 25, 2005

April 25, 2005 Honorable James K. Hahn Mayor, City of Los Angeles 200 North Spring Street, Room 303 Los Angeles, CA 90012 Dear Mayor Hahn: On behalf of the Mayor’s WiFi & Beyond Executive Advisory Panel, please find our report, “Fast and Easy – The Future of WiFi & Beyond in the City of Los Angeles.” We are submitting this to you and to members of the City Council for your review and consideration. During the past six months, the Mayor’s WiFi & Beyond Panel has explored issues related to how L.A. can lead the way in fast (broadband) communication and easy Internet access (your device, your choice). The recommendations contained in the attached report will help support your vision to improve economic development, increase internal efficiencies and help bridge the digital divide. I look forward to working with you and your staff on the public presentation of these recommendations. Our many thanks to you for taking a crucial leadership role in convening the panel and for providing support for its work throughout the process. Very truly yours,

Morley Winograd Chairman Mayor’s WiFi & Beyond Executive Advisory Panel Attachment

Report of the Mayor’s WiFi & Beyond Executive Advisory Panel April 25, 2005

CONTENTS Members of the Mayor’s WiFi and Beyond Panel. . . . . . 4 Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Technological Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Customer Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 The City’s Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Critical Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Description of WiFi and WiMax Technologies Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Current WiFi Hotspots in Los Angeles Appendix C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Summary of WiFi Networks in Other Cities


MEMBERS OF THE MAYOR’S WIFI & BEYOND EXECUTIVE ADVISORY PANEL

Panel Chair Morley Winograd, Executive Director USC - Center for Telecom Management

Sub Committee Chairs Thera Bradshaw, General Manager City of L.A. - Information Technology Agency Rajit Gadh, Ph.D. Professor/ Director UCLA - Henry Samueli School of Engineering and Applied Science/Wireless Internet for the Mobile Enterprise Consortium (WINMEC) Richard Grimes, Executive Vice President Wireless Capital Partners, LLC Todd Richmond, Ph.D. Managing Director USC Annenberg Center for Communication

Members James Burkhardt, Commissioner City of L.A. - Board of Information Technology Commission Mark Desautels, Vice President CTIA – Wireless Internet Development Curtis Gibbs, Senior Resource Development Officer City of L.A. - Community Redevelopment Agency Curt Hessler, Chairman 101 Communications, Inc. Russell Kaurloto, Associate Executive Director USC Information Services Division - Network Technologies & Operations Deane Leavenworth, Vice President Time Warner - Corporate Relations & Communications

Ken Nordholm, Strategic Business Manager Motorola Government and Enterprise Mobility Solutions Robert Schwandt, Regional Vice President SBC – G.E.M. Public Sector Francisco Uribe, Director of External Affairs Verizon Paul Wang, Director of Corporate Strategic Planning City of L.A. - Department of Water & Power Ike Wells, Vice President Comcast - Engineering & Technical Operations Staff Doane Liu, Deputy Mayor Office of Mayor James K. Hahn Mark Wolf, Director of E-Government Office of Mayor James K. Hahn Maryam Abbassi, Director of IT Standards and Policy City of L.A. - Information Technology Agency Terry Halberg, Telecom Planner City of L.A. - Information Technology Agency


Fast and Easy—the future of WiFi and Beyond (WAB) Advanced Communication Services in the City of Los Angeles

A Report from Mayor Hahn’s “WiFi and Beyond” Expert Panel In October of 2004, Mayor Hahn asked our panel of experts to provide his office a strategic plan on how Los Angeles could lead the way in providing fast (high speed broadband) communication and easy Internet access (your device, your choice) to its residents, businesses and visitors. This report from the “WiFi and Beyond” panel is designed to provide policy makers and planners guidance along the path to that very desirable future. Executive Summary VISION: We envision the City of Los Angeles as a place where everyone who works, lives or visits here enjoys convenient and affordable broadband access to the Internet. We want Los Angeles to be a ‘broadband city’ both in reality and in global reputation. We think that the experience of increasingly mobile, high speed, personalized communication will help make the City a great place to live, work and enjoy the excitement of urban life. Most importantly, we believe the ability for everyone to communicate easily and quickly is vital to the City’s aspiration to serve as a great forum of open and free democratic discussion and creative expression. In developing our report, the members of the panel agreed on several core values that guided our deliberations and recommendations: Affordability. High speed communication services need to be available at prices competitive with other cities and regions in the U.S. not just to help close the Digital Divide within the City, but to avoid any negative impact on the decision to locate in Los Angeles or even in one area of the City vs. another by individuals, non-profits or businesses. Convenience. Access to high speed networks should be available to all City residents, businesses and visitors in ways and at locations that encourage their use and enhance the experience of living in a modern, connected metropolis. Technological Neutrality. The rapid changes in communication technologies that will occur over the next five years requires that the City not attempt to “lock in” on any one technological solution nor attempt to award preferred status to any particular solution for fast and easy access to the Net.


Public/Private Partnerships. One of the best ways for a city the size of Los Angeles to achieve our goal in the next five years is to work with institutions in the private sector that share our vision and want to work in partnership with the City to achieve it.

These are ambitious goals but with common purpose and careful planning they can be accomplished. Here’s how: RECOMMENDATIONS: Our fundamental recommendation is the adoption by the Mayor and Council of a coordinated plan, phased in over five years, that leverages the existing communications infrastructure to build and enhance broadband networks that take advantage of both licensed and unlicensed wireless/WiFi spectrum.1 Under this plan the City would:

1. Encourage the adoption of a public/private partnership business model designed to deploy fast and easy broadband communications services in every neighborhood, to minimize gaps in existing service.

2. As part of the first phase of the coordinated plan, conduct a citywide

broadband survey to determine if there are any gaps in the availability of broadband services for residents and businesses in Los Angeles.

1 The Mayor’s WiFi and Beyond Executive Advisory Panel reached a majority consensus in full support of the report as written. The two panel members participating from the Cable Industry disagreed with some of the text or recommendations of the report.

MISSION: We believe the City of Los Angeles, within the next five years, should ensure that high speed access to the Internet is available and affordable for any one who wants it anywhere in the City. In addition, we believe it is possible to implement strategies to accomplish that mission in ways that address the Mayor’s goals of:

• Helping to close the digital divide, • Accelerating economic development, and • Making our City’s government more efficient and accessible.


3. Do a review of the available City-owned physical assets in the City’s rights-of-way, including facilities, to determine the available “space” that could potentially be used to construct broadband networks.

4. Provide all City residents, and those doing business with the City,

fast and easy access to the Net in all municipal facilities within three years.

5. In addition, ensure that fast and easy communication services are

available in key public places and commercial corridors used by visitors and travelers of all types.

6. Encourage public/private partnerships that would create new e-

government applications of benefit to the City of Los Angeles and ensure that City of Los Angeles web pages that provide information about and access to various City services, are incorporated into such services.

7. Finance these activities through the use of securitized bonds (tax

exempt of taxable depending upon the use of the proceeds), savings from cross-departmental and agency partnering, and grant funding for specific projects.

8. Become a national and local champion of WiFi and future

technologies. The City’s role in assuring the deployment of WiFi and Beyond (WAB) communications services in Los Angeles should be driven by the needs of its users, based on periodic assessment studies and community input coordinated through Neighborhood Councils and other groups. The plan should proceed in phases to assure constant attention to user needs and the rapid changes in technological alternatives. If the City of Los Angeles adopts our recommendations we can become a ‘broadband city’ both in reality and in global reputation within five years.


Technological Trends Existing broadband access technologies – telephone lines (enhanced by DSL, etc.), TV cables (broadband enabled), cellular (moving to G3 and beyond), fiber networks (both deployed as backhaul transport and now increasingly to the home or nearly to the home) and even the nascent power line technologies – all share three characteristics, which are somewhat inter-related: 1. Their “access infrastructures” are very expensive to build initially or to build

out; 2. Their providers enjoy de jure and/or de facto regional monopoly or oligopoly

status; and 3. Their regulatory regimes are of a national and/or statewide character leaving

the City with little or no direct say or responsibility in their deployment.

For these reasons, until recently municipal governments have had very little influence over the issue of high speed communications beyond the regulation of cable franchises within their boundaries. However, as the availability and convenience of these technologies become more and more important to its residents and businesses, the City of Los Angeles should take every opportunity

Key Users: The key users whose needs our panel’s recommendations are designed to address are:

• Residents, • Businesses, both large and small, • Tourists, Mobile Workers and Business Travelers, and • City Government Agencies.

Key Drivers: Policy makers for the City of Los Angeles have a unique opportunity to lead the way in the deployment of fast and easy WAB communication services for all of these types of users. By creating a unique public/private partnership dedicated to delivering a seamless cloud of advanced communication capabilities the City can:

• Help close the Digital Divide, • Generate more economic activity within the City, • Improve the operational effectiveness and efficiency of the City’s

government, and • Make Los Angeles an even more exciting place to experience.


to encourage the further development of each of these technologies by their private company providers, and in particular to encourage competition among the technologies and their providers. Indeed, there is no conceivable way for Los Angeles to accomplish the mission we have outlined in our report without the further growth of all of these technologies and nothing in our recommendations is designed to hinder their commercial success. But WiFi, and future wireless technologies such as WiMax, (see Appendix A for a more complete description of each of these technologies) hold out the promise of infrastructure that is relatively cheap to build and can therefore avoid the “natural monopoly” problems inherent in other technologies. For instance, metro-scale Wi-Fi mesh networks can take advantage of popular broadband radio technologies used in a wide variety of devices from laptops to PDAs, security cameras, parking meters, traffic control systems and cellular phones, to create a seamless high speed connection that is not dependent on a centrally managed network architecture. Already, the relative low cost to build wireless broadband networks, and the desire of many people to be constantly linked to the Internet has resulted in the development of hundreds of WiFi “hotspot” locations throughout Los Angeles. (see Appendix B for a list of current hot spots, both commercial and governmental in Los Angeles). These two factors have resulted in many cities throughout the United States and abroad evaluating the benefits of wireless broadband technologies for their communities. Some cities have built wireless networks for public use, and/or to support internal municipal operations such as public safety through first responder communication systems. (Appendix C includes a summary of some of these networks). While the relative low cost of the infrastructure required to deploy “WiFi and Beyond” (WAB) technologies is intuitively attractive, other characteristics of the technology, especially its use of open, unlicensed spectrum and the security challenges that presents, limits its use for many applications and once again demonstrates the importance of not becoming wedded to any one technological solution. Nevertheless, our panel believes that WAB technologies will play an important role in making it possible to provide wireless high speed access to the Internet available and affordable everywhere in the City of Los Angeles. Policy makers should think of WAB technologies as a tool they can use to promote the creation of a seamless cloud of connectivity, supplementing existing broadband technologies such as cable, DSL, WiFi and cellular making possible a City-wide network linking all of these broadband technologies into a mesh network. As the country experienced when the Defense Department used its initial investment in DARPANET to create the foundation for the Internet, the inherent economic value of networks increases exponentially with the number of users (Metcalfe’s Law). Now the City has an opportunity to use the relative low cost of deploying wireless networks as a catalyst to spur the development of


what will soon become an extraordinarily valuable economic resource for the City and its residents. Customer Demand If no one wanted to use high speed connections to the Net in their home or business, or as they traveled throughout the City, no amount of technological development or City involvement would lead to our desired outcome. The best technology, with perfect implementation and support, can still go unused if it provides no advantage to the end user. Similarly, capabilities that are needed by the user can also go unmet by technology implementations that do not take into account all aspects of the user experience, including cultural setting, expertise levels, support structures, etc. Our recommendations anticipate demand for fast and easy communication services to come from four types of users. We believe our proposals address each of these types of customers’ needs and wants. Residents With 3.7 million residents, widely disparate incomes and cultures, and a geographically dispersed society, there are myriad challenges associated with providing any public service, including communications, to the City’s residents. Nonetheless, one can imagine certain things that a “typical” Los Angeles resident might want to accomplish during their daily life in the city. Needs/wants:

• Information access o Neighborhood – community news, advertisements, connections

including web blogs and video blogs o City – information on local businesses and city services, especially

e-government applications o Wider – access to the broader Internet communities

• Entertainment o Traditional forms – broadband capabilities as entry to current

entertainment services o New forms – taking part in emergent entertainment forms such as

online gaming, pod casting, and video and still picture sharing through instant messaging

• Healthcare – reduction in health care costs and greater access to information and in-home care capabilities

• Work – telecommuting and beyond, home based entrepreneurial activities • Education – access to traditional and new distant learning opportunities • Communication— increased communication opportunities at affordable

prices • Public Safety— less crime and lower cost enforcement


Businesses, both Large and Small Businesses are the lifeblood of economic activity in Los Angeles, generating over $380 million annually in business tax revenues providing jobs for over 1.67 million. Reflecting the diversity of our City, these employers range from small entrepreneurs to the largest entertainment conglomerates to be found anywhere in the world. But all of them depend on reliable, affordable, accessible communications to generate economic value in an information age. The smaller employer may be satisfied with a minimal broadband connection to connect with their customers and suppliers; a larger one may require their own dedicated fiber network to handle the flow of video as well as data they generate, but their fundamental needs and wants can be categorized as follows:

Needs/wants:

• Information access and search services • Business transactions

o Business to Business (2B) o Business to Government (B2G) o Public to Business and Business to Public (P2B and B2P)

• Constant, ubiquitous availability • Safe and secure data transfer • Increased communication capabilities and affordable prices

Business Travelers and Tourists Los Angeles is highly dependent on both tourist and business traveler related income. Over 2.5 million cultural tourists visited Los Angeles in 2003 and it is estimated that the tourism industry generates over $1 billion dollars for the City each year. As such, anything that helps to promote L.A. as a destination, or makes the stay here easier and/or more pleasant/productive, will generate increased revenue. We also include the local business traveler in this set of customer needs and wants. The possibility of gaining an extra hour of work at the beginning and end of the day by providing high speed communications on Metro rail and bus services could be a strong motivation to use public transportation and lessen the pain of rush hour in Los Angeles for everyone. One of the reasons suggested for providing Wi-Fi in public areas in the downtown core such as Pershing Square is to encourage business people to stay downtown and complete their work over a meal or a drink before rushing back home. Needs/wants:

• Information access through open networks where appropriate • Corporate networks (access to Virtual Private Networks (VPNs) for the

business traveler)


• Entertainment o via the network o information on local attractions

• Travel o ground transportation o flight transportation o hotel information

• Directions and other location based services • Safety

Government Agencies Perhaps the most study has gone into the impact of broadband communications, particularly mobile services, on various government entities. As communication is critical for these organizations (both internal and external), various technologies and scenarios will have differing effects. For instance, many Public Safety agencies are now moving away from operating their mission critical applications on the unlicensed Wi-Fi spectrum, and are looking to move to a newer Spectrum (4.9GHz) that is licensed exclusively for Public Safety. As a result, any city’s business case for Wi-Fi should not include mission critical Public Safety applications. But, for example, deploying cameras connected by wireless networks to central observation points is a public safety application that can help improve the City government’s performance as part of an overall strategy to inject communications strategies that have the potential for cost savings and/or improved public services into the City’s internal operations. For example, the City could leverage existing fiber infrastructure to deploy digital full motion video surveillance. Already the City of Los Angeles has been ranked by the Center for Digital government as the 3rd most technology-advanced city in America in terms of using e-government applications such as online service delivery; planning; and developing the infrastructure and architecture that make the transformation to digital government possible. The application of high speed communication technologies to fundamental municipal services tasks such as meter reading, garbage pickup, code enforcement, and traffic control promises to produce a City government that works even better and costs less. Needs/wants:

• Communication o Within an agency o between agencies o with the public

• Improved public access o services o support


• New e-government services • Pervasiveness and persistence • Increased bandwidth and lower costs

The City’s Role This confluence of forces—technological trends making fast and easy communication services less costly to deploy and access and an increasing demand for such services from all types of users—has sparked a debate throughout the United States on just what role, if any, municipal governments should play in responding to these developments. Some have suggested that information infrastructures are the new public good of the 21st Century, just as water and power were determined to be by many cities, including Los Angeles, in the early part of the last century. Others argue that the market forces described here negate any role for municipal governments since the inherent demand will generate a robust private sector response guaranteeing access and availability to the Net for anyone who wants it. Our panel believes neither side of this debate is completely right or wrong. Rather than engage in further ideological discussion around this controversy, we have focused our work on defining what the role of the government of the City of Los Angeles should be over the next five years, given the unique characteristics of our City, the expected changes in technology, and the goals we have set out to achieve. The possible roles for the City that we considered can be summarized in a series of “Business models” or scenarios as follows:

A. None. Established City policies and processes currently in place are working. No need to take action. Factors related to the availability of advanced communications technology, e.g., the delivery of e-government to citizens and the management of rights-of-way are keeping pace with the public’s demand for advanced broadband services.

B. Public Spaces Only. City provides broadband communication

services, both wireless and wireline, in key public spaces. These services are provided through public/private partnerships that extend existing “wired” broadband from City facilities such as civic centers and libraries into public gathering spots. This could also be expanded to include key redevelopment project areas, commercial corridors and commercial centers, such as CRA/LA’s Pershing Square Public WiFi District.


C. Network Partnership Models. Large “metro scale” networks are developed in partnership with telecommunications industry – these can take many forms:

1. City Built and Owned Infrastructure. City infrastructure could

provide wholesale services to telecommunications providers. The City could provide the physical infrastructure itself, financing its construction and then auction its use to multiple, competing ISP’s, presumably on an auctioned usage fee-type basis. The City could also leverage its ownership of these facilities to provide lower cost services to under served areas or those in which it wants to focus its redevelopment efforts.

2. Real Estate Management. - The City could explicitly welcome

communication infrastructure build outs by any interested firm or entrepreneur on City property. This may result in several/many redundant communication networks. While no one can be really sure where such “open competition” by infrastructure builders might lead, if the City makes some of its physical assets available to all for a fee on a non-exclusive basis and couples that offer with streamlined permitting processes to increase the economic value of doing business with the City, the revenue opportunities for the City become very attractive and the process itself creates an opportunity to influence the nature and direction of wireless communication network deployments.

3. Franchise Model. - The City could “favor” (franchise or approve) a

single physical tower network build on “its” property or rights of way, on condition that that network’s owner would make the network available to multiple competing ISP’s on “equal terms”. This would put the City into new and perhaps uncomfortable regulatory duties. However, the use of such a model requires rigorous enforcement of equal terms and conditions access to each ISP or else it has the potential to create a last mile bottleneck for these new services.

4. Leverage Procurement Model. - The City provides market

incentives for the development of networks by purchasing such service. Some cities, including Los Angeles, have constructed fiber based communications network infrastructure to support their internal communications needs. There are a number of examples of cities that have leveraged these existing networks by making incremental investments to develop metro-scale wireless broadband networks. These wireless networks expand the availability of broadband services by using the “wired” network


facilities to provide the necessary physical links, or backhaul, to the Internet.

D. Retail Model. City provides broadband service directly to business and

residents using a retail model. City owned and operated infrastructure is built to deliver “end to end” services that could include wireless and wireline data, as well as other services.

The panel rejected the “do nothing” model because the majority believe that any gaps in providing affordable, convenient high speed communication services will not be filled through unaided private sector efforts alone during the next five years. Our concerns with regard to closing or at least “leveling up” the digital divide for the City’s residents and businesses make it imperative that the City play an active role. We also believe the “retail model”, is problematic for the City of Los Angeles with its challenging fiscal environment. The regulatory and legal challenges of the “franchise model” make this approach unattractive. Furthermore, the economics of the new technologies work against the franchise model.

We believe that the social and geographic diversity of our City makes it unlikely that any one of the other approaches or models will be appropriate for all settings. However we do believe that the other models can be used as a catalyst by the City to accelerate the deployment of WAB technologies. The City’s role regarding the deployment of advanced communications services in Los Angeles should be driven by the needs of its users, based on periodic assessment studies and community input from Neighborhood Councils and other groups. The plan should proceed in phases to assure constant attention to user needs and the rapid changes in technological alternatives. We also believe that the decision on what role the City should play must address the following critical issues for the provision of fast, easy, ubiquitous communication services. Critical Issues Digital Divide There is no silver bullet to solve the myriad of issues that created the so-called “Digital Divide.” For one thing, the issue itself has many interrelated components such as availability of both access services and devices, affordability, both as to service and device, convenience, knowledge or skills in utilizing the service or device and the relative level of performance of the service or device for any particular group or area. Nor will any one business model enable all communities without high speed broadband to power up and surf the web. There are however


three possible solutions that have the potential to “Level Up” the digital divide in terms of service access and affordability that are within this plan’s scope:

A. The Real Need for Ubiquitous Residential Coverage: Residential Communities on both sides of the digital divide will not necessarily have the need nor would they utilize all the various applications that require high speed broadband. While technologies are going to be driven by the consumer demand for broadband applications (data, video, voice, broadcast on demand etc.), not all residents regardless of location require, nor can they necessarily afford, every application that the network operator wants to sell. While there is a cost for basic service, competition between cable companies, traditional telephone service providers, and now satellite service and broadband over power line providers, are likely to continue to drive down the cost for basic Internet access. In addition, bundling of services in promotion of a particular brand name may very well provide basic Internet service and on-line access to City services for free. What is not known is if there are any current gaps in providing basic residential access anywhere in Los Angeles and affordable, dependable broadband services within lower income business districts. Finding the answer to that question should be one of the first action items in any comprehensive broadband policy for the City.

B. City Owned/Community Facilities as Alternatives to Ubiquitous

Coverage: Even if such gaps are found to exist, there might be better ways to expand the availability of broadband where it is needed than direct deployment to each home. The City of Los Angeles has many opportunities to leverage existing and potential network infrastructure, such as hundreds of miles of City and DWP fiber optic network, Institutional Network capacity resulting from Cable Franchise renewals, and access to rights-of-way in City facilities. This and other technological solutions that ensure fast and easy access to the Net in all community buildings, including Housing Authority facilities, in Los Angeles are the quickest and easiest way to begin to close this particular Digital Divide. A comprehensive review/inventory of public facilities with broadband connections should be undertaken and facilities with broadband connections that could be outfitted with wireless public access should be identified.

C. Personalized Broadband Services: Even though the provision of access

to broadband services at municipal facilities is a necessary first step in the achievement of our proposed mission, within the space of five years we believe most people would not want to travel to a central location to gain access to broadband networks. Fortunately, the inherently lower cost structure of WAB technologies makes it possible for the City to begin to address this issue in ways that were outside its capacity in the past. While some aspects of the Digital Divide such as devices, service performance,


and education are beyond the scope of this panel’s work, in the time span of five years, we believe the City should also have a plan that will address this issue of convenient access to the Net for all its residents, businesses and visitors that takes into account both public and private activities. It can help address these other factors by empowering community based non-profit stakeholders and leveraging grant opportunities to undertake such a role.

Network Security When considering the potential deployment of WiFi networks, security issues become extraordinarily important when the City is involved. The wireless network paradigm has developed at an exponential rate in the amazingly short time of just the last 5 years. Because of this rapid development of radio and access technology, the newly developed broadband capabilities available with wireless networks now make them attractive targets to network hackers. As well, wireless applications involving sensitive data have evolved much faster than the security protocols necessary to protect that data. By their nature, and almost by definition in the case of ‘public’ networks, WiFi networks are inherently insecure. In contrast, the physical LAN/WAN networks we are used to dealing with have a layer of physical security that can be applied to thwart unauthorized network access that wireless networks do not have. It is the very ease of access and increasing availability of the wireless world that makes it so vulnerable from a security standpoint. The most recent example of this phenomenon was the ability to capture personal data from anyone attending the Academy Awards who were using Bluetooth enabled cell phones by several people standing outside on the red carpet with some basic radio equipment. As wireless network standards have evolved, security protocols have become increasingly more effective and will continue to do so. But there is a trade-off that has to be considered. All else being equal, increasing the level of security of the network and of the data it carries will result in a decrease in network performance and accessibility. User frustration with a network that is secure but difficult to use can easily cause frustration with the City, if it is perceived to be the owner and provider of such services. And the unique responsibility that governments carry to assure privacy protection for information they “collect” makes security concerns a critical consideration in any decision about what role the City should play in providing high speed communication services. As a result, the solutions we recommend for achieving our goal for fast and easy communication services in Los Angeles, avoid placing the City directly in the role of a service provider responsible for maintaining the security of the communications on the network.


Financing In order for the City to determine the comparable benefits of any particular plan for deployment of high speed communication services, engineering design cost studies are needed to properly evaluate the business model and public policy environment in which the technology will be deployed. It will essentially require a ‘Decision-Making Calculus’ in order for the City to determine by what basis, business model and process it should determine its role. This “Decision Making Calculus” is imperative given the risks of mergers impacting collocation revenue; lease cancellation and decommissioning risk; not to mention telecommunication obsolescence from emerging technologies. Furthermore, any business model of a ubiquitous broadband plan must address the approval process for deployment of wireless and broadband facilities, and define the fees, rents and property taxes from the plan; especially in light of the FCC and the U.S. Supreme Court upholding that Wireless Industry Service Providers (“WISP’s”) must be given mounting rights on utility poles, in a “cost efficient and environmentally friendly manner; . . . with the only exception being where there is insufficient capacity, or for reasons of public safety, reliability, and generally applicable purposes.” U.S.C. Section 224(F) (2). A rough estimate of the cost to provide WiFi networks for one square mile of open space in a City is approximately $150,000 to $200,000, assuming the focus is on open space access. Maintenance and management costs can be assumed to double the initial capital investment costs. Assuming any such technology will be obsolete within five years, any investment, not including backhaul and connectivity costs, in such networks by the City would require the generation of approximately $400,000 in revenue, over those five years, in that square mile from either retail or wholesale users. Those rough calculations suggest the need for significant ongoing revenues for the City to recover the initial capital cost. If the charge for such services was $15 per month per retail user, about 450 would need to subscribe, for example, for the City to break even on its investment. All of these considerations argue against a significant expenditure of taxpayer dollars for the purpose of providing advanced communication services, even at the cost of today’s technologies, unless a solid calculation of the Return on that Investment can be made. Just a small change in the estimate of technological obsolescence in the above calculations could undermine the business plan and possibly expose the City to even further financial expenditures. The City is not in a position to oversee the business of marketing such services with sufficient savvy to generate the required level of user acceptance and penetration. On the other hand, future technology may be available at even lower costs making such an investment more viable. However, there are other ways to leverage the City’s financial resources to accomplish our mission. For instance, the City of Los Angeles does have the ability to issue Certificates of Participation as a form of tax-exempt long-term debt to finance public facilities.


One example would be using such vehicles to finance expansion of the City’s fiber network. Or the City could lease its facilities to the private sector for the construction of communication towers and the like and use the proceeds from such leases to cover the cost of the bond issue. Whether or not these bonds would have tax-exempt status would depend on how the leases are structured and whether such facilities are open to all. In addition to the use of tax exempt bonds secured with an annual repayment stream, there are many opportunities for public agencies to work together in laying fiber or using telecommunication networks for the financial benefit of all, and generating either new revenue or cost savings that could be used to pay for the initial deployment of wireless networks. Because of the many applications available from the use of these networks, there are economies of scale that can also be realized through partnerships in using available and future federal grant opportunities such as Homeland Security, reauthorization of T21, and telecommunication networking opportunities within Department of Commerce, HUD, HHS, and Education. Future partnerships are also possible with LAUSD, MTA, CalTrans, Metrolink, Housing Authority, LAPD, etc. In addition, there are opportunities for partnership with Business Improvement Districts and other Community Redevelopment Agency strategies. And some cities have been able to finance initial build outs just from the increased revenue that using such technologies to monitor and collect parking revenues can produce. The City Administrative Office’s Grant Coordinator should take the lead in creating such partnerships across City Departments to secure these funds. Recommendations Our fundamental recommendation is the adoption by the Mayor and Council of a coordinated plan, phased in over five years, that leverages existing communications infrastructure to build and enhance broadband networks. The plan should incorporate the following key strategies:

1. Encourage the adoption of public/private partnerships designed to deploy fast and easy communications services in every neighborhood. Initially, these should take several forms using appropriate models such as the Public Spaces, Leveraged Procurement, and Real Estate Models described in our report. We salute the recent RFI issued by the City as taking the necessary first step to initiate this latter model.

Another critical element of this approach is to couple the offer to lease City facilities for network equipment deployment with a streamlined approval process that encourages the private sector to take advantage of such facilities and gives preferred treatment to those private sector participants who work cooperatively with the City to develop the networks in the places and manner that helps the City achieve its overall goals.


It is clear the right business model for the City will vary over time and by location as user needs and technology changes. That is why it is important to involve Neighborhood Councils and other interested parties in initial pilots of different approaches before settling on any one particular model. But the approaches of the pilots should be built on the basic platform of a public/private partnership designed to increase the availability of such services and provide residents, visitors and businesses more choices in how they gain access to them. Properly constructed these public/private partnerships can nurture an eco-system that encourages the growth of ubiquitous broadband networks with the technologies most likely to produce fast, easy access to the Net for all users.

2. As part of the first phase of the coordinated plan, conduct a citywide broadband survey to determine if there are any gaps in the availability of broadband services for residents and businesses in Los Angeles. Such a survey would also be a valuable tool in assessing the potential demand for less expensive services or more accessible ones, such as wireless broadband. Neighborhood Councils and other groups such as Business Improvement Districts, and local Chambers of Commerce should be asked to determine the level of interest and demand for such services in each of their areas as part of this assessment as well. Any gaps in availability of service access that are found in the course of the survey should be addressed using the public/private partnership model as quickly as possible.

3. A review of the available City-owned physical assets in the City’s

rights-of-way, including facilities, should be done to determine the available “space” that could potentially be used to construct broadband networks. The City’s process for granting easements for the development of advanced broadband communications networks should also be reviewed to determine its effectiveness. A more coordinated process, with the appropriate level of oversight may need to be developed. Over the next 5 years, effective rights-of-way management, planning and land use may be one of the most important factors in shaping Los Angeles’ broadband future.

4. Provide all City residents fast and easy access to the Net in all

municipal facilities within three years. The Marvin Braude building trial of a city provided hot spot should be reviewed to determine the level of usage generated, the operational issues uncovered and the financial costs of such an approach, with the goal of developing a sustainable operational model. In general, our panel believes that public/private partnerships, where the City is not the direct provider, offer a better alternative to accomplishing this recommendation. Every City library should be


connected to the high speed fiber available to them for providing community access to the Net. Those libraries that are close to fiber should be done in the first phase of the plan. The final plan should identify every type of community facility the City manages and provide a date and methodology for turning up high speed communication services at that location, with the requisite funding coming from the financing methodologies described here in this report.

5. In addition the City should ensure that fast and easy communication

services are available in key public places and commercial corridors used by visitors and travelers of all types. We believe that these key public places (KPP) should be determined by the Mayor and City Council, with input from Neighborhood Councils, Business Improvement Districts, and local Chambers of Commerce, as part of the first phase of the plan. In the second phase, the use of our recommended public/private partnership and financing methods should be utilized to ensure deployment into each KPP based on the lessons learned from such current trials as the Civic Center, Pershing Square and Little Tokyo.

6. Encourage public/private partnerships that would create new e-

government applications of benefit to the City of Los Angeles and ensure that City of Los Angeles web pages that provide information about and access to various City services, are incorporated into such services. Any service provider receiving benefits from the City would be required under their contract with the City to incorporate this page, a modified version of the City’s current portal at www.lacity.org, into their service delivery package. Others providing service within the City would also be encouraged to include this “Garden Wall” content in their service. In City owned areas such as the City libraries, schools, community centers, parks and recreational areas providing WiFi or other broadband access, branding of the City services is not only logical but obvious, but our recommendation extends that idea to create a City of Los Angeles ‘Brand Identity” for all residents, businesses and visitors, who choose to use this portal. By providing access to e-government services, location based services such as transportation and traffic information, and news and entertainment information about what’s going on in Los Angeles, the “Garden Wall” will address many of the needs and wants of users identified earlier. Management and maintenance of the portal should be done by the City and paid for through revenues from our recommended public/private partnership model.

7. Finance these activities through the use of securitized bonds (tax

exempt of taxable depending upon the use of the proceeds), savings from cross-departmental and agency partnering, and grant funding for specific projects. The issuance of Certificates of Participation to finance the construction of public facilities and the expansion of the City’s


fiber network is a power available to the City. It can be used for this purpose as the City opens its real estate assets and rights of way for the purpose of leasing sites for the deployment of communication network equipment or to encourage the use of its fiber network by telecommunication and service firms that do not have such assets. To further justify this approach, the City could act as anchor tenant for those network facilities it has particular interest in seeing deployed. Either the City or a non-profit entity the City creates, could apply for state and federal grants and even private foundation donations to further finance the costs of network management and effective social and/or economic development programs that utilize these services. Improving the efficiency of revenue collection activities such as parking meter and code enforcement provide additional opportunities to produce revenue to finance the City’s role as catalyst for the deployment of WAB technologies. These tactics, along with a clear focus on the reduction of other communication services costs to the City through the utilization of the newly deployed WAB technologies, should provide sufficient funds for the recommendations made here.

8. Finally, the City of Los Angeles should become a national and local

champion of ubiquitous broadband technologies. The technology industries, including standards bodies such as the Institute of Electrical and Electronics Engineers (IEEE), must complete their work setting uniform technical standards for future wireless broadband platforms, including Wi-Max and its variants. The City can use its influence to encourage this important work. The Federal Communications Commission (FCC) will determine frequency access for the new technologies. This is another area where the City can favor early and bold FCC action that speeds and facilitates wide-spread adoption of WAB technologies.

Conclusion Policy makers for the City of Los Angeles have a unique opportunity to lead the way in the deployment of fast and easy advanced communication services for every type of user in the City. When fully available through the adoption of a coordinated, phased plan that establishes a public/private partnership to accomplish its goals, this seamless cloud of communication capabilities should:

• Generate more economic activity within the City. While the expenditures for deploying lower cost networks are not likely to produce significant job gains, the overall growth of high speed communications will provide employment for many and that is one reason why our recommendations deliberately avoid creating impediments to private sector investments in L.A. for those purposes. In addition, the extension of such services to areas that are not currently served has been demonstrated to be an important component of an overall economic


development strategy, in places such as Watts and Little Tokyo. Our recommendations for closing the Digital Divide anticipate that this phenomenon will be repeated in other such areas of the City over the next five years.

• Improve the operational effectiveness and efficiency of the City’s

government. Additional savings to the City might flow from a comprehensive review of its existing communications infrastructure, performed in cooperation with the incumbent providers. Linking that more efficient network through wireless services will save even more money as, for example, code enforcement officers no longer have to return to the office through Los Angeles traffic to fill out their reports; sanitation workers send pictures of trash requiring special pickup to the right truck that can immediately respond to such calls; and crimes are solved based on capturing video images from City streets and sidewalks, rather than the time consuming traditional detective work required today. The savings generated from such applications can be used to fund further deployment of e-government services creating a virtuous cycle of innovation and savings while bringing more and more of the City to the fingertips of each resident, business or visitor who comes to the City’s portal.

• Help close the Digital Divide. Initial pilots for the City’s involvement in

helping to spur the deployment of WAB technologies should focus on currently underserved areas of the City to provide some initial momentum to close at least the access part of the Digital Divide. Surveying the City to determine where such gaps currently exist will help focus those efforts. And bringing fast, easy Internet access to both municipal facilities and public meeting places during the first three years of the plan will also help address current disparities in access in the City. So too will efforts such as the Targeted Neighborhood Initiative in which a team of City Departments and other agencies work together to focus their resources on Digital Divide issues. But in the long run, the fundamental strategy of using the City’s assets and powers to spur the development of affordable, convenient access to the Net utilizing the new network economics of WAB technologies should be adopted by the City because it will, through the inevitable application of Metcalfe’s Law, spur the spread of applications and services that every resident, visitor and business will be able to afford and utilize.

• Make Los Angeles an even more exciting place to experience. With

whole-city wireless broadband you get “nomadicity”- the ability to travel with your laptop, PDA, Cell phone or other device and connect to the Internet wherever you are, including on a City bus or the Metro. And it is just not email, it is the range of broadband services, including video and low-cost Internet calling. This makes businesses and municipal workers more productive and visitors and residents alike more connected to the


City. Neighborhoods can be woven together through this communication cloud as people create a community online bulletin board or web blogs that allow neighbors to post messages to one another and discuss local issues, upcoming events, and items for sale or trade. People who are new to the area can ask residents for their favorite restaurants, green grocers and dry cleaners; others can organize to solve problems in the neighborhood. And access to such neighborhood bulletin boards through the City’s own portal, can provide an increased sense of place in an increasingly homogenized metropolis. By creating, in effect, very localized travel guides, locally-owned and operated businesses that are the hallmarks of local flavor and history can be given much greater exposure. These places, like the downtown café with greasy breakfasts and stout coffee, the old bakery where the owner still rolls the dough, the local bookstore with the box labeled, “leave a book, take a book,” our favorite college hangouts, and the local watering holes and neighborhood eateries are the out-of-the-way treasures and best-kept secrets that every travel guide to a city attempts to reveal to its visitors. When you experience them, the City becomes a more exciting place to be.

These and other benefits await the City of Los Angeles if it adopts our recommendations and becomes a ‘broadband city’ both in reality and in global reputation.

Appendix A Description of WiFi and WiMax Technologies

Wi-Fi is a technology that allows broadband connectivity within ranges of a few 100 feet from a piece of hardware called the WiFi access point. It transmits over the unlicensed spectrum which is one the reasons for its rapid growth. It is very popular in the US and is growing in popularity worldwide at a rapid pace. By blanketing entire regions or campuses with WiFi access points, wide area coverage can be obtained. Standards – There are three prevalent standards of WiFi as follows:

i. IEEE 802.11b – This is the most common standard that transmits data at 2.4GHz with a bandwidth of 11 MBPS

ii. IEEE 802.11a – This standard transmits data at 5GHz band with a bandwidth of 54 MBPS.

iii. IEEEE 802.11g – This is backwards compatible with 802.11B and operates at the same frequency of 2.4GHz, and provides bandwidths of 54MBPS.

iv. 802.11n – This is a new standard proposed recently which is supposed to give a bandwidth of 100MBPS with a range that significantly exceeds the previous versions of WiFi.

More information on WiFi is available at http://en.wikipedia.org/wiki/802.11#802.11n. WiMAX In layman’s terms, WiMax is a significantly longer range version (up to 31 miles) of WiFi with bandwidths that are somewhat higher than WiFi’s WiMax operates both on licensed as well as unlicensed spectrums. It is being touted as a technology that can be a replacement for the DSL/cable for applications that are point to multipoint. The IEEE 802.16d is a recent standard for WiMax that is touted to connect 60 businesses with a T1 type line or a 1000 homes with a 1MBPS type service. More information is available http://en.wikipedia.org/wiki/Wimax. Difference between WiFi and WiMax WiFi is meant to connect an access point to a computer or PDA within a distance of 100 – 200 feet. Outdoor coverage can extend over a few city blocks using “carrier-grade” equipment. WiMax is meant to connect an access point to another device or a network at a distance of up to several miles. WiMax is being designed for a large number of users sharing the network whereas WiFi is designed for a small number of users. WiFi operates exclusively on the unlicensed spectrum, where WiMax operates on both licensed and unlicensed.

Differences between 3G (cellular) technologies and WiFi/WiMax

3G is a wide area broadband technology that is typically serviced by a carrier since it involves using licensed spectrum to connect devices to the network. WiFi/WiMax on the other hand have an option of an unlicensed spectrum. There are significant differences between 3G and WiFi/WiMax, in particular because the latter started out as short-range unlicensed technologies. More information on 3G is available at http://www.atdi.com/glossary.htm

Appendix B Current WiFi Hotspots in Los Angeles

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k:\Maps\Av_proj\fiber_optic\APC_CensusPopWiFi

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Source: U.S. Census Bureau - Population DataJwire.com, wi-fihotspotlist.com, wififreespot.com, metrofreefi.com - WiFi Service Areas.

LegendNeighborhood Service Area

Census 2003

L.A. FreewaysL.A. Primary Streets

Central 680,188

East LA 399,972

Harbor 198,040

North Valley 665,681

South LA 693,615

West LA 395,166

Population

South Valley 718,355

WiFi Service Areas

5

Municipal Free Use Sites - 12!.

!. Municipal Fee Based Sites - 9

!( Private Free Use Sites - 44

Note: Data is based on a best effort to compile LA area WiFi sites.The list is not exhaustive, and may not include WiFi networks that arenot listed in these directories.

!. Private Fee Based Sites - 160

Appendix C

Summary of WiFi Networks in Other Cities

City Type of Network Owner Business Model

New York City, NY Pop. 8,000,000 303 sq. mi.

Public: Total Locations 767 Municipal: Developing Public Safety Network

Non-profit NYC Wireless owns networks City will own public safety network

Public: Free public access http://www.nycwireless.net/ Muni: Increased public safety

Chicago, IL Pop. 2,896,016 227 sq. mi.

Public: City Library system offers free wireless access City Free public WiFi access at 79 branch locations

Philadelphia, PA Pop. 1,492,231 135 sq. mi.

Public: 5 pilot projects. Developing City-wide network Non-profit

Cooperative Wholesale mode. City encourages the creation of a non-profit organization to raise the required funding, facilitate the RFP for the design, deployment, and management of the WAB network, and work with private providers interested in utilizing wholesale access to the network to provide their own retail services to customers. The model is not restrictive, since private providers not interested in the wholesale program can deploy their own network infrastructure.

Long Beach, CA Pop. 461,522 50 sq. mi.

Public: Downtown Business District Non-profit Free public access

http://www.longbeachportals.com/wireless/downtown/logged-in.php# Corpus Christi, TX Pop. 278,520 155 sq. mi.

Municipal: Supports city services i.e. public safety and wireless meter reading

City City has partnered with Tropos to extend existing fiber optic network using Wi-Fi mesh technology. http://www.muniwireless.com/archives/000402.html

Riverside, CA Pop. 274,226 78 sq. mi.

Public: SmartRiverside Downtown Wireless Mall City is one of several sponsors

Non-Profit SmartRiverside

Free public access - supported by sponsors http://www.smartriverside.com/srindex.cfm

City Type of Network Owner Business Model

Fontana, CA Pop. 143,607 36 sq. mi.

Public and Municipal: Will support city services and provide service to business and residents

City Proposal to develop core infrastructure servicing all public entities, including schools, and utilities in the city. This will include fiber to the home or business. http://www.fontana.org/main/mgmt_serv/fiber/ fiber.htm

Spokane, WA Pop. 196,000 56 sq. mi.

Public and Municipal: Supports city services Public/Private Free public access - supported by sponsors

http://www.downtownspokane.com/downtownspokane/#

Cerritos, CA Pop. 51,000 9 sq. mi.

Public and Municipal: Aiirmesh wireless ISP Aiirmesh $29/mo for residential customers Service rates discounted for

Police/Fire/Municipal workers

Hermosa Beach, CA Pop. 19,000 1.4 sq. mi.

Public and Municipal: Planned Police and Fire use City Free WiFi service: advertisement supported

prepared by the mayor’s wifi & beyond executive advisory ... · mayor, city of los angeles...

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