Report backs broadband plan CivicNet called vital to Chicago’s firms

Inside Digital Kitchen’s River North offices, working versions of TV commercials and movie clips flash nearly instantly from computer to computer, allowing designers and editors to collaborate.

But when it comes time to send the fat computer files of high-definition video to colleagues in Seattle and Los Angeles, Digital Kitchen resorts to dropping digital tapes in overnight mail. That’s because the firm’s broadband connection–a high-speed T1 line–isn’t fast enough to transmit efficiently the files’ billions of bits of data.

By Barbara Rose
Tribune staff reporter

http://www.chicagotribune.com/business/chi-0403150131mar15,1,6232499.story?coll=chi-business-hed

"Right now we’re turning down jobs, and part of the reason is not having the physical bandwidth to work collaboratively in all our offices," said President and Executive Producer Don McNeill.

Faster service is available for 5 to 10 times what Digital Kitchen pays, but McNeill said his firm "can’t make it work financially."

Digital Kitchen is among the businesses–from high-tech firms to manufacturers such as Ford Motor Co.–highlighted in a report to be released Monday to build support for a long-stalled City Hall initiative.

"From Broad Shoulders to Broadband," by the non-profit Metropolitan Planning Council, states that even though Chicago is a worldwide Internet hub, many neighborhoods still cannot access even basic broadband service.

The report argues that many neighborhoods will be left behind economically unless the city moves forward with CivicNet, a project designed to save taxpayer money while extending affordable broadband service.

CivicNet envisioned pooling the city’s estimated $30 million annual spending on telecom services to contract with private carriers to connect 1,600 schools, libraries, police and fire stations and other facilities in a high-speed network.

In exchange for winning the city’s business for 10 years, the carriers would provide an open network stretching to every neighborhood. While serving the city, the network also would provide new access nodes from which to sell private service, making broadband ubiquitous and more affordable.

Announced in 1999, CivicNet captured international attention as the first such ambitious undertaking. Then came the telecom industry’s collapse, a recession and the city’s budget crunch.

While cities such as Houston moved ahead on such projects, Chicago never completed the bidding process it kicked off in late 2000. Houston is saving more than $4 million annually by moving all city facilities to a broadband fiber network, according to the planning council.

A spokesman for Mayor Richard M. Daley’s office said CivicNet is "on hold, but nothing has been shelved or cancelled."

Bidders say privately they believe CivicNet is dead. They note that city agencies are renegotiating longer-term contracts separately.

City officials, meanwhile, no longer mention economic development or enhanced neighborhood services when discussing the project, instead stressing cost savings.

"It’s a volume purchase of voice and data," the mayor’s spokesman said. "It hasn’t fallen off the radar by any stretch of the imagination."

He noted that broadband technology has changed since the project’s inception, adding, "Who knows what the next phase will bring when it does get back on track?"

The planning council’s report makes a business case for CivicNet by showing that private broadband demand exists in areas where the network would be extended to city facilities. Technology decisions, such as whether to deploy fiber-optic cable or wireless solutions, would be left up to carriers, said Scott Goldstein, the group’s vice president for policy and planning.

"Chicago is built on infrastructure," he said. "We’ve gotten far economically by building infrastructure, whether it’s our railway network or O’Hare International Airport. Broadband is a basic necessity for any business."

The study, conducted for the planning council by Tangent Business Solutions, analyzed broadband demand and availability for small and midsize businesses and non-profits–customers that historically are underserved.

Tangent’s survey found that demand for higher-level broadband service–speeds of 3 megabits per second or greater, provided by multiple T1 lines–will surge over the next three years.

Forty-six percent of small and midsize businesses will require this service by 2007, compared with only 4.5 percent in 2002, Tangent found.

Tangent identified areas where businesses cannot access a basic, low-cost option for broadband service–digital subscriber lines–as well as areas where customers need higher-level service but are located too far from the city’s fiber-optic backbone to access it.

Broadband needs will become "acute" in city-designated industrial corridors such as West Kinzie Avenue, the Pilsen neighborhood and along the North Branch of the Chicago River, the report states.

According to the report, areas where some firms cannot get DSL service include the North Park and the Belmont and Central Avenues neighborhoods on the North Side; West Town, Logan Square and Little Village on the West Side; and Bronzeville, South Shore, Beverly and Pullman on the South Side.

"The percentage of small and midsize businesses that cannot currently receive DSL in Chicago is approximately 10 percent," the study states.

Goldstein said the planning council’s objective is to spark "economic renewal" and promote jobs. "Broadband is a very inexpensive way to better connect areas that have been left behind," he said. "It just makes sense from a budget standpoint.

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