Cities like Chattanooga, Tennessee, and Dublin, Ohio, have ranked among the early winners from their multimillion-dollar investments in Internet networks that provide the blazing 1-gigabit fiber-optic speeds required by bandwidth-hungry businesses — delivering 1,000 megabits of data transferred per second. Other cities, such as San Francisco, are focusing on deploying Internet-connected devices that control citywide systems such as transit and lighting, and collect data to make the entire city perform better as a support to business. And cities including Chicago and Pittsburgh are attempting to establish leading positions in building out networks of sensors that could make them meccas for the “Internet of Things” (IoT), connecting places as disparate as a college mess hall and a cross-river bridge into one nearly organic digital nexus that facilitates business and civic needs across an entire region.
Many engaged in smart-city development say that the immediate economic benefits of such efforts are real and that, even more important, these data-friendly networks may become table stakes in the intra-city competition of the future for companies that, across most industries, will become increasingly dependent on digital-technology infrastructures.
“You’ll see a lot of cities be able to go with more than 1 gigabit once they have the infrastructure,” says Marc Hudson, co-founder of Rocket Fiber, which is laying high-speed fiber in Detroit. “But, for a while, it will still be a differentiator. It still puts us on the leading edge because only a handful of cities are even doing this now.”
Dana McDaniel, now city manager of Dublin, a northwest suburb of Columbus, Ohio, remembers that “everyone thought we were crazy” when the economic development department he ran more than a decade ago began laying high-capacity fiber. “Now, they’d all like to do it. We recognized early on and deployed it relatively inexpensively, and now we’re leveraging the value of that.”
Investment That Paid Off
For such reasons, urges Danna Bailey, “Do whatever you need to do to get this infrastructure for your community.” Bailey is the vice president of corporate communications for EPB — the Tennessee electric utility that laid the local fiber-optic network that arguably has powered Chattanooga to the No. 1 position among America’s fast-fiber cities. “We get calls from folks all the time, and we’re happy to share our expertise because we believe strongly that this is something cities across the country need,” Bailey adds.
In fact, suggests Charles Wood, vice president of Economic Development for the Chattanooga Area Chamber of Commerce, “the best thing would be to have interconnectivity with other 1-gig cities. It would be to their and our benefit to be connected. It would open up the population that can work on it.” But nearly every other city would have a long way to go to catch up with Chattanooga, which now has a $370 million, fast fiber-optic network that has generated an estimated $1 billion in economic and social benefits, including as many as 5,200 new jobs, as well as an outsized reputation as one of the digital vanguards of American cities.
Do whatever you need to do to get this infrastructure for your community. We get calls from folks all the time, and we’re happy to share our expertise because we believe strongly that this is something cities across the country need. Danna Bailey, vice president of corporate communications for EPB — the Tennessee electric utility that laid the local fiber-optic network that arguably has powered Chattanooga to the No. 1 position among America’s fast-fiber cities. Chattanooga’s success is a result of foresight that now is a decade old. EPB began planning in 2005 to build out a new fast-fiber-optic infrastructure for both business and residential purposes, and the city council approved the plan in 2007. The entire network takes in 600 square miles that includes not only Chattanooga proper, but also most of the surrounding county and parts of eight additional counties in Tennessee and Georgia.
“One of our main goals in laying a pretty sophisticated and comprehensive automation network was to modernize our electric grid; most of the country hadn’t been modernized,” says Bailey of EPB. “We wanted to be able to add smart devices and sensors to have more insight into the health and performance of our grid, so that it could actually ‘self-heal’ by routing power around a problem and identifying things before we can fix them. We’ve seen a 50- to 60-percent reduction in the duration of power outages because of this.”
By 2009, roughly six years ahead of schedule, EPB also was taking advantage of hooking up customers to its network as a telecommunications and economic development player, and by late 2010, the utility was making available residential symmetrical interconnection speeds of up to 1 gigabit per second — the fastest Internet in the Western Hemisphere. By 2010, the utility saw a 150 percent increase in Internet customers. And by 2011, existing and startup companies that needed a lot of bandwidth discovered the 1-gig network in droves. The city, EPB, and their allies added to Chattanooga’s allure with efforts like a summer-long accelerator program called GIGTANK that focused on companies exploring uses for high bandwidth.
Citing or relying on the fast-fiber network as a major lure for their decisions, Claris Networks, a data-center company, set up an operation in Chattanooga; HomeServe, a home-warranty company, established a call center that now employs about 300 people. And adding to Chattanooga’s heritage and growth as a manufacturing capital have been bandwidth-hungry startups including Branch Technologies and two 3-D printing companies, Feetz, a “digital cobbler,” and 3D Models, which constructs digital copies of human hearts for practice before surgery.
A Model to Follow
This impressive track record has attracted admirers and wannabes from across the country. For example, Marc Hudson, co-founder of the high-gigabit Rocket Fiber in downtown Detroit, has attended a couple of Chattanooga’s GIGTANK competitions and notes how “that entire city has been transformed. Chattanooga has been a phenomenal visionary with what they’ve done.”
Hudson co-founded Rocket Fiber with backing by companies owned by Dan Gilbert, the billionaire who is funding so much of the renaissance of close-in Detroit. And Hudson believes that bringing fast fiber to a city the size of Detroit (which Rocket Fiber planned to begin before the end of 2015) could create a much greater overall economic impact than it has in Chattanooga.
“It will be massive and somewhat difficult to measure,” Hudson says. “But I think it will translate into something bigger here because Detroit is bigger, and our manufacturing footprint is bigger. And whereas Chattanooga started the fire, I think Rocket Fiber will pour fuel on the fire.”
Specifically, Rocket Fiber has initially been laying high-capacity fiber — which will provide Internet access and cable television at speeds up to 100 times faster than the nation’s current average residential speed — in the Central Business District of Detroit. It plans quick expansion to the city’s “Midtown” district and other business- and resident-dense areas. This not only will boost productivity in basic tasks such as downloading files and sending e-mail but, more importantly, “will be a platform of innovation,” Hudson explains.
“Big thinkers and entrepreneurs who want to create the next generation of web-based products will be able to utilize some of the fastest Internet in the world right here in Detroit to tinker and build,” Hudson told Crain’s Detroit Business. “We’ve always had a history of innovation here in Detroit, and now we’ll have more cutting-edge digital infrastructure [that] we need to continue that tradition.”
While Detroit and some other cities are looking at fast-fiber networks as ways to provide an economic development jolt, McDaniel of Dublin, Ohio, says his city built its success in this arena by taking another approach: laying cable at first simply to improve municipal services. The idea of leveraging this new infrastructure to lure expanding and new companies came later.
In fact, the best thing would be to have interconnectivity with other 1-gig cities. It would be to their and our benefit to be connected. It would open up the population that can work on it. Charles Wood, vice president of Economic Development for the Chattanooga Area Chamber of Commerce Dublin initially deployed about 20 miles of conduit underground, beginning nearly two decades ago, as a way of protecting its right of way in the “wild-west” era of building telecom infrastructure that was unfolding. Soon it began connecting city facilities with fiber optics and reaping the value of productivity boosts. When the telecom bust of 2000 made adjacent digital pathways available, Dublin added ownership of another 100 miles that wended throughout adjacent Columbus and some of its other suburbs.
Soon Dublin was working with the Ohio Academic Resources Network to connect the state’s colleges, universities, and research institutions to one another, and in 2004 hooked up a Dublin satellite office of the prestigious Battelle Memorial Institute with the mother ship in Columbus. “That’s when we realized we could have some value for the business community,” McDaniel notes.
Over the last decade, Dublin has worked to hand off “dark-fiber” lengths of its network to eager companies for them to develop and utilize as they wish, and the economic development benefits have flowed. One of the first major deals was the siting of 300 back-office jobs in Dublin by OhioHealth, a major healthcare provider.
“We were competing with other places and had pitched them all sorts of traditional incentives, but we weren’t getting out ahead, and so and I finally pitched them one more time,” McDaniel recalled. “So I went to them and had this map of our network, with all their hospitals and back-office operations plotted out, and their surgical centers, and headquarters building. And I said that I didn’t have any other monetary offerings, but I did have this fiber-optics system and two pairs of fiber that I could provide them at no expense.” According to McDaniel, that sealed the deal.
In fact, McDaniel says about 10,000 jobs overall have come to Dublin that have been specifically attached to deals in which its fast fiber was the most important, or a major, factor. In addition, the arrival of those companies and projects has yielded $31 million in direct tax revenues to the city, even as Dublin has been able to reap nearly $5 million in savings and cost avoidance for its own operations.
And now, Dublin is adding to its edge by installing fiber-optic laterals into office buildings and allowing for up to 100 gigabits of high-speed broadband capacity within the city. This will be especially helpful, McDaniel says, to small- and medium-sized companies with limited IT operations.
Walk Before You Run
But McDaniel advises other cities with fast-fiber dreams to walk before they run. Yet, such has become the documented effectiveness of a fast-fiber play for more cities that, fewer than 150 miles to the northeast of Dublin, the city of Hudson, Ohio, seems ready to take the plunge. Marketed under the name Velocity Broadband, a new city-owned entity offering 1-gigabit service is opening this month.
Without mentioning any way in which Velocity Broadband would streamline municipal operations, the city called it “a key economic development initiative that will position [Hudson] for future expansion, while advancing local businesses.”
So the question remains, “If you build it, will they come?”
Small Cities Add Fiber Optics to Their AssetsOne community that modeled itself on Chattanooga’s high-speed fiber optic network is Opelika, Alabama. Through a comprehensive broadband fiber optic system deployment by the local power company — Opelika Power Services (OPS) — Opelika has built its own “on-ramp” to the global information highway, thus creating a new local, digital communications asset that puts the city on the high-speed Internet map.
It also breaks new ground for the region. With the ?roll out of fiber-to-the-home services able to reach ?100 percent of its citizens, Opelika became the first ?city in Alabama to have fiber to the user, a smart grid telecommunications deployment that includes video (cable TV), ultra-high speed Internet, and telephone service. And through a new joint collaboration with Information Transport Solutions, Inc. (ITS), OPS now provides one gigabit of Internet access to Opelika City schools. According to Opelika’s Mayor Gary Fuller, “Opelika’s school system does an outstanding job ?of providing our children with advanced learning technology.”
Additionally, community leaders are hoping Opelika’s fiber installation will draw business as well. Working in partnership with Opelika Power Services, and technology partners like Alcatel-Lucent, in October 2014 local government, business, and economic development officials put plans in place to roll out ultra–high-speed fiber services, including phone, data, and video conferencing services to Opelika’s business, corporate, and industrial customers. To date, more than 425 miles of fiber connect Opelika customers to the network.
“It’s cutting-edge technology and world-class, and some folks might be surprised it’s here in a community of only 28,000 people,” proudly boasts Mayor Fuller. “It’s a big investment and a lot of money, and we believe it’s paying off,” the Mayor says, noting that approximately 300 businesses are already using the service.
Opelika is also home of the Round House, with 22,000 square feet of space for co-working, incubation and acceleration, user meetings, seminars, and mentoring. In an effort to promote business growth in Opelika, the City of Opelika and Opelika Economic Development have partnered with Round House, providing the symmetric gigabit service.