Monday, April 03, 2000
Mixed reviews for fiber-optic network
BY CINDI ANDREWS
The Cincinnati Enquirer
LEBANON — A year old, the city's telecommunications experiment appears to be on the verge of breaking even, but don't expect a rush of other communities to try this at home.
Jim Baldwin, telecommunications director, says the fiber-optic network, which uses these sattelite dishes, has grown with Lebanon.
(Michael Snyder photo)
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Lebanon is one of a handful of cities nationwide that has built a municipal fiber-optic network capable of bringing cable TV, telephone service, high-speed Internet access, remote meter reading and public safety information to every house.
“I think we've been an unqualified success,” telecommunications director Jim Baldwin said. “We're providing quality services for residents that were either not available at all or were available at a monopoly-driven price.”
Not everyone agrees. Critics include residents and politicians who are aghast at the $8.2 million price tag, and, of course, local cable provider Time-Warner.
“Most communities that we do business with choose to spend their money on safety and recreation rather than compete with us,” said Jennifer Mooney, vice president of public affairs for Time-Warner's southwest Ohio operations.
Attractions of Lebanon's city-owned system:
• Cable TV costs $20.98 for a standard package, about a third less than what Time-Warner charges for similar packages elsewhere.
• An Internet connection that's speedier than modems and a boon for businesses, with a $39.95-per-month commer cial rate.
“It is incredibly faster and less expensive that what we had before,” said Steve Wilson, president and chief execu tive officer of Lebanon Citizens National Bank.
• Local phone service that will extend to Cincinnati and Dayton when installation is fin ished, possibly by the end of the summer.
“That's a huge deal — huge,” Lebanon resident Cathy Mick said. “I can call Waynesville, and I can call Mason. Everything (else) is long distance.”
• The ability to add services such as remote electric meter reading and in-home emergency weather alerts. Unlike with private cable systems, all homes have been wired regardless of whether residents signed up for cable.
Cost has been steep. The system lost $1 million in its first year, said Councilman Mark Flick, chairman of the city's finance committee, and it's still losing money.
The project grew, Mr. Baldwin said, because the city has added houses so quickly. Lines also have been run to planned subdivisions that are not yet built.
Payments on the debt must come from elsewhere in the city budget until revenues draw even. Telecommunications should be in the black by fall, Mr. Flick estimated.
The political cost has been big, too. Disagreements over the system have contributed to a contentious atmosphere on council. Councilman Joe McKenzie unexpectedly resigned last week after warning that telecommunications was “hemorrhaging” — a charge denied by Mr. Flick.
“It hurts me to have to say it, but this system's in trouble,” Mr. McKenzie told a finance committee meeting. “And no one's listening to me.”
City Manager Richard Hayward, who introduced the idea of building a telecommunications system, was forced out in late 1998.
Councilwoman Mary Ann Cole, an opponent of the system, was removed in a recall election in mid-1998, and Councilman Michael Coyan resigned shortly thereafter.
The telecommunications system survived them all, and cable service started in March 1999. Digital cable begins today.
Even those who say the city should not be providing telecommunications concede they have benefited. Resident Ellen Allen, who has Time-Warner cable, says the price fell and digital was added faster after the city built its system. “That was some good that came out of it.”
Time-Warner matched city prices and occasionally offered specials that undercut the city, but it clearly has suffered. About 2,300 of Lebanon's more than 7,000 homes and businesses have city cable, Mr. Baldwin said.
Ms. Mooney said Time-Warner has “slightly fewer” subscribers than a year ago, but Mr. Baldwin contends Time-Warner had 3,200 then and has fewer than the city now.
It's not fair that Lebanon, as a government entity, regulates its competitor, collecting fees and taxes from Time-Warner, Ms. Mooney said. A bill to limit municipal ownership of cable systems has languished in the General Assembly for more than a year.
Nonetheless, she said, Time-Warner plans to stay in Lebanon.
Regardless of whether Lebanon's system is ultimately judged a success, Mr. Baldwin said other cities should not rush to build their own telecommunications systems.
“Cable television alone won't pay the bills,” he said. “This is not for everybody. It's very expensive.”
Many factors made Lebanon a strong candidate, he said:
• The city-owned electric utility provided utility poles, an experienced staff and office space for the telecommunications effort.
• The limited local calling area for this city midway between Cincinnati and Dayton.
• The lack of high-speed Internet access.
Cincinnati, for example, would be a poor candidate, Mr. Baldwin said. Residents there are happy with Cincinnati Bell; Time-Warner has poor penetration; and two companies offer high-speed Internet access, he said.
Likewise, Monroe Mayor Elbert Tannreuther said, his city is not interested in linking to Lebanon's telecommunications system because Monroe does not have the infrastructure.
Other Warren County communities, however, are looking into connecting with Lebanon.
“The question is, should you introduce competition into the mix by the municipality having its own system?” Middletown Commissioner Jerry Banks said. He's treasurer of the Warren County Municipal League, which has formed a subcommittee to look for answers.
“You look at the price, and you can tell what we're looking at is a monopolistic system,” Mr. Banks said of Time-Warner. “I don't think anybody's happy with a monopoly.”
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