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The Initial Wave of I-Nets
The term "institutional network" or "I-Net" is often used loosely -- to refer to telecommunications networks built for the needs of state and local governments, schools, universities and libraries. The term has a specific and narrower meaning, however, in cable franchise regulation. It refers to networks built and funded by cable companies as a condition of a franchise agreement.
Cable television in America has developed in three stages: (1) Community Antenna Television (CATV) systems built to serve rural areas; (2) the first round of municipal cable systems in the late 1970s and early- to mid-1980s; and (3) the current round of franchise renewals for the municipal systems. I-Nets were often required in stage 2: the first set of municipal franchises.
This first set of I-Nets generally served the municipal buildings of the city that issued the franchise and sometimes also the local schools and libraries. The networks generally consisted of capacity on the regular cable system, using the same radio frequency (RF) technology used for cable programming. The institutions used the networks mostly for video transmissions, such as training programs for police and fire departments, special events broadcasting and shared educational courses. The costs were often borne by the cable companies competing for what they saw as lucrative franchises.
Increasingly, however, cities, schools and libraries, which have facilities spread out through a city or county, began linking the facilities into networks to transmit data. As these data communications grew, the institutions became larger purchasers of telecommunications services to tie the facilities together. At the same time, they found they could use the I-Nets for their data needs effectively and less expensively than through private telecom providers.
Also, at the same time, the data communications of other institutions, such as state and federal governments, hospitals and universities, were growing, and they, too, examined the idea of building their own private telecommunications networks -- without the participation of cable companies. Some cities, especially smaller cities with municipally-owned electric plants, built their own telecommunications networks alongside the electric lines.
The New Wave of I-Nets
With the growth of the Internet and increased networking within institutions, the expectations of institutions and cable companies are changing. The traditional I-Net Institutions have a growing need for bandwidth, requiring the building of more capacity. In addition, some of the institutions that had not participated in the initial I-Nets have been looking to join.
In addition, the needs are changing. Institutions increasingly require separate dedicated fiber -- not the joint use of RF frequencies used for cable programming.
These factors require bigger, better -- and more expensive -- I-Nets, while, at the same time, factors are developing that may lead cable companies to be less interested in doing so.
Cable companies increasingly view institutions as paying customers. Under the initial model, the primary service of cable companies was cable programming, for which institutions were not significant customers. With the growth of the Internet, however, cable companies are trying to sell bandwidth to allow customers to reach the Internet, and they are designing the upgraded systems that they are building under their renewed franchises to offer such services. They could also sell private telecommunications networks to the institutions. AT&T's purchase of TCI indicates a likely interest in broadening the cable company's service offerings.
The result is that there is more interest in I-Nets by potential users, and there may be less interest by cable companies.
Recent renewals in Austin, Boston, Portland, Oregon and Seattle and King County, Washington, show how these factors are being played out. Although cable companies still appear willing to build I-Nets as conditions of franchise renewals, they increasingly want the costs of the I-Nets to be evident to cable customers -- through itemized accounting of costs on customer bills. The companies also want to control the users who will be using the I-Nets, thereby limiting the erosion of their own customer base.