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Portland, Oregon, and Multnomah County
Expanded "Shared System" I-Net Under Recent Franchise Renewals
Portland recently negotiated for the upgrade and extension of an existing I-Net. The I-Net will consist of capacity on the commercial cable system. Unlike traditional I-Nets whose costs were folded into the company's rates, the Portland I-Net will be funded through charges that appear on customer bills.
Portland is considered a "highly-wired" city. It ranked 20th in Yahoo Internet Life's 1998 survey of "most wired" cities and 15th in the1999 survey.
The Willamette River splits Portland into east and west sides. The east side is served by Paragon Cable (Time Warner), and the west side is served by TCI Cablevision of Oregon, Inc. The east side has had an I-Net under the franchise agreement executed in the late 1970s. Under recently-issued renewals, the existing I-Net will be up-graded and expanded not only into the west side of Portland but also into 4 adjacent cities and the rest of Multnomah County.
The extensions were coordinated by the Mt. Hood Cable Regulatory Commission, of which Portland, Multnomah County and the other municipalities are members. Each of the member municipalities negotiated similar I-Net requirements.
Although each of the municipalities approves its own franchise agreements, the Commission provides a centralized source of expertise for the negotiations and is formally responsible for the administration of the agreements, after they have been executed. Each of the members pays a share of the Commission's costs.
The existing I-Net is a part of Paragon's coaxial RF system. The upgraded and expanded I-Net will consist of a share of the capacity on the company's new hybrid fiber-coaxial system.
The I-Net's users in Portland will be divided into High and Low Capacity users. The high capacity users consist of 300 government buildings, public and private schools and universities, public libraries and selected non-profit organizations. The low capacity sites include 1,000 traffic signals, bus stops and digital monitoring devices.
The high capacity locations will have fiber connections and are entitled to a bi-directional capacity of 180 MHZ from each fiber node to and from each high capacity site. The low capacity locations will have coaxial connections to fiber nodes and are entitled to a minimum of 8 MHZ upstream and 12 MHZ downstream capacity from the nearest fiber hub.
The portion of the I-Net in Portland is estimated to cost about $4 million – $2.5 to $3 million for the east side (Paragon Cable) and its 100 high-capacity connections and $1.3 million for the west side (TCI) and its 55 high capacity I-Net sites.
The capital costs will be funded through a 1 percent of gross revenues charge on all customers' bills. The 1 percent charge is included within a 3 percent charge for PEG programs that is added on top of the municipalities' 5 percent of gross revenues franchise fee. The I-Net upgrade/construction is estimated to use about seven years of the 1% funds over the life of 12-year franchises.
The cable companies will own and maintain the I-Net, given that the I-Net will be incorporated into the cable systems. The companies may charge fees set on a cost plus ten percent basis. These costs will be passed on to the I-Net's users through charges to be determined by the Mt. Hood Cable Regulatory Commission
Additional Background Information:
-- Web site for Mt. Hood Cable Regulatory Commission
– Intergovernmental Agreement establishing the Commisssion
-- Franchise
agreements for Portland and Multnomah County area