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Text of Wednesday's proposal. Follow up coming out in the morning.


                         D   R   A   F   T
                              4/14/99
 
                          I-Net Proposal
                 Working Group of Community Groups

Summary:

      The proposal involves two major elements:

1. Free cable modems and related services (including Internet
access) for 100 community groups.

2. Extendable I-Net -- I-Net to School District buildings, with
the capability to extend to adjacent community groups.

Background on the Working Group

      Over the past few months, a group of local community
leaders, including representatives of community groups, the
School District, the libraries and hospitals, has been discussing
the communications needs of the public, in anticipation of the
upcoming franchise renewal negotiations with TCI and AT&T.

      In the course of those meetings, it has become clear that
these groups have needs for affordable, high bandwidth services
and that the needs are not being met by current service
providers.  We have also discussed the opportunities presented by
an institutional network (I-Net) to address these needs.

      On April 8, 1999, the Group met with the technical
consultant hired by the City to assist in the negotiations with
TCI and with members of the City's negotiating committee.  The
Group described its needs and a conceptual plan.  The negotiating
committee asked the Group to develop a more specific proposal.
That proposal follows below.

Community uses beyond those of traditional I-Nets

      I-Nets have traditionally been built to serve large
institutions wanting to link geographically dispersed facilities.
Traditional I-Net participants have included city and county
governments, school districts and libraries.  Community groups
have usually not been included.

      Institutions use I-Nets to share video programming (live and
taped) for training, education and meetings, for their own data
communications needs (for records transmissions, etc.) and for
phone calls.
      I-Nets replace lines that institutions lease from phone
companies at higher prices.  I-Nets are relatively inexpensive
due to economies of scale.  Cable companies install the I-Net
cable as they install cable for their commercial systems --
saving on construction costs.  Also, institutional users share
the same cable infrastructure -- economizing on the amount of
cable required and on operating and maintenance costs.

      In the current franchise negotiations, the City and the
School District are promoting the concept of an I-Net. But they
appear to be seeking several individual I-Nets, eliminating
economies of scale and increasing the cost. Moreover, none of the
proposals includes access by community groups.

Why do Community Groups need access to high bandwidth services?

      (1) The vital roles of community groups

      Pittsburgh prides itself on the cultural strength and
diversity of its 88 neighborhoods.  This strength and diversity
is reflected in and nurtured by an even larger number of
community groups.

      Community groups serve important functions.  They identify
community needs and goals, and they organize people and seek the
financial and other resources to achieve those goals.  They often
represent the key point of interaction between residents and all
others affecting the community -- city government, school
districts, local businesses and outside developers.

      Community groups make sure that their communities thrive --
that local businesses grow, that struggling businesses survive,
and that new businesses come into their neighborhoods.  They make
sure that their residents have jobs, that streets and parks are
maintained, and that police and fire protection, garbage pick-ups
and other city services are provided promptly and efficiently.
They make sure their schools provide the best education and that
health care providers and social service agencies address
community needs.

      Community groups also supplement programs of government
agencies and schools, where community needs outpace the agencies'
resources.  These include recreation programs for youth and
senior citizens, after-school education and arts programs, child
care services, block watches and community newsletters.

      (2) Community communications, the Internet and the I-Net

      Much of the work of community groups boils down to
communications.  Community groups currently rely on face-to-face
meetings, phone calls, faxes, mail, VCRs and televisions.  They
are relatively new to computers, email, the Internet and data
networks, and they make less than effective use of what they
have.
      Face-to-face personal communications will always be
invaluable and necessary. However, these new communications
technologies can make community groups more efficient and
effective.

      _ Community groups can use email and websites to provide
        timely information to government officials and to
        residents.
      _ Community groups can make computers and Internet access
        available to residents looking for information about
        jobs, government services, education and health care
        services.
      _ Meetings with government officials can still be face-to-
        face, but residents who are unable to make the trip
        downtown can watch, ask questions and make comments over
        the Internet.
      _ After-school arts and education can make use of the multi-
        media applications of computers and the Internet.  Adults
        can also continue to learn.
      _ Community groups can make health services more accessible
        by partnering with health care providers to establish
        local clinics that use remote medical monitoring and
        imaging.
      _ Community groups can become more efficient, often
        substituting email and Internet communications for more
        time-consuming and expensive photo-copying, postage,
        overnight services, long-distance phone charges.

      These activities all use telecommunications lines.  These
lines link groups to residents, to other institutions and to the
Internet.  The I-Net provides these lines inexpensively and with
high bandwidth.

      (3) How much "bandwidth" do community groups need?

      With the growth of the Information Age, successful cities -
and neighborhoods -- will increasingly be determined by their
access to "bandwidth." "Bandwidth" is the amount of information a
telecommunications wire can carry over a period of time - like
the size of a water pipe and the amount of water it can carry.
 
      The Internet and the rapidly expanding uses that it makes
possible require a telecommunications infrastructure with
increasingly large amounts of bandwidth and greater reliability.
The I-Net represents the opportunity to gain this higher
bandwidth at relatively less cost.
 
      Without sufficient bandwidth, neighborhoods will lag.  With
high bandwidth in some areas and insufficient bandwidth in other
areas, the high bandwidth areas will benefit and the others will
lag.  This underlies what is becoming known as the Digital
Divide.
 
      Community groups currently need less bandwidth than the
traditional I-Net participants.  The typical community group may
use email and browse the Internet for information.  Those that
provide public access to the groups' computers will have greater
needs for audio and video.
 
      Community groups typically use regular phone lines and one
or more dial-up Internet access accounts for their bandwidth
needs.  These needs can be served better in the short term with
the bandwidth available through cable companies' cable modem
services.  These services give users access to the Internet over
the same coaxial and fiber lines that the cable company uses for
its commercial programming services.  The bandwidth improves
sharply from the 56 kilobits per second (kbps) available over a
regular phone line. TCI currently advertises that its @Home cable
modem service can provide speeds up to 2.8 megabits per second
(Mbps). Web pages will load faster, and people can get limited
audio and video.
 
      As the Internet grows further, however, and as bandwidth-
intensive applications become more widely available, community
groups will use them and the groups' needs for bandwidth will
grow. Data and services will be increasingly offered in multi-
media and interactive formats.  Information will be provided with
audio and video, in addition to the text and graphics we're used
to seeing.  Two-way communications will also be possible.
 
      The specific uses that will be made of such a system cannot
be fully enumerated now.  The Internet is new and its ability to
quickly and inexpensively transmit information to large groups of
people is also new.  New applications (or uses) include a broad
range of activities that can be developed with desktop video
conferencing capabilities.  Additional uses are being developed
rapidly, and their future growth is open to the imagination.
 
      Call-in phone lines for medical information, for example,
may be replaced with interactive video where multiple patients
can gain access to the same health-care videos provided by health
service agencies and patients can be examined and monitored from
remote clinics.  Community development groups can use the same
techniques to inform potential developers about opportunities in
their neighborhoods.  Citizens can get access to government
records and services.  Residents -- of school age and older --
can gain access to educational material and job information.
Community groups can provide access for these purposes beyond the
hours and capacity and the geographic proximity of libraries.
 
      The only certainty is that future uses will involve greater
amounts of data and greater use of audio and video - which will
require greater amounts of bandwidth.  Many community groups will
have a set of computers used by the staff and an additional set
available to the public to access the Internet in connection with
the programs discussed above.  The computers will be connected in
a Local Area Network (LAN), which will be connected to the
Internet with a single high-bandwidth telecommunications
connection.
 
      With the advent of these bandwidth-intensive uses, cable
modems may not provide sufficient affordable bandwidth for
community groups.  Also important, cable modem users share the
commercial fiber system with each other and with cable customers.
As more subscribers use cable modems, they will compete with each
other for bandwidth.  Already, cable modem customers in some
areas are complaining that promised bandwidth is not available.
 
      To avoid a crisis of inadequate bandwidth and the lagging of
Pittsburgh's neighborhoods, the City has to plan for the future
bandwidth needs of our communities.

The Community Proposal:

      This proposal seeks to take advantage of the opportunity
afforded by the upgrade of TCI's system to provide additional
bandwidth throughout the City's neighborhoods at affordable
prices.  The vitality of neighborhoods and equitable access to
high bandwidth facilities are the guiding principles.

      From discussions with the City's technical consultant and
from our own research, it appears that cable companies renewing
franchise agreements typically contribute more to public purposes
than the five percent franchise fee.  This is usually justified
under the franchising authority's power to ensure that the cable
system satisfies the community's communications needs.  Cable
companies make these additional contributions in the forms of
additional facilities and/or cash grants.

      From these discussions, it also appears that the magnitude
of the following proposal falls within reasonable limits.

      The proposal includes free cable modems to address community
groups' short-term needs and their inclusion in the I-Net (at
some pace) to address long-term needs.

      1. Free cable modems and services for immediate needs

      Cable modems provide an immediate and relatively low-cost
means to gain access to substantial bandwidth.  This is
especially true, given the relatively limited uses that the
groups are making of the Internet.  Accordingly, we propose that
the City seek a commitment that TCI provide free cable modems and
service to 100 community groups for the life of the franchise
agreement.

      The costs are relatively modest.  The initial capital costs
would include the costs of the cable modems, which currently cost
approximately $300.00.  With volume discounts, TCI's costs would
be less.  TCI would also fund the installation costs, for which
TCI charges approximately $100 to $175 per site.

      Recurring costs would be substantially less.  The company
would incur incremental recurring costs only for customer
questions.  Operating and maintenance activities would not be
directly affected, and the groups' Internet activity would likely
represent only a small portion of the company's costs for
Internet access.  The company will forego the monthly revenues of
$40.00 per month, which, for 100 cable modems, translates into
$4,000.00 per month and $48,000.00 per year.
 

      2. Extendable I-Net for longer-term needs

      The long-term answer for community groups is to gain access
to the dedicated bandwidth of the I-Net proposed by the school
district to link its 95 buildings.  This can be done with an
Extendable I-Net which allows community groups to connect into
the existing I-Net at the buildings where the fiber cables
terminate. The community groups would provide their own
connections to the junction points.

      The dispersion of school buildings throughout the City's
neighborhoods would provide a broad distribution of access points
for the community.  Such community uses are also consistent with
the school district's technology plan.

      This program leverages the resources committed to the school
district and requires from TCI only the further commitment that
the school district I-Net also be permitted for the use of
community groups.

      The program, however, also entails additional support for
the community connections.  Funds are required to develop cost-
effective wireline and wireless means to connect the groups to
the terminating points of the fiber and to help community groups
develop the program applications that warrant the higher
bandwidth.

      Funds are, therefore, required to develop the connections,
to buy the electronics required to operate their networks and to
provide technical support for the community sites.  Funds for
these purposes could be raised from foundations, from federal
grant programs and from hospitals, universities and others
seeking to provide community services over the I-Net.  In
addition, the City could seek an additional capital contribution
from TCI for these purposes.


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