Council Meeting: February 24, 1998      Santa Monica, California
          TO:       Mayor and City Council

          FROM:     City Staff
          SUBJECT:  Status Report on Telecommunications Master Plan,
          Including Preliminary Conceptual Findings, and
          Recommendation to Proceed with Finalizing the Master
          Plan for City Council Adoption

This report provides a status report on the Telecommunications
Master Planning effort and presents preliminary conceptual findings
of the Plan.
Overview of City's Telecommunications Master Plan 
The City of Santa Monica is assessing its telecommunications needs
and interests for the future, taking into account recent
technological developments and the far-reaching changes brought
about by the Federal Telecommunications Act of 1996.  Technological
advances are making it possible for the City to use a broad array
of innovative, two-way, interactive voice, data and video
communications.  Santa Monica residents have embraced new
technologies for their personal and business use. The City's own
system of telecommunications has developed sophistication. The City
desires to be well-positioned to enhance the quality of life,
economic vitality and delivery of government services in Santa
Monica through the strategic use of telecommunications technologies
and infrastructure.
Technology advances and telecommunications deregulation are
altering the traditional roles performed by telecommunication
providers.  Providers have begun to encounter competition to their
core services.  Existing carriers and new carriers recently
certified by the California Public Utility Commission (PUC) have
been asking for greater access to the City's public Rights-of-Way
(ROW). Utility companies routinely trench in the streets and, with
the increase in use permits, the City has legitimate concern over
degradation of street pavement and disruption to the general
public.  New ROW procedures are needed to achieve the proper
balance between facilitating the prompt entry of telecommunication
companies and minimizing disruption from and the economic impact of
multiple street cuts. 

Within this context, the City initiated development of a
Telecommunications Master Plan to identify the current
telecommunications infrastructure; ascertain future
telecommunications needs and services; and determine potential
roles and partnership opportunities to help the City meet such
needs.  The effort began with an analysis of:
               (1)  the uses of existing City rights-of-way for
          telecommunications infrastructure and methods to protect
          these valuable assets while encouraging location of new
          technology within the community;
               (2)  the types of telecommunications systems that best promote
          community objectives and the electronic delivery of
          government and institutional services;
               (3)  public and business partnership models that promote
          increased use of telecommunications technologies within
          the community;
               (4)  how telecommunications providers might help the City
          achieve these objectives; and
               (5)  financial models that clarify likely City roles in the
          telecommunications arena.
The kinds of questions explored include: how the City might
encourage greater competition and consumer choice in
telecommunication services; what the City can do to promote
universal access and telecommunication literacy; whether the City
should construct its own fiber network or "loop"; how the City
might enhance the delivery of government services; and the role of
telecommunications to enhance the economic climate of the City.

Working with Media Connections Group (MCG) and a City Council-
appointed community Telecommunications Working Group (TWG), staff
began the planning process in May 1997.

Community Needs Assessment
The master-planning process has been informed through extensive
public outreach.  The TWG helped refine and structure a public
survey, a business survey, and additional contact with the business
and residential community through focus groups and a public
workshop.  Also, staff and the consultants undertook provider
interviews to ascertain current and future bandwidth capacity.

Public Survey
The major findings of the statistically valid random telephone
survey conducted by Godbe Research in August 1997, portray a high
degree of telecommunications connectivity in the Santa Monica
community today.  A significant percentage of residents have and
use telecommunications and computer technology.  Of the households
responding, 59% use computers, 30% have a fax,  20% have a second
phone line. Of households with computers, 78% have modems and 58%
use the Internet. These results are considerably higher than the
national averages.  Further,  55% of households report doing some
work at home using a computer or telephone.  Of the sample, 59%
subscribe to cable and/or Direct Broadcast Satellite (DBS)service. 
For these respondents, program choice, price of video and competent
technical service are important.  One-fourth of the respondents
have used the City's Library catalogue services, 11% have used PEN,
and 12% have used the City's voice mail system.

Business Survey Results
A mailed business survey was conducted during fall of 1997.  The
top 25 telecommunications businesses were visited and survey
instruments were sent to 200 additional  businesses, with 70
surveys  returned.  The data provides useful information on the
application of telecommunications technologies by local businesses. 
Of the business respondents, 80% have a Local Area Network (LAN), 
87% have their own telephone system and almost 40% use a second
telephone carrier.   In general, current needs of these businesses
for the installation and pricing of telecommunication services are
being met by existing providers.  Seventy-three percent (73%) of
responding companies expect an increase in voice circuit use over
the next 5 years, 58% expect existing providers to meet future
voice and data needs, and  81% believe that the future availability
of digital voice and data installed in a timely and cost effective
manner will materially affect local business.

Focus Group Messages
To further refine the inquiry, staff and consultants conducted
focus groups with the  Chamber of Commerce Entertainment Committee,
Chamber of Commerce Business Technology & the Future Committee,
utility companies, and PEN Users Group, and Santa Monica Unified
School District (SMMUSD) Technology Advisory Committee and
Intercultural Advisory Council.   Discussion ranged from the need
for increased bandwidth to refinement of how the City delivers
government services,  including marketing strategies, community
outreach and adaptations to PEN.

Provider Interviews
Provider interviews were conducted with GTE, Pacific Bell,
Independent Fiber Network, Century Communications, DBOVS, AT & T,
SpectraNet, Tamkin Fiber Corporation, TCG and Sprint.

Public Workshop
A public workshop  was held on February 9, 1998.  Some 50
individuals, including representatives of businesses and public
institutions, as well as City residents, attended.  Input from this
workshop helped refine the conceptual findings included in this
report and will be summarized for inclusion in the Master Plan.
Planning Deliberations
Economic Models
The consultants undertook analysis of two economic models to
determine the appropriate role for the City to undertake:  a
Citywide full-service network (cable TV; telephone; high speed data
services); and a City institutional network model.  Regardless of
the network approach chosen, it is important to note that the
recommendations of the modeling component are in addition to the
services and telecommunication solutions offered by the traditional
private telecommunication providers.

Three potential roles for the City emerged:
               1.   Develop internal infrastructure, including City-owned
          conduit with fiber linking its facilities on a priority
          and cost-justified basis.  The first phase of this
          approach includes non-governmental institutions such as
          facilities of the Santa Monica-Malibu Unified School
          District and Santa Monica College.
               2.   Become a provider of external infrastructure as a lessor
          of conduit and/or fiber to non-governmental institutional
               3.   Become a provider of a full-service network to external,
          non-governmental institutional entities and City

In any of the above three options, the City might partner with an
established telecommunications provider.  The partner and City
could jointly develop and provide the above assets and services,
subject to their economic and technical feasibility, under a multi-
phase agreement.

To determine the feasibility of a City-operated full-service
network, the consultants projected the most optimistic market
conditions and tested various business scenarios: cable TV, high
speed data, telephone.  For the most favorable business
opportunity, cable TV, the model indicated a $35 million investment
would be required in the first two years to build a network and
operate a cable business.  After a 10-year operating period, the
City would have accrued a loss of over $18 million.  As mentioned,
this is the most optimistic of the business scenarios and, given
the magnitude of the loss, development of a full-service network is
not being recommended at this time. 

Consultants and staff are recommending development of an
institutional network with leased conduit and/or fiber to non-
governmental entities. 

Enhancements to Delivery of Government Services
Over the past few years, the City's internal use of
telecommunications technologies has grown significantly.  The City
now operates and depends on a sophisticated local and wide area
network that connects staff at all City facilities for voice and
computer communications.  The vast majority of this network is
currently leased from GTE at an increasing cost as the City
continues to implement advanced information systems.  Like Santa
Monica, cities nationwide are looking at investing in advanced
telecommunications systems to support internal and external
applications and to ensure that future bandwidth needs are met at
reasonable costs.

The City has made significant investments in telecommunications
technologies, including  to Geographic Information Systems, Imaging
Systems, client server software packages for Library Catalogue and
Circulation, Financial Management, Human Resources and Payroll, E-
mail/Document routing systems, telephone and voice mail systems,
and Internet access.

The City's network supports the electronic delivery of government
services.  Through the City's Public Electronic Network (PEN) and
the World Wide Web site, government information, searchable
databases, interactive service request forms, business
transactions, conferences on local issues, and free local
electronic mail are available to the public.  These services are
available through dial-up modems, the Internet and public access
terminals in libraries and other City facilities.

As a means to address Universal Access and in response to public
input, the plan will recommend expansion of the delivery of
government services through the use of telecommunications
technologies.  These services include access to PEN conferences via
the Internet, a gateway for sending and receiving electronic mail
between PEN and the Internet, electronic calendars of local events
and expanding use of the City's Web site for presentation of City
programs, information and services, and for electronic commerce. 
Additional terminals and touch screen kiosks are being deployed to
meet the increasing public demand for Universal Access to these
services and the Internet.  In addition, staff will continue to
explore the suggestions provided during this planning effort in
order to expand and refine our outreach and marketing to the

To support these services, high bandwidth fiber circuits have been
installed within City Hall and the Police Department wing, with a
link to the Civic Auditorium.  The City leases an additional fiber
link between City Hall and the Main Library.  Maintenance and
support services for these fiber circuits are provided through
contractual agreements approved by Council in fall of 1997.  These
fiber circuits demonstrate the capacity of supporting technologies
now being implemented and provide opportunities to deliver high
bandwidth video and multimedia applications to City facilities and
the public as planned in the near future, facilitating video
conferencing, video training, integrated voice and data
applications, and full motion video and sound.  Other facilities in
the Citywide area network now require bandwidth upgrades to support
new demands. 

Benefits of Municipal Fiber Network (MFN)
Development of a municipal fiber optic network (often referred to
as a "fiber loop") has been identified as a key strategy to provide
the bandwidth necessary to support enhanced service delivery and to
give the City control over operating costs for its internal
telecommunications needs.   Additionally, the MFN would:
               1.   provide a secured and reliable private network for
          supporting public safety and emergency response;

               2.   support additional public access terminals at libraries,
          parks and City facilities;

               3.   provide advanced telecommunications connectivity to the
          Downtown transit mall and corridors along the fiber loop;

               4.   present revenue opportunities for the leasing of City-
          owned conduit and fiber to telecommunications providers
          and businesses in Santa Monica;

               5.   provide a foundation for promoting continued investments
          in the City's telecommunications infrastructure by
          telecommunications providers and local institutions and

               6.   provide a framework to work with Westside Summit Cities
          on regional telecommunications services;

               7.   present opportunities for sharing telecommunications
          services with the school district and college, e.g., the

               8.   provide opportunities for the Multimedia Academy at the
          college to partner with and promote a local multimedia
          economy; and

               9.   extend infrastructure into strategic areas of the City
          and provide the backbone to enable a broader network to
          be developed if it is shown to be technically and
          economically feasible.

The proposed municipal fiber network could be developed in
conjunction with currently planned public works projects over the
next three years, saving up to two-thirds of the cost of network
installation by piggybacking on trenching required for other

The MFN should be viewed as a foundational network, harnessing one-
time opportunities in a coherent infrastructure plan and setting
the parameters for future infrastructure investment. MFN serves
several immediate objectives of the City and at the same time lays
the foundation for the evolution of a wider network serving more
customers, if deemed feasible in the future telecommunications
market.  The City's exploration of strategic public/private
partnerships will yield important information about what private
sector providers will commit to further develop the
telecommunications network in Santa Monica and the region.  In
short, immediate City business opportunities can be realized and
the business risk elements of the network can be mitigated and
minimized with this proposed approach to a network venture.

Right-of-Way Management
The public right-of-way (ROW) is defined as the distance between
private property lines that contains the roadway, parkway and
sidewalk area of streets and alleys throughout the City.  Under the
Telecommunications Act of 1996, public agencies are given the duty,
responsibility and authority to manage the ROW.  With an increasing
number of telecommunications companies entering the market in Santa
Monica, it is critical that the City re-double its efforts in
managing the ROW effectively.

The ROW contains surface and sub-surface facilities, including
asphalt and concrete roadway pavement, concrete sidewalks, street
trees and other landscaping, fire hydrants, street light and
traffic signal facilities, traffic signage, bus shelters, and
underground utilities.

The goals of ROW management include protecting the public health,
safety and welfare; coordinating construction with pedestrian,
bicycle and vehicular traffic in the work zone; avoiding repetitive
street cuts whenever possible; minimizing private business
disruption; preventing unnecessary financial burden to the
taxpayers of Santa Monica due to street cut degradation of  the
pavement; ensuring the long-term structural integrity, ride quality
and aesthetic properties of the existing infrastructure; enhancing
competition among telecommunications providers; and promoting
potential partnerships between the City and private utility

In conjunction with the Master Plan process, the City Department of
Environmental and Public Works Management implemented "Interim
Right-of-Way Management Standards and Policy Goals" in November of
1997.  These interim standards assist in ensuring complete,
accurate and clear utility installation plan submittals; timely
plan checks and permit issuance; proper trench repair techniques to
preserve pavement quality; coordination between the City's capital
improvement program and the private utility companys' short-and
long-range plans;  and public notification.

The City is conferring with public and private utility companies
for the purpose of drafting "Final Right-of-Way Management
Standards" and "Future Policy Goals."   As part of the process of
developing final standards and goals, the City has commissioned a
study of appropriate utility trench patching methods and
appropriate fee structures for utility permit plan check,
inspection and use of the public ROW.   Final ROW Management Policy
Goals  will also be refined by this process and will be presented
upon completion of the standards. 

Antenna Siting Policy Direction
In conjunction with the Telecommunications Master Plan, the antenna
sections of the  Zoning Ordinance have been reviewed and the  City
is exploring several changes to the Ordinance in light of the
Telecommunications Act of 1996.  Minor changes to the parabolic and
non-parabolic antenna sections will be necessary to 1) bring  the
Zoning Ordinance into conformance with the Telecommunications Act,
and 2) to revisit by-right versus discretionary zoning approvals. 
In addition, updated antenna permit instructions will be
streamlined.    Also, the City is conducting an inventory of all
public properties to determine which properties may be appropriate
for antenna siting.  Based on the results of this inventory, City
staff will recommend to the Planning Commission and City Council a 
policy on the use of public properties for antenna siting.

Conceptual Findings - Initial Policy Recommendations
In summary, the following are key policy recommendations likely to
be included in the Master Plan.
          The City should continue development of a municipal fiber
     network (MFN) for the purpose of connecting key public
     institutions (City, Santa Monica College, and SMMUSD).  The
     network should be tied to other public works projects whenever
     possible to lower development costs and can be expected to
     provide  service to major City sites within 12 months.  The
     MFN will support the continued development of advanced voice,
     data and video services for the citizens and businesses of the
     City and ensure that the City will continued to be a leader in
     the use of modern telecommunications systems to provide
     quality public service.

          Potential public and private partners for construction,
     financing and operation of the MFN should be identified.  This
     effort should proceed while the MFN is under development, as
     an independent project with its own schedule and goals.  The
     scope of partnership could range from lease of excess City-
     owned telecommunications conduit and/or fiber strands to full
     partnership in the development, financing and management of
     the MFN.

          Revised ordinances, policies and procedures that will lead to
     better right of way (ROW) management should be adopted.  
     Driven primarily by the decision of the Federal government to
     promote competition in the telephone market, the new ROW
     procedures will achieve the proper balance between
     facilitating the prompt entry of new telecommunications
     companies and protecting the structural integrity of the ROW, 
     while avoiding unnecessary financial burdens on taxpayers of
     Santa Monica.

          Revised ordinances, policies and procedures that will lead to
     better management of antenna sites located within the City
     should be adopted.  The advent of new cellular, PCS and
     similar radio services by competing companies means that the
     City must exercise tighter control over private antenna sites
     and encourage the use of designated City-owned antenna sites
     whenever practical.  The new procedures are designed to
     achieve the proper balance between facilitating enhanced,
     efficient wireless services and preserving the unique
     aesthetic qualities that make the City a desirable place to
     live and work.

          A policy statement should be adopted  that encourages
     Universal Access to modern telecommunications services, taking
     the following concepts into account:

               1.   Encouraging priority access for special populations such
          as the disabled or students.
               2    Encouraging access at specific types of facilities such
          as schools and higher education institutions, libraries,
          and public facilities owned or controlled by government.
                         3.   Encouraging availability of user-friendly equipment.
               4.   Ensuring appropriate privacy and security for users.
                         5.   Developing or promoting affordable pricing mechanisms.
                         6.   Promoting fair and equitable regulation of
               telecommunications providers.
                         7.   Promoting interconnectivity, interoperability and open
                         8.   Encouraging the creation of opportunities for user
               participation and interactivity.
                         9.   Providing incentives or other mechanisms to promote
               businesses and others to support the policies, such as a
               special fund for those who adopt and take actions
               consistent with the policies.

City staff will continue to expand upon the use of
telecommunications technologies for electronic delivery of
government services.  Expected outcomes include increased
availability of government information and services, support of
community services, increasing public awareness of local issues,
promoting public involvement and sense of community, and
enhancement of City business activities through electronic


Preliminary estimates for the City fiber loop are $1.5 million-$2
million required over the next three years.  These funds will be
considered in the context of preparation of the three year Capital
Improvement Plan as part of the FY1998/99 City budget process.

At this time, the consultants and staff anticipate revenue offsets
will be realized through leasing conduit and/or fiber that will
become available through construction of the City fiber loop.  The
consultants will estimate the magnitude of the offsets in the final

Staff respectfully requests to proceed with finalizing the Santa
Monica Telecommunications Master Plan for Council adoption.

               Prepared by:   Kathryn Vernez, Senior Management Analyst
               Jory Wolf, ISD Manager
               Dave Britton, Senior Civil Engineer
               Craig Perkins, Director of Environmental
               & Public Works Mgmt.
               Mike Dennis, Finance Director
     Exhibit A -  ROW Management Standard and Future Policy Goals
     Exhibit B -  Universal Access Policy