Friday, February 18, 2005

Rizzo Digs Big Into A Black Hole

If you’ve never met Frank Rizzo, you really should. He’s a charming fellow who doesn’t allow facts to stand in his way. On February 17th, Philadelphia City Councilman Frank Rizzo had a story published in the online magazine, comparing Philadelphia’s aspirations to build a city-wide Wi-Fi network to Boston’s “Big Dig.” Mr. Rizzo called Boston’s Big Dig a “black hole for taxpayer dollars” and a “boondoogle,” and said that Philadelphia and hundreds of municipalities “are creating the potential for their own Big Dig” by building municipal networks.

I need to stop here and give Frank a piece of advice. Mr. Rizzo, you need to know that only Bostonians are allowed to criticize the Big Dig, not anyone else and certainly not ambitious politicians from Philly.

There were various parts of his story that had me riveted. One in particular was when he named several cities that had failed miserably at building their own telecommunications networks. Not knowing where I should go to see if Rizzo was being mendacious, I picked up the phone and started calling the cities he listed.

For instance, he said that city officials in Ashland Oregon had experienced “buyer’s remorse with their municipal network, having to starve other budget items to subsidize their network beset with excessive cost overruns.”

I love how he used the word “beset.” It’s one of those words people just don’t use enough.

Gino Grimaldi, City Administrator for Ashland, told me in an interview that “There were some initial cost overruns, but they had no impact on the municipal budget. Like any other business you don’t expect to break even right away. Our rates are well below market, even below the national average, had we gone into business and charged market rates we’d be way beyond breaking even. But what is the goal? Is it economic development or consumers’ interests? If that is the goal then it’s worth the investment. That said, I would urge municipalities to look at it carefully.”

When I asked if city officials were having “buyer’s remorse,” Grimaldi replied “We have tremendous support for this from the community and city council.”

Sounded kinda positive to me, so I picked up the phone to inquire about another system he cited, the Iowa Communications Network (ICN). Rizzo said that it had recently “foundered in red ink” and was now being “hawked at fire-sale prices.” Tami Fujinaka of the ICN wrote me a fairly decisive email, “Bunnie the network is not for sale.”

Seems there had been some sort of move by the Governor, but the bill to authorize its sale never made it to the floor of the House. Because of that there is no idea how much the network would fetch if it did go up for sale and ICN’s own financial statements for FY 2003 show a net asset gain of over $5 million dollars or roughly 12%.

Just to clarify Ms. Fujinaka sent me another email telling me that the backbone of the network was built in the early 90’s, giving a “point of presence” to every county in Iowa and DS-3 connections to public schools, libraries and area education agencies were pretty much completed by 2000. She also let me know that by statute the ICN rate structure could only include operating costs, money for capital had to be appropriated by the state.

Then, to ice the cake, she included revenue and expenses for 2004, by my calculations even if ICN had not gotten appropriations from the state for capital investment they still would have realized a $4 million dollar income over expense.

No foundering or hawking there. Mmmmm…

In a speech to the U.S. Conference of Mayors, Philadelphia Mayor John Street outlined his vision. “Just as highways were a critical infrastructure component of the last century, wireless Internet access must be a part of our infrastructure for the 21st century.”

Mayor Street understands that the 135 square-mile project will enable city employees, commercial interests, students and low income residents to get on and use the net in new and more efficient ways. It’s encouraging news that Philadelphia is leading the way for what some have called a national movement.

But to Rizzo, it’s the “Big Dig.”

It puzzled me as to how Rizzo’s assertions could be so far off. Then I came across an article in (Feb. 1, 2005) that Frannie (as he is affectionately known) is making overtures to run for mayor in ’07 but he doesn’t have nearly enough money to launch a viable campaign. Could it be some potential deep pocket contributors have been whispering sweet nonsense in his ears?

For a man that has a fairly decent political record, we can only hope that he’ll reconsider and not be so eager to “Spacco il Municipal Wi-Fi.”

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