City tries to lure high-speed Internet to seven ‘innovation zones’
BY FRAN SPIELMAN City Hall Reporter February 10, 2014 3:07PM
Updated: March 12, 2014 6:19AM
Using city light poles, fiber, freight tunnels, sewers and building rooftops to reduce capital costs, Mayor Rahm Emanuel on Monday launched a high-stakes competition for the right to provide low-cost, “gigabit-speed” Internet service to seven industrial corridors.
The “Chicago Broadband Challenge” that Emanuel touted nearly two years ago began with a request for qualifications inviting companies to demonstrate their technological expertise and financial wherewithal to forge a high-speed Internet partnership with the city.
Only after companies are prequalified will a request for proposals be issued.
Emanuel hopes to succeed where former Mayor Richard M. Daley failed by leveraging city assets and Emanuel’s plan to rebuild Chicago’s crumbling water and sewer system and by dividing the city into seven commercial corridors — down from his original plan for 15.
Competitors were required to select at least one of three “Preferred Innovation Zones” — River North, the Loop and West Loop — with “preference” given to those offering to serve all three.
The four remaining “innovation zones” were identified as” the University of Chicago and the U. of C. Medical Center, the Illinois Institute of Technology and Bronzeville, the Ravenswood Industrial Corridor, and the Pullman Industrial Corridor.
“The city’s goal is to make available gigabit- or near-gigabit-speed broadband service at prices that represent a substantial reduction from current ... prices” that range from $1,000 to $5,000 a month in Chicago, the request for qualifications states.
To reduce capital costs, the city says that Chicago “possesses a variety of public assets and infrastructure that may be leveraged” by designated bidders, either at no cost or “at rates substantially below market value.”
Those assets include, city light poles, excess fiber tied to Chicago’s vast network of surveillance cameras and fiber installed along CTA rail lines, rooftops of government buildings, storm sewers, 37 miles of downtown underground freight tunnels, 4,000 miles of roads and 2,000 miles of alleys.
In addition, the city and its partners “may have limited funding sources available” to support the high-speed Internet, including tax-increment-financing, the city says.
Designated bidders were also invited to provide a “broadband network service solution” for more than 400 remote city offices that currently spend $2.3 million for the service.
In a press release announcing the competition, Emanuel likened Chicago’s broadband infrastructure to the “highways and railroads of the 21st Century” and said it would “drive job creation and entrepreneurships for years to come.”
The Broadband Challenge also seeks to bridge the “digital divide” by providing affordable Internet service to underserved Chicago neighborhoods and to broaden access to free wireless service at parks and public spaces.
Seven years ago, Daley unveiled a similarly ambitious plan to build a wireless Internet access system attached to streetlights and lamp poles.
The city’s initial goal was to create an alternative broadband service that could compete with cable, DSL and cellphone-based wireless service and drive down costs.
In exchange for paying Chicago a sizable monthly fee and possibly a share of revenues, a technology company or group would have installed, maintained and upgraded roughly 7,500 small antennas on streetlight poles every one or two blocks, at a cost of roughly $18.5 million.
That system would have given Chicago a sorely needed revenue stream — and carried benefits far beyond the tens of millions it would have raised.
Rising costs, declining demand and increased competition from private Internet providers killed that plan, prompting Daley to settle for a far less ambitious plan to bridge the “digital divide.”
Daley declared four impoverished neighborhoods — Englewood, Auburn Gresham, Chicago Lawn and Pilsen — “digital excellence demonstration communities” to be flooded with technology to demonstrate the Internet’s “transformative power.”