Official Conference Kick Off, Houston & Earthlink Share With Us

City of Houston Perspective

Richard Lewis is the CIO of the City of Houston. Be sure to look for the PowerPoint slides on MuniWireless.com. These are good slides!

Wireless Networks are an important Public Policy Issue - big deal for cities because of the assets to electric utility assets, and broadband is a critical infrastructure now for cities, similar to elecric grid and water supply.

Houston is unique because the project was initiated by a busines group, which in August 2004 published a white paper on the importance of ubiqutous, affordable broadband. That gave the city political cover, to be responsive to a group, rather than the initiator.

The RFP came out in October 2005, and just last month Earthlink was awarded the project. The project had these objectives:

1. Reduce field data costs and improve access options.
2. Digital Divide
3. Increase Consumer Choice and Lower Prices
4. Promote Economic Devleopment

Public Private Partnership is their model, where the city leverages its private real estate holdings to help a private party make a business case and an investment in the city.

Multiple applications will ride on the network. Houston has a long way to go: Corpus Christi currently has 23 wireless applications, where Houston currently has two.

Evaluation Criteria for the Respondents:

Value to the Community 25%
Value to City Government 10%
Financial Capacity 10%
Experience 30%
Deployment Strategy and Plan 25%
MW/DBE P/F

June 2009 is the projected date for project completion - hold on to your hats!

Five proposals were received in May 2006, with the two highest rated proposers invited in for negotiations: Earthlink and Convergent Broadband, a local consortium led by former Houston Lighting and Power CEO Don Jordan. Only a few weeks ago, February 13, the City announced that they had picked Earthlink as the most experienced provider to go forward with. This process served the city well.

The city used an investment banking firm to help them with the negotiations. They started with 10 key deal terms, but they didn't conclude negotiations until all deal items had reached conclusion. Earthlink was selected based on the following points.

1. Finance - they offered a Cash deal v. the highly leveraged deal offered by Convergent
2. Project Management Plans and Staffing - Earthlink plans were for an on-site management team, which they had already formed.
3. Earthlink would Finance, Design, Build, and Operate the Network at its Sole Expense.

Some other aspects of their deal:

City committed to a minimum bandwidth purchase of $500,000/year, for 4,000 users (out of a total 22,000 municipal employees). Lewis believes that as applications go up, that minimum will rapidly be dwarfed.

Earthlink will provide quarterly project management briefings to the city's project team.

Richard Lewis wrapped up the presentation with one question, an easy one, thank goodness!

How Big? 408 square miles of coverage is anticipated, making this the largest network out there!

Earthlink Perspective

Finally, Earthlink VP Janet West (VP Access Sales and Marketing) concluded by providing the Earthlink perspective, not only on the City of Houston deal, but also on the industry opporunity in general. Luckily, as my battery ran dead, Esme Vos provided a good recap on her website here.