4.0 Building a Telecommunications Backbone in Interstate Highway Rights-of-Way (ROW)
4.a. Advantages of Using Interstate Highway ROW
In many respects, interstate highway corridors are ideal places to build telecommunications networks. The controlled-access corridors of interstate highways were designed to interconnect disparate parts of the United States, and to transport people and goods across the Nation. A telecommunications backbone has a role similar to that of the interstate highway system. The telecommunications backbone also is controlled-access in the sense that it handles long-haul data transmission, with relatively few access points (interchanges) interrupting the data-traffic flow. Moreover, as explained elsewhere in this report, just installing additional backbone will not necessarily bring the benefits of advanced telecommunications to the people and communities adjacent to interstate highways; access points are critical to the use of the network.
For many rural communities, a nearby interstate highway that also accommodates high-speed Internet backbone could result in significant benefits. The interstate highway provides a physical link to the rest of the State, the Nation, and the world. Similarly, high-speed telecommunications backbone that is interconnected with rural communities affords digital transmission of data that connects people and institutions. Potential synergies between telecommunications and transportation would clearly benefit rural communities. The rural community must be connected to the telecommunications backbone, however, for benefits to be realized – a step that requires additional investment by the private sector and/or municipal interests. Furthermore, both costs and risks accompany the complex undertaking involved in building telecommunications backbone in interstate highway rights-of-way.
From the perspective of potential private sector partners, the prospect of a partnership for a corridor-level high-speed telecommunications could be enticing. A national or regional telecommunications provider could enter into a single agreement to obtain statewide rights-of-way, rather than undertaking multiple agreements with several different entities. This process could reduce risk, minimize the number of potential partners, and minimize the number of different regulatory and operating rules across jurisdictional boundaries.
The interstate system rights-of-way themselves are attractive because of the standards to which the interstate highway routes are constructed. Interstate system ROWs present fewer right-of-way obstructions than would be encountered in using secondary road rights-of-way. Secondary rights-of-way often have multiple utilities already installed, thus making it harder to create a conduit pathway for new optical fiber installation, and creating a higher risk of optical fiber being cut by other parties accessing or maintaining their facilities in the ROW. The limited number of intersections/interchanges also contributes to lower costs for construction. This advantage is somewhat diminished as construction at highway interchanges requires boring instead of trenching, and boring is significantly more expensive than trenching.
The financial characteristics of possible shared-resource agreements also may make the interstate system corridor approach more attractive, since in-kind payments to State DOTs rather than cash payment to private land owners means less well capitalized companies may find these deals more affordable.
"The Interstate system rights-of-way themselves are attractive because of the standards to which the Interstate highway routes are constructed." |
4.b. Disadvantages and Risks of Using Interstate Highway ROW
Despite these advantages, both costs and risks accompany the building of a telecommunications backbone in interstate highway rights-of-way, which can be a complex undertaking. Right-of-way ownership issues represent one complicating factor. A variety of other State and private sector concerns about financing, institutional arrangements, and other factors also must be addressed.
4.B.i. Right-of-Way Ownership
Installing advanced telecommunications backbone facilities in interstate highway rights-of-way requires basic knowledge regarding ownership of and control over interstate highway ROW. Although interstate highway ROW is almost uniformly State-owned, quite a number of stakeholders, each with a different role, are involved in ownership and control of interstate highway ROW. Starting from the ground up, these ROW stakeholders include the States that own interstate highway rights-of-way and the Federal Government (primarily FHWA), which provides funding for acquisition of these rights-of-way and general oversight of the interstate highway system. In addition there are the owners, installers, and maintainers of the telecommunications facilities – whether wireless or wireline, or some combination.
The land on which interstate highways are built forms a longitudinal strip of real property known as the right-of-way. ROW ownership may in fact take several different forms. ROW may be held in full fee ownership, including control over all underground and overhead airspace rights. Interstate highway ROW also can be owned as an easement to use the surface of the land for limited transportation purposes. As a result, the nature of the property rights involved in ownership of ROW is not always a single type of all-encompassing right, but rather is a variable set of real property rights that may provide extensive or very limited control and use of the interstate highway ROW. This variability in what is owned as ROW can affect installation of telecommunications backbone and adds to the risks and complications inherent in telecommunications installations in interstate highway ROW.
Interstate highway ROW is, for the most part, acquired by States through negotiation between State DOTs and landowners or by State exercise of the power of eminent domain. The ROW taken through this process is owned by the State and managed either by the relevant State DOT or the State agency that manages State-owned lands. When the interstate highway ROW is held in full fee ownership, the State owns all rights above, under, and on the strip of land where the interstate highway is situated, as well as its clear zones, interchanges, and the like. Other interstate highway ROW is controlled by the State as an easement for transportation purposes. The particular land interests and uses within the scope of these easements vary. Even within a single State, the precise nature of rights included within particular ROW easements may differ depending on the particular times or circumstances of their acquisition, as well as the language used in conveying the ROW easement to the State. This variable nature of the rights owned by States in interstate highway ROW creates some fundamental uncertainty, and risk, in determining whether State ROW ownership encompasses sufficient rights to use the ROW for telecommunications installation.
Most ROW acquisition for the interstate highway system is Federally funded under the Federal Aid Highway Program, which is managed by the Federal Highway Administration in cooperation with State DOTs. FHWA is responsible for oversight of interstate highway projects, which are required to follow Federal requirements for project eligibility, as well as standards for contract administration and construction standards. Part 710 of Title 23 of the Code of Federal Regulation (CFR) contains the FHWA ROW regulations. Section 710.105, defines “right-of-way” to mean “real property and rights therein used for the construction, operation, or maintenance of a transportation or related facility funded under (the Federal-Aid Highway Program) Title 23 of the United States Code.” This definition encompasses both full fee ownership of interstate highway ROW land, and more limited real property rights in the form of easements discussed above. Since interstate highway projects tend to be undertaken in segments over an often extended period of time, different types of ROW rights will frequently have been acquired along a single interstate highway. Ascertaining particular State land titles to ROW can be complicated and present some risk that a ROW easement’s scope does not include installation of telecommunications facilities. Moreover, rights to use ROW along the length of an interstate highway corridor that crosses many States will multiply concerns that ROW ownership rights may not include telecommunications installations. In any event, ROW ownership will always change at the State line.
"As a result, the nature of the property rights involved in ownership of ROW is not always a single type of all-encompassing right, but rather is a variable set of real property rights that may provide extensive or very limited control and use of the Interstate highway ROW. This variability in what is owned as ROW can affect installation of telecommunications backbone and adds to the risks and complications inherent in telecommunications installations in Interstate highway ROW." |
Some interstate highways require Federal lands for interstate highway ROW. The Federal Lands Highway Program (FLHP), managed by the FHWA, assists States in planning for and acquiring necessary interstate highway ROW from Federal agencies. The Federal Lands Highway Program was created in 1983 and coordinates relationships with various Federal land management agencies, including the Bureau of Indian Affairs (BIA), U.S. Forest Service (USFS), National Park Service (NPS), Fish and Wildlife Service (FWS), Bureau of Land Management (BLM), Military Surface Deployment and Distribution Command (MSDDC), U.S. Army, U.S. Army Corps of Engineers (USACOE), U.S. Navy, Tennessee Valley Authority, and the Bureau of Reclamation (BOR). Interstate highway ROW acquired from these Federal agencies is often restricted to easements for transportation purposes. To the extent that ROW over Federal lands is used for installation of telecommunications backbone, it is necessary to interpret the easement to determine whether the easement is sufficient to permit installation of telecommunications transmission facilities as an aspect of transportation purposes. If not, it may be necessary to acquire an additional easement for telecommunications installations through the FLHP from the agency managing the Federal land. Extending the use of interstate highway ROW to include a private telecommunications installation may well exceed the scope of some ROW easements. This uncertainty adds to the time involved, and may present some risks, when telecommunications backbone is installed in interstate highway ROW that runs through Federal lands.
Until 1988, installations of utilities and telecommunications facilities along interstate highway corridors (longitudinal installations) were not generally permitted as a matter of Federal law. In some states, this past Federal policy not to allow longitudinal installations of telecommunications in interstate highway ROW persists in State policies. After the FHWA revised its policy on utility accommodation to allow States which had FHWA-approved utility accommodation plans to permit installation of optical fiber cables and other utility infrastructure along interstate highway rights-of-way, the Federal regulatory door to shared resource telecommunications projects was opened, and remains open as a means to bring additional advanced telecommunications capacity to rural areas.
When the Telecommunications Act of 1996 became effective, both FHWA and AASHTO already had prepared guidance regarding shared-resources telecommunications installation, as well as utilities access and accommodation in interstate highway ROW. When AASHTO updated its guidance regarding “Accommodating Utilities within Highway Right-of-Way” in 2005, it continued to differentiate between communications facilities and utilities. Indeed, whether utilities are considered to include telecommunications facilities depends on the circumstances. In some States, broadband facilities are treated as utilities for some purposes but not for others. Since there are many physical and practical differences among installations of optical fiber cable, of wireless towers or antennae, and of power lines or gas pipelines, AASHTO provides separate guidance for locating different types of utilities in ROW. These AASHTO standards help to provide consistency and uniformity among States with regard to physical and engineering aspects of the layout and dimensions of construction in ROW, but establish different guidelines for wireless and wireline installations.
In 1999 FHWA regulations related to interstate highway ROW were restructured to provide greater discretion to States in permitting, or not permitting, longitudinal telecommunications projects. These regulatory changes may have the effect of making the acquisition and management of interstate highway ROW somewhat less uniform across jurisdictions.
FHWA requires each State to compile and to make public a State ROW manual. Many of these ROW manuals (often highly detailed and many hundreds of pages long) are posted on the Internet by State DOTs. The availability of such specific information about the standards for permitted telecommunications installation in a specific State’s ROW helps to control risks caused by lack of authoritative information regarding standards that apply to advanced telecommunications installation in a State’s interstate highway ROW. One potential disadvantage of these highly detailed State DOT ROW manuals is that their requirements are not the same from State to State. Even along a single interstate highway corridor, adjacent States’ ROW regulations often vary considerably. For example, some State ROW policies facilitate shared resources telecommunications projects; but other States do not enter into shared resources projects at all. In addition to these ROW standards variations, other types of permitting standards, such as environmental and natural resources requirements, are also variable from State to State. Indeed, land use planning and environmental reviews can be time-consuming and costly preconditions for telecommunications installations in some States. In other States, centralized permitting processes for telecommunications installations reduce the risks and costs of securing State permits.
Current Information on ROW Use and Activities in the Study Corridors Workshops, meetings, and interviews were conducted with the States involved in this study. Individuals from the State DOTs, information technology, economic development, and planning organizations provided their insights and experiences in advancing HST for transportation use and beyond. These are the expert voices of those currently operating and maintaining the corridors:
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4.B.ii. Other State and Private Sector Concerns
Barriers and risks to implementing corridor communications along a multistate interstate highway may be substantial. To begin with, there is great variation among States with regard to their enthusiasm for such projects. Some States are simply not willing to enter into shared resources projects, particularly with unfamiliar private-sector telecommunications partners. Other States appear to feel that State government should not invest State resources, such as State-owned ROW, in telecommunications projects that are essentially private-sector business undertakings. Still other States are risk-averse and fear potential liabilities arising out of road hazards and disruptions in traffic flows along their interstate highways. Overall, there appears to be relatively little corridor collaboration that would bring neighboring States together to harmonize their policies in ways that would facilitate installation of advanced telecommunications facilities within their respective segments of interstate highway ROW. Without collaboration for corridor communications, the pattern of telecommunications is likely to remain on a State-by-State basis.
There also are some disadvantages to making use of interstate highway rights-of-way from the private sector perspective. The long cycle-time associated with a typical State DOT procurement process, which may involve requests for proposal and other contractual delays, may mean that such arrangements may only be attractive for long cycle-time, national, or regional infrastructure projects. Such an approach is not likely to be attractive for customer-specific builds in interstate highway rights-of-way since such projects require short time lines in order to meet customer needs.
Another factor is that State DOTs may harbor unrealistic expectations with respect to the value of rights-of-way, given the availability of other no-cost public rights-of-way and of dark optical fiber in existing routes. Private sector partners also may fear that they may encounter problems in getting DOT permission for new lateral access points added to network after initial construction.
In terms of achieving the ultimate goal of linking up with rural users in need of high-speed telecommunications access, participants in the process are faced with geographic, demographic, and financial issues. As a rule, larger population centers are located along interstate highway right-of-way, while rural markets may be located several miles away from the interstate highway ROW. Factors such as low population densities and low revenue potentials often make the cost to construct access from the interstate highway into the rural markets and all of the way to the end user cost-prohibitive.
Perhaps the biggest barrier to implementation is the cost of construction. The cost of installing telecommunications infrastructure, including conduits, optical fiber, handholes, and other appurtenances is estimated to be between $75,000 and $125,000 per mile, depending on the difficulty of construction, number of conduits, and amount of optical fiber installed. Most State DOTs either cannot afford these costs or cannot justify the expense to State policy-makers when the private sector is willing to provide service for a lower initial cost.
State policies regarding utility installations may not allow utilities to be located within interstate highway ROW. Citing safety and liability concerns, some States have not changed their policies to match the latest guidance from the FHWA regarding use of access controlled ROW for telecommunications facilities. Related to this is State legislation restricting use of ROW in a public-private partnership. Either through fear of losing control of the ROW, in response to a perceived failure, or in response to public pressure, the State legislature can prohibit a State agency from engaging in a public-private partnership.
"Lack of a coordinated utility access policy between adjacent states along a corridor will create a difficult atmosphere for a private sector partner to be able to install communication infrastructure expeditiously along the entire length of the corridor." |
Lack of a coordinated utility access policy between adjacent States along a corridor will create a difficult atmosphere for a private sector partner to be able to install communications infrastructure expeditiously along the entire length of the corridor. In addition, the lack of coordinated or consistent procurement practices between States will make the creation of a corridor-wide public-private partnership all but impossible. There needs to be a common approach among all States along the corridor to ensure success.
Key to making a public-private partnership work is a project champion within the State. This person needs to be the point person for the State on all matters related to the partnership, including making presentations to various agencies, the legislature, and groups that can provide support to the project. The project champion will prepare request for proposal (RFP), perform proposal evaluations, and guide the project through the State procurement process. Without this project champion, the project will likely fail as lack of interest and lack of time by others will overtake the project.
Current Information on Public-Private Partnership Activities in the Study Corridors Workshops, meetings, and interviews were conducted with the States involved in this study. Individuals from the DOTs, information technology, economic development, and planning organizations provided their insights and experiences in advancing HST for transportation use and beyond. These are the expert voices of those currently operating and maintaining the corridors:
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4.c. Technology
Technology choice is an important factor in building telecommunications backbones in the interstate highway rights-of-way. Therefore, it is crucial to understand enough about the variety of telecommunications choices currently available and on the horizon so that the appropriate telecommunications solution is chosen for the project. A single choice or a combination of telecommunications choices may be used in each project.
This report is focused on the backbone or trunk line telecommunications network. The ‘last mile’ connection between the end-user and a telecommunications service provider is beyond the scope of this document and must be addressed specifically for each community. This report will, however, make some initial recommendations about how to potentially reach the end-users.
4.C.i. Wireless and Wireline Technologies
Current telecommunications technology can be broken down into two basic types; wireless and wireline. Wireless includes microwave, cellular wireless, Wi-Fi, and the emerging WiMAX technologies. Wireline includes optical fiber, copper, and coaxial cable technologies.
Wi-Fi is short for wireless fidelity and is a term for certain types of wireless local area networks (LAN) that are designed to the IEEE (Institute for Electrical and Electronics Engineers) 802.11 standards. WiMAX is defined as Worldwide Interoperability for Microwave Access in accordance with the IEEE Standard 802.16. WiMAX aims to provide wireless data over long distances.
Table 2 illustrates types of commercial providers, the telecommunications transport medium used, example companies, and typical data rates to end users. Note that Mbps stands for mega (million) bits per second and Kbps stands for kilo (thousand) bits per second.
Table 2: Local Transport Providers and Technologies Utilized
| Type of Provider | Transport Medium Used | Example Companies | Typical Maximum Data Rate to End User |
|---|---|---|---|
| Local Telephone Companies | Copper and optical fiber | ATT (SBC and Bellsouth), Verizon, Qwest | 10 Mbps for non-fiber served premises |
| Competitive Local Exchange Carriers (CLECs) | Copper and optical fiber | Level 3 (Telcove, KMC Telecom), XO | 10 Mbps for non-fiber served premises |
| Cable TV Providers | Coaxial cable, copper and optical fiber | Charter, Mediacom, Time Warner | 28 to 37 Mbps for non-optical fiber served premises |
| Cellular Telephone Carriers | Cellular wireless, copper and optical fiber | ATT/Cingular, Verizon Wireless, T-Mobile, Sprint | 100 Kbps to 2 Mbps for newest technology |
| Wi-Fi Providers | Unlicensed wireless, copper and optical fiber | T-Mobile | 54 Mbps (distance and line of sight dependent throughput) |
| Wi-Max Carriers | Licensed and unlicensed wireless, copper and optical fiber | Sprint | 75 Mbps (early stage technology, distance and line of sight dependent throughput) |
| Broadband Over Powerline | Electrical transmission lines | Early stage industry without a leader | 4 Mbps |
4.C.ii. Long-Haul, Local, and Last Mile Networks
The type of networks utilized to transport telecommunications traffic can further be categorized into Long-Haul networks, Local Transport networks, and Last Mile networks. Long-Haul networks are those networks that connect one community to another. Local Transport networks are those networks that move telecommunications capacity around within a community. Last Mile networks are the portion of the networks connecting the end user locations to the first physical location of the Local Transport networks.
The technological convergence of data, voice, and video into one uniform format of bits has eliminated the practice of distinguishing networks on the basis of the content of the traffic transmitted. Table 3 describes each type of telecommunications technology along with advantages and disadvantages.
Optical fiber technology has emerged as the clear leader in reliability and cost effectiveness for Long-Haul high-capacity networks. There is no currently known technology that appears capable of displacing optical fiber as a mainstay of Long-Haul, high-capacity telecommunications transport. Some microwave transport is still in use in niche applications, such as in Long-Haul transport between the smallest markets, however it is being displaced by optical fiber. Optical fiber transport also is becoming the preferred technological choice for Local Transport uses.
Broadband over Power Lines (BPL) Broadband over Power Lines (BPL), also known as Power Line Communication (PLC), is a technology that allows Internet data to be transmitted over utility power lines. To use BPL the subscriber needs to use a special BPL modem that plugs into an electrical outlet. Internet services are received via radio waves over electrical lines, using many of the same frequencies that are traditionally used for ham radio. There are two types of BPL: 1) in-building BPL technology, which uses the electrical wiring within a building, and 2) access BPL, which uses the electrical power distribution grid to provide broadband Internet access. The City of Manassas, Virginia had a successful one-year pilot with BPL. Based on the success of the pilot phase, in October of 2003, the City Council of Manassas voted to award a franchise to a provider for city-wide deployment of the service. BPL has also been deployed in Cincinnati, Ohio; Dallas, Texas; and other U.S. cities, and trials are underway in other nations worldwide. |
Table 3: Advantages and Disadvantages of Technology Types
| Transport Technology Type | Advantages | Disadvantages | Use (long-Haul, Local transport, Last Mile) |
|---|---|---|---|
| Wireline Technologies | Wireline Technologies | Wireline Technologies | Wireline Technologies |
| Optical Fiber Cable | Virtually unlimited bandwidth; future proof for application of different transport protocols (time division multiplexing (TDM), Internet protocol (IP), Ethernet); highest quality of service/reliability | High upfront installation costs; slow/costly right-of-way acquisition; slow installation times | Long-Haul, Local Transport, Last Mile |
| Coaxial Cable/Cable Modem | Inexpensive installation; high-level of installed base of cable | Limited bandwidth capabilities (38 Mbps); limited geographic range without regeneration (2,000 feet) | Local Transport, Last Mile |
| Copper Pair/ Digital Subscriber Line (DSL) | Inexpensive installation; high-level of installed base of cable | Limited bandwidth capabilities (10 Mbps); limited geographic range without regeneration (10,000 feet) | Local Transport, Last Mile |
| Broadband Over Powerline | Inexpensive installation; high-level of installed base of cable | Limited utility for any use other than distribution within a building; limited bandwidth capabilities (4 Mbps) | Last Mile |
| Wireless Technologies | Wireless Technologies | Wireless Technologies | Wireless Technologies |
| Cellular Wireless | Well developed technology; large installed base of equipment; roadmaps to much higher bandwidth services are being developed | Capital investment intensive; must have licensed spectrum to avoid interference and therefore expensive; limited geographic range without regeneration means will remain a local transport technology | Last Mile |
| Wi-Fi | Inexpensive for pick and choose hot spot type locations; expensive to blanket an entire community with Wi-Fi mesh capability | Limited bandwidth capabilities (54 Mbps); limited geographic range without regeneration (100 feet) means it will remain a pico-cell application; interference issues due to use of unlicensed spectrum | Last Mile |
| WiMAX | Greater range than Wi-Fi; fewer right-of-way issues than cable, copper, or fiber | Limited bandwidth capabilities (54 Mbps); unproven technology and limited equipment availability currently; limited geographic range without regeneration (two to three miles) means more likely a local transport technology; must have licensed spectrum to avoid interference and therefore expensive | Local Transport, Last Mile |
| Satellite | Can be used nearly anywhere; may be only option for those without DSL or cable modem option | High-cost of satellite deployment, low bandwidth; very expense cost of service | Converged Long-Haul, Local Transport, Last Mile |
| Microwave | Well developed technology; fast installation; low capital expenditure per link | Limited bandwidth (155 Mbps); expensive to change to different transport protocols; moderate quality of service/reliability (rain fade); limited geographic range without regeneration | Long-Haul, Local Transport, Last Mile |
Figure 14 illustrates the basic construction and operation of a local telephone company network connected to a Long-Haul fiber network that serves both its own end users as well as a third party wireless company. As can be seen from the figure, even the wireless company relies on the local telephone company to provide the transport from its wireless towers. The local phone company itself also is dependent on the long-haul company in order to get its own long-distance voice and Internet traffic out of the market. This type of dual competitive/cooperative relationship is normal in the telecommunications market.
An access point to the long-haul optical fiber is typically a manhole and building where the optical fiber can be accessed (spliced) and then connected to an interexchange carrier (IXC) point of presence (POP). An IXC is a Long-Haul telecommunications provider that supplies long-distance and Internet connectivity to a Local Phone company, and point of presence is the physical location where the networks are connected. Local Phone Company Central Office is the aggregation point of all the end user connections and the distribution point for telecommunications services (i.e., local telephone, long-distance telephone, and Internet).
4.C.iii. Selection of the Appropriate Telecommunications Transport Technology
As is clear from the above discussion, there are many different telecommunications technologies that could be used for any particular application. The selection of the appropriate technology for any given need or set of needs must be informed by a combination of technological, economic, and other factors. This selection must be made for virtually every individual link in the network since the characteristics, geographies, and bandwidth needs will vary along the multiple links in network from the end user to the ultimate end point of the communications.
Figure 14: Basic Elements of a Local Telephone Company Connected to a Long-Haul Fiber network
The selection of the correct technology at each point in a telecommunications network to deliver telecommunications service must consider each of the following factors:
- How much bandwidth is sought to be delivered both now and in the future?
- Is the end-user located at a fixed or mobile location? Wireline technologies cannot be used to deliver the last mile of service to mobile phones.
- What quality of service is required? Voice and video require a greater quality of service than data services.
- What is the density of population of the area to be served? The business case for deploying a high-cost technology is unlikely to make economic sense when deployed in a low population density area.
Each of the above factors is essential in selecting the correct technology or combination of technologies to deliver a given telecommunications service or set of services. The selection of technology also varies by what portion of the network need is sought to be fulfilled. Some technologies such as Wi-Fi and DSL are only usable as a solution for the ‘last mile’ to the end-user. Generally, optical fiber makes economic sense to deploy only when there is a need for high-bandwidth services. The selection of the correct technology is very fact-specific and must be undertaken with great care.
4.C.iv. State Department of Transportation Requirements for Selecting Telecommunications Transport Technologies
State DOTs have used two approaches to addressing their telecommunications needs, namely building the telecommunications networks and/or leasing telecommunications service from a private sector provider.
From a leasing perspective, the DOT would not be concerned with the transport technology used by the service provider, as the only consideration for the DOT would be the delivery of the required bandwidth for an acceptable price and term of contract. This approach of using private sector services to meet DOT telecommunications transport needs provides a model for backhaul communications capabilities required for VII and other transportation data initiatives. The DOT telecommunications network becomes another DOT need that must be fulfilled in the same way as computer LAN/WAN (wide area network) connections, telecommunications voice services, and Internet access services. In these instances of computer, voice, and Internet services, the DOTs have historically relied on the private sector to fulfill these needs rather than building potentially duplicative and competitive telecommunications networks to meet these DOT needs. Bringing services to rural areas to meet the transportation needs of the DOTs also would assist the private sector in making the business case that construction of broadband networks can be utilized by others in the community. One of the difficulties with leasing telecommunications service is that operational costs are typically disallowed expenses as part of a Federal grant. Under this type of scenario, it may be necessary to alter the way Congress views operational and capital costs.
The choice of telecommunications transport becomes much more important if the DOT decides to construct, or to enter into a public-private partnership to construct a telecommunications network. There already is a considerable long-haul optical fiber infrastructure installed throughout the United States. It is unlikely that a private sector company will be interested in entering into a public-private partnership to install just optical fiber along an interstate highway right-of-way. However, private sector companies might be interested in installing a hybrid project involving wireless infrastructure (towers, antennae, small buildings) that will connect communities to the existing long-haul network.
4.d. Implementation Issues
A number of practical policy and institutional issues must be addressed in determining how to implement HST infrastructure along interstate highway corridors. These include:
- State rights-of-way and utility accommodation policies;
- Statewide telecommunications plans; and
- The role of the private sector.
4.D.i. Rights-of-Way Policy
Each State has a Utility Accommodation Policy (UAP) regarding public and private utility access to State-owned ROW. The UAP defines what types of utilities may access certain types of ROW and provides construction guidelines. One of those guidelines is where within the ROW a utility may install their infrastructure. Some States have a defined utility corridor adjacent to the outside ROW line while others allow utilities to be installed adjacent to the roadway or wherever available space is in a corridor. No matter the State’s approach, the ROW is a finite commodity that needs to be treated as a valuable resource.
During the course of this study, each State was asked to estimate the value of the ROW along the subject corridor. The purpose of this is to identify what the value of the land is if a telecommunications company needed to access private land versus public ROW to install infrastructure. The answers received varied greatly based on what part of the country the ROW was located, urban versus rural, agricultural versus commercial, etc. In general, rural area agricultural ROW values were $1,000 to $5,000 per acre. In urban areas the amounts varied dramatically and should be considered on a case-by-case basis.
"In general, rural area agricultural ROW values were $1,000 to $5,000 per acre. In urban areas the amounts varied dramatically and should be considered on a case-by-case basis." |
One interesting exception to the standard approach of purchasing ROW for fair market value was in Minnesota. In the case of buying land for telecommunications towers, rather than paying the landowner for the property based on the value of adjacent land, the State is required to pay the landowner for the value of the land based on what it is to be used for, in this case telecommunications. In other words, the property the State may be interested in can be in the middle of a corn field, but rather than paying the landowner for one-acre of corn field, the State must pay the landowner for one-acre of telecommunications property. In Minnesota, the average value of land used for telecommunications is $25,000 to $40,000 per acre.
For interstate highway ROW, ownership lies with the State. There are some exceptions to outright ownership of the ROW if the State has an easement with an adjacent landowner that restricts the use of the ROW. For the corridors that are part of this study, the ownership of the ROW and areas subject to easement restrictions will be investigated with the development of the preliminary alignment plans.
4.D.ii. Statewide Telecommunications Plans
All of the States interviewed for this study had an established agency or organization within the State that manages telecommunications assets for State government. These organizations negotiate telecommunications contracts, maintain State networks, and provide for IT services between offices for all State agencies. In Iowa and Minnesota, these agencies are enterprise agencies, which means that they are self-sustaining and their operating budgets come from the fees they charge State agencies for their services. In most cases, there is good cooperation between the DOT and the State telecommunications agency.
"When structuring public-private partnerships certain elements should be incorporated to help ensure successful implementation and long-term success." |
One of the questions to be answered by this study is whether or not the establishment of a HST backbone along an interstate highway corridor is of benefit to the State as a whole, not only the DOT. The answer appears to be yes. The representatives interviewed from the State telecommunications agencies stated they can absolutely make use of the infrastructure to enhance their networks and provide better services to their customers.
One fear expressed by private sector stakeholders is the loss of business if the States create their own networks for carrying data versus leasing service. One potential solution is for the private sector to be contracted to manage State-owned telecommunications infrastructure. The private sector is better equipped to manage the rapidly changing technology and keep personnel trained than State government, and costs may be offset by sharing use of the infrastructure with the private sector manager.
4.D.iii. Role of the Private Sector
In the 1990s, when fiber optic companies were seeking rights-of-way on which to construct Long-Haul fiber routes, several public-private partnerships were created in which the private company received the use of interstate highway rights-of-way in exchange for providing to the DOT telecommunications services and telecommunications assets along the rights-of-way. The current lack of market demand for new Long-Haul fiber routes means there is little market demand for Long-Haul rights-of-way for the installation of fiber. Nevertheless, the interstate highway rights-of-way and the DOT need for telecommunications services may have value to different companies within the telecommunications sector which could be leveraged to further rural broadband penetration rates.
Partnerships for Infrastructure Construction
When evaluating public-private partnerships with a particular industry sector for infrastructure projects, the most fertile ground for such relationships will be found in those companies that are still in the expansion portion of their business life cycle. Those companies will likely have not only a current infrastructure need to be filled but also will have access to capital that can be utilized to add value to the project. Currently, within the telecommunications sector, one such fertile ground is the wireless sector. More specifically, DOTs should explore possible relationships with cellular wireless carriers who are augmenting their existing networks to meet the explosive growth in demand for wireless mobile data services, and emerging WiMAX-based wireless carriers.
Wireless carriers are experiencing high growth rates of usage of their networks due to increasingly bandwidth intensive mobile applications on wireless devices such as live video news feeds, streaming video, streaming audio, and general Internet access. This growth has lead to the need for a higher density of tower sites and higher capacity fiber-based services to each tower site. Likewise, the emerging companies building their businesses around the new WiMAX technology are building new ‘greenfield’ networks, and therefore have an even broader need for tower sites.
Value Proposition to Telecommunications Companies
The value of a public-private partnership to a private telecommunications company for use of interstate highway rights-of-way can be realized by the private partner through:
- Lower capital expenditures to build out a network;
- Lower operating costs after completion of network construction; and
- Other softer cost savings that are harder to quantify but which are readily understood in the telecommunications industry.
"...DOTs should explore possible relationships with cellular wireless carriers who are augmenting their existing networks to meet the explosive growth in demand for wireless mobile data services, and emerging WiMAX-based wireless carriers." |
Lower Capital Expenditures
The capital expenditures necessary to construct a telecommunications network (whether fiber or wireless) can be reduced through the use of interstate highway rights-of-way rather than other types of rights-of-way. The interstate highway rights-of-way have a lesser number of interchanges than do secondary roads on which fiber may be constructed. Digging trenches in the ground is the most inexpensive method of fiber installation but can only be utilized where the rights-of-way are unobstructed by crossing roadways. Interchanges and secondary road intersections have lateral roadways which require the use of more expensive subterranean boring to install the fiber. Fewer road crossings or interchanges mean a lower overall cost to install a fiber route. This dynamic is of lesser importance when considering partnerships with wireless telecommunications companies due to the only intermittent need for rights-of-way to place towers.
One Right-of-Way Provider for the Entire State/Corridor
A telecommunications company can obtain use of rights-of-way throughout the State with one transaction or relationship in a public-private partnership. This single agreement will reduce operating costs and potentially speed construction since there will be only one group of decision-makers on business issues in the relationship, one process for permit issuance, one set of construction standards, and one set of maintenance standards.
Use of secondary rights-of-way involves winding through the permitting and, in the case of wireless towers, the zoning and siting processes, of multiple entities. Municipalities are becoming increasingly difficult to appease regarding aesthetic issues surrounding tower sites. There also are a myriad number of such municipalities on a given route, each of which has its own differing and sometimes conflicting standards for tower placement. The time that can be saved by working with just one right-of-way provider on these complex issues has real value to a telecommunications service provider seeking the fastest construction time for its network.
Stability of Right-of-Way
Utilizing a State DOT or other State entity as a right-of-way provider eliminates some risks that would otherwise accompany having a private entity as the right-of-way providers. The risk of bankruptcy of the right-of-way provider and potential rejection of the right-of-way agreement by the bankruptcy party is much lower when the provider is a governmental entity. To the extent that the right-of-way grant can be made in the form of an easement, the telecommunications company partner enjoys even greater stability of the right-of-way grant under State property laws.
Recently, lawsuits have been brought by various utility right-of-way landowners against the utilities that utilize those rights-of-way. Generally, these lawsuits arise where the easement the landowner granted had a limited scope of usage, such as usage only for railway purposes. These lawsuits seek damages from telecommunications utilities for usage that is beyond the permitted railway scope of use. This issue also has arisen on State and county secondary roads built on easements with a scope limited to highway purposes. To the extent that a State DOT acquired full legal title to the rights-of-way containing the interstate highway, any private partner of the DOT would be exposed to little or no risk of liability for underlying rights-of-way issues.
Public-Private Partnership Tools for Success
When structuring public-private partnerships certain elements should be incorporated to help ensure successful implementation and long-term success.
Short Time to Commencement of Construction
Any public-private partnership should be evaluated, reviewed by decision-makers, and approved in a short timeframe; for example, six months or less for all negotiations, documentation of the transaction and the commencement of construction. Telecommunications is a highly competitive industry. Accordingly, the time that it takes to bring any particular product to market must be short to protect the competitive advantage that can be of such great value to the private partner. Longer lead times to close the transaction mean more time in which the network is not creating revenue and in which the cost of borrowing the dollars to fund the capital expenditure is essentially getting a zero-dollar return.
Private Sector Ownership of a Portion of the Telecommunication Assets
A public-private partnership for telecommunications purposes could be constructed such that the public sector owns the asset and simply leases capacity to the private sector. However, private sector ownership of a portion of the assets is essential to realizing the full value of the transaction. Generally, if the private partner owns its portion of asset, it reduces long-term variability of costs, and thereby lowers the overall business risk compared to a non-owned assets scenario. Owning an asset from the transaction also makes it more likely that the private partner will make additional capital investment that is dependent on the partnership obtained asset.
For example, if the WiMAX company obtains a short-term lease to a tower constructed on the interstate highway rights-of-way, the private company will be less likely to spend capital to construct additional towers from the interstate highway to rural markets for broadband assets. With only a short-term lease for use of the tower or a short-term lease to capacity provided from the tower, the private company has the risk that the transaction with the DOT will falter and therefore any capital expended for a network asset that is dependent on the existence of that tower lease or capacity is at risk of becoming a useless asset.
In addition, if lit capacity or dark fiber were to be leased from the DOT to the private partner, it is unlikely that a large commercial carrier would be comfortable that the DOT has sufficient core competencies to meet the stringent maintenance and repair standards required in the telecommunications industry. These dynamics make it less likely that telecommunications companies would participate in a public-private partnership in which the telecommunications company does not get ownership and control of a portion of the telecommunications asset.
4.e. Preliminary Alignment Approach
A portion of the work for this study is to aid in the development of preliminary alignment plans for telecommunications infrastructure along interstate highway ROW of the three identified corridors, including wireless structure locations. One obvious challenge to developing a comprehensive approach will be to meet the varying needs of the States involved in the study. This section discusses these challenges and how they will be addressed in the Report to States which will subsequently be developed as part of this study.
4.E.i. State Needs
Each of the 10 States involved in this study is different with respect to the development of telecommunications public-private partnerships, and is therefore different with respect to their need for a preliminary alignment plan. For instance, South Dakota DOT has never engaged in a public-private partnership for telecommunications, but would like to have a preliminary alignment developed so that they are better prepared to determine what will be required should they choose to develop a partnership. Massachusetts and Vermont already have preliminary designs for upcoming shared resource projects and therefore have little need for an alignment plan. Mississippi and Alabama laws do not allow shared resource projects, so these States also have no need for an alignment plan to be produced.
The study team is proceeding with the development of conceptual alignment plans that showcase typical construction design challenges that will assist all States as programs move forward. These challenges would include difficult soil conditions (rock), environmentally sensitive areas such as wetlands, and construction issues with bridge attachments and complex interchange configurations.
4.E.ii. Representative Segments
The proposed approach to the development of preliminary alignments is to develop standard sections over representative segments of roadway. This will entail the determination of the applicable standards of each State for telecommunications utility installations and likely the creation of standard alignment plans for each State that the corridor traverses.
4.E.iii. Location of Access Points
Fiber optic infrastructure requires access in order to connect various field devices or make connections to adjacent rural communities. Access points in the form of handholes or at regeneration buildings should ideally be spaced to accommodate the needs of the State DOT based on their deployment plan for ITS devices in the future. One methodology is to locate access points at or near interchanges. This allows connection to field devices that may likely be located at or near that interchange, and also provides an access point for future communication connections to communities or facilities accessed via the roadway served by that interchange. At a minimum, access points should be provided at every regeneration building and provisions made in any agreements that will allow the State to create an access point at locations of their choosing in order to access the telecommunications backbone (if provided for in their contract).
4.E.iv. Design Challenges
There are numerous differences in design standards and accommodation policies among the States included in this study. Minnesota and Wisconsin have well-defined utility corridors adjacent to the ROW line. Massachusetts is anticipating a design that would install conduit and fiber optics very near the shoulder-line of the roadway. Louisiana allows their utilities to incrementally move away from the ROW line in order to avoid utilities already in place. Any alignment plan developed will need to take into account the differences among the States and make accommodations for those differences. Ideally, consensus among corridor States will allow cohesive designs in a corridor spanning several States.
Different construction and environmental issues also will need to be addressed in each State and will affect any alignment plans. Avoidance of environmentally sensitive areas, such as wetlands and crossing of streams and rivers, is common to all of the States. In addition to the Federal environmental review and permitting process that each State follows, however, there are State environmental regulations that must be met. In South Dakota, for example, no construction near streams is allowed during the spawning season of the Topeka Shiner. In Vermont, there are rock protectionist groups with concerns that need to be addressed.
Construction issues vary greatly by State as well. In Mississippi, there is a layer of Yazoo clay in places that shrinks and swells dramatically and can deform conduits. Flexible conduit needs to be used in these areas. Some of the States routinely allow conduit attachments to bridges; others do not without just cause. Bullet-proof conduits on bridges are a requirement for most of the states. Areas where rock and wetlands are located adjacent to the highway in Vermont will require median installation of fiber along Interstate 91. Louisiana requires conduit to be installed at least six-feet deep or be encased; other states have a three-foot minimum. Other than occasional rock outcroppings, the States along the I-90 corridor have very few construction issues due to the openness and accessibility of the ROW.
The variability in the State construction standards and the differing issues in each State will represent a challenge to producing a one-size-fits-all alignment plan. This should also be an indication of the challenges presented in developing public-private partnerships involving multiple States along the same corridor. Although these elements are discussed here as challenges, for a corridor to be successful, addressing these challenges allows a project to take form rapidly.
4.f. Operational Issues Associated with Installation and Maintenance
Among the major concerns for the FHWA and States with respect to opening interstate highway ROW up for telecommunications utility installations is the safety of the driving public. Traditionally, access to interstate highway ROW has been restricted to avoid creating potential hazards to the motorists. One of the fears with allowing utility contractors on interstate highway ROW is the potential for hazards to be created by the presence of construction equipment within the ROW. This would include the equipment for installation of conduit and towers as well as equipment carriers used during mobilization and offloading in the ROW. Post installation, maintenance vehicles accessing regeneration or control buildings along the ROW and performing repairs may represent a hazard as well. As reported by the States involved in this study, there was one State that had anecdotal information from the State patrol that a couple of accidents had been caused due to the installation activities of a contractor. No other information beyond that was available. No other States reported this as being an issue and they did not feel this was going to be an issue as long as the contractors exercised proper traffic control during all activities.
4.g. Case Studies of Successful Practices
Despite the various challenges involved, there are a number of examples in which study corridor States have successfully developed public-private partnerships to deploy fiber optics or other HST communications systems along interstate highways and other corridors. Examples of such successful partnerships are highlighted in Louisiana, Massachusetts, and Minnesota.
4.G.i. Louisiana
The State of Louisiana has successfully engaged in public-private partnerships with telecommunications companies since 2000. State law permits the LaDOTD to partner with the private sector to install fiber optic infrastructure along interstate highway ROW and to share tower space with private companies. In exchange for allowing access to the interstate highway ROW and towers, the LaDOTD receives compensation in the form of cash, infrastructure such as dark fiber or conduit, or bartered telecommunications services. The State’s telecommunications utility access policy is to allow anyone on the ROW at anytime, subject to approval. This means that they do not advertise for companies to partner with nor provide them exclusive access. Access to interstate highway ROW in Louisiana is on a first-come, first-serve basis and theoretically, there is no limit to the number of companies that may install infrastructure along a certain stretch of highway. For State-owned towers, the LaDOTD allows private companies access to their towers. There is a permit fee and the company must perform a loading study based on the equipment they wish to install on the tower. In one case, LaDOTD has allowed a private entity to build a tower on State property for their use. There are no restrictions on to whom the private telecommunications company may market their services.
Compensation rates are pre-established and the private company must accept the rates or not perform their installation. By law, the LaDOTD can only recuperate administrative costs associated with the permitting process. Therefore, the LaDOTD tries to balance the cost of the installation permit with the value that the State receives. Currently, the permit cost in Louisiana is a one-time fee of $5,000/mile for fiber installations on interstate highway ROW and $3,500/year per tower permit. The tower permits are generally set up on a 10-year basis. These fees are considered by LaDOTD to be a bargain for telecommunications companies as opposed to those companies negotiating and purchasing their own easements.
This established process for allowing utility installations for a set compensation rate has been very successful for Louisiana. They have extensive fiber networks throughout the State and their tower usage fees are used to fund ITS projects within the State through a barter system. In order for LaDOTD to get telecommunications services for data transport between field equipment and a TMC or between other offices, they would normally have to contract with their Office of Telecommunications Management and be subject to the rate structures they have negotiated. With the ability to barter with telecommunications providers for services under their established procedures, LaDOTD can directly receive telecommunications service for their needs.
This case study shows how the establishment of an access policy and predetermined rate structure can prepare a DOT to react quickly to requests for ROW access and receive fair compensation that can be used to improve their ITS communications network.
4.G.ii. Massachusetts
In 1997, Massachusetts developed a shared resource policy initiative to promote public-private cooperation to facilitate deployment of telecommunications systems along Massachusetts highways. The policy generally contemplated fiber optic infrastructure construction within State/interstate highway ROW funded by the private sector. In exchange for use of the ROW, MassHighway standardized and streamlined its telecommunications project approval and permitting processes and received defined system capacity in the form of two 1.25-inch conduit, one empty and one containing 12 strands of unused (i.e., dark fiber) single mode fiber optic cable. There were a few projects, e.g., Level 3 Communications, completed in Massachusetts under this policy initiative.
Today, MassHighway is revising their wireline policy. The policy currently under development is an entirely different model than the Wiring Massachusetts initiative of 1997. Pending approval for funding, MassHighway has initiated a project to pay for and construct 63 miles of conduit and fiber optic cable within ROW on the I-91 and I-291 corridors to support expansion of ITS and promote economic development. The project will provide for six conduits within the highway ROW, five of which are empty for future use, including four that can be leased out by the Division of Capital Asset Management (DCAM) with one empty spare reserved for MassHighway’s future use. Ninety-six fibers will be installed in one conduit for MassHighway use. Private entities seeking access will pull fiber through the empty conduits. In this way, MassHighway has complete control over how excess capacity is built out and how access is provided to the infrastructure.
Central to MassHighway retaining this control is the ability of DCAM to execute long-term, revenue generating agreements on behalf of the State and MassHighway with private providers. Similar to the wireless policy already in place, DCAM will execute necessary agreements to lease capacity to the private sector in an open and fair environment.
This important project currently is being procured. To reduce risk and accelerate project delivery, MassHighway has initiated necessary environmental reviews. Recently they have secured decisions of non-applicability from all 12 conservation commissions covering the I-91 and I-291 corridors. They have developed a preliminary design positioning the conduit pathway within 10-feet of the edge of pavement in order to construct in areas previously disturbed as an aid to securing permits for construction.
The current market climate has dictated that MassHighway put in the conduits versus letting the private sector do so. There is not enough positive economic benefit to a private sector provider for them to fund the installation independently. MassHighway has recognized this and updated the traditional public-private partnership model to meet their needs as well as provide a business case for a private sector partner to join them. The specific language to govern future public-private partnership is being written into the Massachusetts Utility Accommodation Plan, with the wireless language complete and the wireline language currently under review.
4.G.iii. Minnesota
The State of Minnesota created a project called “Connect Minnesota” in 1996. The project was designed as a public-private partnership in which private telecommunications companies were given the opportunity to bid on the project and propose the level of compensation that would be provided to Minnesota in exchange for access to interstate highway ROW and other highways. Connect Minnesota was to provide communications services between several major cities in Minnesota as well as penetrate into rural areas of the State.
Two bids were received and ultimately one was accepted from ICS/UCN LLC. An agreement was reached between the State of Minnesota and ICS/UCN and construction began in 1998. The first route to be constructed was Interstate 94 from the Minnesota-Wisconsin border to the Minnesota-North Dakota border, approximately 250 miles. Ultimately, Connect Minnesota was to build out over 2,000 miles of telecommunications infrastructure by the time it was completed.
Soon after construction began, there was a downturn in the HST industry. Without a market to sell their services to and a large investment in the construction of the Interstate 94 infrastructure, ICS/UCN LLC was forced to file for bankruptcy. Interstate 94 was the only route where construction had been started and Minnesota ended up with multiple conduits and access vaults along the entire length of the route, but no private service provider to operate or maintain a network. Ultimately, AT&T entered into an agreement with the State to take over management of the infrastructure along Interstate 94 in exchange for the right to use the infrastructure and the provision of telecommunications services to the State.
As a result of the Connect Minnesota project not delivering on its advertised goal, the Minnesota State Legislature enacted a law that prohibited State agencies from engaging in public-private partnerships with values in excess of $100,000 without legislative approval. This in effect prohibited any type of shared resource project in Minnesota. While the project was initially characterized as a failure, ultimately it provided for the installation of several million dollars worth of telecommunications infrastructure along the major east-west route in the State and is providing a large benefit to the State to this day.
This case study demonstrates that these projects are risky and there will be successes and failures, but if the risks can be overcome and expectations managed for what each partner can bring to the table, then a benefit to all parties can be achieved. The case study also demonstrates the need for a DOT to be flexible when working with the private sector. Market forces can shift the direction of a project and partnering is required to deal with unavoidable changes over the course of a project’s life.
