Hot-Wiring Anaheim

By P.J. HUFFSTUTTER

July 24, 1997 12 AM PT

TIMES STAFF WRITER

ANAHEIM —

More than 100 years ago, this city’s public utilities department turned on a switch and delivered electric light to its residents.

The same agency now stands behind one of the country’s most ambitious telecommunication ventures: to connect every home and business to a high-speed digital network, a laser-powered system with virtually no limits on how much--and how fast--it can transmit data.

For the city, it’s a revenue windfall. For consumers, it eventually means hundreds of new cable channels, incredibly fast Internet connections, direct access to local libraries and potentially cheaper phone bills.

Friday, Anaheim takes its first step toward a fiber-optic future by rolling its power unit’s phone service off Pacific Bell’s copper wires and onto SpectraNet International’s digital lines.

By September, all city administrative phones--from the libraries to the Police Department to the mayor’s office--are expected to be switched over to the faster grid and sporting new numbers.

However, residents must wait at least a couple of years before plugging into this citywide web and its promised digital delights. And when they do, it could cost thousands of dollars to bring a fiber-optic cable all the way to their front door.

The city’s phones will use the prefix 765, abandoning 254, but keep the same suffix. Both numbers will continue to work for three months.

“When you realize all you need is a single cable about the width of a garden hose, and that can handle all the telecommunication needs for everyone in the city, why would you want to go with any other option?” said Edward Aghjayan, the utility department’s general manager.

Fiber-optic wire moves information by firing bursts of light along a glass thread thinner than a human hair. A single strand can carry thousands of times more information--at rates billions of times faster--than copper wire used in traditional telephone systems.

It takes 18.5 minutes to transmit a digital copy of the Mona Lisa over most telephone lines. With fiber, that enigmatic smile pops up in only a tenth of a second. An episode of “Seinfeld”--including commercials--sent through a 14.4 modem takes nearly 3 1/2 days. But audiences wait just 28 seconds when the same footage is transmitted across fiber.

“Eventually, physics will force us to reach a limit. But for the time being, fiber is erasing the bandwidth problem,” said John Lewis, senior vice president of network operations for SpectraNet, a San Diego-based telecommunications firm.

Anaheim’s utility department relies on a network of 10 electric substations and four water facilities, which regulates the amount of power delivered to customers. Years ago, the city laid telephone lines between each hub, creating a communications network.

From a central location, staff tapped these copper lines to operate switches in each substation. If a problem occurred, the system could be shut down immediately.

As the copper began to decay, the city decided to upgrade to fiber-optic, an industry standard among utility companies.

“If we don’t protect the equipment in the substations, we could lose millions of dollars trying to replace it,” said Vishwa Tiwari, principal telecommunications engineer for the city’s public utilities department. “It’s a matter of whether you want to pay to prevent problems or pay to fix them.”

In 1994, the city set aside $6 million to build a 50-mile grid, which connects the substations and all of Anaheim’s administration offices.

The actual cable contains 96 fiber lines. Thirty-six are devoted to handling city government needs. Anaheim leased the remaining 60 strands in 1996 to SpectraNet, which specializes in developing and marketing telecommunications systems to cities.

The San Diego firm will then rent the spare lines to other companies looking for high-speed lines, from local cable companies to national telephone groups.

“We want to be it all, your phone company and your cable provider and your home shopping network,” said SpectraNet president and chief executive Renney Senn. “This is the future: every entertainment and telephone and computerized need funneled into a building through one pipe.”

For SpectraNet, these 60 lines represent less than 5% of the total network it plans to build in Orange County. Five additional fiber-optic loops, each anchored on Anaheim’s backbone, will encompass the city’s industrial and commercial-heavy areas. SpectraNet expects these lines to be finished by next year.

The company has also approached several other communities in the county, and hopes to expand its networks into Santa Ana and Orange.

“It’s a bold plan, but not a new idea,” said John Castagna, a spokesman on science issues for the Edison Electric Institute in Washington.

Indeed, the modern marriage between the telecommunication and utility industries dates back several decades, particularly in places where state and local laws allowed such service cross-breeding. In the 1970s, MidAmerican Energy Co. laid fiber-optic lines in Des Moines. By the ‘80s, they were providing long-distance telephone access.

The trend continued elsewhere, particularly after the passage of the federal telecommunications act. TECO Energy Inc., the parent of Tampa Electric, forged a deal last year with First Alert Professional Security Systems. The agreement allows the security firm to use the utility’s fiber-optic communication system to provide residents and businesses with home security services.

And Southern California Edison leased part of its enormous capacity to ICG Access Service Inc., which could use the fiber-optic network to offer telephone services.

Pacific Bell launched its own effort in Orange County in 1993, as part of a statewide $16-billion venture. But by 1996, it dropped the Los Angeles and Orange County component of its fiber-optic plan.

Analysts say no one has tackled a plan as broad as SpectraNet’s for one simple reason--cost.

To get Anaheim’s lines, SpectraNet pays the city $450,000 a year and 30% of its net revenue.

These fees are minor, compared to the nearly $75 million SpectraNet will spend to build a fiber-optic web that connects the city’s commercial-heavy areas by the end of next year. It also doesn’t include the estimated $200 million needed to bring cable into Anaheim’s residential neighborhoods by 2004.

And until the cable enjoys mass appeal, some early subscribers will pay $2,000 to $3,500 to bring it from the curb to the building.

For consumers to enjoy fiber-optic’s ballyhooed speed, SpectraNet’s lines need to physically reach three points. The first connection is fiber to the node, which already exists within the city’s 50-mile loop. Then, it’s fiber to the curb, or along the actual roadways outside the buildings. Construction on this stretch is ongoing in Anaheim’s commercial areas.

Finally, the last stretch is fiber to the home, or a line that feeds directly into the building. Because most residences aren’t fiber-ready, this last leap is an expensive one.

“In the business world, companies can justify paying that kind of money for that kind of connection,” said Rona Shuchat, an analyst at International Data Corp. in Framingham, Mass. “But in the home? I can’t imagine an entertainment option that could justify the cost.”

SpectraNet agrees and, as of now, its high-speed loops will stop at the street. Older--and slower--metal-wired systems link it to commercial structures that aren’t fiber-ready. While the services will be available, the incredibly speedy connections won’t. At least not right away.

Analysts say the success of SpectraNet’s strategy depends on a very simple equation: the cost of installing fiber-optic lines dropping below the fee consumers are willing to pay for specific services.

Senn hopes that point will come in two years, just when SpectraNet plans to move into Anaheim’s residential areas. Then, the company plans to start building that last connection into every home.

Growing consumer reliance on computer technology could help the company’s bid to provide both fast Internet access and broad-band services. A recent study among 1,000 people who had computers in their homes found that 51% would rather give up their TV than their PC, according to the survey by New York-based research firm Roper Starch.

“It’s all about timing and who’s willing to take a chance,” said Aghjayan, the utility department’s general manager.

“The technology is already here. Now, it’s only a matter of time before the public and businesses realize what they can do with it.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Fiber-Optic Age

Anaheim’s fiber-optic loop, under construction since 1994, begins its initial operating phase Friday. A segment of the city’s phone service will be moved from Pacific Bell’s copper network to the digital system. The 50-mile network will provide a backbone for five major nodes under construction. Additional lines will eventually provide access to every Anaheim home and business by 2004. Approximate boundaries of the nodes:

1. Downtown

City Hall

Chamber of Commerce

Main Library

Police Department

2. Dowling

Industrial parks

3. Yorba

Industrial parks

4. Convention Center/Disney

Anaheim Convention Center

Disneyland