2011 Availability of Advanced Telecommunications Capability in

AVAILABILITY OF ADVANCED TELECOMMUNICATIONS CAPABILITY IN PUBLIC BODIES

2011 REPORT

Economic Research and Financial Analysis Division

Public Utility Commission of Oregon

December 2011

Advanced Telecommunications Capability in Public Bodies - 2011

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Availability of Advanced Telecommunications Capability in Public Bodies - 2011

Among the amendments HB 2577 enacted in 2003 was the requirement that the Public Utility Commission of Oregon annually submit a report including information on "[t]he number of public bodies, as defined by ORS 174.109, providing basic telecommunications infrastructure so that private entities may use that infrastructure to provide advanced information and communications services." According to ORS 285C.530(a), "[a]dvanced telecommunications facilities" means high-speed, dedicated, or switched broadband telecommunications infrastructure or equipment that enables users to send or receive high quality voice, data, or video telecommunications using any technology. While the statutory requirement to conduct the survey has sunset, in order to monitor and analyze the market for telecommunications services, the OPUC staff identified and surveyed public bodies in Oregon during fall 2011, gathering information on the existence and use of advanced telecommunications facilities. Survey Results: I. Market in General - Statewide The survey was sent to 534 public bodies in Oregon of which 360 were completed and returned for a response rate of 67 percent. Of the 360 respondents, 74 percent (265) do not own advanced telecommunications facilities, while 26 percent (95) of the respondents own some types of facilities. About 18 percent (16/95) of respondents who own some types of facilities are willing to offer some type of high-speed telecommunications services. About 14 percent (13/95) of respondents currently offer high-speed telecommunications services (see Figure 1).


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Figure 1. The Availability of High-Speed and Advanced Telecommunications

Capability in Public Bodies

0%

15%

30%

45%

60%

75%

Do not Own Own Facilities Willing to Offer Currently Offer2003 62% 38% 10% 6%

2004 65% 35% 11% 6%

2005 68% 32% 8% 5%

2006 66% 34% 7% 5%2007 70% 30% 8% 5%2008 69% 31% 4% 4%2009 72% 28% 6% 5%

2010 74% 26% 6% 3%

2011 74% 26% 4% 4%

The Availability of Capability 2003-2011

1. The Survey Questions The first part of the survey includes three questions. Q1. Do you own the following telecommunications facilities?

a. DSL (digital subscriber line) b. Coaxial Cable c. Fiber Optics (DS-1, DS-3, OCn, SONET, includes Dark Fiber) d. Copper Cable (T-1, DS-1) e. Satellite or Fixed Wireless f. High Bandwidth Switches g. Other


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Following are descriptions of the various types of advanced telecommunication facilities:

a. DSL: Digital Subscriber Line - is a communication technology that uses existing

twisted-pair telephone lines to transport high-bandwidth data, such as Internet, multimedia, and video.

b. Coaxial Cable: Typically used to connect a television to cable TV services,

coaxial cable consists of a small copper tube or wire surrounded by an insulating material and another conductor with a larger diameter, usually in the form of a tube or copper braid.

c. Fiber Optics: High-speed transmission using light to send images (in

telecommunications: voice or data) through a bundle of glass fibers.

d. Copper Cable: Copper cable is a pair of traditional copper telephone lines using electric current to carry signals.

e. Satellite or Fixed Wireless: A satellite is used to relay telecommunications

information. Fixed wireless means the use of radio or microwaves to connect any two stationary points.

f. High Bandwidth Switches: Bandwidth, in digital systems, refers to data speed

usually measured in bits per second (bps). High bandwidth is often equated with high-speed. ATM (Asynchronous Transfer Mode) is a high bandwidth, low-delay, connection-oriented, packet-like switching and multiplexing technique.

g. Other: Item "other" includes video telecommunications equipment.

Of the 360 public bodies responding to this year’s questionnaire, 95 currently own one or more type(s) of advanced telecommunications facility. Some of these 95 public bodies own more than one type of facility. Sixty-nine (69) respondents own fiber optic facilities, 44 own high bandwidth switches, 27 own copper cable, 38 own satellite or fixed wireless facilities, 25 own Coaxial Cable, 12 own DSL, and 6 own other telecommunications facilities (see Figure 2 for the percent of advanced facilities by type).


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Figure 2. Percentage of Advanced Telecom Facilities by Type in 2011

DSL 6%

Coaxial Cable11%

Fiber Optics31%

Copper Cable12%

Satellite/Fixed Wireless

17%

High Bandwidth Switches

20%

Other 3%

Percentage of Advanced Telecommunications Facilities by Type in 2011

The pie chart of Advanced Telecommunications Facilities by Type shows that 20 percent was High Bandwidth Switches, 6 percent was DSL, 31 percent was Fiber Optics, 12 percent was Copper Cable, 11 percent was Coaxial Cable, and 17 percent was Satellite or Fixed Wireless.


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The bar chart below displays the data (see Figure 3). The total of the numbers in each row in Figure 3 exceeds the number of responding public bodies with advanced facilities because some own more than one type of advanced telecommunications facility. Figure 3. Number of Public Entities Owning Advanced Telecommunications Facilities by Type 2003-2011

0

20

40

60

80

100

120

140

Own Total DSL Coaxial Cable Fiber Optics Copper Cable Satellite or Fixed

WirelessHigh Bandwidth

SwitchesOther

2003 138 13 35 77 80 44 58 4

2004 119 13 23 68 50 36 53 6

2005 120 4 24 68 50 40 60 5

2006 122 9 27 71 48 52 73 5

2007 110 6 18 72 45 41 48 7

2008 111 7 21 75 43 45 58 4

2009 76 5 13 50 26 28 39 3

2010 90 4 16 64 28 34 43 2

2011 95 12 25 69 27 38 44 6

Own Advanced Telecommunications Facilities 2003-2011


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The bar charts below show the number of public entities owning advanced telecommunications facilities by 6 individual types. Figure 3.1. Own DSL

Figure 3.2. Own Coaxial Cable


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Figure 3.3. Own Fiber Optics

Figure 3.4. Own Copper Cable


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Figure 3.5. Own Satellite or Fixed Wireless

Figure 3.6. Own High Bandwidth Switches


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Q2. If you own telecommunications facilities above, are you willing to offer telecommunications facilities to private entities for their use for advanced telecommunication services? If yes, indicate which facilities from the above list? Of the respondents who own facilities, 16 public bodies said they are willing to offer their facilities for use by private entities. Thirteen respondents are willing to offer fiber optics, five are willing to offer satellite or fixed wireless, and four are willing to offer high bandwidth switches (see Figure 4).

Figure 4. Number of Public Bodies Owning Facilities

And Willing to Offer Use to Private Entities

0

5

10

15

20

25

30

35

40

Total DSL Coaxial Cable Fiber Optics Copper Cable Satellite or Fixed

Wireless


Other

2003 36 5 6 18 19 7 10 3

2004 36 1 5 22 9 8 8 6

2005 31 0 4 19 11 8 12 3

2006 27 2 4 18 2 8 9 3

2007 28 1 3 20 7 6 9 2

2008 16 0 0 11 1 4 6 1

2009 16 0 0 11 3 4 5 1

2010 20 1 1 14 1 7 5 0

2011 16 1 1 13 0 5 4 2

Willing to Offer 2003-2011

Nineteen percent of Fiber Optics owners (13/69) are willing to offer those facilities to private entities, followed by 13 percent (5/38) for Satellite or Fixed Wireless, and 9 percent (4/44) for High Bandwidth Switches. Q3. If you own telecommunications facilities above, do you currently offer telecommunications facilities to private entities for their use for advanced telecommunications services? If yes, indicate which facilities from the above list? Fourteen percent (13/95) of the public bodies with advanced facilities said they currently offer those facilities to private entities for their use for advanced telecommunications services. Ten respondents currently offer use of their Fiber Optics facilities, five offer


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use of their Satellite or Fixed Wireless facilities, two offers use of their Copper Cable facilities, and three offer use of their High Bandwidth Switch facilities. As Figure 5 indicates, there has been a reduction over the last eight years in the number of public bodies offering the use of their advanced telecommunications facilities to private entities.

Figure 5. Number of Respondents Owning Facilities Currently Offering Service to Private Entities

0

5

10

15

20

25

Total DSL Coaxial Cable

Fiber Optics

Copper Cable

Satellite or Fixed

Wireless


Other

2003 22 2 3 9 7 3 5 4

2004 20 0 2 10 5 3 6 4

2005 17 0 3 10 7 4 7 1

2006 19 2 2 11 1 8 3 3

2007 18 1 2 14 3 4 5 1

2008 15 0 0 11 1 2 4 0

2009 14 0 0 9 3 3 2 1

2010 11 1 0 8 1 3 3 0

2011 13 1 1 10 2 5 3 2

Currently Offer 2003-2011

2. Market Trends The ownership of facilities providing high-speed and advanced telecommunications capabilities by public bodies has trended downward since the survey was initially administered in 2003. The downward trend occurred might be caused by the following reason. New technology makes “bit-price” (bit = binary digit, is the basic unit of information in computing and telecommunications) dropping, and the advanced telecom market does not show much price-demand elasticity. Therefore, there is no incentive to own the facilities when variety of options is available in the market.


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Figure 6. Availability of Capability 2003-2011

Several trends are present regarding the availability of advanced telecommunications capability in public bodies:

(1) The number of public bodies who OWN advanced telecommunication facilities declined by 31 percent from 2003 to 2011. The changes of individual type of facilities are showed in Figure 7.

Figure 7. Own Facilities


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(2) The number of public bodies who OWN advanced telecommunication facilities

and are WILLING TO OFFER the service to others declined by 56 percent from 2003 to 2011. The changes of individual type of facilities are showed in Figure 8.

Figure 8. Willing to Offer

(3) The number of public bodies who OWN advanced telecommunication facilities and CURRENTLY OFFER the use of their facilities to others declined by 41 percent from 2003 to 2011. The changes of individual type of facilities are showed in Figure 9.

Figure 9. Currently Offer

0

2

4

6

8

10

12

14

16

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Currently Offer by Type

DSL

Coaxial Cable

Fiber Optics

Copper Cable

Satellite or Fixed Wireless


Other


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II. Education Sector Increasing the quality of education is driving demand for high-speed connections and faster computers. Advanced high-speed telecommunications infrastructure is crucial for achieving the state’s targets for the public education sector. Access to greater bandwidth and higher speed data transmission will clearly provide a competitive advantage for Oregon’s quality education and information solutions. The survey showed that 44 percent (233/534) of Oregon’s public bodies are educational entities. Of the 360 survey respondents, 151 (42 percent) are school districts, colleges, or universities. Survey results include that, of the 151 respondents in the education sector, 40 percent (60 schools, 60/151) own some form of advanced telecommunications facilities as compared to 26 percent (95/360) of all public bodies responding. Ten percent (6/60 schools) of the education sector respondents owning advanced facilities are willing to offer use of those facilities to private entities as compared to 17 percent (16/95) of all public bodies responding. Seven percent of education sector respondent currently offers high-speed telecommunications services as compared to 14 percent (13/95) of all public bodies responding (see Figure 10).

Figure 10. High-Speed Facility Comparison between All Public Bodies and the Education Sector 2011

1. Schools Ownership of Telecommunications Facilities Of the 151 educational sector respondents, 40 own fiber optics, 20 own copper cable, 33 own high bandwidth switches, and 27 own Satellite/Fixed Wireless.


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Figure 11. Distribution of Advanced Telecommunications Facilities Types -

Comparison between All Public Bodies and the Education Sector in 2011

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%

DSL Coaxial Cable

Fiber Optics Copper Cable

Satellite/ Fixed

Wireless


Other

All Public Bodies 12.6% 26.3% 72.6% 28.4% 40.0% 46.3% 6.3%Education 10.0% 33.3% 66.7% 33.3% 45.0% 55.0% 6.7%

Facility Types - % Ownership Comparison between All Public Bodies and Education Sector in 2011

2. Schools’ Willingness to Offer use of owned Telecommunications Facilities

Ten percent (6 schools) of the school respondents said they are willing to offer use of their owned telecommunications facilities to private entities. This compares to 17 percent (16 public bodies) of all public body respondents willing to offer use of their owned telecommunications facilities to private entities.


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Figure 12. Distributions of Advanced Facility Types - Owners Willing to Offer to

Private Entities – All Public Bodies vs. Education Sector in 2011

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

DSL Coaxial Cable

Fiber Optics Copper Cable

Satellite / Fixed

Wireless


Other

All Public Bodies 6% 6% 81% 0% 31% 25% 13%Education 0% 0% 50% 0% 50% 33% 17%

School Districts and Colleges Willing to Offer the Advanced Facilities to Private Entities - 2011

3. Percentage of Responding Schools That Currently Offer use of their

Telecommunications Facilities to Private Entities

Four schools out of all school respondents currently offer use of their advanced telecommunications facilities as compared to 13 of all public bodies.


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III. Market Distribution – by Region

The 534 public entities were grouped into one of six regions based on their geographic location. The six regions are Portland Metropolitan,1 Willamette Valley,2 Southwest Interior,3 Coast,4 Central,5 and East.6

1 The "Portland Metropolitan" region consists of the following exchanges: Aurora, Beavercreek,

Beaverton, Burlington, Canby, Carlton, Charbonneau, Colton, Corbett, Estacada, Forest Grove, Gresham, Hillsboro, Hoodland, Lake Oswego, Molalla, Newberg, North Plains, Oak Grove-Milwaukie, Oregon City, Portland, Redland, Sandy, Scappoose, Scholls, Sherwood, Stafford, Sunnyside, Tigard, Vernonia, Woodburn-Hubbard, and Yamhill.

2 The "Willamette Valley" region consists of the following exchanges: Albany, Alsea, Amity, Aumsville-Turner, Bellfountain, Blodgett, Blue River, Brownsville, Clatskanie, Corvallis, Cottage Grove, Creswell, Dallas, Dayton, Deadwood, Detroit, Drain, Eugene-Springfield, Falls City, Gervais, Government Camp, Grand Island, Grand Ronde, Halsey, Harlan, Harrisburg, Horton, Independence-Monmouth, Jefferson, Junction City, Lewisburg, Lebanon, Lobster Valley, Lowell, Lyons, Marcola, McMinnville, Mill City, Monitor, Monroe, Mt. Angel, Murphy-Provolt, Oakridge, Philomath, Rainier, Salem, Scio, Shedd, Sheridan, Silverton, St. Helens, St. Paul, Stayton, Summit, Sweet Home, Triangle Lake, Veneta, and Willamina.

3 The "Southwest Interior" region consists of the following exchanges: Ashland, Azalea, Butte Falls, Camas Valley, Canyonville, Cave Junction, Central Point, Crater Lake, Days Creek, Diamond Lake, Elkton, Fish Lake, Glendale, Glide, Gold Hill, Grants Pass, Jacksonville, Medford, Myrtle Creek, North Umpqua, Oakland-Sutherlin, O'Brien, Phoenix-Talent, Prospect, Riddle, Rogue River, Roseburg, Selma, Shady Cove, White City, Wolf Creek, and Yoncalla.

4 The "Coast" region consists of the following exchanges: Ash Valley, Astoria, Bandon, Bay City, Beaver, Brookings, Cannon Beach, Chitwood, Cloverdale, Coos Bay-North Bend, Coquille, Depoe Bay, Florence, Garibaldi, Gleneden Beach, Gold Beach, Jewell, Knappa, Lakeside, Langlois, Lincoln City, Mapleton, Myrtle Point, Nehalem, Newport, Pacific City, Port Orford, Powers, Reedsport, Rockaway, Scottsburg, Seaside, Siletz, South Beach, Tidewater, Tillamook, Toledo, Waldport, Warrenton, Westport, and Yachats.

5 The "Central" region consists of the following exchanges: Antelope, Arlington, Bend, Bonanza, Bly, Camp Sherman, Cascade Locks, Chemult, Chiloquin, Condon, Culver, Dufur, Fort Klamath, Fossil, Gilchrist, Grass Valley, Hood River, Klamath Falls, Lakeview, La Pine, Madras, Malin, Maupin, Merrill, Mitchell, Moro, Mosier, Odell, Paisley, Parkdale, Paulina, Pine Grove, Prineville, Redmond, Rocky Point, Rufus, Silver Lake, Sprague River, Sisters, The Dalles, Tygh Valley, Wamic, and Wasco.

6 The "East" region consists of the following exchanges: Adrian, Athena-Weston, Baker, Bates, Boardman, Burns, Cove, Dayville, Durkee, Echo, Elgin, Enterprise, Flora-Troy, Granite, Haines, Halfway, Harney, Harper, Helix, Heppner, Hereford-Unity, Hermiston, Huntington, Imbler, Ione, John Day, Jordan Valley, Joseph, Juntura, La Grande, Lexington, Long Creek, Lostine, Meacham, Medical Springs, Milton-Freewater, Monument, Mt. Vernon, North Powder, Nyssa, Ontario, Oregon Slope, Pendleton, Pilot Rock, Prairie City, Richland, Ridgeview, Seneca, Spray, Stanfield, Starkey, Sumpter, Ukiah, Umatilla, Union, Vale, Walla Walla (Stateline), and Wallowa.


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Regional distribution of the 95 responding public entities that own some type of advanced telecommunications facilities is as follows: Willamette 25, East 16, Portland 17, Central 12, Coast 13, and Southwest Interior 12 (see Figure 13).

Figure 13. Numbers of Public Bodies Owning Advanced Facilities by Region

0

5

10

15

20

25

Portland Metropolitan

Willamette Valley

Central Coast East Southwest Interior

Own Facilities 17 25 12 13 16 12

Numbers of Public Bodies Owning Advanced Facilities by Region

The survey identified by region the advanced facilities currently owned, the number of public entities willing to offer use of their advanced facilities to private entities, and the number who currently offer use of their facilities. Statewide, of the 95 public bodies that own high-speed facilities, 16 are willing to offer use of their facilities to private entities and 13 currently do offer use of their facilities. Of the 95 public bodies that own advanced facilities, 25 are in the Willamette Valley; followed by the Portland (17), East (16), Coast (13), Central (12), and Southwest Interior regions (12). Of the 16 public entities that are willing to offer use of their advanced facilities to private entities, five (5) are in the Willamette Valley region, two (2) in the Southwest Interior region, five (5) in the East region, four (4) in the Coast region. Of the 13 public entities that currently offer use of their advanced facilities to others, five (5) are in the Willamette area, three (3) in the East, four (4) in the Coast, and one (1) in Southwest Interior regions.

2011 Availability of Advanced Telecommunications Capability in

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