Corporate Services and Economic DevelopmentCorporate
Services and Economic Development Committee
Comité des
services organisationnels et du développement
économique
and Council / et au Conseil
8 28 May 02July 2002 / le 8 juillet 2002
Submitted by/Soumis par : Kent
Kirkpatrick, General
Manager/Directeur général Corporate
Services Department/Services
généraux If
Dept selection not available, type the Dept here in Eng/Fr. If not, space for none.
If
applicable, type additional submission information here (Name, Title, Dept in
Eng/Fr). If not, space for none.
Prepared by/Préparé parContact/Personne-ressource : Greg GeddesDavid B. Johnston
Manager, IM/IT Planning, , Director, Information Technology Services and Chief
Information Officer/Directeur, Services de technologie de l’information et
directeur de l’information, Information
Technology Services/More
English Branches (2nd Box) Services
de technologie et de l'information More French Branches (2nd Box)If Br anch selection not
available, type Branch here in Eng/Fr.
If not, space for none.
580-2424, est./poste x2170521375, Greg.Geddes@ottawa.ca
david.johnston@ottawa.ca
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Ref N°: ACS2002-CRS-INT-0003 |
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SUBJECT: |
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OBJET : |
services de communication par RÉseau de données,
d’audio-messagerie et de videos – Accord préférentiel avec telecom Ottawa |
REPORT RECOMMENDATION(S)
That
the Corporate Services and Economic Development Committee
recommend that Council approve:
1. A approve Telecom
Ottawa as the preferred, non-exclusive
provider for video,
voice, and
and data network communications
services for the City of Ottawa, and
2. Authorize the General Manager,
Corporate Services, to negotiate a preferential, non-exclusive agreement with Telecom Ottawa, under terms and conditions
satisfactory to the City Solicitor..
Que
le Comité des services
organisationnels et du développement économique recommande au Conseil
municipal :
1. d’approuver
Telecom Ottawa comme fournisseur de tarifs préférentiels pour les services de
communication par réseau de données, d’audio-messagerie et de videos;
2. d’autoriser
le directeur général des Services généraux à négocier un accord préférentiel non
exclusif avec Telecom Ottawa satisfaisant aux
conditions de l’avocat de la Ville.
BACKGROUND
This report discusses current
technologies and pricing alternatives available to the City, and recommends to
Council the preferred strategy for acquiring video, voice and data network communications services which complement the deployment
of broadband connectivity throughout Ottawa.Voice and data networks are used extensively by the
City of Ottawa for the transmission of information between City facilities
using end-user equipment such as desktop computers, notebooks and
telephone. The volume of information
being transmitted is increasing rapidly, in part as a result of increased
technology usage by City staff, but more significantly as more sophisticated
and complex computer applications are developed to meet the City’s business
requirements and service expectations of the public.
The rapid growth of the Internet and so-called
“broadband” applications that utilize data networks (such as webcasting and
streaming video) require larger network bandwidth. The City’s ability to deploy client-centred applications
including the Integrated Library System (ILS), Program Booking and Registration
(CLASS), or mission-critical systems such as Computer-Aided Dispatch, are
predicated on the availability of reliable and robust data networks.
This report discusssdiscusses current
technologies and pricing alternatives available to the City, and recommends to
Council the preferred strategy for acquiring voice and data network
communications services.
Broadband Connectivity: Broadband refers to the high-speed transfer
of information through fibre opticson, satellite, wireless or co-axial cable
transmission technology. Data rich
applications such as full motion video require more telecommunication capacity or bandwidth than low bandwidth applications such as e-mail.
Existing use of video, voice and data networks at the City of Ottawa: Video, voice and data networks are used extensively for the
transmission of information between City facilities using a wide range of end-user equipment such as desktop and laptop computers, hand held devices and telephones.
The volume of
information being transmitted is increasing rapidly as more sophisticated and complex computer
applications are
being used to meet
the City’s business requirements and service expectations of the public.
For example, our ability to deploy applications such as the Library’s Integrated Library System (ILS),
People Service’s Program Booking and Registration
(CLASS), or the mission-critical Fire Computer-Aided Dispatch System, are predicated on the availability of reliable and
robust data networks.
Present purchasing practice: When procuring voice and data communication
services, IT Services Branch normally seeks quotes for multiple
vendors. Contract awards are made by assessing both the price and capability of
the vendor to meet the delivery date.
How the service is provided by the vendor (e.g. fiber, copper wire,
wireless, etc.) has
been less important
than ensuring on-going
reliability and the provision of a secure communication channel
with the bandwidth required.
Over the past
several years, the City has continued to monitor technological trends in the
broadband/voice and data communications industry. As this industry changes and matures and as pricing becomes more
and more competitive, the City has adopted a pro-active, procurement strategy
of awarding short term contracts to facilitate achieving lowest cost pricing.
Broadband Requirements: To date, the
City of Ottawa has purchased dedicated and/or
shared bandwidth from suppliers including Bell Canada, AT&T Canada and
Storm Internet Services. The City’s requirements
for bandwidth isare
determined by the business needs. The business must assess , as represented by the
volume of information to be transmitted,transmitted and the distance that
information has to travel, balanced against the speed by which that
information needs to be transmitted and the performance and associated
cost for that performance. . For example, a “T1 link” transfers data at speeds
of 1.5 mbps (megabitsytes/sec). The cost at costs of this service typically ranges ranging from $8500
to $3,51,700
per month, depending on the distance and point of origin. The monthly cost is based at the
distance between the 2 sites. Therefore, tThe further apart
sites are, the more expensive the T1 link will be. As such, the monthly cost is therefore, in a large part, based at the physical distance
between the two sites.
City facilities
in the downtown core are generally well served by a variety of data
communication options and pricing models. For City facilities located in suburban areas, the availability of suitable
broadband capability is limited. In the rural facilities, the availability is limited and in some places non-existent. Cost to provide broadband service, even if technically possible,
tends to be very expensive and does not represent a cost-effective use of
taxpayer’s dollars. A T1 link is generally suitable for connecting
medium to large facilities to the City’s network, whereas multiple T1 links are
used to inter-connect the City’s 3 data centers.
To date, the City has purchased dedicated and/or
shared bandwidth from suppliers including Bell Canada, AT&T Canada, Time
MCI and Storm Internet Services.
Other services, such as DSL and ISDN, offer lesser bandwidth at a
corresponding loweresser
cost. These services are used
selectively by the City for sites where a small number of users require broadband network
connectivity.
In some cases, where traditional wire services are not available,
the City has seeked contracted
with providers that can offer wireless solutions.
When looking to procure voice and data
communication services, the IT Branch seeks quotes for multiple vendors. Contract awards are made using both the
price and the capability of the vendor to meet
the delivery date as the main decision factors. How the service is provided by the vendor (e.g. fiber, copper
wire, wireless, etc.) is less important to the Branch than ensuring the vendor
provides a secure communication channel with the bandwidth required.
Generally, City facilities in the downtown core
area are well-servedwell served by a variety
of data communication alternatives and pricing models. Nevertheless, the
capacity of the City networks to accommodate technology growth and deploy
client-centred broadband applications is constrained by cost (urban, sub-urban and rural areas), and
availability (sub-urban and and rural locations). For City facilities located in sub-urban and
rural areas, the availability of suitable broadband capability is limited, very
expensive, or non-existent, particularly using traditional, cable-based network
infrastructure.
Current Technology Developments: The developments in the telecommunications industry are taking place at a rapid speed. Many sectors of the Ottawa population are
keenly aware and interested in the development of an affordable, high quality, equitable broadband network. In
fact, a report for approval
of the development of a Broadband Connectivity Plan
for Ottawa will be tabled to Corporate Services and Economic Development
Committee. Much momentum has been gained
on this initiative with exciting opportunities for the City to leverage as a
result.
For example, the City is working in
partnership with the Ottawa Centre for Research and Innovation (OCRI) to plan
and implement broadband capabilities to connect City facilities, as well as to
facilitate the advancement of broadband applications through initiatives such
as Sm@rtCapital.Over the past
several years, the City has continued to monitor technological trends
in the voice and data communications industry, and adopted
procurement strategies (e.g. short term contracts) that will allow the City flexibility
to reduce its operating
cost as pricing becomes more competitive.
In parallel, the City has worked in partnership
with the Ottawa-Carleton Research Institute (OCRI) to plan and implement
broadband capabilities to connect City facilities, as well as to facilitate the
advancement of broadband applications through initiatives such as SmartCapital.
Establishment of Telecom Ottawa: Telecom
Ottawa is a recently
created, subsidiary
of Hydro Ottawa Holding Inc., which is wholly owned by the City of Ottawa. As such, the financial viability
of Telecom Ottawa is naturally of interest to the City.
Its Business Plan outlines a
strategy for a community broadband network.
As a broadband
data utility, this
backbone data network will service the entire city, including both downtown and
rural areas. The plan incorporates
pricing that is the same regardless of distance with guaranteed service, quality and availability. Telecom Ottawa’s vision is to ensure that affordable broadband
services will be available to all citizens of Ottawa.
With the establishment of Telecom Ottawa, the industry has now a subsidiary of Hydro Ottawa,
the landscape has changed considerably. Telecom Ottawa is positioning themselves to provide data transfer
capabilities via fFibre
at speeds of that are 10 to 100 times faster
than what the City currently uses but at very competitive pricing fixed monthly price of $750 per site.regardless of location, and as such it This substantially reduces cost as a limiting factor in
the City’s ability to deploy broadband
applications.
Telecom Ottawa
has Secondly,
it is their stated their intention to ensure penetration of
broadband capabilities to rural areas within ?? months by utilizing
existing City radio towers and wirelessmicrowave technology
that connects to their fibre network.. No- no similar
commitment has been provided from other suppliers [– need to validate this through consultation process
or historical data] Did we ever
asked other suppliers?
Thirdly, as a shareholder in Hydro Ottawa, the
financial viability of Telecom Ottawa is of paramount concern to the City.
Preferential
Agreement with Telecom Ottawa: Given
these recent developments, Discussions with Telecom Ottawa officials have confirmed
that they are willing to enter into a preferential agreement with the City of
Ottawa, whereby the City is guaranteed to receive the lowest possible pricing
for data communications services available to any Telecom Ottawa customer. Secondly, tThey are also committed to providing fibre optic and 1gbps
1000 Mbps service to any City office location.
Telecom Ottawa
currently has an interim municipal access agreement to use City right-of-way for installing fibre optic cable. The City expects Telecom Ottawa to complete a proper municipal
access agreement in order to be eligible for a preferential relationship.
An important
consideration is the Given the fact that broadband service
is not yet available from Telecom Ottawa throughout the entire geographic area
of the City. It is anticipated that Telecom Ottawa will have
coverage throughout the entire geographic area of the City with a fibre optic backbone within two to four years. Therefore, any agreement
reached with Telecom Ottawa should it is recommended that this
agreement be non-exclusive, and that the City retainretains the option to utilize other service providers
where they provide the best demonstrated value to the City. At the point when Telecom Ottawa’s network extends
throughout the City of Ottawa, city staff will then be in the position to
reevaluate the non-exclusivity of this agreement may be
situations in the interim where Telecom Ottawa is unable to
provide service to a specific geographic location. In these situations, the City may choose to engage another
provider as an interim solution. In
addition, the City may choose to utilize another provider for low cost, low
bandwidth requirements..
However, the City does expect that
Telecom Ottawa will have coverage throughout the entire geographic area of the
City within 3-5? [confirm
timeframe] years.
Telecom Ottawa intends to utilize existing
infrastructure (poles/conduits/radio towers) where available to deliver broadband
services. By contrast, other
technologies such as microwave or DSSS will most likely require installation of
new towers, particularly in rural
areas or where existing towers are not available. Clearly, the latter services may have
negative environmental implications for the community.
The IT Services
Branch seeks reliability in data communications. While wireless transmission is a possibility, environmental
factors, such as changes in weather, affect service.
There are also
security issues
inherent with this technology.
While Telecom
Ottawa intends to utilize existing infrastructure (poles/conduits/radio towers)
to deliver broadband services, additional towers may need to be installed for line of sight
based communications. This type of
installation will require public consultation.
The Telecom Ottawa is business plan ccommitteds to ensuring providing a
broadband backbone data
network that will service the entire city, including both
downtown and rural areas. The plan
incorporates pricing that is the same for City sites regardless of distance with guaranteed service,
quality and availability.
Recent
public-private partnerships and initiatives that have defined a vision and strategy for broadband
connectivity in Ottawa have benefited from strong support from rural constituents.
Volunteer organizations such as the Ottawa Rural Communications Network
have recognized the importance of broadband service and are looking
for innovative solutions to provide high-speed Internet access to rural residents and constituents. The report
on approval for the development of a Broadband Connectivity Plan for Ottawa, to be tabled toconsidered by Corporate
Services and Economic Development Committee, provides
greater detail of the benefits for rural citizens.
With the
approval of the recommendations in this report, the City will be able to work
towards a preferential , non-exclusive agreement with Telecom Ottawa, which
will eventually result in greater service provision for the rural areas
of Ottawa. to serve rural areas over the next ?? months. As articulated in the Community Broadband
Plan, broadband services will be advanced in rural areas. Where
the City
locations are is
currently constrained by bandwidth, it will be able to offer consistent levels
of service at these locations, as well as offer new services such as video
conferencing and /webcasting.
This approach complements the initiatives underway to develop citywide broadband capabilities. All citizens of Ottawa will benefit because of lower costs and
increased access. This approach pursues an integrated and complementary
strategy to support deploying state of the art telecommunicastion inftrastructure that can support the next generation of
high-bandwidth applications and services, as well as bridge the ‘digital divide’ between urban and rural
Ottawa and foster economic development outside of the urban core.
CONSULTATION
Discussions and
negotiations have taken place with Telecom Ottawa as well as the Business Development Branch of the
City.
Key to the
success of this preferential agreement is Telecom Ottawa’s interest in working with other private sector partners, such as school boards, hospitals and universities, in planning new broadband infrastructure.
The Information Technology Services Branch has
consulted with several parties, including the Ottawa-Carleton Research
Institute (OCRI), Bell Canada, AT&T Canada, and Storm Internet
Services.
The results of this consultation…..
As the City's current contracts come up for
renewal, Telecom Ottawa will be given the 1st opportunity
to submit a contract offer to the City.
Over the
next few months, 12 current contracts are expiring. The anticipated monthly expense to renew these with the current
service provider is $13,400. Using
Telecom Ottawa, the expense would be reduced to $9,000 for a monthly savings of
$4,400 or $52,800 annually. The City of Ottawa currently spends approximately
$[annual voice/data network charges] on an annual basis. Analysis of current contract/renewal pricing vs. Telecom
Ottawa suggests that if all voice/data network contracts were converted to Telecom Ottawa, based on Net Present Value (NPV), the annual savings could amount to as much as
$[enter amount].
Over the next few months, 12 current contracts are
expiring. The anticipated monthly
expense to renew with the current service provider is $13,400. Using Telecom Ottawa services, the monthly
cost will be reduced to $9,000, representing annual savings of $52,800.
As technology
expands, costs will be reduced as more efficient and reliable technologies are
employed providing cheaper, faster and more reliable bandwidth to conduct City business.
DISPOSITION
Upon
approval by Council, the General Manager, Corporate Services, in consultation
with the City Solicitor, will negotiate a preferential agreement with Telecom Ottawa.ATTACHMENTS
DISPOSITION