By HOWARD FINE

Staff Reporter

Los Angeles lags far behind its rivals in Silicon Valley and other high-tech regions in the laying of fiber-optic cable, considered key to high-tech growth.

But several L.A.-area cities are moving quickly to change that putting fiber-optic network development on the fast track.

They are being spurred by two main realizations: that the 1996 Telecommunications Act allows cities to generate revenues by getting into the telecom business, and that fiber-optics networks are powerful magnets for attracting high-paying jobs.

"For so long, nobody here did anything to develop fiber-optic networks. Now, people are looking around and saying, 'Wait a minute! We can be like Silicon Valley,'" said Jon Goodman, director of EC2, the Annenberg Center Incubator Project at USC.

Several cities in the region Glendale, Los Angeles, Santa Monica and Pasadena to name a few are pursuing fiber-optic strategies. Those range from building their own networks and leasing out excess space to teaming up with private-sector partners or granting rights-of-way to private telecommunications providers.

"There has been a lot of activity in the fiber arena in the Los Angeles basin, but it has been very scattered," said Bob Cerosoli, chief strategist for SpectraNet International, a San Diego provider of fiber-optic networks. "Now, there is a growing realization that there is a need for broadband service."

The interest among businesses is fueled by a dramatic drop in the cost of hooking up to a fiber network as well as the ever-increasing need to transmit large amounts of digital information.

Entertainment and multimedia companies are heavy users of fiber-optic cables because of their ability to carry digital images that overwhelm the capacity of traditional copper cables.

And those are just the companies that cities nationwide are competing fiercely to attract.

Goodman and other industry experts said that Silicon Valley and other high-tech hotbeds like Austin, Texas and Boston are ahead of L.A. when it comes to fiber-optic networks.

For example, the city of Palo Alto has an extensive "loop" of fiber-optic cable that hooks up almost every business in the city, according to David Rozzelle, a principal at the San Jose-based telecom consulting firm Media Communications Group.

But in L.A. County, fiber-optic networks exist only in limited pockets, such as parts of Burbank, downtown L.A., the Wilshire Corridor, Long Beach and the Westside. In most areas of the county, fiber-optics are only available for major businesses.

While no one tracks the actual number of L.A.-area businesses hooked up to fiber optics, the county's largest telecommunications provider, Pacific Bell, estimates it has laid about 60,000 miles in its L.A. County service territory.

Still, the vast majority of L.A.-area businesses are not hooked up.

Among local cities, Glendale is the furthest along in its fiber-optics quest. The city last summer sent out requests for proposals to gauge interest in a public-private partnership to build a network.

Four companies responded, and a decision on whether to proceed could come as early as next month, said Philip Lanzafame, Glendale's economic development administrator.

"We're looking to maximize our revenue opportunities. We are also trying to decide whether we need to bring competition to the main provider here, which is Pacific Bell," Lanzafame said.

L.A. City Councilman Mark Ridley-Thomas said he and Mayor Richard Riordan will announce as early as this week the formation of a task force to review the city's fiber options and report back to the City Council within 90 days.

"The real question is: 'Are we taking advantage of the profitability of fiber?'" said Ridley-Thomas. "I'm not just talking about direct payments to the city for building or leasing fiber-optic capacity. If more businesses start up, expand or come to the region because of our fiber-optic capability, that also enhances our revenues."

The city has several choices: it can add on to its existing fiber-optic network; contract with a private-sector partner to build out the network; or facilitate rights-of-way for private-sector providers.

Until recently, the Los Angeles Department of Water and Power had a policy of leasing out to businesses any excess capacity on its extensive fiber-optic network.

But that policy has been put on hold while the DWP grapples with more urgent problems associated with the deregulation of the power industry, said spokesman Ed Freudenburg.

While cities around Los Angeles County debate their options, the gaps in the region's fiber-optic network are limiting opportunities for some businesses.

One example is Santa Monica-based 2-Way Media Inc., publisher of the Launch CD-ROM music magazine which just last fall launched an online version.

"We went to our telecommunications provider, GTE, and asked for a fiber-optic line so we could run our Internet site from our office," said Chief Executive David Goldberg. "They told us that it was not possible right now to hook us up; they said they could not give us a definite timetable for hooking us up."

As a result, 2-Way Media had to lease additional space in a building two blocks away that had fiber-optic access. The available space was too small to move the entire office over.

"We're right now looking for new offices that will allow us to have fiber-optics and our offices in the same place."

Jim Larson, GTE California's acting general manager of infrastructure provisioning, said GTE decides on a case-by-case basis which businesses get fiber access.

"We have to weigh how much it's going to cost to run cable into an individual business. Sometimes we have to dig up streets and get permits, so it can get really expensive. So we focus on the businesses that can most readily demonstrate the need for fiber," Larson said.

Typically, for a business needing a single data transmission line, called a "T1 line," high-capacity copper wire can function just as well as a fiber-optic cable, he said. So GTE gives fiber-optic priority to businesses that need multiple T1 lines or even higher-capacity lines. That usually means larger firms, especially in the entertainment arena.

As a result, L.A.'s fiber-optic infrastructure is a disconnected hodgepodge. For many businesses, it's now a matter of geographical luck as to whether they have access to fiber optics.

"Let's face it. The local phone companies have not put together the required infrastructure here in L.A.," USC's Goodman said. "If Los Angeles has any pretensions to being a center for technology-based industries, then somebody must take the lead in getting this electronic highway system in place."

Besides L.A. and Glendale, several other cities are looking to install or improve fiber-optic networks. In Santa Monica, for example, officials are developing a master telecommunications plan to be presented to its City Council next month.

Meanwhile, Burbank already has a 12-mile fiber-optic loop to serve the needs of its own municipal utility. The excess capacity on that city-owned network is being leased out to Warner Bros. and Walt Disney Co. studios.

Burbank is now looking for partners willing to connect smaller businesses to its network, said Fred Fletcher, the city's fiber-optic systems manager.

Culver City is taking a different approach. It is limiting its role to identifying pre-existing underground conduits (abandoned oil pipelines, electric wire casings, etc.) that private-sector providers can run their fiber-optic cables through, said John Richo, director of information technology.

"We do not see ourselves getting into the telecommunications business. It's not the business of government and it interferes with the marketplace," Richo said. "Rather, we see ourselves as facilitators, making it as easy as possible for private providers to build their own networks."

The key issue that is likely to face the Culver City council later this year, he said, is deciding whether or not to charge providers a fee for using the city's pre-existing infrastructure.

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