Economic Development Committee, Technology Update

Chip Meyer
CEO, The Chip, Inc.
Co-Chairs the Technology Sub-Committee for the EDC

The Chamber Economic Development Committee wants to assure that the Santa Clarita area is attractive for businesses looking to relocate to the valley, especially high-tech firms with high paying jobs.  A major concern on this has been the limited availability of high speed Internet within the industrial parks, since without convenient broadband at competitive rates, it is difficult to convince a company to take a serious look at the valley. 

 

The main limit has been what’s known as the “last mile” – that connection from the closest existing fiber trunk into the phone closet of each building.  The limit is not the availability of fiber trunks; the area has plenty, since most of the major utility companies have been pulling fiber along with their normal activities for several years.  However, that last mile is only served by AT&T and Time Warner, and neither company had been installing high speed connections into buildings as a matter of course. 

 

Until recently, a business looking to relocate to Santa Clarita would find major limits in Internet service, in comparison to other areas of Los Angeles.  There is lots of finger pointing going around on that issue, but it mostly came down to money.  No one was willing to pay for that last mile.  As a result, the only wired connections into our buildings are phone lines and electrical circuits.   The technology for Internet over electrical connections exists, and it might be an interesting discussion at a later date.  For now, Southern California Edison has no plans to make Internet available across power lines.  That leaves DSL, the phone company’s bastard step-child, as the most common Internet connection for business, which is unacceptable.

 

DSL pricing is such that the carriers cannot afford to offer reasonable support, but it is a connection that requires a lot of support.  Basically, DSL service is guaranteed to disappoint a business that depends on Internet, such as the high-tech firms we are trying to attract.  The main alternative for a quality connection is the T-1, which is priced much higher than DSL, but provides better support.  However, T-1 speeds, especially for downloads, are actually slower than DSL, making it unattractive for most business users.

 

One of the areas that the technology committee has been addressing with AT&T is the lack of quality technical support for DSL to the business community.  We do not have any resolution on this issue as yet, but we are trying to get them to adopt a “business quality” DSL service with technical support and response times that would allow business users the reliability needed to depend on DSL.  So far, they have been very responsive to the proposal, and we are optimistic on its success.

 

Time Warner’s cable Internet service is faster than DSL, and a little more reliable, buy it also suffers from the “pricing problem” – they price it low by taking away the much needed technical support.  An even larger roadblock to their service is its lack of availability.  Time Warner has managed to marginalize their business into a consumer-only product by refusing to make the investment into servicing the needs of the business areas of the valley.  A building that wants cable service has to pay tens of thousands of dollars in installation fees, plus allow Time Warner to become their phone company, in order to get them to install cable across that last mile into the building.

 

This leaves direct fiber as the only alternative for reliable high speed internet service.  With AT&T’s direct fiber connection, a business can buy dedicated Internet at speeds far greater than T-1, with good support and reliability, just like they could in other areas of Los Angeles.  Until recently, AT&T was offering similar guidelines for installation as Time Warner, making it cost-prohibitive for most buildings.  However, after meetings with the EDC, they have committed to waiving the installation costs for that last mile in most of the commercial areas of the valley. 

 

Basically, AT&T has offered to extend their fiber lines all the way to the curb of the building.  From there, if the existing conduit into the building supports additional cable, they will pull the fiber all the way into the building.  If the exiting conduit is not sufficient, then the building does have to deal with installing an additional conduit (and making that process smoother is one of the next projects for our technology committee).  There are some details to manage, such as service commitment and lead time for the permit process, but most businesses in the city can order a connection and have it working in less than 90 days.  In the county areas, the permit process is much more painful – yet another reason for those areas to consider annexation.

 

With the newly available fiber service and service upgrades to DSL, on top of all of the low taxes and high quality-of-life, Santa Clarita is now a very attractive location for your business.