DEPARTMENT OF PUBLIC WORKS: UPDATING CONDUIT ACCESS CHARGES

8-A
DEPARTMENT OF PUBLIC WORKS: UPDATING CONDUIT ACCESS CHARGES
Problem Identification:
The City’s inability to assess conduit access charges in excess of the cost of maintaining the system unnecessarily constrains a potentially lucrative revenue stream.


Recommended Action:
Consider lifting the restriction on charging fees that exceed the cost of maintaining the City’s conduit system.

Classification:
Revenue Enhancement

Functional/Operational Area:
Bureau of Transportation

Estimated Annual Impact:
While the precise financial impact would be based on changes to existing laws governing this area, estimates of the potential financial impact range from $3,000,000 to $25,000,000.


Barriers to Implementation:
Existing laws governing charges for access to the conduit system; anticipated strong opposition from current users of the conduit system.Projected Implementation:
180 days

Next Steps:
Establish a small working group to study this issue, including representatives from DPW and the Law Department. If the decision is made to pursue a change in conduit charges, develop an implementation plan and revised fee structure.

Analysis:
The City’s conduit system represents an untapped and potentially highly lucrative asset/revenue stream. Changes within the telecommunications industry have brought new interest in the use and/or expansion of the City’s system.

Access to the City system is coveted by such current and potential users as Baltimore Gas and Electric, Bell Atlantic, AT&T, and MCI. Recommendation 2-E of the Information Technology section of this report suggests investigating opportunities for leasing City conduits to regional telecommunications vendors as a means of funding the City’s wide area network connectivity and management costs.

A 1996 study (see the Department of Public Works executive summary) indicated that the City could realize between a $3,000,000 and $25,000,000 increase in revenues if existing policies and/or rental rates were adjusted. Given the value of this potential revenue or the in-kind services that might be available as suggested in the Information Technology section of this report, this represents an opportunity that the Administration should strongly consider.