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In this story: Phone, cable and Internet for about $140 a month The municipal approach RELATED STORIES, SITES

August 6, 1999
Web posted at: 5:40 p.m. EDT (2140 GMT)

By Robin Lloyd
CNN Interactive Senior Writer

(CNN) -- The path to your front door is the last place the country's telecommunications giants plan to lay down 20 yards of the thousands of miles of fiber-optic cabling being installed nationwide to push data transmission rates into the stratosphere.

While telco behemoths like MCI, AT&T, Sprint and Qwest have contracted with cable companies to install the high-tech backbone from coast to coast, they generally have left the rest of the skeleton up to consumers, municipalities and businesses.

In other words, don't hold your breath for that high-speed line that brings you digital TV, telephone and Internet service all at once.

In telecommunications lingo, it's called the "last mile" problem.

A handful of cities and towns nationwide, such as Shrewsbury, Mass., have taken it upon themselves to upgrade wiring for their residents, paying for the installation either with bond measures or city-owned cable service fees. Those efforts bring super-fast service and can be used for digital TV, telephone and Internet service.

But it's usually not fiber-optic cabling, which is 10 times faster than coaxial cable or DSL (digital subscriber line), approaches some towns and businesses have taken.

A Houston firm has taken another route -- stepping in to close the gap by partnering with developers to install the fiber-optic cabling when the building goes up and then offering a myriad of digital services to homebuyers.

It's a smaller scale approach -- easier than laying a citywide network -- and it's up to 10 times faster than even DSL or cable modem services. And, perilously, it cuts into territory traditionally monopolized by cable companies.

"Our focus is to lay the last mile of cable ourselves to offer services to subscribers," says ClearWorks.net Chief Executive Officer Michael McClere. "What we're doing is where the industry is headed, delivering dial tone, cable TV and high speed connectivity to users all over the Internet."

Phone, cable and Internet for about $140 a month

So far, the two-year-old company has been a part of wiring eight housing developments in the Houston area, including one across from the Compaq headquarters, and signed up 21,000 subscribers. It opened a Las Vegas office recently and there are plans to expand to Colorado and Arizona. ClearWorks.net also offers its service to businesses.

In the future, the company will be part of efforts to retrofit existing homes, installing fiber-optic cabling for digital service there -- a more bothersome approach than installing the cabling at the time of construction.

Residents in the new developments can sign on to a bundled digital service package for about $140 a month which provides heavily discounted local and long distance telephone service, Internet service and a digital TV signal. Other services include video conferencing, game rentals and video-on-demand.

The ClearWorks service comes with a dedicated desktop computer that serves software to the residential or business TV monitor. Also wired in is IBM Home Director, which makes possible local area networks, home security, closed circuit TV and various telephone and video wiring options.

Some of the communities offer intranets where they may book tee times at their local golf course or enter chat rooms with neighbors.

ClearWorks.net also has signed agreements some of the top homebuilders in Houston area to "future proof" communities where homes are being constructed.

The cost of fiber-optic wiring a home then is passed on to cost of "future proofing" a home is generally less than 1/2 of 1 percent of the total construction cost of a new home -- about $500 on average. By contrast, an upgrade could go for up to $2,000.

The municipal approach

For smaller towns, where fewer folks are willing to ante up $140 a month and there's a shortage of space or developers for new housing, a compromise may be the best solution.

About 40 miles from Boston, the town of Shrewsbury chose several years back to form a municipally owned cable system -- making it one of 40 or so cities and towns nationwide to have done so.

In recent years, the system has upgraded to HFC (hybrid fiber coaxial) cable, installing 180 miles of thick wires set to go live for Internet service in September to its 11,000 customers -- about 85 percent penetration of the town's market. The line could be used for local and long-distance telephone service too, but there are no plans to do that for now.

The service will be 10 times faster than 56K dial-up service and comes from the town's own cable provider -- providing the satisfaction of subverting the big boys.

It's not nearly as fast as fiber-optic cabling, but it's a good solution for now, says the service's general manager Thomas Josie. And it gives the city control over its telecommunications rates and service.

"It should be looked at by communities as infrastructure -- no different from roads, water and waste disposal systems," he says of high-speed telecommunications service. "It's going to be that vital for a community. Clearly I don't think communities should leave such a vital part of infrastructure to a third party. We can do it more cheaply and provide a better service."

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