Local

Verizon and Sacramento want to make a deal. What’s in it for you?

People walk past a Verizon store in Manhattan’s midtown area in New York.
People walk past a Verizon store in Manhattan’s midtown area in New York. The Associated Press

Wireless giant Verizon and the city of Sacramento want to make a deal.

Mayor Darrell Steinberg on Thursday will announce a plan in which the city would give Verizon fast permitting and access to city pipes for cable in exchange for a next-generation internet backbone and amenities such as free wifi at 27 parks.

Steinberg said he believes the technological leap could expand internet access in the city’s disadvantaged communities and position the city as a testing ground for new technology.

Steinberg said Wednesday the proposed deal represented “a new era of Sacramento” as it pushes to become a destination city for tech firms. He said the deal doesn’t tie the city to Verizon and he hopes it will become a model for similar partnerships with other companies.

Details of the proposed contract were not available Wednesday, but a memo about the public-private partnership said Verizon would get free use of 101 small cell towers for 10 years, and low-cost rates for 5G cell locations when that technology becomes commercially available in coming years.

Verizon also could use a network of conduit the city owns to pull its own fiber-optic cables through, saving on construction costs.

According to the memo, the deal could bring residents free wifi in 27 parks for five years; digital kiosks with free lightning-fast service; traffic signals connected and controlled by a main city brain; and police cameras that can follow subjects.

Verizon would build a fiber-optic backbone capable of supporting bandwidth-hungry new technologies. Steinberg said that would boost economic development by attracting companies eager to test products that rely on fast wireless connections – such as self-driving cars.

The City Council is expected to vote on the deal Tuesday.

Verizon vice president Lani Ingram said the company would benefit by rolling out multiple types of products at once – from consumer wireless to advertising on kiosks – with easier permitting and upfront costs.

“That saves us time and money and energy and allows us to be able to do more,” Ingram said. “The entire rollout becomes way more efficient.”

Ingram said the deal also benefits Verizon because it has the potential to create a showcase city that the company can use to sell the concept in other markets.

“We would love to be able to do something here and then be able to bring lots of other folks over to Sacramento and say, ‘Look what’s possible,’ ” said Ingram.

Pablo Spiller, a business and technology professor emeritus at UC Berkeley Haas School of Business, said the proposed partnership was not an uncommon model in smaller cities. Spiller said “in general these types of programs are good in the sense they provide a boost to deployment” of new technologies.

Spiller cautioned that technology alone, however, doesn’t always create an economic boost.

“It’s not easy to create those dynamics,” he said.

A 5G fixed wireless network is a key component of the deal. Sacramento is currently one of 11 test markets where Verizon is debuting that ultra-fast service.

Having one of the first 5G networks in the nation is a “gamechanger,” said Maria MacGunigal, the city’s director of information technology, who has been overseeing technical aspects of the deal.

Spiller said the city’s willingness to “being open to private-sector investment is a competitive advantage.”

But 5G technology is not expected to be widely available until 2019 at the earliest. Under the deal terms, Verizon would be required to start installing 5G in Sacramento within 18 months of the technology being approved by regulators. If Verizon fails to hit that mark, it would lose its low rates on cell-tower leases, said Crystal Strait, an adviser to Steinberg.

Strait said that while Verizon faces no direct penalties for failing to hit other marks, the city would have the power to revoke permits.

MacGunigal said the deal would give the city access to infrastructure that it otherwise could not afford, especially in disadvantaged communities. While the city hasn’t decided which parks would get free hotspots, MacGunigal said the city would concentrate them in economically challenged areas, as well as key gathering places like William Land Park.

MacGunigal said the deal also includes internships for local high school students with Verizon – a minimum of five per year and up to 20.

Anita Chabria: 916-321-1049, @chabriaa

  Comments