MTA ponders viability of leasing its excess fiber optic cable space.

The Metropolitan Transportation Authority board is scheduled to decide this week whether to begin leasing out fiber optic right-of-way and/or cable along rail routes to private companies and other governments.

"It is just yet another way to help leverage the public's investment ... by generating revenues," commented Daniel Wright, telecommunications integration planner at the MTA. "We have been approached by a number of firms in the past, but we lacked a policy or procedure."

It is unknown how much revenue the leases could generate, but transportation authorities in cities such as Washington, D.C., and Boston generate close to $1 million per year on such leases, plus "in kind" compensation in the form of equipment or services.

The MTA owns approximately 300 miles of right of way for subway tunnels and rails that include fiber optic rights. The MTA uses fiber optic cables to carry alarms, signals and video security pictures to its central control facility. Data transmission is about 50 times faster on fiber optics than on conventional copper phone lines.

MTA staff is advocating adoption of policies and procedures that would allow the Los Angeles County transportation authority to lease "raw" right of way, license empty fiber optic conduits, or license excess capacity on MTA cable lines already in use.

The MTA does not have much excess capacity available to lease, Wright said, and would be restricted to leasing such capacity to government agencies, because of federal tax laws applying to projects financed using tax-exempt bonds.

If the MTA leases raw right-of-way to a private company, the authority likely will require the company to build multiple conduits as part of a compensation package, so that lines will be available when the MTA needs them, he added.

Wright said one commercial firm (which he would not identify), the County of Los Angeles, and the City of Los Angeles' Department of Transportation have made specific requests for fiber optic right-of-way licensing along rail routes.

The city earlier this year made a deal with Oakbrook, Ill.-based Metropolitan Fiber Systems Inc., allowing the firm to use a 13-mile, city-owned pipeline to house a fiber-optic loop, in exchange for granting the city capacity on the lines.

Metropolitan Fiber Systems also currently has a 10-year lease deal with the transportation authority in Washington, D.C., under which MFS pays the authority $950,000 per year to use cable MFS installed along the authority's right-of-way. Title to the cable will transfer to the transportation authority at the end of the lease.

MFS, founded in 1988, operates fiber optic systems in 14 metropolitan areas in the United States. It set up a fiber optic system that serves downtown L.A. in 1989. In L.A., Pacific Bell and GTE also have fiber optic systems in place.

The Los Angeles city transportation department is interested in the MTA's fiber optic right-of-way along the path of the Blue Line to Pasadena to carry the signals of an automated traffic signal system and video cameras that monitor traffic patterns, said Wright.

The MTA staff feels licensing arrangements for MTA right-of-way and cables require adoption of official policies and procedures on the matter. The MTA board is scheduled to decide Oct. 27 whether to proceed with adoption of such a program.

Wright wrote in a recent MTA committee memo that compensation to the MTA for fiber optic leases will generally be priced at "fair market value."

While some discounts may be given to other governments "where a demonstrable public benefit exists," there will be no free leases, he wrote.