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High-speed Internet dreams kept alive

Council votes 5-1 to explore public-private venture despite ‘near certainty’ of a lawsuit by existing communications giants

Dreams of creating a high-bandwidth telecommunications network in Palo Alto were kept alive Monday night by the City Council.

The council voted 5-1 to have the city staff study partnering with a private company to provide high-speed Internet access, telephone service and cable television to residents and businesses.

The move came despite a "near certainty" warning that the city would likely be sued if the city built such a network.

The network would provide at least 100 megabits per second of bandwidth and use either fiber-optic cables or another technology.

The council supported a full study of risks and hurdles of the city owning such a network but letting a private company operate it. If the council were to move forward after hearing that analysis the city would seek proposals from private companies.

The lone dissenter was Councilwoman LaDoris Cordell, who already felt the risks and expected costs were too great based on preliminary information City Attorney Gary Baum and City Manager Frank Benest presented at the meeting.

Baum said the city faced a "near certainty" of getting sued by the area's incumbent providers -- such as Comcast and SBC Cable -- if it moved forward on such a public/private proposal.

Benest said city employees in four departments would be swamped by the time necessary to do the work. He also cited numerous legal and regulatory hurdles the city and the private company would have to overcome, and said the city's General Fund could be put at risk.

But Councilman Bern Beecham and Councilwoman Yoriko Kishimoto, who floated the idea in a "colleague's memo," said the potential benefits of such a project would be too great to pass up. Beecham said the United States lags other nations in building such high-bandwidth infrastructures.

"I think it's absolutely critical to Palo Alto's future that we keep this open as a goal," Kishimoto said. The city shouldn't just roll over because the private companies are threatening litigation, she added.

Council members Dena Mossar, Jack Morton and Vic Ojakian could not vote on the proposal due to financial conflicts of interest.

The proposal came on the heels of the council voting to end a trial run of creating a fiber-optic network. The 70-home trial proved to be a technical success, but the staff believed there are too many legal and financial hurdles to recommend creating a city-owned and city-operated network throughout Palo Alto.

In other actions Monday night, council:

-- Held off moving forward on a project to place electrical wires underground in a neighborhood bounded by Middlefield Road, Oregon Expressway, Cowper Street and Colorado Avenue. More than a dozen neighbors, including several elderly and low-income residents, complained the project would cost them thousands of dollars. The council, which had approved the project earlier this month, changed course to evaluate possible ways the city could help residents pay for their share of the costs.

-- Approved a 73,932-square-foot office building for East Bayshore Road near the Embarcadero Road/Bayshore Freeway interchange. The council had denied an earlier version of the project in November, and the city is facing a lawsuit from developer Richard Peery about that decision. The council felt the new proposal, also from Peery, was better designed and approved it unanimously.

— Bill D'Agostino

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