In a long-awaited decision, the Palo Alto City Council voted 5-1 Monday night to pursue negotiations with Idaho-based 180 Connect Network Services, Inc. to develop a high-speed broadband fiber network for the city.

Councilwoman LaDoris Cordell voted no, citing the high degree of financial risk, the importance of the city’s other priorities and a racial discrimination lawsuit against 180 Connect that was not disclosed during the bidding process. Council members Judy Kleinberg, Dena Mossar and Jack Morton didn’t vote due to conflicts of interest.

The project is expected to cost about $41 million, the bulk of which 180 Connect would be expected to finance. 180 Connect has said it would be working with two partners: PacketFront, Inc, with international experience in open-access broadband networks, and the Royal Bank of Canada’s Capital Market.

When the city officially announced its intention to develop a broadband network last year (after discussing the matter for nearly a decade), only two companies came forward with formal proposals.

DynamicCity, a Utah company, offered to act as a consultant with the city bearing all the financial risk, a bid that was “not responsive” to the city’s request, Director of Administrative Services Carl Yeats said Monday.

180 Connect’s proposal adheres to the city’s requirements, Yeats said, but the company it has a poor financial record and is facing two lawsuits.

In addition, its estimation of public interest in the subscribing to the service may be unrealistically high, Yeats said.

Yeats told the council he does not know of any city in California that is successfully operating a high-speed fiber network.

Several members of the public addressed the council, volunteering their time to help improve the city’s project.

Vice Mayor Larry Klein agreed a committee could be formed, but then rescinded his offer when he learned it would be subject to the state’s open meeting law. Instead, Mayor Yoriko Kishimoto indicated she may put together a less formal mayor’s committee of lay experts from the community to advise the council during negotiations.

The council action will require city staff to postpone or eliminate other projects, City Manager Frank Benest said. He said he will prepare a report to inform the council how its decision will affect other city work.

(Staff Writer Becky Trout can be e-mailed at btrout@paweekly.com.)

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