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Too late for city broadband investment

Original post made by Sue Kemp on Mar 3, 2007

I hope the members of the City Council will consider very carefully before deciding to go with broadband, no matter who would build it.

They missed their opportunity. Five years ago, even three years ago, there were many more people who were still using dial-up. Now even I, a totally non-techie person, finally went broadband a couple of years ago.

Why would I want to change? What inducement would there be? Why would the thousands of others who already have broadband want to change?

Unless the city could count on massive business use, I think they'll end up losing their shirts, I mean our shirts. After having wasted (what is it projected to cost now?) some $50,000,000 desperately needed for other areas of the budget.

If it were left up to me, I wouldn't even consider it.

Comments (12)

Posted by Non-techie, a resident of Another Palo Alto neighborhood
on Mar 3, 2007 at 10:38 pm

I would be interested to hear from the techie community about their thoughts on this project. It also seems to be a "white elephant" concocted by government bureaucrats with a penchant for big projects they can take credit for. Given that the Palo Alto process has kept this project going for years, is it reasonable to assume that it would take another several years to build out at which point faster, better, cheaper will make the project's value obsolete. I would like to understand better why only one vendor completed the RFP. Either the city's reputation for completing projects like this is weak, or firms don't really believe the project will happen. Any feedback from techies, who will have much better understanding of a project like this?

Posted by Anonymous, a resident of Midtown
on Mar 4, 2007 at 10:36 am

Perhaps you can update us on the city's current plan for Municipal broadband. At one point it was fiber to the house for billionaires. Last time I called the city, they were asking for proposals for ultra-wide-band wireless connectivity. Both approaches are a waste of time and money. The former because of the cost and investment and because it has be superseded by wireless. And the later because the proposed customer base isn't using it and won't buy it.

Posted by PA - 3rd world?, a resident of Midtown
on Mar 4, 2007 at 11:23 pm

I love the idea of fiber optic to the home and believe it should be a city utility - provided to all residents. Though its getting late, Palo Alto can still be a model community for the nation in terms of the structure of its service, providing a city owned utility as a utility to ALL parties without commercialization.

Many countries have surpassed the US and what we call "broadband" is comparatively slow. As rich media including video moves online, the difference between DSL and fiber will be extremely noticeable - Non-techie, most people would switch if the cost to consumer was nearly the same as the great quality will be immediately apparent.

A second point to fully appreciate is that this is high-speed in both directions not just to the home. DSL and cable modems are much faster sending to the home with a slower connection back. This is ok for a traditional broadcast model which locks in major corporations as providers of information. A utlity that provides true two way bandwidth enables us all to broadcast - whether its remote band members jamming online or broadcasting home movies to remote family members.

PA has a proud legacy running its own utilities - and served us well during the height of the Enron scandal. I'm not saying Comcast is Enron - but I'd still rather have my lifeline to the online world provided by Palo Alto than almost any other entity.

Posted by Jeff Hoel, a resident of Midtown
on Mar 5, 2007 at 12:21 pm

I hope the Weekly prints this letter:

Dear Editor,

I disagree with Sue Kemp's view (in the Mar 2nd PA Weekly) that Palo Alto missed its chance implement citywide fiber-to-the-home (FTTH), and now it no longer makes sense.

According to FTTH industry analyst Michael Render, "... those who have FTTH believe that it will add just over $4,000 to their home's value. Those who don't have FTTH guess that it will add $2,500. Developers (not surprisingly) believe that FTTH in their developments will boost home prices by $5,500."
<Web Link>
Real estate agents should know this.

FTTH's broadband is head-and-shoulders better than the so-called broadband the incumbents now offer, and that's why Palo Altans would switch to it.

Jeff Hoel
Colorado Avenue, Palo Alto


Here's what I didn't say in the letter, due to the word-count limit.

If Kemp is still upset about some costly mistakes the city made in the past, let her start a new Town Square Forum topic (or write a letter to the editor) for each mistake, naming the mistake, how much she thinks it cost, why she's still upset about it, and what we should learn from it.

Does Kemp think that there is anything else that the city shouldn't do "because" she thinks it made "$50 million" worth of mistakes in the past? Libraries? Public safety building?

Posted by Jeff Hoel, a resident of Midtown
on Mar 5, 2007 at 12:41 pm

"Non-techie, a resident of Another Palo Alto neighborhood" is mistaken. Citywide municipal FTTH in Palo Alto was originally proposed by citizen advocates, not government bureaucrats. If the city hires a private company to build out such a system, that company would not be limited by "Palo Alto process" delays, and could built out the system in a couple of years. The FTTH01 RFP got two bids (not one); it did not attract more bids because potential bidders thought that the city was asking them to take all or most of the risk and then give the city all or most of the rewards.

Posted by Jeff Hoel, a resident of Midtown
on Mar 5, 2007 at 12:52 pm

"Anonymous, a resident of the Midtown neighborhood" is mistaken. At no point was citywide municipal FTTH in Palo Alto (or indeed FTTH anywhere) intended exclusively for billionaires. Wireless Silicon Valley (not the city of Palo Alto) issued an RFP for a wireless system that would serve a large part of Silicon Valley, including all of Palo Alto; that system was never intended to be "ultra-wide-band". Both proposed systems do no yet exist, so it is no surprise that nobody is using them. FTTH will not be superseded by wireless because FTTH offers far superior bandwidth, quality of service (QoS) and security.

Posted by Jeff Hoel, a resident of Midtown
on Mar 5, 2007 at 1:38 pm

Palo Altans should know that in the past the telecom incumbents hired a public relations firm to sabotage citywide municipal FTTH in Palo Alto.

Opponents of citywide municipal FTTH in Palo Alto who are motivated by the good of the city, not the good of the telecom incumbents, should so state. I would appreciate it if opponents would identify themselves by their real names when making posts to Town Square. (So would Town Square.) It would give readers the opportunity to know whom they are being asked to take seriously. It might also encourage posters to take responsibility for what they post.

I wish to state that my motivation is the good of the city. I have no financial interest. (I would benefit by being able to subscribe to services offered by a citywide municipal FTTH system, as would lots of people. But I don't own stock in any companies that would benefit from building the system, and nobody is paying me for my advocacy.)

Posted by Kate, a resident of Duveneck/St. Francis
on Mar 6, 2007 at 7:15 am

Althought fourteen of sixteen companies polled wanted nothing to do with this project, the
Council voted last night 5:1 to direct staff to start negotiating a contract with a marginal company!! What is this going to cost us? This council is beyond help.

Posted by Anonymous, a resident of Midtown
on Mar 7, 2007 at 1:21 pm

"Jeff Hoel, a resident of the Midtown neighborhood",

There needs to be a business case for "Fiber to the house." If there were, companies would pay the city for the right to install it and run it for a profit, or at least not require Palo Alto to invest any funds toward it. FTTH sounded wonderful 10 years ago but it is expensive to bury those fibers and connect them to the boxes of transceivers. Plus the fiber doesn't do you any good unless there is something at the other end with a big pipe to the Internet backbone. By the time all of the streets and front yards are dug up, the entire system will be obsolete. Even UWB is more reasonable now because the infrastructure investment is smaller. WiMax is even more reasonable because many people already own compatible equipment. Maybe the performance is worse, but it will work and the provider won't go out of business like another Palo Alto broadband project, ISPChannel.

Posted by Jeff Hoel, a resident of Midtown
on Mar 8, 2007 at 3:47 pm

"Anonymous, a resident of the Midtown neighborhood on Mar 7,"

Palo Alto commissioned both a "FTTH Business Case" (feasibility study) and a two-part "FTTH Business Plan." For pointers to these documents, see:
<Web Link>

These days, I think it would be more instructive to look at munis that are successfully implementing citywide FTTH, such as Provo and the 14 cities of UTOPIA. They are in effect learn-by-example business plans. They are grounded in reality. They are paying for the system themselves, rather than expecting a private company to pay for it.

If Palo Alto wants to be world-class, wireless is no substitute for FTTH. What's the cost of not being world-class -- or not even wanting to be world-class?

At a recent meeting of Palo Altans for Government Effectiveness (PAGE) about transforming residents into citizens, the subject of anonymous posts to Town Square came up, and one speaker said, "You'll never form community anonymously." Are you interested in forming community?

Posted by Chris Saari, a resident of Old Palo Alto
on Mar 8, 2007 at 3:56 pm


With respect, you didn't answer Anonymous.

I took him to inquire why, if private companies don't think there's a business case for FTTH, the city should risk it's own money.

Off the top of one's head, it seems like a reasonable question. It seems obviously true that private companies are better at evaluating profitable opportunities than governments are. I take their failure to rise to the bait as evidence that it's not a good idea for the city to do so with its own funds.

Right or Wrong?

Posted by Jeff Hoel, a resident of Midtown
on Mar 14, 2007 at 1:19 pm


Thanks for using your real name.

Since you didn't like my previous answer to Anonymous (note that Anonymous hasn't yet accepted my invitation to become unanonymous), let me try again.

Municipalities exist to serve their residents. Private companies exist to serve their owners. Municipalities and private companies have different charters, different goals, and different responsibilities. It's a mistake to assume that what's inappropriate for one is also inappropriate for the other.

Municipalities provide many services for free. You wouldn't expect private companies to do that, but for municipalities it can be appropriate. Palo Alto provides electric, gas, and water services to residents according to the principle that residents should be charged what it costs the city, plus a little for the General Fund. You wouldn't expect private companies to do that, but it's appropriate for the city. I think it's appropriate to implement FTTH as a utility, so that it's available to all and paid for by the people who use it. Others may not agree.

Anonymous said there needed to be a business case for FTTH, implying there wasn't one. But Palo Alto (and consultants) did in fact write both a business case and a business plan. We can argue about whether it was a good case and plan. I think we could get a better business case simply by obeserving what munis like Provo and the 14 UTOPIA cities are doing. Provo and UTOPIA found that when they specified the FTTH systems they wanted, private industry wasn't willing to build them, so they're building them themselves. (I think it's unreasonable of Anonymous to assume that private industry would be willing to build what we want.)

(With its FTTH01 RFP, the city asked private industry if it was willing to build a citywide FTTH system for Palo Alto, pay for most of it, make it a success, and eventually turn it over to the city. The city got only two bids. One bid said no, but they'd be happy to build a citywide FTTH system and show the city how to pay for it and own it. I regret to say that the city rejected that bid. The city is currently considering doing business with the other bidder, who has proposed turning the system over to the city in 30 years. Some FTTH opponents think 30 years is a long time. So do some FTTH advocates.)

Anonymous is correct that the FTTH infrastructure would be expensive, but not having FTTH infrastructure is expensive too. So I think the FTTH infrastructure would be worth it.

Anonymous thinks FTTH would do no good if the rest of the country doesn't have it. But it's already doing good in Provo and UTOPIA and the other 40 or so municipalities where it has been implemented. (FTTH doesn't have to run as fast initially as it's capable of running to do good.)

Anonymous thinks that by the time all our streets and front yards are dug up the FTTH system will already be obsolete. This source ( <Web Link> ) thinks no new digging would be necessary. I don't understand how Anonymous can think that the system would be both obsolete AND much faster than the national infrastructure could support at the same time. The fiber infrastructure would be capable of supporting speeds orders of magnitude higher than provided by the initial optronics, so the fiber insfrastructure would not be obsolete. If you think that required speeds are going to increase exponentially over the years, as I do, then you have to be committed to replacing the optronics when it becomes obsolete, but that's a manageable cost. North Kansas City has decided to start with 1-Gb/s links to homes, because they're not much more expensive than 100-Mb/s links, and they'll last longer. When does Anonymous think they'll be obsolete?

Anonymous thinks UWB (ultra-wideband wireless) might be a better choice. This source ( <Web Link> ) says, "UWB systems tend to be short-range and indoors," i.e., not appropriate for "first-mile" applications. This source ( <Web Link> ) thinks the range is 30 feet.

Anonymous thinks WiMAX might be a better choice. But it's not nearly fast enough, and would require the provider to purchase licensed spectrum, and security would be an issue, as it is for all wireless.

Anonymous doesn't mention that Wireless Silicon Valley plans to blanket 1500 square miles of Silicon Valley, including Palo Alto, with wireless (initially 802.11b/g). Did Anonymous know about this? Is he/she saying that Palo Alto should be thinking about doing UWB or WiMAX in addition to whatever Wireless Silicon Valley does? That doesn't make any sense to me.

When Cable Co-op sold its cable system to AT&T, who then sold it to Comcast, the new owners weren't interested in supporting Internet services on an all-coax infrastructure, which is what Cable Co-op had been paying ISPChannel to do. So ISPChannel (a private company, not a "broadband project") was adversely affected. The people who had been getting Internet service through Cable Co-op were annoyed that the new owners weren't interested in providing Internet services (until they could do so with an updated hybrid fiber coax infrastructure) but that didn't make any difference to the new owners. So what is Anonymous' point? Private companies go out of business all the time. Privately owned cable companies sell out to other privately owned cable companies all the time.

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