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Swelling cash reserves fuel Palo Alto's fiber effort

Original post made on Apr 22, 2013

Palo Alto officials won't be popping champagne bottles this week, when their long-deferred dream of a citywide high-speed Internet finally comes true. That's because the dream will be coming true in Provo, Utah, a city that doesn't claim to be the technological capital of the universe and that hadn't spent the better part of the past two decades watching one effort after another end in heartbreak.

Read the full story here Web Link posted Monday, April 22, 2013, 4:53 PM

Comments (21)

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Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 22, 2013 at 7:44 pm

Whaaaaaaat? The City is flush with money? Utilities has fiber fund which has become a cash cow?



Completely speechless.


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Posted by Robert Smith
a resident of Duveneck/St. Francis
on Apr 22, 2013 at 7:50 pm

We shouldn't feel too envious of Provo.

Provo has spent millions on the iProvo system and have suffered an enormous amount of public grief. The deal with Google transfers the assets for $1, but the city needs to keep paying $3.3 million per year for the next 12 years. Google takes the assets, the city keeps the debts.

Provo is only one of many cities that our City Council used to hold up as "poster-children" for municipal fiber. Other cities include Bend, OR, Alameda, CA, and a consortium of cities in Utah known as Utopia. These have all failed.

Yes, we should have better communications, much better. The best way to do this is to start working with, even cooperating with, the companies that keep trying to help us out. The City Council can start with the cell phone companies to expedite the installation of the cellular infrastructure that we need.

I have no philosophical objection to the city running a FTTP/FTTH system, but I just doubt that it will ever happen.

But perhaps we can hire some of the geniuses from Provo to help us out!


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Posted by What!?
a resident of Community Center
on Apr 22, 2013 at 9:45 pm

It seems pretty clear that "City Officials" in Palo Alto want their fiber effort of decades to succeed for little more than to stroke their deflated egos. Pathetic.

The fiber plan floated by PA has never penciled out financially, and may never.

Sounds like Jerry Brown's legacy driven craze to foist high speed rail on the tax payers, but fortunately, a whole lot less expensive.


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Posted by Gus L.
a resident of Barron Park
on Apr 22, 2013 at 10:13 pm

"Swelling Cash Reserves", I guess that means more Sewer Pipe Art Projects, Massive Tree removal.. Good Job City, Way to go. Give yourself a raise..
Now How about lowering our Utility bills, Eh?


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Posted by Anonymous
a resident of Another Palo Alto neighborhood
on Apr 22, 2013 at 11:04 pm

Maybe if the City Council released any future fiber partner from "the Palo Alto Way" some commercial entity like Google or Sonic would make it a reality.


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Posted by Astonished
a resident of Los Altos
on Apr 23, 2013 at 12:15 am

Provo, Utah? Hah! Better read these two articles from Provo's main newspaper:

1. iProvo's timeline from the beginning in 1998 to this month's Google
acquisition of Provo's fiber network: Web Link

2. The 'Google Gotcha' for Provo: Google promised free Internet to every home but it never said anything about businesses. Whoops! A
long article about that datelined Monday 22 April 2013 is here: Web Link


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Posted by Astonished
a resident of Los Altos
on Apr 23, 2013 at 12:41 am

BTW, before anyone gets too excited about fiber to the premises, one should review the experiences of Verizon and its FiOS offering which is now being dramatically cutback nationwide due to the expense. Several news articles about Verizon's situation:

Verizon Again Confirms No Future FiOS Expansion: Web Link

Future of FIOS TV? Time to switch back to satellite? Web Link

Verizon layoffs hit members - The Electrical Worker Online: Web Link

and many more articles that can be read by Googling 'verizon cutback on fios" (without the quotes).


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Posted by Midtowner
a resident of Midtown
on Apr 23, 2013 at 9:46 am

And would the installation be incremental over 100 or 200 years just like the undergrounding of power lines has been, with residents being billed thousands of dollars each in the process?

No thanks!


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Posted by Toady
a resident of Old Palo Alto
on Apr 23, 2013 at 10:21 am

"Maybe if the City Council released any future fiber partner from "the Palo Alto Way" some commercial entity like Google or Sonic would make it a reality."

Amen to that.


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Posted by Jim Holsworth
a resident of Community Center
on Apr 23, 2013 at 10:42 am

Palo Alto should revisit the fiber issue. There are now several cities like Chatanooga that we could use to study the financials, implementation, and usage.

Sonic.net would be a very possible partner. Perhaps we could get expertise from Google for how to do a smart installation.

Finally, we could pick just one neighborhood to make a complete working fiber network as a test case before trying to cover the city. We'd then have real cost and usage information.


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Posted by Doug
a resident of Palo Verde
on Apr 23, 2013 at 11:51 am

It's easy to take potshots and it's important to weigh costs versus benefits. But who here loves their Comcast or AT&T internet speed?

Bravo to Mayor Scharff for his advocacy of fiber to the premise. Better for Palo Alto to be among the leaders in offering 1000 megabits/second than a laggard.


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Posted by Rudy Wang
a resident of Midtown
on Apr 23, 2013 at 12:56 pm

I second Jim Holsworth's suggestion about partnering up with Sonic.net.

Please read the success story about Sonic.net's Fiber Ring in Sebastopol:


Web Link

Sonic.net builds super-fast network for future -
in Sebastopol



Web Link

Gigabit Internet for $70: the unlikely success of California's Sonic.net
SEBASTOPOL, CALIFORNIA

Two things set a one-block stretch of Florence Avenue apart from other American streets. One is the quirky metal sculptures planted in front of most homes; the other is the Internet traffic coursing through recently-strung fiber-optic cables on the block's utility poles. They offer each house up to one gigabit per second in bandwidth, making this one of the fastest streets in America.

While some other cities can also brag about gigabit access, in this Sonoma County town it costs only $69.95 a month.

The service comes courtesy of Sonic.net, the18-year-old Internet provider based in the neighboring city of Santa Rosa. And Sonic even throws in two phone lines with unlimited long-distance calling when you sign up.


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Posted by @ Astonished
a resident of Duveneck/St. Francis
on Apr 23, 2013 at 2:36 pm

@ Astonished - you link to a forum post form 2010, and call it a news article.... FIOS is great, 100x better than Comcast. Verizon isn't cutting back at all. They are simply focusing on existing areas until before they build out new areas.

The city shouldn't run a municipal system, but a Sonic.net or Google partnership would be great. Pay them to take the existing fiber if you have to.


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Posted by maguro_01
a resident of Mountain View
on Apr 23, 2013 at 3:32 pm

I heard a brief talk from a Google person at an IEEE meeting/talk in Santa Clara that suggests that Google may indeed have reasonable things to say about such a project and may be forthcoming. There are likely articles in trade publications about it. One thing I recall from the talk was that an area had to be done in one shot - no house or two at a time. Get agreement, get equipment out there, get the permits, get everything, and get it done. Anything incremental within an area just blows out the cost. It sounds like it may recently be at a point where it can work in costs if it's done efficiently. Companies like AT&T are provisioning all sorts of services over it - not just the pipe.

Has anyone done a graphic presenting costs/time for the last decade or so with inflation adjusted? What about Japan, Korea, and Hong Kong where FTTH is in wide everyday service because it's national policy? Mountain View's experience with the city wi-fi net courtesy Google is mixed partly because it's a 2.4Ghz network on a leafy city, and because the network wasn't maintained (it seems to be coming back, though). In a desert city with few trees, wi-fi may be a more affordable solution though with a lower data rate.

If the "Palo Alto Process" would be in place every step of the way then costs would skyrocket. Of course public debate and buy in or not is absolutely necessary but in this case especially continuing through the project would make it so expensive it's not worth even starting. California law presently makes it much too easy for anyone to stop anything or at least harass it - a large expense.

From the homeowner's view basically city government exists on the peninsula to increase the price of houses or distribute outside funding to neighborhoods. At least that's what it reads like in local papers and with house prices, no wonder. The history of development in California induces cynicism also. But a case may actually be made for fiber, IMO, and near-100% buy in may be attainable. In the future one of the first home-buyer questions would be "are you on fiber here?" Try to involve the whole population, not just the usual activists from one demographic though the city is changing.

If the cabling is buried, only a short time after the project in an area is done visual evidence of it will be gone. For a city that can propose so much money for a 'signature' bicycle bridge, it's hard to see objection to fiber except extreme cost. Actually, a lack of citizen's confidence in the ability of a city to do a frugal and effective project must be a key to this one and any other.


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Posted by Carlito waysman
a resident of Old Palo Alto
on Apr 23, 2013 at 3:47 pm

>Viewed as a risky investment two decades ago, the fund has in >recent years become a plump cash cow. According to a new report from >the Utilities Department, its reserves stand at $14.6 million in the >current fiscal year and are expected to nearly double by 2018.

Just watch how that fund slowly dies once the new minted bureucrats benefits and salaries dig into it.

City run fiber service? really? Is it that Comcast and ATT, are not good enough for the politicians and the few snooty Palo Altans. Why overburden Palo Alto taxpayers in creating a new bureaucracy, when the private sector is already providing the service?
The utilities department would better serve Palo Alto in redirecting all that money from the "dark" fiber "plump fund" to pave the city streets that are in terrible state of disrepair.


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Posted by A Noun Ea Mus
a resident of Professorville
on Apr 23, 2013 at 5:30 pm

Swelling cash reserves (blush)....Oh PA Online you are making me randy.


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Posted by A Noun Ea Mus
a resident of Professorville
on Apr 23, 2013 at 5:31 pm

Oh but I do declare...while a little southern belle such as myself loves to see such swelling....is it sustainable?


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Posted by Paco
a resident of Palo Alto Hills
on Apr 23, 2013 at 6:09 pm

Perhaps the City can release all recorded and unrecorded reserve fund accounts that city officials now squirrel away while declaring deficit budgets. Last count is reserve funds are now in excess of $300,000,000.


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Posted by bill g
a resident of Barron Park
on Apr 23, 2013 at 7:55 pm

In our neighborhood many use their computers almost entirely for e-mail. They don't need higher download speed especially if it costs them several thousand dollars to install. Before committing to an FTTP system, find out who is willing to pay for it.

This is not a necessary public utility like electricity and water to which everyone must subscribe. I don't need it and would resent being forced to subsidize the unknown percentage who want it.


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Posted by PatrickD
a resident of Barron Park
on Apr 26, 2013 at 8:39 am

I believe Google tapped Sonic.net to run the Stanford FTTH project. It would be wonderful if we could use them for FTTH in Palo Alto.

Here's a link:
Web Link


 +   Like this comment
Posted by just thinkin'
a resident of Midtown
on Apr 26, 2013 at 12:10 pm

Since PA prides itself on being in the fore-front of tech, let's jump in the fiber while the world is going wireless.... we'll be a leader in a field of one plus none....


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