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Palo Alto's fiber dreams still flickering

Staff proposes to develop an in-house plan for a citywide high-speed Internet network; city to apply for federal funds

After seeing their plans for a citywide fiber network fizzle last month, city officials are now considering a more phased, long-term approach to bringing high-speed Internet to the masses.

But first, staff hopes to gauge the community's feelings about a universally wired city.

A new staff report, which is scheduled to be presented to the City Council Monday, outlines a plan to keep the city's fiber hopes alive. The plan includes formally terminating negotiations with an Internet consortium, conducting a community survey to gauge local interest in a high-speed network and pursuing a phased build-out of the city's existing fiber backbone.

The city also intends to apply for economic stimulus funds, though only time will tell if its request for $65 million in federal funds will meet with approval.

The Monday meeting will give the council its first opportunity to discuss the Fiber to the Premises project since a consortium of firms that hoped to build and operate the network backed out of negotiations. The city planned to contribute portions of its existing dark-fiber network to the project, but council members specified that they didn't want to commit money from the general fund.

But a worsening economic environment effectively derailed that plan. The consortium, led by Canadian firm Axia NetMedia, suffered a loss of investors and asked Palo Alto for a heftier contribution to the new network, to the tune of $3.4 million a year.

On Feb. 25, the council held a study session to discuss Fiber to the Premises and the status of negotiations. At that time city officials debated their options and council members expressed major concerns about the consortium's latest proposal.

"The business model has changed, and it's one that doesn't look as attractive to the city," Councilman Pat Burt said at the meeting.

On March 9, Axia sent the city a letter indicating its withdrawal from negotiations.

"Unfortunately, at this stage, we now recognize that the City of Palo Alto has effectively rejected Axia's proposal," the letter stated. "From the time we got involved, we were consistent with our view of what was required to accomplish the Palo Alto objectives and we understood that meant more participation by the City than it had originally planned. We endeavored to make that clear at all stages of discussion.

"Regretfully, in spite of genuine effort on both sides, we have not been able to agree to a model that works for both parties."

But city officials indicated that a citywide network could still be possible. Utility Advisory Commission Chairman Dexter Dawes advocated for a slower, more phased, in-house effort to expand the city's dark-fiber network, which currently generates about $1.7 million a year for the city in licensing fees. The city's Fiber Optics Fund is expected to have about $7 million by the end of current fiscal year, according to the staff report.

"If this falls apart, I think the business could be expanded gradually with what we have," Dawes said at the February meeting. "Instead of a two-to-three year roll-out, it could be a 10- to 15-year roll-out with the businesses we already have."

The new staff report suggests that the city is considering doing just that. Its proposals include to "develop a plan to proceed with a phased build-out of the existing backbone, independent of the consortium."

Such a plan could be significantly bolstered if the city gets federal assistance. The National Telecommunications and Information Administration is preparing to release $4.7 billion for broadband projects as part of the federal stimulus package and city officials are currently putting Palo Alto's application together.

Bob Harrington, member of a citizen group that advises the council on the fiber project, said Silicon Valley would be a natural candidate for federal funds.

"Silicon Valley is known for being the innovation capital of the world and America has that image as well," Harrington said. "If we don't keep enhancing our innovation tools, and certainly a fiber network is a tool enhancer, we're going to lose our reputation and our power in being the leading innovator."

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Comments

Like this comment
Posted by Jeff
a resident of Palo Verde
on Apr 12, 2009 at 4:32 pm

I think it's a shame that the birthplace of Silicon Valley is so far behind other places in this sort of infrastructure: That we didn't get cable until the mid-1980's; that we don't have fibre throughout the city.

As an interim step we should let Google or someone else put wireless throughout the city the way they have in Mountain View.


Like this comment
Posted by Risk averse
a resident of Ventura
on Apr 12, 2009 at 7:53 pm

Is City government in the best position to launch such a risky business? It is quite different from regulated electric, gas and water utilities that don't have any competition. Can we match Comcast's business skills and deep pockets? When Palo Alto tried to partner with a private telecom company without taking any risk, all potential bidders dropped out.

If we take on the risk, we are in danger of repeating Alameda Power's
failed 10 year experience with telecom:
Web Link


Like this comment
Posted by RS
a resident of Duveneck/St. Francis
on Apr 13, 2009 at 7:15 am

Just let AT&T and Comcast do it, like they are doing for other towns.


Like this comment
Posted by go-not-so-slow
a resident of Barron Park
on Apr 13, 2009 at 9:55 am

We certainly don't want a money losing venture.

On the other hand the cost of retail bandwith (aka at&t, Comcast, etc) is very high compared with the wholesale cost of bandwidth. It is understandable that for-profit companies want to give the least while charging the most (high profit margin).

How much bandwidth can a regular household consume? Cable TV is 38 megabits per channel x say 100 channels that Comcast broadcasts.

I'd like to sign up for 10 megabits (symmetric) for $30/month like Lafayette here.
Web Link

Perhaps the old idea of building out only residential blocks that met a mininum participation % is one possibility.


Like this comment
Posted by Super
a resident of Community Center
on Apr 13, 2009 at 10:59 am

Let's keep the city gov't out of this venture. The city needs to focus on cutting costs for existing ventures, not take on new projects.


Like this comment
Posted by Frank
a resident of Ventura
on Apr 13, 2009 at 11:15 am

Having this would be a huge economic advantage to our city. We should have done this years ago. I work in a very small office in Redwood City (it could be a home / garage). We used to use DSL but it just wasn't good enough and now we pay $500 / month for 6 Mbps - it is symmetric and more reliable but quite expensive.

Can you imaging if I could get even 10 Mbps at say $100 (never mind 50 or 100 mbps).

These services are not available to smaller consumers - just too expensive. If they were there would be an explosion of offerings.

Risk asks:
>Is City government in the best position to launch such a risky business?

If government was not willing to takes risks on new technology there would be no internet - you'd be using AOL or Prodigy (and they still wouldn't talk to each other). What is the risk? That we loose our entire investment? That hardly seems likely do we risk not making a profit? Do our libraries, soccer fields, swimming pools, parks, streets make a profit? Perhaps not but we are all richer for having them available to us.


Like this comment
Posted by Been waiting too long
a resident of Midtown
on Apr 13, 2009 at 11:32 am

I moved to PA 10 years ago partly because I heard FTTH was coming. City of PA and it's home owners need to know FTTH will increase home values, and therefore bringing bigger tax income for the city. I for one would not object to investing $1k to have my home connected to the fiber to increase my home value by perhaps as much as $10k when it's time to sell.


Like this comment
Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 13, 2009 at 1:29 pm

"This week in the San Francisco Bay Area, the fiber-optic cable network was purposely sliced at four distinct locations. Where a hacker cannot succeed, bolt cutters will do.
[...] Once the cables were cut, Internet service was flaky for the region and completely out for 50,000 customers. On top of that, the landlines would not work and the cell-phone towers in the area went dead.
Does anyone find this sort of interdependency a little disconcerting? It is as if someone was testing the grid for either redundancy or failure points.
Much of the problem stems from the issues with technologies such as fiber optics. They require a level of public trust to work, because the cables must be clearly marked to prevent public works and contractors from accidentally cutting them.
In most parts of the country, there are signs up and down highways, across bodies of water and even in cities marking the location of a fiber-optic line. There are even maps of these things and where they are located.
How much work would it take to find some choke points that you could cut for the purposes of disrupting data communications in an area? How would this affect the so-called smart grid?" Web Link


Like this comment
Posted by Jeff Hoel
a resident of Midtown
on Apr 13, 2009 at 1:49 pm

Jeff: as far as I know, no municipality has ever successfully used wireless as a stepping stone to fiber-to-the-premisis (FTTP). Google put wireless into Mountain View as a learning experience; they don't need another learning experience.

Risk averse: City of Palo Utilities (CPAU) competes with lots of places to get the best supply contracts on electric and gas; to learn more, attend a Utility Advisory Committee meeting sometime. Also, the FTTP network proposed for Palo Alto would be "open acess," where retail service providers compete with each other and the incumbents to provide retail services, while the City focuses on just moving bits around the network. Also, Alameda's telecom system was hybrid fiber coax (HFC), not FTTP; let's not make that mistake.

RS: AT&T and Comcast aren't implementing FTTP in other towns. (AT&T implemented a now-obsolete form of FTTP at Mission Bay, but only as an experiment.) Last year, Comcast was caught sabotaging some of its users' Internet streams, based on the protocol used. FCC called them on the carpet, but didn't really forbid it. I wouldn't want such an Internet service provider.


Like this comment
Posted by Paul
a resident of Downtown North
on Apr 13, 2009 at 2:23 pm

"I think it's a shame that the birthplace of Silicon Valley is so far behind other places in this sort of infrastructure..."

Well, in the entreprenurial spirit of Silicon Valley, why not raise the capital and just do it? After all, it was private initiative that made this Valley legendary, not government handouts.


Like this comment
Posted by Andrew M
a resident of Duveneck/St. Francis
on Apr 13, 2009 at 2:28 pm

Puh-Lease - you can get 10 mbps from Comcast now for about $80/month. In fact it's even better than that. In fact you can currently get 16mbps for about $67/month from Comcast's website. Does Palo Alto really want to be in that market fighting against the companies that actually know how to do this vs. our centrally planned joint venture?

Verizon has a fiber solution called FIOS, but it's only in SoCal as far as I know, but do we really want to be competing in a low margin business w/ public funds while schools are cutting teachers?

Lets think a bit before we make an investment like this. Like all of you "right" minded folks who voted for the bullet train because it's supposed to be "green" w/out considering the consequences . . . Like it'll be noisy as hell and disrupt the caltrains service/corridor, and it'll be priced significantly higher than competing airline flights.


Like this comment
Posted by Pma
a resident of Community Center
on Apr 13, 2009 at 4:39 pm

I was a participant in the FTTH Trial for four years and loved it. I wish this sort of fast, reliable, and affordable service for everyone in Palo Alto.

If a fiber optic line gets cut, service gets re-routed through other (separate) live lines to other neighborhoods. The lines that got cut last weekend in San Jose were sabotage to a non-redundant system that affected Cellular, Landline, and Internet services by AT&T.

Our city has owned and operated an electric utility on the same scale needed to do FTTP for over 100 years. The topology of this network design would be like a reliable corporate network except that instead of a campus with buildings and offices within you would have a city with neighborhoods and homes/offices. Providers like AT&T and Comcast would be edge service providers into this network and be competing with other providers, unlike today's locked in environment. This would be a very green way to calm traffic and break the World Wide Wait we've been having. Let's build our Seventh Utility (Communications).


Like this comment
Posted by Ben
a resident of Midtown
on Apr 13, 2009 at 5:18 pm

Those in favor of FTTP have not defined how the service would be funded. Would every utility customer be required to participate even if they did not want the service? Several I've asked have said they don't want a $60 to $80 or more monthly charge for something they won't use.

The fact that private companies want city money to proceed tells me that it's not a sound investment. When several cities have tried it and eventually cancelled after losing millions of dollars proves the point.

Palo Alto can't afford another subsidized service. Comparing soccer fields, libraries, parks, etc. to FTTP is apples to oranges.


Like this comment
Posted by RS
a resident of Duveneck/St. Francis
on Apr 13, 2009 at 6:01 pm

AT&T is rolling out an 18 mbps service in various cities.
According a repair man I talked to, it is at the Palo Alto POP.
Ready to go.


Like this comment
Posted by go-not-so-slow
a resident of Barron Park
on Apr 13, 2009 at 7:19 pm

Both at&t and Comcast offerings are very weak for commercial (cottage industry) use. Robust cheap bandwith could make Palo Alto a desirable location for small (low budget) businesses and startups.

at&t U-Verse Max tier 18Mbps is only 1.5 Mbps upstream (full speed not necessarily achievable if watching TV at the same time). Comcast 16Mbps is only 1Mbps upstream. Usually your output (upstream) is what makes money -:)

the technology imposes the asymmetric nature on at&t DSL (hence ADSL asymmetric DSL) and same for Comcast coax. at&t Uverse uses VDSL2, see description at wikipedia.

fiber eg. Verizon fiber is symmetric (same speed up and down), hence the interest in the Lafayette fiber example of 30Mbps (symmetric) for $30/month.

there is no substitute for fiber ... but understandably at&t and Comcast are stretching the life of their copper wire/coax for as long as possible (as long as there is no competition)

the city (the people) own the poles and right of way. you can let others milk the cow, or you can milk the cow yoursef ...


Like this comment
Posted by Snarky
a resident of another community
on Apr 13, 2009 at 7:22 pm

Only in Palo Alto can you split an atom nine different ways but not figure out how to get cable or Internet into homes.

Palo Alto should set up a Department of Overthink.


Like this comment
Posted by RS
a resident of Duveneck/St. Francis
on Apr 13, 2009 at 7:34 pm

go-not-so-slow,

Sorry I have lost faith in this city's ability to do a project like this and think commercial can do it better.


Like this comment
Posted by Rick
a resident of Charleston Gardens
on Apr 13, 2009 at 11:51 pm

Just like the power underground program that started over 40 years ago this fiber project will go only to those who have political connections and businesses.

the fiber to the home trial ,years ago, only got a small percentage of homeowners to sign up for it and they didn't pay the cost of installation. It cost over $700,000 and only about 70 people signed up for it. As I recall it was in the community center neighborhood where some of the wealthiest people in the city live. Many wanted it for home businesses and high speed games.

The city has talked of syncronizing traffic signals for over 30 years ,but hasn't accomplished that.

Let's see how many residents will pledge or put up $10,000 each to build the system and go from there. This would only be the installation cost for overhead service to the home.

Also just like the storm drain parcel tax project. No storm drains are being fixed or added to the miles of roads that don't even have storm drains along them the money is dirvet to a flood control/pump station project near the bay to help the the millionair homeowners who have houses in the flood basin area of the city. Even though they built in a flood zone they expect everyone in to city to pay to protect their property and keep it's value up or to increase its value. This is a hugh issue that must be brought up to protect the people who don't live in the flood prone/basin of the city. Our council seems to be favoring a tax on everyone to solve the flood problem.

In the past, years ago, our utility dept did great getting elect and gas at good prices. Now our gas prices are very high considering the "GLUT" of natural gas. Apparently long term contracts were made when the price of gas was very high.
The same with ENRON payment of $20 million ,gift, to them eventhough they could not deliver the contracted for electricity. It was a strange situation, contract, where we had to pay even if nothing was delivered. How could that happen? Who wrote that contract? There are some plausable answers ,but----. Who got the $20 million? or a big portion of it?


Like this comment
Posted by common sense
a resident of Midtown
on Apr 14, 2009 at 3:55 pm

High speed broadboad is just one factor for a business to consider in determining where to locate; other factors are rent costs, utilities, traffic, housing, ability to expand, etc.

Although proproents talk like High Speed Broadband is the only factor - however the ability to get high speed broadband in other cities from the phone company will make the other factors more of a concern.


Like this comment
Posted by RS
a resident of Duveneck/St. Francis
on Apr 14, 2009 at 5:39 pm

Just pay to put a PC in a rack in a Co-location Facility with speeds and feeds way above what PA can ever deliver.

There is no reason that a small business PC has to be in someone's home.


Like this comment
Posted by An Engineer
a resident of Downtown North
on Apr 14, 2009 at 10:14 pm

"I was a participant in the FTTH Trial for four years and loved it. I wish this sort of fast, reliable, and affordable service for everyone in Palo Alto. "

A carefully pampered prototype only shows what can be done in a small, closely monitored situation. Do not conclude City Hall is capable of delivering that level of service citywide. As anyone who has watched a city council meeting on cable can attest, it cannot even eliminate the embarrassing ground loop hum from the council room PA system, which is a very elementary repair.


Like this comment
Posted by Deep Throat
a resident of Professorville
on Apr 15, 2009 at 11:55 am

Maybe city staff doesn't want to eliminate the ground loop hum from the Council Chambers PA system that began when Benest was City Manager.


Like this comment
Posted by Resident
a resident of Community Center
on Apr 17, 2009 at 2:15 pm

I was part of the former fiber to the home installation, and it was by far the most stable, reliable, very fast connection I've ever had. Absolutely marvelous. No problems whatsoever. The city of Palo Alto, and Palo Alto residents are ready for this and it would be a shame not to pursue every possible route to get it. The city will profit by having small businesses settle here, just for the fiber connection. The value of our homes will definitely increase if fiber can be offered. Our computers, TV and I'm told even telephone connections can use it. For anyone who has tried to get good service from Comcast, or AT&T, you know what a hassle that is.


Like this comment
Posted by Resident
a resident of Midtown
on Apr 21, 2009 at 11:08 am

Oh, please, please, please finish this FTTH project. AT&T and Comcast essentially have a monopoly and the service/price shows it.


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