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Palo Alto presses on with citywide fiber network

Council says the technology is key to competitiveness, despite setback

Saying a citywide fiber-optics system will be critical to 21st century competitiveness, Palo Alto City Council members unanimously decided Monday night to press on in their quest to deliver the ultra-high-speed broadband to every home and business in Palo Alto.

The council directed city staff to seek partnerships with firms selling fiber to Singapore and Australia and to apply for federal stimulus funds to advance fiber in Palo Alto, despite warnings from some residents that the city is too late in pursuing fiber and will never be able to provide perceptibly higher connection speed than companies such as Comcast already offer.

"This is something we really need to do," councilman Larry Klein said.

"Other places in the world are doing it, and some of those places really do compete with us. If we had (fiber) in place now we'd have a competitive advantage. If we have it in place three to four years from now, we'll still have a competitive advantage."

Fiber optics will give Palo Alto homes and businesses superior speed and reliability over competing broadband products, at a lower cost, and also will generate revenue for the city, advocates say.

The council's decision comes after a consortium led by Axia NetMedia of Canada withdrew from its attempt to build and operate a $45 million fiber network for Palo Alto in March. Monday night's decision also included a clause terminating the city's relationship with Axia on the failed project.

The consortium had pulled out saying it had lost a financing partner and could proceed only if the city contributed $4 million to $5 million a year to help with the fiber project.

"We're facing a big setback with the termination of the Axia proposal, but fiber to every home is a breakthrough that would offer us something important as a community," councilman Greg Schmid said Monday.

But not everyone at the council meeting viewed the fiber-to-the-premises plan, which the city has pursued for more than a decade, favorably. Resident Robert Smith warned the council, "It's time to abandon all plans for a citywide fiber system."

Smith said that in the 12 years he's been following the city's fiber efforts, providers such as Comcast have steadily improved their broadband offerings.

Palo Alto "won't have a wide audience because you've waited too long and the established providers are in there," Smith said. "They've been at it for decades. You don't know this business."

Council member Yoriko Kishimoto said infrastructure such as fiber "is our No. 1 economic development tool as we move from a petroleum-based economy to a knowledge-based economy.

"I have a lot of respect for companies like AT&T and Comcast, but they have a business model of selling us entertainment." Kishimoto said.

"The vision I'd like my colleagues to carry forward is a vision of a 'producer economy.' There will be as much uploading as downloading. Each person and business will be contributing as much as they take off the 'Net."

Related story

City's fiber dreams still flickering

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Like this comment
Posted by Bob Harrington
a resident of Embarcadero Oaks/Leland
on Apr 14, 2009 at 7:21 am

The Council has it right.

An open-access Fiber to the Premise (FTTP) network the City will build leverages the unlimited capacity of fiber (there is plenty of room for all). Open to many service providers who each compete to provide a wide variety of services to you on the same network, leveraging a very high capacity fiber network that offers you super high-speed, rock solid reliability, and lower prices. Open to innovation, the lifeblood of Palo Alto and Silicon Valley. Innovation is encouraged, enhanced, rewarded by open fiber.

Within the past 10 days, both Singapore and Australia announced they were building open FTTP networks to serve their entire countries. Japan is a decade-plus ahead of America in fiber, and counting. South Korea and many European countries and/or communities are served by very successful open fiber networks where speeds are symmetric (the same both ways) and ‘all you can eat’ at prices a fraction of ours. Palo Alto and Silicon Valley, the innovation capital of the world, can ill-afford to compete with one hand tied behind its back.

It is time for Palo Alto and Silicon Valley to show America the way with open fiber. Let’s get on with it.

Like this comment
Posted by Frank
a resident of Ventura
on Apr 14, 2009 at 11:19 am

In the news just yesterday:
Web Link
Seems that Comcast is trying to change it's rate structure to surcharge large data users - this might seem fair but in fact is a way to freeze out companies offering new services (like Netflicks offering movie downloads). Others are also looking to change their rate structure.
I get either amused or angry when I hear folk argue that private companies will do this better and the city should not try... Companies will make more money off of it to be sure and that money will come from your pocket.

Like this comment
Posted by Andrew
a resident of Duveneck/St. Francis
on Apr 14, 2009 at 1:10 pm

Yes, let's press ahead and use our budget surplus - this makes great sense! One should probably do research and see that rates for comparable connections are dropping 16mbps to your home from Comcast for $67/month, so you can't have any model that assumes more than that. This is a stupid snafu. Don't go there.

Like this comment
Posted by RLS
a resident of Duveneck/St. Francis
on Apr 14, 2009 at 2:53 pm


The recent behaviour of the City in increasing utilities rates and skimming more off of the top of the utilities revenue is hardly encouraging. My guess is that the City would do the same to fiber: charge as much as they could get away with, and carry the profits into the general fund.

Like this comment
Posted by Rajiv
a resident of Adobe-Meadow
on Apr 14, 2009 at 9:26 pm

Having fiber in Palo Alto could be an amazing advantage, however the way to really make it powerful would be if the whole region got together an built it as part of the next generation infrastructure. If this region could have 100 MB/sec to the home at reasonable prices, it would create the impetus for whole new class of applications - video communications, more powerful social applications, business to business applications that tie buyers and suppliers together tightly into virtual companies, research collaboration and applications we haven't dreamed of.

We should do this as a public/private partnership where we fund a Measure A like sales or parcel tax to subsidize the infrastructure that various service providers can then operate. It would be an amazing long term draw to Silicon Valley which roads, bridges and rail and other infrastructure never could. We would be have a differential advantage over other regions that accelerates entrepreneurial innovation.

Like this comment
Posted by Peter J. Pratt
a resident of another community
on Apr 14, 2009 at 10:44 pm

We make the point over on our site that the prominence of the Palo Alto fiber network as a "muni net" will most probably fuel the current national debate about broadband. This is especially true if, as reported, the City seeks federal "broadband stimulus" funding. In specific we see Palo Alto driving the debate on 2 points: Networks owned by governmental entities in areas in which investor-owned providers operate networks are often accused of 'using public funds to compete unfairly against private companies'. The major cable and telecom firms in the US have recently petitioned the Obama Administration to disallow use of federal stimulus funds for such network projects. Secondly, by seeking to build a super high capacity network (100 Mpbs) the Palo Alto network folks are setting a new national standard for what a broadband "underserved" area is -- a region that has inadequate broadband facilities. We call our story: "Muni Broadband: Palo Alto Puts the Fat in the Fire".

Like this comment
Posted by Jake
a resident of Downtown North
on Apr 14, 2009 at 11:48 pm

Comcast provides terrible service, by the way. 16mbs may seem fast, but Comcast's throughput latency, traffic shaping, and periodic downtimes make using their service painful as a home user, and difficult at best for a business connection. Furthermore, even if the city were to skim quite a bit off the top, municipal FTTP should still be significantly cheaper. My understanding is that most the fiber backbone is in place so lets roll out service.

Like this comment
Posted by Bob
a resident of Downtown North
on Apr 15, 2009 at 12:15 pm

Frank, the alarmist article you refer to is primarily about Time Warner, not Comcast. Comcast (as the article mentions) already has a bandwidth limit. It has been in place for several months and allows up to 250GB of data per month to be downloaded at no extra charge. This is quite generous! I rent several streaming movies a month and have not even come close to this limit. Do the math, and I think you'll find that your claim that this policy will "freeze out" companies like Netflix cannot be supported.

Like this comment
Posted by gardiner
a resident of Midtown
on Apr 16, 2009 at 10:58 pm

We don't need this fiber network, we don't want it, we can't afford it, it's not needed. What else must we tell the city council about how to NOT spend OUR tax money??!!

Like this comment
Posted by Steve
a resident of Midtown
on Apr 17, 2009 at 3:07 am

It seems to me that we do need it, I certainly want it. I think we should find a way to afford it.

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