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Off Deadline: Palo Alto, Google discuss 'fiber to the home'

City finds itself in position of being a follower, with other cities, counties or regions leading the way

A new effort to bring high-speed fiber-optics communication potential to Palo Alto homes and businesses is nearing the point of being submitted to the City Council for budget approval in late June.

So called "fiber to the home" -- or more recently "fiber to the premise" to include small businesses (most larger firms already have fiber) -- has been a topic of community discussion and debate for nearly 20 years. The shorthand is FTTH or FTTP for those engaged in the dialogue of advocacy and delays. A broader shorthand once was linking "the last mile" between the fiber source and homes/businesses. It's been a long last-mile trudge.

Once upon a time cities across America and beyond were looking to Palo Alto, as the ostensible heart of Silicon Valley, to see what this tech-happy community was going to do. No longer. Palo Alto now finds itself in the position of being a follower, with other cities, counties or regions leading the way.

This caution may have been wise, avoiding false starts and expensive do-overs as equipment and technology evolved. A trial installation of fiber in some neighborhoods dead-ended when donated equipment turned out to be obsolescent.

And the expense of installing fiber-optic cables throughout Palo Alto neighborhoods -- estimates ran as high or higher than $40 million at one point -- was a significant deterrent.

Yet there's a growing feeling in this round that something might really happen. From time to time over the past decade and a half I have asked local fiber advocates and officials whether it was time for me to write the FTTH/P "obituary." If not dead it most assuredly was comatose, lying there with remnants of citizen advisory committees and old debates that flared up with promises during council election campaigns.

But the resuscitation, or resurrection, of fiber as a possibility for the "heart of Silicon Valley" has one major source: Google. The massive communications firm's decision to fund FTTH/P systems shocked the Palo Alto policymakers and staff into action, first applying for a Google grant and then getting down to the business of tapping into Google's latest, regional round of installations.

A budget item for fiber has been tentatively scheduled for consideration at the council's June 27 meeting, delayed from June 13, according to Jonathan Reichental, an assistant city manager overseeing staff-level discussions of a possible "co-build" for the project. The co-build has not yet been precisely defined publicly, but likely includes some type of installation of fiber as an extension or back-up to the Google-installed fiber.

Whatever system is installed will entail extensive trenching in Palo Alto neighborhoods. Years back, one advocate of higher-speed internet, Joe Villareal, commented that the city should take the initiative in installing fiber to prevent private, competing firms from installing their own, proprietary fiber systems and creating "trench warfare in the streets of Palo Alto." Great line.

Staff-level discussions are underway and a report, originally expected by the mid-June council meeting, is due out before the matter returns to the council with a budget item. Google has announced plans to create an extensive fiber-optic rollout in cities across the nation.

One Palo Alto official said the Google discussions are going well and an agreement is at the stage of "dotting the i's and crossing the t's" prior to being made public.

One huge boost to Palo Alto's confidence about going for full-out FTTH/P has been the stunning success of the so-called "fiber ring" that the city, swallowing hard, approved in 1996 despite concerns about the nearly $2 million installation cost. The ring was installed as "dark fiber," meaning that it wasn't lighted up with communications traffic.

Slowly the city began leasing out fiber wires to companies -- at a loss in early years. But after a significant rate adjustment the leases started piling in and the system started making a profit, or "an excess of revenues over costs." Can cities make profits?

Today the system generates an, ahem, profit of close to $2 million a year, equivalent to the initial investment. Not bad.

So there is revenue that could be tapped for expansion of fiber to homes and businesses, although many details and questions remain to be sorted out. How far up the hills into low-density residential regions should fiber extend? Who pays for the "last 100 feet" connection to homes and businesses?

Sorting out the details, where the devil hides of course, is a task facing staff and the council right now, with some urgency for approval of the budget by the state-imposed deadline of June 30.

Reichental expressed optimism about the discussions/negotiations with Google, describing the tech giant as being responsive and joining in a "good dialogue" with the city about alternatives and possibilities for a collaborative, "public-private" partnership.

Google approached the city on the new round about two years ago as it was exploring creating a truly regional network throughout the Bay Area, Reichental said.

Another big boost for fiber resurrection was that City Council members Liz Kniss -- who witnessed most of the starts, false starts, distractions and concerns that derailed earlier efforts on expanding fiber citywide -- and Nancy Shepherd attended a conference on FTTH/P in Kansas City. Ah, resist, resist saying "... where everything's up to date."

There a big topic was the creation of what was called "Google Villages," where installation was based on a minimum number of signups in designated areas.

The long-running community debate on growth in Palo Alto, and whether it's evolving (or has evolved) from a suburban to an urban community, or whether its future is "becoming another Beverly Hills or another Berkeley," has not yet encompassed the notion of its becoming a village.

Former Weekly Editor Jay Thorwaldson can be emailed at jaythor@well.com. He also writes periodic blogs at www.PaloAltoOnline.com.

Comments

1 person likes this
Posted by Curmudgeon
a resident of Downtown North
on Jun 3, 2016 at 6:54 pm

Why not enlist Netflix? FTTH would benefit it more than anybody else, unless Google is planning to enter the streaming video market.


13 people like this
Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Jun 3, 2016 at 7:31 pm

Please make this happen. Comcast isn't the devil, but they need real competition to keep them honest.

@Curmudgeon - Netflix is a video streaming service, there is nothing relevant to enlist them in. Google is now an ISP and can make this happen if the city is less lame than normal.


16 people like this
Posted by Rip off
a resident of Woodland Ave. area (East Palo Alto)
on Jun 3, 2016 at 9:20 pm

$42 a month (after much negotiating)for a month to month contract From AT&T. This is for DSL only, furthermore, to add insult to injury, we only get 6 Mbps. Honestly, I would rather go to the dentist then step foot into another AT&T store. Comcast is not much better. I would like to see Comcast and AT&T end up like a Blockbuster. These duopolies are pure evil. Come on Google make this happen!


6 people like this
Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Jun 4, 2016 at 2:19 am

@Rip off - Comcast is worse than AT&T in some ways (reliability), not that different in price (a little worse), but it is a heck of alot faster than DSL - downloads easily 20x as fast.


15 people like this
Posted by Anonymous
a resident of Another Palo Alto neighborhood
on Jun 4, 2016 at 9:23 am

The Palo Alto Way will deter Google from entering the market. Palo Alto will hold a design contest on how to lay the fiber.


Like this comment
Posted by drizzle
a resident of Barron Park
on Jun 4, 2016 at 11:45 am

drizzle is a registered user.

Web Link


11 people like this
Posted by Jeff Hoel
a resident of Midtown
on Jun 4, 2016 at 12:47 pm

If Google is allowed to deploy Google Fiber (GF) in Palo Alto, then it will likely become the monopoly wired telecom provider here for the next several decades at least.

Palo Alto is the only city in California to have five municipal utilities: electric, gas, water, wastewater, and dark fiber. It gives the City control over its destiny. For example, our electricity is 100 percent carbon-neutral, and it's still less expensive than is PG&E's electricity in neighboring cities. Mayors, in their state-of-the-city speeches, like to pay homage to forebears who were wise enough to give us all the advantages of municipal utilities. Well, FTTP is the next utility, and it should be municipal.


GF hasn't yet promised to deploy citywide.


GF hasn't yet promised to serve all customer types, e.g., all businesses.


GF in other cities has limited when folks can sign up for service.


GF isn't offering smart grid services, but a municipal FTTP network could provide them.


GF isn't offering open access to competitive retail service providers, but a municipal FTTP network might in the future be willing to providing open access.

GF offers 1-Gbps symmetrical Internet service today, which is great; what will it offer in the future? Chattanooga's municipal FTTP network offers 10-Gbps symmetrical Internet service today (as well as 1-Gbps and 100-Mbps symmetrical Internet services), and is looking into how to offer 100-Gbps service in the future.
Web Link

GF might sell the network to someone else.


4 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 4, 2016 at 12:50 pm

"Netflix is a video streaming service, there is nothing relevant to enlist them in."

Yes there is--the most important thing of all: $$$$


8 people like this
Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Jun 4, 2016 at 1:05 pm

@Jeff Hoel - Google wouldn't be a monopoly with Comcast and AT&T already entrenched in the city. They'd be lucky to have 33% market share after 5 years. Same thing would happen as has happened where competition has shown up in other cities. Comcast suddenly finds a lot more bandwidth and starts to looks much more viable. AT&T will start to push fiber themselves, or push lower cost plans for the people who are happy with slow internet.That's what happened in Kansas. Honestly, you're just spreading FUD. A city run taxpayer financed provider is a bigger monopoly threat. I know you are deeply personally invested in a the city running our tv/telephone/internet, but let's keep it real.


13 people like this
Posted by midtowner
a resident of Midtown
on Jun 4, 2016 at 1:35 pm

while were at it; can we PLEASE get some cell towers? (you know, like the one that has been proposed at the baseball diamond on middlefield! freaking nimby's!) gawd, but it's frustrating to be in the heart of silly-con valley and have ZERO bars and have my phone say it roaming. ugh.


6 people like this
Posted by Rip off
a resident of another community
on Jun 4, 2016 at 1:44 pm

@ Mr.Recycle

Comcast (Infinity) was $55 +/- for a one year contract, then it bumped up to $88 +/- for the following year. However Comcast will give you 25 Mbps, which is what you need to watch HD Netflix on your 4K TV. That was for internet only,no bundling. Honestly if you want to add the price of Netflix Streaming at $10 a month You are still paying around $2000 ($83.33 a month)for two years. Oh,I forgot to add, that if you decide to break the contract you will get penalized. That was the pricing,more or less, about a month ago.

We are fine with Netflix pricing, what we are not fine with is the way the Internet providers have been gouging us ever since we cut our cable. I am sure that their are many internet customers out there that feel the same way we do.


4 people like this
Posted by Jeff Hoel
a resident of Midtown
on Jun 4, 2016 at 3:00 pm

@Mr.Recycle -- Wired telecom is a natural monopoly, meaning that whoever gets there first has the advantage. Specifically, whoever gets there first with FTTP has the potential to blow away copper-based competitors over time. I agree that it might take a few years.

Chattanooga EPB's municipal FTTP network, which has been offering services since 2009, now has more customers than Comcast has in its footprint.

I agree that where Google has deployed Google Fiber (GF), the incumbents have often made a show of trying to offer their own FTTP alternatives, at least in a few neighborhoods. I just suspect that the competitive impact will be minimal.

Yes, a municipal FTTP network could become a monopoly over time, but the municipality is supposed to act in the public interest. A municipal FTTP network needn't be "taxpayer-financed" -- and most aren't. They're paid for by the customers who use their services.

I have no interest in the City's "running" TV or phone by providing these services. I'd be OK with the City's offering open access to retail service providers, if that were financially viable.


Like this comment
Posted by Rip off
a resident of another community
on Jun 4, 2016 at 4:30 pm

Woops!

Comcast (Xfinity)


1 person likes this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Jun 4, 2016 at 5:43 pm

Most of the customers in the municipal Chattanooga system are buying and using 100mps service. 1GB, or 1TB or 1 Faster-than-the-speed-of-light is is no value to most people--virtually everyone for that matter.

The idea that fiber service should be municipal is an opinion, not a fact.

Comcast is now offering 1GB service for $70/month:
Web Link

1GB Service available in San Jose:
Web Link

The whole idea that telecommunications should be in the province of the government, which, by and large, is increasing non-transparent, shows the mindset of someone who is more socialist than not. Wonder if such people would support government ownership of housing and food production?

Let's see what Google can do, and when they can do it.


3 people like this
Posted by Mary
a resident of Old Palo Alto
on Jun 4, 2016 at 7:27 pm

[Portion removed.]

Palo Alto already has had one experience with a "wired telecom"- like service. Years ago we had Cable Co-Op which tried and failed to run a non-profit cable TV service in the city. (Technically it was not city-run, but it had all the political interference and subsidy type problems that a city run service would have.) After years of financial problems - and pretty crummy service - Cable Co-Op was sold to AT&T in 2000.

As posters have pointed out, there are several providers of high speed internet in Palo Alto already capable of providing meaningful competition to Google. How are we worse off with more choices?

From the article, it sounds like Google is ready to start pretty soon. Do we really want to get the notorious Palo Alto process started analyzing, studying and consultant-hiring a municipal system? It would be decades before anything happened.



3 people like this
Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Jun 4, 2016 at 10:13 pm

@Jeff - "the municipality is supposed to act in the public interest" and there is the rub. We both live in Palo Alto and it's pretty obvious that the city doesn't always act in the public interest. If there is no private option for fiber, I'll work with you on municipal broadband, but it needs to be a last resort.

@Rip off - I don't like Comcast bundling or pricing either. And I really really hate data caps. We need competition in the city, and if Google is willing to bring it, awesome! I'm just noting it is a win-win, because when competition comes, the service and prices from existing companies tends to get better. For example, in Chattanooga, Comcast starting rolling out 2gb service.


4 people like this
Posted by Jeff Hoel
a resident of Midtown
on Jun 5, 2016 at 5:24 pm

@Joe -- Chattanooga EPB has about 75,000 FTTP customers, of which about 6,000 take 1-Gbps service (which costs only $12/month more than 100-Mbps service).
Web Link

If someone wanted to connect two places in Palo Alto with a 1-Tbps link, they could, using the City's dark fiber network, but it would be expensive. "Faster-than-the-speed-of-light" is not possible, so it's unworthy of discussion.

The reference you cite for Comcast's $70/month, 1-Gbps service says it's for Atlanta; it's not available everywhere. It's not even FTTP, so uploads are considerably slower than 1 Gbps. And it requires a three-year contract.

The reference you cite for Comcast's FTTP service in San Jose says it's a 2-Gbps symmetrical service, and it's also available in Palo Alto. But this article say it costs between $159 (in Nashville and Chattanooga) and $300 per month (elsewhere), and there's a considerable installation fee, and you have to be within a third of a mile of their existing fiber infrastructure, and even then they don't serve everybody.
Web Link

Is it socialist to favor municipal electric, gas, water, wastewater, and dark fiber utilities? Why would FTTP be any different? On the other hand, housing and food are not utilities or natural monopolies, so let's not talk about them.


2 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 5, 2016 at 6:01 pm

FTTP (recently downgraded from FTTH) has been on the municipal table for over fifteen years. If it is such a desirable, profitable thing, why haven't the commercial biggies rushed in to milk the bonanza?

Because there ain't no bonanza, that's why. Therefore FTTP/FTTH advocates want government participation and taxpayer subsidy for their baby. It's that simple.

Fortunately, in a remarkable display of fiscal prudence, city hall has so far resisted that notion. But ego may win out in the end.


2 people like this
Posted by Mary
a resident of Old Palo Alto
on Jun 5, 2016 at 8:47 pm

[Portion removed.] Is fiber to the home a "natural" monopoly in an environment where we already have two commercial behemoths providing internet service in Palo Alto and a third looking to enter? It doesn't seem obvious to me, yet it's asserted without bothering to engage with the facts.

Now that we have Google expressing a hard interest in providing residents with fiber, the underlying ideology behind FTTH "advocates" like Hoel becomes clear. It's not really about FTTH, it's about having the city control and subsidize what they want. Sane taxpayers should object strenuously to this [portion removed] notion.


Like this comment
Posted by Joe
a resident of Another Palo Alto neighborhood
on Jun 6, 2016 at 6:34 am

> Chattanooga EPB has about 75,000 FTTP customers,
> of which about 6,000 take 1-Gbps service

Leaving about 69,000 (the vast majority) not subscribing to 1-Gb service. So, What’s your point?

> Is it socialist to favor municipal electric, gas, water,
> wastewater, and dark fiber utilities?

Absolutely—particularly when Palo Alto’s original utility providers were private sector organizations which were targeted for elimination by members of the City Council of the early 1900s—which saw pro-government advocates of the time proposing the takeover of all utilities in California. One even went so far as to suggest that all railroads in the US be nationalized.

Dark fiber has very few customers. While there may be some rational justification for waste water to be a municipal responsibility—since the city government has no access to a supply of water, gas or electricity—all of these commodities have to be purchased outside the city, and more-often-than-not from private sources. Electricity and gas have to be transported from their sources, again via private carriers.


Like this comment
Posted by Grammar police
a resident of Leland Manor/Garland Drive
on Jun 6, 2016 at 10:45 am

"Premise" is not the singer of "premises", unless you're talking about ideas.


Like this comment
Posted by Grammar police
a resident of Leland Manor/Garland Drive
on Jun 6, 2016 at 10:47 am

Aargh! SINGULAR, not singer, stupid spellcheck.


8 people like this
Posted by Muni fiber
a resident of College Terrace
on Jun 6, 2016 at 11:12 am

I'm not sure where all these Comcast and att posters have come from but clearly by any reasonable yardstick we are already suffering from monopoly power of telecom companies. Consumer broadband is widely recognized as extremely overpriced vs what you get. This is monopolistic profit at work. With muni owned fiber and Google (to an extent) there would be little movement on speed or price. Google is still a closed, private network however subject to changing business priorities.

A city owned physical layer would ensure cost effective and truly high speed broadband with monopolistic bundling charges w phone/tv or cherry picking of certain neighborhoods. With over 150 cities across the country already doing it, we are not leading. We should follow best case examples and utilize the advantages we have with an existing fiber utility.


4 people like this
Posted by Jeff Hoel
a resident of Midtown
on Jun 6, 2016 at 11:47 am

@Mary -- As you point out, Cable Co-op is not an example of municipal telecom; it was a private-sector entity. So what are you complaining about?

Where I live, AT&T's fastest Internet product is 768 kbps down and even slower up. So, no, they've shown no interest in competing with 1 Gbps symmetrical Internet service where I live. This year, the state legislature considered a bill, AB 2395, that would have given AT&T permission to walk away from its wireline service commitments anywhere it wanted to, if it offered to provide a wireless service as a replacement, even if that might be more expensive and less capable. (That bill seems to have stalled. Good.)

To answer your "meaningful competition" question, I think that in the long run, Palo Alto would be worse off if one of its FTTP options were not municipal. I think that if Google Fiber comes to Palo Alto, that will make municipal FTTP less likely.


Like this comment
Posted by Curmudgeon
a resident of Downtown North
on Jun 6, 2016 at 12:02 pm

"I think that in the long run, Palo Alto would be worse off if one of its FTTP options were not municipal."

Please define "worse off." Be sure to include the municipal financial aspects.


4 people like this
Posted by Jeff _Hoel
a resident of Midtown
on Jun 6, 2016 at 12:07 pm

@Mr.Recycle -- Sure, City government doesn't always act in the public interest, but I think the community is in agreement that that's the goal, and individuals can always let City officials know what they think the public interest is. I go to most Council meetings, most Utilities Advisory Commission meetings, and most Citizens Advisory Committee on FTTP and Wireless meetings, and I send messages to these bodies analyzing the staff reports, and making them aware of what other communities are doing. Private sector corporations are supposed to act in the interest of their shareholders, whether or not that's in the public interest.


Like this comment
Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Jun 6, 2016 at 12:25 pm

@Jeff_Hoel - "City government doesn't always act in the public interest, but I think the community is in agreement that that's the goal"

I strongly disagree with this, especially in Palo Alto, where a few loud activist voices often drive the agenda. I'd point to the attempt to phase out natural gas, the disproportionate attention to cycling as effective activism, and not reflective of the general community. Most people don't have the time or interest to lobby, go to meetings, join committees, etc.. I'd put municipal broadband in this category. A few loud activists, not much general interest. I'd support a referendum on it. If people really want it let put it to a vote with a realistic proposal and realistic financing.


2 people like this
Posted by Jeff Hoel
a resident of Midtown
on Jun 6, 2016 at 1:05 pm

@Curmudgeon -- I don't understand your comment about how FTTP was recently downgraded from FTTH.

I haven't been saying that FTTP is necessarily the best way for corporations to make money for their shareholders. I've been saying that FTTP would benefit the community. So, since municipal government exists to benefit the community, it's something that it makes sense to consider doing as a municipality. The same goes for utilities in general. I'm not asking the City to subsidize municipal FTTP using taxpayer money. I want the City to create a municipal FTTP utility that is paid for by the customers who use it -- the same as the City's other utilities.


2 people like this
Posted by light reading
a resident of Duveneck/St. Francis
on Jun 6, 2016 at 1:25 pm

See attached article. Web Link

The Killer App of 1900 was lighting. Public sentiment strongly opposed the idea of widespread electricity for lighting.

“Unless we adopt the principles of socialism, It can hardly
be contended that It is the province of government, either
state or municipal, to undertake the manufacture or supply
of the ordinary subjects of trade and commerce, or to impose
burdens upon the whole community for the supposed benefit of
a few...."

Fast forward, 100 years. It's amusing to see some of today's commentary precisely mimic these antiquated and myopic views. For generations, incumbent carriers and their armies of lobbyists have been quick to play the socialist card whenever the possibility of real competition availed itself. Fortunately back then, more visionary and reasoned leadership prevailed.

Let's hope that Palo Alto City Council embraces it's elected responsibility to provide vision, infrastructure and investment.


6 people like this
Posted by Jeff Hoel
a resident of Midtown
on Jun 6, 2016 at 1:34 pm

@Mary -- Yes, since 2002, I've been advocating for municipal FTTP. I'm doing so for the good of the community, not for me personally.

Here's what "natural monopoly" means.
Web Link

I think that FTTP is a natural monopoly because whoever builds it first in a given community invests a lot up-front for the infrastructure but after that has lower operating and maintenance costs than any copper-based competitors, and can offer more reliability and faster products than copper-based competitors can. A competitor might consider being the second builder of FTTP in a community, but that would require building out a second FTTP infrastructure up-front, at great cost, and then trying to lure customers away from the first builder, even though the second builder's technology wouldn't be better than the first builder's. So a second builder would probably conclude that there must be easier ways to make money.

Some people think that because there's been a telecom duopoly in many geographical areas for the past few decades that a duopoly is "natural" going forward. But I don't think so. In most areas, the cable TV infrastructure was built decades after the telephone infrastructure was built. But when it was built, the telephone infrastructure couldn't do cable TV, and the cable TV infrastructure couldn't do phone. So the two infrastructures did not compete. Later, both infrastructures were upgraded so that they could do Internet (because upgrading didn't cost as much as the initial infrastructure). But the phone company's DSL is vastly inferior to the cable TV company's HFC, so over time the latter is going to win, and there won't be a duopoly anymore (in that area).

I agree that I want the City to be in control -- to be able to use the FTTP network for whatever would be in the community interest. I disagree that I want the City to "subsidize" the network using "taxpayer" money. I want the network to be paid for by the customers who use it. Most municipal FTTP networks in the U.S. have been successful at doing this.


9 people like this
Posted by High fiber diet
a resident of Adobe-Meadow
on Jun 6, 2016 at 1:52 pm

Some of the dimmer bulbs on the council think this is a service to deliver high fiber food to the home so that we will eat properly. Of course they are worried about traffic from the delivery trucks.


Like this comment
Posted by Jeff Hoel
a resident of Midtown
on Jun 6, 2016 at 2:59 pm

@Joe -- My point? In your Jun 4, 2016 at 5:43 pm post, you seemed to be implying that since most EPB customers took 100-Mbps service, that was all EPB really needed to provide. But EPB's view is apparently that it might as well provide what customers want and are willing to pay for: 100-Mbps to most people, 1-Gbps to a significant minority, and even 10-Gbps to a few. Once you have the fiber infrastructure, upgrading speeds is not that big a deal.

OK, I don't know whether Charles "Daddy" Marx and Charles Benjamin Wing, the two Council members most responsible for Palo Alto's creating its municipal electric utility, would have called themselves socialists. But whatever they were, we owe them a great debt.


The American Public Power Association (APPA) says, "Public power is a collection of more than 2,000 community-owned electric utilities, serving more than 48 million people or about 14 percent of the nation's electricity consumers."
Web Link
In a 2010 speech, APPA's president said, "During the 'red scare' years of the 1940s and 1950s, opponents of public power often tried to tar our industry with labels of 'communists' or 'creeping socialism.'"
Web Link
Do you really want to go there?

At last report, the dark fiber utility had 105 customers (some of whom were resellers with multiple customers) and 232 connections. It's paid for entirely by its customers.

I don't know anyone who thinks that a municipal utility is somehow less of a municipal utility if it purchases commodities or their transport from other entities.


Like this comment
Posted by Joe
a resident of Another Palo Alto neighborhood
on Jun 6, 2016 at 3:53 pm

> At last report, the dark fiber utility had 105 customers
> (some of whom were resellers with multiple customers)
> and 232 connections. It's paid for entirely by its customers.

By any reasonable evaluation—this enterprise is a failure—not a stellar success!


Like this comment
Posted by Mary
a resident of Old Palo Alto
on Jun 6, 2016 at 4:03 pm

"I go to most Council meetings, most Utilities Advisory Commission meetings, and most Citizens Advisory Committee on FTTP and Wireless meetings, and I send messages to these bodies analyzing the staff reports..."

[Portion removed.] As Mr. Recycle points out, the city staff - at the behest of local activists - now is on a quest to eliminate natural gas as a source of energy in Palo Alto. Very few people in the City even know this is going on, and even fewer would think it anything other than appalling if they did know about it. Most people don't have the time or the inclination to "... go to most Council meetings, most Utilities Advisory Commission meetings, and most Citizens Advisory Committee send messages to these bodies analyzing the staff reports"

Fiber may turn out to the be everything its advocates say, or perhaps some unexpected technology change (like that which allowed AT&T to provide TV service over copper) may make it less than the ultimate internet connection method. Either way, with Google seemingly ready to put up its own money right away, why should we tolerate the almost certain Palo Alto Processed delay and taxpayer risk of getting the city involved?

Most of our neighbors had cable TV long before Palo Alto because the city dithered, studied and delayed putting off the willingness of private companies to provide service. We finally ended up with a sub-standard, money losing Cable Coop that was sold to AT&T. Do we really want to this to happen with our future Internet connections?

Fiber advocates used to say that the City had to provide FTTH because the private sector was unwilling to take the risk. Now that we have a private entity apparently willing to do just that, they balk. Makes you think that Fiber zealots don't really care about fiber as much as they care about the City running things.




Like this comment
Posted by Curmudgeon
a resident of Downtown North
on Jun 6, 2016 at 5:10 pm

"I don't understand your comment about how FTTP was recently downgraded from FTTH."

It's the loss of that last twenty to fifty feet of fiber from the premisis boundary to the home. FTTP < FTTH.


2 people like this
Posted by Bob
a resident of Palo Verde
on Jun 6, 2016 at 5:53 pm

What I would like to see is for the city to bring fiber to every home / premise, but then allow competition for who can "light it". That is give each household the choice of AT&T, Comcast, Google, etc to get service from. This would allow competition for the service, not the infrastructure. Easy to change to a different service provider if they aren't providing good service, or if some else offers it for less. That is, competition for the service.


Like this comment
Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Jun 6, 2016 at 5:59 pm

@Bob - Why should the city and taxpayers pay to wire the city when there is a potential private party (google) willing to pay for it, and there is already viable competition in place (Comcast/AT&T). If we had no broadband options, and no private entity was willing to step forward, then your plan would make sense. But given the current situation, it would be a waste of money.


Like this comment
Posted by Jeff Hoel
a resident of Midtown
on Jun 7, 2016 at 11:18 am

@Curmudgeon -- The world doesn't need another DEFINITION of "worse off."
Web Link

A study of Chattanooga EPB's municipal FTTP network found that it generated more than $865 million in benefits to the community between 2011 and March of 2015.
Web Link
Web Link


Like this comment
Posted by Mary
a resident of Old Palo Alto
on Jun 7, 2016 at 11:36 am

[Portion removed.]

Now that Google is apparently willing to provide a fiber system in Palo Alto, the purported arguments in favor of a fiber system (which is what the links Hoel provided make), aren't an issue. Fiber's benefits as described in the links will exist (or not) whether it's provided by Google, or by the taxpayers of Palo Alto.

Unaccountably, Hoel who has been futilely arguing for fiber for years - unable to convince the city that it makes economic sense - now is coming out against the first concrete fiber venture the City has seen, only it seems because the City isn't paying for it.

[Portion removed.]

There's really no logical reason why we shouldn't do what we can to see that Google starts building its system as quickly as is possible. If we wait for Hoel and the City to build one, we'll still be waiting in the slow lane while most of our neighbors have moved on to the 21st century.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 7, 2016 at 11:39 am

@Joe -- So you think that "by any reasonable evaluation," the City's dark fiber network "is a failure, not a stellar success!" Even though it's earned $22.2 million so far, on an initial $2 million investment.
Web Link

The only failure I see is that this stellar success hasn't already led to municipal FTTP.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 7, 2016 at 12:01 pm

@Curmudgeon -- You don't understand what people mean by the term fiber to the premises (FTTP). They don't mean fiber to the property line, after which you're on your own. They mean fiber to the building, whether that building is a home or a business.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 7, 2016 at 12:50 pm

@Bob -- In general, what you're asking for is that the municipal infrastructure owner provide "open access" to a collection of retail service providers, so that they can offer retail services to end users. MuniNetworks recently did a report that names 30 open access municipal networks in the U.S.
Web Link

There are different ways of doing open access.
Web Link
I prefer that the infrastructure provider also provide the electronics, and then offer "open access" to its wholesale bit-moving services. That way, if's possible for a given premises to subscribe to services from more than one retail service provider, and to switch retail services providers without having to change anything physical.

Historically, municipal open access networks have had a harder time being successful financially than networks where the muni is the only provider of retail services. I'd be OK with designing the network to support open access but then not actually offering open access until financial success was assured.

@Mr.Recycle -- Your question assumes that a municipal FTTP network would be paid for by "taxpayers." That's not how most municipal networks are paid for. It assumes that the copper-based infrastructures of Comcast and AT&T will provide adequate competition going forward; they will not. It assumes that a private-sector FTTP network will provide the same benefits to the community that a municipal FTTP network will provide; it will not.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 7, 2016 at 2:01 pm

@Mary -- I object to your accusing me of pleading for a "special interest." I believe that virtually all premises in Palo Alto would benefit from the kinds of services that can be provided over a municipal FTTP network, for decades to come. I also believe that such a network would benefit even those who chose to stick with the incumbent providers, because those providers would be forced to be more competitive. In other words, I believe that municipal FTTP is a "general interest," not a "special interest."

By the way, I'm not advocating for municipal FTTP because I'm being paid or because I stand to profit from of my investments in the field, or because I personally want to control the network.

Incidentally, the technology that allowed AT&T to provide TV over (twisted-pair) copper is fiber-to-the-neighborhood (FTTN). Not all Palo Alto neighborhoods have been upgraded to FTTN. FTTN is still not competitive with Comcast's HFC (hybrid fiber coax), so I don't know why they bothered.

Sure, I "balk" at ceding Palo Alto's telecom future to a private-sector entity that would have the potential to become the telecom monopoly here. I care about not only using the right technology (FTTP) but also seeing that technology used in the public interest.


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Posted by Mary
a resident of Old Palo Alto
on Jun 7, 2016 at 4:14 pm

[Post removed.]


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Posted by Jeff Hoel
a resident of Midtown
on Jun 7, 2016 at 6:24 pm

@Mary -- If you had followed the issue over the years, you'd realize that my advocacy has consistently been on the side of making information available to the public. For example, the Citizens Advisory Committee on FTTP and Wireless (CAC) was created so that it didn't have to follow the rules of the Brown Act for deliberative bodies -- didn't have to have public meetings, didn't have to have agendas or minutes, and was advisory only to staff. I thought that was a big mistake, especially since its scope seemed to overlap with the Utilities Advisory Commission (UAC), which does have to follow the rules of the Brown Act.

A number of reader commenters here have said they don't want a municipal FTTP network subsidized by taxpayers. Well, guess what, I don't want that either.

Regarding the "contradiction" you think you spotted, when a FTTP network (whether municipal or private-sector) is deployed in a community that has only copper-based networks, the FTTP network has the capability to offer faster speeds and more reliability, and its operational costs can be lower, so it can outcompete the copper-based networks. In the short run, the copper-based networks can try to hold onto their market shares by reducing prices, but in the long run, they just have to give up (assuming they can't afford to build comparable FTTP infrastructures). (An exception to this might be if the copper-based network were able to provide content that folks really wanted that the FTTP network could not provide. But these days, there's a trend to getting content "over the top," i.e., via Internet service, rather than via traditional cable TV service.)

I'm not sure why you think I favor a "closed" system where insiders determine the content. First, I favor a municipal FTTP network, like Longmont's NextLight, where the muni offers no traditional TV service at all, so the muni doesn't have to choose what content to provide. Users are free to use their Internet service to receive content "over the top" from wherever they wish. Second, philosophically, I'd support the muni's offering "open access" to all manner of retail service providers, including those who provide traditional cable TV services, but only if this "open access" approach is financially feasible.

I guess I didn't make clear in a previous post that although I go to most Council meetings, to follow what it is they do, I rarely speak if FTTP isn't on the agenda. Same for UAC. I do frequently speak at CAC meetings (when they're open to the public), because FTTP is more or less always on the agenda.

If the City had a citywide municipal FTTP network, Council wouldn't necessarily be burdened with having to deal with it frequently. UAC's charter responsibility is to oversee utilities, including FTTP. And the Utilities Department would be capable of handling most day-to-day details in accordance with Council policy.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 7, 2016 at 7:01 pm

Curmudgeon is a registered user.

"I believe that virtually all premises in Palo Alto would benefit from the kinds of services that can be provided over a municipal FTTP network, for decades to come."

No, the only users who need, or can even use, fiber-size bandwidths are large households that stream a separate HD video stream for each individual in the household. The vast majority of domestic and home office internet usages, such as email, youtube, code exchange, thermostat diddling, etc., are well supported by DSL data rates.

Have you considered moving to Chattanooga to partake of the fiber nirvana there? If any of the purported benefits claimed by our FTTP/H pushers are true, it must be the Supremissimo Silicon [insert catchy geographic feature here] of the USA over there.


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Posted by Mary
a resident of Old Palo Alto
on Jun 7, 2016 at 7:04 pm

[Portion removed.]

Jeff Hoel: "I'm not sure why you think I favor a "closed" system." Jeff Hoel 4 hours earlier: "I'd be OK with designing the network to support open access but then not actually offering open access until financial success was assured." [Portion removed.]

The contradiction, clearly described, was that in the same post, Hoel says that a City run system would stimulate existing providers to compete to provide better service. But a Google run system would drive the existing providers out of business. This is self-evidently silly (and contradictory). [Portion removed.]

Hoel says that the Council wouldn't necessarily "be burdened" with having to deal with it as if that's a desirable feature. Instead it would be run by the UAC which is even more insulated from the public and subject to influence by the few people who have the energy to show up at their meetings and speak [portion removed.]








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Posted by Curmudgeon
a resident of Downtown North
on Jun 7, 2016 at 11:27 pm

@Mary

Maybe you missed the real howler. Very early in the FTTH hucksterism its leader, a professor of education at San Jose State, would brandish a section of data fiber in one hand and a power distribution cable with a two-inch-diameter copper conductor bundle in the other, and dazzle a credulous audience by claiming the fiber could move a million times as much data as the big cable.

Any knowledgeable audience member knew the comparison was totally specious, and would assume he was joking or satirizing. But he was completely serious; he didn't know that the data transmission capacity of a wire is totally unrelated to its conductor size.

The FTTP advocates' level of technical understanding has not improved in the fifteen years since I witnessed that little skit.


3 people like this
Posted by I'm no Google (or Facebook) product
a resident of College Terrace
on Jun 8, 2016 at 6:21 am

Please don't give Google any further reigns over my data at all. Google is known to 'accidentally' (gathering router info during the gathering of Street View images) or willfully (working around Safari privacy settings) break privacy boundaries and make it their business model do track everybody in various ways and so gather way more info about individuals than I want or ever have given permission for. I don't want their 'free' services, nor their cables connected to my life. Privacy is an important good and right. Say no to Google in Palo Alto!


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Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Jun 8, 2016 at 10:30 am

@I'm no Google (or Facebook) product - Don't worry, it won't be free, and no one is going to force you to use it. If you trust Comcast or AT&T more with your data, good luck with that.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 8, 2016 at 12:15 pm

@Curmudgeon -- What do you mean by "DSL data rates"? The DSL data rate the phone company can offer to any particular residence depends on how far it is from the "central office." As I mentioned before, the fastest speed AT&T can offer me is "up to" 768 kbps down and a lot slower up.

Over time, what's fast enough for ordinary just-folks users is going to increase exponentially, so sooner or later fiber will be required.

Last Monday, during a break at the City Council meeting, a friend who lives in Palo Alto told me that when he used his AT&T DSL service ("up to" 6 Mbps down) to download a software upgrade for his Apple computer, it took 25 hours! One problem was that the data rate was throttled to slower and slower speeds.

In Sandy, OR, people can get 100-Mbps Internet service for $39.95/month from their municipal FTTP network, SandyNet. (Or 1-Gbps Internet service for $59.95/month.)
Web Link
Is that just-folks enough for you? (I don't know what products or prices would be offered by a Palo Alto municipal FTTP network if we had one.)

Also last Monday, someone else told me his 50-Mbps Internet service from Comcast costs $75/month. Less for more.

No, I haven't considered moving to Chattanooga.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 8, 2016 at 1:21 pm

@Mary -- Re your "all over the map" claim, I've said that philosophically I favor open access, so I want the FTTP network to be designed to support open access eventually. But if the network has to be operated for at time with the City providing all the retail services to assure its financial success, I'd be OK with that.

Re your "somebody has to determine the content" claim, I've said I favor the City's not offering a traditional TV service. So nobody has to determine the TV content. Internet users are free to seek out whatever content they want to.

Re your "self-evidently silly" claim, I've already said that the FTTP network (whether public-sector of private-sector) can outcompete copper-based networks. In the short run, the copper-based networks can try to compete by lowering prices, but in the long run, they really can't be competitive.

Re your claim that UAC would "run" the network, I didn't say that. Generally, UAC's job is to watch what's happening with utilities and to advise Council when things could be better. Council's job is to listen to UAC's advice and act on it (or not). Council's job is to "run" the utilities, through a chain of command that includes the City Manager and the Director of Utilities. When things are going OK, Council doesn't have to micromanage utilities.

I think a citywide municipal FTTP network would benefit a very large fraction of the community. You apparently don't. Even though I don't know who you are, I think it's safe to say that I have studied the issue more than you have.

In any case, if the citywide municipal FTTP network is paid for by the people who use it (and, incidentally, benefits even the people who don't use it), how can you object to that?


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Posted by Curmudgeon
a resident of Downtown North
on Jun 8, 2016 at 2:41 pm

"@Curmudgeon -- What do you mean by "DSL data rates"? The DSL data rate the phone company can offer to any particular residence depends on how far it is from the "central office." As I mentioned before, the fastest speed AT&T can offer me is "up to" 768 kbps down and a lot slower up."

Geez, I'm measuring at least 3x that on my ATT DSL, much more than I need for anything, including recently upgrading the home fleet to Win10. And last month they offered me 45 Mbps fiber to my home.


"a friend who lives in Palo Alto told me that when he used his AT&T DSL service ("up to" 6 Mbps down) to download a software upgrade for his Apple computer, it took 25 hours!"

A Win10 upgrade comes down my pipe in a couple hours, max. Maybe your friend should ditch Apple's bloatware for honest Linux. Much faster all around.


"One problem was that the [DSL] data rate was throttled to slower and slower speeds."

News flash! Fiber is throttleable too.


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Posted by Mary
a resident of Old Palo Alto
on Jun 8, 2016 at 4:25 pm

[Portion removed.]

It is quite true that as Mr. Hoel brags, he knows more about Fiber than almost anyone else here. But he's either naive or disingenuous about politics and economics when he argues for a City run system instead of accepting Google offer to provide one - apparently in a way that doesn't pose the financial risk to taxpayers that a government run system inevitably would - and would be run by people who know what they are doing and have done this before in other localities, not government bureaucrats with a steep learning curve. Anyone who knows the Palo Alto process knows it would be years and years before anything actually happened should the city decide to reject Google and move forward on its own.

In his latest post, Hoel seems to suggest that the argument is between forward thinking people like himself who favor a "municipal FTTP network would benefit a very large fraction of the community", and troglodytes like me who would leave us in the internet dark ages. As I have reiterated over and over here, this is pure nonsense. At one point the only option for a Fiber network in PA was a municipal one because private providers didn't think it could work profitably. [Portion removed.]

So, as I've pointed out, it is VERY revealing that now that there is a private entity willing to put in a Fiber system, Hoel finds himself arguing against the only concrete proposal ever to come along for FTTH. For all his tergiversation, it appears from his comments here that he'd rather have No fiber system than one not run by the government.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 8, 2016 at 5:03 pm

"One problem was that the [DSL] data rate was throttled to slower and slower speeds."

Don't reflexively blame the last leg. Throttling can occur in the backhaul, often at the server, and a failing hard disk drive at the receiver can manifest as the same effect.


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Posted by Mary the Troll
a resident of East Palo Alto
on Jun 8, 2016 at 5:57 pm

[Post removed.]


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Posted by Jeff Hoel
a resident of Midtown
on Jun 8, 2016 at 6:14 pm

@Curmudgeon -- So you're getting 3 x 768 kbps = 2.3 Mbps. If that's all you want, fine.

I don't think AT&T offered you a FTTP service to your home at any speed. AT&T has no FTTP in town. They have applied for permits for building FTTP distribution cabinets in a couple of places, so it might happen eventually. AT&T's U-Verse (FTTN) has a 45-Mbps option. Last I checked, you couldn't take just Internet service, and bundled with TV it's "as low as $134.99/month."
Web Link

Sure, the technology exists for throttling fiber connections as well as copper-based connections. The question is whether the provider is going to use it.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 8, 2016 at 8:50 pm

Curmudgeon is a registered user.

"I don't think AT&T offered you a FTTP service to your home at any speed."

What you think ATT offered me is irrelevant. What is relevant is what ATT told me.

But 3 x 768 kbps = 2.3 Mbps is fine, so why pay extra for what I don't need, Mbps bragging rights aside.

Similarly, why ask others to pay for installing capabilities most of them don't need, bragging rights vs. Chattanooga aside.


"Sure, the technology exists for throttling fiber connections as well as copper-based connections. The question is whether the provider is going to use it."

While one can blithely postulate a world in which the provider does not throttle, that has no bearing on a whether a provider actually throttles. They do want to throttle certain disfavored streams--remember the recent furor over open internet?

And don't forget the data rate cannot exceed the server's instantaneous capacity in any case.


2 people like this
Posted by jerry99
a resident of Barron Park
on Jun 9, 2016 at 8:16 am

In July there will be huge increases in all utility rates while inflation is less than 2%. Too large and paid staffs and too many benefits. I don't want the city involved in providing anything. They will just hire large staffs and provide them with Cadillac benefits and charge endless amounts of money to city residents. Knowing Palo Alto, they will probably require the provider to half their programming in Spanish or Chinese or some other language and find a way to make city residents pay for low income people.
Its typical of what happens in Palo Alto and Berkeley all the time.
No city involvement in anything where they can add fees to residents.
Let the City Council figure out how to stop building, add parking to downtown Palo Alto and hire more police to make Palo Alto safer.


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Posted by Pma94301
a resident of Community Center
on Jun 9, 2016 at 8:27 am

I was a member of our utility's FTTH Trial for 50 months in 2001-2005. It was fantastic - fast and far more reliable than wired providers. Moreover the FTTH Trial was a success in terms of learning how to build and operate such a system. And only one customer left the trial - because they moved.

I see the 'fibercation' of this country taking place exactly 100 years after the call to electrify coast to coast. We are on the early edge, yet the service is proven and the early learning stage is over.

The technology and operational issues are no longer the impediment. Now it's about foresight, political will, and ownership. Palo Alto has a strong tradition with our own utility (the CPAU) which provides six services today. A First Mile Network could be Palo Alto's 7th utility.

Our CPAU has the best knowledge, experience, and the right people and equipment to own, build, and service a First Mile optical infrastructure. Who *operates* the utility network has options.

Current well run examples range from our electricity - which we operate locally but don't generate, to our garbage which is run from our facility but completely outsourced. If you want the Telco (AT&T and Comcast) model, that's available too (they own and operate everything) but I think that there are enough complaints about that model to want to avoid "the taxi company owning the road".

Yes, Palo Alto is no longer the leader in FTTP. But we can be the second mouse that gets the cheese.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 9, 2016 at 3:00 pm

@Curmudgeon -- Sometimes AT&T representatives tell people things that turn out not to be true. As of 02-18-16, AT&T hadn't deployed any cabinets capable of delivering its GigaPower FTTP services in Palo Alto.
Web Link

If 2.3 Mbps down is all you want, nobody is asking you to pay for more. Nobody is asking anybody to pay for Internet products they don't want.

On 01-29-15, the FCC changed its standard definition of "broadband" from 4 Mbps down and 1 Mbps up to 25 Mbps down and 3 Mbps up.
Web Link
One of the FCC commissioners thought it should have been changed to 100 Mbps down.

On 01-21-16, six senators complained about the new definition. This article accuses them of carrying water for the telecom incumbents.
Web Link

But, again, anyone who doesn't need this kind of "broadband" (or faster) doesn't have to pay for it.

Sure, I know that from time to time a private-sector provider has been caught throttling or otherwise sabotaging specific content, and has been shamed or coerced into ceasing and desisting. Has any municipal provider been caught doing this? I don't think so. If that ever happened, an outraged public could demand that it stop.

Sure, there any number of reasons why the instantaneous data rate of a connection might be less than its nominal data rate. But FTTP connections -- and municipal FTTP connections in particular -- perform well enough often enough that people like them enough to pay for them.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 9, 2016 at 4:10 pm

"I was a member of our utility's FTTH Trial for 50 months in 2001-2005. It was fantastic - fast and far more reliable than wired providers."

Pampered prototypes like that one always work "fantastic." But that boutique level of service is usually impractically expensive on a production system.

I always wondered why city hall wasted its (our) money on that FTTH "demonstration." Fiber communications was by even that time a well-established technology. Nobody knowledgeable doubted it would work.


"Yes, Palo Alto is no longer the leader in FTTP."

That's good. It removes much of the ego factor that is always a huge impediment to fiscally sound decisions.


"As of 02-18-16, AT&T hadn't deployed any cabinets capable of delivering its GigaPower FTTP services in Palo Alto.

Nice deflection try, but no connect. We both know that 45 Mbps is way below the 1000 Mbps gigabit range. Well, I do.

Look: multiple ATT sources gave me a definite 45 Mbps fiber offer at a definite price with a definite installation schedule. YOU go tell them they can't do it, OK?


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Posted by Curmudgeon
a resident of Downtown North
on Jun 9, 2016 at 4:26 pm

"But, again, anyone who doesn't need this kind of "broadband" (or faster) doesn't have to pay for it."

Isn't that the key concept here? A municipal system is by definition a public asset paid for by all taxpayers, whether they be users or not.

But you will say the users' fees will pay for it? Experienced telecom service providers like ATT, Comcast, etc. have apparently concluded otherwise, which is why they have not been out hanging glass from every pole in town. The municipal FTTH/FTTP crowd knows this, thus their push to have city hall string up the town while the taxpayers pony up the financial shortfall.


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Posted by Mary
a resident of Old Palo Alto
on Jun 9, 2016 at 6:17 pm

[Portion removed.]

Curmudgeon is right that FTTH proponents want the taxpayers to buy them a hobby horse and take the financial risks that goes along with it. They've been pushing this for years arguing (as Curmudgeon implies) that since the private sector won't provide fiber, the city should - under the apparent reasoning that people who run the city so well are better business people when it comes to telecom than experienced providers of telecom services.

Now, however, we have a private provider in the form of Google apparently willing to give the FTTH advocates what they've said they want: A FTTH system in PA. You'd think they'd be rejoicing in their victory and saying "I told you so" to all the people in the city who wouldn't make a multi-million dollar bet with taxpayer money. But Nope: they apparently want a City run system more than they want FTTH.

[Portion removed.]


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Posted by Mary
a resident of Old Palo Alto
on Jun 9, 2016 at 6:51 pm

We have a poster here arguing that the Utilities Department would be a suitable party to run a FTTH system because it is "well run". I really don't understand what is wrong with pointing out as counter-evidence to this claim that in 2005 there was a huge scandal in the Utilities Department where Utility Dept workers were running a private business out of the Utility Yard during work hours using Palo Alto taxpayer provided equipment. It's even worse than is sounds because the workers were initially fired then hired back a few months later. Is this the kind of "well run" department we want to trust with a multi-million dollar FTTH system? Isn't this a valid point?!


2 people like this
Posted by Jeff Hoel
a resident of Midtown
on Jun 9, 2016 at 7:09 pm

@Curmudgeon -- On 06-08-16 at 2:41 pm, you said, "And last month they offered me 45 Mbps fiber to my home." I have been trying to point out that that can't be correct, because "fiber to my home" implies FTTP, which AT&T doesn't have here yet. On 06-08-14 at 6:14 pm, I pointed out that AT&T could have offered you 45 Mbps using FTTN, but that as far as I knew AT&T required that it be bundled with TV, so it would be expensive. So, what definite price and definite schedule did AT&T offer you?

It is false that "A municipal system is by definition a public asset paid for by all taxpayers, whether they be users or not." Did all taxpayers pay for the City's dark fiber network? No, they did not.

You continue to claim that the fact that an experienced private-sector entity like Comcast (or AT&T) hasn't deployed FTTP here so far is proof that that it would be financially infeasible for the City to do it. That "proof" is simply invalid. Why would Comcast go to the expense of deploying FTTP technology if no competitor is going to give its HFC customers a better alternative? It's better for shareholders if the company just milks an obsolete technology and charges what the market will bear. By the way, Comcast's experience with FTTP is microscopic compared to its experience with HFC. And by the way, it's not like governments haven't used taxpayer dollars over the years to subsidize the incumbents. The vast majority of municipal FTTP networks are being paid for by the customers that subscribe to their services, so taxpayers are safe. A decade ago, you could have argued that nobody knew how things would turn out. Today, we know.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 9, 2016 at 9:03 pm

"Why would Comcast go to the expense of deploying FTTP technology if no competitor is going to give its HFC customers a better alternative?"

Well then, give them that competition. Form a startup, raise capital, run glass, and watch the money roll in. Such enterprises are not unheard of in Silicon Valley.

If Silicon Valley capital goes for a FTTH/FTTP network in Palo Alto, there is no need for city hall to be involved. Enjoy your billion$.

If Silicon Valley capital won't risk FTTH/FTTP, then city hall and our tax dollars definitely should not go anywhere near it.

So, you see, there is no justification for city FTTH/FTTP involvement in any case.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 10, 2016 at 12:54 pm

@Curmudgeon -- You should know that, typically, "venture capitalists expect a ten times return of capital over five years."
Web Link
Typically, utilities don't offer that possibility. Typically, venture capitalists don't value the extrinsic benefits to the community that their investments make possible. But municipalities can -- and should.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 10, 2016 at 4:32 pm

"venture capitalists expect a ten times return of capital over five years."

I never restricted your FTTP venture's funding to vulture capitalists. I only said raise capital.

I think I see the problem: you insist on structuring all putative private efforts so they surely fail, then you demand taxpayer buy-in based on municipal ego and nebulous promises of a vague fiber heaven.

Why is it so impossible to find FTTP investors if FTTP is such a great opportunity, especially in The Valley? The only logical answer is that, like the experienced telecom providers, the smart money knows it's a financial rathole.

And our city government needs to realize that also.


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Posted by Mary
a resident of Old Palo Alto
on Jun 10, 2016 at 5:00 pm

Curmudgeon is correct: There has been no economic case to be made for FTTH in Palo Alto or somebody would already be hooking us all up. (Unless, of course Google has discovered some secret sauce - or does its calcs differently to account for the synergies with its search business....something that may become clear when their proposed agreement with the City becomes public in (we can hope) a few weeks.)

If municipal FTTH supporters were honest, they would have admitted the economic problems with FTTH from the outset and tried to persuade policy makers of the value of "extrinsic benefits to the community". That probably would have been a hard sell, but at least it would have meant for an honest debate [portion removed.]


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Posted by Jeff Hoel
a resident of Midtown
on Jun 11, 2016 at 2:22 pm

@curmudgeon --

> "I never restricted your FTTP venture's funding to vulture capitalists. I only said raise capital."

You didn't use the word "venture," but you mentioned "Silicon Valley capital" and said I should "enjoy [my] billion$," To me, that sounded like a startup approach, funded by venture capital.

> "I think I see the problem: you insist on structuring all putative private efforts so they surely fail, ...."

Not at all. I think that if Google deploys Google Fiber in Palo Alto, that may well turn out to be a financial success FOR THEM, but it won't be optimal for the community, for reasons that include those I listed in my reader comment from Jun 4, 2016 at 12:47 pm.

Also, I'm completely open to considering the possibility that the City could subcontract construction and/or operation of the municipal FTTP network to one or more private-sector entities, and to offer open access to private-sector retail service providers, while retaining control of the policies that govern how the network is run.

> "... then you demand taxpayer buy-in based on municipal ego and nebulous promises of a vague fiber heaven."

No. I don't demand anything. I ask the City and the community to consider the fact that many, many municipalities have implemented FTTP networks that are providing state-of-the-art Internet and other services to their communities, and that these networks are paid for by the customers who use them, not by taxpayers.

> "Why is it so impossible to find FTTP investors if FTTP is such a great opportunity, especially in The Valley? The only logical answer is that, like the experienced telecom providers, the smart money knows it's a financial rathole."

Many municipal FTTP networks have, in fact, found investors -- entities willing to buy bonds.

Maybe the question you intended to ask is why for-profit private-sector entities haven't deployed that many FTTP networks up to now. Broadband Communities Magazine has a list of FTTP networks that includes 587 incumbent local exchange carriers (ILECs), 110 competitive local exchange carriers (CLECs), and 44 multiple system operators (MSOs).
Web Link

Or perhaps the question you intended is why no for-profit private-sector entity has deployed FTTP in Palo Alto so far. Actually, some condominiums in Palo Alto already have FTTP, provided by resellers of the City's dark fiber network. But that doesn't help most of us.

What for-profit private-sector entities have in common is the motivation to maximize financial return. The motivation of a municipal FTTP utility should be to maximize value to the community while breaking even financially. Sometimes this can mean that there's a municipal opportunity before there's a private-sector opportunity.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 11, 2016 at 4:20 pm

"[You] said I should "enjoy [my] billion$," To me, that sounded like a startup approach, funded by venture capital."

I was wishing you well on the outcome of your FTTP business enterprise.

You continue to spurn any private business arrangement that could succeed, for the most spurious of reasons, apparently to push a false necessity for taxpayer support. Stop it.

OK, "The motivation of a municipal FTTP utility should be to maximize value to the community while breaking even financially." However, that financial break-even is not assured. What is certain is the necessity for a substantial cash outlay upfront for capital costs, which remains a liability until income from user fees pays it off. Absent break-even, taxpayers are on the hook for the sunk costs plus ongoing operating expenses.

"What for-profit private-sector entities have in common is the motivation to maximize financial return."

Yes, in return for bearing the risk of failure. The principals enter the deal knowing what those risks are. Or they damn well should. That's called business. There's nothing inherently undesirable about it.

You instead propose to dump that risk on Palo Alto taxpayers without their informed consent. Uh-uh.

The proper approach is the initiative process, in which the taxpayers undertaking the risk can make an informed choice. But know you would face vigorous informed opposition, which could be a referendum if your group manages to stampede the city council.

Look, just talk to a biz school graduate about how one raises investment capital for a business opportunity. Or maybe Nolo Press sells a book on the topic. It's done all the time, especially in this town. But do have a business plan that's structured to SUCCEED.


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Posted by Jeff Hoel
a resident of Midtown
on Jun 11, 2016 at 5:02 pm

@Mary -- I have always tried to be clear -- and "honest" -- about my municipal FTTP advocacy, both in general and specifically about the financial opportunity for the City. I haven't said -- and I don't remember that any municipal FTTP supporter has said -- that the City should do citywide municipal FTTP because it would be a preferred way to get the greatest return on investment (ROI) in the traditional sense. The reason to do citywide municipal FTTP is because of the extrinsic benefits.

City officials understand this very well. It's the same for the City's other utilities. I remember that more than a decade ago, in a public meeting, Council Member Bern Beecham took pains to explain to the world that if the City did municipal FTTP, it wouldn't be to make the most money for the City, it would be to deliver value to the community. (Sorry, I tried and failed to find this statement on the City's website. I don't remember which meeting, or what he said verbatim.)

On 09-28-15, Council considered a staff report that said that citywide municipal FTTP was not financially feasible.
Web Link
But I didn't agree with it. (See pages 35-36).
Web Link
(See also page 37, for Vince Jordan's view.) On 09-28-15, Council asked for more information, but later staff said it couldn't provide the information because the consultant considered it to be proprietary. That's really unsatisfactory.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 11, 2016 at 5:32 pm

You know, Mr. Hoel, you could have had a citywide fiber network up and running years ago if you had set up a private enterprise instead of just pushing city hall to take what it knows is a bad financial deal.

That is, assuming you and your investors hadn't gone bankrupt by now. But that's far preferable (in my thinking, anyway) to saddling the taxpayers with a bankrupt system.

Or I'm wrong and the city's consultants were wrong and you got rich.


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Posted by pestocat
a resident of University South
on Jun 20, 2016 at 4:33 pm

pestocat is a registered user.

When is the Fiber Issue going to council.
Gary


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Posted by kenith
a resident of El Carmelo School
on Mar 16, 2017 at 1:09 am

We are in Silicon valley and ATT offer 1Mbps internet at my home (on alma street). Are we moving forward when it come to infrastructure? Seriously fibre optic should be up & running in Palo Alto but city & elected official never do the job. Politician across the globe are same old. I expect something will happen by 2020 but that looks remote..lol


Sorry, but further commenting on this topic has been closed.

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