News

With fiber expansion, Palo Alto prepares for fierce competition

While some City Council members tout benefits of Fiber to the Premise, others are daunted by the risk

Palo Alto City Hall. Embarcadero Media file photo

Palo Alto is still at least five years away from expanding its fiber network to every section of the city, but 738 residents have already contributed $50 each to show their commitment to the cause, helping the city crowdsource $35,000 for a nonexistent project.

They're paying for a dream that the city has been chasing for well over a decade: to bring high-speed internet to every community nook by building out the municipal dark fiber network, which today serves a few dozen business customers. The City Council took a major step toward making that dream a reality in 2020, when it hired a consultant to prepare a plan and a business analysis for the fiber expansion, commonly known as Fiber to the Premise.

On Monday, as council members reviewed the latest survey results, business plans and cost estimates, they found themselves in a familiar position: agonizing over whether the risk is worth the reward. While some highlighted the promise of the new system, most concluded that they would need more information before they could endorse the expansion.

The latest analysis, performed by the firm Magellan Advisors, suggested the citywide system could start making money after about a decade of operations. Just as importantly, it could improve reliability in municipal operations and make internet connection for businesses and residents throughout the city faster, cheaper and more reliable than it is today, John Honker, founder of Magellan, told the council on Monday.

"The goal is to reinforce and reinvest in that (fiber) backbone to make it stronger and more resilient for the city and its departments," Honker said.

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For fiber advocates, the rewards are clear. Loren Smith, a member of the city's Utilities Advisory Commission, recalled the early days of the COVID-19 pandemic, when everyone was trapped indoors and depended on internet service to work, go to school and socialize. Building the network, he said, will create "a provision for future generations so that they will be prepared when we weren't."

Andy Poggio, who has been advocating for a fiber expansion for many years, noted that 5G wireless technology, which some tout as an alternative to fiber, can be unreliable during rain and around foliage. Fiber doesn't have that drawback, he said.

"Fiber is reliable and fast," Poggio said.

The enthusiasm, while high, is far from universal. Detractors argue that the fiber project is just as likely to leave the future generations with a different sort of legacy: mounting debt incurred for creation of a service that is already provided by two private sector giants: Comcast and AT&T. Resident Bob Smith called the fiber expansion "an unnecessary risk" and said he doesn't see the point for pursuing it.

In the best case scenario, Smith said, the system makes a little bit of money but its services will be so similar to those offered by incumbents that people won't notice the difference.

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"On the other hand, if you try to build it and fail, that's a $130-million investment sitting there, probably a lot more by the time you get it done," Bob Smith said.

The estimated cost of the new system has gone up since the council last discussed it, moving from $120.8 million to $142.9 million. It encompasses two projects. The first is an expansion of the "fiber backbone" to create a dedicated communication network for municipal operations such as smart meters, substations and wireless field communication. The second, far more ambitious one, is Fiber to the Premise, which would expand the network throughout the neighborhoods. The two projects would require 45 miles and 176 miles of fiber cable, respectively.

Magellan estimated that the city can bring the costs down by about $11 million if the fiber backbone expansion and Fiber to the Premise were constructed in parallel due to "network overlap." Even so, because of the high costs associated with launching the utility, the city wouldn't see net profits until 2031 (if many functions are outsourced to vendors) or 2032 (if the city keeps most services in-house).

Loren Smith, who serves on the utilities commission's Fiber Subcommittee, said money is not really an issue. The city can rely on a revenue bond and gradually pay off the bond through revenues generated by the fiber system.

"We're talking about paying for the fiber network via the revenue the fiber network generates," Smith said.

The new analysis from Magellan also suggested that the program would have plenty of takers. Its survey found that about a third of existing customers are, to some extent, unhappy with their existing internet service provider and would likely consider making the switch. If the city is able to provide superior service at a reasonable price — necessary conditions in any successful scenario — it could reach a "take rate" of about 40%.

Phil Metz, who serves on the commission, pointed to another promising factor: a survey finding showing that about half of Palo Alto's customers have already "cut the cord" from cable TV and are relying on Netflix, Hulu and other streaming services for their entertainment needs. That makes things easier for Palo Alto because it obviates the need for the city to offer cable to compete with the likes of Comcast.

"It certainly was a surprise to me and I think it highlights the feasibility of offering broadband service separate from entertainment, which was one of my personal concerns going into this," Metz said.

Yet Metz and Honker each also pointed to the risks. Competition is at the top of the list. The expanded fiber network would be the first city of Palo Alto utility that is not a monopoly. Incumbents — Comcast and AT&T — may respond by lowering prices and locking in longer contracts. AT&T, which is gradually expanding its own fiber offerings in Palo Alto, may also speed up its deployment schedule, Honker said.

Given stiff competition, some council members said they are not yet convinced that Fiber to the Premise should move ahead. Council member Greg Tanaka said the case for Fiber to the Premise is "not compelling" because the private market already provides 1-gigabit service.

"We have enough trouble just doing what we're doing right now," Tanaka said, alluding to recent power outages.

Council members Alison Cormack and Eric Filseth also favored a cautious approach and suggested they would need a stronger business case before they could sign off. Filseth said he was concerned about the risk of the city providing "infinite subsidy" to the fiber utility because the take rate didn't live up to expectations and the municipal network couldn't differentiate itself from the Comcast and AT&T offerings.

Cormack said she doesn't have a clear idea of the problem that Fiber to the Premise is trying to solve.

"I feel really strongly that we do not have a value proposition that's written out in a way that's going to make people comfortable making a multimillion-dollar decision and that's easy to explain to people," Cormack said.

Council member Tom DuBois was far more optimistic. He said the city's goal should be to ramp up subscribers as quickly as possible and "start generating revenue to fund the rest of the build-out." He noted that the city already has experience successfully managing a fiber system. The existing fiber network, which was launched in the mid-1990s, generates more than $2 million annually. He suggested a marketing effort for accelerating the switch.

"Instead of 'Shop local,' it can be 'Surf local,'" DuBois said.

The council did not have any clear consensus about whether the fiber system should be run entirely by the city or whether operations should be outsourced. The former option would require 25 new full-time equivalent positions and $58.6 million in staffing costs over the next 10 years; the latter would entail five positions and $48.9 million in staffing and vendor costs. DuBois favored outsourcing for most of the services but having in-house managers overseeing the fiber workforce. Vice Mayor Lydia Kou suggested that having city staff more involved in the system would create institutional knowledge and help gain community confidence.

Mayor Pat Burt suggested that while success is far from certain, Fiber to the Premise could bring significant benefits. He pointed to the city's strong history of running its utilities and noted that local customers pay far less for electricity than those who are served by PG&E. He also cited the recent reconstruction of the municipal golf course in the Baylands and the council's decision to take over Palo Alto Airport from Santa Clara County. Both the golf course and the airport are now generating significant revenue, he said.

"We do have a good history of very good success on these enterprises," Burt said.

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Gennady Sheyner
 
Gennady Sheyner covers the City Hall beat in Palo Alto as well as regional politics, with a special focus on housing and transportation. Before joining the Palo Alto Weekly/PaloAltoOnline.com in 2008, he covered breaking news and local politics for the Waterbury Republican-American, a daily newspaper in Connecticut. Read more >>

Follow Palo Alto Online and the Palo Alto Weekly on Twitter @paloaltoweekly, Facebook and on Instagram @paloaltoonline for breaking news, local events, photos, videos and more.

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With fiber expansion, Palo Alto prepares for fierce competition

While some City Council members tout benefits of Fiber to the Premise, others are daunted by the risk

by / Palo Alto Weekly

Uploaded: Tue, Sep 20, 2022, 1:00 am

Palo Alto is still at least five years away from expanding its fiber network to every section of the city, but 738 residents have already contributed $50 each to show their commitment to the cause, helping the city crowdsource $35,000 for a nonexistent project.

They're paying for a dream that the city has been chasing for well over a decade: to bring high-speed internet to every community nook by building out the municipal dark fiber network, which today serves a few dozen business customers. The City Council took a major step toward making that dream a reality in 2020, when it hired a consultant to prepare a plan and a business analysis for the fiber expansion, commonly known as Fiber to the Premise.

On Monday, as council members reviewed the latest survey results, business plans and cost estimates, they found themselves in a familiar position: agonizing over whether the risk is worth the reward. While some highlighted the promise of the new system, most concluded that they would need more information before they could endorse the expansion.

The latest analysis, performed by the firm Magellan Advisors, suggested the citywide system could start making money after about a decade of operations. Just as importantly, it could improve reliability in municipal operations and make internet connection for businesses and residents throughout the city faster, cheaper and more reliable than it is today, John Honker, founder of Magellan, told the council on Monday.

"The goal is to reinforce and reinvest in that (fiber) backbone to make it stronger and more resilient for the city and its departments," Honker said.

For fiber advocates, the rewards are clear. Loren Smith, a member of the city's Utilities Advisory Commission, recalled the early days of the COVID-19 pandemic, when everyone was trapped indoors and depended on internet service to work, go to school and socialize. Building the network, he said, will create "a provision for future generations so that they will be prepared when we weren't."

Andy Poggio, who has been advocating for a fiber expansion for many years, noted that 5G wireless technology, which some tout as an alternative to fiber, can be unreliable during rain and around foliage. Fiber doesn't have that drawback, he said.

"Fiber is reliable and fast," Poggio said.

The enthusiasm, while high, is far from universal. Detractors argue that the fiber project is just as likely to leave the future generations with a different sort of legacy: mounting debt incurred for creation of a service that is already provided by two private sector giants: Comcast and AT&T. Resident Bob Smith called the fiber expansion "an unnecessary risk" and said he doesn't see the point for pursuing it.

In the best case scenario, Smith said, the system makes a little bit of money but its services will be so similar to those offered by incumbents that people won't notice the difference.

"On the other hand, if you try to build it and fail, that's a $130-million investment sitting there, probably a lot more by the time you get it done," Bob Smith said.

The estimated cost of the new system has gone up since the council last discussed it, moving from $120.8 million to $142.9 million. It encompasses two projects. The first is an expansion of the "fiber backbone" to create a dedicated communication network for municipal operations such as smart meters, substations and wireless field communication. The second, far more ambitious one, is Fiber to the Premise, which would expand the network throughout the neighborhoods. The two projects would require 45 miles and 176 miles of fiber cable, respectively.

Magellan estimated that the city can bring the costs down by about $11 million if the fiber backbone expansion and Fiber to the Premise were constructed in parallel due to "network overlap." Even so, because of the high costs associated with launching the utility, the city wouldn't see net profits until 2031 (if many functions are outsourced to vendors) or 2032 (if the city keeps most services in-house).

Loren Smith, who serves on the utilities commission's Fiber Subcommittee, said money is not really an issue. The city can rely on a revenue bond and gradually pay off the bond through revenues generated by the fiber system.

"We're talking about paying for the fiber network via the revenue the fiber network generates," Smith said.

The new analysis from Magellan also suggested that the program would have plenty of takers. Its survey found that about a third of existing customers are, to some extent, unhappy with their existing internet service provider and would likely consider making the switch. If the city is able to provide superior service at a reasonable price — necessary conditions in any successful scenario — it could reach a "take rate" of about 40%.

Phil Metz, who serves on the commission, pointed to another promising factor: a survey finding showing that about half of Palo Alto's customers have already "cut the cord" from cable TV and are relying on Netflix, Hulu and other streaming services for their entertainment needs. That makes things easier for Palo Alto because it obviates the need for the city to offer cable to compete with the likes of Comcast.

"It certainly was a surprise to me and I think it highlights the feasibility of offering broadband service separate from entertainment, which was one of my personal concerns going into this," Metz said.

Yet Metz and Honker each also pointed to the risks. Competition is at the top of the list. The expanded fiber network would be the first city of Palo Alto utility that is not a monopoly. Incumbents — Comcast and AT&T — may respond by lowering prices and locking in longer contracts. AT&T, which is gradually expanding its own fiber offerings in Palo Alto, may also speed up its deployment schedule, Honker said.

Given stiff competition, some council members said they are not yet convinced that Fiber to the Premise should move ahead. Council member Greg Tanaka said the case for Fiber to the Premise is "not compelling" because the private market already provides 1-gigabit service.

"We have enough trouble just doing what we're doing right now," Tanaka said, alluding to recent power outages.

Council members Alison Cormack and Eric Filseth also favored a cautious approach and suggested they would need a stronger business case before they could sign off. Filseth said he was concerned about the risk of the city providing "infinite subsidy" to the fiber utility because the take rate didn't live up to expectations and the municipal network couldn't differentiate itself from the Comcast and AT&T offerings.

Cormack said she doesn't have a clear idea of the problem that Fiber to the Premise is trying to solve.

"I feel really strongly that we do not have a value proposition that's written out in a way that's going to make people comfortable making a multimillion-dollar decision and that's easy to explain to people," Cormack said.

Council member Tom DuBois was far more optimistic. He said the city's goal should be to ramp up subscribers as quickly as possible and "start generating revenue to fund the rest of the build-out." He noted that the city already has experience successfully managing a fiber system. The existing fiber network, which was launched in the mid-1990s, generates more than $2 million annually. He suggested a marketing effort for accelerating the switch.

"Instead of 'Shop local,' it can be 'Surf local,'" DuBois said.

The council did not have any clear consensus about whether the fiber system should be run entirely by the city or whether operations should be outsourced. The former option would require 25 new full-time equivalent positions and $58.6 million in staffing costs over the next 10 years; the latter would entail five positions and $48.9 million in staffing and vendor costs. DuBois favored outsourcing for most of the services but having in-house managers overseeing the fiber workforce. Vice Mayor Lydia Kou suggested that having city staff more involved in the system would create institutional knowledge and help gain community confidence.

Mayor Pat Burt suggested that while success is far from certain, Fiber to the Premise could bring significant benefits. He pointed to the city's strong history of running its utilities and noted that local customers pay far less for electricity than those who are served by PG&E. He also cited the recent reconstruction of the municipal golf course in the Baylands and the council's decision to take over Palo Alto Airport from Santa Clara County. Both the golf course and the airport are now generating significant revenue, he said.

"We do have a good history of very good success on these enterprises," Burt said.

Comments

felix
Registered user
Another Palo Alto neighborhood
on Sep 20, 2022 at 6:07 am
felix, Another Palo Alto neighborhood
Registered user
on Sep 20, 2022 at 6:07 am

Our household has fiber now for $20 a month from Sonic/AT&T. It’s terrific.
No way would we ever get 5G.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 20, 2022 at 8:32 am
resident3, Another Palo Alto neighborhood
Registered user
on Sep 20, 2022 at 8:32 am

Let’s see, the fiscal hawk and the two council members with the most business knowledge are not convinced *for very good reasons* and the proponent is already thinking about slogans like “surf local” to compete with giants who I much prefer to call with a problem than the City. And won’t the city have to borrow money to take this risk?

I’m thinking just shoot me that this is taking up anymore time from our City government.


MyFeelz
Registered user
JLS Middle School
on Sep 20, 2022 at 9:09 am
MyFeelz, JLS Middle School
Registered user
on Sep 20, 2022 at 9:09 am

It'll be like MySpace.

A $35k stake from 10% of the population ... will that even cover the numerous "studies" that will have to be performed just to figure out where to put the tents for outreach?

My favorite quote: "multi-million-dollar decision and that's easy to explain to people" -- Would it sound like, "We spent your multi-millions to bring you what you already have." ?

Then, "would require 25 new full-time equivalent positions and $58.6 million in staffing costs over the next two years" - HOLY COW! GET ME ON THAT PAYROLL!! $1 million a year per employee?? That can't be right! If it is, where do I file a job application?

I guess it's not quite as easy as they think, to explain to people how they spent multi-millions.


Gennady Sheyner
Registered user
Palo Alto Weekly staff writer
on Sep 20, 2022 at 9:35 am
Gennady Sheyner, Palo Alto Weekly staff writer
Registered user
on Sep 20, 2022 at 9:35 am

@MyFeelz. The $58.6 million in staffing costs is for a 10-year period, not two years as initially stated. Sorry for the error.


Local Resident
Registered user
Community Center
on Sep 20, 2022 at 10:51 am
Local Resident, Community Center
Registered user
on Sep 20, 2022 at 10:51 am

I have AT&T Fiber and its 1 gig. I usually get almost 900MBit downstream and upstream. Exceptionally low (fast) latency. No problems so far. At the same price as City Fiber to the home will offer in four years. For myself City Fiber to the Home will provide no additional value over what I have today. However, for folks who will only ever have Comcast they would benefit from City Fiber to the Home.


Barron Park Denizen
Registered user
Barron Park
on Sep 20, 2022 at 11:07 am
Barron Park Denizen, Barron Park
Registered user
on Sep 20, 2022 at 11:07 am

1. This project requires significant capital investment and borrowing.
2. It requires significant and expensive labor to manage and maintain.
3. It hasn't happened despite 10+ years of trying
4. There will be significant competition from large entities with superior financing, technical and labor resources, and marketing capability.
5. It's a huge risk to the taxpayer.
6. The monthly cost to the users could be quite high, so there would need to be private competition in any case.
7. The technology will change fast, and may be supplanted by wireless technology. Why should Jane and Joe Taxpayer assume this risk of obsolescence, or spending ever more to keep up?
8. The Council again is taking its eye off its pressing issues of train crossings, pension financing, housing, and traffic.

So, doesn't add up. Perhaps the fiber backbone could be sold to a private entity. But it's like the idea of a City-funded gym--it's not the City's place to supplant private enterprise, and private competition can do the job much more easily.


Palo Alto well-wisher
Registered user
Crescent Park
on Sep 20, 2022 at 11:59 am
Palo Alto well-wisher, Crescent Park
Registered user
on Sep 20, 2022 at 11:59 am

I think it would be great to push this effort slightly more forward if for no other reason than to push the competition to lower the prices and to build more infra. Definitely, in our parts of Palo Alto we are not getting 1GB, so this fibre is a much welcome !


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 20, 2022 at 12:03 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 20, 2022 at 12:03 pm

"On Monday, as council members reviewed the latest survey results, business plans and cost estimates, they found themselves in a familiar position: agonizing over whether the risk is worth the reward."

When will the city stop basing decisions on totally flawed surveys?? Does the city ever bother to review the consultants' work? This survey was so ridiculous It was widely commented on neighborhoods boards that there was no way to say people REJECTED the idea of a city fiber network in the surveys and was merely a transparent way to collect advanced deposits for a non-existent network.

"Loren Smith, who serves on the utilities commission's Fiber Subcommittee, said money is not really an issue. The city can rely on a revenue bond and gradually pay off the bond through revenues generated by the fiber system."

What an absurd statement. Bonds have to be repaid just like credit cards, Nothing is free and we've got LOTS of more important priorities than this consultant-enriching boondoggle.


Chris Dewees
Registered user
Leland Manor/Garland Drive
on Sep 20, 2022 at 12:15 pm
Chris Dewees, Leland Manor/Garland Drive
Registered user
on Sep 20, 2022 at 12:15 pm

The city is way too late on this. AT&T is rolling out fiber as we speak. It is unclear to me that there is any business case for the City to provide a competing service at this point given the time and expense required to construct the network and the highly uncertain return on investment once completed. Let's not repeat the mistakes of the late 19th century railroad promoters.


PST
Registered user
South of Midtown
on Sep 20, 2022 at 12:22 pm
PST, South of Midtown
Registered user
on Sep 20, 2022 at 12:22 pm

I’d rather see the city do a better job on other things instead. The survey was absurd with no chance to say no thanks. Whatever happened to under grounding all utilities or is that just for the wealthier northern part of city like other decisions that favor that part of the city over others?


TuppenceT
Registered user
Adobe-Meadow
on Sep 20, 2022 at 12:32 pm
TuppenceT, Adobe-Meadow
Registered user
on Sep 20, 2022 at 12:32 pm

Will Palo Alto have control over infrastructure? or will it be like cell towers, where the city has no authority to reject a location?


marc665
Registered user
Midtown
on Sep 20, 2022 at 12:50 pm
marc665, Midtown
Registered user
on Sep 20, 2022 at 12:50 pm

Can anyone name any project that the City has done on time and on budget? Or that the City can't even manage the existing utilities how will they every provide better service than AT&T or Comcast.

/marc


Allan
Registered user
Old Palo Alto
on Sep 20, 2022 at 12:52 pm
Allan, Old Palo Alto
Registered user
on Sep 20, 2022 at 12:52 pm

@Felix: "Our household has fiber now for $20 a month from Sonic/AT&T. It’s terrific."

The current new customer price for fiber is $65/mo. at the Sonic website. I would be interested in fiber at $20 a month, if such a price really exists! Is this the price variability we can expect with a Palo Alto fiber network?


KOhlson
Registered user
Old Palo Alto
on Sep 20, 2022 at 1:20 pm
KOhlson, Old Palo Alto
Registered user
on Sep 20, 2022 at 1:20 pm

I have fiber from AT&T, and it replaced Comcast. I want to highlight that Comcast Gig and AT&T Fiber Gig are not equivalent. AT&T's Fiber offers the same gigabit speed up and down, and these "channels" are independent of each other. Neither of these things are true with Comcast. Why is this an important distinction? Upstream is Zoom, Teams, etc. If you've ever had 2 or more people working from home, you'd see the difference.

That said, when CPAU offers fiber and it's within the ballpark, I'll switch.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 20, 2022 at 1:37 pm
resident3, Another Palo Alto neighborhood
Registered user
on Sep 20, 2022 at 1:37 pm

@KOhlson,

"That said, when CPAU offers fiber and it's within the ballpark, I'll switch."

And I probably won't so we cancel each other out.

How's the switching to electric going for the City? Looks like we have to PAY to achieve the City's goals.

Individuals can say anything and Council throws darts all the time, but this is a few dozen million dollars too many... for something nobody really asked for. The people who "dreamed" of this are against it.

It's not a bake sale where the city can just wing it based on feeble indications of demand.


Mama
Registered user
Crescent Park
on Sep 20, 2022 at 2:16 pm
Mama, Crescent Park
Registered user
on Sep 20, 2022 at 2:16 pm

We love our AT&T fiber, even more every time we hear about Comcast problems. We have NEVER had an issue with ours. Local government entities can never compete with great American companies. Don’t you wish EDD and other California disasters were run by free enterprise??


MyFeelz
Registered user
JLS Middle School
on Sep 20, 2022 at 2:33 pm
MyFeelz, JLS Middle School
Registered user
on Sep 20, 2022 at 2:33 pm

Thanks for the clarification, Gennady. I was already sharpening pencils to fill out an app and take a pre-employment exam. Darnit.


Bystander
Registered user
Another Palo Alto neighborhood
on Sep 20, 2022 at 5:15 pm
Bystander, Another Palo Alto neighborhood
Registered user
on Sep 20, 2022 at 5:15 pm

This has been talked about for so long that it now is meaningless, except for the fact that we do not have excellent internet infrastructure. Having visited and experienced internet with family members living in other areas I can see just how poor our options and services are.

However, although I think of this as an essential utility, I can't see that it would be any better than the utility power service we have. Since we depend on our power coming through wires dangling on poles draped through trees, and subject to outages caused from anything from wildlife and weather, to balloons, planes and car accidents, can we expect anything better from our utilities to provide such an important infrastructure?

The new pedestrian bike bridge has finally been completed after years if not decades of talk! Is this going to be the same?


William Hitchens
Registered user
Mountain View
on Sep 20, 2022 at 5:37 pm
William Hitchens, Mountain View
Registered user
on Sep 20, 2022 at 5:37 pm

Forget this nerdy distraction from reality. Palo Alto has two far more important HUGE it MUST DO in the near future:
1. PA must build four 4-way Auto/Truck/bike/ped underpass rail crossings at Charleston, E Meadow, Churchill (yes, it's necessary fools), and where Alma joins El Camino just South of Menlo Park. And it must mimic the 4-way highly effective design at Page Mill Rd. ALL must be designed, finalized, planned, contracted & funded, and built ASAP to prevent a traffic jam nightmare along all of Alma and at all of the above mentioned intersections when electrified Caltrain starts running A LOT more commuter trains. Ignore noisy flakes and replicate the solid 4-way crossing at Page Mill. PA is a NOT a True Democracy, thank God. It is a Representative Democracy. Time for its elected Representatives to suck it up, vote, and take some heat. They wanted their jobs? Now DO THEM. Governing is not a social popularity process. It is a dirty, nasty, and necessary business.
2. Palo Alto already is in the beginning stages of an electricity supply crisis due to 30+ years of political neglect for its pathetically outdated, self-owned (HUGE mistake), and grossly inadequate power distribution system. If PA follows City, County, and State mandates, it will need to increase capacity of its electrical system by at least 3x and probably 4x by 2035 to 2040. So that means: 4x new guaranteed power supplier capacity, 4x new substation capacity, and 4x local transformer and lines on poles capacity by 2035-2040.
Good luck with that!!! PA can't do afford it, either politically or economically.

The real question here if if we can hold all of the politicians and their "advisors" accountable for their grossly inaccurate decisions. Remember they're not true power engineers. They're just whatever technically ignorant fools that politically correct colleges allow to graduate while grossly ignorant.


Annette
Registered user
College Terrace
on Sep 21, 2022 at 7:01 am
Annette, College Terrace
Registered user
on Sep 21, 2022 at 7:01 am

This is terribly like High Speed Rail. Great idea in concept, but the details are not favorable. The project will be hugely expensive, competing for money that SCREAMS to be allocated elsewhere. Like on grade separation, affordable housing, public safety, and doing whatever can be done to stabilize and fortify our electricity utility.

Online Name makes a good point about bonds: they have to be repaid. There's an existing reserve for this project but as Nose pointed out, if the fund plus projected revenue cannot cover the bond payment, the General Fund will be on the hook for what is due, creating a mandatory city expenditure that will compete with other demands.

Unfortunately, this issue ties into the business tax issue. Palo Alto needs a relevant business tax, not the paltry one that is on the ballot. The projected $9 million in revenue will flow to the general fund and, IF promises are kept, will be spent on housing, public safety, and grade separation. That is in jeopardy if there's a mandatory draw on the general fund.

I listened to the discussion on Monday and I think it is good that there's hesitation because of the details.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 21, 2022 at 10:30 am
resident3, Another Palo Alto neighborhood
Registered user
on Sep 21, 2022 at 10:30 am

Annette,

“This is terribly like High Speed Rail. Great idea in concept, but the details are not favorable. “

I sure hope not. Details for HSR would have been worth working out instead of Palo Alto fighting it as it did,..at least for the generation now left to instead be stuck with a one car per person culture. What’s the worst that can happen if the City doesn’t do fiber?


Citizen
Registered user
Another Palo Alto neighborhood
on Sep 22, 2022 at 9:49 am
Citizen, Another Palo Alto neighborhood
Registered user
on Sep 22, 2022 at 9:49 am

I would like to see this done in Palo Alto on the municipal utility model.

We’ve had to maintain 2 services through the pandemic because of how unreliable they all are. One of them, mentioned above, basically provides dialup speeds (“up to” some speed we never get near is basically false advertising, but…) The other, mentioned above, sporadically cuts out for hours. I had to stop doing digital darkroom hobby years ago because of abysmal upload speeds of the first. City fiber won’t be nearly as expensive or unreliable.

This is something we should just do. No, it’s nothing like HSR. It’s a utility, and we are lucky here to have our own. Nothing is perfect, but it’s better than the alternative by far.


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 22, 2022 at 11:12 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 22, 2022 at 11:12 am

@Citizen, what makes you think a service run on the municipal utility model will be any more reliable than electrical service now provided by our municipal utility after years of experience? How many power outages have we had recently?


SR
Registered user
Community Center
on Sep 22, 2022 at 3:07 pm
SR, Community Center
Registered user
on Sep 22, 2022 at 3:07 pm

William Hitchens is a little harsh and not wrong. He omitted two giant upcoming capital costs: City's share of subsidizing several billion dollars of affordable housing, and an unstudied and unpriced sea level mitigation plan.

Any talk about Citywide utility undergrounding or redevelopment at the airport site is nothing but unfunded fantasy


Eeyore
Registered user
Adobe-Meadow
on Sep 22, 2022 at 10:56 pm
Eeyore, Adobe-Meadow
Registered user
on Sep 22, 2022 at 10:56 pm

@resident3: HSR will become mandated. The current global warming movement will move mountains to cut air travel in favor of a fast, comfortable, less polluting, train.


Mondoman
Registered user
Green Acres
on Sep 23, 2022 at 9:48 am
Mondoman, Green Acres
Registered user
on Sep 23, 2022 at 9:48 am

@SR Don't we also have a big underfunding of City employee retirement plans?


KOhlson
Registered user
Old Palo Alto
on Sep 23, 2022 at 11:44 am
KOhlson, Old Palo Alto
Registered user
on Sep 23, 2022 at 11:44 am

Canceled, baby! I've finally lived long enough!


densely
Registered user
Embarcadero Oaks/Leland
on Sep 26, 2022 at 9:46 am
densely, Embarcadero Oaks/Leland
Registered user
on Sep 26, 2022 at 9:46 am

People are right to be concerned about the risks this project would bring. That's premature, though, before we ask why we need a city-run ISP.

When I saw an email asking me to take a survey I went to the city's web site for fiber, looking for a business plan that explained simple things like what the city needs that's not already provided by commercial services, how much it will cost per household that's not well served by commercial services, how the service would be staffed, and how long the city expects to be in this business. All I found was happy talk about how great it is to have broadband so school kids can read things on the Web and attend classes using Zoom. There was nothing about why a city-run service is needed. Magellan's report talks about profitability of the service if it can attract about a one-third share IN COMPETITION WITH COMCAST AND AT&T. What sense does it make to talk about competing if the goal is to provide a needed service for residents who are not well served by the incumbent providers? If that's not the goal, why does the city need to do this at all?

A few weeks ago I asked Tom DuBois, in an online discussion, to show me the business plan for this project. He dodged the question twice. We deserve more when he's asking us to commit $140 million of the city's credit to fund his hobby horse.


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 26, 2022 at 10:04 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 26, 2022 at 10:04 am

I wrote to City Council objecting to this project and noting PA has no expertise in running such a service when it can't even handle basic power outage updates and Tom DuBois responded, "Oh don't worry. We'll outsource Customer Service" and presumably anything else the city can't handle.

That begs the obvious question: WHY BOTHER?

When Pat Burt heard various objections about how losses from this could be "catastrophic" unless it achieved major market penetration, he dismissed those concerns because PA has such a "great track record PROFITING" from the services it sells to residents like utilities and the airport.

Greer Stone had to remind him that those are monopoly services where we have no choice. Has the mayor forgotten that the city lost the lawsuit for overcharging us for utilities and that we've been waiting years for the court-ordered refunds??


resident3
Registered user
Another Palo Alto neighborhood
on Sep 26, 2022 at 11:16 am
resident3, Another Palo Alto neighborhood
Registered user
on Sep 26, 2022 at 11:16 am

@Online name,

“When Pat Burt heard various objections about how losses from this could be "catastrophic" unless it achieved major market penetration, he dismissed those concerns because PA has such a "great track record PROFITING" from the services it sells to residents like utilities and the airport.”

The City ‘s job is not to be speculator but even if that was their job, the City’s bandwidth to handle anything beyond what’s on their plate has not been proven. If 100 million expanded the City’s ability to handle issues, maybe that could be worth borrowing money for but it’s the opposite with this monster project with a million places where some things can go unexpectedly very bad. It’s lose, lose, lose for everyone except for a minuscule number of homes unhappy with their connections which I find *very hard* to believe that it’s even a real problem. Explaining the problem that is being fixed can’t just be a flawed survey.


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 26, 2022 at 11:28 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 26, 2022 at 11:28 am

@resident3, I totally agree. Enough with these poorly planned monster projects.

I'd much prefer that they spend the money to ensure we have reliable electrical service, adequate police and fire and restored library hours -- real current needs.

I'd like to hear some common sense from the city council candidates.


Tom DuBois
Registered user
Midtown
on Sep 26, 2022 at 3:33 pm
Tom DuBois, Midtown
Registered user
on Sep 26, 2022 at 3:33 pm

I'm apparently not popular in Embarcadero Oaks/Leland though I don't know who "Densely" or "Online Name" are. I'm happy to talk about the Fiber opportunity for Palo Alto and I'm easy to reach.

We have a Fiber reserve fund with revenue generated by the current Fiber busines and an oppountity to use that money along with broadband customer subscription fees to fund the rest of the network. This is not an "either/or" choice. These same dollars (and staff) are NOT available for affordabe housing, police, fire, library hours, rail separations, etc. The city is a large organization that can walk and chew gum at the same time.

The survey and people plunking down cash was a measure of willingness to switch providers. We hired Magellan to write the business plan. They've built networks for many US cities successfully, places with competition and where they did not have the benefit that we do of existing fiber revenues.

The headline is correct here. People and competitors will sow FUD (Fear, uncertainty and doubt). I suspect some of these posters work in telecom or broadband and don't want the compeition. But sadly the state of US broadband is below par. While a few people in Palo Alto have access to resaonable service, many do not. And we pay far too much for what we do get.

What the article didn't make clear, is that the first subscribers would be online in 12 months, and more neighborhoods will be lit up all the time, with the entire city taking up to 5 years. The project is cash flow positive quickly if we can ensure the buildout is well planned. This already includes paying the bond payments and maintenace - we could pay off the bond early if we wanted to or use that cashflow for other things.

In terms of naming projects that the city does on time and budget - nearly all the city projects are. We do over 100 projects a year. Mitchell Park Library was on budget but was delayed. We held the contractor to their agreement and did NOT pay more.


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 26, 2022 at 4:24 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 26, 2022 at 4:24 pm

Tom, this isn't about your personal popularity but rather how decisions are made and justified. Many people beyond Embarcadero Oaks have commented on how meaningless the Fiber Survey was because there was no way to say they /we did NOT want Fiber from the city at all.

Beyond Embarcadero Oaks, check out the folks from Crescent Park and search the comments on the CPNA (neighborhood association) list. They're even more critical than the above posts, questioning the city's ability to manage a cost-effective competitive network AND blasting the flawed survey which they saw as more a tactic to "crowd source" advanced deposits than a real opinion survey.

Instead of assuming the project's critics work in the telecom industry and don't want not want competition, isn't it more likely that advocates plant to reward their folks with lucrative consulting and outsourcing contracts??

Try looking at and responding to the arguments logically instead of attacking the messengers and cavalierly dismissing our arguments. After the business tax debacle, resident-taxpayers are tired of being ignored.

If the city has extra funds from the Fiber Reserve Fund, how about using it for something useful: a reliable power grid, more cops, etc.

Tonight's City Council has an agenda item to spend $625,000 on a presumably more reliable power outage reporting system to replace the long-time flawed one.

How about using the Fiber Reserve Fund for that?? We don't have unlimited funds and lots of other priorities.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 26, 2022 at 10:55 pm
resident3, Another Palo Alto neighborhood
Registered user
on Sep 26, 2022 at 10:55 pm

@Tom Dubois,

“I suspect some of these posters work in telecom or broadband and don't want the compeition. But sadly the state of US broadband is below par”

Sounds like online name struck a cord but you don’t have to be an insider to understand competition, or how the City is not good at selling things. The 100 projects a year, did the City have to sell their purpose and value to anyone that is accountable?

Seriously, sounds like you’re saying that the City’s goal is to improve the nation’s broadband. Is that a City responsibility? However laudable disrupting broadband may be, our problems are not fiber to the few people who put in a deposit based on a survey everyone else saw through.


Annette
Registered user
College Terrace
on Sep 27, 2022 at 11:11 am
Annette, College Terrace
Registered user
on Sep 27, 2022 at 11:11 am

Can we get more detail? Per this article, this two-part project will cost $142.9 million. The article also SUGGESTS that the system COULD start making money after about a decade of operations and COULD improve reliability in municipal operations and make internet connection for businesses and residents faster, cheaper and more reliable. Suggest, would, and could are words that do not fit comfortably with a $142.9 million municipal price tag. Nor does ten years of operating in the red.

Also, if revenue projections are not realized and the bond obligations have to be met by the General Fund, what happens to other services that rely on the General Fund? Will Palo Altans be forfeiting libraries for fiber? Police and Fire for fiber? Those promoting the passage of Measures K and L consistently tell us that the City needs the revenue or we will see service cuts in two years. That tells me that the General Fund needs a steady revenue stream that is greater than what it is now. How can we afford to add this fiber project?

Also: if businesses are to benefit from this proposed system, why shouldn’t they pony up specifically for that? As is, they raked us over the coals vis-à-vis the proposed business tax. It’s galling to think that Palo Alto residents would be adding yet another element to City infrastructure that businesses benefit from but do not contribute to at a proportionate rate.

TomDuBois and other proponents: what am I missing? If this is financially feasible, please make that clear.

Thank you.


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 27, 2022 at 11:21 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 27, 2022 at 11:21 am

Thanks, Annette. For $142.900,000 you'd think we'd get some real answers.

See also Diana Diamond's recent blog on all the non-answers she's gotten from the Utilities Department on if it's ready for the increased demand for more electricity.
Web Link

It's the same type of NON-answers we get when asking questions about Fiber and countless other PA projects.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 27, 2022 at 11:33 am
resident3, Another Palo Alto neighborhood
Registered user
on Sep 27, 2022 at 11:33 am

@Annette,

“ It’s galling to think that Palo Alto residents would be adding yet another element to City infrastructure that businesses benefit from but do not contribute to at a proportionate rate.”

It’s pretty much the main feature, to reduce costs “for doing business” which explains a lot about how we’re being used with “fiber to the home” as if we’re in the middle of nowhere. Like we need more jobs to come to Palo Alto for cheap and cheaper.

This project can’t be meant for Palo Alto homes when the majority of homes are fine, we’re not in the boonies without options and I don’t care that broadband is not good enough for Amazon.


AllenPod
Registered user
Community Center
on Sep 27, 2022 at 1:21 pm
AllenPod , Community Center
Registered user
on Sep 27, 2022 at 1:21 pm

We had Palo Alto FTTH for a few years. It was solid, reliable.
The commute issues and housing pressures could be alleviated by a communications infrastructure that virtually placed the participant in the conference room, the classroom, or the office. Zoom falls far short of this. Much more bandwidth would be needed for a real build-out. Schools, businesses, everyone would benefit. Traffic would be reduced, and savings in transportation and housing could be seen as cost benefits of the new technology. Indeed, ATT and Comcast have met most people's needs for today's market. We are talking about the future.
By the way, as bandwidth requirements rise, wireless internet chokes to death.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 27, 2022 at 3:00 pm
resident3, Another Palo Alto neighborhood
Registered user
on Sep 27, 2022 at 3:00 pm

@AllenPod,

"Traffic would be reduced, and savings in transportation and housing could be seen as cost benefits of the new technology. Indeed, ATT and Comcast have met most people's needs for today's market. We are talking about the future."

Sounds like a horrible life, everything reduced to an online world. It's not even a good future for a business park in the middle of nowhere.


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