Palo Alto makes big move to expand citywide fiber network | May 28, 2021 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - May 28, 2021

Palo Alto makes big move to expand citywide fiber network

City Council approves plan to build out fiber-optic backbone, bring municipal internet to all neighborhoods

by Gennady Sheyner

After nearly two decades of debate, Palo Alto took a monumental step Monday toward transforming the city's fiber-optic network from a small system that mostly serves critical city facilities and large commercial customers to one that could deliver high-speed internet service to every local home and business.

By a unanimous vote, the City Council advanced a work plan for gradually expanding the city's existing fiber ring to all areas of the city — a project that over the years has been referred to as Fiber to the Home or Fiber to the Premises. The expansion would take place in at least two phases, with the first one focusing on building out the fiber backbone to make it available to more city departments and the second one targeting neighborhoods throughout Palo Alto.

The idea is far from new. City leaders have long considered expanding the fiber network, which was established in 1996 and which now serves about 220 commercial customers and generates about $4 million in annual revenues. To date, however, the journey has been filled with false starts, half-measures and disappointments.

In 2009, the city's prospective partnership with a consortium of tech firms for the buildout of the fiber network collapsed because of the economic downturn. Since then, city officials have been considering different models for the fiber expansion and commissioning numerous studies in the process, only to return to step one.

This time, city leaders and proponents of Fiber to the Home believe things are different. The COVID-19 pandemic, they argued Monday, has demonstrated both the critical value of having reliable high-speed internet and the shortcomings of existing providers in meeting local demand. And a new study from the firm Magellan Advisors, which has worked with dozens of municipalities to develop municipal fiber networks, makes a case that a municipal fiber system would not only enhance all sorts of city services — from traffic management to emergency preparedness — but also generate money and improve the customer experience.

The study estimated that it would cost about $22 million for the city to roughly double the fiber network in the first phase, an endeavor that could be paid for in large part through the fiber utility's existing reserve of nearly $35 million. This would create a 44-mile fiber network that would flow through neighborhoods and business districts and include dedicated cables for the city's utility operations, for every other city department and for commercial users.

The new network would also set the stage for Fiber to the Home, a much more ambitious project with an estimated price tag of about $98 million. The city also has the option of teaming up with private companies — which would reduce both the city's costs and its control over the network. Under that scenario, the system would cost about $86.5 million and shift some of the risk away from the city.

The council largely rejected that approach. Instead, the majority agreed that it would like to see the city build and operate its own system, much like the 63 other cities across the nation that currently provide direct internet service to their customers. Mayor Tom DuBois, a longtime champion of Fiber to the Home, said the municipal system would "pay for itself."

"It's going to generate money for the city," DuBois said. "It's going to save our residents a lot of money, and it's going to enable businesses."

John Honker, CEO of Magellan, told the council that the new plan presents the city with an opportunity to reinvest in a valuable asset — its fiber ring — at a time when the need for the city to connect more services is rapidly expanding. His company's analysis showed that the city would need about a third of local households and businesses to plug into the system for the operation to break even. Some cities that his company has been working with have done far better than that, with Longmont, Colorado, enjoying a 54% take rate for its municipal system, he said.

The operation does, however, come with some risks — namely, stiff competition from the two incumbent providers, Comcast and AT&T, as well as smaller boutique providers. In other jurisdictions, Honker said, existing telecommunications firms "took a shotgun approach" and launched negative campaigns against municipal offerings.

"They spent marketing dollars to try to dissuade each of the cities from building out. They lobbied commissioners; they lobbied the city managers. They did everything they could until the point that the project was green-lighted, and then it was just a matter of competing," Honker said.

"It's stiff competition because they are established companies," he added. "But they don't have good reputations, and the reputations that they have are one of the biggest challenges that they face when going up against municipal providers."

The city's utilities staff, which in the past has been hesitant to undertake a major expansion without private partnerships, similarly pointed to competition from the private sector as a major risk. The industry will "fight not to lose a single customer," a report from the Utilities Department states.

"Private sector competition plus the city's ability to host and support a private sector offering are considered the greatest vulnerabilities of city-provided internet services," the report states.

Despite that risk, council members agreed to follow the direction of its Utilities Advisory Commission and staff and to move ahead with a massive buildout of the fiber system. The council directed staff and Magellan to create a detailed engineering design for both the near-term expansion of the fiber backbone and the eventual Fiber to the Home system, as well as to create a business model for turning the city into an internet service provider, which could entail outsourcing some of the functions.

The city is also moving ahead with a more detailed risk analysis and a community survey designed to gauge local interest in municipal fiber. The council's timeline calls for having Fiber to the Home in place within five years.

Andy Poggio, a longtime proponent of the citywide system, was among those who urged the council on Monday to advance the effort.

"We all know the advantages of the municipal fiber system for Palo Alto: attracting startups and new businesses, improving age-in-place, enabling better work from home, keeping Palo Alto a uniquely desirable place to live," Poggio said. "Let's take this opportunity to build a 100% Palo Alto Fiber to the Home now."

The pandemic has only strengthened the case for municipal fiber, said Loren Smith, a member of the Utilities Advisory Commission.

"Our children and our community were forced overnight to switch to a work-from-home, school-from-home, life-at-home quarantine space, all of which significantly increase the demand on our existing broadband networks — most to unsatisfactory levels," Smith said. "As children and parents all jumped online, existing broadband services were crippled and buckled under the strain."

Council members largely agreed, even as they expressed some concerns about issuing debt or relying too much on the fiber reserve fund to pay for the expansion. Greg Tanaka, the council's staunchest fiscal conservative, suggested looking into an "open access" model in which private providers help the city build the network and then are allowed to use it to provide services (Honker suggested that such a model is unlikely to succeed in Palo Alto because telecoms are unlikely to invest in capital costs for the city-owned system).

But Tanaka, who struggled with his own AT&T-provided connection earlier in the meeting, ultimately joined the rest of the council in advancing the project.

Other council members were more bullish about municipal fiber. Council member Greer Stone argued that it will represent a reliable revenue stream, while council member Lydia Kou suggested that it will improve internet reliability for local residents.

"This year, we've seen how much this is needed," Kou said, citing unstable internet connection during council meetings. "This is a great investment for our community."

Email Staff Writer Gennady Sheyner at [email protected]


Posted by pestocat
a resident of University South
on May 25, 2021 at 11:02 am

pestocat is a registered user.

With this Fiber to the Home system, has a data rate and cost been established for the home user.

Posted by Judith Wasserman
a resident of Leland Manor/Garland Drive
on May 25, 2021 at 11:06 am

Judith Wasserman is a registered user.

I suppose the premise is that fiber should go to the premises. Premise is not the singular of premises when "premises" refers to a location.

Posted by Gennady Sheyner
Palo Alto Weekly staff writer
on May 25, 2021 at 11:19 am

Gennady Sheyner is a registered user.

Thank you, @Judith. Duly noted and corrected.

Posted by Brendan
a resident of South of Midtown
on May 25, 2021 at 12:38 pm

Brendan is a registered user.

The arguments against FTTH have always been penny-wise, pound-foolish.

Nice to see something positive on this front. At the very least, maybe this will push AT&T to offer something other than 90s-quality DSL crap...

Posted by Bystander
a resident of Another Palo Alto neighborhood
on May 26, 2021 at 6:53 am

Bystander is a registered user.

Amazing! We can't underground our powerlines, but we can do this!

Our power is unreliable at best. Will this be the same?

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 26, 2021 at 8:50 am

Online Name is a registered user.

"Our power is unreliable at best. Will this be the same?"

You'll find out when the city gets its usual stellar customer service in place. You'll get the same 2-week response time as you get for power outage updates.

Posted by Scott
a resident of Barron Park
on May 26, 2021 at 9:02 am

Scott is a registered user.

For many years, I had hopes, and even wondered if it there were some way to privately do like a street-level co-op to bring something like this in. Then ... AT&T gave us fiber over the winter, and reasonably priced, and Comcast offered stronger speeds for cheaper. I had given up on getting this, but there you are. This kind of city project is a great idea for 2011 when the offerings were uniformly lacking, but in 2021 and now it feels like it's kind of too little, too late.

Posted by rsmithjr
a resident of Duveneck/St. Francis
on May 26, 2021 at 10:12 am

rsmithjr is a registered user.


Great observation, thanks!

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 26, 2021 at 10:24 am

Online Name is a registered user.

I can't believe PA is considering spending $120,000,000 when it's pleading poverty and can't even keep its libraries open more than 4 days a week or offer timely customer service responses to power outages.

At the CC meeting on this, they talked about only hooking up properties whose owners committed to subscribing to the service. What happens when properties are sold and new owners want the service or they don't want to pay for the service previously ordered?

Posted by rsmithjr
a resident of Duveneck/St. Francis
on May 26, 2021 at 11:30 am

rsmithjr is a registered user.

@Online Name:

The library is a loss center. There is no practical way for the city to monetize it.

Municipal fiber is on the other hand potentially a profit center. They are willing to put a lot of money into it regardless of what the actual need is and what the risks are.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 26, 2021 at 11:58 am

Online Name is a registered user.

@rsmithjr, True. The key word is POTENTIAl profit center since the city hasn't demonstrated any skill in providing the required level of customer service.

Also, please explain my point in the second paragraph about connecting / disconnecting property owners with different needs. Will the FTTH be connected a few years later to a property owner who wants it later or are they out of luck forever?

This cash cow resents being milked by the city to keep its consultant gravy train running while it can't provide the basic services that WE taxpayers want.

Posted by rsmithjr
a resident of Duveneck/St. Francis
on May 26, 2021 at 12:33 pm

rsmithjr is a registered user.

@Online Name:

I don't know what the city is actually planning to do, so let me fall back to what I have seen in other places.

In the old days when cable systems were "new builds", the cable company typically would take a neighborhood, have something of an "event" to get people to sign up, and do the whole neighborhood at the same time. This would get high penetration rates, but often with high churn rates later.

Today, with overbuilds (which is what the city will be), it is more common to try to pick areas that are likely to have customers with small construction costs. Google Fiber has practically been "red-lining" when they select areas they will cover.

They may also run the main fiber down the street, pick up what they can, and then wait for more customers to follow. This can be very expensive if you choose wrong.

Note also that Palo Altans get very annoyed with construction in their neighborhoods.

I doubt that there would be only one chance to get installed if that was your question. Usually, if the street is wired, they will send in a truck to wire you if you ask, in most communities.

It is noteworthy that many people who express interest in switching to a new system will nevertheless decide that their current vendor is good enough to keep, especially if the current vendor is offering incentives to remain.

Palo Alto is going to have to be careful to choose policies that will not annoy members of the community but will still be economically sensible. I do not envy their situation. Let's hope for the best.

Posted by KOhlson
a resident of Old Palo Alto
on May 26, 2021 at 1:16 pm

KOhlson is a registered user.

Thanks to Tom Dubois and others who helped push through this first stage. I am a fan of fiber and believe the city will do well with this initiative.

Posted by densely
a resident of Embarcadero Oaks/Leland
on May 26, 2021 at 8:03 pm

densely is a registered user.

If 220 business customers are currently paying $4 million a year, they're paying an average of $1500 a month. How much will we be paying to provide the city a profit on this service?

Posted by Brendan
a resident of South of Midtown
on May 29, 2021 at 2:56 pm

Brendan is a registered user.

I am genuinely happy to see progress. Comcast does offer fair-to-middling "gigabit" (usually closer to 500Mbps/30Mbps)'s what I'm presently stuck with... AT&T is _still_ only 18Mbps in my neighborhood (90s quality crapola IMHO!).

I believe that municipal fiber can work (the "dark fiber" is already profitable for the city) if done correctly. Perhaps, follow models that have worked well? Say, Chattanooga?

Web Link

At minimum, competition for AT&T and Comcast would be good. Their internet-only rates are just not competitive (on a national and certainly on a global level) at this point in time...

Posted by Curmudgeon
a resident of Downtown North
on Jun 1, 2021 at 6:20 pm

Curmudgeon is a registered user.

This is very good news, for Netflix

Posted by Jeffrey Lane
a resident of Greenmeadow
on Jun 2, 2021 at 9:19 am

Jeffrey Lane is a registered user.

200 mps should be the established standard regardless of the connection.

At our primary home in Torrey Pines (San Diego County) we are getting 220 mps via Spectrum and in Pacific Palisades (Los Angeles County) our other home is receiving on average 190+ though Cox.

For an upscale, high-tech community Palo Alto really needs to step things up.

Get out of the internet ice age as I am currently getting about 80 mps via WiFi while in town to check on our rental unit off Alma.

Unacceptable in the modern world.

Posted by rsmithjr
a resident of Duveneck/St. Francis
on Jun 2, 2021 at 2:14 pm

rsmithjr is a registered user.

@Jeffrey Lane:

I have been using Comcast 200 mb service for many years now. Works reliably and is fast even with multiple users. My grandson is here right now using it. You can get 1gb from Comcast in many areas.

AT&T has been installing fiber with speeds of 300mb, 500mb, and 1gb. Only some areas right now.

I suggest that if you want faster speeds here in PA, you can get them right now from incumbent providers. I think you will find our options to be comparable to what you have in SoCal.

Good luck.

Posted by Luther Payne
a resident of Evergreen Park
on Jun 2, 2021 at 8:35 pm

Luther Payne is a registered user.

200 mps sounds remarkably fast. How long has it been available?

I am currently using a dial-up modem and it only get about 56 kps.

Trying to download a video stream is very time consuming and sometimes it stops loading altogether.

On the other hand, the monthly service is very reasonable and along with my refurbished Samsung Galaxy 3 I seem to be doing OK.

Posted by Curmudgeon
a resident of Downtown North
on Jun 2, 2021 at 9:04 pm

Curmudgeon is a registered user.

"I suggest that if you want faster speeds here in PA, you can get them right now from incumbent providers."

Yes. The major reason to build a municipal broadband system is to have a municipal broadband system. As a side benefit, it will probably absorb any pesky budgetary surpluses the city might stumble into.

Posted by Penelope Gerhardt
a resident of another community
on Jun 2, 2021 at 9:16 pm

Penelope Gerhardt is a registered user.

Why not simply offer all Palo Alto residents 5G cellular data access at below market costs?

Then people will buy new smartphones and this in turn will stimulate the economy.

They can use their stimulus checks.

Posted by rsmithjr
a resident of Duveneck/St. Francis
on Jun 2, 2021 at 9:34 pm

rsmithjr is a registered user.

@Luther Payne:

Comcast has had such speeds for about 8-10 years. I suggest your giving it a try.

If you live in a portion of the town currently wired for AT&T fiber, I suggest that instead. This is probably comparable service to what the city would provided, and at good prices.

56kb is just not going to do it today.


Posted by Jim Nemo
a resident of Los Altos
on Jun 3, 2021 at 8:31 am

Jim Nemo is a registered user.

> "along with my refurbished Samsung Galaxy 3 I seem to be doing OK."

Along with using dial-up 56 kps internet service and an Android that no longer gets security updates (or a new OS anymore) this is like taking a quantum leap back to 1990 (internet) and 2012 (smartphone).

Posted by Edward Jones
a resident of Stanford
on Jun 3, 2021 at 1:18 pm

Edward Jones is a registered user.

An older style flip phone or 'burner' adequately suffices for those who simply need convenient access to a phone.

And these older designs are not vulnerable to hacking and security breaches + they are small and fit in one's pocket or purse easily.

Smartphones are essentially a mini-tablet computer with call/text features.

They're excellent for people on the go, social media followers, and the plethora of networking teenagers.

One way to tell an old person vs a youngster on a smartphone...the young ones type with their thumbs while the older folks tend to hunt & peck with their index fingers.

Posted by Mondoman
a resident of Green Acres
on Jun 3, 2021 at 11:36 pm

Mondoman is a registered user.

@Edward Jones - you may be mistaken on the flip phones. Those were pretty much all 3G at most, which is either no longer supported or soon will lose support by the major US carriers. TMobile at is requiring at least 4G LTE support for even voice calls (VoLTE), and from what I can tell, the 4G LTE flip phones are running a modified Android or similar OS, and so are vulnerable to hacking and security breaches.

Posted by Cecelia Watson
a resident of Stanford
on Jun 4, 2021 at 9:20 am

Cecelia Watson is a registered user.

Verizon ceased its 3G network in 2020 while both AT&T and T-Mobile plan to do the same by 2022.

And AT&T/Tru-Mobile are no longer offering 3G services to new customers.

The 4G LTE flip phones run on a modified Android platform as Mondoman clarified but there some flip phone brands available only overseas that run on KAIos (a modified and bare blankets Linux system).

I have a smartphone for personal use and a burner for work-related calls.

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