Victoria, I wouldn't be too excited with the new and free wireless access available to Mt View residents. It's pretty darn slow for one thing, and security problems might become a real issue.

On the other hand, I don't agree with Palo Alto's fiber optics initiative. It's too vanguard at this point and therefore too expensive. Do we really need that kind of speed today? What we need is more competition to bring down the cost to get online. I can't stand the monopoly situation Comcast has over its cable service. We need at least two more alternatives to force down cable fees.

Victoria: the system that Google is put in is about two orders of magnitude slower than a wired network, doesn't work reliably indoors, and may not work if your neighbor is using a 2.4ghz cordless phone.

Those are some major disadvantages, and ones which mean that even where such access is available, anybody who wants to make more than casual use of their network access is going to end up paying for service.

Principal: My impression is that Palo Alto is talking about a system which would be pretty standard in Japan or Korea, but is definitely bleeding-edge in the US, where home network access has tended to lag. I'm not very worried about technical feasability; I'm far more interested in finding out whether it makes financial sense for the city government to shoulder the risk associated with rolling out a new type of utility.

A minor disclaimer: I work for Cisco as a software engineer.

One of the negatives of WiFi operating outdoors is it is attenuated by moisture. Intuition: microwave ovens, which used the same frequency band, cook food by heating (transferring energy) to water molecules in the food.

Curious about the magnitude, I set up an experiment last winter. I configured my system to allow a neighbor to connect. The antennas were in windows with direct line-of-sight, about 100 feet apart. On a dry day, we saw transfer rates close to what was expected for that distance. However, during a drizzle, the neighbor's system couldn't even see my SID (Station ID). After the rain stopped but while humidity was still high, their system could see my SID but would lose the connection after a few seconds.

Caveat: this was using low-end Super G equipment for use in homes and small offices - I don't know how other equipment would perform. I had a very limited goal - to try to see how big a problem moisture was.

Internet access has already become a "segmented" market. And it should remain a private sector matter for the foreseeable future.

High speed via a fiber optic would be a great improvement over DSL or Cable, but a sensible question to ask is how much demand is there for that type of even greater speed in people's homes? No doubt such demand will increase over time as more uses are developed and files continue to expand, but I would love to see some data that demonstrates that a fiber network over some time horizon will benefit a large enough segment of the Palo Alto residential population, relative to the current offerings of cable and DSL, to justify the investment. How big is/will be this home user segment?

Wi-Fi is serving a different segment and need. For the most part, e-mail and low volume files such as documents, spreadsheets, photos, etc. can work quite satisfactorily on a wireless network, whether it is provided by Google or a Linksys connection on a home or internet cafe network. What Google is potentially offering is greater coverage--you can be anywhere and get inernet access, not just at locations that have set themselves up as "hot spots." And then the "pricing" that comes in the form of a payment, a subscription, advertising, or a blend of this. What are people willing to pay and how?

My point is that comparing a wi-fi offering from Google to a fiber optic network to homes is a false comparsion. However, both of these technologies are still in their nascent stages, are not stable, predictable "utilities" that serve most it not all of the population in a consistent way. With those points in mind, this is stuff for the private sector to pursue. Palo Alto can be supportive in many ways, but should keep its checkbook in its pocket, and drop any notion that this stuff is a logical extension of our fiber ring, or of our electrical, gas, and water utilities in town.

PG&E never comes up in discussions around this for other cities in the Bay Area. For good reason.

How many people in Palo Alto are like me and have become allergic to Willow tree pollen or dust from the leaves? Allergies are not something you have they are acquired. At the rate the City is planting new Willows we should see a dramatic increase over the years. /Marvin Lee

"Internet access has already become a "segmented" market. And it should remain a private sector matter for the foreseeable future."
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Significant parts of the infrastructure used by the private sector were built with public sector funds (your tax money. Continuing efforts by large commercial interests to build out fiber infrastructure is also enabled by additional tax breaks (that you and I ultimately pay for), and legal manipulations (i.e. bought politicians). This is fact, and can be quite easily shown.



XXXXXXXXXXX
"High speed via a fiber optic would be a great improvement over DSL or Cable, but a sensible question to ask is how much demand is there for that type of even greater speed in people's homes? No doubt such demand will increase over time as more uses are developed and files continue to expand, but I would love to see some data that demonstrates that a fiber network over some time horizon will benefit a large enough segment of the Palo Alto residential population, relative to the current offerings of cable and DSL, to justify the investment. How big is/will be this home user segment?"
-----------
Good question. No consider this. what is Palo Altans knew that a significant portion of the profits made from their accessing the Internet - including entertainment, content uploading, phone calls [VoIP], etc - STAYED in their community? Assuming an equal quality of service, and pricing that was equal or better than what is currently offering, what do you think they would do?



XXXXXXXXXX
"Wi-Fi is serving a different segment and need. For the most part, e-mail and low volume files such as documents, spreadsheets, photos, etc. can work quite satisfactorily on a wireless network, whether it is provided by Google or a Linksys connection on a home or internet cafe network. What Google is potentially offering is greater coverage--you can be anywhere and get inernet access, not just at locations that have set themselves up as "hot spots." And then the "pricing" that comes in the form of a payment, a subscription, advertising, or a blend of this. What are people willing to pay and how?"
--------
Another good question. Google is giving Mountain View policy makers some years to figure out how they can monetize this free gift horse. Here's hoping that they (Mt. View policy makers) do the necessary work to figure that out. Cartainly, there are many, many wireless applications that already expand the value of wireless networks, and more are coming. There are lots of possibilities, but no proven "winning formula". All we know for sure is that people crave mobile access. Perhaps there's a way to leverage that access, and target some portions of that access for payment (including micropayment). Google will be working with Mt. View to figure some of this stuff out. It will be an interesting channelnge and learning experience.






XXXXXXXXX
PG&E never comes up in discussions around this for other cities in the Bay Area. For good reason.
---------
Nor is PG&E is not known for its strategic vision.

"The profits will stay in the community"

1. Every time you eat a carrot the profits go outside the "community." So let's get the City of Palo Alto to grow and provide us with carrots so the profits will stay in the community. The whole "stay in the community" argument is a crock which can be used to justify any hare brained idea.

2. What profits? Are you aware of what is going on in Ashland Oregon where the city run fiber network is losing money at such a rate that the city wants to tack a surcharge on electricity bills to keep it alive? Or Provo Utah which is giving a "loan" from the general fund to iProvo so it can pay the interest on its bonds? Remember "losses, too, stay in the community."

David

David,

1) I'm afraid you're conflating an agricultural product, composed of atoms, with an information-based product, composed of bits. One is hysical, the other isn't, quite. So, your carrot analogy fails. By many orders of magnitude, server farms use a lot less space than carrot farms, in terms of realized opportunity cost :)

2) Ashland, Oregon is a different community, with a different bureaucracy than Palo Alto. Ashland, Oregon was also one of the first municipalities to create a municipal network.

That said, the problems that the Ashland Fiber Network has gotten itself into have little to do with the inherent value and potential of the network, they have almost entirely to do with the poor pre- and post-market diligence that was performed by Ashland politicos abd city staff. Palo Alto and other communities wanting to deploy municipal networks can learn from the Ashland case history. Isn't that one of the great things that mistakes are for - learning?

There'a an old, anonymous Japanese aphorism that says "fall down severn times, get up eight". In other words, one learnes from one's own, and others mistakes. That's not so hard to do.

3) In fact, I've argued long and hard for *exactly* the kind of diligence (pre- and post market) that was *not* performed in Ashland. Those arguments are beginning to catch on.

btw, if you want to read more about what really happened in Ashland, read this
Web Link

Dear Sanford,

1. No, I'm sorry. As an economic commodity carrots and bandwidth are exactly the same thing. There are producers and consumers. And the idea that either should be supplied by the City of Palo Alto is equally absurd.

2. The idea that we must "keep the profits in our community" is humbug. Should I not buy books at Keplers because it is in Menlo Park? Ideas like that are positively medieval. As for me, I would like to think that my "community" is the planet Earth.

3. I am glad to see that you are in favor of due diligence. So where is it? The business plan presented by Utilities was a joke; a cut and paste job prepared by a consultant. Even the proponents of FTTH admit that.

4. The story you referenced in the Ashland alternative newspaper seems to be accurate; at least it jibes with what I have read in the Ashland Daily Tidings. But it is 8 months old. Things have become even more bizarre since then.

5. Ashland's Fiber Network had competition from only one major supplier, Charter. Palo Alto will have competition as follows:

For broadband:
Comcast
ATT DSL
Sprint EVDO
Verizon EVDO
Free Wireless

For TV
Comcast
Dish
DirecTV
Free Broadcast TV (30 pct of the Palo Alto market)
ATT (within 18 months)
Verizon (within two years)
Google, Yahoo, Microsoft and everybody else for downloadable video.

For voice:
Too numerous to count.

And Palo Alto Utilities which has never faced a competitive situation in its entire history is going to survive? Please. This is the road to municipal bankruptcy.

David

David,

1) Palo Alto already supplies various commodities - e.g. power, water, gas, etc. Providing bandwidth as a simple commodity would not be a big stretch.

2) How can you make the statement that keeping profits in our community is absurd, when our utility directly supplies commodities to Palo Alto citizens, and at the same time manages to keep the profits from the provision of those commodities in the community?

3) No one person was more vocal about, or did more time doing diligence on the Uptown plan than I did. It was deeply flawed. In its wisdom, the City Council at that time paid attention to this, and refused to let the plan go forward.

4) Regardless of whether things have become more bizzare in Ashland, it's quite apparent that the primary problems encountered with AFN were administrative problems. Municipal communications projects are a rather new enterprise sector, and cities are still learning "best practices". Just because early Apple products failed, should Jobs and company given up? Of course not.

5) Yes, Palo Altans will (and do) have many choices for broadband service. This is why our city, and those who are FTTH proponents, must work to help citizens understand what the primary differentiating factors are for a Palo Alto municipal network. This has yet to be done in a way that would both reduce the risk profile (re: subscriber uptake) and innoculate the muni network from forward price competition.

There is no doubt that the first venture into this effort was not a stellar effort. That can be chalked up to 1) an overzealousness on the part of early supporters that led to overconfidence re: generating compelling community support; 2) the lack of (at the time) any clear, aggressive leadership from policy makers on the issue (understandable, because the differentiating factors were never really made clear to policy makers, and the lack of compelling consumer support); and 3) dependence on outside consultants who were otherwise competent, but were not the right firm this particular job.

Palo Alto still has a way to go in order to get this right. We will have to 1) find the right private partner - a partner who is willing to bear a considerable, but potentially very rewarding risk risk; 2) properly and authentically promote the network to Palo Alto citizens and institutional stakeholders (the latter may even be a source of cash if the promotion is handled in a way to show institutional ROI from the network - this would not be hard to do); and 3) make sure that experienced personnel, who have aggressive private communications industry experience are put into place in the pre- and post-planning phase. The latter group should have strict milestones built into job descriptions, with a considerable part of compensation built into network performance.

There are other, technical variables that will have to be present, but I'd rather not go into those here.

I'm not sure what you say about PAU never having faced a competitive situation is correct. PA Utilities has managed to survive, and keep a loyal consumer base. PAU provides many millions of dollars to the general fund. Granted, this would be a *different* kind of competitive profile; that's the reasom why personnel who understand how to both "reach" community in this market, and build the network to the profitable entity I'm confident it can be.

All the above depends on the RFP process, and then finding the right partner. All may be for naught in the near future if we fail to do that.

One the most slippery slopes on this entire matter is who builds and who operates.

Building the ring and supporting an effort to introduce additional infrastructure--hi speed fiber or wi-fi--is one thing. Operating it successfully, which means making money, re-investing as tehcnology changes and market demands evolve, etc., is another matter altogether. Being good or involved in one does not lead per se to being good or involved in the other.

It really is not different from who bulds a commercial property, who owns it, and who operates it. (I will avoid commentary about carrots, and instead introduce this new metaphor! ;+> ) This whole conversation can benefit from drawing such distinctions, in order to gain a better insight into where Palo Alto's involvement makes the most sense, and where it should tread lightly and leave it to others. I have my own opinions, but unless we parse this out more fully, it is difficult to understand how best to approach this matter.

Sanford,

1. Yes, Palo Alto provides commodities such as electricity, gas, water and does so profitably. It would be hard not to; they have a legally enforced monopoly for an essential service. If you think that bandwidth is a simple logical extension, then I say carrots are, too. And I bet I can make a much better business case that PA should be in the carrot business than you can that it should be in the communications business.

2. PA Utilities does indeed supply significant dollars to the general fund from its profits. Will it also supply significant losses to the general fund if broadband loses money? You bet.

3. You are "not sure" that Utilities has never faced a competitive threat? Perhaps you can tell me who else I can legally buy electricity, natural gas and water from? Or what about garbage collection? Many cities in the U.S. have competing trash haulers. Not here.

4. How can PAU supply electricity at lower rates than PGE and still be dazzlingly profitable? Easy. Federal law gives priority to municipal systems to purchase hydroelectric power from federal dams and water projects. Hydro power is the cheapest power there is. From a moral point of view this is interesting. Those dams were built by taxpayers. So we have a situation where poor people in, say, Oakland are subsidizing the life style of wealthy people in PA. What else is new?

5. You say that the problems in Ashland are due to bureaucratic incompetence. What assurances can you give that the same won't be true here? Are you aware that, according to the city's own figures it costs PA Utilities twice as much to dig a trench than a licensed outside contractor? It's right there in the addendum to the FTTH business plan.

6. The city is now outsourcing the maintenance of public parks and saving a bundle by doing so. And you think that PA can compete in the cut-throat telecom business when it can't even mow the grass economically?

David

David,

1. Well, now this is getting interesting. You say that Palo Alto would do better in the carrot business than in the telecommunications business. One word question, one word answer - all at once: "zoning"?! :)

You're damning your argument with an absurd example. It tends to make one think that you "believe" your argument to be true, more than you've throught through your arguement to be true. So, let's cool it with the carrot analogy; it just doesn't work, and you know it. If you don't agree, then let's see your business plan for PAC (Pal Alto Carrots), and we'll ask the Wicked Witch to review it. :)

Now, there _is_ some doubt that a muni network would work here. So? There's risk. So? To some large degree these things can be measured. Is the city prepared to mitigate risk? Seems so. It's looking at a private vendor to mitigate that risk. That may be unreasonable. We'll find out soon as responses to the RFP come forward. That's what I and some others are waiting for.



2. You're making an conclusion based on a belief,, and I'm defending on belief. How do you know that the city won't make money? I can't guarantee that the city will make money, nor can you guarantee the opposite.

This boils down to how cleverly - or not - the city is able to _negotiate for and deploy a network_. This citizen will be the first to raise hell if we start going down the past (dysfunctional) road on this issue again. That said, I think we've learned a few things from last time, and we've learned some things from other municipalities. Let's wait and see how the RFP's turn out.


3. PAU - rather, those who started PAU had a vision that enabled Palo Alto to capture revenue from it's own generation of necessary utilities. _That_, my friend, is outsmarting the competition.


4. You talked about the advantage that PAU has received from Federal law. What about the advantages that the telecommunications and cable oligopoly have gained from Federal Law, and Federal oversight institutions (the FCC), and bought members in the Congress? How about an Alaskan Senator who believes that the Internet is a series of tubes, voting on legislation that limits consumer preference, helping to bias an entire market in favor of commercial service providers, and thus holding back America's long-term ability compete in a fiercely competitive world?

The propsed muni network would "one up" the cabal that is taking more and more money from our pockets for service that seems to decrease in quality, and quantity (especially as one considers how communication service provision is becoming more and more fragmented into multiple paid services controlled by the big corporations).

5. We have no assurance that Palo Alto's policy makers or bureaucracy won't make the same - or worse - mistakes than Ashland did. That said, it will be quite easy to look at the way this process begins to unfold as the RFP's come in.

If I, or you, and/or many others I know see that process unfolding in ways that indicate Palo Alto is repreating the same old mistakes, or repeating mistakes that others have made (in spite of information available to the contrary), then I and you and many others are going to let a lot of other people know that this isn't a good idea.

I'm willing to risk that the city has learned a thing or two; let's wait and see.


6. About outsourced park maintenance comared to the telecom business. Again, you're mixing metaphors as a rhetorical device. This is fun - even cute - but it really doesn't get to the heart of the question about muni telecom here.


I'm waiting to see the first part of the RFP process play out before making any judgment at all. Let's see how that goes.

Are you willing to consider that it's even "possible" that this could be done in a way that really makes something special happen here? If not, then there's really use in continuing.

If so, what requirements do you think are necessary for the city to have that would make a network fly here?

btw, Paul's earlier comments are very germain, and right on point.

btw, Paul's earlier comments are very germain, and right on point.

Those who think that the same city that can't prevent its Utility Department employees from doing private jobs in Menlo Park on City time and with City equipment can run a technologically complex business like FTTH have a faith in municipal government bordering on religious fanaticism.

Palo Alto's government isn't performing competently even basic municipal government functions like fixing the streets and protecting residents from violent criminals. It is beyond me how some in our city want to heap more responsibility on our barely competent officials.

There is a reason that telecom and cable companies, who actually have experience with information technology, are proceeding cautiously with fiber. David is quite right: given Palo Alto's increasingly precarious finances, FTTH is a prescription for bankruptcy.

Is there also a reason why telecom companies - Verizon among them - have insisted that they be paid user fees (in the billions) for infrastructure upgrades, including fiber, and spent the money on other things? There are lawsuits pending to deal with this abuse.

Is there a reason why telcos are investing 10's of millions in lobbying efforts to keep municipalities out of the telecom business? If they're so fiercely efficient and the cat's meow in terms of competitiveness, what are they afraid of?

You might be putting too much faith in the telecom and cable companies. Just a thought.

JL,

I hold no particular brief for the telecom companies, which you rightly note, use any tool at their disposal in attempts to gain and keep their local monopolies.

My concern is that the city, which has NO expertise in this at all, and has proven incapable of operating even the basic aspects of municipal government efficiently, is considering risking money we don't have on a questionable enterprise.

Whether the telecom companies, with or without their monopoly efforts, are capable of doing FTTH profitably is a moot point: for the most part, they apparently don't think it's worth the candle to try. Why should WE risk our scarce tax resources on something that's likely to prove quixotic at best, and disasterous at worst?

Why do you think it is that the telcos have resisted deploying fiber? It's because they want to squeeze every dollar out of the infrastructure that TAX MONEY (our tax money) paid for. It has NOTHING to do with risk.

As for Palo Alto's ability to cooperate with a PRIVATE partner to run a network, with much of the risk borne by the private partner, what's wrong with that, especially if we have a chance to take in revenue, just for starters?

You're generalizing about Palo Alto's ability to make things work. Yes, we have problems; and yes, we have made mistakes. But focusing only on the negative gets us nowhere.

With respect, I don't think it's unreasonable to expect the city to demonstrate conpetence in the basics of running a municipal government BEFORE undertaking something as complex and risky as running a fiber network. They haven't done that as is evident to anyone who's paying attention. Moreover, it's universally acknowledged that the City faces severe financial problems in the near and medium term. It's foolhardy to be taking on even more risk - even if part may be born by private partners. You may see this as focusing on the negative, but if we don't face up to our very real problems, we'll never solve them. And we need to solve them before doing something like FTTH.

I'm not sure of your beef with the telcos, but you'll have to take that up with someone else. I think they're greedy corporate pigs, and if they could make money off of fiber, we'd have their cables all over town in no time.

It is POSSIBLE that Palo Alto will enter the communications business and succeed.

It is POSSIBLE that peace, love and justice will break out all over the world.
It is POSSIBLE that the Giants will win every one of their remaining games on the way to the World Series.
It is POSSIBLE that Osama Bin Laden will admit the error of his ways and convert to Judaism.

I would not bet my future on any of these. With the latter three I can easily refrain from doing so. But with FTTH the decision will be made for me by the elected and non-elected officials of the city of Palo Alto and once that decision is made I am on the hook whether I like it or not.

Therefore I intend to do everything in my (admittedly limited) power to make sure it doesn't happen. All I have is the power of persuasion and I intend to exercise it to the maximum.

And now back to the carrot futures market.

David

How about cameras at every intersection, real time reading of all utility meters, dispersion of public safety with no loss of cooperation, revenue from cable and phone company tenants, and virtual libraries in every home?
Just don't give government content control.
Go with it!

Chris,

Palo Alto already runs a commercial fiber optic network. Check it out here if you don't believe me:

Web Link

But of course that doesn't mean that FTTH is a good idea. There is too much competition and not enough demand on the home side. As for the Google WiFi, I live within 100 feet of one of their stations and I have only managed to connect once at 1 Mbps. That only worked near the back of my house close to the station near the window. It was pretty slow. I'm not counting on it to replace my Comcast service.

It's not a foregone conclusion that we'll have a muni network here, for many reasons. Ironically, the least among those reasons is objection to the network by people who are reflexive in their response to any entrepreneurial initiative taken by municipal governments.

What's even more ironic is that those who yammer on about the inefficiencies of government do so from the safety of their homes, kept mostly crime free by municpal government, drive to the market on roads that are mostly well-paved by their municipal government (show me where the streets are better paved on the Peninsula), and throw their trash in bins that are almost always emptied on time by their municipal government.

It's laughable to hear about someone who can't make a 1 Mbps WiFi connection confalting that experience with the promise of fiber. This shows a poor understanding of both technologies. At least weigh in with something more than irrelevant data - personal, or otherwise.

It's even more laughable to read a litany of generalities like "It is POSSIBLE that peace, love and justice will break out all over the world" applied to the topic under discussion here. Do you really think anyone up on this issue would consider that anything but an empty emotional plea? It's really weak.

Any sane citizen or politician who has made it his/her duty to get informed on this issue will see both Bvrwins and David Leiberman's arguments for what they are - i.e. "can't do" arguments that on the one hand accuse governments of incompetence from inaccurate overgeneralizations, and on the other hand want to forbid even tiny risks based on their flawed first-principle arguments that don't hold water, in reality.

Wireless technology is new, and keeps getting better and better, but Luddites in our community who want to make a point about how bad an idea a muni network is based on some of the problems that wireless is having. It's a poor argument, and conflates two very different technologies - one whose life is still in its genesis.

Then we have those who yammer on about "competition", like the competition is SO efficient. If that were true, Mr. Lieberman, how come the entire telco and cable industry is still trying to fugure out how it will survive as new IP-based information networks sprout all around them. The majors clueless - just look at the record, look at the rollups, look at the incompetence, look at the pathetic quality or programming. And you're defending THAT as the gold standard?

Like I said, a munii network here is a long shot, at best. And there are some arguments in opposition to it that make sense. Most of those arguments have to do with constraints that are self-created, and self-limiting within our local government. the criticisms I've heard assume somehow that governments,, who are populated by human beings, can't learn. That's silly.

In sum, I have yet to see anything in this thread, brought up by anyone who is opposed to a muni network, that holds water once the general assumptions of those arguments is examined.

In response to J.L.

You are absolutely right that the telco and cable industry have made massive, very expensive mistakes in communications strategy. Is it because they lack experience? Hardly. Because they are stupider than the rest of us? I doubt it. Is it because they are dealing with a constantly changing and very difficult marketing and technological environment? Could that be it? And what confidence should I have that PA Utilities with no expertise and no experience will get it right?

I have spent enormous amounts of time trying to find a successful municipal FTTH in a community comparable to Palo Alto, without success. I have read the "business plan" proposed by the city. It wouldn't get a hearing at a venture capital firm. Salt Lake City which was going to be the anchor for the UTOPIA FTTH system took one look at the economics and pulled out.

You think opponents are Luddites. Having spent my entire career developing telecommunications products I can assure you that that is not the case.

You think it is OK for the city to take risks. On what basis? Where is the plan? The current idea is that some outside body will write one for us and then drop the completed network in our lap. How naive.

Where is the exit strategy if things don't work out? You, yourself say that it is a long shot. When it fails what will happen? Will it be shut down? Sold? Will it be subsidized by surcharges on electric bills or on real estate taxes as proposed for Ashland? Or grants from the general fund as in Provo?

If it is shut down how will the outstanding indeptedness be handled? If it is put up for sale what if there are no buyers? Ashland tried to find a buyer and the best offer was "we'll take it off your hands for nothing and if we happen to make a profit we'll cut you in on it to help you pay off the debt."

From your comments it would appear that you never read the business plan. That you think it has something to do with wireless. That your knowledge of the current state of municipal telecom is zero.

And if you think the roads are well maintained in Palo Alto you must have pretty low standards. We have a city where basic infrastructure maintenance has been ignored for fifty years. Read some of the cities own reports of the costs necessary to fix that problem.

David

Let me add one further thought:

J.L. obviously you are a very smart guy. Why don't you write a business plan for a FTTH system for Palo Alto, take it to a Venture Capital firm, get 40 million dollars and build it.

If you are able to provide quality service at a reasonable price I would love to be your customer.

I just don't want to be your business partner.

David

David is quite right. The only reason a municipally operated fiber network even is being discussed is that Telcos, VC's, and indeed all who would have to risk their own money in the enterprise, are taking a pass.

Those who would have the city risk tax dollars on this scheme don't have anything on the line. It's easy to gamble, or invest, with other people's money.

Fiber advocates apparently believe they can achieve through the political process what they can't acheive in the market. That's the reason J.L. won't ever take David up on his challenge to produce business plan that someone risking his own money would buy into. It's much easier to agitate politically when you're pursuing an uneconomical venture, and unfortunately, much more likely to succeed.

By the way, J. L., regarding your comments about how well city government works here, perhaps you haven't been reading the papers lately. If you had, you'd have found the following:

1. The City has $27 million of delayed maintainence in infrastructure - mostly street repairs - to contend with. They have no idea where they're going to come up with the money for this. And yet they did find $6 million a couple of years ago to build a bike tunnel that's mostly unusable because, although it duplicates an existing tunnel, it was sited poorly.

2. Just two weeks ago, we had people marching in the streets to protest an unprecedented crime wave in town. It's claimed we need a new police station, but we don't know where money for that is going to come from either. We also had two Palo Alto Police officers on trial recently for abusing a resident, just the worst among several such incidents.

3. A year ago, eighteen Utility Department workers quit or were fired because it was discovered that some had been using city equipment during working hours for years to do private jobs in Palo Alto and neighboring cities. (These are the same guys you want to run the fiber network.)

4. We have taxpaying hotels and car dealerships leaving as fast as they can, while the city conducts "studies" on how to keep and attract them. Meanwhile we're told that the city faces a five to seven million dollar budget deficit next year.

I could yammer on some more, but maybe you get the idea.

Like I said, some people like to point out and focus on the *few* negative things, and lose sight of the big picture.

1) The delayed maintenence is the result of PAST year's problems, and mistakes. Sure, it's a mistake, but you overestimate the size of it.

2) "Crime Wave"? Please. Palo Alto has been one of the most crime free areas on the Peninsula. Populations are increasing, so we're going to see more crime. It's highly disingenuous to "blame" that on the police. It's weak.

3) I happen to agree with you on the hotels, but should we really blame government for that? how about certain citizen activists and a few neighborhood associations sharing the blame for that one, as they frustrated process by thier constant interference in process. Why do you think that the City Council has to have all those 'studies', other than to please every little interest group and wannabe politico that pops up out of othe woodwork when anyone suggests change around here. It's pathetic.

So here you and a few others are, people pwho have an opinion that is NOT well researched, using generalizations that would lead to defeat in any formal debate forum, whining about keeping the city from attempting a minucipal network that they're looking for a PRIVATE partner to finance.

The only idea I get from you is that you're against change, and you really don;t have any good reasons except for broad generalizations (like D. Lieberman) - that don't hold universally - for doing so.

It's ironic; you don't like the way things are, but you don't want to let those things change, either. "Catch 22", anyone?

Chris Saari..."Fiber advocates apparently believe they can achieve through the political process what they can't acheive in the market. That's the reason J.L. won't ever take David up on his challenge to produce business plan that someone risking his own money would buy into. It's much easier to agitate politically when you're pursuing an uneconomical venture, and unfortunately, much more likely to succeed."

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The market? What market are you talking about? You mean the telecommunications and cable markets that have been bought up by companies who have been paying off politicians for decades.

Are you even remotely aware of the fact that one a telecommunications infrastructure is built (wire, wireless, fiber) and universally deployed that it practically amounts to a license to print money?

Why do you think the telcos are fighting like hell (through payoffs, bribery, lies, and political manipulation) to keep municipalities out of the muni communications business - EVEN in places that are too remote for those companies to serve? Why would they do that?

And again, you simply do not understand the current RFP, or the potential play here. The city is looking for a PRIVATE partner to build the network, That may or may not succeed.

I think you need to do some research into this initiative - as do those that agree with you on this thread - before reflexively coming out "against" something you don't understand very well.

david...

You finally admit that the telcos are struggling, but you provide the wrong answer as to why. David, it's not the "constantly changing and very difficult marketing and technological environment" that you claim. No, not at all. It's their absolute refusal to innovate in the early years of net, and even presently.

What I don't understand is why you thinkn it would be such a rocket science challenge to run a muni network here. It's a no-brainer, really. the real challenge is execution. You're correct to have healthy doubts that can happen here, but they're overwrought.

This is a NEW sector for telecommunications. Of course you're going to have a hard time coming up with long term successes - their just hasn't been enough time to deploy, let alone operate muni networks...yet.

The "busines plan" of past was a loser. Someone else posted that as well. I agree. But, that was yesterday. And why would a VC be interested in this? This isn't the kind of thing VC's invest in, anyway. Salt Lake City pulled out to "wait and see". A shortlook at SLC politics will quickly reveal that it's pretty much a smess up there, anyway.


As for the Luddite comment. What I don't see are sound reasons why this WON'T work (coming from you - other than opinions about the incompetence of government - that's just plain silly, and pure overgeneralization). Why shuoldn't the city take a measured risk, if a private partner wants to accept a large part of the risk burden (the latter won't be an easy bill to fill)? I think you're being naive to think that the city thinks that this will just be "dropped in our lap". That's not at all what people are thinking.

You think it is OK for the city to take risks. On what basis? Where is the plan? The current

Where is the exit strategy if things don't work out? You, yourself say that it is a long shot. When it fails what will happen? Will it be shut down? Sold? Will it be subsidized by surcharges on electric bills or on real estate taxes as proposed for Ashland? Or grants from the general fund as in Provo?

If the network fails? Why do you assume it will fail. What is your underlying assumption - a valid assumption other than overgeneralization about the competence of government - that it will fail. Do you think for a moment that the city couldn't write in fail safe clauses?

You're putting the failure cart before the success horse. Did your company get anywhere thinking this way?

As for the roads here, show me a city on the Peninsula where there a lot better than here. I await your response on this point.

JL,

You may want to go to the City Auditor's website: www.city.palo-alto.ca.us/auditor/reports.html, and read the March 2006 report on Street Maintenance, the opening paragraph of which is:

"Palo Alto has a $28.7 million backlog in street repair, and less than half of residents rate street maintenance good or excellent. The annual street maintenance budget is inadequate to both address the backlog and stay current with recommended preventive maintenance. The backlog is extensive."

It goes on from there. The city's own auditor admits the problem. So let's stop with the "show me" challenges regarding street maintenance, crime prevention, and generally the management of the city.

As I said before, you need to take up your unremitting, seemingly monomaniacal hostility toward the telcos up elsewhere. Bashing telcos or VC's - however deserved your calumny toward them may be - simply isn't a rational argument in favor of a government run fiber system. If notwithstanding their lies, market manipulation, greed, and bribes (etc.), telcos can't make money off of fiber, what makes you think the city (which can't even supervise its Utility employees) can?! It's not necessary to "study" the RFP or anything else to conclude that a city that's not performing even the basic functions of municipal government well shouldn't be investing in "leading edge" technology - technology that the private sector won't touch.

Greedy VC's, telcos, and anyone risking their own money, invest in enterpises they think will be profitable. They'd surely be in the market for (how did you put it?) "licenses to print money". But they aren't even bribing the city council to get such a license. Maybe they're just not as visionary as you are. That being said, it's so nice of you to share your investment tips with the city. We could use one of those money printing licenses to deal with our impending budget crisis.

Meanwhile, back in the real world, it's governments, not private entities that invest for non-economic reasons. To be sure, sometimes there are good reasons a city should put money into something that won't turn a profit in strict economic terms. (Emergency services, for example.) You haven't advanced any argument that this applies to FTTH.

You may want the city to buy you a fiber system. I may want the city to buy me a new, state of the art swimming pool. That doesn't mean the other taxpayers in the city should be on the hook for either of us.

As David suggested, if you can come up with a plan where money can be made off of a fiber system, you won't have to keep begging the politicians to build you a network: greedy telcos and VC's will fall all over themselves to do it for you.

As for me, I'd much rather that the city use any extra money it finds to start paying down the $28 million street repair backlog the city auditor says we have.

Chris Saari...""Palo Alto has a $28.7 million backlog in street repair, and less than half of residents rate street maintenance good or excellent. The annual street maintenance budget is inadequate to both address the backlog and stay current with recommended preventive maintenance. The backlog is extensive.""
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Show me a single municipality that has worse street maintenance than Palo Alto, or streets that are in better condition than Palo Alto's... I'm waiting...you keep trying to bring together streets and fiber in a pretty weak way...

I'm also waiting for the logic behind an argument that admits the incompetence and greed of the telecommunications majors, and then says "it's OK for Palo Altans to keep dishing out revenue EVEN IF we have a chance to find a way to change that". It's a pretty weak argument - again, based on generalizations that simply don't hold water. It's a reflexive objection to small risk, given the nature of the planned private/public nature of network. (it seems from yours and Lieberman's criticisms that you have a fundamental misunderstanding of what that means - - also, your statements about VCs also illustrate ignorance of how VCs work - - fiber here has NEVER been a VC play...

As far as arguments for investment in telecommunications infrastructure - it's just that, *infrastructure*, *communications infrastructure*, that, just like power and water, will be even more important in the future. Deny that at your peril. You and some others here are complaining about the need for revenue. Do the math, and try doing it without applying general negatives to the proposed network.

Your statement requesting my 'coming up with a plan' is naive. Others can do that better than I. It isn't easy, and the returns can be easily shown. If you and others can't imagine a long term profit scenario from this, you have no business criticizing it.

correction in the last post:
Show me a single municipality that has *better* street maintenance than Palo Alto. how many are there?

This is getting way off topic but since J.L. insists:

The streets in Menlo Park are in much better shape than in Palo Alto. As an avid cyclist I could tell blindfolded when I have crossed the border. My crotch knows the difference. Note: I do not bike blindfolded and do not recommend it.

The older sections of Mountain View seem to be better maintained than comparable parts of Palo Alto. San Jose, a city with far less wealth and far greater problems seems to do a better job on a comparable neighborhood basis.

David

J.L.

It's kind of time for you to put up more than verbiage in support of your advocacy of fiber. Normally, when one proposes something controversial or new, it's up to those in support of the new enterprise or project to demonstrate why it will work and why it makes sense. So far your pose seems to be that it's up to us who're skeptical about fiber to prove to you that it won't work. That's kind of backwards. Let's see some numbers - even back of the envelope numbers - that give some realistic estimates of how much your system will cost to build and operate and how much revenue there might be to support such a system. Then we'll have something to discuss.

We'll probably be a lot fairer to you than you are to the city auditor, whose lengthy report you dismiss with a sneer and some obviously uninformed speculation about the state of street repair in other cities.

J.L.,

On second thought, I give up. In fact I agree with you. Let's build the fiber network and start printing that money you mention. Getting the city involved in complex business enterprises seems like a great idea. In fact I have a proposal of my own for Frank Benest and the other municipal entrepreneurs you describe down at City Hall:

It's not only those evil telcos who're taking advantage of us. How about those greedy, incompetent and monopolistic oil companies? To counter them, I propose that the city develop a plant to produce and distribute cheap synthetic gasoline to its residents.

We could use something we produce a lot of around here for raw material: hot air. And all the profits would stay in Palo Alto! Talk about a win-win for residents!

And if you're skeptical, just show me why it wouldn't work, would you? If you can't "imagine a long term profit scenario to this, you have no business criticizing it".

Chris Saari writes that J.L.'s argument that opponents of a Palo Alto municipal communications system must prove that it doesn't work is crazy.

Of course, Chris is right. Saying that something will work, providing no business plan, no numbers and then expecting somebody to disprove it is beyond the realm of rationality and belongs in cloud cuckoo land.

But then I asked myself, could I prove that it won't work. It turns out to be rather easy to do so based upon current prices for competing services, estimated operating costs and prevailing interest rates.

I will work it out and post it here.

David

I can't wait to see those numbers. :)

I'm also waiting to see what numbers come out of the RFP (if we find a private partner to build the network). Don't you think you should see those first? Think about it.

Like I said, creating numbers based on what the network would cost Palo Alto is really not quite - shall we say - 'correct'? (I'm being kind).

Why do this before we see what happens with the RFP? So, as usual, you're premising your arguments and even your numbers based on FIXED and PROJECTED costs that have no basis in reality UNTIL the RFP does or does not play out. Are these the actions of prople who perport to know how to ACCURATELY criticize this effort? I think not.

We see a lot of this in Palo Alto. Many bright citizens with just enough knowledge about something to be dangerous.

Last, I wasn't the one who brought up all the stuff about roads; it was a few people on this thread who want to confuse road repair (which isn't as bad as most people want to make it) with cooperating to build a fiber network. I've merely been pointing out the illogic of this approach, and how hasty generalization in debate that is based on outlandish examples result in poor results...."garbage in, garbage out" is another way to say it.

With that, I'll wait for the next poor analogy from those on this thread who seem to want to compare growing carrots and creating oil refineries in Palo Alto to partnering with a private entity to build a communications network. Funny.

J.L., you're the one who says about fiber, "...the returns can easily be shown." So, if it's so easy, show us some returns. If you can't, shouldn't we draw the conclusion that there are none to be shown, and that you've been mostly talking through your hat in these posts?

In case you haven't figured it out, the reason the city's problems with street maintenance are relevant is that street maintenance is the archetypical municipal infrastructure responsiblity. And if the city can't manage its basic infrastructure well, there's huge reason to doubt that it can manage something as exotic as a fiber network infrastructure. And we don't have to speculate about how bad our street maintenance is: to repeat, the city auditor did a detailed analysis and determined that it's $28.7 million bad. That's not how "people make it out to be". It's a fact with specific numbers attached to it - unlike your vaporous meanderings about a fiber network.

I should also point out that your continual unsupported assertion that other cities do even worse than Palo Alto in managing their street infrastructure in fact cuts against, rather than for, a municipally run fiber system. Your assertions tend to support those who say municipal governments, whether in Palo Alto or in other cities, aren't very good at managing their infrastructure. These other cities apparently have the good sense not to try to expand their mandates into areas in which they have absolutely no expertise when they're having difficulty with "normal" government functions. Maybe Palo Alto (and you) should take a cue from them.

How about taking a ride through most municipalities on the Penninsula. I ride a bike all the time, and they're mostly fine. I don't see wide potholes or huge cracks. Why do you insist on comparing roads to fiber? Most cities run their infrastructure pretty well. Sure, improvements can always be made, but you make it sound like cities around here are incompetent. They're not.

As far as other cities wanting municipal networks, most around here are cooperating to help build a wireless network, and there are dozens across the nation attempting to get a fiber network built.

As for making the case for fiber with a business plan, I suggest that you wait for the RFP process to unfold, and then wait for the projectinos that come out of that, and how the network would operate, before reflexively jumping to conclusions.

Here's a bet. If we turned over street maintenence and policing to the private sector, I wonder how long it would be before you'd be screaming about this or that. I think the rhetoric about how poor municipal government is around here needs to chill out a bit.

btw, you'd better hold off on those numbers, and please don't accuse me for bringing up the street repair analogy again, because you introduced it and seem fixated on using it inappropriately, in this case.

I'll wait for a more substantive response before continuing on this thread. My point is made.

No doubt about that, J.L., your point is indeed made.

Fiber to the home is a great concept, one that is undeniably superior to Google WiFi. However, the city's years-long inability to get substantive action on this issue is less great.

In the meantime, at least I can enjoy free Wi-Fi access in the Mountain View Library.