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Palo Alto Online

Publication Date: Friday, October 04, 2002

Survey says: Palo Altans want fiber Survey says: Palo Altans want fiber (October 04, 2002)

Fear and excitement for new potential service

by Bill D'Agostino

Many Palo Altans are clamoring for the day when the city's utility department will bring ultra-high-speed Internet access -- as well as video and phone services -- into their homes using a city-installed system of glass fiber lines.

That's according to a survey of 960 residents the city released last week. Seventy-five percent of those customers randomly polled said they would be "very interested" in subscribing to city-offered high-speed Internet. Only 41 percent said they were happy with their current Internet service provider.

"I've been salivating over the fiber access since it was first proposed about three years ago," one excited resident wrote. "Let's move on this!"

The survey was part of a 300-plus page study of the pros and cons of having the city enter the fiber-to-the-home business. What the questionnaire did not ask, however, was how much residents would be willing to pay for such services.

On Wednesday night, the city's Utilities Advisory Commission debated taking the next crucial step in the process: authorizing a consultant to study the financial details, including how much it could cost customers per month and who the business partners would be.

Despite some residents' strong desire to have the technology in their living rooms -- many of the 50 residents who came to the four-hour late-night Wednesday meeting sported homemade "I want fiber to my house" stickers -- the city is taking a measured approach. One commissioner, Richard Carlson, described the prospect of bringing fiber into residents' homes as "really, really exciting" but also "really, really scary."

The commission did not vote on the new $100,000 study, but it could at its next regular meeting in November. Commissioners seemed to be leaning toward approving the study, but wanted to more time to review the information gathered thus far.

Fear about the project is felt by many in the city because of the hefty price tag for the fiber venture to be extended to households: $50 million is the city consultant's best guess. That consultant does believe the investment will be paid off in a little more than 10 years and then start to make a profit, but Pacific Bell has challenged those numbers, saying the city could spend more than $120 million.

Snickers could be heard from the enthusiastic pro-fiber audience on Wednesday night when a Pac Bell representative claimed her company's contrary numbers were "objective." Many pointed out that the telecommunications company has an obvious financial incentive to actively discourage the city from becoming its competitor.

Still, Pacific Bell's lobbying has appeared to bring doubt into the minds of two council members they privately met with last month, Nancy Lytle and Dena Mossar. The council will ultimately have the final say on the new business.

One thing fiber supporters have going for them is the level of dissatisfaction with the town's primary cable provider, AT&T.

"Since AT&T Broadband took over Cable Co-Op, our cable prices have gone up while our selection of good channels and transmission quality has gone down," one resident pointed out in the survey. "Also, AT&T Broadband's customer service is abysmal. It would be great for us to have an alternative provider and then to have some competition."

The excitement is felt beyond residents. Showing his romantic side, Utilities Director John Ulrich compared this moment in Palo Alto's history to 100 years ago when the city's founding fathers had to decide whether or not to provide electricity to their residents. There are considerable risks, Ulrich pointed out, but the technology could bring benefits beyond just high-speed Internet and cable access. Property values could increase and power meters could be read using the technology.

Not every resident thinks the city should be heading this way, regardless of the cost. Michael Silverton worries about the city becoming both a regulator and a provider in the telecommunications marketplace. He believes critical checks and balances would be lost.

But the majority of residents who answered the survey or came to the meeting are more like Gerald Fisher, one of 70 participants in a recently completed year-long trial of fiber to the home.

Fisher wanted a fast Web connection for his wife, who can no longer drive due to an eye disease. The fiber connection greatly increased the quality of her life and allowed her to get instant information on subjects that interested her, Fisher said. "Once you've done it, you can't go back. I can't imagine a life without access to high-speed Internet."

Many of the trial participants are still paying $85 a month to have fiber's pathways open in their homes. The eventual price tag would likely be quite lower if the new service was installed citywide.

Still, questions remain in the minds of officials, and some residents.

"Currently there are many competitors in the Internet service business. This is very different than the competitive situation for gas and electric. And almost all of those providers are losing money," one survey respondent pointed out. "Why does the city need to take the risk? What is the problem that the city is looking to solve, that cannot be solved by the private enterprise?"

E-mail Bill D'Agostino at [email protected]


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