HomeMy WebLinkAbout1999-10-18 City Council (13)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT:UTILITIES
DATE:OCTOBER 18, 1999 CMR:397:99
SUBJECT:FIBER-TO-THE-HOME TRIAL STATUS UPDATE
This is an informational report and no Council action is required.
BACKGROUND
On April 5, 1999 the City Council authorized staff to proceed with a medium FTTH trial
area, delivering Internet access services to approximately 69 customers in the Community
Center Neighborhood. The proposed service would have data rates of 10 or 100 Mbps and
be delivered over an Ethemet local area network (LAN). Conslxucfion Costs were estimated
at $380,000 (with contingency funding) and were to be fi~ly recovered in 5 years through
a contract arrangement.
On May 10, 1999, Council adopted a Budget Amendment Ordinance (CMR:228-99) for
$380,000 and created the Fiber to the Home Capital Improvement Program (CIP #9916)
Subsequent to these dates, staffremrned to the City Council on August 2, 1999 with a CMR
requesting Cotmcil direction regarding pricing, payback period and commitment period for
the FTTH Trial. At this meeting the Council approved the options below:
Service Speed
# of Customers
Sign-up Fee
Service Connection Fee
Monthly Service Fee
Commitment Period
lOMpbs
85
$500
$7OO
$45
2.5 Years
lOOMpbs
15
$500
$1900
$100
2.5 Years
Since this approval, staff prepared and mailed out a package to the customers in the
designated trial area on September 1, 1999. Included in the package was a brief description
of the project, conditions for participating in the trial, and an application form. The project
CMR:397:99 Page 1 of 3
deadline for signing up for service was October 1, 1999. In addition to the staff mailing,
members of the community also canvassed the area extensively promoting the Trial. Prior
to the conclusion of the sign-up period, staff sent out one final letter notifying the residents
that that the sign-up period was nearing the end and requested that interested parties send in
their applications on or before the cut-off date of October 1, 1999.
DISCUSSION
Project Status: 10/13/1999
To date, 65 customers have submitted applications for the trial. Of the 65 submitting
applications, 13 were submitted by residents outside the trial area boundaries on or adjacent
to Fulton Street. These customers will be considered for inclusion in the trial at the time of
final design. This leaves52 applications from within the trial area boundaries. The following
is a breakdown of the service applications by service type:
Service Type # Inside Trial # Outside Trial
Boundaries Boundaries
100 Mbps 6 7
10 Mbps 46 6
Total 52 13
Based on the Council approved parameters on August 2, 1999 the FTTH trial needed to have
approximately 85-10 Mbps and 15-100 Mpbs customers to recover the cost of the trial over
a six year period.
During the one-month sign-up period many potential customers declined to sign-up for the
trial because the Intemet Service Provider (ISP) charges were estimated rather than actual
charges. In order to appeal to as many customers as possible, staff, with advice from the
community, has chosen to extend the deadline to November 30,1999 to allow solicitation
of firm ISP charges through.the RFP process. All eligible participants in the trial area will
be informed by letter that they will be provided with the actual ISP charges prior to the
closing of the extended sign-up period. This extension will allow the City to stay within the
general schedule presented to Council, May 10, 1999.
RESOURCE IMPACT
Funds for this project were approved by Council on April 5, 1999.
POLICY IMPLICATIONS
This report does not represent any change to existing City policies.
CMR:397:99 Page 2 of 3
PREPARED BY: Larry Starr and Tomm Marshall
DEPARTMENT HEAD:
.’H
Director of Utilities
CITY MANAGER APPROVAL:
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