HomeMy WebLinkAboutStaff Report 324-07City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:
SUBJECT:
JULY 30, 2007 CMR: 324:07
STATUS OF AT&T’S PROJECT LIGHTSPEED INITIATIVE IN
PALO ALTO
This is an informational report and no Council action is required.
BACKGROUND
In September 2006, the Digital Infrastructure and Video Competition Act of 2006 (DIVCA) was
signed into law. This new law changed the franchising and regulatory structure for the provision of
cable television services in California. Under DIVCA, video service franchises are granted
exclusively by the California Public Utilities Commission (Commission) rather than by local
franchising entities. On March 30, 2007, the Commission issued a California Video Franchise to
AT&T. DIVCA requires AT&T to notify the City prior to offering video service. On March 30,
2007, AT&T notified Palo Alto that it plans to offer television service to Palo Alto residents no
sooner than 10 days from the date of its notification.
DISCUSSION
AT&T, as part of its Project Lightspeed Initiative, plans to make a significant investment in its
California network to provide customers with new Internet protocol or IP-based services. AT&T’s
Project Lightspeed Initiative involves extending its existing fiber optic network deeper into
neighborhoods, closer to customer homes. This will involve placing new above-ground utility
cabinets in the public rights-of-way and connecting them to existing Serving Area Interface (SAI)
cabinets using underground conduit. AT&T’s new cabinets will provide fiber optic capability for
neighborhoods of approximately 200 to 500 homes and will connect to its existing copper
distribution network. SAIs serve as the connection point for copper distribution lines into customer
homes. In some cases, the existing SAI will need to be upgraded.
When AT&T’s Project Lightspeed Initiative is complete, it will be positioned to offer Palo Alto
residents a broad new suite of integrated, advanced services. AT&T plans to offer "U-verse TV",
voice and high-speed Internet access services. In addition to making faster high speed Internet
service available, Lightspeed will provide customers with the ability to manipulate and share data
and messages over various IP-based devices. For example, customers will have the option of having
their voicemail, email and faxes delivered to one electronic mailbox and will be able to access and
review those messages from an IP-enabled device in either a voice or text format. AT&T anticipates
rolling out service to Palo Alto residents in early 2008.
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AT&T Utili~ Cabinets
New above-ground utility cabinetry is a necessary component of AT&T’s network upgrade. These
cabinets are approximately four feet tall by four feet wide by t-wo feet deep. AT&T plans to install
50 to 60 of these cabinets in Palo Alto.
AT&T has told the City that these cabinets are best installed above wound. This is because AT&T’s
Lightspeed technology consists of high-speed electronic circuitry needed to light the fiber-optics and
convert the fiber signal to a bandwidth that can be transmitted over copper to residences. If this
electronic circuitry were to be placed underground, it would need to be in a controlled environment
free from moisture and excessive temperatures. It would also have to be placed in a vault large
enough for access by technicians for routine maintenance and repair. The vault would need lighting,
ventilation, cooling, waterproofing, backup power, and emergency water pumping. Because of these
factors, AT&T indicates that it is not feasible to place cabinets underground. In addition, there is not
enough room in many residential public rights-of-way for large underground vaults.
In accordance with the Palo Alto Municipal Code, AT&T’s new utility cabinets are subject to
architectural and street work permit review and approval. In processing AT&T’s architectural
review applications, staff has required review by a landscape architectural consultant and the Public
Works Managing Arborist. The purpose of this review is to ensure that each proposed cabinet is
placed in a location with the least impact on the street trees and visual quality of the neighborhood.
This review may result in changes to the placement of cabinets and the use of organic vegetation to
visually screen cabinets.
To date, AT&T has submitted three batches of architectural review applications for a total of 37
cabinets (9 in the first batch, 7 in the second and 21 in the third). Of these, 35 have received staff
level architectural review approval. As part of the conditions of approval, AT&T must provide
notice to the neighbors immediately adjacent and directly across the street from the proposed cabinet
location. More recently, staff has begun to provide courtesy notices to a wider distribution of
neighbors regarding the proposed cabinet location. As part of the noticing process, residents have
opposed two cabinet locations. As a result, AT&T withdrew those two cabinet locations.
Only one AT&T cabinet has been installed to date. This cabinet is located in the Downtown Library
frontage on Bryant Street. Six cabinets have received street work permit approval and will be
installed in the next four to six months; the remaining cabinets are awaiting street work permit
approval.
Carriaae of Public. Educational and Government (PEG) Channels
DIVCA requires AT&T to carry Palo Alto’s seven PEG channels on its system. DIVCA also has
certain requirements related to channel placement and signal quality. In May 2007, the City began to
make arrangements with AT&T for the activation of these channels. During this process, the City
found that AT&T’s PEG plan may be in violation of DIVCA, as follows:
PEG channel number and placement concerns: DIVCA requires that PEG channels not be
separated numerically from other basic channels and that they be assigned the same channel
numbers as Comcast (channel numbers 26, 27, 28, 29, 30, 75 and 76.) AT&T’s plan does not
CMR: 324:07 Page 2 of 4
satisfy this requirement. Under the AT&T plan, subscribers will access PEG cham~els from
one channel location (channel number 99). A subscriber then must pass through several
screens before getting to a list of PEG channels, making it difficult for subscribers to find
these channels on the AT&T system. Since the City has spent a significant amount of time
and money to brand and market its current PEG channel numbers, staff is concerned that
AT&T’s plan will not fulfill its DIVCA obligations in this area.
PEG signal quality concerns: DIVCA requires that PEG channels be of similar picture and
sound quality as the commercial channels carried by AT&T. AT&T has told the City that its
PEG plan results in inferior PEG signal quality in comparison with other commercial video
channels on its system. In addition, AT&T has stated that it only supports a picture
resolution of 320x240, which represents less than one-fourth of the original picture
resolution. The City is concerned that AT&T’s PEG plan will result in a PEG signal that is
noticeably inferior to other video channels on the AT&T system.
At a meeting with AT&T on May 29, 2007, AT&T told the City that its compliance with these
DIVCA requirements is not technically feasible. On June 13, 2007, the City documented its
concerns and asked AT&T to provide a detailed explanation of why its compliance is not technically
feasible (Attachment A). To date, AT&T has not responded to these alleged violations or taken any
steps to address the City’s concerns. IfAT&T is not willing to correct these problems, the City may
be forced to consider legal action.
RESOURCE IMPACT
In 2006, Palo Alto received approximately $581,000 in franchise fees and $316,000 in PEG fees
from Comcast Corporation. Staff anticipates that a portion of these fees will be paid by AT&T in the
future as it gains market share from the incumbent cable provider.
POLICY IMPLICATIONS
The AT&T franchise will bring cable service competition to Palo Alto and give community members
a new choice in cable providers.
ENVIRONMENTAL REVIEW
The Director of Planning and Community Environment has determined that the three batches of
AT&T Project Lightspeed utility cabinets submitted to date are categorically exempt from California
Environmental Quality Act (CEQA) pursuant to Section 15303, Class 3. This Section exempts
certain projects from CEQA that consist of installation of small new equipment and facilities in
small structures.
PREPARED BY:
~F&ISSA CAYAL£O
Cable Coordinator
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DEPARTMENT HEAD APPROVAL:
CITY MANAGER APPROVAL:
~ATS7 ~
Director~ Admystrative Services
~MILY ~SONN--.....~
Assistant City Manager
ATTACHMENTS:
Attachrnent A: June 13, 2007 Letter to AT&T
CMR: 324:07 Page 4 of 4
ATTACHMENT A City of Palo Alto
Administrative Services Department
rune 13,2007
DMsions
Administration
650.329.2692
650,323.1741 fax
Budget
650.329.2260
650.323.1741 fax
InformationTechnology
650.329.2182
650.617.3109 fax
Real Estate
650.329.2264
650.323.1741 fax
Finance
650.329.9,2264
650.323.1741 fax
Accounting
650.329.2264
650,323.1741 fax
Purchasing
650,3292.271
650,329.2468 fax
Investments
650.329.2362
650.323.8356 fax
Revenue Collections
650,320.2317
650.617.3122 fax
Parking Citations
650.329.2252
Bettye J.Saxon, Ed.D.
Area Manager
AT&T External Affairs
401 W. Franklin
Monterey, CA 93940
Subject: Potential Violations of DIVCA PEG Requirements
Dear Bettye:
The purpose of this letter is to document the concerns expressed at the PEG
implementation meeting held on Tuesday, May 29, 2007. Based on what AT&T
described during the meeting, the City of Palo Alto (City), representing the JPA,
believes that AT&T’s PEG plan violates the California Digital Infrastructure and
Video Competition Act of 2006 (DId/CA). Specifically, the City is concerned
about AT&T’s compliance with DIVCA’s PEG channel placement, signal quality
and functionality, and intercormection requirements, as fol!ows:
1) PEG channel number and placement issues
Utility Code Section 5870(b) requires that PEG channels not be separated
numerically from other basic charmels and that they be assigned the same
chmmel numbers as the incumbent (channel numbers 26, 27, 28, 29, 30, 75 and
76.) AT&T’s "channel 99" plan does not satisfy this requirement. Also, under
this plan, AT&T makes it difficult for subscribers to fred PEG channels on its
system. A subscriber must pass through several screens before getting to a list
of the JPA’s seven PEG channels. In addition, the JPA’s PEG channel
programming guide punished in local papers on a daily basis wil! not match the
channel numbers on the AT&T system. The City has spem a significant amount
of time and money to brand and market its current PEG channel numbers and is
deeply concerned about AT&T’s plan not to fulfill its Section 5870(b)
obligations.
2) PEG signal quality and interconnection issues
Utility Code Section 5870(g)(3) requires that PEG access capacity "shall be of
similar quality and functionality to that offered by commercial channels on the
lowest cost tier of service unless the signal is provided to the holder at a lower
signal quality or with less functionality." At the May 29th meeting, AT&T
indicated that its PEG plan results in inferior PEG signal quality in comparison
wi, h other commercial video channels on its system. In addition, AT&T has
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