HomeMy WebLinkAboutStaff Report 7616
City of Palo Alto (ID # 7616)
City Council Staff Report
Report Type: Action Items Meeting Date: 8/21/2017
City of Palo Alto Page 1
Summary Title: Work Plan for Fiber-to-the-Premises and Wireless Network
Title: Staff, Utilities Advisory Commission, and Policy and Services
Committee Recommendation that Council Direct Staff to: (1) Pursue a
Municipal Fiber-to-the-Node Network (FTTN) for Fiber and Broadband
Expansion; and (2) Expand Wi-Fi to Unserved City Facilities and Discontinue
Consideration of City-Provided Wi-Fi in Commercial Areas
From: City Manager
Lead Department: IT Department
Recommendation
Staff, Utilities Advisory Commission and City Council Policy and Services Committee Recommend that
Council direct staff to:
1. Develop a business case for a municipal-provided Fiber-to-the-Node (FTTN) network for fiber
and broadband expansion (“Option 2”); engage an engineering firm to design a FTTN network
including an expansion option to build a citywide Fiber-to-the-Premises (FTTP) network; and
work to identify potential partners and/or service providers, including identification of last mile
funding models; and
2. Expand Wi-Fi to unserved City facilities and discontinue consideration of City-provided Wi-Fi in
commercial areas.
On May 23, 2017, the Policy and Services Committee specifically moved to recommend to the City
Council:
A. Approve the recommendation for the Municipal Fiber-to-the-Node network with
neighborhood/private last mile provision; and
B. Expand Wi-Fi to unserved City facilities while minimizing the investment in facilities that
are being redeveloped; and
C. Discontinue consideration of City-provided Wi-Fi in commercial areas; and
D. Direct staff on the following:
i. Define more clearly the goals of FTTN; and
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ii. Reach out to other communities on the approaches post Google and share
strategy and funding models; and
iii. Include ROI estimates; and
iv. Present a rollout strategy with an estimate of how many homes will be passed;
and
v. Draft a communication strategy
The Policy and Services Committee Motion passed 3-0 (Kniss absent) – Exhibit A (Policy and Services
Final Action Minutes May 23, 2017).
Background
Staff reviewed fiber expansion options and wireless recommendations with the Utilities Advisory
Commission (“UAC”) on April 5, 2017 and with the City Council Policy and Services Committee on May
23, 2017.
Fiber expansion options:
OPTION 1. Municipally-Owned Fiber-to-the-Premises (FTTP). Explore potential funding models,
such as general obligation bonds requiring a ballot measure with two-thirds voter
approval, or revenue bonds secured by ongoing dark fiber license revenues and fiber
reserves, to build and maintain a ubiquitous, municipally-owned Fiber-to-the-Premises
network; the estimated build costs for a FTTP network is between $50 million to $78
million; or
OPTION 2. Municipally-Owned Fiber-to-the-Node (FTTN) Network with Neighborhood/Private
Last Mile Provision. Develop a business case for a Fiber-to-the-Node network,1 which
may be a platform for Public Safety and Utilities wireless communication in the field,
Smart Grid and Smart City applications, and new dark fiber licensing opportunities;
engage an engineering consultant to design a citywide FTTP network; identify potential
partners and/or service providers, and identify last mile funding models; the estimated
build cost to build a FTTN network is between $12 million to $15 million; or
OPTION 3. Pause Municipal FTTP Development Efforts; Increase Transparency and Predictability
for Third Party Providers. Direct staff to identify additional resources and opportunities
to assist Internet service providers committed to deploying gigabit-speed broadband
service; in addition, pause internal efforts to pursue municipal FTTP as the
telecommunications industry and associated technologies rapidly evolve.
1 FTTN is one of several options for providing fiber cable telecommunications services to multiple neighborhood access points.
FTTN helps to provide broadband connections and other data services through a common network box, which is often called a
node. The node provides a neighborhood access point to build the so-called “last mile” to deliver services to the customer
premise. The last mile is typically the most expensive portion to build in a FTTP network. Fiber-to-the-Node is also called
“Fiber-to-the-Neighborhood.”
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Wireless Recommendations:
Expand the City’s OverAir Wi-Fi Hotspots to unserved City facilities and request that Council
approve an estimated $165,100 for one-time equipment and installation costs funded by the
Fiber-Optic Fund and allocation of monthly recurring charges of approximately $6,239 to the
respective departments; and
Discontinue consideration of building a City-provided public Wi-Fi network in high traffic
commercial areas.
Fiber Utility
Given the increasingly competitive telecommunications landscape, including new hybrid fiber/wireless
technologies and emerging services and applications requiring access to networks capable of gigabit-
speeds and beyond, staff recommended to the UAC and the Policy and Services Committee to pursue
one of three identified approaches to fiber-optic expansion. Staff is requesting feedback, direction and
approval by Council to direct staff work concerning the fiber utility for the next twenty-four (24) months
to best facilitate citywide access to gigabit-speed broadband services. On May 23, 2017, staff
recommended the Policy and Services Committee select one of the three options proposed above for
approval by Council.
UAC Recommendations
Fiber Options: At its April 5, 2017 meeting, the UAC unanimously recommended Option #2 (Municipally-
Owned FTTN, with Neighborhood/Private Last Mile Provision) with the conditions that a business case
be developed establishing the benefits to the City and quantify the return on investment (“ROI”). Staff
should also identify potential last mile service provider models. Staff agreed with the UAC’s conditions
and included them in the Option 2 proposal presented to the Policy and Services Committee on May 23,
2017.
Wireless Deployment: With respect to Wi-Fi, staff recommended expanding the City’s existing Wi-Fi
service to unserved City facilities such as common areas at the Cubberley Community Center, Palo Alto
Municipal Golf Course, Lucie Stern Community Center and Lytton Plaza. However, staff does not
recommend pursuing deployment of City-provided public Wi-Fi connectivity in high traffic commercial
areas such as University Avenue and California Avenue. The UAC unanimously approved Wi-Fi
expansion to unserved City facilities with the exception of the Golf Course Pro Shop and Café, and
discontinuing consideration of building a City-provided public Wi-Fi network in high traffic commercial
areas. Staff agrees with UAC’s wireless recommendations, but suggests including the Golf Course Pro
Shop and Café consistent with services provided in other City facilities. This expansion of Wi-Fi at
unserved City locations will minimize investment in facilities that are being redeveloped.
In general, the UAC indicated that Option 1 is too challenging since voter approval will most likely be
required; Option 2 may be feasible, but a viable business case must be developed first in terms of
confirming what the FTTN network would be used for and to establish the public benefits, ROI and
potential last mile service provider models. Regarding Option 3, the UAC stated that the support of
third party network upgrades should be considered a standard activity by the City.
There was significant discussion by the UAC Commissioners regarding Option 2 (FTTN Network with
Neighborhood/Private Last Mile Provision). There is a concern that FTTN has potential, but is
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speculative; therefore, the UAC requested staff to analyze the benefits and quantify the potential ROI on
investment if the City spent $12 million to $15 million to build the network. Additionally, the City should
consider deploying Fiber-to-the-Premises in one neighborhood as a pilot project, thereby limiting the
City’s financial exposure and gauging the level of community interest. Staff should also research
potential last mile service provider models. These models need to be identified and should be
technology independent, otherwise, the City will not know how to design and build the network. The
City needs to consider emerging technologies and next-generation Internet speeds provided by the
existing Internet Service Providers (“ISPs”). Service upgrades by the ISPs may affect overall community
demand for a municipally-owned network. Moreover, staff should identify applications and services
that require gigabit-speed broadband such as virtual reality, telemedicine, telepresence or
telecommunication, and develop a strategic plan outlining phased deployments of these applications.
FTTN has the potential to be a foundational technology that may allow the City to support smart grid
applications such as communicating with smart meters, utility supply and demand applications, and gas
and water leakage detection. These applications are available and currently being deployed by other
municipal and investor-owned utilities.
Policy and Services Committee Recommendations
On May 23, 2017, the Policy and Services Committee reviewed the three above-noted options and the
two wireless recommendations. In general, the Committee members agreed with the UAC’s
recommendation to pursue Option 2 and the wireless recommendations, with the following general
comments:
FTTN benefits and the costs should be made clear to residents with measurable goals and an
understanding of what kind of private partners would be interested in the FTTN network;
Provide an ROI calculation to understand the revenue potential;
A FTTP pilot has already been done; the City should not consider conducting another pilot;
This evaluation period is a good opportunity to share ideas and funding models with other cities;
staff should reach out to other communities on approaches “post Google Fiber” (e.g. San
Francisco);
Evaluate implementing “dig once” and “one touch make ready” policies, in addition to
determining the feasibility of using the microtrenching construction method to reduce fiber
build costs;
A fiber rollout strategy should be developed with an estimate of how many homes will be
passed by the network;
Develop a communications strategy to inform residents; and
Establish if there are Utilities funds available for the project for smart grid applications.
Staff will address these items as part of the business case. Staff would need to issue an RFP for
professional services to develop the business case, engineering design, implementation plan and
communication strategy. Staff has researched and contacted other California municipalities in regards
to their fiber, wireless and broadband initiatives (Exhibit B - Overview of Municipal Broadband in
California).
Discussion
The dark fiber optic backbone network (“fiber network”) was originally conceived by the City in the mid-
1990s and is maintained and operated by City of Palo Alto Utilities (“CPAU”). Exhibit C – Fiber History
and Initiatives provides a comprehensive history of various efforts to expand the network from 1996 to
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the present. The most recent activities under the Council’s “Technology and the Connected City”
initiative involved the preparation of a Fiber-to-the-Premises Master Plan (“FTTP Master Plan”) and a
Wireless Network Plan, in addition to working with Google Fiber for more than two years on a potential
citywide FTTP network build. The FTTP Master Plan and Wireless Network Plan were prepared by the
City’s consultant, CTC Technology & Energy (“CTC”). Since 2014, staff has also worked closely with a
Citizen Advisory Committee (“CAC”) on various fiber and wireless issues. In 2016, the CAC was
expanded from six to eleven members. The committee meets approximately every two months and has
provided valuable feedback and guidance to staff.
Since the FTTP Master Plan and Wireless Network Plan were completed and reviewed by the Council in
September 2015, staff has worked to complete the various tasks in the Council’s September 28, 2015
(staff report #6104) and November 30, 2015 (staff report #6301) motions. The status of the Council
motion items can be found in Exhibit D – Council Motion Status.
In the past year, the competitive landscape in the telecommunications industry has changed
dramatically throughout the country, including Palo Alto. The most significant change affecting Palo Alto
occurred in July 2016, when Google Fiber advised staff that it was “pausing” its plans to build a fiber-
optic network in Silicon Valley and other cities where construction had not yet started. Other significant
changes include upgrades to existing wired and wireless networks by AT&T Fiber, Comcast, AT&T
Mobility and Verizon Wireless.
At the November 2, 2016 UAC meeting, staff reviewed several elements of the above-noted
recommendations and provided other information related to network and service improvements by
AT&T Fiber, Comcast and the wireless carriers, in addition to the status of Google Fiber. Information
was also provided about the responses to the Request for Information (“RFI”) for a partnership for
deployment of a citywide FTTP network issued in May 2016. Staff reported that none of the responses
to the RFI completely aligned with the City’s objective for a public-private partnership. Commissioners
provided feedback and suggestions which includes incentivizing the incumbents to accelerate their
network upgrades while providing ubiquitous coverage and identifying the public benefits of a
municipally-owned fiber network. (Exhibit E – Excerpted Final UAC Minutes of November 2, 2016).
At the November 2016 UAC meeting, City Manager James Keene observed that an incremental Fiber-to-
the-Node (“FTTN”) approach has potential because of the need to reinvest in the fiber network and the
cost is manageable. The fiber ring could be expanded in a way to stay competitive. For example, the
fiber network was extended to the school district and there may be other opportunistic expansions.
Also, since staff does not exactly know now where the technology is headed for fiber and wireless
deployments, FTTN may be back-filler for fiber backhaul opportunities to support citywide coverage and
possibly facilitate future 5G services.2
On December 12, 2016, staff provided Council with an informational update regarding fiber and wireless
activities (Staff report #6221): http://www.cityofpaloalto.org/civicax/filebank/documents/55016
In light of the rapidly evolving telecommunications marketplace, staff has attempted to pursue and keep
all options open. Nonetheless, this staff report is designed to allow the Council to select one of the
three options to direct staff to focus on a single effort over the next 24 months. The following provides
2 5th generation mobile networks or 5th generation wireless systems, abbreviated 5G, are the proposed next
telecommunications standards beyond the current 4G/IMT-Advanced standards.
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additional information about the three options, in addition to recommendations for wireless
deployment.
Option 1: Municipally-Owned Fiber-to-the-Premises (FTTP).
The 2015 FTTP Master Plan indicated that the City will require an estimated overall capital investment of
approximately $78 million one-time cost to build and approximately $8 million annually to operate and
maintain the network. The estimated network construction and operating costs are subject to change
based on real-world variables.
Certain challenges inherent to FTTP deployment are especially pronounced in the Palo Alto. The City’s
primary challenge in its pursuit of an FTTP buildout is that its costs will be high compared to other
metropolitan areas for labor and materials. The cost of outside plant (“OSP”)3 and drop cables4 will be
greater than in other metropolitan areas because Bay Area costs tend to be higher. For example, many
of the easements where the City must build are privately owned, which may require every drop cable to
be placed in conduit. Additionally, many back yard utility poles in private easements will need to be
replaced, because they’re too short for new fiber-optic attachments.
The high construction and labor costs result in a higher necessary take rate for the City’s FTTP enterprise
to obtain and maintain positive cash flow. Based on the financial projections (and the underlying
assumptions), a 72 percent take rate is required to financially sustain the network. The FTTP Master
Plan also stated that if approximately $20 million from the Fiber Optic Fund was used to finance the
network, then the take rate required would be about 57 percent. These take rates are not only much
higher than overbuilders5 have been able to achieve in other communities, but also higher than the
required take rates for other potential municipal fiber enterprises. As a comparison, other recent
analyses performed by CTC for municipalities have shown a required take rate in the mid-40 percent
range in order to maintain positive cash flow.
In the FTTP Master Plan, CTC provided an analysis of potential funding models. A key consideration for
network implementation is how to fund both capital construction costs and ongoing operational
expenses. The importance of factoring in the ongoing cost of operations cannot be overstated; these
expenses fluctuate based on the success of the enterprise, and can vary considerably each year, and
even month to month. The capital and operating costs associated with a full-scale communitywide build-
out will be significant, and the City will have to seek a combination of outside funding, internal subsidies,
and/or other financing alternatives such as user-financing, creating Assessment Districts or finding a
private sector partner to provide additional funding to support construction and the FTTP network’s
startup costs. Each of these potential funding mechanisms would require a more detailed legal and
practical feasibility analysis, should the Council elect to pursue this option. It’s important to note,
however, that some private entities involved in financing and building municipal broadband networks
may require an ownership stake to secure loans from the private lending markets.
Examples of potential financing models are bond issuances, City subsidies and loans, user-financing and
Assessment Districts. Municipalities typically rely on General Obligation Bond and Revenue Bond
3 OSP is physical assets like overhead and underground fiber, accompanying ducts and splice cases, and other network
components
4 Drop cables connect the fiber optic backbone to the customer premises.
5 An “overbuilder” is a private entity or a government entity that builds a new network in the public rights-of-way that will
operate and compete with existing networks already built by the cable TV and telecom incumbents.
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issuances for capital projects; therefore, the City may be able to issue a bond (i.e., borrow funds) to
enable construction of an FTTP network.
General Obligation (“GO”) bonds are directly tied to the City’s credit rating and ability to tax its citizens.
This type of bond is not related to any direct revenues from specific projects, but is connected instead to
citywide taxes and revenues that can be used to repay this debt. GO bonds can be politically challenging,
because it requires approval by two-thirds of the voters. Because GO bonds can only be used for
physical improvements and not for services, they are generally issued for projects such as libraries,
museums, community centers, schools, public parks, roadways and other infrastructure improvements.
Revenue bonds are directly tied to a specific revenue source to secure the bond and guarantee
repayment of the debt. As of June 30, 2017, the Fiber Optic Fund has accumulated approximately $27
million dollars in reserves. The Fiber Optic Fund currently generates a positive net income between $2.5
million to $3.0 million annually depending on the level of capital improvement activity.
In addition to funding the construction cost, it is also possible that ongoing internal subsidies from other
City funds will be necessary to support regular operations if customer take rates are not sufficient.
Examples of these operational costs include network equipment license fees, ongoing hardware and
software replenishments, labor-intensive customer support, customer acquisition costs, and network
maintenance.
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Option 2: Municipally-Owned Fiber-to-the-Node (FTTN) Network with Neighborhood/Private Last Mile
Provision.
To evaluate a potential incremental step for citywide FTTP, staff worked with CTC to develop a
preliminary, high-level analysis of the cost to build a FTTN network.6 A FTTN network would require
construction of approximately 62 miles of fiber plant, compared to 230 miles for a citywide FTTP
network deployment. The FTTN network would provide an access point to connect neighborhood-area
backhaul communications links.7 Building a FTTN network would be an incremental approach for fiber
expansion and may lower the barriers for potential FTTP providers to build the “last mile” from
neighborhood access nodes to individual premises. FTTN would provide the City with a phased and
economically viable deployment approach to push fiber closer to residential neighborhoods and create a
potential “jumping off point” to bring fiber to individual premises (i.e. building the “last mile”). Ancillary
benefits would also occur by expanding the functionality and the choices of technology that can be
implemented for Utilities and Public Safety and to support Smart City, Smart Grid and wireless
applications dependent on fiber-optic communication links. Additional opportunities to license dark
fiber to third parties for commercial purposes may also develop.
If fiber was expanded to residential neighborhoods, it would be available to the wireless carriers who
need to build small cell sites in not just commercial areas, but also in residential areas to improve
coverage and capacity for their networks. This is known as “network densification.” These small cell
sites, located primarily on utility and streetlight poles in the public rights-of-way, will need to be
connected to fiber to “backhaul” traffic to a central point in a wireless carrier’s network. The carriers can
build this fiber themselves, but if City fiber is available it could be licensed to the carriers at a more
expedient and cost-effective manner. According to RCR Wireless News, fiber is expected to be a
significant focus on planned 5G network deployments. Similar to 3G and 4G before it, 5G is the “next
generation” of wireless connectivity built specifically to keep up with the proliferation of devices that
need either a fixed or mobile Internet connection, connecting not just a smartphone and computer, but
home appliances, door locks, security cameras, cars, wearables, and many other inert devices beginning
to connect to the web. This is commonly known as the “Internet of Things” (“IoT”). In effect, these dark
fiber licensing opportunities for the wireless carriers and builders of shared wireless infrastructure may
facilitate a new opportunity to increase revenues under the existing business model. Additionally, this
expansion could also create a communications platform for Smart City and Smart Grid applications,
especially for communication with utility meters, streetlights, parking, traffic and City news.
6 CTC advises that there are variations of the concept of building some subset of the physical plant to entice private
investment. For example, Lincoln, NE used 300 miles of conduit to attract an FTTP provider. Holly Springs, NC built
a middle-mile fiber network to serve their own town sites, but designed it specifically with capacity and other
attributes intended to make it attractive as a backbone for FTTP. This attracted Ting Internet, who is leasing large
quantities of fiber strands (144-count) throughout Holly Spring’s approximately 20-mile backbone.
7 Backhaul communications fiber links are required to transmit data back to a network backbone or central office.
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The following is a high-level breakdown of the FTTN cost components and total estimated network costs
provided by CTC:
Cost Components Total Estimated Costs
Outside Plant (OSP Engineering) $1,110,000
Quality Control/Quality Assurance 290,000
General OSP Construction Cost 7,110,000
Special Crossings 150,000
Backbone & Distribution Plant Splicing 310,000
Backbone Hub, Termination & Testing 2,410,000
Drop Connections (Tap to WAP) 45,000
Total Estimated Cost
*This estimate does not include any of the network electronics,
wireless or otherwise
$11,425,000
The $11.4 million estimate is within the capacity of the existing Fiber Fund reserves. At this time, staff
does not know the ongoing costs to operate and maintain a FTTN network since its contingent on the
use(s) of the network.
With regard to business case development, a number of approaches could be considered and staff
requests Council feedback on next steps. Preliminarily, staff would recommend proceeding with the
following steps if Council directs proceeding with Option 2:
1. Staff will engage an engineering consultant to initiate a preliminary design for FTTP and FTTN.
Any such design will need to make certain assumptions driven by business case model(s), public-
private partnership opportunities, and technologies for last mile service delivery. The
components of developing a FTTP network design includes identifying the type of services which
will be carried over the network and cost estimates for the geographic layout of fiber routes and
outside plant, nodes and transmission equipment required. Upon completion of the design and
confirmation of the business model, the consultant scope of services will be structured to
enable full citywide FTTP design, but with the expectation that authorization to proceed will
occur in phases, based on cost estimation, community interest, and/or partnership agreements.
2. Utilities staff will develop a public outreach program to solicit neighborhood interest in
participating in verifying the business case for FTTP. Residents will be advised that as
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envisioned, the City would fund extension of the fiber network to the neighborhood with the
understanding that residents may be responsible for some or all of the costs to reach individual
homes. An up-front cost estimate per home would be communicated (e.g. estimated range of
$800-$5,000 per home for wired service or undetermined costs at this time for wireless service),
with cost estimates to be refined as the evaluation proceeds. Residents will also be advised that
decisions have not been made regarding service provider(s). Depending on the level of interest
expressed, a handful of neighborhoods may be selected to proceed with preliminary network
design.
3. IT staff will explore marketplace interest in (a) participating in the last mile buildout and (b)
providing gigabit service to neighborhood residents. Participation in (a) and (b) could be
described as integrated or separable levels of involvement.
4. Subject to positive responses to the steps above, staff would engage stakeholders in identifying
priority characteristics of prospective service provider(s). Topics would likely include
characteristics such as services to be provided, customer service expectations, and policies on
issues such as data privacy.
Staff would report to the UAC, Policy and Services Committee and Council on the results and conclusions
from these steps, ultimately leading to Council action prior to proceeding with construction of the FTTN
network.
Under Option 2, staff would likely issue competitive solicitation(s) for a FTTN design and concurrently
evaluate other last mile funding models to pay for the connections between neighborhood nodes and
homes and businesses. If a certain level of interest is met and property owners are willing to pay for the
connections, fiber and/or wireless technologies could be deployed to deliver faster broadband services.
Potential funding models for the “Last Mile” include:
User-Financing. User-financing which relies on homeowners to pay on a voluntary basis for
some or all of the cost to build-out the City’s existing dark fiber backbone network into
residential neighborhoods. Homeowners would voluntarily finance system build-out costs by
paying a one-time upfront connection fee that could range from $800 to $5,000, or more. The
City would provide a wholesale transport-only service to one or more ISPs on an “open access”
basis and the homeowner would directly pay the ISP for Internet connectivity. The City would be
responsible for building and maintaining the core network while leaving customer service,
provisioning, technical support and billing to the ISP. Property owners could self-organize, or a
third party could potentially facilitate neighborhood participation, or the City could facilitate the
formation of Community Facilities Districts or Assessment Districts.
Assessment Districts; Mello-Roos/Community Facilities Districts (CFDs). City staff could also
explore using Assessment Districts or CFDs to fund Last Mile development. More study would
be required to determine whether using such districts for fiber buildout would be practically and
administratively feasible and also adhere to all applicable legal requirements, including statutory
requirements for establishing assessment districts in a charter city and constitutional
requirements such as Proposition 218.
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Assessment Districts may be used to finance new public improvements or other additions to the
community. Generally speaking, an Assessment District is formed with property owner mail
ballot proceedings involving each property that will be assessed in the district. Owners vote yes
or no, and votes are weighted by the assessed amount. A simple majority of “yes” votes is
required in order for an assessment to be levied. Assessment districts are still subject to
Proposition 218, which requires identification of special rather than general benefits.
Under the Mello-Roos Community Facilities Act of 1982 (Gov. Code §§ 53311, et seq.), cities and
other local government agencies can form a community facilities district to finance certain
facilities and services. These districts can levy a special tax, and issue bonds secured by that tax,
upon approval by two-thirds of the registered voters or property owners within the district.
Public-Private Partnership for Last Mile Expansion. Explore the potential for a public-private
partnership, where the City and a private entity work together to achieve mutual goals for an
FTTP network. In light of the high cost to build and the extremely high required take rate, it may
seem that there is little incentive for any provider (public or private) to pursue an FTTP
deployment in Palo Alto. A private entity and a public entity could complement one another by
developing a partnership that can take advantage of each entity’s strengths, which may
significantly reduce cost and risk. While this model is newly emerging, engaging a private
partner may enable the City to take advantage of opportunities to mitigate risk and maximize
opportunity. The public and private sectors each have unique advantages and disadvantages
that may impact their ability to undertake a standalone overbuild.
Option 3. Pause Municipal FTTP Development Efforts; Increase Transparency and Predictability for
Third Party Providers.
In light of the aggressive upgrade plans by the incumbents and the development of emerging
technologies such as gigabit-speed fixed wireless and 5G that will significantly enhance the delivery of
consumer and business broadband services, another potential option is pausing any further municipal
FTTP development efforts at this time. Obtaining viable market share and acquiring new customers is
necessary to financially sustain a City FTTP offering.
A new City FTTP network would compete directly with existing local incumbent cable, telco, and other
ISPs to offer services to customers. Generally, fiber overbuilds do not offer a high rate of return, which
is why there are not many private sector providers seeking to build fiber networks in markets where
customers are already served. The likelihood that a municipally-owned FTTP network could be
financially viable is doubtful, unless the City was willing to subsidize the network indefinitely, or if one of
the aforementioned funding approaches was feasible, or if a partner from the private sector was willing
to assume a portion of the financial risk. The ability of the City to acquire more than 70 percent market
share on its own is highly unlikely, thus the financial risk would be very high. In the FTTP Master Plan a
market assessment report was provided in an appendix. This market assessment provides an overview
of providers that currently offer services with which the City’s potential new fiber-to-the-premises
(FTTP) enterprise might compete (Exhibit F – Palo Alto Existing Market Assessment). The City’s existing
dark fiber enterprise is viable, because it is a niche service with little or no competition. Nonetheless,
success in providing commercial dark fiber does not translate into a feasible business case for the City to
enter a very competitive industry.
In the interest of improving broadband in Palo Alto and based on the concerns noted above, another
approach is to identify resources and improve coordination of City policies and processes to facilitate
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network upgrades by third-parties such as AT&T, Comcast and other wired and wireless ISPs. This will
enhance transparency and predictability for third party providers. Municipal strategies that advance
broadband deployment can be grouped into three general categories: (1) ways to facilitate access to key
assets such as fiber, conduit, utility poles, and real estate; (2) ways to make useful information available
to potential broadband service providers; and (3) ways to streamline and publicize local processes.
Access by third-parties to infrastructure data and assets such as poles, conduits and rights-of-ways is
essential to encouraging broadband improvements. Ensuring efficient and predictable processes that
enhance deployments is equally important, as with any public project. According to a study published by
CTC in 2014,8 local governments balance the needs of broadband providers with the public cost of the
processes necessary to support them and with other priorities that clamor for the same resources. To
balance these competing interests, local processes such as permitting and inspection can be formalized
and publicized. Timelines can be determined based on local needs, publicized, and then met.
Transparency about processes and timelines enables broadband companies to expeditiously plan and
deploy networks, enabling localities to manage the costs and burdens of the processes necessary to
meet broadband providers’ needs.
The City and broadband providers can cooperatively plan before construction so as to understand
respective schedules and needs, and so that the provider can plan to stage its work around known and
predictable local processes. In order to implement these strategies, staff will need to identify additional
internal and/or external resources to better facilitate planning approvals, environmental reviews,
permitting, inspections and legal reviews. The work to identify resources was well underway when staff
was working with Google Fiber to manage the anticipated large volume of activities to build a fiber-optic
network in Palo Alto.
The City Attorney’s office, Development Center, Public Works, Planning & Community Environment and
Utilities reviewed multiple City policies, practices and procedures to accommodate these activities. The
Google Fiber City Checklist process, which required all of the above-mentioned departments to work in
concert to identify information about existing infrastructure (e.g. utility poles and available conduit),
review various policies and procedures to facilitate access to the public rights-of-way and utility poles, in
addition to reviewing infrastructure data such as utility routes to make construction speedy and
predictable. An example of this staff review is the “pole intent process” required to manage hundreds
of applications to attach fiber-optic cables and other equipment to utility poles jointly-owned by the City
and AT&T. Another example was the review of construction methods and various construction
constraints to ensure the integrity of the public rights-of-ways and street conditions that would be
significantly impacted by large scale excavations and directional boring required to install new conduit
and fiber-optic cables in the public rights-of-way, in addition to placing thousands of below-grade vaults
citywide.
The following includes information about current and upcoming third-party provider upgrades:
AT&T Fiber plans to upgrade their network beginning in January 2018 in Palo Alto in order to
provide gigabit-speed broadband services to the community. AT&T plans to select
8 GIGABIT COMMUNITIES - Technical Strategies for Facilitating Public or Private Broadband Construction in
Your Community
http://www.ctcnet.us/wp-content/uploads/2014/01/GigabitCommunities.pdf
City of Palo Alto Page 13
neighborhoods with high potential for adoption and will use consumer demand levels to
determine further deployments in the city.
Comcast now provides a 1GB and 2GB service in Palo Alto. Comcast has launched DOCSIS 3.1
technology citywide to offer multi-gigabit service to its residential customers. Data over Cable
Service Interface Specification (“DOCSIS”) is an international telecommunications standard that
permits the addition of high-bandwidth data transfer to an existing cable TV system. DOCSIS
technology is employed by many cable television operators to provide Internet access over their
existing hybrid fiber-coaxial (HFC) infrastructure. DOCSIS 1.0 was released in 1997. The most
recent version of DOCSIS (3.1) was released in 2014. The DOCSIS 3.1 specification supports
Internet speeds of 10 Gigabits per second (Gbps) for downloads downstream and 1Gbps
upstream - the level of speeds typically only available with a fiber optic connection. For business
services, bandwidth will be scalable from 1 Mbps to 10 Gbps, and as high as 100 Gbps if specific
criteria are met. The brand name for this service is Gig-speed Internet from XFINITY. Upgrading
to Gig-speed Internet requires the customer to swap out their existing modem for a new DOCSIS
3.1 compatible modem. The modem swap requires a professional installation. The pricing for
Gig-speed Internet is $110 per month with a one year contract and $120 per month with no
contract. Comcast also currently offers a 2 Gigabit Per Second (“Gbps”) broadband service called
Gigabit Pro when certain conditions are met.
Other Telecommunication Service Providers: Several wireless carriers and builders of shared
infrastructure for the cellular industry are seeking to deploy new communication facilities such
as distributed antenna systems (“DAS”) and small cell technologies in Palo Alto. In the past few
years, AT&T Mobility and Crown Castle have deployed approximately ninety-five (95) DAS and
small cell sites in several areas of the city to improve the coverage and capacity of the carriers’
mobile networks. These facilities are typically located on City-owned utility poles and streetlight
poles in the public rights-of-way. More deployments are planned by AT&T Mobility (16 small cell
installations), Verizon Wireless (93 small cell installations) and other carriers, in addition to the
builders of shared wireless infrastructure such as Crown Castle (16 small cell installations to add
to the 19 small cell sites built in the downtown area in 2016).
WIRELESS DEPLOYMENT
The expansion of Wi-Fi technology at unserved City facilities and public areas was evaluated with the
Community Services Department (“CSD”). Most City facilities already have Wi-Fi access (“OverAir Wi-Fi
Hotspot”). The outcome of the evaluation reflected concern from CSD regarding the deployment of Wi-
Fi at Rinconada Pool and City parks due to safety concerns. The potential for distracted parents in the
areas of the City where parents are expected to supervise their children is the primary concern. In
addition to potential safety concerns, parks and other open spaces provide an important respite from
technology, a place to “unplug” and focus on spending time with family and friends and to connect with
the outdoors and nature.
The areas of the City where CSD recommends Wi-Fi deployment at common areas in the Cubberley
Community Center, Lucie Stern, the Golf Course Pro Shop and Cafe, and Lytton Plaza. A high-level cost
estimate for the recommended sites is $165,100 for installation and $6,239 for monthly recurring
charges. Exhibit G – Wi-Fi CSD Site Summary provides estimated costs of the individual sites.
City of Palo Alto Page 14
Multiple interviews conducted during the assessment for the Wireless Network Plan indicated there
have been no specific requests from the business community or the general public for City-provided Wi-
Fi services in high traffic commercial areas. A significant number of Palo Alto businesses already offer
free Wi-Fi service to patrons as an amenity. Additionally, companies such as AT&T and Comcast have
installed and operate Wi-Fi access points for their customers in many areas of the City and are planning
upgrades to these services in 2017.
It should be noted, too, that other cities’ implementations of municipal Wi-Fi services generally did not
develop the anticipated level of acceptance. Part of the problem with those deployments was related to
the speed and reliability of earlier Wi-Fi technology compared to commercial wireless options. In the
same timeframe that those cities implemented municipal Wi-Fi, the commercial wireless carriers
successfully deployed 3G and 4G data access technologies that have developed a high degree of
consumer acceptance based on cost, performance, and the convenience of essentially universal service.
In contrast, many municipal Wi-Fi deployments served only a limited area and performance in many
cases fell short of user expectations.
Ongoing Initiatives
Fiber Network Rebuild Project
In fiscal year 2016, the City established a new capital improvement project, Fiber Optic System Rebuild
(CIP FO-16000), to rebuild portions of the dark fiber network for improved reliability and increased
capacity. The rebuild project will install new aerial duct or substructures (conduit and boxes) and
additional fiber backbone cable to increase capacity for sections of the dark fiber ring that are at or near
capacity and allows CPAU to meet commercial customer requests for service. See Exhibit H - Fiber Optic
Network Rebuild Project for project description and current status.
In the FTTP Master Plan, CTC noted that it’s important to recognize that the rebuild reinvestment does
not increase the attractiveness of the fiber to encourage a partner to build FTTP. The current
commercial dark fiber reach would be a relatively small portion of the total FTTP investment, and a
citywide FTTP endeavor will likely benefit little from commercial dark fiber expansion.
Dig Once Policy
The Council’s September 28, 2015 Motion directed staff to develop a “dig once” ordinance. The basic
objective of dig once is to promote broadband by lowering the cost of building infrastructure by making
it unnecessary to tear up the streets every time a company wants to reach new homes with its
underground network. In the above-noted informational update provided to the Council on December
12, 2016, staff provided a summary of the issues related to developing an ordinance or policy in view of
the changes nationwide and in Palo Alto with the third party telecommunications providers. The
assumption in 2015 was that the City should actively encourage or require simultaneous underground
construction and co-location of broadband infrastructure in the public rights-of-way with the intention
of creating benefits for both the City and private sector communications providers. Establishing a dig
once policy may reduce the long-term cost of building communications facilities by capitalizing on
significant economies of scale as outlined in the informational update.
At this time, telecommunications providers are not proposing the same citywide, large scale excavations
or builds that the City was anticipating back in 2015 with a Google Fiber build. Instead, with Google
Fiber’s reorganization and apparent retreat from a comprehensive infrastructure build, the City is
finding that incumbent telecommunications providers are more inclined to explore incremental
City of Palo Alto Page 15
expansions or, where the scope of a project is larger, above ground builds on utility poles. As a result,
staff is reevaluating the approach to dig once and has met with AT&T, Comcast and other companies
that may propose large scale excavation projects in the future. These discussions are ongoing. Staff is
also reviewing existing Municipal Code provisions governing Third Party Coordination in the public
rights-of-ways and Joint Trench Coordination in Underground Districts, including specifically an
assessment of how cross-departmental teams (Utilities, Public Works, Development Center and
Planning) currently work together on both City-initiated and third party infrastructure projects to
determine if there are other joint opportunities for streamlining and improvement.
Public Safety Point-to-Multipoint Wireless Network
A Request for Quotation (“RFQ”) was issued in June 2017, for equipment to expand and upgrade the
existing Point-to-Multipoint public safety wireless network. The overall goals are to:
Improve coverage throughout the City and areas outside the City limits in the area of operations
for public safety mutual aid, with focus on mobile command vehicles, including the Mobile
Emergency Operations Center (MEOC)
Enhance data throughput and quality of service (QoS)
Expand client applications supported on the network
Staff will return to Council with a recommendation to approve a vendor contract and the funding source
for the equipment purchase and installation costs.
Public Safety Wireless Mobile Network
Staff is developing a competitive solicitation for a pilot project to support public safety officers in the
field with a broadband mobile network that will provide:
Enhanced vehicular day-to-day network coverage and capacity by deploying approximately
fifteen wireless access points on traffic signals poles throughout the City;
Coverage redundancy in key areas of the city;
In vehicle mobile broadband and phone access is provided by Verizon Wireless. This access will
continue, but this alternative, private network with controlled user access, will supplement that
access when the Verizon Wireless network performance is impacted due to high consumer
demand.
This pilot project will first support a limited number of vehicles (approximately 5), and if deemed
feasible, eventually support all public safety vehicles. Staff will return to Council for approval to fund the
equipment purchase and installation costs.
RESOURCE IMPACT
Depending on the option selected for fiber and broadband expansion, staff will develop cost estimates
and a work plan and return to Council for approval.
An estimated $165,100 for one-time equipment and installation costs and monthly recurring charges of
$6,239 are required to expand Wi-Fi in unserved City facilities. Funding is available in the FY 2018
operating and capital budgets for the Fiber Fund for the contract amendment and one-time installation
fees. The monthly recurring charges will be allocated to the respective departments consistent with the
City’s existing chargeback model.
City of Palo Alto Page 16
POLICY IMPLICATIONS
The fiber and wireless activities are consistent with the Telecommunications Policy adopted by the
Council in 1997, to facilitate advanced telecommunications services in Palo Alto in an environmentally
sound manner (Reference CMR: 369:97 - Proposed Telecommunications Policy Statements).
ENVIRONMENTAL REVIEW
The recommended actions in this staff report are exempt from the California Environmental Quality Act
(“CEQA”) under section 15262 (Feasibility and Planning Studies for possible future action) and section
15301 (Negligible Expansion of Existing Facilities). Environmental review will be conducted, where
required, prior to approval of subsequent projects.
Attachments:
Attachment A: Policy and Services Final Action Minutes May 23 2017
Attachment B: Overview of Municipal Broadband in California
Attachment C: Fiber History and Initiatives
Attachment D: Council Motion Status
Attachment E: Excerpted UAC Minutes April 5 2017
Attachment F: Palo Alto Existing Market Assessment
Attachment G: WiFi CSD Site Summary
Attachment H: Fiber Optic Network Rebuild Project
POLICY AND SERVICES COMMITTEE
ACTION MINUTES
Page 1 of 3
Special Meeting
Tuesday, May 23, 2017
Chairperson Wolbach called the meeting to order at 6:14 P.M. in the
Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California.
Present: DuBois, Kou, Wolbach (Chair)
Absent: Kniss
Agenda Items
1. Discuss the Topic of Aircraft Noise, Review Federal Legislative Updates
and Recommend That City Council Reaffirm City's Positions to Reduce
Aircraft Noise and Make Other Recommendations as Needed to
Advance City’s Goals to Reduce Aircraft Noise Over the Skies of Palo
Alto.
MOTION: Council Member DuBois moved, seconded by Chair Filseth to
recommend the City Council direct Staff to:
A. Take into account the public comments made tonight and received in
writing, and reaffirm the City’s position to reduce aircraft noise over
the skies of Palo Alto; and
B. Endorse and advocate a seat on the Select Committee's proposed Ad-
Hoc Committee and any new permanent entities whose actions will
impact Palo Alto and communicate that interest to Representative
Eshoo; and
C. Obtain an expert opinion on aircraft noise monitoring strategy and
make a recommendation to Council; and
D. Reach out to neighboring communities such as Portola Valley,
Woodside, Menlo Park, Mountain View, Los Altos, Sunnyvale and East
Palo Alto to establish a regional position on this issue; and
E. Be prepared to respond to the FAA Select Committee Report in the
form of legal or professional representation; and
ACTION MINUTES
Page 2 of 3
Policy and Services Committee Special Meeting
Action Minutes 05/23/17
F. Emphasize as a priority a focus on minimizing noise, the equitable
dispersion of noise and improving technology and flight methods to
minimize the noise in general; and
G. Recognize that on the ground noise matters, even if it is within the
vicinity of an airport and establish an objective standard for noise at
certain elevations and flight methods; and
H. Ask FAA to consider emissions from aircraft
MOTION PASSED: 3-0 Kniss absent
The Committee took a break from 8:09 P.M. to 8:18 P.M.
2. Staff and Utilities Advisory Commission Recommendation That the
Policy and Services Committee Make a Recommendation That Council
Recommend: (1) Option 2 for the Municipal Fiber-to-the-Node Network
(FTTN) for Fiber and Broadband Expansion; and (2) Expand Wi-Fi to
Unserved City Facilities and Discontinue Consideration of City-Provided
Wi-Fi in Commercial Areas.
MOTION: Council Member DuBois moved, seconded by Chair Wolbach to
recommend the City Council:
A. Approve the Option 2 recommendation for the Municipal Fiber-to-the-
Node Network (FTTN) with Neighborhood/Private Last Mile Provision;
and
B. Expand Wi-Fi to unserved City facilities while minimizing the
investment in facilities that are being redeveloped; and
C. Discontinue consideration of City-provided Wi-Fi in commercial areas;
and
D. Direct Staff on the following:
i. Define more clearly the goals of FTTN; and
ii. Reach out to other communities on approaches post Google and
share strategy and funding models; and
ACTION MINUTES
Page 3 of 3
Policy and Services Committee Special Meeting
Action Minutes 05/23/17
iii. Include ROI estimates; and
iv. Present a rollout strategy with an estimate of how many homes
will be passed; and
v. Draft a communication strategy; and
MOTION PASSED: 3-0 Kniss absent
3. Recreational and Medical Marijuana: Review and Discussion of State
Law Developments and Input to Staff on Next Steps, Including
Possible Ordinance Adopting Local Regulations Regarding Commercial
Marijuana Activity, Outdoor Cultivation, and Marijuana Dispensaries.
This Action is Exempt Under Section 15061(b)(3) of the California
Environmental Quality Act.
STAFF REQUESTED THIS ITEM BE MOVED TO JUNE 13, 2017.
Future Meetings and Agendas
ADJOURNMENT: Meeting was adjourned at 9:19 P.M.
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Overview of Municipal Broadband in California
FIBER-TO-THE-PREMISES AND WIRELESS COMMUNICATIONS INITIATIVES
#
CITY
MODEL, SERVICES
OFFERED,
BROADBAND
INITIATIVES
CURRENT STATUS & NEW ACTIVITIES
1 Anaheim/Public Utilities
Department
Dark Fiber No update available.
2 Atherton FTTP
Atherton Fiber is a locally
owned company operated by
Mike Farmwald of Atherton
and Robert Hayes of Palo
Alto.
Note: This network is not a
public-private partnership.
Atherton Fiber will run at least one fiber to the easement in
front of every home in Atherton. This fiber may be leased
by any ISP to offer internet access, video or phone to that
home. The connection from the easement to the house will
be for the homeowner's account.
Homeowners have the option to purchase an irrevocable
right-of-use (IRU) for either two or four dedicated fibers.
These will be “home-runs”, i.e. each fiber will be a direct,
unshared optical connection from the home to the
Atherton Fiber central office. Atherton Fiber is currently
working with homeowners who want fiber-optic internet
service, and doing site assessments of individual properties.
The company doing that work is Paxio, a subcontractor to
Atherton Fiber.
3 Berkeley Broadband Development
Assessment
In 2015, the city and Tellus Venture Associates prepared a
Broadband Development Assessment:
http://www.tellusventure.com/downloads/berkeley/tva_c
ity_of_berkeley_broadband_development_assessment_2
9may2015.pdf
The objective of the assessment was to gain a better
understanding of the types of conduit the city currently
uses. The assessment also aimed to identify conduit that
could accommodate high-speed fiber in the future.
Berkeley is a Webpass city. Webpass, is a wireless internet
provider that Google Fiber bought in 2016. Webpass uses
radio devices to connect with existing Ethernet wiring,
making it less infrastructure-heavy than traditional Google
Fiber, which brings fiber cables directly to homes.
4 Beverly Hills Developing plan for citywide
FTTP
City currently owns and maintains a scalable high-speed
fiber-optic network designed to support additional capacity
to benefit businesses and residences. The city is planning to
invest in a citywide Fiber-to-the-Premises (FTTP) network
for all homes and businesses, including apartments and
condos, inside the city. A pilot installation will begin in July
2017.
5 Brentwood FTTP
Public-private partnership
between city and Sonic.net.
Residential and business
Internet and phone provided
by Sonic.net.
The city began installing conduit as a regular practice in
1999; the community adopted the policy as a local
ordinance, requiring new developers to install it in all new
construction. Per MuniNetworks.org, the city has
experienced significant growth and the conduit has grown
to over 150 miles, reaching over 8,000 homes and a large
segment of Brentwood's commercial property. As a result,
Brentwood incrementally developed an extensive network
of fiber-ready conduit. In an agreement with the city,
Sonic.net agreed to install fiber-optic cables in businesses
and homes in the city’s Yamanaka neighborhood, located in
the eastern section of town. In return, the city agreed to
maintain the conduit, and lease the fiber-optic cables over
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to Sonic. The company has also agreed to provide free
Internet to the city’s public schools, provided that at least
30 percent of households within those schools’ jurisdictions
are Sonic customers.
6 Burbank Water & Power/ONE
Burbank
Dark Fiber and Business
Internet Services
ONE Burbank offers: Dark Fiber, Dedicated Internet Access
(DIA), Virtual Private LAN Services (VPLS), Wave Lambda
Services, and Communication Transport Services (CTS).
7 Culver City/Culver Connect Business Internet Services
Culver Connect is the
Municipal Fiber Network for
facilitating high speed
connectivity to the business
community, the Culver City
Unified School District, and
for municipal services to
promote economic
development in Culver City.
Since 2013, city staff has been consulting with the Culver
City business community about their need for enhanced
broadband connectivity. A consultant was then engaged to
assist with developing a high-level network design &
potential business models.
In November 2015, the City Council appropriated funding
for the design and construction of a Municipal Fiber
Network. The City has partnered with Culver City-based
Mox Networks to provide professional services to design,
implement, and operate Culver Connect. The City will install
an open access network, where it is envisioned that any
Internet Service Provider (ISP) will have the opportunity to
utilize the City’s fiber infrastructure to service the business
community. The Network is currently under construction
and is expected to be completed in August 2017.
8 Fresno Issued Request for
Qualifications for Gigabit
Fresno initiative (seeking
public-private broadband
partnership).
In October 2016, city issued Request for Qualifications
(RFQ) for a Gigabit Wireless and/or Wired/Fiber System for
affordable, ubiquitous Gigabit-class broadband services
and capabilities available throughout the City.
Gigabit Fresno
https://www.fresno.gov/informationservices/gigabit-
fresno/
RFQ
https://www.fresno.gov/informationservices/wp-
content/uploads/sites/15/2016/10/WiFiRFQwithAppendic
es_FINAL.pdf
Fresno wants to build citywide high-speed internet system
http://www.fresnobee.com/news/local/article109779602.
html
9 Glendale/ Glendale Fiber
Optic Solutions
Commercial Dark Fiber Program Overview
Glendale Fiber Optic Solutions provides both large and
small commercial customers optical fiber lease services
both within the City limits and to adjacent cities. Glendale
Water & Power owns and operates approximately 98
miles of dark fiber network within Glendale.
Recent Activity
Glendale Fiber Optic Solutions connects libraries and Fire
Stations. Recently strung over 17 miles of dark fiber in
order to add additional capacity and coverage through the
entire Glendale fiber optic system.
10 Hayward Fiber deployment in
industrial zones for economic
development.
The federal government awarded a $2.74 million grant to
Hayward to help fund the design and installation of
conduit and fiber-optic network in the city’s industrial
zone.
The grant, from the U.S. Department of Commerce’s
Economic Development Administration, will enable
Hayward (pop. 150,000) to install at least 11 miles of new
conduit and fiber optic cable. Construction will begin in
September 2017, and should be finished by the fall of
2019.
The $2.74 million grant award is 50 percent of the total
estimated project cost, roughly $5.4 million. The city’s
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matching share of the project includes a $2.1 million in-
kind contribution of the city's publicly-owned right-of-way
property, $480,000 in general funds, and an additional
$156,000 that has already been committed to the
construction and installation of fiber-optic conduit in the
Whitesell Street segment of the fiber loop.
11 Huntington Beach City retained consulting firm
for broadband strategic plan
initiative and connectivity
survey. Retained consulting
firm to study city’s
broadband infrastructure and
develop a plan that will
involve either helping private
companies better connect
with customers or for the city
to develop its own
broadband service.
Broadband Strategic Plan Initiative & Connectivity Survey
http://www.huntingtonbeachca.gov/announcements/ann
ouncement.cfm?id=959
Magellan Advisors
http://www.magellan-advisors.com/resources/city-of-
huntington-beach-ca-retains-magellan-advisors-for-
broadband-wireless-strategic-plan.stml
Huntington Beach could take over broadband service
http://www.latimes.com/socal/hb-independent/news/tn-
hbi-me-0114-broadband-20160113-story.html
12 Loma Linda City FTTP provided to homes
built since 2004. Funding
Method: in part,
requirements for private
developers to include fiber
optics and wiring in new
construction projects.
Internet access. Top
residential speed 15 Mbps
symmetrical.
In 2004, fiber connections and structured wiring were
required in any home newly built or significantly
remodeled in the city. Since 2005, 600 new homes were
built and all are connected to the muni fiber network, with
half choosing to buy Internet bandwidth from the city. The
service is $30 per month for 5 Mbps service, going up to
$100 for 15 Mbps.
13 Lompoc/Lompocnet Citywide Wi-Fi Lompocnet is a municipal Wi-Fi network that provides
broadband level, internet service to citizens, businesses
and city agencies.
14 Long Beach Commercial Dark Fiber Fiber Expansion Plans
The City owns approximately 60 miles of fiber optic cable in
the City. Expanding the capacity and adding more City
facilities to the Fiber Infrastructure is operationally and
strategically critical to the City’s business processes due to
three major trends:
1. Significant increase in network traffic
2. Significant increase in connected devices moving
applications to the cloud
3. In FY 2015, the city had over 8,000 feet of optical fiber
installed to connect the Airport, Fire Headquarters
and Police Field Support. The city will be developing
plans to expand even further to satisfy the demand
for a high performance network backbone.
The Internet of Everything (IoE) phenomenon, or the next
wave of the Internet in which people, processes, data, and
things connect to the Internet and each other, is showing
tangible growth. The move to cloud applications
necessitates good end to end connection from the tenant
host site to each City facilities because the cloud
applications rely primary on the network connectivity and
less on the CPU, memory and hard drive on the user’s local
workstation. With that, the fiber infrastructure is a critical
operational and strategic City asset that hand in hand with
City workers, facilitates the delivery services to our
constituents, businesses and visitors.
15 Los Angeles
Department of Water &
Power/Fiber Optic Enterprise
Commercial Dark Fiber and
Business Internet Services
The Los Angeles Department of Water & Power (LADWP)
Fiber Optic Enterprise manages an extensive fiber-optic
infrastructure, offering various fiber optic transport
services to the Los Angeles area businesses including
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Metro-Ethernet, digital video transport, and dark fiber
leasing to both private businesses and the public sector
throughout the Los Angeles City area. LADWP does not
provide residential fiber service.
City of Los Angeles Broadband Expansion Plans
In June 2015, the Los Angeles City Council approved a
Request for Participants (RFP) to identify one or more
providers to commit to deploying advanced wireline and
wireless networks that can provide one gigabit broadband
speed or more to residences and businesses. The RFP
asked proposers to provide a free level of service,
including free basic wireless services, and to complete
build-out within the next five years. The RFP was issued as
part of CityLinkLA, the long-term initiative led by Mayor
Eric Garcetti and City Councilmember Bob Blumenfield to
ensure that Los Angeles is among the most connected
cities worldwide. The RFP received unanimous approval
from the City Council. The city will not pay for the
network, but will leverage city assets and expedited
permitting for high-speed broadband and free Wi-Fi. The
RFP responses and subsequent negotiations were not
satisfactory for elected officials and all proposals were
rejected. The city’s Information Technology Agency is
leading a cross-department task force (Connectivity &
Digital Inclusion Group), which is coordinating a large
number of tactical efforts (e.g. connectivity around the
Port using Private LTE, free Wi-Fi in parks, and expedited
5G permits for digital inclusion).
CityLinkLA
http://citylinkla.org/about/index.htm
Los Angeles is a “potential” Google Fiber city.
16 Modesto/LinkMODESTO May 2017: City released
Fiber Network Infrastructure
Master Plan.
The City of Modesto currently utilizes a combination of
aerial and in-ground fiber optic cables for City
communications – primarily used for the advanced traffic
management system (ATMS) that controls the City’s signal
system. There is also a fiber-optic connection between City
Hall and the Police Department downtown. The City leases
space on the Modesto Irrigation District’s aerial poles for
fiber where conduit is not available or existing. The in-
ground fiber optic cable is mainly located in the downtown
district where aerial is not present, but is also located
around the City. In addition, the City is working with
private-sector communications companies (e.g. CVIN,
Wave) to install additional empty conduits for City use as
these companies build out their fiber networks. The City’s
existing fiber optic network was mainly funded by federal
funds (Congestion Management and Air Quality Funds -
CMAQ) and thus cannot be used for commercial purposes.
For this reason, the City is exploring the option of
installation of an additional, somewhat parallel separate
fiber optic network that may be used for commercial
purposes, as well as other City uses. This effort to for a City-
wide fiber optic network is collectively referred to as
LinkMODESTO.
17 Mountain View Mountain View is a “potential” Google City, but has no
plans to pursue fiber-to-the-premises on its own.
18 Oakland
Existing fiber-optic network
to support city services and
infrastructure:
Information Technology
Department
In 2015, the city prepared a Fiber-Optic Network Master
Plan
file:///C:/Users/jflemin/Downloads/OAK052667.pdf
The Master Plan presented documentation and evaluation
of the existing city fiber-optic infrastructure. The report laid
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Electrical Services
Division
Transportation Services
Division
Economic Development
(would also serve as
conduit for public-
private partnerships)
Public Safety
Fiber connections with
Port of Oakland and
BART
the groundwork for developing a strategic approach to
implementing projects and policies that will:
Strengthen the City’s IT fiber-optic network;
Expand the capacity of the fiber-optic network;
Integrate and connect City facilities;
Establish system redundancy; and,
Position the City for strategic and methodical
expansion of the system in the future.
Oakland is a Webpass city. Webpass, is a wireless internet
provider that Google Fiber bought in 2016. Webpass uses
radio devices to connect with existing Ethernet wiring,
making it less infrastructure-heavy than traditional Google
Fiber, which brings fiber cables directly to homes.
19 Ontario/Ontario Net Dark Fiber and Business Data
Services
Planned expansion of the
network.
City is developing a Fiber Optic Master Plan to guide design,
construction and operation of a fiber optic backbone
infrastructure as a long term investment. The City has
planned the Ontario Net infrastructure that will connect
city facilities in the New Model Colony area to ultimately
provide a City owned Fiber-to-the-Home (FTTH) to begin
once there is sufficient potential subscribers to support
operational costs.
20 Palo Alto/Utilities
Department
Commercial dark fiber.
49 mile dark optical fiber
backbone network to support
City infrastructure and
facilities (e.g. traffic signal
system and electric
substations).
Network routed to pass
commercial areas and
business parks.
Network serves the Palo Alto
Unified School District.
CPAU Fiber Program
http://www.cityofpaloalto.org/gov/depts/utl/business/pr
ograms/fibernet.asp
Palo Alto is a “potential” Google Fiber city.
21 Pasadena/Department of
Information Technology
Commercial Dark Fiber and
Business Internet services
The City owns and operates approximately 50 miles of fiber
network. The fiber infrastructure supports City business
and transportation operations, and also provides the
foundation for a variety of business-oriented services that
the City offers currently and plans to expand in the future.
Currently the City does not provide service in residential
areas. For businesses seeking to connect multiple facilities
within Pasadena, the City offers either dark fiber leases or
lit services between locations within Pasadena. With a dark
fiber lease, the customer lights the fiber itself. For
customers that prefer service, the City can offer the
security and dependability of a private, secure campus
network, with bandwidths of 1 Gbps, or 10 Gbps.
Access to Lit Services
For businesses interested in Internet access and related
services, Pasadena can also provide access to lit services,
such as Internet access and connectivity to local collocation
and regional collocation and peering sites. The City offers
100 Mbps, 1 Gbps, and 10 Gbps connections.
22 Riverside/Riverside Public
Utilities
Commercial Dark Fiber Riverside Public Utilities installed a fiber optic network in
the 1990s to help protect its electric system. The network
is also a commercial asset that officials hope to market to
make money for the utility. Riverside’s utility makes about
$420,000 a year by leasing fiber to five customers,
according to a city report. The biggest user is Riverside City
Hall, followed by UC Riverside, California Baptist University,
Charter Communications and TelePacific Communications.
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The system could be expanded further, making room for
more business customers who would use the cables for
communication and internet service. Riverside Public
Utilities will spend $2.1 million to add fiber to an already
planned city traffic signal project.
23 Riverside
County/RIVCOconnect
County issued RFP for
broadband initiative seeking
a public-private partnership.
The California county of Riverside issued an RFP in April
2017, seeking proposals as part of its RIVCOconnect
Broadband Initiative, a public-private partnership valued at
$2 billion to $4 billion and aimed at developing what it
believes will be the nation’s largest broadband network.
Proposals are due August 15, 2017. RIVCOconnect is a
Riverside County initiative, supported by the Riverside
County Board of Supervisors and Executive Office, and led
by Riverside County Information Technology (RCIT), that
seeks to remove the road blocks that obstruct service
providers from building out the current infrastructure.
RIVCOconnect seeks to invite the private sector, either
incumbent vendors or business entities new to the County,
to work in cooperative fashion and create partnerships to
deliver Broadband services Countywide at speeds of 1 Gbps
and above.
24 San Bruno/San Bruno Cable Citywide residential and
business Cable
TV/Broadband/Telephone
The city is the incumbent cable TV operator in San Bruno.
Comcast does not operate in San Bruno. The cable system
was built in the early 1970s and has been periodically
upgraded to deliver high-speed Internet, digital phone and
advanced cable TV services. Business services currently
offered include: Business Phone Line, Business Fax, SIP
Trunks, DIDs, LNP, Hosted IP PBX service (Cisco Unified
Communications Manager based), Ethernet services
including point-to-point and up to 1 Gbps IP circuits.
25 San Jose Developing digital inclusion
and broadband strategy.
The city has retained the consulting services of Price
Waterhouse Coopers to help develop a digital inclusion
and broadband strategy. The project will develop a
citywide strategy to achieve the goals of:
Improving the City’s existing digital infrastructure to
support San Jose’s Smart City Vision and improve
digital inclusion;
Understanding options to improve residential and
business broadband and Internet choices, quality
and pricing; and
Promoting availability of gigabit level broadband
Internet to support economic development and
inclusion.
https://www.sanjoseca.gov/index.aspx?NID=5557
San Jose is a “potential” Google Fiber city.
26 San Leandro/Lit San Leandro Public-Private Partnership
Commercial Dark Fiber with
ISP Partners
Lit San Leandro LLC and San Leandro Dark Fiber LLC
comprise the private partnership that works with the City
of San Leandro to create the Fiber Loop. The City brings
their underground conduit to this partnership. San Leandro
Dark Fiber owns the fiber optic cable that runs through the
City’s underground conduit. Lit San Leandro owns and
operates the switch and routing facilities that bring Internet
access to the community.
In March 2017, the City posted a Request for Proposal to
engage with an experienced “Smart City” consultant to
assist in development of a Fiber Optic Master Plan.
27 San Luis Obispo Public-Private Partnership
Business Internet Services
As part of the City’s Economic Development Strategic Plan,
the City partnered with a local provider to bring high speed
fiber to government buildings and provide the opportunity
for fiber connectivity to local business and residences.
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Currently, 23 miles of fiber optic network are already in
place, providing 75 “lit” commercial buildings with Internet
services.
28 Santa Clara/Silicon Valley
Power
Commercial Dark Fiber In 2000, SVP developed its 145 conduit mile dark fiber
backbone to link the electrical substations that serve the
community. The fiber backbone was overbuilt to allow the
city to act as a wholesale provider and lease dark fiber
within the City of Santa Clara.
The Dark Fiber Enterprise Program serves:
Business and institution sectors throughout the City
Co-locations to the proximity of local exchange data
center central offices
Key data centers within Santa Clara
Long distance points of presence (POPs)
SVP is responsible for installing network attachments
and maintaining the backbone throughout Santa
Clara
Santa Clara is a “potential” Google Fiber city.
29 Santa Clarita Dark Fiber lease to one client:
Wilcon
Fiber began in the City Traffic Engineering Division when
the City received federal grants for the implementation of
Intelligent Transportation System (ITS) throughout the city.
In 2012 a proof of concept was started for using fiber
installed by the City for commercial use. The City is still very
new at providing any services other than dark fiber. The City
currently leases 86 miles of dark fiber to Wilcon, a provider
of dark fiber, lit transport and colocation services in
southern California. In April 2017, Crown Castle announced
an agreement to acquire privately-held Wilcon Holdings LLC
(“Wilcon”) for approximately $600 million.
30 Santa Cruz/Santa Cruz Fiber FTTP Public-Private
Partnership:
In 2016, the City and local ISP
Curzio Internet agreed to
build citywide FTTP under a
public-private partnership
agreement branded. The
network is called Santa Cruz
Fiber.
Services: Business and
Residential Internet
The City Council has approved encroachment permits for
Santa Cruz Fiber to begin building the first segment of the
citywide fiber optic network. The broadband upgrade will
provide internet speeds of 1 Gigabit per second to both
businesses and residents. With the permit’s approval,
construction in the downtown area is expected to begin in
the summer of 2017. The network will be built using a
construction technique called “horizontal boring,” which
allows the installation of fiber conduit with minimal street
trenching, and almost no traffic interruptions.
31 Santa Monica/Santa Monica
City Net
Commercial Dark Fiber and
Business Internet Services
FTTP digital inclusion Pilot in
affordable housing.
Unlike the majority of municipal fiber networks, Santa
Monica does not have a municipal power provider. City Net
is run out of the Information Systems Department. City Net
offers business broadband, wavelength services and dark
fiber. The network also supports city facilities and public
Wi-Fi hotspots. The City Council approved funding for a
Digital Inclusion Pilot in 2015. The City has connected the
first of 10 affordable housing buildings with 10 Gigabit
Broadband. City Net’s model is considered to be one of the
more innovative in the country.
32 San Francisco Commercial Dark Fiber
Fiber network primarily
supports city functions,
services and facilities
In March 2017, San Francisco
Supervisor Mark Farrell
formed a group of business,
privacy and academic experts
to discuss and study the issues
related to Farrell’s plan to
The City has constructed approximately 216 miles of fiber
optic network. The City’s current fiber optic network was
originally developed beginning in 2002 when the
Department of Emergency Management (then the
Emergency Communications Department) issued a bond to
construct a fiber-optic network to connect public safety
buildings. Since then, the Department of Technology has
taken over the management of the network, which has
expanded to service 231 City buildings. The City leases out
a small portion of its excess fiber capacity, commonly
known as “dark fiber”, to private companies and nonprofit
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wire the city with high-speed
Internet service.
The San Francisco Municipal
Fiber Blue Ribbon Panel will
conduct research and provide
recommendations on the
feasibility of deploying a
network that could cost up to
$1 billion.
organizations. These leases generate $279,000 in annual
revenue.
Plans for Expansion
The City plans to spend $5.45 million over the three fiscal
years between FY 2015-16 and FY 2017-18 to expand the
existing fiber network, City Fiber, to connect the remaining
178 City buildings that are still using private Internet Service
Providers (primarily AT&T) to access the Internet. Of the
$5.45 million, $4.3 million was appropriated by the Board
of Supervisors for FYs 2015-16 and 2016-17.
Blue Ribbon Panel to Wire the City with High-speed Internet
Service
In March 2017, San Francisco Supervisor Mark Farrell
assembled a group of business, privacy and academic
experts to discuss crucial, early-stage questions
surrounding Farrell’s plan to wire the city with high-speed
Internet service. Farrell will serve as the panel’s co-chair
alongside Harvard Law School Professor Susan Crawford.
Crawford, who teaches courses on municipal uses of
technology, Internet law and communications law, worked
as an assistant to the president for science, technology and
innovation policy in Barack Obama’s administration and co-
led the FCC’s transition team between the Bush and Obama
administrations.
In addition to providing recommendations for the most
cost-effective ways to finance the fiber project and how to
create and maintain privacy and security standards for
customers, the volunteer panel will also evaluate whether
to operate the network as a public or private utility, or a
combination of the two. Farrell said the panel’s work would
build on a report published by the San Francisco budget and
legislative analyst’s office that laid out a number of possible
scenarios.
Financial Analysis of Options for a Municipal Fiber Network
for City Internet Access:
http://sfbos.org/sites/default/files/FileCenter/Documents
/55324-BLA.MuniGigabitFiberFinance031516.pdf
The Blue Ribbon Panel issued its first report in June 2017:
WHY FIBER? SHOULD SAN FRANCISCO DEPLOY A FIBER
BROADBAND NETWORK?
San Francisco Blue Ribbon Panel on Municipal Fiber
Subcommittee on Technology & Infrastructure
https://sfmunifiber.files.wordpress.com/2017/06/why-
fiber-report.pdf
San Francisco is a Webpass city. Webpass, is a wireless
internet provider that Google Fiber bought in 2016.
Webpass uses radio devices to connect with existing
Ethernet wiring, making it less infrastructure-heavy than
traditional Google Fiber, which brings fiber cables directly
to homes.
33 Shafter/Shafter Connect Business and residential FTTP
Service providers include
Level 3 and Vast Networks
(ISP).
Shafter Connect uses qualified vendors to provide faster
and more reliable high speed Internet and telephone
service over a fiber optic network.
The Shafter Connect network consists of a 30+ mile
backbone ring serving key areas of the City. Additional
backbone and ring extensions are planned and under
construction to expand the service reach of the network.
The network is designed and built to industry standard
metro-Ethernet or “Finished E” specifications.
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The city currently operates a 10 Gbps Ethernet network
over the Shafter Connect all-fiber optic network. The
installed infrastructure supports 100 Gbps and faster
speeds as technology standardizes.
Business and residential services are provisioned and
supported directly by established, qualified service
providers (Level 3 and Vast Networks). Bandwidth to the
customer premise is limited only by the capabilities of the
selected service provider. Additional capabilities such as
high-speed intra-network connections and video are
planned as the Shafter Connect network grows.
34 Sunnyvale SmartCities Assessment City in the process of conducting a SmartCities Assessment
using the SmartCities Council Readiness Guide and as part
of that effort, the city will be defining what infrastructure
will be needed to support the city as a whole.
Sunnyvale is a “potential” Google Fiber city, but has no
plans to pursue fiber-to-the-premises at this time.
35 Truckee/Truckee Donner
Public Utilities District
Dark Fiber No update available.
36 Union City Provide fiber in a former
industrial area to encourage
business development and
retention.
Union City spent $318,000 of bond money to run new high-
speed Internet fiber lines underground near the Union City
BART station as part of its larger effort to try to attract and
retain businesses.
In February 2017, the City Council authorized
Communication Network Resources to pull the lines
through a three-block area of 11th Street between Decoto
Road and Cheeves Way, in the city’s southern end.
The underground conduit where the fiber will be installed
is already in place, a result of the city’s more than 15-year
effort to revitalize a former industrial area into transit-
oriented housing and office space known as the Station
District.
The fiber will be “dark” at first, as the city will need to work
out a deal with an Internet provider to eventually add
service to the lines. The goal is to create incentives for
businesses to move to Union City.
37 Vallejo Public-Private Partnership
Business Internet services
In 2016, the City developed a Fiber Optic Master Plan. The
City owns and operates approximately 36 miles of three-
inch conduit. The majority of the conduit was built for
traffic communications. Fiber is routed from City locations
to Ethernet switches at eight hub locations and the main
hub at City Hall. The Ethernet switches are interconnected
with the main City network hub at City Hall. The remainder
of the conduit not containing fiber generally contains
twisted-pair copper cables used for traffic signal
interconnection. In February 2017, the city agreed to lease
its existing fiber network to Inyo Networks, Inc., which will
then provide internet service to city facilities, along with
businesses, medical facilities, other governmental
agencies, and educational institutions.
38 Vernon: Vernon Gas &
Electric Department Fiber
Optic Division
Citywide FTTP
Business and Residential
Internet services
Vernon is the smallest incorporated city in the state of
California. Describing itself as "exclusively industrial," the
city is home to over 1,800 businesses that employ 50,000
people from surrounding communities. The residential
population is only 112 in 31 existing households. The fiber
network offers these few residents an opportunity to
connect.
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Note: This information was obtained from various city and county web sites, news outlets, and other
entities that track municipal broadband projects. The City of Palo Alto cannot guarantee the accuracy
of this information.
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HISTORY OF THE CITY OF PALO ALTO DARK FIBER OPTIC BACKBONE NETWORK
FIBER‐TO‐THE‐PREMISES AND WIRELESS COMMUNICATIONS INITIATIVES
This document is intended to provide a summary of the highlights of the City’s dark fiber optic backbone network, in
addition to various initiatives to expand the network for citywide fiber‐to‐the‐premises and wireless services.
City of Palo Alto Dark Fiber Optic Backbone Network
The dark fiber optic backbone network (“fiber network”) was originally conceived by the City in the mid‐1990s and is
maintained and operated by City of Palo Alto Utilities (“CPAU”). The City’s initial telecommunications strategy was to build
a dark fiber ring around Palo Alto that would be “capable of supporting multiple network developers and/or service
providers with significant growth potential.” In the mid‐1990s, most investor‐owned and public utilities invested in fiber
optics to improve command and control of their utility infrastructure. Many of these networks typically had excess
capacity that could be licensed or leased to third parties.
The first phase of the fiber backbone construction occurred in 1996‐1997. The initial portions of the network were
constructed in a backbone ring architecture in existing utility rights‐of‐way. The fiber backbone was routed to pass and
provide access to key City facilities and offices. The majority of the City’s business parks (e.g. Stanford Research Park) and
commercial properties are also passed by the fiber backbone. The original fiber backbone consisted of 33 route miles with
144 or more strands of single‐mode fiber along most routes. Since the late 1990s, the fiber backbone has been expanded
to approximately 49 route miles of mostly 144‐ or 288‐count single‐mode fiber.
Fiber network construction was financed internally by the Electric Enterprise Fund through a 20‐year, $2 million loan at a
0% interest rate. These funds were used to construct the network and to cover operating expenses. At the end of Fiscal
Year 2008, the fiber optics business completed the loan repayment to the Electric Enterprise Fund for all capital and
operating expenses from the beginning of the project. A separate Fiber Optics Enterprise Fund, capable of maintaining its
own capital and operating budgets and financial operating reserve, was also created. In Fiscal Year 2009, a Fiber Optics
Enterprise Fund Rate Stabilization Reserve (RSR) was established.
The fiber network was built in part in response to telecommunications service providers such as emerging Competitive
Local Exchange Carriers (CLECs) that would use available dark fiber to provide various telecom services. In the mid‐1990s,
there was a high demand for fiber transport facilities to support the expansion of bandwidth‐intensive broadband services.
By the late 1990s, many CLECs left the market either through mergers with other CLECs or bankruptcy; the so‐called “dot
com bust” also occurred at roughly the same time. As a result, the anticipated demand for dark fiber in the original target
market proved to be somewhat limited. By the late 1990s there was a glut of available dark fiber in many areas of the
country. Nonetheless, it was evident that a fiber network would be a valuable asset for command and control of City of
Palo Alto Utilities (CPAU) facilities (e.g. electric substations) and other critical City infrastructure such as traffic signals.
The network would also support a wide range of broadband voice, data and video applications for City departments, in
addition to various commercial users, telecommunications service providers, and the community as a whole.
EXHIBIT A
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In 2000, the City began to license “dark fiber” for commercial purposes. Dark fiber is unused fiber through which no light
is transmitted, or installed fiber optic cable not carrying a signal. The basic business model is to provide dark fiber
connectivity to users requiring access to large amounts of bandwidth. Customers are responsible for providing and
maintaining the equipment to “light‐up” or provision licensed fiber strands. Dark fiber is licensed or leased by a provider
such as the City without the accompanying transmission service. In contrast, traditional telecommunication service
providers only make available certain products (commonly known as “managed services”) within their service options that
may not adequately meet the requirements of the specific applications.
The fiber network has high market share and brand awareness among commercial enterprises and other organizations
that need the quantity and quality of bandwidth provided by direct fiber optic connections.
By connecting to the City’s fiber backbone, the customer gains fiber access to their Internet Service Provider (ISP) of choice.
A dark fiber customer can interconnect communications systems or computer networks across multiple Palo Alto locations
and can also connect directly to their local and/or long distance carrier(s) of choice with a full range of communications
services. Dark fiber customers can also have redundant telecommunication connections for enhanced reliability.
Many of the City’s commercial dark fiber customers gain access to the Internet through the Palo Alto Internet Exchange
(PAIX, now owned by Equinix). PAIX is a carrier‐neutral collocation facility and hosts over 70 ISPs at their facility located
in downtown Palo Alto. Equinix has 21 similar facilities in the United States and other collocation facilities in Asia and
Europe.
The City currently licenses dark fiber connections to 107 commercial customers. The fiber network also serves the
following City accounts: IT Infrastructure Services, Utilities Substations, Utilities Engineering, Public Works, Water Quality
Control Plant and Community Services (Art Center). The total number of dark fiber service connections serving commercial
customers and the City is 219 (some customers have more than one connection). At the end of fiscal year 2016, the
licensing of dark fiber service connections resulted in a fiber reserve of approximately $24 million. There is a separate
$1.0 million Emergency Plant Replacement fund. According to the proposed Fiscal Year 2017 Budget, the fiber reserve is
projected to increase by $2.3 million.
Annual dark fiber license revenues come from the following customer categories:
• City service connections: 27% of gross revenues.
Private sector entities licensing dark fiber from the City:
Resellers: 42% of gross revenues. “Resellers” are telecommunication companies that purchase large amounts of
transmission capacity from other carriers and resell it to smaller end‐users. Examples of resellers are telecom
companies that sell broadband, telephony and video services to the commercial and residential markets.
Various commercial enterprises: 31% of gross revenues. Examples of private end‐users are companies involved in
various technologies, web hosting, social media, finance, medical, pharmaceuticals, research and development,
software, law firms, consulting firms, e‐commerce, etc.
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Service offerings: Dark fiber backbone license fees are based on the number of fiber miles per month. The base license
price is $272.25 per fiber mile, per month. Quantity, route, length, topology, and other discounts are available. The
minimum backbone license fee is $425 per month. Lateral connection (premises to backbone) fees are based on the
length and type of the lateral, with a minimum fee of $210. Available configurations include point‐to‐point and diverse
rings.
The majority of business parks and commercial properties are passed by the fiber backbone. In 2014, CPAU completed a
project to serve all Palo Alto Unified School District facilities with dark fiber service connections.
2016 ‐ 2017: In 2016, CPAU retained Celerity Integrated Services, Inc. to provide a one‐time comprehensive review and
audit of the City dark fiber optic network. Celerity completed the review and audit and provided a physical description of
the network; documented the number of fiber strands, in addition to conducting an inspection of 90 fiber nodes/cabinets
(i.e. network splice points) to identify what is labeled within the individual nodes/cabinets.
CPAU Engineering is currently working with CAD Masters to reconcile the audit data provided by Celerity with various fiber
databases, in addition to rebuilding front‐end databases to facilitate fiber assignments at the engineering level and to
improve network mapping.
In 2017, CPAU initiated a $1.3 million backbone rebuild project that will install new aerial duct or substructure (conduit
and boxes), in addition to fiber backbone cable to increase capacity for sections of the dark fiber ring that are at or near
capacity. This project will allow CPAU to meet customer requests for services. The project areas primarily cover the
Stanford Research Park, Palo Alto Internet Exchange/Equinix at 529 Bryant, and Downtown areas. This project basically
“overlays” new fiber over existing fiber routes in the network. Existing fiber will continue to serve City facilities and
commercial dark fiber customers.
Fiber‐to‐the‐Premises
For more than fifteen years, the City has worked to develop a business case to build a citywide fiber‐to‐the‐premises
(“FTTP”) network to serve homes and business. A number of business models have been evaluated. The following is a
summary of the highlights to develop a network:
1999: A Request for Proposal (RFP) was issued to build citywide FTTP. There were no viable bids.
2000‐2005: The City Council approved a Fiber‐to‐the‐Home (“FTTH”) trial to determine the feasibility of providing citywide
FTTH access in Palo Alto. The FTTH trial passed 230 homes and included 66 participants in the Community Center
neighborhood. The purpose of the trial was to test the concept of fiber‐to‐the‐home. The FTTH trial proved successful
(i.e., proved technical feasibility), but when initial investment and overhead expenditures were included in the calculation
to create a business case, it was not profitable for the City and the trial was ended.
2006‐2009: In 2006, the City issued another RFP and negotiated with a consortium of private firms to build FTTP under a
public‐private partnership model. In 2009, Staff recommended to Council termination of the RFP process and negotiations
due to the lack of financial resources of the private firms.
2010: The City responded to Google Fiber’s Request for Information.
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2011: Staff worked with two telecommunications consulting firm to evaluate the expansion of the existing dark fiber
network for its commercial dark fiber licensing enterprise and also to expand the network on an incremental basis to
attract a “last mile” FTTP builder and operator. This is a link to the staff report provided to the Utilities Advisory
Commission in June of 2011, and the Council Finance Committee in November of 2011:
Subject: Provide Feedback on the Development of a Business Plan for the Citywide Ultra‐High‐Speed Broadband System
Project
http://www.cityofpaloalto.org/civicax/filebank/documents/27421
2012: Staff worked with a telecommunications consulting firm to study the feasibility of an alternative model for citywide
FTTP which would rely on homeowners paying on a voluntary basis for some or all of the cost to build‐out the existing
dark fiber network into residential neighborhoods. The name of this model is “user‐financed” FTTP. The analysis
concluded that an opt‐in FTTP network can be built using a combination of upfront user fees and City financing; however,
there is very little probability of the debt incurred being repaid through operations. Ongoing subsidies would be required,
very likely in excess of surpluses in the Fiber Optics Fund reserve generated by licensing dark fiber. The study was
supported by a market survey which concluded there was limited interest among residents in this model. This is a link to
the staff report provided to the Utilities Advisory Commission in June 2012:
Subject: Request for Feedback Concerning the Dark Fiber Optic Backbone Network
http://www.cityofpaloalto.org/civicax/filebank/documents/30112
2013 ‐ 2015: The City Council started it’s “Technology and the Connected City” initiative and directed staff to prepare a
Fiber‐to‐the‐Premises Master Plan and a Wireless Network Plan. In 2015, staff worked with a telecommunications
consulting firm to prepare these plans and they are provided for your review in this September 28, 2015 Council staff
report:
Summary Title: Discussion of Fiber‐to‐the‐Premises and Direction on Next Steps for Fiber and City Wireless Services
http://www.cityofpaloalto.org/civicax/filebank/documents/49073
At the September 28, 2015 Council meeting, staff and the consultant reviewed these plans with the Council Members. As
a result, a Council Motion directed staff to pursue several initiatives, which are described in this August 16, 2016 staff
report which updated the Council about the various activities from the Motion:
Summary Title: Fiber‐to‐the‐Premises update on City Council Motions and Google Fiber
http://www.cityofpaloalto.org/civicax/filebank/documents/53363
2014 ‐ 2016: Google Fiber announced Palo Alto as a potential “Google Fiber City” for a build‐out of their fiber optic
network. Since early 2014, staff has been engaged with Google personnel to complete an extensive checklist process
regarding City infrastructure and processes, in addition to negotiating agreements for a project description, utility pole
attachments, encroachment permits, environmental reviews and other agreements for cost recovery for use of staff time.
Based on Council direction, staff has also worked with Google to develop a “co‐build” concept which would explore the
feasibility of building a City network in parallel with Google’s network. In July 2016, Google announced a delay in their
plans for up to six (6) months to build a fiber optic network in Silicon Valley, which also included Mountain View, San Jose,
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Santa Clara and Sunnyvale. Google advised staff that they are exploring more innovative ways to deploy their network,
which may include implementing wireless technologies. Co‐build discussions have also been delayed.
In the summer of 2016, the City approved permits for two cabinets so AT&T can begin to deploy their “AT&T Fiber” service.
AT&T is exploring deployment of additional cabinets in 2017. Based on Council direction, staff is also pursuing co‐build
discussions with AT&T.
On December 12, 2016, staff provided Council with an informational update regarding Fiber‐to‐the‐Premises and wireless
initiatives:
Summary Title: Update for Fiber‐to‐the‐Premises and Wireless Initiatives:
http://www.cityofpaloalto.org/civicax/filebank/documents/55016
Wireless Network Plan
Based on the above‐mentioned Wireless Network Plan, Council directed staff to issue an RFP for a Point‐to‐Multipoint
Secure Access Network for Public Safety and Utilities communications, in addition to an RFP for a Mobile Broadband
Network to improve “in‐vehicle” broadband access in Public Safety vehicles. Staff is also working to extend the City’s
existing Wi‐Fi service to other City facilities that are currently unserved. Most key City facilities already have Wi‐Fi available
for staff and public use.
Staff Work Plan Update: City Council Motion from September 28, 2015 (CMR ID #6104) and
status of November 30, 2015 (CMR ID #6301) staff recommendations:
Task Target
Date Status
1
Council requests an update to the consultant’s
report including:
a In the FTTP Master Plan:
12/31/2015
Completed. Reviewed
assumptions for outside plant
costs and capital additions in FTTP
Master Plan with CAC and CTC on
1/21/16 and 2/18/16. CAC now in
agreement with CTC’s FTTP
network cost estimates and there
are no discrepancies to report.
Detailed assumptions, and their impacts,
used to forecast the FTTP capital additions
are to be reviewed by Citizen Advisors if
there is a disagreement between the
consultant’s report and the CAC’s
recommendation, the Staff Report to
Council will highlight the discrepancy.
Once this is accomplished, a revised
forecast is to be provided to the Council as
an Action Item;
b In the Wireless Network Report:
i. A 20-year forecast should be provided
consistent with the FTTP report; 12/31/2015 Completed
ii. The description of Scenario 1 lacked
both a price forecast and fiber backhaul
details for the proposed municipal
properties to be served. These details
should be included in an update prior to an
RFP. Evaluate expanding wireless access in
retail areas, with an option for expanding
Wi-Fi coverage at City facilities and public
areas as part of the RFP (Scenario 1);
9/30/2016
Completed.
The cost estimates for the
extension of existing City Wi-Fi to
unserved City facilities & public
areas/parks are shown in Exhibit
A.
The evaluation of expanding Wi-Fi
access in retail areas showed that
Wi-Fi coverage in retail areas is
adequately provided by the retail
institutions. Expanding Wi-Fi
coverage in these areas is not
recommended by City Staff.
2
Issue RFP to add dedicated wireless
communications to increase communication
for Public Safety and Utilities departments
(Scenarios 3 and 4);
9/30/2017
In progress.
The RFQ for the equipment to
support the Point-to-Multipoint
Network for Secure City
Enterprise Access (Public Safety &
Utilities) was issued in June 2017.
Currently, Public Safety is
obtaining a quotation for
installation of the equipment.
The draft RFP for the Citywide
Mobile Data Network for Public
Safety is completed and currently
being reviewed by the CAO.
3 Direct Staff to bring a dig-once Ordinance;
Fall/Winter
2017
In Progress.
The CTC draft report was provided
on 5/16/16. The report evaluates
existing dig once models from
other municipalities and provides
recommendations for the City to
consider. The CAO, in consultation
with cross-departmental staff, is
currently reviewing the
recommendations contained in
the report.
4
Direct Staff to discuss co-build with AT&T and
Google how the City can lay its own conduit to
the premise during the buildouts;
a AT&T 12/30/2016
Completed.
The City met with AT&T
representatives to discuss a co-
build opportunity as AT&T
deploys their AT&T Fiber Internet
service in Palo Alto. AT&T
representatives subsequently
indicated the company is not
interested in a co-build at this
time.
b Google TBD
On-Hold.
At Google Fiber’s request, the
discussion regarding deployment
of FTTP for the 5 proposed Bay
Area cities is on hold while they
examine new, innovative methods
for fiber deployment.
5
Move forward with RFI exploring both Muni-
owned model with contractors for build and
ongoing operations, and Public—private
model with City owned fiber and private
partner (such as Sonic) operating and owning
electronics, considering both Google in the
market and not;
9/30/2016
Completed.
The 8 RFIs received have been
reviewed and CTC provided an
evaluation report of the RFIs in
Exhibit B. 3 of the respondent
firms were interviewed, none of
the respondent’s proposals
completely align with city goals.
6
Approve a temporary contract position for a
Fiber and Wireless Telecommunications
Project Manager, dedicated to Fiber-to-the-
Premises and wireless initiatives, in the
amount of $228,000 annually, $684,000 for a
period up to three (3) years;
TBD
On-Hold.
The decision was made to put this
position on hold due to the
Google Fiber “pause”. Staff will
evaluate whether a contract
position or professional services
agreement is needed dependent
on City Council’s decision
regarding next steps for the
project.
7
Approve and authorize the City Manager or his
designee to execute amendments to two
contracts with Columbia Telecommunications
Corporation dba CTC Technology & Energy
(“CTC”) as follows:
a
Increasing the not-to-exceed amount for
Contract No. C15152568 (Wireless
Network Plan) by $94,490 from $131,650
to $226,140 (includes a 10% contingency
for the provision of related additional, but
unforeseen consulting services) and extend
the contract to June 30, 2016 to develop a
Request for Proposal for dedicated wireless
communications for Public Safety and
Utilities, in addition to evaluating the
expansion of wireless access in retail areas
12/31/2015
Completed.
Amendment finalized on 1/6/16.
b
Increasing the not-to-exceed amount for
Contract No. C15152569 (FTTP Master
Plan) by $58,850 from $144,944 to
$203,794 (includes a 10% contingency for
the provision of related additional, but
unforeseen consulting services) and extend
the contract to June 30, 2016 to provide
technical analysis of the Request for
Information (RFI) responses and any
consulting services needed to help develop
a “Dig Once” Ordinance for consideration
by the Council
12/31/2015
Completed.
Amendment finalized on 1/6/16.
UTILITIES ADVISORY COMMISSION MEETING
MINUTES OF April 5, 2017 MEETING
ITEM 2: ACTION: Utilities Advisory Commission Recommendation that Council Approve a
Recommendations Concerning: (1) Future Plans for Fiber and Broadband Expansion; and (2)
Expansion; and (2) Expand Wi-Fi to Unserved City Facilities; and Discontinue Consideration of
City-Provided Wi-Fi in Commercial Areas
Strategic Business Manager Dave Yuan gave an overview of past Fiber-to-the-Premises (FTTP)
efforts to build a municipally owned network including multiple studies and issuance of various
request for proposals (RFPs) and request for information (RFI). In the last couple years, under
advisement from Council, UAC, City Manager’s Office, and Citizen Advisory Committee (CAC),
we’ve pursed numerous FTTP initiatives such as the master plan, Google Fiber effort, co-build
discussions with Google and AT&T, and RFI issuance for a public-private partnership. We have
gathered a lot of valuable information through these endeavors. We’ve come to a point where
we’re asking UAC and Council to provide us direction on where we should focus our efforts
towards in the next year or so. We present you with three options and we would like the UAC
to recommend one of these options to Policy & Services Committee (P&S) and Council.
Option 1 – Explore funding models to finance a municipal FTTP network with an estimated cost
of $77.6M.
Option 2 – Pursue a design a fiber-to-the-node network with an estimated cost of $12M; in
addition, explore different funds models to finance the “last mile” build.
Option 3 – Discontinue pursuing FTTP thus pausing municipal FTTP efforts, redirect resources to
streamline 3rd party upgrades and allow the market to play out.
Chief Information Officer Jonathan Reichental spoke about the future of wireless services,
stating that most industries will be using wireless for most applications in the future. One of
five U.S. households are now mobile only access to internet. The number of households with
mobile only access is increasing rapidly. It doubled in the last two years from one in ten
households in 2013. He discussed the coming Fifth generation (5G) standard, which is intended
to be a connection fast enough to replace fixed connections such as cable. 5G specifications is
not complete but anticipate it will move to mainstream around 2020. There’s a lot of
experimentation happening today with 5G. It will be far faster than 4G LTE, a minimum of 20
Gigabits for download and 10 Gigabits for upload, and is far faster than physical connections.
5G will be about 2000x faster than 4G and average U.S. broadband will be 400x faster. Google
DRAFT
had stopped its fiber rollout to focus on wireless broadband. Verizon currently has 5G fixed
wireless technology testing underway in “eleven geographies” and “different environments”
including urban and suburban settings. AT&T is piloting in Austin, TX with Intel and Ericsson
using millimeter wave reaching 1GB speeds up and down. Mobile World Congress 2017, the
mobile industry’s biggest trade show, 5G was everywhere. Big players Qualcomm, Ericsson,
Intel, Nokia, and all chip and mobile leaders betting the future on it.
Telecom Italia says Turin, Italy will become 100% 5G by 2020.
Senior Management Analyst Jim Fleming discussed three options being offered tonight for
action on Fiber to the Premises (FTTP). The first option was to implement municipal FTTP. The
cost was estimated at $78M for construction, $8M annual O&M, and would require a 72% take
rate. If the City used $20M from its fiber reserves, required take rate could decrease to 57%. A
key consideration for network implementation is how to fund both capital construction costs
and ongoing operational expenses. Acknowledging that capital and operating costs associated
with a full-scale citywide build-out will be significant, the City will likely have to seek outside
funding and/or internal subsidies to support construction and the FTTP network’s startup costs.
Certain challenges inherent to FTTP deployment are especially pronounced in the Palo Alto. In
particular, high construction and labor costs in the Bay Area result in a higher necessary take
rate to obtain and maintain positive cash flow. As a comparison, other recent analyses
performed by our consultant for municipalities have shown a required take rate in the mid-40
percent range in order to maintain positive cash flow.
The second option was to explore the design of a Fiber-to-the-Node Network, which may
provide a platform for Public Safety and Utilities wireless communication in the field,
communications support for Smart Grid and Smart City applications, and new dark fiber
licensing opportunities. This approach may also create a basis to explore alternative “last mile”
models for Fiber-to-the-Premises, including user-financing, creating Assessment Districts,
Mello-Roos Community Facilities Districts and/or public-private partnerships. Construction
costs were estimated at $12M to $15M, with unknown ongoing O&M cost and would be
dependent on usage of the network. A FTTN network would require construction of
approximately 62 miles of fiber plant, compared to 230 miles for a citywide FTTP network
deployment. This network would provide access points to connect neighborhood-area backhaul
communications links. The network could be a phased approach for fiber expansion and it may
lower the barriers for potential providers to build the so-called “last mile” from neighborhood
access nodes to the premises, and provide the City with an economically viable deployment
approach. Additionally, this approach may expand the functionality and the choices of
technology that can be implemented for Utilities and Public Safety communications, and
possibly support communication requirements to implement future Smart City and Smart Grid
applications. New opportunities to license dark fiber may also occur, particularly for the
wireless carriers who will be densifying their networks to improve coverage and capacity with
more wireless communication facilities such as small cell antennas deployed within residential
neighborhoods and high traffic commercial areas such as University Ave. These small cell
antennas and other distributed antenna systems will need fiber for backhaul purposes to
connect to the wireless carriers’ macro cellular towers and other network hub sites. This
potential opportunity aligns with the existing commercial dark fiber enterprise. A FTTN
network may include an option for the City to build the “last mile” at a later date, or as a means
of creating an incentive for a private sector partner to build and operate the last mile. Another
potential approach is to direct new investment to neighborhoods that meet established
subscription requirements – in other words “take rates.” If a certain level of interest was met
and property owners were willing to pay for the connections between the neighborhood node
and homes and businesses, assessment districts could be created as an incentive to build FTTP
The third option was to stop evaluation of either FTTP or FTTN and focus on streamlining the
ability for third parties to perform network upgrades in the City, where feasible. In light of the
anticipated upgrade plans by the cable and telco incumbents and challenge in obtaining
sufficient market share, another potential option is pausing any further municipal FTTP
development efforts at this time. In the interest of improving broadband in Palo Alto, another
option is to identify resources and improve coordination of City policies and processes to
facilitate network upgrades by the incumbents and other independent ISPs. To that end, the
objective of this recommendation is to enhance transparency and predictability for third party
providers. Access by third-parties to infrastructure data and assets such as poles, conduits and
public rights-of-ways is essential to encouraging broadband improvements. Ensuring efficient
and predictable processes that enhance deployments is equally important, as with any public
project.
Staff also has two wireless recommendations. The first recommendation is to expand Wi-Fi to
unserved City facilities at common areas in Cubberley, Lucie Stern, the Golf Course Pro Shop
and Cafe, and Lytton Plaza. A high-level cost estimate for the recommended sites is $165,000
for installation and $6,200 for monthly recurring charges. The second wireless
recommendation is to discontinue consideration of City Wi-Fi in commercial areas since there
have been no specific requests from the business community or the general public for Wi-Fi
services in high traffic commercial areas. A significant number of Palo Alto businesses already
offer free Wi-Fi service to patrons as an amenity.
Citizen Jeff Hoel serves on the CAC, but expressed his personal views. Hoel referenced a
lengthy email that was sent to the UAC. There is $25M in fiber fund and the dark fiber has
revenue stream of $2.5M per year. User financed approach could be used for part of funding.
If planning smart meters in Palo Alto, City could use Electric Special Project fund for fiber.
There seems to be enough funding to do FTTP. A previous staff report couldn't find the
necessary funds. We can still afford to pay for a very large phase 1 of the project. Sandy, OR
had a contest that showed many neighborhoods were interested.
Citizen Herb Borock stated the FTTP project has been managed under multiple departments
and no decision has been made on whether it’s a project or not. The City just conducted
another lengthy study but now no one wants to give it the time of day. The CAC is not present
tonight, the sense I have is the CAC is simply responding to what staff says should be done.
There have not been substantive discussions, although staff promises stronger action in the
future. The CAC can help, but not in role they have today. Create a demand-driven dark fiber
partnership, then lease fiber to partner. PA is unique, we have bridge funding for the additional
fiber. The main thing is Council needs to make a choice. If we study for 2 more years, it will
take too long.
Commissioner Ballantine said he did not think much about the options had changed since the
previous year’s discussion. He thought the best idea was some kind of citizen referendum about
whether it would be possible to raise funds for the rollout. He said tonight’s recommendation
did not align with the Council’s guidance. He did not see any way to reasonably approve any of
the three options. It was not reasonable to abandon the effort given Council direction. He
thought FTTN might end up coming for free as a result of the smart grid buildout. He
understood the issue with financing.
Commissioner Johnston said a member of the public had e-mailed with questions about
conflicts of interest. He said he did not have a conflict, and that he did not own the stocks cited
in the e-mail. He asked what the revenue might be from an FTTN rollout.
Fleming said it was difficult to predict the revenue, but the business model was in line with the
City’s current business model. The City currently partnered with resellers of the City’s dark fiber
service. By contrast, competition in the area of FTTP was very difficult, a new service for the
City, with two existing incumbents to compete with.
Commissioner Schwartz asked staff to confirm that FTTN would support a 5G rollout.
Reichental confirmed fiber was essential to support better wireless.
Commissioner Schwartz said it would be helpful to talk about applications that would be
enabled by 5G, rather than listing speeds. It helped people relate to the discussion effectively.
She also suggested something such as a “scholarship fund.” If there was a startup or nonprofit
that required fiber, she would like to see the City provide that service at a lower rate. She said
she had seen progress since the previous year’s discussion, particularly the inclusion of the
FTTN option. Lastly, she clarified that in her Commissioner comments, when she had mentioned
Chattanooga Electric Power Board, that organization was evaluated as a utility rather than a
telecom.
Yuan spoke to the “scholarship fund” idea, saying staff could consider adding fiber under the
Emerging Technology program. He said regarding the comments on lack of progress, most of
the work over the last couple years have been focused on a potential partnership with Google
Fiber, which had not panned out.
Commissioner Danaher said option three was not that feasible. Staff had seen how difficult it
was to work with a third party when collaborating with Google Fiber, and he had seen AT&T
make excuses and delay, such as the color requirements for equipment cabinets, to delay
rollouts. He asked about FTTP, and whether the City would be the service provider or license to
third parties. He also said that option #1 will pass all homes, but there’s no data collection.
Fleming said in an FTTP rollout it was best for the City to be the provider, but pulling together
those services, such as providing cable services, was difficult. It was typically a money-losing
business for a small operator. The classic “triple-play” model is outdated. It was possible to
partner with an ISP, but that would be a revenue sharing situation, meaning it would be difficult
to make any return on investment. The breakeven take rate required to make FTTP work was
very high, making it difficult even without a revenue sharing arrangement.
Commissioner Danaher said it would be a matter of what the City was willing to subsidize.
Fleming said that was the case. He noted that Chattanooga, a commonly cited public provider,
had built their system using Federal grants, had built it out to roll out a smart grid service, and
had been underserved by other telecom providers. One-third of the build costs came from
federal grants and they were able to allocate costs against their electric utility. Comcast
answered by performing upgrades in Chattanooga to maintain their market share.
Commissioner Danaher asked whether there would be just one provider on the City network.
He noted the challenges with that approach. He asked how the buildout of the last mile of an
FTTN network would work. How does FTTN get us to FTTP?
Fleming said there were few ISPs who would be interested in partnering and capable of
providing services to all homes in the community. Fleming said it's speculative, we might attract
a partner. The last mile is the most expensive part of the build and the provider would
probably want a guaranteed take rate.
Commissioner Danaher asked about the alternative in which citizens signed up as a
neighborhood to fund the last mile.
Fleming said user-financing has been considered but there wasn’t enough community interest
given the costs. Nowadays, connections to homes could be wireless, which costs much less.
The home owner could pay for the wireless connection.
Reichental noted that it was more likely that the last mile would be served wirelessly by 5G
providers.
Fleming said that was the likely future business model for Google Fiber.
Commissioner Danaher said it was important to distinguish between the business model and
the technology. The business model must be thought through. He said the City could subsidize
connections and amortize them over twenty years. He agreed with the assessment on the
technology, but still had questions about the technology.
Councilmember Filseth asked whether future wireless technologies could replace the need for
fiber backhaul.
Reichental said it was hard to predict, but he did not see anything on the horizon. There was a
need for fiber backhaul for good wireless services.
Councilmember Filseth said two things have changed in the past one and a half years. First is
whether we get on the Google train? Second, there’s more clarity on 5G and it’s looking more
realistic where fiber to node and wireless to the home is more likely. The fundamental question
regularly raised was why the City would want to be in this business in the first place given there
are commercial providers and there are a lot of technology services the City does not provide
such as ISP, commercial cellular or citywide commercial Wi-Fi. He said he could not speak for
the whole Council, but for some the motivation related to a “bad scenario” was one in which
laying fiber was so expensive that the first provider in became the sole provider, and he was
concerned that with a natural monopoly the operator could end up being rapacious. The
concern is we don’t want to operate the network but if the monopoly provider is not servicing
our community, we wanted an insurance policy against the “bad scenario” such as “dig once”
with Google. It seems that 5G and wireless are looking concrete enough at this point, that if we
pursue the same path as the incumbents, we would avoid the “bad scenario” because there will
be multiple providers. Under option 1, there's a risk that we could have a $50M - $100M boat
anchor years down the road; if the service provider could provide enough bandwidth through
wireless and avoid the massive investment in trenching and adding fiber. He would be cautious
in making the investment now under option 1 and would want to see what happens with
wireless. The City would likely not lose by delaying a short time. FTTN is a much cheaper
option; it could work if wireless is used for the last mile. He also wondered whether FTTN might
be obsolete eventually. Is this a logical thought process?
Reichental agreed. This is similar to Clay Christensen’s “disruptive innovation” model where a
company goes along a path of innovation but an upstart enters the market and makes the
technology obsolete. This happens often.
Commissioner Ballantine suggests to prevent a “bad scenario” under option 2, can we
implement a neighborhood lottery? Build to the node and extend to premise in one
neighborhood, gather data, and experiment partnership models. If a “bad scenario”
materializes, we can stop and the cost is marginal.
Chair Cook thanked staff for the presentation. He said option one was infeasible without a vote,
given the high costs and take rate required. His “bad scenario” was spending a lot of City money
and having it become worthless. Option 2 seemed promising on its face since the Fiber Fund
has $20M - $25M in reserves, but wondered whether there was really enough value in that
option to move forward. Per Jeff Hoel, is this “fiber to the nothing” or “fiber to the node”? He
said the benefits for option 2 had to be quantified before the City moved forward. Is there
really a tie-in with smart grid and what’s the advantage of advanced meters and smart devices?
He said some of the possible benefits sounded interesting, but a clearer benefit had to be
shown. He was skeptical about 5G, and wanted a clearer explanation of the value. Will FTTN
encourage something, not just something speculative? He did not like option 3. He also did not
think municipal Wi-Fi was a good idea. He thought the golf course can pay for its own Wi-Fi.
Vice Chair Danaher said he agreed that more work needed to be done on the service provider
model associated with FTTN. Under option 2, need to explore design of FTTN, identify service
provider model and financing mechanisms. It should be technology independent.
Councilmember Filseth said in looking at option 2, it seems pretty likely that next generation
wireless will be much faster than now. If the incumbents are offering 20Mb-40Mb and citizens
can get these speeds directly from them without going through the city; we need to think about
this when researching. We need to assess the value of option 2. Some customers will pay more
for faster speed but most are probably content with their existing service.
Reichental said he was 100% confident various wireless providers would provide speeds above
what Filseth stated.
Councilmember Filseth said 3G had not rolled out anywhere near as quickly as had been
expected. 2.5G carried people a long way.
Vice Chair Danaher said there were many virtual reality startups, and there were a variety of
applications even beyond entertainment such as work, medical, telepresence and other
applications that have not been invented. It would require very fast gigabit connection speeds.
Commissioner Schwartz said option 2 is a foundational technology. FTTN which would enable a
variety of new technological applications, such as smart grid, interval meters, supply and
demand applications and gas and water leak detection which already exists. She said it was
hard to find any businesses really using telepresence. But she said that if virtual reality became
more prevalent, the FTTN investment would not be a waste of money since it would enable
technology for these types of applications. She expected that the consultants hired for the
strategic plan would address these issues. We need to build a strategic plan outlining phased
application deployment.
Commissioner Ballantine said Palo Alto doesn't have underground wiring citywide. Earlier
underground wiring costs more to maintain but future undergrounding was made better
because of lessons learned. Utilities has a plan to underground in a piecemeal fashion. For
option 2, add an element of option 1 as an experiment so we’re able to learn from it.
ACTION: Commissioner Schwartz made a motion to recommend Council approval of Option
Two, taking into account UAC feedback on that option including the idea of a neighborhood
beta. Commissioner Danaher seconded the motion. The motion passed unanimously (5-0), with
Chair Cook, Vice Chair Danaher and Commissioners Ballantine, Johnston, and Schwartz voting
yes and Commissioners Forssell and Trumbull absent)
Second motion – Commissioner Schwartz, second Ballantine, approve the recommendations on
wireless expansion, excluding extension of Wi-Fi to the golf course and discontinue
consideration of City Wi-Fi in commercial areas. (5-0)
Appendix A: Existing Market Assessment
Final
Prepared for City of Palo Alto
July 2015
EXHIBIT D
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
i
Contents
1 Existing Market Assessment ................................................................................................... 1
2 Enterprise Market ................................................................................................................... 1
1.1 Dark Fiber Services ........................................................................................................... 1
1.1.1 Integra Telecom ........................................................................................................ 1
1.1.2 Level(3) ...................................................................................................................... 2
1.1.3 Zayo ........................................................................................................................... 3
1.2 Ethernet Services .............................................................................................................. 4
1.2.1 AT&T .......................................................................................................................... 4
1.2.2 CenturyLink ............................................................................................................... 5
1.2.3 Cogent Communications ........................................................................................... 5
1.2.4 Comcast ..................................................................................................................... 5
1.2.5 Level(3) ...................................................................................................................... 6
1.2.6 Megapath .................................................................................................................. 6
1.2.7 Integra Telecom ........................................................................................................ 6
1.2.8 Verizon ...................................................................................................................... 6
1.2.9 Windstream Communications .................................................................................. 7
1.2.10 XO Communications ................................................................................................. 7
1.2.11 Zayo ........................................................................................................................... 7
2 Residential and Small Business Services ................................................................................. 8
2.1 Cable ................................................................................................................................. 8
2.2 DSL .................................................................................................................................... 9
2.2.1 AT&T .......................................................................................................................... 9
2.2.2 EarthLink ................................................................................................................. 10
2.2.3 MegaPath ................................................................................................................ 10
2.2.4 Sonic ........................................................................................................................ 10
2.3 Satellite ........................................................................................................................... 10
2.3.1 HughesNet .............................................................................................................. 10
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
ii
2.3.2 Exede ....................................................................................................................... 11
2.3.3 DishNET ................................................................................................................... 11
2.4 Wireless .......................................................................................................................... 11
2.4.1 Verizon .................................................................................................................... 11
2.4.2 Sprint ....................................................................................................................... 12
2.4.3 AT&T ........................................................................................................................ 12
2.4.4 Cricket Wireless ...................................................................................................... 12
2.4.5 T‐Mobile .................................................................................................................. 12
2.4.6 Etheric Networks ..................................................................................................... 13
Figures
Figure 1: Integra Telecom Network Map ........................................................................................ 2
Figure 2: Level(3) Dark Fiber Routes ............................................................................................... 3
Figure 3: Zayo Fiber Map ................................................................................................................ 4
Tables
Table 1: Overview of Residential and Small Business Data Services in Palo Alto ........................... 8
Table 2: Comcast Residential Internet – Internet Only .................................................................. 9
Table 3: Comcast Small Business Internet – Internet Only ............................................................. 9
Table 4: AT&T Residential Internet – Internet Only ..................................................................... 10
Table 5: Etheric Networks Internet Services ................................................................................ 13
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
1
1 Existing Market Assessment
This existing market assessment provides an overview of providers that currently offer services
with which the City’s potential new fiber‐to‐the‐premises (FTTP) enterprise might compete. The
information provided here is based on what was publicly available—providers often do not
publish extensive information about their networks (e.g., capacity and other specific details).
2 Enterprise Market
This section summarizes competitors for dark fiber and Ethernet services with respect to the
enterprise customers within the City of Palo Alto.
During the course of our research, we identified 11 service providers in the Palo Alto area that
offer a range of services from dark fiber connectivity to data transport services, with speeds that
range from 1 Megabit per second (Mbps) to 100 Gigabits per second (Gbps). Individual providers
tailor these services to a customer’s requirements, such as speed and class of service. Greater
proximity to the provider’s existing network infrastructure results in lower service pricing.
Providers prefer to offer transport services between locations on their network (On‐Net) and
provision Multiprotocol Label Switching (MPLS) based services for connecting locations that are
Off‐Net.
A trend that we expect to continue is the consolidation of competitors through mergers and
acquisitions. Competitors are discussed in detail in the following sections.
1.1 Dark Fiber Services
In addition to the City of Palo Alto Utilities (CPAU) dark fiber offering,1 our analysis found that
three service providers in the City offer dark fiber services2: Integra Telecom, Level (3) and Zayo.3
There may be other providers that offer dark fiber (e.g., on a case‐by‐case basis), but this analysis
yielded information only about the three discussed here.
1.1.1 Integra Telecom
Integra Telecom offers dark fiber services within the city. They provide flexible options in securing
dark fiber through bundles, lease, and indefeasible rights of use (IRU). The dark fiber routes are
depicted in Figure 1.4,5 Dark fiber pricing varies individually, based on distance from the
1 CPAU is engaged in capital improvements for added capacity and to provide additional dark fiber routes.
2 An assessment of the potential impact of alternative dark fiber provider offerings to City of Palo Alto’s existing
dark fiber enterprise is beyond the scope of this analysis.
3 While this analysis yielded only these three, there may be other providers offering dark fiber—for example, on a
case‐by‐case basis.
4 http://www.integratelecom.com/pages/network‐map.aspx, accessed March 2015.
5 As we noted, carriers typically do not publish details such as whether they directly own the routes depicted on
their publicly‐available maps.
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
2
provider’s fiber ring. A difference in a few tenths of a mile can lead to significant differences in
the price of dark fiber connectivity due to additional construction costs.
Figure 1: Integra Telecom Network Map
1.1.2 Level(3)
Level(3) has multiple dark fiber routes in Palo Alto as depicted in Figure 2.6 Services are offered
only to select customers based on their application requirements.
6 As we noted, carriers typically do not publish details such as whether they directly own the routes depicted on
their publicly‐available maps.
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
3
Figure 2: Level(3) Dark Fiber Routes7
1.1.3 Zayo
Zayo provides dark fiber connectivity over its national network of metro and intercity fiber.8 The
company claims to have proven expertise in deploying major new dark fiber networks and offers
multiple financing options including lease or Indefeasible Rights of Use (IRU). Pricing varies
significantly depending on whether the building is On‐Net or not; if the location is Off‐Net,
construction and splicing costs would apply.9
7 http://maps.level3.com/default/, accessed May 2015.
8 Zayo is also a CPAU Value Added Reseller (VAR), based on conversations with CPAU staff.
9 http://zayofibersolutions.com/why‐dark‐fiber, accessed May 2015.
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
4
Figure 3: Zayo Fiber Map10
1.2 Ethernet Services
Most existing service providers offer enterprise‐grade Ethernet based services. These are
typically classified under two categories: point‐to‐point connectivity and access services, such as
Dedicated Internet Access (DIA) and IP Virtual Private Networks (IP‐VPN). Bandwidths range from
1 Mbps to 100 Gbps. Providers prefer to offer MPLS based IP‐VPN services when the service
locations are Off‐Net to avoid construction and installation costs. MPLS based networks provide
high performance for real‐time applications like voice and video, and are typically priced higher.
The carriers who provide these services in the Palo Alto region are AT&T, CenturyLink, Cogent
Communications, Comcast,11 Integra Telecom, Level (3), Megapath, Verizon, Windstream
Communications, XO Communications and Zayo. Prices depend on the bandwidth, location, and
network configuration, whether the service is protected or unprotected, and whether the service
has a switched or mesh structure.
1.2.1 AT&T
AT&T has four different types of Ethernet products—GigaMAN, DecaMAN, Opt‐E‐MAN, and
Metro Ethernet. GigaMAN provides a native‐rate interconnection of 1 Gbps between customer
end points. It is a dedicated point‐to‐point fiber optic based service between customer locations
which includes the supply of the GigE Network Terminating Equipment (NTE) at the customer
10 http://www.zayo.com/network/interactive‐map, accessed March 2015.
11 It appears Comcast may be pursuing the enterprise market more aggressively through means like going into
wireless backhaul. http://www.fiercetelecom.com/offer/gc_backhaul?sourceform=Organic‐GC‐Backhaul‐
FierceTelecom, accessed July 2015.
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premises. DecaMAN connects the end points at 10 Gbps and is transmitted in native Ethernet
format similar to GigaMAN, only 10 times faster. Opt‐E‐MAN service provides a switched
Ethernet service within a metropolitan area. It supports bandwidths ranging from 1 Mbps to
1,000 Mbps, and configurations such as point‐to‐point, point‐to‐multipoint, and multipoint‐to‐
multipoint. Metro Ethernet service provides various transport capabilities ranging from 2 Mbps
through 1 Gbps while meeting IEEE 802.3 standards.12
1.2.2 CenturyLink
CenturyLink provides point‐to‐point inter‐city and intra‐city configurations for full‐duplex data
transmission.13 The company offers speeds of 100 Mbps to 10 Gbps.14
1.2.3 Cogent Communications
Cogent Communications’ Ethernet services are available at speeds of 1.5 Mbps to 10 Gbps.15 The
company provides middle mile services with the last mile service provisioned through local
exchange carriers (LEC).16 Often, more competitive pricing and better customer support is
available through Cogent even though the company utilizes the LECs’ last‐mile services. Cogent
has two on‐net locations (data centers) in the City.
1.2.4 Comcast
Comcast provides Ethernet Private Line (EPL) services. EPL service enables customers to connect
their Customer premises equipment (CPE) using a lower cost Ethernet interface, as well as using
any Virtual Local Area Networks (VLAN) or Ethernet control protocol across the service without
coordination with Comcast. EPL service is offered with 10Mbps, 100Mbps, 1 Gbps or 10 Gbps
Ethernet User‐to‐Network Interfaces (UNI) and is available in speed increments from 1 Mbps to
10 Gbps.17
It is important to note that Comcast began offering “Gigabit Pro” service in 2015, a 2 Gbps service
priced at $300 per month with installation fees of up to $1,000.18 Given the installation and
monthly fees, this service is priced out of most residential users’ reach. Further, the service does
not have the bells and whistles that traditional Metro Ethernet has—such as committed interface
12
http://www.business.att.com/service_overview.jsp?repoid=Product&repoitem=w_ethernet&serv=w_ethernet&se
rv_port=w_data&serv_fam=w_local_data&state=California&segment=whole, accessed March 2015.
13 CenturyLink is also a CPAU VAR and typically uses ring configuration for redundancy, based on conversations
with CPAU staff.
14 http://www.centurylink.com/business/products/products‐and‐services/data‐networking/private.html, accessed
May 2015.
15 http://www.cogentco.com/en/products‐and‐services, accessed May 2015.
16 Cogent is also a CPAU VAR, based on conversations with CPAU staff.
17 http://business.comcast.com/ethernet/products/ethernet‐private‐line‐technical‐specifications, accessed April
2015.
18 http://www.theverge.com/2015/7/13/8949207/comcast‐gigabit‐pro‐price‐300, accessed July 2015.
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
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rates. However, if Gigabit Pro is successful, it could disrupt the Metro Ethernet market by filling
a mid‐range gap with service and pricing that has not previously existed.
1.2.5 Level(3)
Level (3)’s Metro Ethernet dedicated service is available in bandwidth options of 3 Mbps to 1
Gbps and its Ethernet Virtual Private Line (VPL) offers in speeds ranging from 3 Mbps to 10
Gbps.19 It is an end‐to‐end Layer 2 switched Ethernet service delivered via a Multi‐protocol Label
Switched (MPLS) backbone. Internet services are available in a range of 14 speeds up to 10
Gbps.20
1.2.6 Megapath
Megapath offers business Ethernet services in the Palo Alto area with advertised speeds up to 45
Mbps. Higher speeds are available on a case‐ by‐case basis.21
1.2.7 Integra Telecom
Integra Telecom offers Ethernet services from 1.5 Mbps to 10 Gbps. The point‐to‐point E‐Line
and multipoint ‐to ‐multipoint E‐LAN configurations are available.22
1.2.8 Verizon
Verizon offers Ethernet services under three different product categories—Ethernet Local Area
Network (LAN), EPL, and EVPL. The Ethernet LAN is a multipoint‐to‐multipoint bridging service at
native LAN speeds. It is configured by connecting customer User‐to‐ Network Interfaces (UNIs)
to one multipoint‐to‐multipoint Ethernet Virtual Connection or Virtual LAN (VLAN), and provides
two Class of Service options—standard and real time. The Ethernet Private Line is a managed,
point‐to‐point transport service for Ethernet frames. It is provisioned as Ethernet over SONET
(EoS) and speeds of 10 Mbps to 10 Gbps are available. The EVPL is an all‐fiber optic network
service that connects subscriber locations at native LAN speeds; EVPL uses point‐to‐point
Ethernet virtual connections (EVCs) to define site‐to‐site connections. It can be configured to
support multiple EVCs to enable a hub and spoke configuration and supports bandwidths from 1
Mbps to 10 Gbps.23
19 http://www.level3.com/en/products‐and‐services/data‐and‐internet/vpn‐virtual‐private‐network/evpl/,
accessed March 2015.
20 http://www.level3.com/~/media/files/factsheets/en_ethernet_fs_ethernetmatrix.pdf, accessed April 2015.
21 http://www.megapath.com/data/ethernet/, accessed May 2015.
22 http://www.integratelecom.com/enterprise/products/pages/carrier‐ethernet‐services.aspx, accessed May 2015.
23 http://www.verizonenterprise.com/products/networking/ethernet/, accessed April 2015.
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1.2.9 Windstream Communications
Windstream Communications has a nationwide presence serving major metropolitan areas,
including the City, with private line and MPLS VPN services with speeds up to 10 Gbps.24, 25
1.2.10 XO Communications
XO Communications offers carrier Ethernet services at multiple bandwidth options from 3 Mbps
to 100 Gbps over their Tier 1 IP network.26, 27
1.2.11 Zayo
Zayo delivers Ethernet in three service types with bandwidth ranging from 100 Mbps to 10 Gbps
and options like quality of service (QoS) guarantees and route protection based on customer
needs. The different types of services offered are: Ethernet‐Line, which provides point‐to‐point
and point‐to‐multipoint configurations with reserved bandwidth availability; Ethernet‐LAN, with
multipoint configurations having a guaranteed service level; and Ethernet Private Dedicated
Network (E‐PDN) with a completely private, managed network operated by Zayo with dedicated
fiber and equipment.28 As an example of pricing, Zayo charges a monthly recurring cost of $1,613
to $2,090 (depending on contract term) for 1 Gbps point‐to‐point Ethernet service between On‐
Net sites in the Los Angeles region that are three miles apart.
24 http://carrier.windstreambusiness.com/wordpress/wp‐content/uploads/2014/10/Carrier‐Ethernet‐Ordering‐
Guide‐10.8.14.pdf, accessed April 2015.
25 http://www.windstreambusiness.com/shop/products/ca/palo‐alto, accessed May 2015.
26 http://www.xo.com/carrier/transport/ethernet/, accessed May 2015.
27 http://www.xo.com/network‐services/internet‐access/ip‐transit/100G/, accessed May 2015.
28 http://www.zayo.com/ethernet, accessed April 2015.
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2 Residential and Small Business Services
Residential and small business customers in the Palo Alto region have access to a range of
services, though individual service options are dependent on location. Table 1 lists the service
providers and minimum price for each type of service that is available in at least some part of the
City.
Table 1: Overview of Residential and Small Business Data Services in Palo Alto
Service
Type Provider Minimum Price
(per month)
Cable Comcast
$29.99
DSL
AT&T $29.95
Earthlink $80
MegaPath $45
Sonic $40
Satellite DishNET $49.99
Exede $49.99
HughesNet $49.99
3G/4G/
WISP
AT&T $50
Cricket $35
Sprint $35
Verizon $60
T‐Mobile $20
Etheric Networks $85
2.1 Cable
Comcast offers internet service from 3 Mbps to 150 Mbps download speeds starting at $29.99
per month in the City as illustrated in Table 2. Promotional rates are available for the first year
after which the rates increase. Discounted prices are available if bundled with another service
like voice or TV.29 On the small business side, multiple options are available starting at 16 Mbps
download speeds up to 150 Mbps download speeds as illustrated in Table 3.30 Bundling with
voice introduces a savings of $30‐$40.
29 http://www.comcast.com/internet‐service.html, accessed March 2015.
30 http://business.comcast.com/internet/business‐internet/plans‐pricing, accessed May 2015.
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
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Table 2: Comcast Residential Internet – Internet Only
PACKAGE INTERNET SPEED REGULAR
PRICE
PROMO
RATE
Economy Up to 3 Mbps download $39.95/mo ‐
Performance
Starter
Up to 6 Mbps download $49.95/mo $29.99/mo
Performance Up to 25 Mbps download $61.95/mo $39.99/mo
Blast! Blast! Internet ‐ up to 105 Mbps download $78.95/mo ‐
Extreme up to 150 Mbps download $114.95/mo ‐
Table 3: Comcast Small Business Internet – Internet Only
PACKAGE INTERNET SPEED PRICE
Starter 16 Mbps download/3 Mbps upload $69.95/mo
Deluxe 50 50 Mbps download/ 10 Mbps upload $109.95/mo
Deluxe 75 75 Mbps download/15 Mbps upload $149.95/mo
Deluxe 100 100 Mbps download/20 Mbps upload $199.95/mo
Deluxe 150 150 Mbps download/20 Mbps upload $249.95/mo
2.2 DSL
Four providers offer DSL services in Palo Alto: AT&T, EarthLink, MegaPath, and Sonic.
2.2.1 AT&T
AT&T offers DSL service for residential customers in Palo Alto starting at as $29.95 per month for
unbundled or standalone DSL service at 3 Mbps with a 12‐month commitment. Additional
options up to 45 Mbps are available as indicated in Table 4.
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
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Table 4: AT&T Residential Internet – Internet Only
INTERNET SPEED REGULAR PRICE PROMO RATE
Up to 3 Mbps download $42/mo $29.95/mo
Up to 6 Mbps download $52/mo $34.95/mo
Up to 18 Mbps download $62/mo $44.95/mo
up to 45 Mbps download $82/mo $44.95/mo
2.2.2 EarthLink
EarthLink provides DSL based business services in the region starting at $80 per month and
offering speeds up to 6 Mbps with 99.9% network availability.31
2.2.3 MegaPath
MegaPath is an Internet service provider that offers speeds of up to 20 Mbps download and 1
Mbps upload for business customers in certain parts of Palo Alto.32 The lowest plan offered by
them is for 1.5 Mbps download speeds at $45 per month.
2.2.4 Sonic
Sonic offers residential internet services at 20 Mbps and 40 Mbps at a rate of $40 per month and
$60 per month respectively in Palo Alto. The service also includes a phone connection. The
provider is promoting the development of gigabit fiber connectivity on a neighborhood by
neighborhood basis depending on the interest shown by consumers.33 Sonic also offers business
internet and phone service in some locations in Palo Alto for $89.95 per month for speeds of 40
Mbps.
2.3 Satellite
Satellite Internet access is available in the area as well and three providers offer the service:
HughesNet, Exede, and DishNET.
2.3.1 HughesNet
HughesNet has four packages available for residential users: 1) Connect Satellite with speeds up
to 5 Mbps download/1 Mbps upload, a monthly data cap of 5 GB, and 5 GB of “bonus” data (10
GB total) for $49.99 per month2) HughesNet Power with speeds up to 10 Mbps download/1
31 http://www.earthlinkbusiness.com/DSL/, accessed March 2015.
32 http://www.megapath.com/services/, accessed May 2015.
33 https://www.sonic.com/availability ,accessed May 2015.
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Mbps upload, a 10 GB monthly data cap, and 10 GB of bonus data (20 GB total) for $59.99 per
month; and 3) HughesNet Power Pro with speeds up to 10 Mbps/2 Mbps, a monthly data cap of
15 GB, and 15 GB bonus bytes (30 GB total) for $79.99 per month; and 4) HughesNet Power Max
with speeds up to 15 Mbps/2 Mbps, a monthly data cap of 20 GB, and 20 GB of bonus data (40
GB total) for $129.99 per month.
HughesNet offers two packages for Internet services to small businesses. The Business 50
package provides speeds of up to 5 Mbps download and 1 Mbps upload for $69.99 per month
with a 5 GB per month anytime allowance and 10 GB bonus bytes from 2am to 10 am for a total
monthly data allowance of 15 GB. This package requires a two year agreement and only supports
up to five users. The Business 100 package provides the same download and upload speeds of
the Business 50 package, but offers a higher data allowance threshold of 10 GB per month
anytime and 15 GB bonus bytes from 2 am to 10 am for a monthly data allowance of 25 GB. This
package also requires a two year agreement and is best for 5 to just over 10 users.
2.3.2 Exede
Exede offers three Internet packages in the region each with up to 12 Mbps download and 3
Mbps upload speeds. These packages are: 1) Evolution 5 with a monthly 5 GB data cap (excluding
emails and web pages) for $49.99 per month 2) Evolution 20 with a 20 GB monthly data cap for
$69.99 per month and 3) Freedom with unlimited access for $99.99 per month.
2.3.3 DishNET
DishNET offers three residential Internet packages in the region. These packages are: 1) Up to 5
Mbps download speed with a monthly 5 GB data cap and 5 GB of bonus data for $49.99 per
month with a 24‐month commitment; 2) download speeds up to 10 Mbps with a 10 GB monthly
data cap and 10 GB of bonus data for $59.99 per month with a 24‐month commitment; and 3)
up to 10 Mbps download speed with a 15 GB monthly data cap and 15 GB of bonus data for
$79.99 per month with a 24‐month commitment.
2.4 Wireless
There are six providers that offer wireless Internet services in Palo Alto: Verizon, Sprint, AT&T,
Cricket Wireless, T‐Mobile, and Etheric Networks.
2.4.1 Verizon
Verizon offers two 4G LTE data packages with multiple choices for data allowances and pricing
depending on the desired mobility and equipment chosen. The HomeFusion Broadband Package
is a data‐only 4G LTE service with WiFi connectivity and wired Ethernet for up to four devices.
There are download speeds of 5 Mbps to 12 Mbps and upload speeds of 2 Mbps to 5 Mbps.
Monthly prices range from $60 for a 10 GB data allowance to $120 for a 30 GB data cap. Overages
are charged at $10 per additional GB. A two‐year contract is required with a $350 early
CTC Report | City of Palo Alto – Appendix A: Existing Market Assessment | July 2015
12
termination fee. Verizon offers a $10 monthly deduction for every month completed in the
contract. The Ellipsis JetPack provides a mobile solution with download speeds of 5 Mbps to 12
Mbps and upload speeds of 2 Mbps to 5 Mbps. Prices for the 12 options of data allowances range
from $30 per month for a 4 GB data allowance to $335 per month for 50 GB of data, in addition
to a monthly line access charge of $20.The device is $0.99 with a two‐year contract. There is a
$35 activation fee.
2.4.2 Sprint
Sprint offers 4G LTE wireless data in Palo Alto. The three data packages offered range from 100
MB per month data allowance for $15 per month to 6 GB per month data allowance for $50 per
month to 12 GB per month data allowance for $80 per month. Each MB over the limits is billed
at a cost of $.05. A two‐year contract is required as well as an activation fee of $36, and
equipment charges for three different types of devices. There is also an early termination fee of
$200.
2.4.3 AT&T
AT&T also provides 4G LTE wireless data service in the area, but only offers one package type
with a 5 GB per month download allowance for $50 per month. There is an overage fee of $10
per 1 GB over the limit. There are also equipment charges with or without a contract and an
activation fee.
2.4.4 Cricket Wireless
Cricket Wireless, which recently became a subsidiary of AT&T, offers 4G LTE wireless service in
Palo Alto with a download speed of up to 8 Mbps with three options for data allowance packages.
Starting at $35 per month for 1 GB of data allowed there are also options for data allowances of
3 GB ($45) and 10 GB ($55).Data used beyond allowances are at reduced speeds. There is a $79.99
modem fee for an additional device. There is a $15 activation fee, but no contract or early
termination fees.
2.4.5 T‐Mobile
Of the cellular wireless providers in the area, the least expensive wireless data option offered is
from T‐Mobile for $20 per month with a limit of 1 GB per month. T‐Mobile offers additional
capabilities and increasing data limits at incremental costs in a total of six packages up to $70 per
month for up to 11 GB of data. Depending upon current promotions, the $35 activation fee may
be waived.
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2.4.6 Etheric Networks
Etheric Networks is a wireless internet service provider (WISP) that provides services in Palo Alto
for speeds up to 30 Mbps.34 The range of speeds and pricing available are indicated in Table 5. A
radio and antenna fee of $299 is also charged during setup and installation.
Table 5: Etheric Networks Internet Services
PACKAGE INTERNET SPEED PRICE
Bronze Up to 5 Mbps download $85/mo
Silver Up to 10 Mbps download $99/mo
Gold Up to 20 Mbps download $139/mo
Platinum up to 25Mbps download $179/mo
Diamond up to 30 Mbps download $229/mo
34 http://ethericnetworks.com/residential/. accessed May 2015.
Fiber Exterior WAP Equipment Aerohive WAP NW Equip
Site #Site name: # sites Address:Monthly Install Mount NIU Monthly WAP Cabling Equipment Totals
Proceed with
Deployment
2 Cubberley 1 4000 Middlefield Rd. 2,361$ 4,200$ 3,500$ 142$ 8,500$ 16,200$
Theater waiting area 2 47$ 2,800$ 800$ 3,600$
Classrooms A ‐ H8 560$ 33,600$ 24,000$ 57,600$
Artist Studio 1 70$ 4,200$ 3,000$ 7,200$
Dance Studio U1 23$ 1,400$ 400$ 1,800$
3 Lucie Stern 1 1305 Middlefield Rd. 647$ 2,400$ 6,000$ 8,400$
Children's Theatre Lobby 2 47$ 2,800$ 800$ 3,600$
Courtyard in front of outdoor theatre 2 47$ 2,800$ 800$ 3,600$
4 & 5 Golf course: Pro Shop & Bay Café 2 1875 Embarcadero Rd. 1,351$ 3,900$ 7,000$ 1,000$ 11,900$
Pro Shop 4 93$ 5,600$ 1,600$ 7,200$
Bay Café 4 93$ 5,600$ 1,600$ 7,200$
9 Lytton Plaza: entire plaza 1 202 University Ave. 635$ 21,000$ 4,500$ 3,500$ 123$ 1,400$ 400$ 6,000$ 36,800$
Monthly Total 4,994$ 1,245$ 6,239$
Installation Total 31,500$ 4,500$ 14,000$ 60,200$ 33,400$ 21,500$ 165,100$
Assumptions and notes:Notes
1 Each connection contains two new fibers from specified location to CC Level A.WAP ‐ Wireless Access Point ‐ $1400
2 Established government rate applied NIU‐ Network interface Unit ‐ $3500
3 Prevaling Utility construction costs Splice ‐ tap point into existing fiber
4 CPAU Fiber does not perform substructure work
5 Support during business hours only (8‐5)
6 Estimates use existing poles at all locations
7 These estimates are high level "desktop" estimates. Actual fees to be determined by field investigation and contractor bids.
Construction Fees
Overhead per span is $1,500
Underground is $75/ft.
Small splice box in the sidewalk $5,000+
Palo Alto Wi‐Fi sites Installation & Monthly Costs (City Staff Estimates )
EXHIBIT E
Utilities Department
Version:1.0
Fiber-to-Fiber Premises and Wireless Communication Initiative Page 1 of 1 Date Last Updated
February 1, 2017
Fiber Optic Network Rebuild Project Summary
FIBER-TO-THE-PREMISES AND WIRELESS COMMUNICATIONS INITIATIVES
February 1, 2017
Project Description: The rebuild project will install new aerial duct or substructure (conduit and boxes), in addition to
fiber backbone cable to increase capacity for sections of the dark fiber ring that are at or near capacity. This project will
allow City of Palo Alto Utilities (“CPAU”) to meet customer requests for services. The project areas primarily cover the
Stanford Research Park, Palo Alto Internet Exchange/Equinix at 529 Bryant, and Downtown areas. This project basically
“overlays” new fiber over existing fiber routes in the network. Existing fiber will continue to serve City facilities and
commercial dark fiber customers.
2016: As a first step, CPAU retained Celerity Integrated Services, Inc. to provide a one-time comprehensive review and
audit of the City dark fiber optic network. Celerity completed the review and audit and provided a physical description
of the network; documented the number of fiber strands, in addition to conducting an inspection of 90 fiber
nodes/cabinets (i.e. network splice points) to identify what is labeled within the individual nodes/cabinets.
•CPAU Engineering is currently working with CAD Masters to reconcile the audit data provided by Celerity with
various fiber databases, in addition to rebuilding front-end databases to facilitate fiber assignments at the
engineering level and to improve network mapping.
2017-2021 Capital Improvement Projects: The budget for the rebuild was reduced by the City Council during the Fiscal
Year 2016 budget process. The Fiscal Year 2017 budget reflects this adjustment from $2.4 million to $1.3 million. The
rebuild is a CIP charged to “system improvements.”
Rebuild Work in Progress
o Route from PAIX at 529 Bryant to the Park Boulevard Substation. Substructure work, fiber pulling and
cabinet installation are nearing completion. The new fiber installed for the backbone rebuild is 312-
count single-mode fiber (2 x 144-count single-mode fiber, plus 24-count single-mode fiber).
•Upcoming work scheduled over the next 12 months:
o Route from Park Substation to Hansen Substation
o Route from Hansen Substation to Stanford Research Park
o Additional phases/routes to be determined.
Estimated cost is between $500,000 and up to $1,000,000 for substructure work. Approximately another $250,000 for
the overhead portion of the work. CPAU crews are performing the equipment installation, cable pulling and
terminations. CPAU’s substructure contractor is installing the conduit and boxes.
EXHIBIT F