HomeMy WebLinkAbout2000-04-03 City Council (8)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:APRIL 3, 2000
SUBJECT: FIBER TO THE HOME TRIAL
This is an informational report and no Council action is required.
BACKGROUND
CMR:195:00
In August 1999, Council directed staff(CMR:332:99) to proceed with developing a Fiber to
the Home (FTTH) trial in the Community Center Neighborhood, authorizing an expenditure
of $380,000 for construction. To make the project viable, 100 customers would need to sign
up for the trial and commit to paying the City $45 per month for a 10 megabit per second
(Mbps) Internet connection or $100 per month for a 100 Mbps connection. In addition, the
customers would have to sign an agreement that they would initially pay $1200 (for 10 Mbps
service) or $2400 (for 100 Mbps service) at the start of the trial and agree to take service for
a minimum of 30 months. The City would be obligated to contract with an Internet Service
Provider (ISP) to provide the Internet Services, which would be billed separately and in
addition to the City charges.
In working with community representatives, it became apparent that some potential
customers were unwilling to sign up for the trial unless they knew what the ISP charges
would be. To satisfy this desire, staff went out to bid for an ISP. The first request for
proposals resulted in one proposal that was not acceptable. Staff again went out for
proposals and received 7. Of these, Darwin Networks, Inc was determined to be the most
responsive and was selected to be the Internet Service Provider (ISP), pending Council
approval. The ISP costs were then shared with the members of the Community Center
Neighborhood to help achieve 100 subscribers to the FTTH trial. The closing date for sign-
ups was March 3, 2000.
DISCUSSION
The number of sign-ups that were In by the end of the closing period was very encouraging.
CMR:195:00 Page 1 of 3
As of this time, there are 108 subscribers that have committed to be customers in the FTTH
trial. Based on this, staff is proceeding with the next step which is to acquire a contractor
and construct the Trial. The success of the sign-ups is the result of a lot of hard work by
members of the Community Center Neighborhood and members of PA-Fibernet. Without
the help of these individuals, it is questionable if enough subscribers would have been found
to make the trial viable. The 2000-01 Proposed Budget includes funding to enroll the City
facilities in the Community Center Neighborhood (Lucie Stern community Center,
Children’s Theatre, Children’s Library and Junior Museum) as "customers" for the trial.
RESOURCE IMPACT
Because Darwin Networks chose to bill the customers directly for the ISP charges, the only
costs to the City with Darwin are the network management services at $8 per month per
customer. Based on this cost, the contract with Darwin is substantially under $65,000 and
does not require Council approval. Darwin will be charging $42 per customer per month
for the 10 Mbps service. Originally, the City intended to offer 100 Mbps service at a higher
cost. However, after reviewing the proposals and discussing the issue with Darwin, it has
become apparent that a 100 Mbps connection to the Intemet is not practical at this time.
Darwin will provide a 10 Mbps Intemet connection to the 100 Mbps subscribers for $42 per
month. The 100 Mbps subscribers will still have the 100Mbps speed, but only in the
Community Center network, not to the Internet. In addition, Darwin will be providing the
switch!router for the network, which reduces the cost to the City for network construction.
Based on this, the City will offer the 100 Mbps service for those wishing it for an initial cost
of $2400, but at the same monthly rate of $45 as the 10 Mbps subscribers. Staff does not
expect this change in pricing to effect the cost.recovery for the trial. A complete price list
from Darwin is included as Exhibit B. During the course of the contract, Darwin will offer
a higher speed Intemet connection when it becomes feasible. Staff will be contacting all the
subscribers who have signed up for the 100 Mbps service and inform them of the changes
to the service, the change in costs, and give them an opportunity to change to a 10 Mbps
service.
Although there are 112 subscribers to the trial at this time, not all are grouped together to
allow for efficient service. Staffwill specify separate prices in the bids for those customers
who are remotely located. Once the costs have been determined, staff may either tell these
potential customers that they cannot be served because of the cost, or staff will come back
to Council and request additional funds, so service can be provided to all who signed up.
CMR:195:00 Page 2 of 3
TIMELINE
Staff is currently working on the specifications and contract to send out to interested
contractors for the design and construction of the FTTH trial. Award of this contract will be
coming back to Council for approval in September 2000. Construction is anticipated to be
completed by the end of December and the start of operations in January 2001.
ATTACHMENTS
Exhibit B
PREPARED BY:Larry Starr, Assistant Director Utilities: Engineering & Operations
DEPARTMENT HEAD APPROVAL:
of Utilities
CITY MANAGER APPROVAL:E~L~y~’ ~HARRISON
Assistant City Manager
CMR:195:00 Page 3 of 3
Exhibit B
Price and Time Schedule
A. ISP Services Prices
Customer Cost:
1. Initial Installation/Set-up charges:
2. Point of Presence(POP) charges:
3. Internet Access charge:
4. Internet Access charge:
$100.00/subscriber (Labor)*
$ 00.00/subscriber
$ 42.00 for 10Mbps per. month
$ 42.00 for 100Mbps per month**
Note: * Initial Installation/Set-Up charges are if Darwin Networks installs Network
Interface Cards (NIC) in the subscribers computers. This is labor only and does
not include the card. Subscribers may install their own NICs and avoid this
charge.
Note: ** 100 Mbps service is only provided at the local level in the local network
and not to the Internet.
Network Service Administration (NSA) Services Prices
City of Palo Alto costs:
NSA Operations and management
10Mbps subscriber:
100Mbps subscriber:
$8.00 per month per subscriber
$8.00 per month per subscriber
Customer costs:
1.Static Internet Protocol addresses
1 address:
Additional addresses
2. Personal Web Page
Set-Up (includes DNS)for 25 MB
Monthly charge
3. E-Mail
3 e-mail addresses
Additional e-mail address
$00.00 per customer
$ 25.00/month each
$199.00
$49.00 per month
$ 0.00 per customer
$ 4.95/month each
Other Services
1. E-Mail hosting: SMTP
2. Free Community Web Page
3. Future offerings:
VOIP
Streaming Video
Exhibit B
B. Timeline
Infrastructure Acceptance:
Network Design:
Network Development:
Subscriber Configuration:
Maintenance:
Trial Period:
Complete within 6 weeks
Complete within 6 weeks
(can proceed in conjunction with infrastucture
acceptance)
Complete within 8 weeks
Complete within 2 weeks
(Can proceed in conjunction with Network
Development)
Beginning at Start-Up of,Trial (Approx 1/1/01)
Start approximately 1/1/01, run for minimum of
6 years
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