http://paloaltoonline.com/blogs/p/print/2013/10/31/can-palo-alto-afford-the-vanity-of-its-ruling-elite-part-1-of-an-infinite-series-intro-and-fiber-to-the-premises-


Local Blogs

By Douglas Moran

Can Palo Alto Afford the Vanity of its Ruling Elite? Part 1 of an infinite series: Intro and Fiber-to-the-Premises

Uploaded: Oct 31, 2013

"Ruling elite" in the title is meant to provoke thought about how far the priorities of the decision-makers diverge from those of the typical resident. One of the reasons that Palo Alto has such a huge infrastructure deficit is our ruling elite's spending on vanity items. In discussion of issues, delivering value to the residents routinely loses out to their need to have a service be "world-class", "world/national leader", "leading edge", "a lighthouse to the nation"… The immediate instance is "Palo Alto moves ahead with citywide fiber plan: City Council approves 'master plans' for Fiber to the Premise, wireless network" (PA Weekly, 2013-10-30).

In the business world, there is a warning "You can always spot the pioneers, because they are the ones with the arrows in their back" which has been popularized as the admonition to never buy Release 1.0 of a product, and to try to avoid any X.0 release. A more cautious version of this is "Wait for Release 2.1", under the reasoning that changes between Release 1 and Release 2 are often so great that you lose much of your investment in Release 1.x installations (integration, training…). If you are new to this, good summaries can be found in discussions of "First-mover Advantage" (Wikipedia), which is often instead a disadvantage.
Aside: I had a neighbor who invested in restaurants. I asked about this, saying that my impression was that most restaurants failed. He responded that that was true, but that often that was the result of the debt load from remodeling and initial marketing. If not for that extra cost of being a first-mover, the restaurant would have been operating profitably. To minimize the debt-load problem, what he did was match his potential restauranteurs to a location that would require minimal remodeling, that had equipment that could be largely reused (rather than purchased new), and that already had an established clientele for that type of restaurant.

It is not that our ruling elite is oblivious to this problem. Rather, some see bragging rights as priceless. If they were spending their own money, that would be one thing, but here we are talking about public monies. Others regard Palo Altans as so rich that they are morally obliged to subsidize the development of new technologies for the rest of the US/world (through the high costs of being an earlier adopter).

On to our immediate example: Fiber-to-the-Premises (FTTP) (previously -Home and FTTH for anyone doing historical searches). This has been under consideration since the late 1990s with a limited trial 2001-2005 (66 homes). A survey in 2012 found little real interest in FTTP: Few residents saw a need for its capabilities to the extent they were willing to pay for it, even at a moderately subsidized rate. The conclusion of our ruling elite was has been the answer is more subsidies.

I have been on the fringe of the FTTP discussions since about 2000, and have been dissuaded from being more involved because it is so thoroughly dominated by the true believers. My first question is "Is the higher speed of FTTP actually usable?" I have DSL capable of a download speed of 13 Mbps (Sonic.net + favorable location). However, I rarely see this speed utilized except briefly and except in special situations (off-hour downloads of large popular files that would be cached on edge servers, for example, Windows updates). Mostly, I see speeds peaking at 1-3 Mbps with multiple gaps. My estimate is that there are only a few minutes a month when my current connection runs at over 75% capacity. The problem doesn't seem to be what FTTP would address--"the last mile" to my house--but rather the capacity of the remote web servers and the intervening network. The analogy is someone who ignores that the pipe between the water main and their meter is only a half-inch diameter and decides the way to get better water pressure is to install a 6-inch pipe from the meter to the house.
Additional data: Netflix's ISP Speed Index (Weblink) shows Google Fiber at 3.41 Mbps (average), far below its rated capacity, and with the various competing vendors and their technologies providing 1.2-2.59 Mbps, again suggesting that the bottleneck is not in the last mile.

My next question is "What would the much higher speeds of FTTP be good for?" The first answer is almost always "It would allow you to download a Hi-Def feature-length movie in a few minutes?" My response is two-fold. First, having to download a movie before viewing it was a short-term problem a long time ago--it was largely solved by streaming. Second, for quickly downloading humongous amounts of data to be compelling, that task must be unpredictable, the cost of delay high, and it must affect a significant portion of Palo Alto residents. None of the needs that I have heard the advocates present seem to come close to fitting these criteria.

The next answer I get is that having very high speed networks will inspire the creation of new software and services. But that begs questions about assembling critical mass of users and developers. And with the current emphasis on mobile devices and mobile apps, who is going to invest money and talent in such systems (that would be affected by whether Palo Alto has FTTP)? There seems to be no real analysis, only hope. And as many have observed, "Hope is not a strategy."

Answering these and similar questions would provide the foundation for the big question: What are the advantages and disadvantages of moving forward now versus waiting? From what I have heard, although there is a certain number of lessons-learned from the few other cities installing FTTP, too many were negative lessons. Consequently, Google saw itself needing to subsidize the learning with its experimental/trial deployments. And notice that Google deliberately chose to not deploy FTTP where many of its employees live.

I have heard (unconfirmed) claims that the City has spent over $2M on consultants for this over the years, plus staff time. The next step is "only" a few hundred thousand more, preparing for expenditures in the tens of millions.

In the most recent Staff Report (Weblink), I don't see any of the above questions being answered. What I do see are more invocations of vanity/prestige, for example, City's goal of becoming a "leading digital city" (pg 3), "Progressive cities" (pg 7).

There is already a Town Square Forum discussion going on under the news article (Weblink). What I would like to foster here is a more analytical discussion. That means no exhortations to be world-class (or similar), no reiterations of complaints that the US trails other countries in broadband speeds, no generic claims that City of Palo Alto government is incapable of running such a system (I am not judging that claim, simply placing it outside the focus of this discussion),... You get the picture.

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The Guidelines (Weblink) for comments on this blog are different from those on Town Square Forums. I am attempting to foster more civility and substantive comments by excising violations of the guidelines.

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