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Palo Alto reboots its dream of a fiber network
Original post made
on Mar 18, 2013
For more than 15 years, Palo Alto's drive toward a citywide fiber network flickered on and off like a faulty dial-up connection, with gusts of enthusiasm repeatedly stymied by long stretches of inactivity, frustration and disappointment. This time, officials hope, things will be different.
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posted Monday, March 18, 2013, 10:13 PM
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Posted by Wayne Martin
a resident of Fairmeadow
on Mar 18, 2013 at 11:53 pm
Palo Alto City Council
City of P al o A lt o
Palo Alto , CA 94301
Cc: James Keene
Subject: City-owned Fiber-to-the-Premises (FTTP)
> The infrastructure discussion is the last item on the council's
> agenda, and the meeting is scheduled to begin at 6 p.m. with
> a study session on the possible expansion of the city's fiber-
> optic network, known for years as "Fiber to the Premises,"
This FTTP project has been discredited every time it has been put forward. Last time, the (also) discredited Head of the Utilites, spent about $125,000 on a "business plan" that was so incomplete that when the Consultant came back for another $125K (for a possible total of $250K)--even the people pushing for City-subsidized fiber encouraged the Council to deny the request--which it did.
The orginal proposal was for the City to provide data, telephone and subscription TV services. The analysis at the time made it clear that the City would have to displace the current analog telephone providers (AT&T mostly) with City-provided telephone service. That meant that roughly half of the telephone subscribers would have to ditch their current providers, and subscribe to the City's telephone service.
Since that time, there has been a tremendous shift in the way people use telephones. All of the major providers are seeing a monthly loss in landline subscribers--with a shift to evermore powerful, and capable, mobile Internet devices (smartphones, tables, etc.). The FCC is curretly in the process of opening up more bandwidth for WiFi, since regional wireless data networks are becoming more prevailant. Many smartphones come with both 3G/4G and Wifi capabilies, so that the phone can "off-load" data, and voice, to the local WiFi network, reducing load on the regional net, and reducing customer costs.
AT&T has been adding additional wireless capacity to the Palo Alto area, and doubtless we will see increases in regional network capacity in the coming years.
Cable TV is also undergoing constant evolution. The arrival of IP-TV has opened many doors. Sites like HULU.com, THEWB.com, ABC.com, NBC.com, Fox.com, UVERSE.com, and others, now offer many Prime-Time Network shows for free, as well as a lot of older TV programming, also for free. (Shows like Quincy , Remington Steele, Picket Fences are available). Hulu offers a premium option, offering access to all of a given show's episode for something less than $10/month. The same is true for Amazon, Netflix and Youtube is also offering a lot of programming that includes shows that originated outside the US .
The Cable channels have been toying with offering "al a carte" pricing for a long time now. Given that programming can be delivered to mobile devices, every one of the content providers has been moving towards a recreation of the Cable-TV market. The idea that people are going to purchase their TV from the City of Palo Alto does not make a lot of sense to people who are enoying the freedom, and often low expense to the user, that is offered by the Internet.
This leaves only very high-speed data as something that the City might be able to find a niche to market its fiber services--at least until AT&T/Comcast respond. AT&T has upgraded Palo Alto to its Uverse capability over the past few years. Comcast also has run fiber to the neighborhood a long time ago. Comcast has announced its support for DOCSYS 3.0 within the last two years, primarily through its XFINITY product offering:
The main issue for any data customer is: "how much speed can I get for how much money?"
The City was pitching that it could offer 100mbs for $35 dollars at one point. However, it eventually backed off to admit that it would have to offer a "triple play" (data, telephone, TV) package for $100/month in order to eventually pay off the costs of the system (and that was based on the incomplete business model). All of the major vendors have offered packages of one form or another that fit into this cost profileleaving the City with nothing much to offer except the 100mps claim.
The argument that new ind ustries would develop because the City had FTTH has nev er carried much weight with Palo Alto , particularly since AT&T/3rd Party vendors easily provided Fiber to those businesses that needed it. The City's own Fiber business seems to have nev er been attractive to local customersattracting somewhere between 50 and 75 customers.
The idea that this offering would be discussed in the same context would imply that peopleincluding the Mayorseem to think that the hardwar e/software/maintenance for FTTP could be hidden inside a bond issue is reprehensible. This sort of financing would have people owning property, but not subscribing to City telecommunications services, to be expected to pay the infrastructure costs for those who are subscribers. Just another example of the kinds of fiscal mismanagement that one finds when one looks at government activities.
Historically, the cost of a Fiber "drop" (premises termination equipment) has been in the $1,500 to $2,500 range. Fiber proponents have always claimed that that the cost would come down to about $250/dropas fiber gained more acceptance. As it were, fiber has not gained that much acceptanceeven though Verizon did upgrade a significant portion of its customer based with fiberthe cost of very high speed data was simply too expensive for people who had limited need for it. Most people seem financially comfortable with slower speed DSL, and Verizon has slowed down its fiber upgrades.
The bottom line is that Fiber is very expensivealbeit very fast. People are not willing to pay for that level of service in the home, for the most part. That's true all over the US including Palo Alto .
Proposals for City-owned FTTP should be buriedonce and for all!
Palo Alto , CA