As Palo Alto forges ahead with a plan to bring high-speed Internet access to every local home and business, city staff is struggling to keep up both with the rapid changes in the broadband market and with the City Council's growing ambitions.
On Nov. 30, the council will hold another hearing on the project known as "Fiber to the Premises" and will consider adding staff, expanding the contracts of the city's fiber consultants, reaching out to private sector partners who may want to operate the new system and exploring partnerships with the very companies that could end up competing for customers with the city-run service.
The multipronged approach is the city's latest attempt to bring to fruition the 20-year effort, which would expand the city's small, existing fiber-optic ring to every section of the city. Once that happens, the municipal network that currently serves about 200 commercial customers would reach just about every home and business.
First proposed in the late 1990s, the project fizzled several times before being resurrected during the current climate of financial prosperity and digital hunger. On Sept. 28, council members reaffirmed their commitment to the project when they adopted as the city's preferred goal "a ubiquitous fiber network in Palo Alto with city ownership of fiber assets."
Whether or not this vision materializes, the effort is becoming more complex and expensive at each step, according to a new staff report. In addition to requesting further exploration of a citywide fiber system, the council also directed staff to pursue a new wireless network focused on public safety and to craft of a "dig once" policy that would require various utility and telecommunications providers to coordinate their construction efforts when installing cable infrastructure in the public right of way.
The work has added up, according to a new report from the city's Information Technology Department. The ability of city staff to be "timely and responsible to the third party providers is slowed and complicated by the additional, unanticipated work required." To cope with the growing and shifting workload, staff is proposing adding a new position directly responsible for the various fiber endeavors -- a senior manager with an annual salary of $228,000. The temporary position is expected to be in place for three years, costing the city $684,000.
The council will also consider on Monday new contracts with the city's consultant on fiber, Columbia Telecommunications Corporation (CTC). The consultant has already put together a master plan for the project, indicating that the type of network the city envisions would cost about $77.6 million to construct -- a figure that has been challenged by council members as well as a citizen advisory committee and that is now being reviewed. Staff is proposing adding $58,850 to the CTC's contract for reviewing the requests for information and for providing consulting services relating to the dig-once ordinance. This would increase the contract from $144,944 to $203,794.
An additional $94,490 is requested for a separate contract with CTC to develop a request for proposals for the dedicated wireless communication system for public safety and utilities (which would raise that contract from $131,650 to $226,140).
The request for additional help underscores the staff's challenge in implementing a project within a dynamic telecommunications marketplace. In September, the council directed staff to put out a request for information for private companies that would be interested in partnering with the city to install the fiber system. At the same time, the council asked for staff to discuss a potential "co-build" project with Google and AT&T, two companies that are also eyeing Palo Alto as a market for high-speed Internet service. AT&T has already applied for permits for its "GigaPower" program, which it plans to construct next year, according to staff.
Google Fiber, meanwhile, remains a wild card that could either enhance or derail the city's goal of fiber for all. After premiering in 2012 in Kansas City, Mo., Google Fiber has expanded to Provo, Utah, and Austin, Texas, and announced plans to bring citywide fiber services to additional communities. Google has marked the greater San Jose metro area, which includes Palo Alto, as a "potential Fiber city." Palo Alto officials anticipate that the Mountain View-based company will reveal its latest expansion plans in early 2016.
As the new staff report makes clear, by attempting to pursue all the options at once, the city is paradoxically putting itself in a bit of a bind. The city's quest for a municipal network could, for example, prompt Google to stay away from Palo Alto. Similarly, Google's potential entry into the Palo Alto market could deter companies that may otherwise be interested in partnering with the city.
"The goals in the motion are worthy -- a desire to ensure the potential for near-ubiquitous access to fiber, now and into the future, and preserve city flexibility over the long term in the quantity and quality of fiber access in Palo Alto," the report states. "But the dual directives are not simple to manage and accomplish and are not without risk."
In September, staff argued that the city should wait until Google makes its announcement before reaching out to the private market for proposals.
"Who would respond to it, knowing that Google is still deciding whether they're coming?" Chief Technology Officer Jonathan Reichental asked at the Sept. 28 council meeting. "It's useful to the people who respond to have the market settle."
Councilman Greg Scharff agreed that the city should wait a few months so that the market could shake out -- a position that was shared by Mayor Karen Holman and council members Marc Berman and Liz Kniss but that was overruled by the other five council members.
Kniss also noted at the meeting that the council is "pushing on the edges of staff's ability to keep up with what we're doing."