Terrible idea. AT&T is already building out fiber-to-the-premises in Palo Alto and is upgrading current customers to fiber for free. How will Palo Alto compete with this and why would it want to when there are far more urgent priorities? I am not apologist for the private service providers, but they have scale and competitive objectives that have driven consistent improvements in speed and service over the years and I do not see how a small-ish municipality like Palo Alto will provide a comparable product at comparable cost. Please stop now.

""There's clearly demand for this in the community," council member Eric Filseth said. "The real risk here is: Are we going to end up head-to-head in a pitched fight against serious private sector companies that are going be really good at this? I think that's a real risk.""

Says who? Clearly not the people responding to the city "survey" who weren't given the option of saying they/we DIDN'T want it.

" It would cost about $48.6 million, funding that would come from Fiber and Electric reserves..."

How nice that we have such huge reserves. Maybe some of that money could go toward reducing our utility rates which Shikada recently said are likely to double??

""I think this is a prudent and yet a forward approach," Mayor Pat Burt said just before the vote. "We're going to make some progress that will serve the city well. … It gives us a foundation that, if we are successful, we can grow it."

"IF" is the key word here. I guess risking "only" $48.600,000 is more prudent than risking $144,000,000 but hey, it's only the taxpayers' money and they can always double our utility rates.

To Mayor Burt. It's not prudent nor is it forward thinking. Council member Tanaka has it right. There is no win here for tax paying citizens when in fact the likes of At&T and others have the experience and knowledge to out perform anything the City of Palo Alto can come up with at a cheaper cost. This is but another example of Council trying to be cool technology "leaders" thinking that we have to show everyone how Palo Alto forward we are because of our connections to Silicon Valley tech entrepreneurs. This will prove to be a boondoggle the likes of the high speed rail system to nowhere that is already years behind schedule and billions over cost.

Originally projected to cost $33 billion when it was approved in 2008, it is now estimated to cost $113 billion and may never be completed. The goal was to connect San Francisco and Los Angeles by rail in under two hours and 40 minutes, but the only segment currently under construction is in the Central Valley, nowhere near either city.

Let's not be mindless about this. Oh, wait ....

The best idea for the "excess" funds in the fiber fund is to transfer them to the general fund for use to support basic city services--libraries, police, fire, parks, etc. The transfers from other utility funds (gas, water, electric) are illegal and don't make sense for those businesses. The fiber fund is a profitable business whose funds should be used to build/maintain/upgrade the dark fiber system. The dark fiber services are priced at market prices (unlike other utility--gas, water, electric, and wastewater--services that are priced at cost. The fiber fund makes money as it--let those profits be used for the general fund. The City should not be in the fiber to the premises business as it's too risky and not a core function of city government.

@Tom Dubois,

"How do we make a go/no-go decision?' (for a bond)

That decision has already been made. It's NO. There is no amount of "data" or adoption rates that can compensate for being speculative with public money. Consider the Junior Museum - with no competition, the City is going to be saddled with "marketing" costs to attract customers. OK, now add real competition.

Suzanne Keehn


I totally agree, I already have AT&T fiber, they were across my street years ago and put it in for free. Do not increase utility rates, that really hurts many of us. Use extra funds for city services.

I support this for several reasons:
- Comcast has absurdly low data caps for residential users that prevent Palo Alto residents from loading more than 1 security camera stream to the cloud. This is an important use case for all residents of Palo Alto have cheap access to.
- AT&T has already failed at doing an acceptable job covering neighborhoods with fiber. Huge fractions of the city don't have access to AT&T fiber, include any of the areas with underground utility service. I'm sure that this phase 1 expansion will kick AT&T into gear, but the reality is that, without robust competition, they will continue to slow-roll and over price.

Now that the trial is approved, it's important we come together as residents to support it and make it successful. Thank you City Council!

Re: "AT&T is already building out fiber-to-the-premises in Palo Alto"
Certainly not in south-west Palo Alto. Our ATT internet is often congested, yet not cheap. The City expanding fiber out more than this initial project is however wasteful unless it shows strong demand and good returns on investment.

Still waiting for the city's electrical distribution system to be upgraded to be able to handle all the electrical upgrades the city is forcing on us...

Glad we're hopefully past the $144 million banner ;-)

Of the $48M, about $26M goes to the existing (profitable) dark-fiber ring, much of which is needed anyway. So the real FTTP number here maxes out around $20-25 million. Of that, roughly 2/3 will go to laying physical fiber, which --- hopefully --- is a persistent asset. Admittedly that’s not certain, but if it’s correct, then the amount at risk is maybe $10M primarily from the Fiber Fund (which can’t easily be used for other purposes anyway), not $48M, or $144M.

By rejecting Option 1, the Council (properly, IMO) declined to expose the General Fund to this venture. So the Fiber Fund $10M stake is one side of the ledger. The other side is actually getting reasonably-priced gigabit broadband to most or all of the City in the next few years, which there’s clearly demand for. Reasonable people can disagree whether it’s an acceptable risk or not, but I don’t think it’s a slam dunk either way now.

It’s important that none of this truly precludes the City from collaborating with a private provider. So far none has shown much interest, even though private-provider deployment hasn’t remotely kept up with the vision either (if you’re one of the few who can actually get that service today, good for you! but you’re way ahead of most of the City). If that changes and this process ends up as essentially a kick-start to a high-quality and reliable private-sector or co-op solution, most of us would still consider that a win.

"t’s important that none of this truly precludes the City from collaborating with a private provider."

Excuse me, Mr. Filseth, but your colleague Tom DuBois already said -- when asked about PA's expertise in managing / providing customer service -- not to worry about PA's expertise because the whole project would be outsourced.

What's the difference between collaborating with a private provider and outsourcing to a private provider???

Are you saying Palo Alto's going to reinvent the wheel when established proven companies like Sonic Networks are already collaborating with AT&T right here in Palo Alto.

However much PA's risking on this ego trip -- $144,000,000 with its bad "optics" just before asking for tax increase or a mere $44,000,000 is too much.

As for claiming the money can't be used for other purposes, who set it up that way?? That's like saying the computer screwed up so blame the computer, not the people programming them.

The money would be better spent on how to deal with the Palo Alto rail crossing issue, which seems to be like the immigration problem in Congress, i.e., resolution never seems to be reached. Let AT& T and Xfinty and any other ISPs duke it out in traditional capitalistic fashion which should leave us with high speed internet service at competitive prices.

Hm, maybe we’re not as far past the $144M thing as I thought.

“established proven companies like Sonic Networks are already collaborating with AT&T right here in Palo Alto.”

AT+T doesn’t actually offer fiber in most of Palo Alto; that’s the whole point. Neither does Sonic, which I myself have and like, but can’t get fiber from. If you have them where you are, good for you, but please be aware most of us can’t. If you don’t have them, check and see if you can really get them.

“As for claiming the money can't be used for other purposes, who set it up that way?? That's like saying the computer screwed up so blame the computer, not the people programming them.”

The Fiber Fund is fed by the dark-fiber ring, which is a utility. The voters of California, in their wisdom, passed props 26 and 218. It’s a legal issue, not a technical one.

I have respect for the views of Bob Moss, but don't see how FTTP can ever be a prudent investment. I arranged for AT&T fiber earlier this year--it's been reliable except for a squirrel sharpening its teeth. Fiber was offered at 500 Mbps upload and download--I had them govern it to 300 Mbps to save some monthly fee, but even 300 is super from my standpoint and exceeds what my current downstream equipment can handle.

Let AT&T raise the capital and amortize the huge investment. They will cover the whole city soon enough.

Seven hundred and forty three $50 votes from the customers who will be saddled with the costs of building it. Astonishing. I'm hitting the snooze button on this, will check back in 20 years to see what progress has been made in this "guaranteed to be obsolete before a single shovel of dirt gets turned" project.

743 votes.

Was it just too hard to return the paid-for votes so it had to get railroaded through?

I hope those who already have AT&T Fibre can show some considerations for those who don't. Without the city entering the competition, there is very little incentive for AT&T to speed up the deployment of its network. Competition is exactly what we need. Greg Tanaka got it exactly backwards.

@Anonymous,

“Without the city entering the competition, there is very little incentive for AT&T to speed up the deployment of its network. Competition is exactly what we need. Greg Tanaka got it exactly backwards.“

Unfortunately nobody spoke to the absence of any need to do this at all. The only reason mentioned was a “want”… resident equity for fibre? If it were a vegetable maybe. It’s practically negligence how this got this far.

@resident3, "It’s practically negligence how this got this far." Not practically. Definitely. Faster internet fell to the wayside when people started using primarily smartphones to access the web. This 20 year issue has served mainly to divide people and, in the process, prove that multiple CC members are equally deaf to the voices of most of the people who voted them into office in the first place.

Looking at the fiber situation nationally for a minute, the companies have grown very tired of the huge expense and hassle of wiring up a community for service. Installing a new fiber system in an area that already has cable or fiber installations is especially tricky. Every block is its own challenge. Google Fiber identified installation as the problem and failed because of installation problems and expenses.

The other thing is that customers are tiring of having to have multiple accounts and lots of hassles. The industry now believes that about 18% of internet users use their cell phones for their principal internet access. That shows where people want things to go.

So where is this taking us? The industry has developed 5G cellular service to include fast internet access along with current 4G cellular (and other) capabilities. T-Mobile and Verizon are the leaders and they are all working on it.

The benefits are huge if it works well enough.

I have been studying this but still have not been able to try it for myself. My best guess is that it may work.

If so, connecting to the internet with a certain ISP may be as easy and convenient as connecting a cell phone.

Fiber will likely still be better but we may see the time when all new installations will be cellular.

Error in the article? Southgate is listed as one of the "strong candidates for early coverag" but Southgate has UNDERGROUND UTILITIES - NO POLES. Thus the cost per mile would be much higher, the uglification much greater, and at least some of the residents horribly opposed to the installation of poles.

I loved the Gigabit connection I used to have on Stanford campus: an all underground installation that went in about a dozen years ago. I miss it a little, BUT wouldn't trade the advantages of my Southgate underground utilities - including less vulnerability to storms and accidents - for fiber instead of the current commercial suppliers.

What a crock. The city should stay out of this game. It's unlikely to be able to keep stay competitive in speed and reliability with commercial competitors. Meanwhile the rest of us are going to be funding the planned buildout. I notice a super rich area of Old Palo Alto conspicuously included in the service area. Hmm.