News
by Gennady Sheyner / Palo Alto Weekly
Uploaded: Thu, Aug 11, 2022, 8:58 am 40
Time to read: about 6 minutes
The Palo Alto City Council and Utilities Advisory Commission are set to discuss the city’s fiber network project on Sept. 12, 2022. Embarcadero Media file photo.
As Palo Alto embarks on its ambitious journey to build a citywide fiber network that delivers high-speed internet to every neighborhood, new survey results and financial projections for the proposed system are giving city leaders loads of reasons for both hope and anxiety.
On the bright side, there is the survey showing that about a third of the city’s internet customers are to some extent dissatisfied with their existing provider and would be good candidates to make the switch to Palo Alto Fiber. About 55% of the respondents have already “cut the cord” and are only getting internet service from their provider, while fewer — 28% — are also getting cable, and 25.8% are also getting telephone service, according to the survey, which was conducted by Magellan Advisors.
The trend suggests that Palo Alto will not need to worry about becoming a cable provider to make the fiber utility viable. Honker said that the trend of relying solely on internet streaming is much further along in Palo Alto than in other communities. A cable company typically provides internet service to about 75% to 80% of customers.
“Cord cutting is a big part of Palo Alto,” John Honker, founder of Magellan Advisors, told the Utilities Advisory Commission last week during its discussion of the survey results.
On the less sunny note, the costs for the proposed system have risen and it will likely require the city to take on debt that will take more than a decade to repay. And even though profit is not the primary motivator for the municipal utility, the city will need to find a way in the coming months of crafting a system that would be financially sustainable.
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Because of growing costs of labor and supplies, the estimated price tag for the citywide system has increased from the prior estimate of $116.3 million to $128.3 million today, according to Magellan’s analysis. The city has about $42.5 million today in revenues that it can spend on the project from its fiber and electric utilities. The remaining $85.8 million would likely be financed through a bond and paid off over the next few decades, according to utilities staff.
Costs and staffing models will likely feature prominently when the City Council meets with the Utilities Advisory Commission on Sept. 12 to discuss a project that city officials have been contemplating for more than 20 years and that is finally starting to take shape. According to David Yuan, strategic business manager at City of Palo Alto Utilities, the city has completed about 90% of its work on engineering design for the expanded network, community engagement and business model.
One key question that the council will need to answer is whether the city go on a hiring spree to staff the expanded utility or whether it should hire consultants to provide most of the services. A model that banks entirely on city staff to run the expanded fiber utility would require about 23 new full-time positions, of which 19 would need to be hired within the first two years, well before the service has a wide customer base, Honker said. Between 2023 and 2032, the city would have to spend an estimated $54 million to operate the fiber network under this alternative.
The outsource model would provide the city with more flexibility but less control. The utility would be able to hire as many consultants as it needs to support the growing customer base at any given time. Over the first 10 years, the city would spend about $38.3 million if it outsources many of the key functions in the fiber operation.
“In an outsourced model, you’re paying more by the drink,” Honker said. “You’re paying as you go for the customers who are connected so you’re not managing all the upfront costs.”
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While neither alternative is expected to generate net income over the first nine years of the system’s operation, Magellan estimated that under the outsourced model the city would climb out of the red and get a net income of $190,000 from the fiber system by 2032. Under the fully “insource” model, the utility would still be operating at a loss, with costs exceeding revenues by about $660,000.
What customers will get
Magellan also explored what Palo Alto Fiber could look like for customers. Under the proposed model, the basic package for fiber customers would cost between $40 and $60 per month and would provide them with a service level of 200 megabits per second (Mbps), which is considered sufficient for most households and which is well above the Federal Communications Commission standard definition of “broadband” as 25 Mbps.
Customers seeking higher speeds could purchase packages offering 1 gigabit per second for between $80 and $95 per month; 2 gigabits per second for $95 to $150 per month; or 10 gigabits per second for a rate to be determined in the future.
For commercial customers, the prices would range from a cost of $60 to $80 per month for the most basic package with a service level of 50 Mbps to between $500 and $1,000 per month for the premier package of 1 gigabit per second, according to the preliminary model. There are also options for 100 Mbps ($100 to $150 per month) and for 250 Mbps ($200 to $250 per month).
There are not a lot of applications around today that would warrant speeds of 2 or 10 gigabits per second, Honker said. But because the competition is already offering 2 gigabits per second and may offer 10 in the future, Palo Alto Fiber should be able to match that level of service.
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“It’s important to get ahead of that and say that the network will be ready for next generation broadband and we can support those services natively if customers want them,” Honker said.
A critical question for Palo Alto as it plans for fiber is: If the city builds it, will the customers come? Honker stressed that the biggest factor that would determine the financial strength of Palo Alto Fiber is whether enough local residents and businesses make the switch to the municipal service. The Magellan model projects that the “take rate” for Palo Alto Fiber would climb to about 33% by 2028 and then stay at around that level.
“At the end of the day, more customers and higher take rates will offset the higher operational costs,” Honker said.
Several commissioners said they were heartened by the survey results, which were based on the 3,241 responses that the city had received prior to its Aug. 3 meeting. Commissioner Loren Smith was particularly pleased about the survey finding that more than half of the respondents won’t need a landline or cable service. He also emphasized that the utility doesn’t have to be a major profit generator to be successful.
“We’re not driven by a profit margin,” Smith said. “We’re driven by our ability to deliver the best quality service and the best marginal rate where we can maintain the service and maintain the business, just like we do with our electric. We don’t need to make a significant amount of profit to make it a viable business.”
Commission Chair A.C. Johnston also said he was optimistic, given the high number of people who have already “cut the cord.”
“It seems to me if we can provide faster speeds at a lower price, which we should be able to do since we don’t have to make a profit, we really have an opportunity to capture a significant share of the market,” Johnston said.
He acknowledged, however, that the greatly expanded fiber utility will face a challenge that traditional utilities such as gas, electric and water have not had to deal with: competition from the private sector.
“We have the advantage in that we’re not under some of the cost of service constraints that we’ve got under regulated utilities, but we also have competitors that we haven’t had to deal with before,” Johnston said.
For others, cost was a major concern. Commission Phil Metz observed that the net income is projected to be negative for about 10 years, as the city builds the system and gradually expands its customer base.
“This is a real loss. How do we pay for this loss or ideally eliminate it?” Metz said.
Council member Alison Cormack also took a more skeptical stance. She argued that the survey may not accurately represent the entire city population and suggested that the residents who responded may be those who are more inclined to support the fiber project. She also said the council has received correspondence from residents about the survey. Not all of it was not complimentary.
“I’ve gotten some emails from people who have been supportive of this problem in the last couple of years and are less so now,” Cormack said. “Personally, I’m going to be taking a much harder look at these numbers when we’re making this decision.”
One resident who expressed his disappointment was Paul Gregory, who wrote to the council last month and suggested that the survey is “designed to skew responses to get the desired outcome.” Gregory, a customer of Sonic, said that the survey did not include Sonic as one of the provider options, noting, “I’m very happy with my current internet provider and I intend to continue with them.”
He said that AT&T is already expanding its fiber network to some local neighborhoods and argued that there is no reason to have two sets of fiber.
“In other words, Palo Alto is late to the game,” Gregory wrote. “Palo Alto should instead concentrate on doing things that only they can do. For example, finally make some actual decisions about building grade separations at Caltrain crossings, and get construction underway.”
Whether or not the project ultimately succeeds, Palo Alto would need to commit to a long period of construction throughout the city to install fiber. Honker said construction of the citywide network will likely take about four years and will require strong coordination from city departments and good construction contractors.
“The underground construction is hard work,” Honker said. “It’s going to be difficult, we can’t sugarcoat it.”
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by Gennady Sheyner / Palo Alto Weekly
Uploaded: Thu, Aug 11, 2022, 8:58 am
As Palo Alto embarks on its ambitious journey to build a citywide fiber network that delivers high-speed internet to every neighborhood, new survey results and financial projections for the proposed system are giving city leaders loads of reasons for both hope and anxiety.
On the bright side, there is the survey showing that about a third of the city’s internet customers are to some extent dissatisfied with their existing provider and would be good candidates to make the switch to Palo Alto Fiber. About 55% of the respondents have already “cut the cord” and are only getting internet service from their provider, while fewer — 28% — are also getting cable, and 25.8% are also getting telephone service, according to the survey, which was conducted by Magellan Advisors.
The trend suggests that Palo Alto will not need to worry about becoming a cable provider to make the fiber utility viable. Honker said that the trend of relying solely on internet streaming is much further along in Palo Alto than in other communities. A cable company typically provides internet service to about 75% to 80% of customers.
“Cord cutting is a big part of Palo Alto,” John Honker, founder of Magellan Advisors, told the Utilities Advisory Commission last week during its discussion of the survey results.
On the less sunny note, the costs for the proposed system have risen and it will likely require the city to take on debt that will take more than a decade to repay. And even though profit is not the primary motivator for the municipal utility, the city will need to find a way in the coming months of crafting a system that would be financially sustainable.
Because of growing costs of labor and supplies, the estimated price tag for the citywide system has increased from the prior estimate of $116.3 million to $128.3 million today, according to Magellan’s analysis. The city has about $42.5 million today in revenues that it can spend on the project from its fiber and electric utilities. The remaining $85.8 million would likely be financed through a bond and paid off over the next few decades, according to utilities staff.
Costs and staffing models will likely feature prominently when the City Council meets with the Utilities Advisory Commission on Sept. 12 to discuss a project that city officials have been contemplating for more than 20 years and that is finally starting to take shape. According to David Yuan, strategic business manager at City of Palo Alto Utilities, the city has completed about 90% of its work on engineering design for the expanded network, community engagement and business model.
One key question that the council will need to answer is whether the city go on a hiring spree to staff the expanded utility or whether it should hire consultants to provide most of the services. A model that banks entirely on city staff to run the expanded fiber utility would require about 23 new full-time positions, of which 19 would need to be hired within the first two years, well before the service has a wide customer base, Honker said. Between 2023 and 2032, the city would have to spend an estimated $54 million to operate the fiber network under this alternative.
The outsource model would provide the city with more flexibility but less control. The utility would be able to hire as many consultants as it needs to support the growing customer base at any given time. Over the first 10 years, the city would spend about $38.3 million if it outsources many of the key functions in the fiber operation.
“In an outsourced model, you’re paying more by the drink,” Honker said. “You’re paying as you go for the customers who are connected so you’re not managing all the upfront costs.”
While neither alternative is expected to generate net income over the first nine years of the system’s operation, Magellan estimated that under the outsourced model the city would climb out of the red and get a net income of $190,000 from the fiber system by 2032. Under the fully “insource” model, the utility would still be operating at a loss, with costs exceeding revenues by about $660,000.
What customers will get
Magellan also explored what Palo Alto Fiber could look like for customers. Under the proposed model, the basic package for fiber customers would cost between $40 and $60 per month and would provide them with a service level of 200 megabits per second (Mbps), which is considered sufficient for most households and which is well above the Federal Communications Commission standard definition of “broadband” as 25 Mbps.
Customers seeking higher speeds could purchase packages offering 1 gigabit per second for between $80 and $95 per month; 2 gigabits per second for $95 to $150 per month; or 10 gigabits per second for a rate to be determined in the future.
For commercial customers, the prices would range from a cost of $60 to $80 per month for the most basic package with a service level of 50 Mbps to between $500 and $1,000 per month for the premier package of 1 gigabit per second, according to the preliminary model. There are also options for 100 Mbps ($100 to $150 per month) and for 250 Mbps ($200 to $250 per month).
There are not a lot of applications around today that would warrant speeds of 2 or 10 gigabits per second, Honker said. But because the competition is already offering 2 gigabits per second and may offer 10 in the future, Palo Alto Fiber should be able to match that level of service.
“It’s important to get ahead of that and say that the network will be ready for next generation broadband and we can support those services natively if customers want them,” Honker said.
A critical question for Palo Alto as it plans for fiber is: If the city builds it, will the customers come? Honker stressed that the biggest factor that would determine the financial strength of Palo Alto Fiber is whether enough local residents and businesses make the switch to the municipal service. The Magellan model projects that the “take rate” for Palo Alto Fiber would climb to about 33% by 2028 and then stay at around that level.
“At the end of the day, more customers and higher take rates will offset the higher operational costs,” Honker said.
Several commissioners said they were heartened by the survey results, which were based on the 3,241 responses that the city had received prior to its Aug. 3 meeting. Commissioner Loren Smith was particularly pleased about the survey finding that more than half of the respondents won’t need a landline or cable service. He also emphasized that the utility doesn’t have to be a major profit generator to be successful.
“We’re not driven by a profit margin,” Smith said. “We’re driven by our ability to deliver the best quality service and the best marginal rate where we can maintain the service and maintain the business, just like we do with our electric. We don’t need to make a significant amount of profit to make it a viable business.”
Commission Chair A.C. Johnston also said he was optimistic, given the high number of people who have already “cut the cord.”
“It seems to me if we can provide faster speeds at a lower price, which we should be able to do since we don’t have to make a profit, we really have an opportunity to capture a significant share of the market,” Johnston said.
He acknowledged, however, that the greatly expanded fiber utility will face a challenge that traditional utilities such as gas, electric and water have not had to deal with: competition from the private sector.
“We have the advantage in that we’re not under some of the cost of service constraints that we’ve got under regulated utilities, but we also have competitors that we haven’t had to deal with before,” Johnston said.
For others, cost was a major concern. Commission Phil Metz observed that the net income is projected to be negative for about 10 years, as the city builds the system and gradually expands its customer base.
“This is a real loss. How do we pay for this loss or ideally eliminate it?” Metz said.
Council member Alison Cormack also took a more skeptical stance. She argued that the survey may not accurately represent the entire city population and suggested that the residents who responded may be those who are more inclined to support the fiber project. She also said the council has received correspondence from residents about the survey. Not all of it was not complimentary.
“I’ve gotten some emails from people who have been supportive of this problem in the last couple of years and are less so now,” Cormack said. “Personally, I’m going to be taking a much harder look at these numbers when we’re making this decision.”
One resident who expressed his disappointment was Paul Gregory, who wrote to the council last month and suggested that the survey is “designed to skew responses to get the desired outcome.” Gregory, a customer of Sonic, said that the survey did not include Sonic as one of the provider options, noting, “I’m very happy with my current internet provider and I intend to continue with them.”
He said that AT&T is already expanding its fiber network to some local neighborhoods and argued that there is no reason to have two sets of fiber.
“In other words, Palo Alto is late to the game,” Gregory wrote. “Palo Alto should instead concentrate on doing things that only they can do. For example, finally make some actual decisions about building grade separations at Caltrain crossings, and get construction underway.”
Whether or not the project ultimately succeeds, Palo Alto would need to commit to a long period of construction throughout the city to install fiber. Honker said construction of the citywide network will likely take about four years and will require strong coordination from city departments and good construction contractors.
“The underground construction is hard work,” Honker said. “It’s going to be difficult, we can’t sugarcoat it.”
As Palo Alto embarks on its ambitious journey to build a citywide fiber network that delivers high-speed internet to every neighborhood, new survey results and financial projections for the proposed system are giving city leaders loads of reasons for both hope and anxiety.
On the bright side, there is the survey showing that about a third of the city’s internet customers are to some extent dissatisfied with their existing provider and would be good candidates to make the switch to Palo Alto Fiber. About 55% of the respondents have already “cut the cord” and are only getting internet service from their provider, while fewer — 28% — are also getting cable, and 25.8% are also getting telephone service, according to the survey, which was conducted by Magellan Advisors.
The trend suggests that Palo Alto will not need to worry about becoming a cable provider to make the fiber utility viable. Honker said that the trend of relying solely on internet streaming is much further along in Palo Alto than in other communities. A cable company typically provides internet service to about 75% to 80% of customers.
“Cord cutting is a big part of Palo Alto,” John Honker, founder of Magellan Advisors, told the Utilities Advisory Commission last week during its discussion of the survey results.
On the less sunny note, the costs for the proposed system have risen and it will likely require the city to take on debt that will take more than a decade to repay. And even though profit is not the primary motivator for the municipal utility, the city will need to find a way in the coming months of crafting a system that would be financially sustainable.
Because of growing costs of labor and supplies, the estimated price tag for the citywide system has increased from the prior estimate of $116.3 million to $128.3 million today, according to Magellan’s analysis. The city has about $42.5 million today in revenues that it can spend on the project from its fiber and electric utilities. The remaining $85.8 million would likely be financed through a bond and paid off over the next few decades, according to utilities staff.
Costs and staffing models will likely feature prominently when the City Council meets with the Utilities Advisory Commission on Sept. 12 to discuss a project that city officials have been contemplating for more than 20 years and that is finally starting to take shape. According to David Yuan, strategic business manager at City of Palo Alto Utilities, the city has completed about 90% of its work on engineering design for the expanded network, community engagement and business model.
One key question that the council will need to answer is whether the city go on a hiring spree to staff the expanded utility or whether it should hire consultants to provide most of the services. A model that banks entirely on city staff to run the expanded fiber utility would require about 23 new full-time positions, of which 19 would need to be hired within the first two years, well before the service has a wide customer base, Honker said. Between 2023 and 2032, the city would have to spend an estimated $54 million to operate the fiber network under this alternative.
The outsource model would provide the city with more flexibility but less control. The utility would be able to hire as many consultants as it needs to support the growing customer base at any given time. Over the first 10 years, the city would spend about $38.3 million if it outsources many of the key functions in the fiber operation.
“In an outsourced model, you’re paying more by the drink,” Honker said. “You’re paying as you go for the customers who are connected so you’re not managing all the upfront costs.”
While neither alternative is expected to generate net income over the first nine years of the system’s operation, Magellan estimated that under the outsourced model the city would climb out of the red and get a net income of $190,000 from the fiber system by 2032. Under the fully “insource” model, the utility would still be operating at a loss, with costs exceeding revenues by about $660,000.
What customers will get
Magellan also explored what Palo Alto Fiber could look like for customers. Under the proposed model, the basic package for fiber customers would cost between $40 and $60 per month and would provide them with a service level of 200 megabits per second (Mbps), which is considered sufficient for most households and which is well above the Federal Communications Commission standard definition of “broadband” as 25 Mbps.
Customers seeking higher speeds could purchase packages offering 1 gigabit per second for between $80 and $95 per month; 2 gigabits per second for $95 to $150 per month; or 10 gigabits per second for a rate to be determined in the future.
For commercial customers, the prices would range from a cost of $60 to $80 per month for the most basic package with a service level of 50 Mbps to between $500 and $1,000 per month for the premier package of 1 gigabit per second, according to the preliminary model. There are also options for 100 Mbps ($100 to $150 per month) and for 250 Mbps ($200 to $250 per month).
There are not a lot of applications around today that would warrant speeds of 2 or 10 gigabits per second, Honker said. But because the competition is already offering 2 gigabits per second and may offer 10 in the future, Palo Alto Fiber should be able to match that level of service.
“It’s important to get ahead of that and say that the network will be ready for next generation broadband and we can support those services natively if customers want them,” Honker said.
A critical question for Palo Alto as it plans for fiber is: If the city builds it, will the customers come? Honker stressed that the biggest factor that would determine the financial strength of Palo Alto Fiber is whether enough local residents and businesses make the switch to the municipal service. The Magellan model projects that the “take rate” for Palo Alto Fiber would climb to about 33% by 2028 and then stay at around that level.
“At the end of the day, more customers and higher take rates will offset the higher operational costs,” Honker said.
Several commissioners said they were heartened by the survey results, which were based on the 3,241 responses that the city had received prior to its Aug. 3 meeting. Commissioner Loren Smith was particularly pleased about the survey finding that more than half of the respondents won’t need a landline or cable service. He also emphasized that the utility doesn’t have to be a major profit generator to be successful.
“We’re not driven by a profit margin,” Smith said. “We’re driven by our ability to deliver the best quality service and the best marginal rate where we can maintain the service and maintain the business, just like we do with our electric. We don’t need to make a significant amount of profit to make it a viable business.”
Commission Chair A.C. Johnston also said he was optimistic, given the high number of people who have already “cut the cord.”
“It seems to me if we can provide faster speeds at a lower price, which we should be able to do since we don’t have to make a profit, we really have an opportunity to capture a significant share of the market,” Johnston said.
He acknowledged, however, that the greatly expanded fiber utility will face a challenge that traditional utilities such as gas, electric and water have not had to deal with: competition from the private sector.
“We have the advantage in that we’re not under some of the cost of service constraints that we’ve got under regulated utilities, but we also have competitors that we haven’t had to deal with before,” Johnston said.
For others, cost was a major concern. Commission Phil Metz observed that the net income is projected to be negative for about 10 years, as the city builds the system and gradually expands its customer base.
“This is a real loss. How do we pay for this loss or ideally eliminate it?” Metz said.
Council member Alison Cormack also took a more skeptical stance. She argued that the survey may not accurately represent the entire city population and suggested that the residents who responded may be those who are more inclined to support the fiber project. She also said the council has received correspondence from residents about the survey. Not all of it was not complimentary.
“I’ve gotten some emails from people who have been supportive of this problem in the last couple of years and are less so now,” Cormack said. “Personally, I’m going to be taking a much harder look at these numbers when we’re making this decision.”
One resident who expressed his disappointment was Paul Gregory, who wrote to the council last month and suggested that the survey is “designed to skew responses to get the desired outcome.” Gregory, a customer of Sonic, said that the survey did not include Sonic as one of the provider options, noting, “I’m very happy with my current internet provider and I intend to continue with them.”
He said that AT&T is already expanding its fiber network to some local neighborhoods and argued that there is no reason to have two sets of fiber.
“In other words, Palo Alto is late to the game,” Gregory wrote. “Palo Alto should instead concentrate on doing things that only they can do. For example, finally make some actual decisions about building grade separations at Caltrain crossings, and get construction underway.”
Whether or not the project ultimately succeeds, Palo Alto would need to commit to a long period of construction throughout the city to install fiber. Honker said construction of the citywide network will likely take about four years and will require strong coordination from city departments and good construction contractors.
“The underground construction is hard work,” Honker said. “It’s going to be difficult, we can’t sugarcoat it.”
I live in a neighborhood that still has telephone poles stabding by the house with all wires exposed, while half a block away, my neighbors gave all wires are underground. I have lived in this house for over 40 years, waiting for the undergrounding job to be finished in my neighborhood. Is this the “Palo Alto Way,”
to abandon unfinished projects while starting a whole new mishmash of unsightly overhead cables in one sector and
privileged undergrounding for another? What is wrong with our utilities department?
And I look at high speed rail, similarly uncoordinated, no decisions made yet on grade crossings as electrification barrels ahead! Sad.
The city plan estimates over $128 million (today) to provide $40-$60 per month for 200 Mbps residential plan, and $80-$95 for a 1 Gbps plan.
As we know these big tickets projects tend to overrun, so the final cost and time estimates will likely be a lot more, all paid for by the city taxpayers.
The proposed rates are no better than what Xfinity already provides on its existing infrastructure, and higher than what T-Mobile offers on its emerging 5G home internet plan – a technology that seems more promising than fiber.
Is there any reason to spend so much and have the city (that is – its taxpayers) go into debt for a 20+ year old outdated technology, that results in an inferior product?
Palo Alto should consider launching its own communication satellites.
Then there would be less need for upgrading to fiber optics.
I also don’t understand why we are doing this. We already have several choices for internet service that seem okay. Maybe the city’s version will be a few dollars cheaper or a little more reliable but is it worth a substantial distraction in a department that already has its hands full? I would rather our utility work on undergrounding our electric system and making it more reliable, helping more people to switch away from gas, and expanding purple water distribution.
This project should be killed as quickly as possible. There are existing solutions from commercial vendors already being used by large numbers of residents (and have been used for many years). Further, the estimated costs and incurred debt are unacceptable. The City cannot afford to take on the burden of building, installing, and maintaining the system – it’s far too late, far too expensive, and completely unnecessary.
“Because of growing costs of labor and supplies, the estimated price tag for the citywide system has increased from the prior estimate of $116.3 million to $128.3 million today, according to Magellan’s analysis. The city has about $42.5 million today in revenues that it can spend on the project from its fiber and electric utilities.”
Absurd waste of money. What else WON’T the money be spent on — reducing pension liabilities, hiring more cops, restoring library services, supplementing the pathetically low business tax….?
“Several commissioners said they were heartened by the survey results, which were based on the 3,241 responses….”
And many residents noted the surveys were so biased you couldn’t say you DIDN’T want any of the options presented and that it was a transparent ploy by the city to solicit advanced deposits.
I’m SO tired of the city basing decisions re huge expenditures and major decisions on obviously flawed surveys. Most recently it was the business tax “survey” which even the pollster admitted was full of errors, an admission reported in the papers and something many of us are discussing today in emails as we stew over the council’s pitiful proposed business tax.
When will we learn? Probably never because the city doesn’t really care about accurate polls; it just wants to spend money so it can keep its gravy train of consultants happy and so staff can keep getting awards from other bureaucrats.
American free enterprise run by responsible companies will always do a better job than any government-run operation. Do you really want the government to run your internet service like they run everything else? Think EDD, IRS, healthcare, Solindra? I could go on and on…
I was part of the Fiber to the home project from Palo Alto 20 years ago. This was a very needed service that went nowhere. But 20 years later I now have AT&T fiber that proves up/downloads of 300mb for $55 with no term commitment. I previous had Xfinity that provides 175mb for $70 with no commitment or $55/m for a year commitment. There is no longer any need for a Palo Alto Fiber. And Xfinity provides tens of thousands of hotspots that Palo Alto cannot provide. The customer service for AT&T is now excellent with very quick response.
Palo Alto Fiber is too little too late and there are many very important items to spend this money on.
1. Underground my utilities. Fire potential make this more than just a cosmetic issue
2. Increase maintenance on sidewalks, parks, roads
3. Invent, design, and manufacture a better electric car. Tesla just doesn’t cut it.
@Jim Hols,,, I had a friend on that project and his tales of why the project went nowhere were sadly memorable.
“Palo Alto Fiber is too little too late and there are many very important items to spend this money on….
4) Increased police patrols given the dramatic rise in crime.
5) Cutting the consultant gravy train since they and the outsourcing companies are the only beneficiaries of this $$$$$A$ project.
I am amazed that there are satisfied customers of AT&T and Comcast. For internet connection, I was a customer of the former for a long time and currently a customer of the latter. BOTH SUCKED! AT&T Fiber is not available in all neighborhoods (in particular, mine) and their DSL option just sucked (low speed and bad reliability). For Comcast Xfinity, I am now paying $70/month for supposed 1Gbps but I actually get usually only 300 Mbps or so. Furthermore, the $70/month was a “discount” after Comcast had several unannounced multi-hour outages last year when everyone was working from home. I made a big fuss to them and they condescended to offer me this “discount” for which I had to sign a 2-year contract. I’ve no idea what my monthly bill will be after the contract expires. Indeed, both AT&T and Comcast play games with their prices and you have to waste your valuable time calling them for “discounts” (which usually mean longer contracts) every time they raise their prices. (Indeed, my AT&T wireless bill just went up $12/month last month for absolutely no improvement in service.). With a city-provided internet service, we will have at least visibility into and perhaps even some control over the pricing. With AT&T and Comcast, it’s all an asymmetric game where they have all the information and you have none.
I’m a happy customer of ATT and would prefer them to complain to in the event of a problem than City Hall.
Ditto to Jim H
“Palo Alto Fiber is too little too late and there are many very important items to spend this money on.
1. Underground my utilities. Fire potential make this more than just a cosmetic issue
2. Increase maintenance on sidewalks, parks, roads”
I would be careful about suggesting designing a better car though 🙂 That’s the kind of thing that gets attention but should be left to the residents… at their own place of work with their OWN money.
And how did surveys get so popular? They have always been political tools.
I have ATT Fiber 500Mbps for $65 a month today. Great performance, very good service. No issues. Highly doubt the City of Palo Alto can compete with them. Soon enough, ATT will cover most and then probably all of Palo Alto – long before this Palo Alto network is ever built. Yes, probably there will be a few places that their PA Network can cover that ATT won’t – but is that worth a $125M investment to cover a few oddball locations? And the hotspots, and more….
But, the reality is that ATT is lowball pricing this to keep PA at bay. I recommend the City continue stringing this out for a decade so ATT is always a little bit worried that the City may do its own network, and prices stay low and coverage expands.
“And how did surveys get so popular? They have always been political tools.”
Probably but this survey deserves a prize for not letting you say nope, don’t want it or any of the features at any of the various price points. They were forced choices and there was no way to bypass a question.
I forgot my password for the city surveys and — try as I might — I could never get a “reset your password” link or help from a human in resetting it so I missed participating in several until it belatedly dawned on me register again o use a secondary email address.
Did the city polllsters / adminstrations ever notice that someone with my unique name was registered twice. Nope.
@Bill Glazier: I have been waiting for AT&T Fiber to come to my neighborhood for years. It never did. In the meantime, my AT&T wireless bill just went up $12/month for no reason whatsoever. Even more ridiculous, when I went to Spain a few months ago, AT&T turned on international roaming in my wireless plan (which would have cost $10 PER DAY) without my permission. I had to pay through my nose to turn it off remotely while in Spain. My AT&T bill increased by nearly $60 just because of that. I am sick and tired of AT&T.
As to Comcast, I was paying $90 per month for supposedly 1 Gbps though I get only 300 Mbps. Last year in September and October, they had several unannounced outages which last several hours during the day when everyone was working from home. I went to their store and made a big fuss. Then finally offered to cut my bill to $70 per month, but only after I agreed to sign a 2-year contract. I assume my bill will go back to $90 or more after the contract expires. I am sick and tired of Comcast as well.
I hope the city will push through the fiber plan and give Palo Alto residents some genuine alternatives in internet access other than the duopolies we have now.
@Bill Glazier: By the way, I do not think my neighborhood (Fairmeadow) is an “oddball location”.
Another happy Comcast customer: Web Link
Anonymous –
My neighborhood – Old Palo Alto – just got this less than a year ago. It will roll out. Probably sooner rather than later. The Palo Alto Fiber Network is far from ready to go either. Pretty much everywhere will be covered by ATT in time. I am not claiming ATT are saints – they will price to maximize penetration and then profits, over time. But my fear is that the cost to honestly create and manage a real fiber network will be very high, and we are not likely to attract world-class engineers to manage and upgrade it over time. We have some leverage that we should use over ATT – the threat to do something, which is useful and we should take advantage of while we can.
Think of it this way – if Palo Alto Fiber says that in 3-4 years, they can deliver the same product ATT delivers right now for the same price, you know they will be way behind the technology and the cost curve. ATT will not shy away from competition, they will cut price to compete and squeeze Palo Alto Fiber. The size of the revenue pie will be smaller than what Palo Alto now projects. An underutilized and old technology fiber network will be a huge white elephant that may prove worthless. If high-speed networks were easy to build and not subject to huge scale economies, you would see thousands of high-speed alternatives all across the country. You don’t.
Palo Alto has been hemming and hawing over this for a couple of decades now in its typical indecisive fashion. It might have made sense twenty, or even ten, years ago. But now, it would be a waste of money (factoring in inevitable cost overruns) and the uncertain subscription levels and service costs once completed. We are way beyond the “if we build it, they will come” scenario, particularly now that even AT&T is finally providing fiber to the city. It isn’t cheap, but it is here.
My issue with Xfinity is that the costs have skyrocketed over the last few years in Palo Alto and reliability has become an issue (we’ve had numerous outages over the last year). Yes, Xfinity provides good internet speeds. We have speeds of 2.4 Gbps (download) — increased in our package that provided just 200 Mbps a few years ago.
Unfortunately, Xfinity is finding new ways to nickel and dime for our “triple play” package. As such, our plan is roughly $190 per month (including internet, unlimited nationwide home phone and a deluxe cable package plus X-Fi wireless router rental).
The one advantage of Palo Alto providing this service is that competitors would still be available. Palo Alto would have to be the more affordable option. If Palo Alto can provide the same speeds for $100 per month, then I might consider cutting the cord and relying on streaming services for TV. Otherwise, it seems like we would be trading one company for another.
What “key decisions” is the City preparing to make when its survey had no way to say no to the project and they’re already trying to get deposits from us?
@Nayeli,
“The one advantage of Palo Alto providing this service is that competitors would still be available. Palo Alto would have to be the more affordable option. If Palo Alto can provide the same speeds for $100 per month, then I might consider cutting the cord and relying on streaming services for TV. Otherwise, it seems like we would be trading one company for another.”
$125 million (borrowing money) for a crusade against existing providers in a town of 60,000 inhabitants should make front page news around the world and nobody will have a real explanation as to why???
Pitch fiber. Get grade separation project moving.
For those of you who can’t get enough of the constant construction going on roads all over town already, you will be over the moon when they start digging trenches that will take years to connect to actual reliable service. But remember: ONE THIRD of you asked for this project, and the City welcomes your financial commitment in the form of a deposit, so you could cast your vote! As Mayor Daley always said, “Vote early and vote often”. In 10 years when this is complete, it will be totally obsolete. The chip they implanted inside your arm when you got your COVID shot will soon be connected to a satellite that will allow you to watch anything from behind your sunglasses. Rub your nose, and a virtual ipad appears for all of your streaming and communications needs. Pull your left ear for English, and pull the right for closed captioning. And look at that Palo Alto fiber optic cable … just sitting there, with nobody buying it. Whenever I think of an idea that looks okay on paper, I think about MySpace. Warren Buffet bought …. what …. a room full of webservers, all of them unplugged.
Broadband quality varies dramatically in our city. The AT&T wires on my street are so bad that during the pandemic when my partner’s and my work went entirely online we had constant lags and people would ask “where are you?” And we would say “Palo Alto!” And they would say, stunned, “Palo Alto has bad Internet?”
Technicians for AT&T acknowledge “these underground lines are old and cruddy but we’re not going to replace them.”
To make up for it we added Comcast to our existing AT&T in a desperate search to have two options to keep our online meetings going. But even Comcast’s faster consumer grade gives us 25-35mbs.
So, I’m all in favor of fiber. And I ask that it cover the entire city. And maybe even we could start on the south end? It sure would be great to see a new amenity come here first.
If Palo Alto is all that ‘progressive’ as some would like to believe (or delude themselves), internet access should be FREE and subsidized by the utility billings which have never been reimbursed to PA residents.
What a waste of money when the city claims to be broke and when it has no proven expertise in reporting plain old power outages in a timely accurate fashion. How about undergroinding the power lines which causes us to lose power whenever a balloon or branch hits them.
And STOP with the misleading “surveys” that a merely a way to try to get advanced deposits. Stop wasting OUR money!
I had wanted CPA fiber forever, but now that I have Sonic Internet, I am no longer interested. Sonic use AT&T for the DSL/fiber provider, but Sonic deal with AT&T on your behalf. Recently, a passing truck pulled my internet cable down from the pole across the street. I called Sonic Support, and a real, local person answered the phone on the second ring. She contacted AT&T and scheduled the repair for the first thing next morning. The whole thing took about 10 minutes and the repair was completed on-time. So I have the technical benefits of the AT&T system, but with the excellent customer service of a small local company. CPA had its chance, but has now missed the boat.
@Julie,
“So, I’m all in favor of fiber. And I ask that it cover the entire city. And maybe even we could start on the south end? It sure would be great to see a new amenity come here first.“
Since you’re running for Council, I appreciate hearing where you stand on this, up front. This is a very expensive and massive undertaking for an “amenity” that will not necessarily add to the desirability of Palo Alto, say compared to other features that make the city desirable. I prefer “amenities” outdoors more than dealing with my internet bills and I’m very worried with how stretched the City is already.
It’s choices like these where I hope candidates get tested on, and can there be more meat to understanding this fiber idea than hearing personal download experiences or wanting to reduce people’s internet provider bills?
Echoing resident3. It’s fine to for something generally but one has to look at the costs and capabilities of the city and the departments planning to providing the service.
Re Fiber specifically, a YEAR ago I got a notice from that workers would be out checking our wires/poles for the fiber project. I replied that my neighorhood doesn’t have wires/poles because we’ve had undergrouned utilities for decades and to please advise what we’re supposed to do. MONTHS LATER they asked what neighborhood I lived in even though I’d given them my address. I responded with my neighborhood and suggested they update ALL the undergrounded neighborhoo. A month later they said that was a great suggestion and they’d get right on it.
A year later we’re still waiting. Doesn’t inspire confidence that our money will be well-spent or the project will be well-managed.
Can the City put all its capital projects, with carbon budget and financial burden, to a ranked choice voting system by residents? This obsolete project is likely to come last. Planting trees will win – on cost and on carbon footprint!
In the process of writing my detailed comments about this project, a thought occurred to me that I would like to share.
The city should make a deal with AT&T Fiber to sell access to AT&T. This would avoid having to build a whole system that would essentially duplicate AT&T at little cost to the city. The city could thereby have their own fiber system, thus fulfilling a long-term dream without having to squander our money.
This is actually not far-fetched. AT&T sells this kind of use to other companies. It is very common in the cellular business, where there are actually only a few networks. For example, Comcast now markets cell service; they have a deal with Verizon.
To add to rsmithjr’s post above, I don’t have a preference one way or the other whether CPAU gets into fiber, but if the city does it, it should be part of a local-loop unbundling structure, where the city maintains the infrastructure, but multiple companies can deliver their service on top of it.
That’s one of the reasons why UK and EU have great internet service at cheaper rates. Also allows companies to segment and deliver different service packages to specific market segments.
Maybe Palo Alto could save money on its fiber rollout by limiting (at least at first) its rollout to the areas of Palo Alto that do NOT have access to AT&T Fiber, which includes a very wide swath of south Palo Alto. No need to spend money rolling up fiber to north Palo Alto neighborhoods that already have the option of subscribing to AT&T’s fiber network.
Palo Alto has been down this road before. Years ago Palo Alto just had to have its own cable TV system. It was a disaster. Today the technology is obsolete and the Cable Co-op is but a distant memory.
In the meantime, the catenary for electric Caltrain is up, the EMU’s are undergoing testing and after decades of deliberation, PA still lacks a workable concept for grade separation.
If the city wants to spend money studying something, it should study building a small desalination plant in the baylands.
How many dollars have Palo Alto tax payers already poured down the drain in the last decade or two on this pet project of council member
@mjh, an EXCELLENT question and one we keep asking and one CC keeps ignoring. I’m curious which council member you mean.
A recent superb special article published in PA Online warned that PA’s antiquated electric power infrastructure is becoming increasingly outdated and in danger of being overwhelmed by “projected future demand” for green uses — like charging electric vehicles plus replacing natural gas powered water heaters, stoves, and furnaces. The study concluded that PA will need 3x or maybe even 4x more electric capacity (by what date I don’t remember, possibly 2040?) to keep its power grid robust and reliable. This would require rewiring most, if not all, of the power poles in the City and also most or all of its substations. And that takes time and oodles of $$$ — at a time when PA’s citizens also need to fund at least 3 and possibly 4 hugely expensive beneath grade rail crossings as well.
It’s all about common sense priorities, heard of them?
For me, a very competent Physicist and a good Engineer of reluctant necessity but not love, high capacity & reliable power delivery AND also a reliable, convenient traffic system that includes off-grade rail crossings are essentials to PA’s future quality of life. That analysis is just plain engineering common sense and not advances physics, which is far more complex and fun. Both are necessary for quality of life for residents.
For PA to INSTALL and OWN a 200 Mbps basic fiber optic Internet network (plus crazed techie options of cheap 1 to 10+ Gbps service) is just plain ignorant and stupid. This is a luxury that PA should relegate to reliable Internet providers like Comcast (which I hate), or to ATT (which is far too conservative and afraid to confront Comcast).
In 20/20 hindsight, PA should never have set up its own power system. In 20/20 foresight, it should never set up its own fiber optic cable system. No core competence. Period.
“As Palo Alto embarks on its ambitious journey to build a citywide fiber network that delivers high-speed internet to every neighborhood, new survey results and financial projections for the proposed system are giving city leaders loads of reasons for both hope and anxiety.”
Only anxiety.. as far as I’m concerned for the majority of the population …if they have even heard of this. The article is painful to read because at no point does it say if there is an option to stop this “ambitious journey.”
Is there an option to say NO to both questions?
No to going on a hiring spree for this idea
No to hiring consultants for a journey
Whoever suggested to rank order the many infrastructure needs, that would be welcome, even if it’s by size or anything. And how about the many other needs we have… and the money we don’t have.
Fiber helps you stay regular. But I miss telephone poles. And those glass insulators.
How about Palo Alto partner with Sonic, an ISP with excellent products and customer service, and enable them to rapidly expand throughout PA? Far cheaper, and has the same effect of applying pressure to the huge traditional incumbents?
They already have some service in the area and likely will need to spend a lot less to expand given they are already in the business.
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