The Chairman introduced Van Hiemke, Telecommunications Manager for the City of Palo Alto Utilities.
Van distributed latest version of fiber optic map and pointed out most recent updates. He made a point that this is an evolving project, designed to change and expand over time in order to serve more and more businesses and residents in Palo Alto. He discussed three components of the City's fiber optic program: current fiber project status, the City's general policy statements to be presented to the City Council on November 17 and current status of ideas relating to residential access and universal service.
1. Fiber Project Status
Van explained that the originally planned dark fiber deployment is 85 to 90% completed. He pointed out a deferred section that will be completed in 1999. Newest additions are in downtown area, circles on the map are access points. Section AV-BK is new addition. AT-BL is also new. The City's strategy is to branch out as it makes sense in stages, as demand emerges. The City now has 2 license agreements in place and 7 connections established. Brooks Fiber and WebTV are the two customers.
Some discussion of WebTV as a local company took place. Van explained that the City has a strong presence at the Palo Alto Internet Exchange (PAIX), with two 144 strand cables going in one side and 3 running out the other. The facility is currently filled to capacity with service providers. Van pointed out that there is a link on the City website leading to information on the PAIX, or it can be accessed directly at <http://www.ix.digital.com/>. That site will show who the current participants are in the participating/participants directory. Van noted that there are currently over 30 Internet service providers and 6 telcos (including the City) with space reserved at the PAIX.
According to Van, advance engineering requests have been completed by the City for two other prospective customers. The City is now waiting for the new participants to sign the license agreements.
There is a 3 step process for getting connected to the City's dark fiber loop:
These costs cover the connection to dark fiber. It is the customers' responsibility to find an ISP or other service provider to "light" the leased fiber or to "light" the fiber themselves.
As a provider of dark fiber, the City is not a common carrier and therefore not subject to laws binding Competitive Local Exchange Carriers (CLECs) or other carriers. The City is not a CLEC. Regarding customer usage, the only City-imposed restrictions is that the use of the fiber must be for "lawful purposes." The actual agreement is approximately 60 pages long and is extensive in scope.
Van discussed the demand that is apparent in the present market.
In addition to the above partners, there are six or seven other strongly interested parties.
Marvin Lee: What is the nature of these customers? Are they all comparable in size and type of service?
Van Hiemke: No, there are a wide variety of services coming on line.
There are three basic types of actual and anticipated adopters:
Margaret Cooley: What about changes in Brooks Fiber plans?
Van Hiemke: The impression is that they are moving a little bit slowly, given the amount of MFS fiber in the city and potential Worldcom mergers.
Margaret Cooley: Are there policies preventing a single buyer of all city capacity?
Van Hiemke: No, not formally. However, if it were to happen, it would be looked at very carefully and measures taken to prevent the city from running out of capacity, including installing more fiber cable.
Marvin Lee: Has Cable Co-op put in any bid to lease any of the fiber, either formally or informally?
Van Hiemke: There have been some questions.
Mary Jo Levy: Is there fiber running everywhere that it is possible to reach, throughout the city?
Van Hiemke: No, fiber can be extended to additional areas; however, in some areas the cost is significantly greater if new conduit must be installed. There is additional conduit in some areas, not shown on the map.
David Harris: Does the city have maps of other fiber owners in town? Is there a way to see the big picture of total capacity throughout the city?
Van Hiemke: No, but there are certainly other fiber owners in town.
Paul Pease: Any estimate of anticipated revenue over next five years?
Van Hiemke: The City is still standing by its initial projection of three to five years to break even, with $1million annual revenue beyond that point. Breaking even means with the incremental investment, that is, leaving out the sunk cost of previously placed conduit, etc.. Strategy is to make the money back on this incremental investment and then move on from there. The market is still uncertain, so we are proceeding with the most prudent pricing approach.
2. Telecom Statements
There were four general policy statements presented to the Utilities Advisory Council in October. The need for these was spurred by passage of Telecom Act of 1996. They were approved by the Policy and Services Committee and will be presented to the City Council on Nov. 17. The policy statements essentially reiterate the telecommunications objectives of the city and acknowledge existing right-of-way policies for both above and below grade structures. This is merely a formalization of current standard practice.
Davd Harris: Does this policy guarantee that city is lowest cost provider of residential fiber?
Van Hiemke: No. We play by the same rules as other telecommunications providers in a competitive environment. In order to avoid litigation, the City is required to offer use of its utility poles and facilities to any telecom carrier who desires access without interference with the explicit purpose of the facilities. As long as the existing purpose of the plant is not undermined, city facilities are available.
Imsong Lee: How much does Metricom have to pay for the use of traffic light poles for its Ricochet Wireless Network?
Van Hiemke: I do not know that figure.
Joe: So, if Sprint sets up antennas on the poles, do they have to pay?
Van Hiemke: Not yet, but there are plans to require that. The idea is to enhance revenue by making better use of the city-owned facilities. Next step is to put together "enabling materials", update municipal codes, licensing, etc., to further enable the revenue generating capabilities of the City.
3. Residential Access and Universal Service
It is too soon to get into specific details on this topic.
Internal discussions at the City are proceeding. The current plan is to approach the Council on Dec. 1 with a strategy on how to approach these critical issues.
Marv Jo Levy: Are you going to call in telecom industry people to help craft this strategy?
Van Hiemke: At this point, this is not going to become permanent policy, rather the goal is to suggest a strategy for crafting a policy. I can't say too much at this point.
Richard Adler: Will there be any advance public notice of the proposal, prior to Dec. 1?
Van Hiemke: Meeting agenda and informational packets are generally available the week prior to the meeting.
Keith: Are there any key Council members involved or interested right now?
Van Hiemke: Right now there are not any Councilpersons directly involved, but part of the Dec. 1 process will be to propose a way of going about this policy-development process. Part of the approach would involve reactivating the Telecommunications Advisory Panel.
Paul Pease: Is the school a fiber-ring client? Do they get free access?
Van Hiemke: Not yet. There is a new school district contact person who has been busy getting acclimated to the new environment. Discussions about access for schools will definitely be pursued.
Harry Saal: What about the City itself, as a customer? What arrangements are there for that?
Van Hiemke: There will definitely have to be accounting items for this in the budgets. It's very complicated. For example, the electric fund is a subfund of utilities fund and telecommunications is a separate area within the electric fund. Within the present pricing formula -- as discussed -- there is a "public benefit" discount available, depending on what the use is. Any petitioning entity must submit a proposal for such use. Certainly, the school may be a candidate.
There were some trailing comments about the nebulous nature of the term "public benefit" which were not pursued.
Hank Magnuski: Are there any ideas for a mid peninsula IP, or regional ISP like a nonprofit to promote usage?
Van Hiemke: I have received calls from people interested in the idea, but discussions have been conceptual to this point.
Marvin Lee: Can you offer some sort of time-frame by which citizens will have widest possible access to the fiber loop?
Van Hiemke: Certainly not sooner than 1999, depending on the scope of emerging projects.
David Harris: What about "openness" of your operations because you are a public entity? Don't some of the disclosure requirements of a government entity present competitive disadvantages?
Van Hiemke: In a deregulated environment, this is a very difficult issue. Other competitors enjoy more tightly held decision-making mechanisms. There are proposals pending to provide more protections for the City in such an environment.
Keith Cooley: What marketing measures are being pursued to increase fiber-loop-derived City revenues?
Van Hiemke: Up until now, it has been very individualized. We are just now getting into a phase where we are ramping up to a more high-level marketing effort including a brochure and promotion of our web site. I have a beta copy of the new web site here on a diskette. ISPs and others will also become resellers and provide some secondary promotion. As they find new customers they will promote public awareness, adoption and usage.
Harry Saal: Are there other similarly situated municipalities from which we can learn?
Van Hiemke: Yes. Burbank and Los Angeles come to mind. Burbank is more similar to our situation. Anaheim has an aggressive approach whereby they constructed communication infrastructure to meet internal needs initially, then partnered with private sector to expand those services. There are specific plans to actually reach every resident of Anaheim. They are pursuing a more "second phone company" model where competitors can use those facilities, just like PacBell must do today.
Imsong Lee introduced Phil Patten, from Stanford. He is a Communications Major writing on community action in Palo Alto.
Next meeting will be Wednesday, Dec. 3.
Imsong Lee: Suggestions for next meeting?
Paul Pease: Anyone know about the status of Metricom? I'm interested in keeping up with wireless.
Marvin Lee: Last month, we discussed bringing in someone from utility advisory council. That still seems like a good idea.
Keith: Perhaps Paul Johnston, he is knowledgeable in this area.
Joe Villareal: I believe we have failed to express our appreciation to Van for his instrumental role in bringing this project in ahead of time and under budget, excellent work, Van.
Thank you. [Clapping]
Richard Adler and Joe Villareal reported on their idea for a social gathering--perhaps in the 5pm to7pm timeslot some time after the holidays.
Mary Jo Levy: We are also working toward connecting all libraries in the county. A prototype network is up and running. One vexing problem is with the software, however, the Z39.50 standard to connect/read bibliographic records is slowly being deployed. The Palo Alto, Santa Clara City And Santa Clara County libraries are connected in a test phase. Mountain View will be joining soon. Tests in early January will showcase the benefits of connecting all the county libraries. The public will be able to search the catalog, find items from libraries throughout the county and have them delivered to Palo Alto Library.
Another effort is "The Library of California," the name for proposed legislation--rather than a project--to connect all types of libraries in California and provide access to collections and services through one's academic, school, public or corporate library.
This legislation will work in concert with the University of California Virtual Library project. Private and corporate libraries should or could be interconnected, a total of 8,000 libraries in California could potentially be connected. This would become a tremendously valuable resource to residents.
Meeting adjourned at 8:45am.
In attendance:
Richard Adler <radler@aol.com>
Fred Bockmann <bockmann@apple.com>
Keith Cooley <kcooley@coolware.com>
Margaret Cooley <mcooley@coolware.com>
David Harris <dharris@best.com>
Van Heimke (Speaker) <van_hiemke@city.palo-alto.ca.us>
Stan Hutchings <stan.hutchings@lmco.com>
Imsong Lee <imsong@best.com>
Marvin E. Lee <marvalis@aol.com>
Mary Jo Levy <levymj@class.org>
Hank Magnuski <hank@netvideo.com>
Phil Patten (Stanford Student) <darmok@stanford.edu>
Paul Pease <paulpease@cheerful.com>
Harry Saal <HSaal@svi.org>
Michael Silverton <silverton@edcom.org>
Joe A. Villareal <joe@ondas.com>
Submitted by Michael Silverton