Brian noted the interest of the group with so many people getting up for a meeting at 7:30 AM. This entire subject of communications services is an very interesting topic. He took computer science years ago in school because he thought it might catch on, and it has.
Brian began by reviewing creation of a JPA to assist in dealing with cable companies. The San Mateo County area joined 7 or 8 years ago to form a JPA called SAMCAT beginning with 4 cities and the county. The result was that with more population and joint representation they got a better deal from TCI, more PEG channels, more support for public programming. When the Telecommunications Act passed in 1996 there was hope for more competition and better service, which hasn't really happened yet. There was a similar group of government agencies in Santa Clara County that dissolved when Pacific Bell dropped the cable trial in San Jose. The SAMCAT charter was expanded in 1996 to cover all kinds of communications, growing to 15 agencies with almost 500,000 people to look at more than just cable. Result is more responsiveness from service providers, more political clout, more attention from cable companies and others.
SAMCAT only runs the PEG channels, and supports broadcasting council meetings formerly under contract with college of San Mateo. Otherwise they don't run programming. They just hired Bob Marks who formerly developed programs for MPAC and set will up a more comprehensive channel. They also are negotiating to put on commercial-free channels that aren't carried by TCI, which has TCI concerned. They went to the channels and said we'll see to it that you are carried if you take out the ads. They were surprised at the offer, but one of them appears ready to deal. TCI is reluctant to carry them, however it's going on a PEG channel, so anything can be run on it.
He discussed the area code system, and the overlay issue. He attended a hearing in Sacramento where splitting area codes vs. overlays was discussed. The big problem is issuing blocks of phone numbers to new entrants or to competitors that are unused. The result is that over 180 million phone numbers have been issued in California, but only 35 million are in use. The local phone companies such as Pac Bell and GTE like the present system because by controlling the popular area codes they can discourage people from switching to new competitors. SAMCAT got legislation introduced cutting the number of phone numbers issued to competitive services in blocks. It has a good chance of passing, making California a leader in overcoming the number availability problem. That got Federal organizations interested. Now the FCC is involved also, and is looking at assigning numbers 1 at a time, which extends number availability for 75 years without overlays. Some State Senate members are skeptical of the need for or desirability of overlay area codes.
Fiber service to businesses is an issue. Many providers put in fiber, but may not offer service to homes, or agree to pay cities for access. Cities have little leverage to demand payment for access or use of city utility facilities. This is a holdover from laws in the 1850s and 1860 which limited city controls on phone and later telegraph to encourage telegraph and telephone.
They are working with microwave and wireless companies who are looking at providing service. Most of them are interested mainly in service to businesses. There seems to be little interest in serving residential with wireless because of the high capital costs involved up front.
In video distribution they are working with RCN. RCN probably won't be around long as independent operators. In 5 or 10 years someone will buy them. They have an open video system (OVS) and as such they are required to pay franchise fees. In the east they created controversy because they come in as an OVS in order to avoid city requirements for services, but once they open up and begin serving an area they behave like standard cable companies. An OVS agreement doesn't require wiring entire areas, or going into underground areas. RCN wants cities to sign agreements, not require franchises. Daly City amended the franchise ordinance to cover OVS once they heard that RCN intended to build facilities. RCN reluctantly agreed because Daly City has the highest residential density in the area and overhead lines. Daly City made them sign a franchise and cover all the city, South SF didn't impose franchise requirements, and let them cover just part of the city.
RCN came in announcing that they were eager to serve Silicon Valley, starting in Daly City and SSF. Brian thought their geography was off some. They want to go to areas with overhead wires, and high density. It will be interesting to see how they operate in other areas. They won't serve Foster City because it's all underground. Seren Innovations from Minnesota is doing the east bay and as a more traditional cable system they cover entire cities. They are owned by a utility., and went to the east bay when they heard RCN was doing the peninsula.
In the area of Internet access, San Carlos has recruited many providers to come in and compete. They were pulled into the hearings on the open access issue. The hearing in Sacramento was interesting. It was clear from the discussions by legislators who got contribution from whom. It's likely that there will a law requiring open access. AOL and Pacific Bell are co-operating to get into the market. It was amusing that AOL urged that the issue be addressed at once to prevent serious harm. Some legislators thought it was best not to act now, and let AOL throw more money into the state over the next several years on telecommunications investments in infrastructure and the last mile. The hearing was entertaining because the number of ISPs serving areas is irrelevant, the cost to consumers is nearly the same. This came out in testimony and questions from legislators.
Brian is not sure that cable modems are the long term answer. Presently @Home restricts servers and limits access. If you want to get a cable modem from them it takes lots of time to have it installed and set up. They have service and delivery problems with the limited service they now offer. Adding ISPs may make the system break down. Shared bandwidth makes it slower as users are added. Open access now can sink the ship. Pacific Bell wants to be the key monopoly again by taking control of access directly to users. Wireless transmission has problems getting needed right of way access for the antennas. They are looking more at business, not residential, users, because it is so expensive and hard to get access for repeaters. They are undercapitalized.
Q: What about Anaheim and other cities Internet service.
Burbank put fiber in existing conduit, and got trashed by Pacific Bell and GTE as providing unfair competition. It is nice to see that the bumbling bureaucrats of 1978 who caused the backlash of Prop. 13 now are so cleaver that they are unfair competitors.
Spectranet went into Anaheim and Santa Ana with options to build the system and operate it. The offer was fiber to businesses, HFC to small residential nodes. They fell behind the schedule, gave lots of excuses but very little action, after which they were sued. Brian spoke to the principals when they first began looking at places to operate. He always was dubious about Spectranet, financing, the entire proposal.
SBC wants the Texas law in California, but the legislators are dubious. Cable people are very powerful in the legislature. They were promoting a bill that would exempt cable modems from franchise fees.
The AT&T purchase of TCI is a risky deal. AT&T bought an old system that needs lots of expensive upgrading. In Fremont different neighborhoods have different node sizes. They are experimenting with what works best.
Mike Eager said RCN raised the bar on HFC service by going to smaller nodes. He visited friends in New Jersey who have RCN. People in the east who have RCN are pretty happy with the service, including Internet.
Brian noted that cable franchises aren't exclusive, but cable companies tend not to overbuild each other. Franchises typically are much more rigorous about service requirements, performance, provision of universal service, requirements for PEG channels, etc. SAMCAT has put together a group of requirements for OVS providers that looks very much like a franchise. They may not be able to get RCN to cover the entire city. This can be a serious issue. In San Carlos the underground areas are the hills where the wealthiest people live. If RCN avoids underground areas they will pass a high percentage of low income people in town. There may be partial competition if only part of the city is served by both TCI and RCN. SAMCAT wants more players and more competition, even if the competitors don't cover the entire area.
Q: How will RCN address the undergrounding that's always going on in Palo Alto? Brian said they were asked about that, and got evasive. They finally said they didn't expect to have any problems or big undergrounding expenses.
Brian said it's possible that some cites will require 100 coverage or will refuse to admit RCN without an agreement that they will provide full or almost full coverage..
Brian noted that RCN expects to get about 40 of the users when they come into an area. Bob Moss noted that they had high sign-ups in other areas because the existing cable company was TCI. Here the competition is Cable Co-op, which performs much better and has few complaints, particularly compared to TCI.
There was debate about whether TCI or Microsoft is the most hated organization in the area. It's close in some places, but in San Mateo County TCI has the lead and is easily most hated company.
Once all 15 SAMCAT cities are wired and have cable modems they will see how things work. The cable modem model may not work because cable companies are used to charging flat rates, and not to monitoring how bandwidth is used and charging accordingly. Considering the problems @Home is having, putting on multiple ISPs may be too hard to handle for cable companies. It's more involved to have multiple ISPs than the GTE demo shows. @Home needs to fix their own system first before bringing in more ISPs.
Q: Getting FTTH with a JPA has been proposed. Do you think it is possible to form a local JPA like the one formed by SAMCAT?
A JPA could raise lots of money. Once you leave Palo Alto, how would a JPA and fiber installation work? That isn't clear yet.
Density in other places in the area, like Menlo Park is low. Atherton has too low density to be attractive to RCN, even though it's a wealthy place. Cities were reluctant to get involved because they didn't want to lend their names to a risky venture. Also cities normally don't want to put money into unusual things like FTTH. Cities are risk adverse.
The group thanked Brian for his very interesting talk and his participation.
Meeting adjourned at 8:50 AM.
Respectively submitted, Bob Moss
NOTE: Audio and Video versions of this presentation are available at:
http://www.netvideo.com/tv12/pa-comnet/moura.rmm Audio
http://www.netvideo.com/tv12/pa-comnet/moura-160.rmm Low speed video
http://www.netvideo.com/tv12/pa-comnet/moura-240.rmm High speed video
webmaster - Louis Bookbinder (650) 494-1589 booky1@earthlink.net
http://home.earthlink.net/~booky1 - revised 24 July 1999