PA-ComNet Meeting Wed. May 19, 2000

Taam Marshall of the Utilities Staff gave a summary of present status of the FTTH trial. July is the planned construction start date, with users hooked up in January. It isn’t clear yet if all 108 who sighed up will be connected, as they are still looking at the design and costs. It is likely to cost less than $1200 to hook people up. There is no long-term commitment to continue the project now. It depends on how the initial evaluations turn out. The first report will be done in July 2001.

Question: If others ask to sign up in addition to those already signed up can they do it?

Maybe others can be added, but the City can’t make a commitment now. They are working with the schools also, and plan to wire Walter Hayes and St. Elizabeth Seaton schools, the Main and Children’s libraries, and the Art Center as well as the homes in the test area.

Mike Eager said this is not a technology trial; it’s more an acceptance by the community and utility infrastructure issue. There is little risk that the technology will be obsolete in a few months. Will the ISP give good service, will squirrels chew the cables, and will it work OK? That is what the trail is for.

Brian Reid, now of Bell Labs, said the FTTH trial isn’t about technology; it’s about a new business model and avoiding monopoly operations. When there is only one company providing service and something breaks it’s easier to tell where the problem is but when there are several companies involved it’s harder to tell where there is a problem. There are no new technological fixes that will make the present design obsolete. Wireless gets lots of mention, but it is a good way to generate the need for more wires. Wireless is a good way of getting the last few yards, but it won’t displace fiber.

Marvin Lee gave a summary of the history of the FTTH program and the difficulties and time spent getting the city to agree to the trial. It was never envisioned as just for the one neighborhood, it was intended to be for the whole community. How can a community-wide fiber system be started, how can it be financed? Would it include TV as well as data? What about also providing telephone service?

Councilman Bern Beacham said it’s not a technology experiment, it’s an evaluation of marketing, can it be financed. The City is in the middle of evaluating proposals for the UTCS. With only 100 customers for FTTH there won’t be staff available 24/7 to provide service, as it isn’t economical.

For the UTCS bid the big question is where is it connected? Presumably there will be 1 provider.

Brian Reid showed examples of setting up communications services. Simplest and most usual model is to run all the lines to a central office. If there is only 1 wire from your house, then you have no choice except to use someone else’s wire. The alternate is to have multiple wires run to the house. The only real choice is to have several central offices so that customers can select whom to buy various services from. Fundamental basis of the broadband experiment is what is the central office, who runs it, where is it, who handles service calls, etc. He’s having problems now getting service on a damaged fiber because it’s hard to get anyone to take full responsibility for problems. After several calls and complaints they finally flew a technician out to look at the problems. Even after he showed the service provider what the problems were and what to look for to fix things, it still took lots of time and effort getting them to correct it.

For the Community Center Neighborhood FTTH trial they need to have the head end located nearby in order to serve the area. He calls it a neighborhood exchange. There can be several of them, but it is important to determine who is responsible for the operation and maintenance of the wires and system. There are administrative boundaries, and the city doesn’t get it. The problems with FTTH are political because this is the logical battleground for advanced data services, so there will be lots of big money lobbyists arguing against doing it differently than their normal corporate approach. There are arguments about what the protocol will be for the local interchanges - ATM, IP, or something else. It probably will be ATM at the interchange because it’s readily available.

One problem is billing. He has a flat rate for gigabits/month no matter where it is sent. The local interchange can’t access the ISP or there will be big bills for local service. The intelligence has moved from the central office to computers, which are at the edge of the system. Phone company model is that there is value in aggregation with their expensive big equipment. In data switching the value is in service. The best approach is to have the city own it. He was talking to an assistant postmaster recently who said the Post Office will always be there. A big advantage of the Post Office is it will never be bought out. All other providers can be bought. He can appreciate that considering how his employers have been bought.

City utilities would be a good choice to do FTTH, even without any direct experience in running communications systems. Government has no understanding of the issues and important policies.

Bob Moss noted that there are very few areas where local competition for cable and data service lasted very long. There won’t be real local competition because even though there may be several providers, each will try to carve out separate areas to serve primarily. Where they do compete directly, in the long run they will either buy each other out, or trade areas to recreate defacto exclusive territories.

Estimated cost of FTTH for all of Palo Alto is about $25 - $30 million, not including ongoing costs for ISP, and operations. The FTTH trial should be extended to another area, such as Barron Park or Midtown that also showed a high level of interest. The Barron Park area should have as sound a proposal as possible to get staff to agree to it.

Brian Reid asked if the city goes on with the RFP and does award a contract for universal service, would it prevent the public from doing FTTH? It isn’t sure where the proposals will suggest connecting to.

The city wants no risk, but they want to get franchise fees and do a FTTH trial that they don’t have to worry about. The recent change in city manager may make it easier to convince staff to look at a wider trial more carefully. The real problem is that not enough council members understand the issues and support public ownership of a fiber system. There is no champion of FTTH on the council.

The best way to convince the city to get involved is to have a successful trial and show that there is a real need for it and it works. It also may be possible to do a trial with corporate money. Reid said the head of Bell Labs supports a local FTTH trial as a research project and is willing to fund it if a reasonable proposal is presented. It would serve as both a technology demonstration and as an example of how a community can interconnect effectively with high-speed service to enhance community life. Brian is looking for about 10 people willing to work on such a project, but they need the right mix of people. Two members of the audience offered to join the team and work on another FTTH demonstration project, but Brian needs to get a clearer idea of how to structure the project first.

A problem is that the RFP for UTCS is in process now, so if there is a new proposal it may create problems with the RFP selection and slow down everything. The city need not award the UTCS contract. If there is a competing proposal it may kill the UTCS RFP.

Bern Beacham said the idea for a privately funded additional FTTH trial was attractive and he would present it to proper city staff for consideration.

There was discussion about getting other cities such as East Palo Alto and Menlo Park involved in another FTTH trial. Wider involvement would be a good way to move things forward, but getting other cities actively involved will be hard.

Maybe the way to do it is by going into new homes or new developments and just using the existing conduit. The problem is figuring out who owns what, who pays for what. The new development on El Camino near Vista has FTTH and people are hooked up and using it. It could be expanded into Barron Park, or other neighborhoods such as Midtown might participate in a trial.

The utility survey on FTTH didn’t allow the replies to be used by others. A problem is that in order to give meaningful answers the public has to be much more informed than they are.

We need to get the city to set priorities right and support FTTH, the way they did in 1968when they made the commitment to underground power lines. They are spending lots of money on things like parkland but very little on new high-speed data services that offer many significant benefits.

Meeting adjourned at 9:10 PM.

Respectfully submitted, Bob Moss