Marvin Lee welcomed everyone and made introductory remarks beginning at 7:07 PM. He considers FTTH a major step forward in this area, and something that will greatly help the economy. Using Palo Alto Utilities (CPAU) as the basic provider will build on 100 years of experience and excellent performance. He gave an example of CPAU service and responsiveness to an outage on a holiday which is typical of the fine performance they deliver.
Ken Poulton gave some background information on Palo Alto Fiber Network and the goals of the organization. It has been working for more than 5 years to provide high speed Internet access to the entire community with the preferred approach being fiber to homes and businesses (FTTH). FTTH gives the highest data speed with no bottlenecks, at low cost. The concept is to connect homes and businesses with neighborhood Ethernet switches to a 1 Gbps trunk tied to the Internet via PAIX. It will include businesses, schools, home offices, and libraries and will support new uses now. Inexpensive future upgrades will be possible with the planned system configuration. The cost of the system will be supported by the users.
Multiple service providers can offer service over the single physical network. There would be an information utility open to various providers. Each user could take service from a different ISP, and change ISPs if service was unsatisfactory. Internet services and Internet access can have competitors, but a single party would operate the network and maintain the infrastructure. The proposal is for CPAU to provide the infrastructure and operate the network. Any ISP could provide Internet services, but Internet access would be by approved ISPs, to assure quality and reliability for the network. The system is capable of providing data, CATV and phone service, as desired by customers.
Advantages of FTTH include better communications within the community, between homes and employers and worldwide, exchange of medical information, on-line research, library to the home, video on-demand to the home, and improved government efficiency and delivery of services. Telecommuting would be facilitated, and traffic congestion and smog would be reduced.
CPAU would provide and operate the infrastructure with a selected ISP providing network operations. ISPs qualified by CPAU could provide Internet access. Any ISP could provide Internet services.
A major advantage is the high speed of data transfer. In comparison DSL has limited bandwidth. Wireless, cable and satellite data services share the bandwidth among many users so speed is limited. HFC supports more users than the existing all-coax service but performance is little better. FTTH has more bandwidth and more room for future growth without sharing bandwidth among users. It is easy to provide the same high speeds both down and up stream while HFC and DSL limit upstream speeds to a fraction of downstream speeds. In the future FTTH speeds could be increased by replacing electronics.
The city should be in FTTH to fulfill existing telecom policies, hasten deployment of high speed access to residents, reduce installation costs by using the city's efficiencies, and create a more business-friendly environment. Standard protocols are preferred for data transmittal, but initially it may be necessary to use proprietary protocols. If CPAU enters FTTH there are not likely to be any competitors, so relatively rapid recovery of investment is highly probably.
The fiber has a life of at least 20 to 30 years, but the electronics will have to upgraded in 10 or 15 years. It is important to install a system with capacity for a fiber to every home, to allow for both present and future needs for bandwidth. The system should avoid being tied to a single vendor's architecture, and retain maximum flexibility for upgrading.
Mike Eager gave a summary of the consultants report and business case proposal that was presented to the Utilities Advisory Commission. results of the FTTH trial and current status of video and Internet services. CPAU would provide video and Internet service at lower rates than presently offered. Other providers for phone service would be approved by CPAU for use of the system. The intent is for CPAU to offer video and Internet services, and lease access to the fiber to phone companies such as Pac Bell and CLECs so that they can provide phone service.
Peregrine Communications did the engineering analysis and used Wave 7 Optics as a possible hardware provider. This system would install active nodes serving 288 homes with full analog and digital capability and 1 to 4 gigabit connection to the head end switch. Each home would be connected directly to the neighborhood node, without any splitters, making future upgrades easier. Video would be carried as an analog signal on a different wavelength from data.
Cost estimates were provided along with expected and worst case penetration expectations. Capital and startup operating costs were estimated at $49.9 million, to be funded by bonds paying about 5%. Expected penetration for phone service starts at 10% rising to 25% after 5 years. Worst case phone penetration is 15% after 5 years. Internet expected penetration starts at 30% and increases to 53% after 5 years. Worst case is 25% after 5 years. Video expected penetration starts at 30% and increases to 38% after 5 years. Worst case is 25% after 5 years. It is expected that in the worst case capital costs would be paid in less than 15 years. Very high subscription rates for data are predicted.
Pa-Fibernet would prefer to have many ISPs, but CPAU prefers to start out with a limited number of ISPs to reduce potential problems.
Alan Podell, Hilda Weisberg and Ewout Mante are participants in the FTTH trial. They presented their experiences.
Alan Podell introduced himself. He used to run a wireless service that was bought by Sprint. He's delighted with the FTTH. His wife finds it extremely fast and very efficient. She can access her work server faster from home than from her office. He was able to do on-line consulting via Netmeeting and is very happy with the high upstream speed. He is the provider of data, and can have customers post drawings and pictures in real time. Uploading a 1 meg file takes about 5 seconds. He is on the board of a company in Lowell Mass, but only attended 1 meeting in the past 18 months in person because he can handle everything on-line or by phone very effectively. This saves travel time and expense.
Hilda Weisberg is delighted with FTTH the past year. She uses the always on high speed connectivity to do on-line searches for data that directly affects her quality of life. She thinks of FTTH as helping prepare her to live actively at 90. It also saves her time. She has a friend who is 85 and was tested for Parkinson's at Stanford. Hilda was able to get information on Parkinson's including videos of patients and patient care, making her better informed and more comfortable taking care of the friend thanks to the information provided. She was taking medicine for an under active thyroid, and not getting the desired results. She then used the Internet to research the medicine which she was taking and her medical condition. As a result she found the medicine wasn't doing what it was supposed to. She used the Internet to identify the potential problems with her medicine. She then used the Internet to locate a doctor with expertise in her area and was able to get better advice and improved medical care by linking the doctor and her records at Palo Alto Medical Foundation. Using FTTH she was able to check out information on treatment, effectiveness expected from different medicines, and find a workable treatment.
Ewout Mante was delighted to have FTTH offered in the neighborhood. He has been taking full advantage of it and uses it to communicate with co-workers in New York and Denver. He was able to view video demonstrations from a company in another state and follow the presentation seamlessly with his FTTH. Unlike cable modems and DSL he considers FTTH to be a social benefit and something that brings him more together with his family. He can take his laptop into the children's room at bedtime and find pictures on the Internet to illustrate bedtime stores he tells them. He uploads family photos to the Internet server where friends and family easily can vie them. It sits in the background and is ready to work whenever needed. Even when there is congestion on the net he gets information fast once the slowdown on the net is overcome. It has really improved his life. He gets BBC on demand, and streaming through the house. On several occasions his Pac Bell phone went down but the FTTH phone connection remained on. Pac Bell uses every device to avoid letting CLECs into the area. The cable company provides poor service. Without FTTH we will have only Pac Bell and AT&T to choose from, neither of which is satisfactory. The city offers much better service.
FTTH isn't a technology as much as it is an enabler.
Marvin Lee noted there hasn't been any breakdown of the system since it started.
An attendee noted he as been providing support for the FTTH project. He conducted a survey of resident interest in services and how people regard CPAU. Over 90% consider CPAU service and performance to be excellent. Survey results are available on the Internet, and are posted on the PA-Fibernet home page, plus the Utility Advisory Commission page. The FTTH proposal will be discussed by the UAC on Oct. 2.
Blake Heitzman introduced himself as the telecom manager who is the staff person responsible for FTTH trial. They started 19 months ago. They can provide video with the existing system, but never got the approvals needed to offer it to the users. It is shown in the City Hall lobby. Pac Bell assisted in offering phone service. People were able to use FTTH for home offices, to work with children, and for better communication in general. Staff is looking at functional and operational status of the system, but social benefits also are important and any input is appreciated.
A task group was set up consisting of 1 UAC member, a councilmember, the City manager's office, a FTTH user, and staff. They looked at the FTTH trial and did a survey of the city using E-mail because it made the survey interactive. They could ask respondents why they answered questions. They asked 5000 people for survey responses and got 1000 replies. Homeowners and non-homeowners had the same responses. Younger people were a small number, but they are not likely to be decision makers. Over 90% of the residents have Internet access. Video response was similar to the ratio of actual video users so the data is consistent. The overall study is over 2" thick and will be released next month. They also got information from people who switched data services about why they switched and how they like their present service. Details of the cost analysis also are in the report. Design and performance requirements will be determined by a qualified engineer and used to go out for bids using the standard regular bidding process. Next step is a business plan and finalizing what will be offered, the role of CPAU, how to finance it, staffing, marketing, etc. It is not to be a final proposal at this time, but the way to get to the final plan. A consultant would be hired to do the detailed business plan late this year.
Richard Brand works in the business, is on the IEEE standards committee and expects last mile standards to be ready soon. Ethernet is an excellent system. We will need 10 gbps capacity to offer adequate service. It's a great idea. Once we have it in the home the sky is the limit. There will be standards issued soon for Ethernet and ATM.
Jim Holsworth asked what issues would stop the city from building out. Reply was that they need to show the technology is correct, and the cost is reasonable. Social benefits are an added incentive that isn't quantified.
Since AT&T is building a hybrid fiber coax service presently, and it will take years to get approvals and build the CPAU system, there may not be FTTH until 2007. The idea is to start soon and get at least 90% of the system built in 2 or 3 years, or by 2005.
The FTTH trail has a budget of $660,000. It is for a limited area and has lots of inefficiencies and learning curves. The survey noted above cost $45,000, and the business case cost will be about $100,000. Ongoing operating costs for the FTTH trial are paid by the users at $85/month added to the utility bills.
In addition to the quantifiable benefits there are many others such as saving travel time and cost, more efficient work, better neighbor-neighbor contact, increased house value.
Dexter Dawes has yet to be persuaded of the advantages of high speed compared with a standard hybrid system. Broadband is very useful, he telecommutes via DSL, but how do we trade off cost and risk and evaluate benefits. AT&T is building an HFC system. Why not use that rather than build a separate FTTH system. Service can be upgraded to FTTH as needed. We shouldn't risk public funds needlessly or increase electrical rates.
HFC systems like AT&T are inherently limited and can't offer more than 4 or 5 mbps. The tradeoff is between cost, capital investment and benefits. We should look at the cost and risk in 5 years, not today only. AT&T won't build a high speed 2-way system and won't allow open access. Neither AT&T nor Pac Bell will offer FTTH. DSL can't provide high speed 2-way service.
Bob Moss noted that the consultant cost estimate of $49 million for FTTH build out is far higher than an estimate Cable Co-op got in 1999 for fiber backbone to 100 home nodes, then coax to the home for the entire JPA service area. That cost estimate was $25.5 million. The cost estimate for Palo Alto-only FTTH seems much higher than is likely.
Wireless service is available and much cheaper now. College Terrace residents tried to get help from the city by hooking up wireless points to the city fiber ring, but they were told they aren't eligible. The present wireless service is interim but its available now and is cheap.
Bill van Orsdale asked if the project is economically viable why hasn't anyone come in to do it. Economics for FTTH aren't right for conventional a business, and they aren't interested in public benefits. AT&T or Pac Bell want capital costs paid off in 3 - 5 years, while CPAU has a longer horizon, and looks at 15 - 20 years as being reasonable.
Low latency is a benefit of municipal systems compared with DSL. Our connections will be closer to the Internet gate, latency will be less, and performance will be better.
Elliot Margolis uses the wireless Internet system and is very excited about the opportunities and benefits, particularly the local orientation. What will the local costs be, and can wireless still be used? A range of services and prices can be offered. It is part of the business case.
Dexter Dawes asked about piracy if many people hook up to use the wireless portal via a single user, thus reducing income and skewing results. Marvin Lee encouraged it because many neighbors wanted to hook up but the FTTH trial users were limited to 70. Wireless Internet access is usable at the library now. However if there are many pirates the economics don't work. Wireless also is likely to be limited to data, not video or phones. In the future advances in wireless will make piracy irrelevant. Mark Heyer said the killer application was reliability. People won't use a neighbor's access as the major way to get on the Internet. If FTTH is installed as a true utility and is offered to everyone there is no need to pirate, plus it offers maximum benefits.
Mike Eager pointed out that there is currently very little piracy of cable TV service here and that the same would be the case with FTTH. If people can obtain service at reasonable prices, there is little incentive for piracy. Josh Wallace who was acting CEO for a time at Cable Co-op noted they had extremely low piracy, in the 1 - 2 % range.
Why doesn't AT&T use the fiber system we already have? Josh Wallace asked them to share the fiber and distribution system but they said no. AT&T refuses to cooperate with anyone else on the system. They want to be the only providers.
What is the useful life of the fiber? Water damage may limit it, but fiber is pretty stable. Fiber installed in 1981 showed a noticeable loss of performance after 20 years, but new fiber has longer useful life. The electronics will need replacing or upgrading sooner than the fiber.
The formal meeting ended at 9:23 PM.
Individuals that want to get together on a neighborhood by neighborhood basis and discuss FTTH and the proposal were encouraged to get together.
Submitted by Bob Moss