Tag Archives: santa cruz

Santa Cruz tech rolls out at CES


Plantronic’s Esther Yoon demos the Backbeat Fit at CES.

Two Santa Cruz companies were among the thousands of exhibitors at the Consumer Electronics Show, which wrapped up in Las Vegas last weekend – one industry veteran, Plantronics, and one start up, Future Motion, which is just hitting its stride. Both were on hand at Pepcom’s media showcase.

Future Motion introduced the Onewheel+, the latest version of a motorised balance beam skateboard with, naturally, just one wheel. It has two horsepower electric motor and can hit speeds of 19 miles per hour. It’s designed to be easier to ride than version 1.0, and comes with a smart phone app that’ll let you set it up the way you like it – gentle or go for broke.

“It feels like you’re snowboarding on powder”, said CEO Kyle Doerksen. The product has found its audience, he said. Initially, it was uphill work explaining what the Onewheel is all about. Now that it’s out there, people have a point of reference and can understand the features.


CES spotlight on Onewheel+.

Everything except manufacturing – design, sales and marketing, customer – happens at Future Motion’s headquarters in the Wrigley building in Santa Cruz. The product is made in San Jose.

Plantronics showcased two new wireless headsets, the Backbeat Fit and the Backbeat Pro 2. The Pro 2 is a wireless over-the-ears headset – high quality audio with noise cancelling technology, plus mics for phone functionality.

The Fit was designed with Santa Cruz in mind. It’s a flexible, rubbery headset that’s waterproof and designed to stay in your ears even if you a do backflip. Or a flip in some other direction – handy for surfing. The earpieces don’t completely your ear, so if you want wear it while you’re out running, you can still cars and whatever else is around you.

A third local company, Scotts Valley-based Pearl Automation, was also represented. CEO and co-founder Bryson Gardener appeared on a panel, speaking about life hacks for tech-centric families. Pearl makes an aftermarket back up camera for cars.

Google adopts Santa Cruz muni fiber model in Huntsville

The City of Huntsville, Alabama is following Santa Cruz’s fiber lead: building a fiber to the home (and business) network and leasing it out to a private operator. In Huntsville’s case the private operator is Google Fiber, while in Santa Cruz the partner is a local independent Internet service provider, Cruzio.

The lead consultants on the Huntsville project – CTC Technology and Energy – applied the lessons they learned working for the City of Santa Cruz

The partnership model announcement today between Huntsville and Google Fiber is on the model of that pioneered by Westminster, Maryland in 2014 and by Santa Cruz, California last year…

This innovative, shared-risk partnership model puts the locality in the business of building infrastructure, a business it knows well after a century of building roads, bridges, and utilities. The model leaves to the private sector (in this case, Google Fiber and any other provider that chooses to lease Huntsville fiber) all aspects of network operations, equipment provisioning, service delivery, and customer service.

The Huntsville Board of Utilities approved the project on Tuesday, committing to backfill any revenue shortfalls, up to a point.

Tellus Venture Associates is assisting the City of Santa Cruz with its fiber project. I’m not a disinterested commentator, take it for what it’s worth.

Santa Cruz fiber love becomes serious city business

It’s a love fest, several Santa Cruz city council members declared on Wednesday afternoon, as they unanimously approved 1. moving ahead with negotiating a fiber to the home partnership with Cruzio, a local independent Internet service provider, and 2. pursue lease revenue bonds to pay the lions share of the tab. That city-financed portion – Layer 1 in Internet lingo – could go as high as $50 million. The core network – the fiber in the ground – is pegged at about $35 million. Another $7 million is earmarked to pay for customer connections and there’s an allowance for start up, bond financing and other costs.

Cruzio will have responsibility for buying and installing the electronics – Layer 2 – except for the terminals installed on subscriber homes and businesses, and for Layer 3, the Internet bandwidth. The city’s bonds will be paid back by revenue from the system. Final terms haven’t been set, but the model currently under discussion has Cruzio paying $6 per month for every premise passed and another $30 for every subscriber.

The market research done by the city indicates that an eventual take rate of 34% will pay back the investment over time. That’s about 7,500 subscribers, including the approximately 3,000 that Cruzio will transfer from its current service to the FTTH system. Plan B is for Cruzio to pay 80% of any financing shortfall, with the city picking up the remaining 20%.

Santa Cruz mayor Don Lane was clearly on board with the love fest, but he also added a dose of reality before the vote…

My enthusiasm for this is very high, but I think it’s so important that we recognise the magnitude of the commitment we’re making. I think it’s a really worthwhile commitment and it’s really well vetted. Everything is right about it. But it is something new, we’re taking a little bit of risk here, and I just think we should go into this with our eyes wide open about that, so we’re not saying to the community ‘oh, this is just dreamy and perfect’. It’s a serious investment, it makes sense and it’s a business deal. That’s what we have and I think it’s a good one.

That investment is expected to boost Santa Cruz’s economy, economic development director Bonnie Lipscomb said as she briefed council members on the project. High tech companies are moving into Santa Cruz, local residents want to telecommute rather than slug it out over highway 17 to Silicon Valley every day, and investors are looking at the community in a different light. Lipscomb said that investors from as far away as China have heard about the fiber project, and expressed interest because of it. It’s not just that fiber will be available to some – as it already is in downtown Santa Cruz – but that it’ll be available to all. That’s because it’s a city-led project, Lipscomb explained…

Another important element is to talk about is ubiquitous coverage across the city. That’s one of the unique aspects of this being a city network and this being a utility that’s owned by the city, a municipal government. We’re able to actually take this fiber network across every parcel in Santa Cruz. If this were Comcast, if this were another Internet service provider, the challenges are, particularly in a for profit business, is that you go where people are willing to pay for the service. One of the things that we’re really enabling is to level the playing field, so that everyone has access to this fiber network.

Next steps are for the City and Cruzio to agree on detailed deal terms, and arrange for the bond financing. That’s a process that’s likely to take months rather than weeks but, it is hoped, not very many months.

Documents from the 8 December 2015 council meeting:

City of Santa Cruz fiber project staff report, 2 December 2015
CTC market analysis, November 2015
CTC financial forecast addendum (with current deal terms), November 2015
CTC financial forecast, July 2015
Market survey prepared by Cruzio, November 2015

Documents from the 23 June 2015 council meeting:
City of Santa Cruz fiber project staff report, 17 June 2015
Cruzio FTTH proposal to the City of Santa Cruz, 23 June 2015
CTC costs estimates for a Santa Cruz FTTH system, May 2015

Tellus Venture Associates is assisting the City of Santa Cruz with its FTTH project. I’m not a disinterested observer. Take it for what it’s worth.

Santa Cruz city council unanimously approves muni FTTH

The vote was seven to nothing, as the Santa Cruz city council moved ahead this afternoon with a plan to build a city-owned dark fiber network that will reach every home and business in town. Under the current plan, the system will be leased to Cruzio, a local independent Internet service provider. Cruzio will light the fiber – buy and maintain the electronics, and provision the Internet bandwidth – and run the business. The cost to the city is in the $30 million range. It’ll be financed with lease revenue bonds, which will be repaid via revenue generated by Cruzio. More details later.

Tellus Venture Associates is assisting the City of Santa Cruz with its FTTH project. I’m not a disinterested observer. Take it for what it’s worth.

Santa Cruz city council considers FTTH business plan and market data today

A business model and an outline of a deal to build a fiber to the home (and business) system in Santa Cruz will be on the table at this afternoon’s city council meeting. In June, the Santa Cruz council authorised city staff to negotiate a public/private partnership agreement with Cruzio, a local Internet service provider. The basic terms are now ready for review. The concept is for the City to pay for and own the fiber, and lease it to Cruzio. As the background report prepared for council members explains it…

  1. The City of Santa Cruz will be responsible for building and maintaining the dark fiber infrastructure (often referred to as the Outside Plant or Layer 1) while Cruzio will be responsible for the electronics (Layer 2) as well as the internet exchange and internet service provider as the exclusive retailer on the network (Layer 3)
  2. Cruzio will pay a combination of per passing and per subscriber fees (to be determined once final costs are established)
  3. Cruzio will share risk with the City of Santa Cruz by backfilling 80% of the debt service for bond payments should revenue fall short
  4. Cruzio will design as the network partner, in partnership with the non-profit National Development Council, Economic Development’s financial advisor and consultant for the bond issuance.

Links to the financial analysis and market research prepared for the meeting are below. The financial model uses a lease payment of $6 per premise passed and $30 per subscriber (both per month) as a working assumption. In other words, Cruzio would pay the City $6 a month for every home and business passed by the network, and another $30 if someone at that address subscribes. The City would use that revenue to make bond payments and pay for maintaining the core, dark fiber network.

The financial analysis puts the necessary take rate at 34%, a level the research shows could be reached at a price point of $85 per month for gigabit Internet service. The take rate jumps to 54% at $75 and 82% at $55 per month. Competition will have an impact. AT&T and Comcast are two of the three incumbents in Santa Cruz – Cruzio is the third – and will certainly target that demand as well. But Cruzio has been competing in that arena for more than 25 years and will be starting the game with a base of about 3,000 subscribers and only needs to raise it to 7,500.

City of Santa Cruz fiber project staff report, 2 December 2015
CTC market analysis, November 2015
CTC financial forecast addendum (with current deal terms), November 2015
CTC financial forecast, July 2015
Market survey prepared by Cruzio, November 2015

Documents from the 23 June 2015 council meeting:
City of Santa Cruz fiber project staff report, 17 June 2015
Cruzio FTTH proposal to the City of Santa Cruz, 23 June 2015
CTC costs estimates for a Santa Cruz FTTH system, May 2015

Tellus Venture Associates is assisting the City of Santa Cruz with its FTTH project. I’m not a disinterested observer. Take it for what it’s worth.

Comcast exec says yeah, competitition made us do it


The only sure way to respond to a threat.

Comcast has a habit of upgrading and extending its infrastructure when the threat of competition raises its beautiful head. That’s a deliberate strategy, and not a coincidence, according to a Comcast executive quoted by FierceTelecom

Speaking to attendees during the opening afternoon sessions during SCTE 2015, Jorge Salinger, VP of access for Comcast, said that the cable industry’s development of the DOCSIS 3.1 specification has come together very quickly and is being driven by an emergence of new broadband competition from Google Fiber and telcos like AT&T and CenturyLink.

“It’s an incredibly fast moving specification and the reason for that is competition — competition for cable operators and competition for … equipment vendors and that is helping the acceleration,” Salinger said. “On the equipment side, there is silicon available from three suppliers and there are multiple cable modems so the development of the equipment has been very rapid.”

A few weeks after the unveiling of a city-backed fiber to the home project proposed by Cruzio, an ISP with a 15% share of the local market, Comcast started pushing faster Internet speeds into Santa Cruz. It’s responded similarly to municipal broadband projects in San Leandro, Lompoc and elsewhere in California.

It’s a familiar pattern. For years, residents complain about poor service and businesses struggle to find affordable commercial and industrial grade Internet access. Local officials hold meetings and Comcast makes vague promises. And nothing is done. Until genuine competition appears.

The correlation between municipal competition and Comcast upgrades has always been strong. Now we know it’s no coincidence.

Santa Cruz muni fiber threat forces Comcast upgrade

After years of blowing off customers, sandbagging local governments and stonewalling regulators, Comcast has finally upgraded its Santa Cruz County service area to what appears to be the same broadband speeds enjoyed to the north in Silicon Valley and to the south in Monterey County. All it took was a single word: competition.

Comcast hasn’t said so, but it’s no coincidence that the upgrade came barely six weeks after the Santa Cruz City Council voted to move ahead with building a city-wide fiber-to-the-home (and business) system in a public/private partnership with Cruzio, a local Internet service provider. It’s the second time that Comcast has responded this way to a direct competitive threat in Santa Cruz. The first was two years ago when Surfnet Communications applied for a state grant to build a fiber system in the Santa Cruz mountains, where Comcast had refused to go until then. Other cities, such as Provo, Utah, have similar stories.

Before the upgrade, the best that Comcast could reliably deliver in the Santa Cruz area was less than 25 Mbps download and somewhere between 1.5 Mbps and 3 Mbps upload speeds. That was in stark contrast to the service it offered elsewhere in California, which was in the 100+ Mbps download and 25 Mbps upload range, at least according to the reports it submitted to the California Public Utilities Commission. The map below shows a blotch of green across the northern two-thirds of Santa Cruz County (the south is Charter territory), denoting a maximum reported download speed below 25 Mbps, while surrounding counties are colored blue, which means 100+ Mbps speeds.

Contrary to what it told the CPUC, Comcast routinely advertised and sold Santa Cruz subscribers its faster 150 Mbps service. According to a story in the Santa Cruz Sentinel, when pushed to the wall, Comcast gave refunds and discounts to customers, but apparently only to those who went to the trouble of complaining to the district attorney, the CPUC or other regulatory agencies.

Good Times, another Santa Cruz County newspaper, reported similar customer experiences prior to the recent upgrade

For two years [Comcast] has been telling users they were getting 105 mbps, and charging $39 extra per month for the “Blast!” high-speed service, but an internal document released to Good Times shows the area was only capable of receiving 29 mbps—more of a fizzle than a “blast.”

“We’ve been complaining to the company in Philadelphia for years, asking them to stop promising something they weren’t delivering,” says a Comcast technician whose identity is being withheld to protect his job. “But they ignored us.”
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The technician was so frustrated that he gave customers an internal document saying that speeds in the county were limited to 29 mbps, despite the company’s sales promises of the 105 mbps Blast! service.

That all changed after the City of Santa Cruz and Cruzio turned up the heat with plans for a new FTTH network, at least within the city limits. The competitive fires had already been lit earlier this year by Santa Cruz County, which, after urging from Aptos supervisor Zach Friend, floated plans for a publicly-owned fiber backbone that would serve some of the more densely populated unincorporated areas, and by assemblyman Mark Stone, who introduced a bill in Sacramento that would raise the bar for minimum broadband service in California to 25 Mbps down and 3 Mbps up. By doing that, he would have made Comcast’s service area in Santa Cruz County (as well as uncabled communities in rural areas of the state) eligible for broadband infrastructure subsidies from the California Advanced Services Fund.

Now, people living in Santa Cruz – city and county – can get Comcast’s Blast 150 Mbps plan for an introductory price of $40 per month, $10 less than it costs in Monterey County. The price goes up to somewhere between $75 and $79 after a year, and the fine print includes the standard weasel warning “actual speeds vary and are not guaranteed”.

The City of Santa Cruz has high hopes for its fiber project, believing that it will make Santa Cruz a better place to live and work. But even before a single strand has been hung, the initiative – along with parallel efforts at the county and state level – has already succeeded in improving broadband service for locals residents and businesses.

Tellus Venture Associates is assisting the City of Santa Cruz with its FTTH project and helped Surfnet with its CASF grant application. I also provided support for Mark Stone as he sponsored assembly bill 238. I’m not a disinterested observer. Take it for what it’s worth.

Santa Cruz rail offers a dig once chance for broadband

Another broadband opportunity in Santa Cruz is opening up. The county Regional Transportation Commission (RTC) is offering the use of its 32-mile railroad right of way to interested utility companies, including broadband and telecommunications service providers.

The route runs more or less near the coastline along the length of the county, from Watsonville to Davenport, going through the cities of Capitola and Santa Cruz. About half the population of Santa Cruz County lives within a mile of the right of way. Work is planned on a few segments of the line, particularly in the cities of Santa Cruz and Watsonville, and up coast towards Davenport, as a recreational trail is developed…

The RTC is interested in leasing this right of way to utility companies and municipal districts whose use would be compatible with the planned uses of this right of way.

Currently, the rail line is being used for recreational and freight rail service and in the future may be used for passenger rail service. The rail trail portion of the Monterey Bay Sanctuary Scenic Trail is planned to be built along the length of the rail line corridor. There are a few segments of the rail trail that will be constructed over the next few years. These sections are indicated on the attached map. The RTC intends to follow a “dig once” policy before the paved trail is built next to the tracks. Once the trail is built, the cost of adding underground utilities will rise considerably.

If you’re interested, you can contact the Santa Cruz County RTC directly. The idea of using the rail right of way for broadband was first floated a couple of years ago at the Civinomicon conference in Santa Cruz.

Santa Cruz will be Silicon Valley’s first fully fiber city

Homes and businesses in Santa Cruz are one step closer to full fiber-to-the-premise broadband service. The Santa Cruz city council voted unanimously last week to move ahead with negotiating an FTTP/FTTH partnership with a local independent Internet service provider, Cruzio. As envisioned, the city would own – and finance – the network, Cruzio would operate it and the two would work together to build it.

Cruzio’s proposal to the city also leaves the door open for other ISPs to join the project – that’ll be one of many details that the forthcoming negotiations will address.

The cost to build a fiber network that would reach every premise in the City of Santa Cruz will be about $52 million, according to an estimate prepared by Columbia Telecommunications Corporation. That includes the citywide distribution network, laterals and drops to reach homes and businesses, and the electronics on both ends needed to run it.

There’s significant risk in any municipal FTTH venture, but the Santa Cruz project has several unique aspects that should work to reduce the uncertainty. First and foremost, it involves a partnership with a longstanding and successful incumbent service provider. Cruzio is one of the largest surviving independent ISPs in California, has been delivering Internet service in Santa Cruz for 25 years and has about 3,000 subscribers inside the city limits alone – roughly 15% of the market.

There’s also Santa Cruz’s dual nature: a Californian beach community fueled by Silicon Valley’s economy and entrepreneurial vibe. Silicon Valley boasts many tech savvy and affluent cities, but none have embarked on a full scale FTTH project yet. Santa Cruz, with one eye on high tech innovation and the other on a high quality lifestyle, could well be in the sweet spot that makes it possible.

A lot of questions still need answering, not least the details of the project’s financing, which nominally would involve city-sponsored bonds

Constructing Santa Cruz Fiber requires the issuance of revenue lease bonds to cover the capital investment as well as two years of debt service while the project is being constructed and brought online.

At this point, no commitments have been made, except that Cruzio has pledged up to $45,000 to pay for the costs of getting to a final operating and financing plan, which will need the approval of the city council and, likely, voters. If all goes to schedule, Santa Cruz’s fiber network could be up and running in three years.

Tellus Venture Associates is assisting the City of Santa Cruz with its FTTH project. I’m not a disinterested observer. Take it for what it’s worth.

City of Santa Cruz fiber project staff report

Cruzio FTTH proposal to the City of Santa Cruz

CTC costs estimates for a Santa Cruz FTTH system

Community-owned fiber networks take a big step forward in Santa Cruz County

Santa Cruz County supervisors are moving ahead with a plan to build a fiber network through key economic development zones, and want to coordinate broadband development policy with the four cities in the county. They voted to put a proposal to form a fiber initiative team in front of representatives from Watsonville, Scotts Valley, Capitola and the City of Santa Cruz, and…

Work with the cities to 1) establish complimentary policies, such as the County’s model “dig once” ordinance, 2) propose changes in planning requirements for residential and business construction, 3) explore grant opportunities, and 4) coordinate sewer, water and road construction projects so that conduit for fiber can be incorporated where feasible in order to enhance broadband connectivity and expansion.

“One of the keys to the County’s broadband master plan is ensuring standardization of policies across jurisdictions,” said Aptos supervisor Zach Friend. He’s the one who started the push for better broadband infrastructure two years ago, and has kept it on track. “As local governments band together to unify policies to improve broadband deployment everyone benefits. We believe that our model policies can be adopted throughout the state to ensure that everyone has improved access to broadband.”

The City of Santa Cruz is already there. Two weeks ago, the city council approved a broadband policy package that builds on an initiative started in the city in 2012 and parallels much of the county’s work. Watsonville also has a fiber project underway that would offer independent connectivity through most of the city’s business areas.

The county’s initiative tracks with a plan proposed by two local entrepreneurs, Bud Colligan and Larry Samuel, in a white paper published in 2013. It also builds on work done by the Central Coast Broadband Consortium, a regional broadband planning group that includes Santa Cruz County and the cities of Watsonville and Santa Cruz, as well as representatives from Monterey and Santa Benito County agencies, local Internet service providers and others.

Watsonville’s system and the county’s proposed project would tie in to the new 91-mile middle mile fiber link that a long haul network operator, Sunesys, is building between Santa Cruz and Soledad, thanks to a grant from the California Advanced Services Fund. Sunesys will link that fiber into its existing line that runs through the city of Santa Cruz.U.C.S.C. and Cruzio, the area’s largest independent Internet service provider, are already using it to connect to abundant bandwidth in Silicon Valley.

Download the plans:

Watsonville citywide fiber project, 10 September 2013

City of Santa Cruz broadband master plan – staff report, 5 March 2015

City of Santa Cruz broadband master plan – council resolution

City of Santa Cruz broadband master plan – permitting

City of Santa Cruz broadband master plan – master lease

Santa Cruz County broadband initiative – staff report, 24 March 2015

Santa Cruz County broadband initiative – assessment report, 30 January 2015

Santa Cruz County broadband initiative – map

Santa Cruz County broadband initiative – construction estimates

Santa Cruz County broadband initiative – construction information