Tag Archives: community networks

San Francisco muni FTTP short list is down to three choices

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The City and County of San Francisco is still tight-lipped regarding details of its $2 billion fiber-to-the-premise project, but its latest cryptic update indicates that the scheduled one-on-one interviews with potential bidders are complete and the first cut was made.

Thanks to a tip from a kind reader, I checked the City’s purchasing website and found this notice, dated yesterday, 19 April 2018…

Notice of Pre-Qualified Bidders for Citywide Fiber to the Premises Network, Lit Fiber and Wi-Fi Services RFQ

The City has completed its evaluation of Citywide Fiber to the Premises Network, Lit Fiber and Wi-Fi Services RFQ. Respondent Teams that are selected and placed on the pre-qualified bidders list are not guaranteed a contract. The following Respondent Teams have been selected:

Bay City Broadband Partners
FiberGateway
Sonic Plenary SF Fiber

Protests of the Pre-Qualified Bidders for this RFQ must be received…no later than 12:00 P.M. (PST) on April 26, 2018.

Before the interviews, the City acknowledged that four groups were in the hunt. This latest list is missing Golden Gate Broadband Partners, of which no public information or even basis for speculation exists. Same story with FiberGateway, unless you count the fact that a cable operator, Altice, uses it as a brand name.

Bay City Broadband Partners is claimed by a local wireless Internet service provider, Monkey Brains, and is said to include Nokia, Zayo and Black and Veatch. As far as I know, Sonic.net hasn’t said anything publicly but it isn’t a stretch to suspect they’re leading Sonic Plenary SF Fiber.

The three remaining contenders are still a long way from getting any kind of a contract. Later this year, the City will issue a formal request for proposals, and only the three blessed “respondent teams” will be eligible to bid. Although the City indicated it would be contributing money to the project, it hasn’t said how much.

A little more light shed on San Francisco muni FTTP contenders

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The City and County of San Francisco has released a little bit of information about the companies that are vying for a $2 billion municipal fiber to the premise (FTTP) project. (Okay, they say it’s $1.9 billion, but at this early stage in the game, the rounder and higher $2 billion figure probably describes it better).

A cryptic post buried on the City’s purchasing website says…

Notice of Shortlist of Respondent Teams selected for Oral Interviews for the Citywide Fiber to Premises Network, Lit Fiber & Wi-fi Services RFQ

The written proposal evaluation for the Citywide Fiber to Premises Network, Lit Fiber & Wi-fi Services RFQ is now complete. The following firms will be invited to the Oral Interviews: Bay City Broadband Partners, FiberGateway, Golden Gate Broadband Partners, and Sonic Plenary SF Fiber.

And that’s it. So in the absence of hard information, we can try to read the tea leaves. The only statements about the written responses to the City’s request for qualifications submitted on or before 26 March 2017 have come from Monkey Brains, a San Francisco wireless Internet service provider. In a tweet and a subsequent newspaper interview, Monkey Brains owner Rudy Rucker said that five groups submitted proposals. One of those groups – Bay City Broadband Partners – includes Monkey Brains and, according to Rucker, Black and Veatch, Zayo and Nokia.

It’s a fair guess – but only a guess – that Sonic Plenary SF Fiber is led by Sonic.net, which is already in the business of building out its own FTTP system in San Francisco. No word yet from Sonic.net, though.

I don’t have any idea at all who’s behind Golden Gate Broadband Partners. A google search didn’t turn up any company that operates under that name, and it’s generic enough that it could be anybody. Same with FiberGateway – no company by that name – but tantalisingly, Altice, a mid-sized U.S. (and huge-sized European) cable company uses that brand name for its router and associated management app. At this point, though, it would be an egregious stretch to infer a connection.

Presumably, one of the written proposals was rejected out of hand. So only four groups are moving on to the oral interview round of the competition, which is scheduled to happen next week. After that, the City will finalise a list of qualified bidders who will be allowed to submit firm responses to a request for proposals that’ll be released later this year.

Handful of hopefuls chase contract to light San Francisco FTTP

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Five groups are in the hunt for San Francisco’s citywide fiber to the premise (FTTP) project, at least according to one of the bidders. Monkeybrains, a San Francisco-based wireless Internet service provider, tweeted that they’re on one of the five teams that submitted proposals.

The deadline for filing responses to the City and County of San Francisco’s request for qualifications (RFQ) was last week. According to the San Francisco Examiner, Monkeybrains is talking, but no one else is saying much of anything about it…

Rudy Rucker, who founded Monkeybrains in 1998 with Alex Menendez…that they are part of one team of companies that submitted by last week’s deadline…

“Monkeybrains has teamed up with Black and Veatch, Zayo and Nokia,” Rucker said in an email. “I don’t know all the other teams … but I think we have a very strong team"…

“The City received several bids and we are impressed by the seriousness of the bid teams and their submissions,” [San Francisco mayor Mark Farrell] told the Examiner last week. “We look forward to reviewing the bids in detail and moving full-steam ahead with our procurement process.”

San Francisco voters will have the final say as to whether the City backs an FTTP project financially. The nominal business model calls for a private company to build and operate an open access, citywide FTTP system that would be run according to policies and practices laid down by the City. The total $1.9 billion cost works out to $51 per residence per month and $73 per business, and the City says it – or rather, taxpayers – will pick up some of the tab. It’s not saying how much, but it won’t be chump change and some kind of new, voter-approved tax is the only clear path to paying it.

At this stage, everything is still theoretical. The RFQ is only aimed at developing a short list of qualified bidders who will, presumably, submit hard proposals later this year. We might get a clue as to who’s in the running on Monday, when the City is scheduled to notify bid teams that they’re moving on to the next step of the process, which is one on one interviews.

San Francisco willing to pay for citywide FTTP, but not saying how much

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The City and County of San Francisco wants a short list of companies willing to build an open access, wholesale fiber-to-the-premise system that reaches all homes and businesses. It posted a request for qualifications (RFQ) yesterday, asking potential partners to make their pitches, with the idea of winnowing the responses down to a handful that will go on to a second and final round of proposals later this year.

Unlike Los Angeles, San Francisco is making an upfront offer to subsidise at least some of the costs. In return, it wants a big say in how the system is run, including setting terms to sell capacity on the system to third party “retail service providers” (RSPs) that will, in turn, serve end users…

The City desires a state-of-the-art FTTP network capable of delivering a minimum of a gigabit to consumer premises, and scalable to higher speeds over time as the market develops. The network should include fully fiber connections to the premises that provides ubiquitous data, voice, video services to all communities in San Francisco and offers a choice of competitive private RSPs. The City also seeks to achieve construction and operations efficiencies wherever possible and to build and operate the network at the lowest possible cost.

A study released last October estimated the total construction tab at $1.9 billion or, put another way, a “connection fee” of $51 per home per month and $73 per business per month, which would also cover some operating costs.

The RFQ doesn’t put it on the table, though. The City is offering undefined lump sum payments based on construction milestones and ongoing service fees, but the wholesale partner will also have to depend on income from RSPs and other telecoms companies that want to lease capacity. It’ll share that revenue with the City and, according to the RFQ, is “expected to assume the full performance risk” of the project and “share in City’s financial risk including revenue risk, market risk and uptake risk”.

Responses are due 26 March 2018.

City and County of San Francisco request for qualifications for citywide fiber to the premises network, lit fiber and wi-fi services, 31 January 2018.

The potential for ubiquitous, open fiber-to-the-premises in San Francisco, CTC Technology & Energy and IMG Rebel, 17 October 2017.

City and County of San Francisco, financial analysis of options for a municipal fiber optic network for citywide Internet access, 15 March 2016.

Link to the City’s web page, which provides access to all documents and updates.

Gonzales universal broadband service RFQ deadline extended

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Internet service providers have four extra working weeks to respond to a request for quotes to provide universal broadband access to residents of the City of Gonzales, in California’s Salinas Valley. Following requests from potential respondents for extra time to submit quotes, and an inadvertent glitch that delayed answers to some of the questions they submitted, the City extended the deadline for responses to 22 December 2017.

That means the offers won’t be due on Cyber Monday, 27 November 2017, but that was a coincidental, albeit cool, deadline to begin with.

Several companies submitted questions, mostly looking for market data or information about the City of Gonzales’ expectations, assets and permit processes. Links to the two sets of questions and answers are below.

The City’s objective is to deliver a baseline of Internet access to everyone who lives in Gonzales. In return for a bulk monthly fee paid by the City, the selected ISP will deliver a specified level of service to every home in town. The RFQ specs that baseline level at 6 Mbps download and 1.5 Mbps upload speeds, but companies can structure their responses as they choose. And offer higher levels of service on a commercial basis, if they want.

The new timeline calls for a decision and a contract in February.

Addendum #1 to Request for Quotes for Bulk Residential Broadband Internet Access Services In the City of Gonzales, California, November 20, 2017.
Addendum #2 to Request for Quotes for Bulk Residential Broadband Internet Access Services In the City of Gonzales, California, November 22, 2017.
Request for Quotes for Bulk Residential Broadband Internet Access Services In the City of Gonzales, California, 7 November 2017 (Word version).
Request for Quotes for Bulk Residential Broadband Internet Access Services In the City of Gonzales, California, 7 November 2017 (PDF version).

I’m assisting the City of Gonzales with its broadband initiative. I am not a disinterested commentator. Take it for what it’s worth.

Gonzales requests quotes for universal broadband service

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Bringing broadband service into every home has long been a goal of the City of Gonzales, a town of 8,500 residents located in California’s Salinas Valley. Yesterday, the City took a big step in that direction by releasing a Request for Quotes that asks broadband providers to put an offer on the table…

The City wishes to enter into an extended term contract with one Respondent to provide consistent, reliable access to basic internet service to each housing unit and household (collectively, “Residence”) at a fixed monthly cost to the City. In addition to providing internet service, the selected Respondent must provide continuous bilingual support for the residents, including an informational program to help residents adopt the provided internet service. Acceptance of the internet service will not be mandatory for any resident, but the City expects the selected Respondent to facilitate the acceptance of service by City’s residents. The price to be paid for the internet service is also a key factor for the City.

The concept is analogous to the bulk service deals that private communities often make, except in this case it’s a local government and not a homeowners association that’ll be writing the check every month. The project would be similar in scope to a mid-sized private community – the City of Gonzales has about 1,900 households packed into two square miles.

There is one wireline Internet service provider – AT&T – that serves residents, albeit at speeds that sometimes fall below California’s minimum standard. Even the dumbed down minimum standard adopted by the California legislature earlier this year. Charter Communications is expected to begin offering service at higher levels in the next few months. An open access middle mile fiber line, owned by Crown Castle via its acquisition of Sunesys LLC and largely paid for by the California Advanced Services Fund, runs through Gonzales, connecting to Soledad in the south, and Salinas, Watsonville and Santa Cruz to the north.

Incumbents are welcome to provide quotes, as are competitive Internet service providers.

I won’t try to summarise the RFQ. The meat of it runs about four pages and a lot of work, my own included, went into getting the language just right. Written questions regarding the RFQ can be submitted until 16 November 2017. Responses are due on Cyber Monday, 27 November 2017.

Downloads:

Request for Quotes for Bulk Residential Broadband Internet Access Services In the City of Gonzales, California, 7 November 2017 (Word version)
Request for Quotes for Bulk Residential Broadband Internet Access Services In the City of Gonzales, California, 7 November 2017 (PDF version)

I’m assisting the City of Gonzales with its broadband initiative. I am not a disinterested commentator. Take it for what it’s worth.

New Benicia broadband RFP comes with money on the table

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The City of Benicia is taking another try at priming the pump for upgraded industrial and commercial class broadband infrastructure and service. A request for proposals was posted this week, backed by up to $750,000 of city money. The objectives include…

  • Specific service proposals for the Benicia Industrial Park and the adjacent Arsenal area, which, among other things, is being developed as a home for high tech start-ups.
  • Generally, improving availability of high quality managed services and unbundled network elements, such as dark fiber, throughout the City.
  • Options for meeting the connectivity needs of the City’s internal IT network.
  • Free public WiFi access, particularly in commercial and industrial areas.
  • A more competitive market for broadband service in Benicia.

The City isn’t necessarily looking for a single provider that can achieve all of its objectives and is leaving the door open to working with two or more companies, if that seems to be the better course. The RFP is designed to encourage responses from as many qualified companies as possible – a maximum length of 10 pages is specified for the proposal, not counting any back-up material that might be included in an appendix, although additional information may be requested during the evaluation process.

There’s no particular business or partnership model specified, although the City took care to highlight, in bold letters, that “its preference is for a model that minimizes the City’s ongoing role in the project while ensuring that sufficient public benefits are generated by its investment, including, particularly, achievement of its economic development goals“.

An earlier RFP, issued in 2013, was focused on just the Benicia Industrial Park and Arsenal area. More information about it, including the research reports that backed it up, can be found here. The 2013 RFP resulted in an agreement with Lit San Leandro to build a network, but changes at the company took it in a different direction and a contract was never executed.

The deadline for proposals is 22 September 2017, with any written questions due by 8 September 2017.

Download:

Request for Proposal, Benicia Industrial and Commercial Broadband Project, 21 August 2017

Full disclosure: I’m a consultant to the City of Benicia and assisted with preparation of the RFP. I’m not a neutral commentator; take it for what it’s worth.

Rural Michigan voters approve higher taxes for faster broadband

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Voters in a Michigan town overwhelmingly approved adding about $22 a month to their tax bills, in order to pay for the construction costs of a municipal fiber to the home system. Lyndon Township is in a rural area of southern Michigan, where broadband service is described by a local news site as “almost entirely lacking” (h/t to MuniNetworks.org for the pointer). According to a story in the Chelsea Update by Lisa Allmendinger, the vote was 66% to 34% in favor of the property tax hike

Based on currently available taxable valuation data for Lyndon Township, the average cost per property owner for this construction will be about $21.92 per month. Estimated costs for basic internet access will be between $35-45 per month. This internet service will provide a basic speed of 100Mb, with no caps on data usage, with 1Gb (gigabit) speeds available for about $60-70 per month.

The average combined cost of the millage for infrastructure and monthly fee for basic service will be between $57-67 per month.

On the face of it, this muni FTTH project is credible. It’s small town – about 900 homes – and a small system, which means even a small disconnect between the business plan and reality can have big consequences for taxpayers. But the $22 per month tax hit is in the same ballpark as estimates elsewhere, including in San Francisco and for the Utopia project in Utah. It’s estimated to be a $7 million project, in other words right around $8,000 per household, which is a realistic figure for a rural build. If there are cost overruns or take rates don’t match projections, taxes might go up, but probably not by a huge amount.

It’s an honest approach to municipal FTTH financing. Instead of pie-in-the-sky promises, a realistic price was presented to voters and they agreed to pay it.

Be glad the FCC lost its muni broadband bulldozer

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Municipal broadband dodged a bullet when a U.S. appeals court ruled that the Federal Communications Commission can’t tell states that they have to allow cities to build networks and offer service. It seemed like a good idea to many muni advocates at the time (although not me, I’ll immodestly point out) because of all the warm and fuzzy love that the Obama administration was bestowing on the concept.

Had that preemption withstood court challenges, muni broadband would be at the mercy of the current FCC majority, which includes Michael O’Rielly, who recently offered his thoughts to a group of state legislators. After warming up with some rants about socialism and the collapse of the Venezuelan economy, he riffed on muni broadband systems…

What I am unwilling to do and will never support is allowing government-sponsored networks to use their unfair advantages to offer broadband services. Doing so would be the quickest way to destroy the private broadband market and reassure creation of a market monopoly position by these networks. In addition, in instances where they have been attempted, the success rate is highly suspect. Clearly, building and operating a broadband network is the opposite of easy.

The fact that some states in our nation have enacted protections prior to allowing localities to pursue government-sponsored networks should be celebrated, not criticized or attacked. Upon close examination, the protections are, in fact, quite reasonable. They tend to include requirements that potential networks conduct a right-of-first refusal process to see if the private sector is capable and interested in offering service, perform referendums of the local people to determine whether there is a desire to put taxpayer monies at risk, limit the use of cross-subsidies and government advantages to rights-of-way, and present business plans before becoming operational. Far from being radical, these are common sense requirements.

Fortunately, the FCC’s abortive preemption of muni broadband ended up reaffirming state authority over what cities and counties do, including whether or not they can build and operate networks. The flip side of the argument – that maybe the FCC has the power to ban, rather than require, muni broadband – hasn’t been tested. So don’t rest easy. But be glad the courts didn’t agree that the FCC has unmistakably clear authority over what cities can and can’t do with broadband.

Better data would support better muni broadband decisions

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Not suprisingly, the municipal fiber to the home analysis done by the University of Pennsylvania’s Center for Innovation, Technology and Competition, comes to the conclusion that the more successful systems (or, from the study’s glass half empty perspective, the ones that are failing less badly than the others) keep revenue high and costs low. Operating efficiency – the ratio of operating costs to revenue – and revenue per household had a greater impact on near term positive cash flow and long term capital payback than the per household construction costs…

The fact that these regressions yielded statistically significant results based on only 19 or 20 observations is remarkable. These results suggest that the manner in which a municipal fiber project is operated, both in terms or generating revenue and minimizing operating cost, play a more critical role in the success of a municipal fiber project than the upfront capital costs.

One note of caution: although expense versus income and per household construction costs are commonly used measures for evaluating subscription-based business models, such as FTTH, using revenue per total households passed conflates take rate/market share and average revenue per subscriber, two separate and individually important metrics.

The reason for this relatively vague approach is the general lack of transparency on the part of muni FTTH systems. Of the 88 systems identified by the authors, only 20 broke out FTTH results from overall utility financial statements – overwhelmingly, it’s muni electric utilities that are in the business of being Internet service providers. Publicly traded telecoms companies, by contrast, report results using standard benchmarks that allows the public to make apples to apples comparisons and make informed decisions about which ones to invest in. Taxpayers deserve to have the same level of data when they’re called upon to decide whether or not to build a muni FTTH systems in the first place, and subsidise it on an ongoing basis.