Tag Archives: cruzio

Santa Cruz gets more fiber, more gigabit service

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AT&T’s recent fiber to the home (FTTH) upgrades in Santa Cruz mean that Cruzio isn’t the only Internet service provider bringing gigabit class infrastructure into town (unless you have a sneaking suspicion that it’s a competitive response – in that case you can thank Cruzio for it too). U.C. Santa Cruz’s Jim Warner tracked it down…

AT&T has been working on an FTTH deployment in parts of west Santa Cruz. The work has progressed to the point where some addresses are showing availability of gigabit service in AT&T’s on-line service availability tool. When you enter a “good” address – one where gigabit service is already available – you see, among other things, a web offer for “fiber” service at 100 Mbps and 1,000 Mbps download and upload speeds (subject to the usual disclaimer: “actual customer speeds may vary and are not guaranteed”).

The 100 Mbps packages is capped at 1 terabyte a month; the gigabit package offers “unlimited data”.

An example of what FTTH looks like “on the pole” is in the picture above. The thin curved lines that appear to loop back into the new tap are not fibers. They are simply plastic retainers to keep the protective caps from falling to the ground. To be ready to serve any address, one of the taps needs to be placed on almost every pole.

It is harder to see what’s going on underground. We need to wait for details about the project to know if areas where utilities are underground (rather than on poles) will be included.

The quality of AT&T’s craftsmanship is highly variable and not all of it looks as clean as in the picture presented. So far, I’ve seen FTTH work in the area bounded by Walnut Ave., California St., Almar Ave. and King St. This is a poor way to gauge the scope of their project, though. I visited the AT&T retail store but discovered staff get no special advance information about what the company is working on.

Wireline carriers, such as AT&T and Comcast, each get one foot of vertical space on each pole for their service. AT&T has attached their new fiber network to their legacy copper network to avoid needing to completely rearrange the pole or pay for another foot of pole space.

Santa Cruz fights fire with fiber

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As a wild fire burned in the Santa Cruz mountains, a key AT&T fiber line was cut nearby, reportedly by a road maintenance crew doing previously scheduled work just before 5:00 a.m. on Tuesday of last week.

In 2009, a break in a different AT&T cable effectively knocked Santa Cruz, Watsonville and most of the rest of the county off of the Internet for most of a day. Since then, AT&T, Comcast and independent broadband companies have upgraded and diversified cable routes running north and south. A few thousand customers were affected by last week’s break, but it went unnoticed by most people in Santa Cruz County.

But not all. The County of Santa Cruz’s IT infrastructure was connected directly to the severed AT&T cable, and there was no failover capacity in place. So the county’s website went down, just as residents in and near the evacuation area would have been waking up and going on line, looking for information about the Bear Fire.

Fortunately, Cruzio, a local Internet service provider of 30 years standing, had a solution ready to go. As a result of an earlier swap with the county, Cruzio installed a 100 Mbps auxiliary circuit in the county’s main building on Ocean Street in Santa Cruz. It was connected to Cruzio’s high capacity links that rely on newly installed, redundant fiber routes, one going north to Sunnyvale and the other, subsidised by the California Advanced Services Fund, heading south through Watsonville to the Internet backbone along the U.S. 101 corridor.

With Cruzio’s assistance, county staff routed their traffic through this connection, and got back on line “a little after noon”, according to a county spokesman.

But it wasn’t enough. The combination of external web traffic and internal county business quickly overloaded the connection – the AT&T service it replaced was specced at 250 Mbps – and county staff asked that the connection be bumped higher. Cruzio replied by opening up a gigabit port. “No charge for any of this of course” said James Hackett, director of business operations and development at Cruzio.

Had there been a repeat of the outage caused by the 2009 AT&T fiber cut, on top of a growing fire threatening lives and homes in the Santa Cruz Mountains, the result could have been a major, and dangerous, disruption. Instead, the work that’s been done over the past eight years to build independently-owned fiber optic lines in the region, led primarily by U.C. Santa Cruz, kept the focus where it needed to be: on fighting the fire.

This post is taken from an article I wrote last week for Santa Cruz TechBeat, and has been updated with information provided by the County of Santa Cruz..

Santa Cruz fiber love becomes serious city business

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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

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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

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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

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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 will be Silicon Valley’s first fully fiber city

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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

CPUC connects Salinas Valley to Silicon Valley with fast, cheap fiber

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A 91-mile fiber optic middle network for the Salinas Valley, stretching from Santa Cruz in the north, to Watsonville, Moss Landing, Castroville, Salinas, Gonzales and Soledad in the south, is on the way. On a unanimous vote this morning, the California Public Utilities Commission approved a $10.6 million grant to Sunesys, LLC from the California Advanced Services Fund (CASF).

“The key point for me was that typically that these projects only make a price commitment for two years”, said Commissioner Michel Florio. “In this case the provider has made a commitment for at least five years, maybe as long as fourteen years”.

Pointing out that there are “still more jobs in agriculture” in the Salinas Valley than in an other sector, Commissioner Catherine Sandoval highlighted the acute need for better broadband access in the area, as expressed at public meetings the CPUC held in Salinas last year. “This could be a game changer”, she said. “This is a middle mile project, a back bone that is critical”.

The project will bring low cost wholesale fiber access to Salinas Valley Internet service providers and major commercial and institutional customers all along its route, at a maximum cost of $1,550 per month for any contracts, of any length signed in the first five years. By comparison, unsubsidised dark fiber can cost up to ten times as much. The network will interconnect with major north-south fiber lines in Salinas and Soledad, and terminate in Santa Cruz where Sunesys earlier built a dark fiber connection to Santa Clara, which provides access to several Tier 1 exchanges in Silicon Valley.

Since the Santa Clara connection was built 4 years ago, the price of wholesale Internet bandwidth in Santa Cruz has dropped by a factor of one hundred, to less than a dollar a megabit per month. Cruzio, a local ISP, leveraged this access to light up last mile fiber optic connections for downtown Santa Cruz businesses and improve speed and reliability for thousands of consumers. This new line is expected to do the same for Salinas Valley communities.

On the retail side, the commission also approved CASF funding for two last mile projects in the Paradise Road and Monterey Dunes areas of northern Monterey County, proposed by Surfnet Communications, a local ISP (and a Ponderosa Telephone project in Fresno County), albeit without the haircut proposed by Florio.. These two systems are the first of what are expected to be many consumer and small business-oriented projects that connect directly to the Sunesys middle mile network.

Gonzales councilman Robert Bonincontri and city manager Rene Mendez told commissioners of the tremendous need for connectivity in the Salinas Valley, where unemployment rates are high and household income levels are low, even when work is available. The social and economic impact of the project, coupled with its financial viability – demonstrated by the Surfnet proposals, as noted in the approved resolution – was the reason commissioners opted to fund 80% of its construction cost. Normally, CASF grants are limited to between 60% and 70% of the tab.

The next step is to finalise construction plans and route details, with completion expected within two years.

Tellus Venture Associates assisted with several CASF proposals in the current round, including the Sunesys and Surfnet projects, so I’m not a disinterested commentator. Take it for what it’s worth.

Broadband 101 workshop in Santa Cruz looks at projects, policy

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Zach and friends.

“Economic development is not just building a Costco or a car dealership”, said Santa Cruz County supervisor Zach Friend, closing out a three hour workshop on the basics of broadband development. “What we’re doing now is laying down a backbone for future economic development.”

About forty people attended event last week at CruzioWorks, including supervisors, Santa Cruz mayor Hilary Bryant and local public works and IT staff from around the county. Cruzio CEO Peggy Dolgenos was the host and emcee.

Joel Staker, network administrator for the City of Watsonville and chair of the Central Coast Broadband Consortium, talked about the big public policy picture, comparing subsidising Internet infrastructure now to the decision more than 50 years ago to build the Interstate highway system. He also gave an update on Watsonville’s municipal dark fiber project.

I gave a presentation on what’s needed to build and upgrade infrastructure, and talked about broadband projects in Santa Cruz, Monterey and San Benito Counties, with a particular focus on the Sunesys middle mile project which is being considered for funding by the California Public Utilities Commission.

Tammie Weigl talked about the diverse – and potentially vulnerable – network infrastructure she manages for the County of Santa Cruz. UCSC’s Jim Warner presented research he’s done regarding the problems encountered with mobile broadband service in a coastal community. Local entrepreneur and broadband advocate Larry Samuels talked about private investment opportunities and partnerships with public and community-based projects.

The event was organised by Cruzio Internet, and co-sponsored by the Central Coast Broadband Consortium.

Santa Cruz culture gives tech start ups a competitive edge

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Santa Cruz inspires Tomfoolery.

“The culture of community is Santa Cruz’s greatest export,” said Sol Lipman, one of three local entrepreneurs speaking at an event Thursday evening celebrating the growth and innovation of the local tech scene.

Sol is the founder of Tomfoolery, a start up that’s targeting the corporate sector with mobile apps that grow social networks within companies organically. He pointed out that the top three social networking platforms used for business are actually well known consumer market apps: Facebook, Twitter and LinkedIn, in that order. Their first product, Anchor, is already deployed in about twenty companies.

“Social interactions at work are broken,” he said. “People work at home, people work at places like NextSpace, people work everywhere. But people are unhappy.” The solution is to use social media to infuse corporate culture with the lifestyle values – friendship and fun – that employees often leave at the door.

It’s Sol’s sixth venture, the two most recent – 12seconds.tv and RallyUp – were also started in Santa Cruz, California, working out of the NextSpace coworking community, another successful venture that combines local lifestyle and culture with high technology talent.

Peter Koht and Shane Pearlman joined Sol. Peter is one of the two principals of OpenCounter, an open source portal that helps new businesses navigate the complex and often contradictory permits and approvals process required by local government. He started it when he was working for the City of Santa Cruz, as a Code for America project. The Knight Foundation was so impressed it gave him and his business partner, Joel Mahoney, $500,000 to take it national this summer. In just a couple of months, they’ve signed up several new cities, including Houston, Texas.

Shane has leveraged the Santa Cruz lifestyle into Modern Tribe, a digital design and development agency started with a desire to work where he wants to live, not live where he has to work. The firm now has about 35 freelancers and employees, distributed around the world, linked by technology and shared values and qualities that Shane boils down to happy, helpful, curious, accountable and good.

The forum was organised by the Santa Cruz New Tech Meetup and sponsored by Santa Cruz Tech Beat, Cruzio, NextSpace and the City of Santa Cruz. The next one is coming up on 6 November 2013, at the Cruzio & Ecology Action Green Building in downtown Santa Cruz.