Tag Archives: san jose

Political dreams, not business sense drive plan for public takeover of PG&E

by Steve Blum • , , , ,

Glinda the good witch

It’s not a co-op, despite being “customer owned”. It’s not a utility district or a municipal utility, despite operating “as though it were a public agency”. And it’s certainly not a profit making company. Which leaves wide open the question of what kind of organisational beast San Jose mayor Sam Liccardo and 113 other northern California elected officials think will take over Pacific Gas and Electric’s operations and assets.

The group released a set of “operating principles” for a new, quasi-public entity that would replace PG&E. Key details are missing, including where the money is coming from – bankruptcy judges aren’t in the habit of giving something away for free when others are willing to pay for it – and whether they want PG&E’s natural gas business too.

It’s an all things to all people proposition. Somehow, this new utility will have oversight responsibility for community choice aggregators, which are local governmental agencies – joint powers authorities – that buy electricity and manage customers, via PG&E, in some California cities and counties. But it will have “‘private’ entity legal status” as a “customer-owned utility”. Which makes it sound like a traditional electric cooperative, except that “excess revenues will be re-invested into the communities” it serves, and not rebated to the customers who own it, as co-ops do.

The group’s manifesto includes a long wish list of other goodies the new utility will bestow upon people and public agencies in PG&E’s service territory, such as prioritising capital investment to “prevent wildfires, reduce public safety power shutoff events, and improve overall system reliability”, and “maintaining and growing a skilled workforce” that will improve safety and reliability, as well as customer service. They seem think it’s possible to do all that, while improving “affordability” and offering “options to reduce costs for all ratepayers”.

That would be a neat trick. But it’s only possible to make those kinds of promises when the only cost involved is the price of a press release. Public ownership of monopoly utilities is worth considering, but it’ll only work if the owners – tax payers – are willing to back it financially and if the people running it focus on the tough business of delivering service.

Market competition pushes down San Jose light pole lease rates

by Steve Blum • , , , ,

The City of San Jose will finalise a light pole lease agreement with AT&T. The San Jose city council approved a set of deal points on a nine to one vote last week. AT&T will pay $1,500 per year each to attach small cell equipment to city-owned light poles, plus pay $1,850,000 toward fees and a permit streamlining program.

That’s less than half of what San Jose was trying to charge.

“We have a fast changing landscape”, San Jose mayor Sam Liccardo said. “I’Il be talking with Verizon tomorrow and that’s one of several companies – we’re having challenges nailing them down on prices that are moving very rapidly, in some cases, the wrong direction”.

San Jose’s rate card had a top rate of $3,500 per year for the smallest of small cell attachments, with higher rates for bigger or more powerful equipment. Besides being too expensive, San Jose couldn’t predictably approve permit applications, which led AT&T to invest elsewhere, Dolan Beckel, San Jose’s director of civic innovation, told the council…

In September of 2016, AT&T submitted 17 small cell permit applications. Over a year later in November of 2017…none of those 17 small cell permits were approved. AT&T could not justify further investment in our small cell infrastructure – we are too expensive, we are too slow and we could not generate any predictability. They are pulling their capital investment in small cells out of the city and directing it to other cities.

Whether AT&T would have walked away from San Jose for good is an open question. Probably not – it can’t afford to concede the biggest city in northern California and Silicon Valley to its rivals. But even AT&T’s capital isn’t infinite. Choices have to be made and, for now at least, investment will follow the path of least resistance.

The lower fees and faster permits – the city will try to get permits processed in two months – will lead to an initial build of 170 small cell sites, with 1,000 or more promised in a later phase, Beckel said.

The deal also gives AT&T direct responsibility for dealing with complaints or objections by residents, on a fast track basis. AT&T would snail mail notices to people who live within 300 feet of proposed small cell sites. Recipients would have 20 calendar days to “contact…AT&T with their concerns and questions”. It would be up to AT&T to resolve problems they can and let the city know about the ones they can’t. What happens after that is still undefined.

San Jose cuts $1,500-plus light pole lease deal with AT&T

by Steve Blum • , , , ,

The City of San Jose and AT&T have a new agreement to put “small cells on city-owned assets in the public right of way”. A formal contract is still to be negotiated, but assuming the San Jose city council signs off on the deal points, AT&T will install “approximately” 170 small cell sites to upgrade mobile broadband coverage on city-owned light poles and other vertical infrastructure.

AT&T will pay the city an annual lease rate of $1,500 per small cell site, plus $1,850,000 to process the immediately necessary paper work and streamline future requests. $850,000 covers permit fees; $1,000,000 goes toward “improved permitting process reliability and speed for any permittee through organisational, process, and technology improvements”.

That’s considerably more than the $250 per year rate that AT&T and others tried to ram through the California legislature last year, but it’s less than San Jose’s current price tag for wireless facility leases. The rate card approved in 2015 was based on the perceived desirability of locations – a small cell installation (30 cubic feet and 20 watts or less) costs $3,500 a year in the high traffic central part of the city, and less – as little as $2,625 per year – in outlying areas. Bigger and/or higher powered facilities cost more.

The summary memo prepared for the city council implies, but doesn’t exactly say, the same size and power limits apply. Presumably, that detail will be fleshed out in the actual contract. AT&T’s “photo simulation” of what it’s saying it’ll install is above.

The memo does point out that the current rate card is too pricey for the market…

While this lease rate structure was appropriate for the nascent small cell market in 2015, three years later, the structure does not reflect current market conditions, the current state of wireless technology nor the City’s Broadband Strategy.

The retail lease rates…combined with the private sector burden of remediating the City’s poles had resulted in the City being unable to secure the necessary private sector investment in our broadband infrastructure. At the time the broadband strategy was approved on November 13, 2017 the City had not approved a single small cell permit nor collected any small cell lease revenue largely due to the existing Usage Fee Structure and a lack of centralized broadband governance.

The San Jose city council is scheduled to review the deal at its meeting tomorrow.

Silicon Valley drops off of Google Fiber roadmap

by Steve Blum • , ,

Google has scrapped seemingly imminent plans to start laying fiber in Silicon Valley. According to a story yesterday in the San Jose Mercury News, Google has told officials in Palo Alto and Mountain View that the project is on hold, and the group that was to do the work has been disbanded…

The company was set to begin digging in San Jose last month, but nearly 100 employees hired to install Google Fiber were pulled into an office and told the project was being delayed, according to workers. They were offered a transfer to San Diego to work on an unrelated project.

The reasons given to the Mercury News are nearly identical to the statement Google made when it similarly pulled out of Portland

Google Fiber spokeswoman Veronica Navarrete said company officials will continue talks with San Jose, Palo Alto, Santa Clara, Sunnyvale and its hometown of Mountain View about providing internet service, but added that it “takes time” to deploy “the latest technologies in alignment with our product road map, while understanding local considerations and challenges.”

The latest technologies Google is considering include, maybe exclusively, wireless, the fruits of its acquisition of Webpass. On parent company Alphabet’s second quarter 2016 earnings call last month, chief financial officer Ruth Porat confirmed that Webpass’ wireless is now part of the mix at Google Fiber, and they are “continuing to push the frontier” with “different execution paths”.

Porat also said that total capital investment in what Alphabet calls its “Other Bets” was $280 million in the second quarter, “primarily reflecting ongoing investment in our Fiber business”. With the tab for building out a full fiber network in Silicon Valley looking like ten times that figure or more, and no end to operating losses in sight, Google’s cold feet come as no surprise.

More delays for Google Fiber hopefuls

by Steve Blum • , , ,

Google is putting the brakes on its fiber builds. That seems to be the word out of Portland. According to a story in the Oregonian, contractors involved in the project – or at least who think they’re involved – say that construction won’t begin for several months, if ever. Google Fiber hasn’t actually said that Portland is one of its chosen few markets, but the general expectation was that an announcement to that effect would come in the fall.

The explanation a Google spokesman gave to the Oregonian indicates that the company is reevaluating its technology options…

“We’re continuing to explore the possibility of bringing Google Fiber to Portland and other potential cities,” Google wrote. “This means deploying the latest technologies in alignment with our product roadmap, while understanding local requirements and challenges, which takes time.”

In the context of Google’s recent purchase of Webpass, which does most of its business wirelessly, the term “latest technologies” doesn’t point to, say, slimmer fiber cables. More likely, it indicates a cost-benefit analysis is underway. The capital cost of installing fiber in major metro areas is huge, even by Google standards – the Oregonian puts a $300 million price tag on a Portland build.

Here in California, the tab would run even higher. The estimate for San Jose alone was in the gigabuck range and you can multiply that a few times to cover the rest of the Silicon Valley cities Google has been trawling. San Francisco is now listed as an upcoming Google Fiber city – in contrast to San Jose’s and Portland’s potential status – but that also points to a shifting business model. Google plans to lease other people’s fiber to reach multiple dwelling units there, and the Webpass acquisition complements that strategy.

San Jose cuts a fiber deal but Google won’t say yes yet

by Steve Blum • , ,

San Jose is all for it, but Google Fiber remains coy about whether it’s going to build a fiber to the home system there, or elsewhere in the south Bay Area. On Tuesday, the San Jose city council voted unanimously to approve a construction plan and five fiber hut site leases on city land, for a prospective Google Fiber buildout.

Jenna Wandres, the Google representative at the meeting, said that they plan to build out to virtually the city, with the only possible exceptions physically hard to reach locations in the hills. She said they plan to build 2,300 miles of fiber plant – more or less the total street mileage in San Jose – regardless of household income levels in neighborhoods. That’s not a ironclad guarantee, though. It leaves the door open a crack for Google to prioritise builds on the basis of pre-sales or other consumer demand metrics, as it has done in other markets.

Pricing is not set yet, but it’s likely to follow the pattern set in the southeastern U.S., according to Wandres. There, Google charges $130 a month for a gigabit plus TV service, $70 for a gig alone and $50 for 100 Mbps service. Wandres said that there will be a fourth price plan, at least for low income neighborhoods, but it hasn’t been determined yet.

The construction plan calls for 40% of the network to be installed on utility poles, and the remaining 60% will go underground, with both traditional trenching and microtrenching techniques used.

The City of San Jose is getting about $5,000 a year in lease payments for each of the fiber hut sites. That’s more than twice the rate Google is paying in San Antonio, for example.

The City of Mountain View approved similar plans earlier this month. Google has not yet said, though, whether it will actually implement any of the approved plans. Wandres said that if they do decide to move ahead in the south Bay Area, it would be Google’s first “organic build” in California. San Francisco is the first California city with a Google Fiber project, but it’s mostly using existing fiber lines and involves little or no new construction.

No word on when a decision is expected.

Gigabit for San Jose could cost Google a gigabuck

by Steve Blum • , , ,

The environmental review of Google’s possible fiber optic network in San Jose includes a surprisingly detailed description of the network, including diagrams of the local distribution system with breakouts by aerial and conduit routes. It’s a good primer for anyone interested in learning how a fiber to the home network is designed and built. According to the report…

Google Fiber’s FTTP infrastructure consists of four primary elements. In essence, the architecture of the FTTP build involves (1) installation of a Fiber Ring, (2) which is connected to Local Aggregation Sites (LASs), (3) which then connects to vaults (underground or in above-ground cabinets), and (4) finally connects to customers…

The majority of the approximately 2,300 miles (12,144,000 linear feet) of conduit required for the proposed Project would be installed using five construction methods―aerial installation, rock- sawing, HDD, and trenching/micro-trenching. Google Fiber anticipates 60 percent utilization of rock-sawing/HDD/trenching methods and 40 percent utilization of aerial installation, subject to change based on final design and construction constraints. The ratio could reach 80 and 20 percent underground and aerial installation, respectively, depending upon pole conditions.

Network construction costs alone could be on the order of half a billion dollars. That’s assuming a cost of $25 a foot to hang fiber on poles, including getting existing poles ready and replacing ones that are too far gone, and $50 a foot to install conduit. Could it be less? Yes. Could it be more? Hell yes.

Then you add in the cost of connecting to San Jose’s 300,000 or so homes, plus electronics, plus fiber huts, plus everything else it takes to start a business of that scale, and the tab creeps closer to a cool billion.

Even if Google decides to build an FTTH network in San Jose – it’s far from certain at this point – it likely won’t be spending anywhere near that much money initially. The Google Fiber strategy is to cherrypick neighborhoods based on early interest, and then build slowly from there. Even so, it’s an impressive investment.

City of San Jose’s draft initial study and mitigated negative declaration for citywide Google Fiber
Network diagrams (extracted from the above report)
Appendix A: typical facilities and fiber hut site plans
Appendix B: air quality report
Appendix C: noise report

Google Fiber gets initial enviro okay in San Jose, could be model for California

by Steve Blum • , , , ,

I hope they survey me, Robin. The Batcave still has dial up.

Google Fiber is taking a harder look at San Jose. The city has prepared the initial environmental assessment, more than 400 pages long, which declares there will be no significant environmental impact if Google builds out a fiber to the home system there

The proposed Project includes the following components: The installation of approximately 2,300 miles of fiber optic cables (consisting of about 1,340 miles of below ground installation and 960 miles of aerial installation using existing utility poles); the installation of approximately ten Local Aggregation Sites either inside pre-fabricated communications shelters (fiber huts) or enclosed within existing commercial buildings; underground utility vaults and utility cabinets; and connections directly to customers. With the exception of the Local Aggregation Sites and connections to customers, the fiber cables, vaults, and cabinets will be located within existing public right-of-ways or easements.

That’s not to say there’s absolutely no possibility of environmental degradation. This is California, after all. So among things, biologist will check for nesting birds before work is done, and if any trees have to be cut down, a bat survey will be done. Workers will get special training so they can spot anything of historical or archeological value. There are special procedures to be used around waterways and conditions relating to noise and air quality. And it goes on. But the bottom line is…

The project described above will not have a significant effect on the environment in that the attached initial study identifies one or more potentially significant effects on the environment for which the applicant, before public release of this draft Mitigated Negative Declaration, has made or agrees to make project revisions that clearly mitigate the effects to a less than significant level.

It’s not time to pop the champagne corks yet. Both city and Google reps have said no decision on whether to build out in San Jose, or other Silicon Valley cities, has been made (h/t to the Baller-Herbst list for the pointer). If it ever happens, it won’t be before the environmental review is completed. Now that the initial report has been posted, there’s a 30 day window, which closes on 12 November 2015, for anyone to challenge it.

It appears that San Jose has reached some kind of agreement with Google for blanket permission to build the network. The report references a “master encroachment permit from the department of public works for work in the public right of way”, for example. If this can get past the Nimbys, it could be a template for broadband development throughout California.

We can only hope.

City of San Jose’s draft initial study and mitigated negative declaration for citywide Google Fiber
Appendix A: typical facilities and fiber hut site plans
Appendix B: air quality report
Appendix C: noise report