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.