Atherton exploring town-wide, very high-speed fiber

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1 Atherton exploring town-wide, very high-speed fiber optic netw Uploaded: Thu, May 7, 2015, 11:54 am Atherton exploring town-wide, very high-speed fiber optic network Construction could being by next March by Barbara Wood If things go according to the tentative plans laid out for the Atherton City Council on May 7, Atherton could have a town-wide, very high-speed optical fiber network installed by next year, designed to provide faster and more reliable Internet service than now available, with the goal of free basic service for everyone in town. For the past year, council members Rick DeGolia and Bill Widmer and other members of the town's Technology Committee have been exploring the idea of a town-wide Internet system. Mr. DeGolia said many ideas were discussed and discarded, including a wireless system and a joint town-private company venture. The committee also asked 10 companies if they had interest in providing a system, but not one even responded, Mr. DeGolia said. So committee member Mike Farmwald decided to form a private company to install high-end optical fiber cable, which is capable, at a minimum, of providing Internet at 1,000 times the speeds conventional Internet providers now supply. The company, which will probably be called Atherton Fiber, is privately owned and hopes to raise money through private Atherton investors. The plan is to offset the free underground installation of one fiber optic cable to each property by selling a bundle of four fibers to those interested in additional service, at a cost Mr. DeGolia said is currently believed to be a one-time $6,000 payment. The buyer would own the fiber cables and they would be part of the property if it were ever sold. Residents would be responsible for connecting the cable from the street to their homes. Atherton Fiber would then allow Internet service providers to lease use of the installed system. Mr. DeGolia said this would introduce more competition into providing Internet service and should lead to "both reduction in cost and a guarantee of better service." "We'd like to have a basic, reasonable level of service available to residents at no cost," Mr. DeGolia said, but those details remain to be worked out. Mr. Farmwald said the committee and Atherton Fiber have been talking to Google about providing service. "I feel pretty good about getting a deal with them," he said. The Atherton Library could also be part of a town-wide system. Mr. DeGolia said the library could lease space over the fiber network "which would enable them to directly deliver programming" to everyone using the Atherton Fiber network. 1 of 2 7/27/15, 8:01 AM

2 Atherton exploring town-wide, very high-speed fiber optic netw... Mr. Widmer said other libraries now provide technical support to some of their customers, "which we thought was very attractive and good use of our library money." The fiber optic system, Mr. Farmwald said, is technologically advanced enough that it should be able to provide service for at least the next 25 years. He said it is capable of transmitting data at speeds measured in terabits per second, which would mean the entire contents of a high-end personal computer's hard disk theoretically could be transmitted in less than 10 seconds. Initially, Internet service providers are expected to offer services in the range of 1-10 gigabits per second, Mr. Farmwald said. Mr. DeGolia said the goal is not only to provider faster, more reliable service today, but to provide a system "that will really serve us well into the future" as well as to "give a chance to the library to really define what it means to be a 21st century library." By July, Atherton Fiber plans to present the results of an engineering study to the council, with the hopes of having a contract ready to sign by November. The timetable has construction of the fiber network beginning by March, and Mr. Farmwald said it would take a number of months to build. More information about Atherton Fiber is available by ing atherton.fiber@gmail.com. 2 of 2 7/27/15, 8:01 AM

3 Fiber to the Home City of Atherton 1

4 Atherton Stats 2500 Homes 50 Miles of Streets 7000 Residents ~5.5 Square Miles ~80% Aerial Utilities (Poles) ~20% Underground Utilities 2

5 Service Proposal Private, Resident-owned Fiber Utility Build, Own and Operate Fiber Plant Optionally allow residents to own 4 fibers to home for upfront fee Most homes/residents lease fiber no upfront fee Direct Fiber to each home Combination of Aerial and Underground Multiple ISPs can provide actual internet service Comcast, ATT, CoastSide, Sonic, Google, etc. We have hired Byers Engineering to do design 3

6 Cost Analysis Analysis done by Byers Engineering Actual construction cost per home Aerial $2000, Underground $5000 Atherton homes have 4-6x wider frontage Cost is mostly proportional to length of fiber runs Reasonable monthly lease is $25 Generally paid by ISP and bundled into bill Replaces current ISP physical plant cost Supports a cost per home of $1000 Google built Kansas City for about $1000 per home We needed to get creative to make this work 4

7 Financing Atherton Fiber Propose to offer fiber bundles to homeowners Aerial for $7500, Underground for $9500 Homeowner owns 4 fibers (from home to central office) Can use fiber for any purpose Buying is optional, but need 20% of homes to make system affordable Rough economics of fiber build then becomes: $6.5M actual cost (2000 homes aerial; 500 homes underground) less $4.0M from pre-sold fiber bundles (20% take rate) No lease fee fiber is owned by homeowner $2.5M net capital cost of leased fiber and central offices Lease at $30/month/home 5-15% return on capital invested (depending on operating costs and future CAPEX) 5

8 Homeowner View Choice of ISP Internet, Cable/Video, Telephone, Alarm Most homeowners will see one bill - from ISP Competition should keep price down Full Gigabit bandwidth Typical in Atherton now is down/0.5-5 up (Mbps) x increase for about the same price as now Fiber has lots of headroom 10 Gbps is available now, will be cheap in 10 years Future system wide increase as technology improves Higher performance available now for higher price System should last years, at least Available fiber/gigabit typically is reflected in home prices Owned fiber should be even better 6

9 Why Gigabit Fiber? Current systems are congested Netflix and other video providers overtax existing networks Especially from 6-10pm High Def (1080p) and Ultra High Def (4K) simply won t work now if widely adopted E.g. 4K requires 20 Mbps now and is heavily compressed Better quality 4K (UHD) will need Mbps per stream Allow completely new services 7

10 Other Details 2 Central Offices On each side of El Camino Homeowner is responsible for connection from street Fiber Entity or ISP can help if desired Most homeowners already have conduit 8

11 ISPs in the Central Offices ISPs can lease fiber, and space in CO Shared fiber from COs to POPs Any ISP can offer service at fairly minimal cost Companies can have direct connection for employees Other service providers can add equipment Netflix, YouTube, Amazon cache, etc. Very easy for homeowner to switch ISPs Competition leads to much better service and cost 9

12 Structure of Fiber Entity Private entity Funded & owned by Atherton residents Entirely private capital Small staff for operations and maintenance If conditions are right, expand into other areas City would have control over sale of entity In exchange for access to city right of way 10

13 Library Library could provide ongoing services to Atherton residents Direct services to residents Computer help and education In-library and in-home Can be leveraged to get better prices and service from ISPs Might allow free basic internet access Most of ISP cost is support, both SW and HW Highly visible, great outcome for residents No- (or low-) cost basic internet service Help desk focused on older residents Could prove a good model for other communities 11

14 Other Issues Ties in very well with Net Neutrality Fiber plant is open ISPs are forced to be competitive Built for the long term, with future flexibility Atherton could easily have the best fiber system in the world From mediocre to great 10 gigabit/s or more 12