2A Work Session 2012 0409 Attachment

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of other telecommunications and utility providers. Current policy encourages sharing of tower sites, no policy regarding "future proofing". Promotes the provision of broadband infrastructure in all public buildings, major transportation transportation and other infrastructure projects and commercial developments. Yes, but not formalized into a standing policy. Requires all public works projects include broadband conduit to be useable by multiple government agencies. No current policy. Explicit and consistent standards for incorporating broadband connectivity into public projects provide telecommunications companies with greater assurance that good investments in infrastructure construction and upgrades can be made prospectively. Specifying particular review standards relating to broadband access and facilities in private sector projects can increase the regulatory burden placed on prospective businesses and developers. When evaluating these kinds of requirements, the additional, individual burden needs to be weighed against the general economic benefits of better and lower cost broadband infrastructure, reduced street construction and traffic San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 25 disruption, and more effective and efficient use of broadband services by local businesses. Although future demand cannot be guaranteed, the knowledge that a certain standard of broadband connectivity will be predictably met as the City’s overall development goals are achieved provides a basis for telecommunications companies to project demand. The greater the confidence in projected demand, the higher a given community will be on corporate capital investment priority lists. The same considerations apply to public infrastructure investment. Consistently including broadband facilities, such as conduit or lateral connections, into public infrastructure projects can, over time, reduce the cost and the risk of future broadband facilities. An example is the current Lit San Leandro project which was made possible by the availability of an extensive City-owned conduit network originally installed for traffic signal control purposes. The fact that City construction decisions taken many years ago met the needs of a telecommunications project today was serendipitous. Going forward, the more consistently public infrastructure projects take future broadband needs into account, the likelier similar outcomes will be. 5.2. Recommendation 2: make broadband a standard review criterion As discussed above, many jurisdictions have specific broadband facilities requirements for various aspects of planning and use policies and approval procedures. In this respect, broadband is treated no differently than other essential utilities such as water, electricity and waste water. Broadband facilities and service availability should be included as criteria when reviewing private sector development plans, much in the same way that the City currently considers electrical and water provisioning. Consideration should be given to: • Standards or requirements for fiber connections to existing networks. • Placement of empty conduit to support future network connections. • Design and scale of telecommunication service entry points, vaults and closets. • Access opportunities for competitive providers. • Conduits and cabling for internal networks. • Accommodation of future internal and external upgrades. As with other utilities, this review should be appropriate to the type and scale of the project under consideration and should be justifiable on a cost-benefit basis. This review could be advisory in nature or it might lead to specific performance requirements, depending on the size, type and value of a project. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 26 The City should also develop simple and consistent requirements for broadband inclusion in public construction projects in order to reduce the cost and risk of building telecommunications facilities now to meet future demand, and to insure that the City’s infrastructure will comprehensively support it. Telecommunications service providers should be routinely notified of any such planning or review processes, for both private and public sector projects. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 27 6. Comprehensive Open Trench Policy 6.1. Background Most of the cost of building utilities, including fiber optic lines, in urban areas is related to cutting open streets, placing conduit and repairing the damage done. If projects can be combined, then costs can be shared, damage and disruption minimized and timely deployment can be encouraged. So-called open trench policies are designed to maximize this opportunity by creating a consistent and reliable procedure for sharing advance information about street cuts and facilitating cooperation between public works projects, utility companies of all kinds and both incumbent and competitive telecommunication service providers. The intended result is to install telecommunications conduit at a greatly reduced cost and minimize future digs by providing an opportunity to inexpensively install facilities on a cooperative basis. Most of the expense involved in installing underground fiber optic lines is for digging into roadways and repairing the subsequent damage, so so opportunities such as these could save money and speed construction. For example, if a telecommunications company was notified that a water district was digging a trench on a particular route and given an opportunity to place conduit in that trench on a predetermined cost-sharing basis, it might accelerate plans to extend high speed Internet service to that area. Other open trench policies go further, mandating the installation of empty conduit on a prospective basis any time a street is opened. Ownership of the new, empty conduit is typically in the hands of the public agency that controls the right of way. As with broadband facility reviews, adding open trench notification procedures to City approval processes has the potential to increase project compliance costs. However, a slight increase in cost for an initial applicant would be offset by any subsequent cost sharing arrangements, and by the significant decrease in cost for potential partners. Taken as a whole, costs should decrease for everyone because over time any given company would realize more cost sharing opportunities than be subject to notification requirements. 6.2. Current status San Leandro does not have a formal open trench policy, as recommended by Governor Schwarzenegger’s executive order and the California Broadband Task Force’s 2008 San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 28 report, and as implemented on a pilot basis by Caltrans. As a matter of practice, the City does routinely install broadband conduit during street construction or other appropriate public works projects, and as a part of its utility undergrounding initiative. However, information about prospectively installed conduit is not systematically collected and made available to interested parties. Table 6.1 Open trench policy Open Trench Policy San Leandro Status Strategy Requires and provides a process for notification and information about all major infrastructure and construction projects, including transportation projects and new residential subdivisions, to a shared data base so that broadband and other utility providers have the opportunity to coordinate infrastructure deployment in shared trenches, conduit, poles and towers, and other appurtenances. No current open trench policy. Develop an open trench policy for the City, and adapt and include it in any regional or statewide initiatives that develop. Policy should cover notification, and mandatory installation of conduit and, along key corridors, fiber. Also should address sharing of facilities. Requires conduit space within joint utility trenches for future high speed data transmission systems. No current policy. Requires installation of broadband conduit as a part of any suitable public works project. Yes. Informal policy. 6.3. Recommendation 3: adopt a comprehensive open trench policy A formal notification procedure coordinated with regional and statewide programs should be implemented for street cuts. The goal of placing conduit any time a street or right of way is dug into should be established. Conduit could be installed by telecommunications service providers or the City. The cost of doing so is relatively low, involving staff time and inexpensive materials. Similarly, information regarding construction or upgrading of wireless facilities should be shared widely to encourage joint use. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 29 7. Lateral and System Expansion Opportunities 7.1. Need for new connections As described in Chapter 2 above, four areas of the City have a particular problem with commercial broadband availability: Downtown San Leandro, the Davis/Doolittle/Adams tract area, the 880 Industrial Corridor and the Shoreline. Although each of these areas has unique characteristics, there is a common need to build service connections from current and planned fiber routes to businesses. The City’s existing conduit, including that leased by Lit San Leandro, goes through or near three of the four areas (the Shoreline area is the exception). Fiber routes owned by other providers also pass through the three areas (again excluding the Shoreline). In order to fully serve these areas, extensions and lateral connections will have to be built to existing lines. This work could be paid for by service providers, however in the past the providers have not always been able to justify the investment. To assist in identifying opportunities that meet investment goals, junction boxes, empty conduit, splice points and other potential connection points should be mapped. This information, together with the schedule for any planned public works projects in the area and metrics for local businesses, should be presented to potential wholesale and retail service providers to make them aware of opportunities to inexpensively reach new customers. 7.2. Recommendation 4: encourage expansion via cooperative efforts Promoting the opportunity Wholesale level “middle mile8” companies provide backbone connectivity to “last mile” broadband companies who then provide a managed level of retail Internet service to individual commercial accounts. In some cases, particularly with industrial grade service, last mile connectivity might be provided by a middle mile network. But most businesses customers opt for a packaged solution from a dedicated last mile provider, which could include add-ons such as technical support, connecting equipment and Internet bandwidth. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 30 8 "Last mile" refers to infrastructure (e.g. fiber optic lines, distribution boxes, equipment vaults, poles, conduit) that provides broadband service to end users or end-user devices (including households, and businesses). "Middle mile" refers to broadband infrastructure that does not predominantly provide broadband service to end users or to end-user devices, and may include interoffice transport, backhaul, Internet connectivity, or special access. Middle mile facilities are the link between last mile facilities and major interconnection points, such as those that form the core of the Internet. Many last mile service providers do not own the physical assets, such as DSL or fiber lines, that they use to connect to customers, but instead lease those assets from other companies. In some specific cases, though, a last mile provider might be interested in building short connections or partnering with others to do so, if problems such as middle mile capacity, access to lateral connections, permitting and funding can be addressed. The California Public Utilities Commission provides broadband availability data, in some cases down to the street level, which can be used to identify need and plan extensions and lateral connections. It can be also be used to support or challenge eligibility for state broadband subsidies. The City will be in position to provide much of this information and access, and it should be presented as partnership opportunities to both middle and last mile companies. These presentations can be done individually, but group presentations regarding all four under/unserved areas should also be scheduled. Fiber-to-the-basement A middle mile provider could potentially build a lateral connection to a multi-tenant building and then the owner, a tenant organization or specialty company could install the internal wiring necessary to distribute Internet service to tenants. In this model, the owner and/or tenants would be their own last mile provider. The cost of the lateral and internal distribution facilities would be paid directly or indirectly by the property owner, perhaps on a cost sharing basis with other owners. It is possible that such an installation could be used as a hub to provide retail service to nearby businesses and smaller properties, in addition to serving building tenants. The City can also make use of the fiber strands it is receiving from Lit San Leandro to encourage property owners to initiate fiber-to-the-basement projects. Interim wireless solutions Wireless Internet service comes via a variety of methods, including mobile broadband, WiFi, high capacity point-to-point links and lower capacity multipoint, hub-and-spoke systems. It is difficult, if not impossible, to guarantee that all properties in a given area will be reachable, or that if reached, service levels will be acceptable. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 31 However, if there are delays in finding suitable last mile partner(s), an interim multipoint service might be capable of filling a sizable fraction of unmet downtown demand. Although there are other areas of the City where an interim wireless solution could work, it is particularly suited to Downtown San Leandro because of the concentration of smaller businesses that need commercial grade connections and the difficulty existing wireless broadband companies have in reaching them. One possible business model would be to have businesses pay for their own premise equipment (similar to a fiber-to-the-basement model) and have a last mile company or cooperative organization install the hub equipment and provision service. The City could play a coordinating role in this effort, and might be able to add an incentive by waiving fees if an antenna placement triggers an administrative review or conditional use permit process. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 32 8. Lit San Leandro In 2011, the City of San Leandro worked closely with a local entrepreneur, Dr. J. Patrick Kennedy, to provide non-exclusive access to city-owned conduit for the purpose of building an 11-mile fiber optic loop through commercial and industrial areas of the City. The agreement reached provides the City with direct benefits, including ownership of a substantial number of dark fibers in the system and potential future revenue. The indirect benefits to local business activity and property values are likely much greater. Figure 8.1 Path of Lit San Leandro’s dark fiber loop. Construction is underway. The Lit San Leandro project will provide industrial-grade connectivity directly to companies on or near its route and will provide backbone connectivity to commercialgrade Internet service providers, both incumbents and new entrants into the local broadband market. It provides a high level of commercial broadband service availability to San Leandro that few cities can match. The Lit San Leandro public-private partnership provides opportunities for the City and private businesses to cooperate on expansion efforts aimed at promoting the public good. For example, Lit San Leandro is actively pursuing expansion of its service into the four underserved areas of the City identified in this report. By cooperating with these efforts – or with similar efforts by other service providers – the City can increase San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 33 the chances that much needed broadband facilities will be built and be financially successful in the long run. 8.1. Recommendation 5: support Lit San Leandro on a non-discriminatory basis Because it can generally expand broadband availability in the City and specifically can reach under and unserved properties and enable new kinds of businesses to be established, the Lit San Leandro project has the potential to be a significant economic development driver. It should be supported by the City’s business development efforts to the same extent as any other positive, major player in the local economy. However, the Lit San Leandro project will not, by itself, solve all of the City’s commercial broadband access problems or be the preferred solution for every potential new business relocation or existing business upgrade. By supporting service providers non-exclusively and at a level appropriate to case by case circumstances, the City will maximize the benefit of its commercial broadband initiatives to all local businesses, including Lit San Leandro. The agreement with Lit San Leandro will provide the City with up to 28 dark fiber strands throughout the network. Some of this capacity can be used to support City operations, and assist other public agencies. However, a small number of fiber strands will be sufficient for this purpose. The City has the contractual right to re-market its unused strands at its sole discretion, and it should hold these strands in reserve against the possibility that capacity offered by Lit San Leandro or other service providers is unavailable or unsuited for meeting economic development goals. Whether it is by working cooperatively with the venture or by utilizing the fiber strands it provides, the City can make use of the funding sources described below to assist the development of Lit San Leandro, in the same way it could for other telecommunications service providers. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 34 9. Downtown San Leandro Hotspots Downtown San Leandro has a higher density of small businesses and a higher amount of foot traffic and retail activity than the other three identified under/unserved areas. Problematic wireless connectivity was cited in the research conducted for this study as an issue for Downtown San Leandro businesses. Improving public broadband availability can overcome this problem and potentially create a competitive advantage for existing business and an incentive for business considering relocating to Downtown San Leandro. 9.1. Recommendation 6: limited, free WiFi One solution is to install outdoor WiFi access points at key locations, connect it to existing City fiber or other network infrastructure and offer free, unsupported service. Depending on the type of area and the equipment required, these kinds of hotspots can cost from less than $1,000 to about $6,000 each to build, plus the cost of network access. Operating costs (exclusive of connectivity) are generally less than $1,000 per location per year, sometimes considerably less. The cost of Internet connectivity could range from a high of around a $1,000 per location per year down to very little, if existing resources such as Lit San Leandro fiber and shared Internet bandwidth could be brought into play. The City could play several different roles in the project, for example owning and operating it outright, coordinating an opt-in program funded by local merchants or including it in the scope of a public improvement district. Providing fiber connections to hotspots or arranging for Internet bandwidth sharing are other roles the City could play. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 35 10. City Business Assistance Grants The City of San Leandro has incentive programs that provide small grants and forgivable loans for eligible business projects. Traditionally these programs have been used to support facade improvement projects and energy efficiency projects. 10.1. Recommendation 7: support business connections to broadband services A broadband connections program should be added to the list of incentives the City offers, in order to assist local businesses in meeting the upfront capital costs of connecting to broadband networks. Doing so will benefit small, medium and large businesses in the short term and improve the long term viability of buildings that will also benefit from improved broadband access. Making broadband an eligible use of these programs would not necessarily require additional funding if broadband projects were simply included as part of the current budget appropriation. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 36 11. Potential Funding Sources Although the end of redevelopment agencies in California eliminated an important source of financing for economic development and infrastructure, other federal and state programs offer an opportunity for local agencies to partner with service providers and facilitate access to funds. Some of these programs might provide financial assistance to service providers that want to build facilities to reach under and unserved commercial areas of San Leandro. 1. Federal economic development programs. The federal Department of Commerce, through the Economic Development Administration, will partially fund public works projects used for economic development purposes. Broadband projects are theoretically eligible for this funding, and it is ideally suited to funding lateral extensions to under and unserved commercial and industrial areas. 2. California Advanced Services Fund. The California Legislature has renewed this program and provided the California Public Utilities Commission with an additional $125 million to use in extending broadband service to underserved and unserved areas of the state. Although this program is more commonly thought of in connection with rural areas, it does not preclude urban infill projects. CASF funding is available to telecommunications companies that meet certain requirements for projects in geographical areas that lack defined levels of broadband service. The City can assist companies in applying for this funding by providing and validating information regarding unserved areas, including those areas identified in this study. 4. Educational broadband programs. The federal E-rate program provides subsidies to schools and libraries, including funds to upgrade services under certain circumstances. The Corporation for Education Network Initiatives in California (CENIC) funds, builds and manages educational broadband networks in California, including high capacity networks for higher education. Generally, the specific resources funded through these sorts of programs programs are restricted to use only by qualified schools, libraries and research institutions, but in many cases those specific resources can be purchased from or be made part of a larger project. When lateral construction and other network extensions are planned in San Leandro, consideration should be given to opportunities to link to eligible schools and libraries that might be able to contribute such funds. 5. Telemedicine programs. As with educational broadband programs, federal and state agencies provide funding for broadband resources that support telemedicine programs. For example, the California Telehealth Network, based at U.C. Davis, receives federal funding to provide network services to, primarily, rural health care facilities. Typically, telemedicine programs buy services from existing providers rather than constructing San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 37 facilities, and can potentially be anchor tenants of new broadband projects. The possibility of tapping into these funds should be considered whenever a health care provider can be served by proposed lateral or other network extensions in San Leandro. 6. Public agencies as anchor tenants. Local governments are no different than any other large organization: broadband access is essential and is included, to one extent or another, in budgets. The assumptions that underly many public agency budgets will be changing dramatically in the next few years. In cases where public agencies face rising costs for telecommunications services, it might make more sense to spend information technology and telecommunication budgets on building facilities rather than leasing increasingly expensive services. If a public building is located in (or proposed for) a prospective broadband project area, it might be possible to negotiate a long term lease that provides an assured source of income for the project while saving money for for the agency involved. 7. Public works projects. If coordinated with service providers through an open trench program, planned street and other improvements create an opportunity to greatly reduce the cost of broadband facility construction. There might be cases where broadband facilities, particularly empty conduit, can be included in project budgets. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 38 12. Appendix A – Research 12.1. Online survey questions 1. What is the name of your business? 2. What is your business address? 3. Business zip code. 4. Type of business. 5. How many people are employed at this location? 6. What broadband services do you presently subscribe to? 7. From what provider do you presently receive internet service? 8. If other, please specify service provider(s) 9. What is the internet speed of your current connection (in megabits per second, or mbps) 10. What do you presently pay per month for you broadband service? 11. Is this a bundled service (includes phone and/or other services)? 12. How satisfied are you with the speed of your current broadband service? 13. How satisfied are you with the reliability of your current service? 14. How satisfied are you with the value you are currently receiving? 15. How satisfied are you with the range of broadband options available at your location? 16. How important is broadband availability to your business operations? 17. What improvements improvements would you most like to see in broadband availability for your business? 18. What broadband services would you like to have that are not presently available to your location? 19. Please provide any additional information about your broadband needs. Specifically, what improvements would be most beneficial to your business? 20. Name. 21. Phone. 22. Email. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 39 12.2. Business workshop responses and notes Workshop 1: 19 July 2011, 12:00 pm What they have: T-1 1.5 Mbps, unreliable, on Davis west of Doolittle Dial up at first then Comcast come in and tenants started using that. Estudillo. Uverse – 12 mbps -plus mobile/mifi up to 3 mbps, on Bancroft Mobile/wireless DSL – 1 Mbps, Bancroft near Sybil and Pontiac near Broadmoor Mobile/wireless Bank of America – get it from ATT, having problems Next generation business: Critical need for business – 3 said yes, for design work, for doctors and dentists and to attract new business. Broadband is a barrier to expansion, need it for communication and doing business online. Voice service is OK. One said “nice to have”, consistency is the issue. Willing to pay more for more options -data caps are an issue -want more options -cost of new construction/installation is an issue -would be happy with 5-6 Mbps if it was consistent Ranking concerns: 1. Reliability 2. Speed 3. Cost Future issues: Consistency will be increasingly important Reliability – agree More mobile usage Amount of bandwidth