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City of San Leandro Meeting Date: September 17, 2012 Staff Report File Number: 12-363 Agenda Section: ACTION ITEMS Agenda Number: 10.A. TO: City Council FROM: Chris Zapata City Manager BY: Lianne Marshall Assistant City Manager FINANCE REVIEW: Not Applicable TITLE: Staff Report for Resolution Adopting the San Leandro Commercial Broadband Strategy SUMMARY AND RECOMMENDATIONS The San Leandro Commercial Broadband Strategy includes an assessment of current broadband availability and several recommendations to improve service in the future. The report will be used to guide future efforts related to broadband expansion in the City. Staff recommends that the City Council approve the attached resolution adopting the San Leandro Commercial Broadband Strategy. BACKGROUND Fast and reliable Internet service has become a requirement for most successful business enterprises. Although this need was once restricted to businesses in “high-tech” sectors, broadband service that facilitates fast transfers of large quantities of data is now a prerequisite for almost every industry. Given these trends, the City recognizes that enhancement of our broadband infrastructure can be an effective tool for business attraction and retention. With that need in mind, the City Council approved a Consultant Services Agreement with Tellus Venture Associates on June 6, 2011 for development of a Commercial Broadband Strategy. The goals of this project were as follows: · Assess current conditions and identify shortcomings in the availability of broadband to industrial and commercial businesses; · Identify and assess options for addressing service shortcomings, including negotiations with current service providers, identification of new service providers, and potential for infrastructure improvements to improve service levels; and · Develop a comprehensive strategy to ensure that high-quality broadband service is available at reasonable costs to as many businesses as possible. City of San Leandro Page 1 Printed on 9/11/2012 File Number: 12-363 Analysis Initially, the development of the Commercial Broadband Strategy involved an extensive process of community outreach and data collection. Because comprehensive data on broadband availability by location is rarely made public by service providers, staff and the consultant gathered information using a variety of methods. That process included: · Two community workshops; · An online survey; · Meetings with service providers; · Meetings with individual businesses and property owners; · Data sets released by the California Public Utilities Commission; · Meeting with the San Leandro and San Lorenzo Unified School Districts; and · Participation in East Bay Broadband Consortium. Information gained from this process provided an understanding of the service levels available to San Leandro business and the limitations in the available service, particularly on a geographic basis. Because service providers have made their greatest infrastructure investments in residential areas, several industrial areas in San Leandro presently suffer from inadequate broadband availability. Priority Areas Information from the data collection and outreach process was used to identify four priority areas for broadband improvements. Those areas are the Davis/Doolittle industrial area, the I-880 industrial corridor, the shoreline development area, and Downtown San Leandro. The first two were selected because they presently lack adequate broadband availability. If San Leandro is going to successfully reposition older industrial properties for the types of businesses that will thrive in the 21st century, improving broadband in these areas will be critical. In contrast, the shoreline and Downtown areas were identified not so much for a lack of current service, but rather because they will benefit from exemplary service in the future. Downtown San Leandro already has a high density of office and professional uses, and future development is planned as part of the San Leandro Crossings and Town Hall Square projects. Hotel, conference center, and office uses are all planned as part of the shoreline development project. For both areas, availability of extremely high quality broadband will enhance the City’s ability to attract high-quality, high-technology tenants and visitors. Recommendations The Commercial Broadband Strategy includes the following recommendations for improving service availability in San Leandro: 1. Formalize and promote existing broadband-friendly practices. Generally, the City does a good job supporting and encouraging infrastructure projects that expand broadband networks. Mostly, however, this practice is based on existing planning and permitting procedures and not on policies explicitly related to broadband. The report makes several suggestions for codifying existing practice to make sure that broadband projects continue to be handled smoothly. City of San Leandro Page 2 Printed on 9/11/2012 File Number: 12-363 2. Make broadband a standard planning review criterion. Just as City staff will routinely review electrical or plumbing systems in a construction project, an opportunity exists to review provisions for broadband facilities. Although broadband need not be a mandatory requirement for construction, the City can encourage it. Buildings constructed with conduit for broadband (in most cases, fiber optics) will be much easier to serve in the future. 3. Adopt a comprehensive open trench policy. The most significant costs related to broadband infrastructure expansions are typically tied to street work. The report recommends that 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, but this policy would ensure that all parties are notified and have the opportunity when street work is occurring. 4. Pursue opportunities for lateral connections to major fiber routes. Ultimately, the best way to improve service ability is to construct more miles of broadband networks. Although it can be costly, the City should continually seek out opportunities to construct lateral connections to expand the existing networks. 5. Support Lit San Leandro on a nondiscriminatory basis. Lit San Leandro’s dark fiber network, including fiber strands owned by the City, is a resource few cities can offer and is a competitive advantage in attracting expanding and relocating businesses. 6. Develop WiFi hotspots in Downtown San Leandro. WiFi as a community amenity can encourage foot traffic and attract connected business people and consumers. 7. Support business connections to broadband service. To incentivize the construction of physical connections between businesses and existing networks, the report recommends that the City add a broadband connection component to the City’s existing business incentive programs. A draft of the Commercial Broadband Strategy was presented at a City Council Work Session on April 9, 2012. After that meeting, the draft report and presentation were posted on the City’s website and distributed to interested stakeholders for review and feedback. Several modifications were made to the final version of the report, however, the core recommendations are consistent with what was presented at the Work Session. Revisions to the final report include expanded discussion of plans to expand and market Lit San Leandro and some clarification in regard to wireless facilities. These revisions reflect feedback received after the Work Session. In many ways, implementation of the recommendations is already underway. The City is actively working to market and support the Lit San Leandro project (recommendation #5) and plans are in place to implement a broadband connection business incentive program (#7). Other recommendations, such as downtown WiFi and an open trench policy, have received strong support and will be considered in more detail in the coming months. City of San Leandro Page 3 Printed on 9/11/2012 File Number: 12-363 Previous Actions The City Council approved a Consultant Services Agreement with Tellus Venture Associates on June 6, 2011 for development of a Commercial Broadband Strategy Summary of Public Outreach Efforts Data used to develop the Commercial Broadband Strategy was obtained through a public outreach process that included two public workshops, meetings with individual businesses and property owners, and an online survey. The draft Commercial Broadband Strategy was presented at a City Council Work Session on April 9, 2012. After that meeting, the draft report and presentation were posted on the City’s website and distributed to interested stakeholders for review and feedback. Fiscal Impacts Adoption of the Commercial Broadband Strategy does involve the appropriation or expenditure of any funds. Costs to implement the recommendations are detailed in the Strategy along with a summary of available non-local funding sources. PREPARED BY: Jeff Kay, Administrative Analyst, City Manager’s Office Office City of San Leandro Page 4 Printed on 9/11/2012 City of San Leandro Meeting Date: September 17, 2012 Resolution -Council File Number: 12-362 Agenda Section: ACTION ITEMS Agenda Number: TO: City Council FROM: Chris Zapata City Manager BY: Lianne Marshall Assistant City Manager FINANCE REVIEW: Not Applicable TITLE: ADOPT: Resolution Adopting the San Leandro Commercial Broadband Strategy (adopts the Broadband Strategy which will guide ongoing efforts to expand broadband access for businesses in San Leandro) WHEREAS, Broadband Internet access for businesses has been recognized as a basic infrastructure for economic development, supporting the operations of existing San Leandro businesses and enhancing the City’s ability to attract and develop new businesses; and WHEREAS, an assessment of current broadband availability in San Leandro identified numerous opportunities for improvement, particularly in commercial and industrial areas; and WHEREAS, the San Leandro Commercial Broadband Strategy was developed in conjunction with an extensive community outreach process, including two public workshops, an online survey, meetings with service providers, meetings with individual businesses and property owners, and presentation of a draft report at a City Council Work Session on April 9, 2012; and WHEREAS, the Commercial Broadband Strategy details several strategies that the City can employ to improve broadband availability for businesses in San Leandro; and WHEREAS, the ongoing deployment of the Lit San Leandro fiber optic loop presents an opportunity for San Leandro to be a national leader in providing world class broadband service; and WHEREAS, a final draft of the Commercial Broadband Strategy, a copy of which is attached, has been presented to this City Council. NOW, THEREFORE, the City Council of the City of San Leandro does RESOLVE as follows: City of San Leandro Page 1 Printed on 9/11/2012 File Number: 12-362 The City Council does hereby adopt the San Leandro Commercial Broadband Strategy. City of San Leandro Page 2 Printed on 9/11/2012 San Leandro Commercial Broadband Strategy Final 16 July 2012 Tellus Venture Associates ® Stephen A. Blum Tellus Venture Associates www.tellusventure.com Table of Contents 1. Executive summary 1 1.1. Introduction 1 1.2. Commercial access assessment 1 1.3. City policy review 2 1.4. Recommendations 2 2. Commercial Broadband Assessment 5 2.1. Introduction 5 2.2. Summary of research 6 2.3. Workshops 6 2.4. Online survey 7 2.5. Service provider follow up and gap identification 8 2.6. Specific priority areas 11 Downtown San Leandro 11 Davis/Doolittle/Adams area 12 880 Industrial Corridor 14 Shoreline 14 3. City Policy Review 16 3.1. Placement of broadband facilities in public right of ways 16 3.2. Utility line undergrounding 17 3.3. Wireless towers and antennas 17 3.4. Location of broadband-intensive businesses 18 3.5. City use of broadband services 19 4. Broadband Policy Benchmarking 20 4.1. Policy environment 20 4.2. Benchmark analysis 21 4.3. Existing San Leandro practice meets or exceeds best practices 21 4.4. Recommendation 1: formalize broadband-friendly policies 23 5. Broadband as a Development Policy Component 24 5.1. Broadband infrastructure standards 24 5.2. Recommendation 2: make broadband a standard review criterion 26 6. Comprehensive Open Trench Policy 28 6.1. Background 28 6.2. Current status 28 6.3. Recommendation 3: adopt a comprehensive open trench policy 29 7. Lateral and System Expansion Opportunities 30 7.1. Need for new connections 30 7.2. Recommendation 4: encourage expansion via cooperative efforts 30 Promoting the opportunity 30 San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page i Fiber-to-the-basement 31 Interim wireless solutions 32 8. Lit San Leandro 33 8.1. Recommendation 5: support Lit San Leandro on a non-discriminatory basis 34 9. Downtown San Leandro Hotspots 36 9.1. Recommendation 6: limited, free WiFi 36 10. City Business Assistance Grants 37 10.1. Recommendation 7: support business connections to broadband services 37 11. Potential Funding Sources 38 12. Appendix A – Research 40 12.1. Online survey questions 40 12.2. Business workshop responses and notes 41 13. Appendix B – City Policy Documents 45 14. Appendix C – Maps 51 15. Appendix D – Broadband Policy Benchmarks 61 16. Appendix E – Reference Material 63 17. Appendix F – Glossary 65 San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page ii 1. Executive summary 1.1. Introduction Access to high speed, reliable links to the Internet and internal networks is a basic, 21st Century utility, as vital to economic development as electricity or water. The essential nature of broadband1 service has been recognized at many levels in California: in an executive order from the Governor’s office, in bills passed by the Legislature, in reports prepared by a statewide task force and various state agencies and in economic development studies prepared for jurisdictions throughout the state. Studies by the U.S. government and by international organizations uniformly tell the same story about broadband: “it is a key driver of economic growth and national competitiveness, and it can contribute to social and cultural development.”2 1.2. Commercial access assessment In 2011, the City of San Leandro’s Office of Business Development worked with local businesses, property owners, entrepreneurs and service providers to assess the current state of broadband access for business and industrial users. This research included two business workshops, an online survey, map analysis and one-on-one meetings. As a result, four specific areas within the City were identified as priorities for broadband improvements due to current substandard service levels or future plans for significant development that could benefit from higher quality service: • Downtown San Leandro • The Davis/Doolittle/Adams Tract area • The 880 Industrial Corridor • The Shoreline In some cases, acceptable commercial broadband access was completely lacking. In other cases, it was unreliable and not of sufficient speed or reliability to support business or industrial users. The City has already applied for federal funding to address some of these problem areas. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 1 1 For definitions of technical terms, please see the glossary in Appendix F. 2 Building broadband: Strategies and policies for the developing world, World Bank, January 20 10.The importance placed on fast, reliable commercial grade broadband service by businesses and developers supports the conclusion that extending fiber optic facilities to these areas will create economic development opportunities and maximize the positive impacts of broadband on commercial real estate values. 1.3. City policy review City staff provided information regarding policies and practices that impact broadband service development. These policies included conditional use and encroachment permits, wireless tower policy, utility undergrounding, use of City-owned facilities and treatment of high technology businesses. San Leandro’s policies were then compared to benchmarks developed by other local governments and at a state level in California. In general, broadband-related policies and practices in the City of San Leandro meet or exceed benchmarks established elsewhere. On the whole, San Leandro is conducive to high technology businesses and uses, and works to minimize obstacles to broadband development. In some cases, no formal policy exists but routine practice is consistent with explicit policy benchmarks established elsewhere in California. In others, general practice is broadband-friendly, but not broadband-specific. 1.4. Recommendations The commercial access assessment and the review of City policy led to seven policy and infrastructure initiative recommendations. Table 1.1 Summary of Recommendations Recommendation Description Cost Funding Options 1. Formalize and promote existing broadband-friendly practices. Capitalize on the City of San Leandro’s competitive advantages regarding development to attract new business and investment Staff time City 2. Make broadband a standard planning review criterion. Encourage the growth and universal availability of commercial-grade service by treating broadband similarly to other utilities. Staff time City San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 2 Table 1.1 Summary of Recommendations Recommendation Description Cost Funding Options 3. Adopt a comprehensive open trench policy. Reduce costs and traffic disruption and encourage forward-thinking broadband construction through cost sharing and joint planning of street-cut projects. Staff time 4. Pursue opportunities for lateral connections to major fiber routes Extend the benefits of San Leandro’s long haul and local dark fiber networks to under and unserved businesses by assisting construction of links to commercial areas and properties. Depends on scope, thousands to millions of dollars. Federal EDA, CASF, cost sharing 5. Support Lit San Leandro on a nondiscriminatory basis Lit San Leandro’s dark fiber network, including fiber strands owned by the City, is a resource few cities can offer and is a competitive advantage in attracting expanding and relocating businesses. Staff time 6. Develop WiFi hotspots in Downtown San Leandro Encourage foot traffic and attract connected business people and consumers by providing WiFi Internet access as a free amenity. Staff time, under $50K to start, operating costs likely less than $10K per year. City, PBID, grants, partners 7. Support business connections to broadband service. Add a broadband connection component to the City’s existing business incentive programs. $5K to $25K per business. City, grants The City of San Leandro can promote deployment of commercial and industrial grade broadband infrastructure and encourage faster adoption of those services by continuing to pursue the general policies and specific initiatives that it has already successfully implemented. As detailed below, the City already meets or exceeds California benchmarks in several essential categories. Improved broadband access, including new fiber optic networks similar to Lit San Leandro, has helped cities attract relocating businesses and encouraged upgrades by existing ones. Jobs and businesses have been created in depressed areas as a result of municipal broadband policy and development initiatives. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 3 By itself, better broadband access will not transform San Leandro’s economy. But it is a necessary precondition and gaining it will open the door to new and expanding companies with more and better paying jobs. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 4 2. Commercial Broadband Assessment 2.1. Introduction The purpose of this report is to assess commercial broadband3 availability in San Leandro and current City of San Leandro policies and initiatives related to broadband, and then make general and specific recommendations for addressing any gaps identified and to guide future development of this utility. Access to broadband service – fast, reliable, high quality links to the Internet and internal networks – is a basic competitive requirement in the 21st Century economy. Broadband availability is one of the first criteria assessed when businesses consider relocating or expanding. It is considered to be a non-negotiable resource that is necessary for businesses to operate and to keep pace with global competitors. Appendix E contains a list of documents, including municipal case studies, that discuss broadband as an essential utility and consider its vital role in economic development. As an example, the City of Santa Cruz has seen a significant increase in the number of people and businesses added to its downtown economy since an independently-owned dark fiber link was built to Silicon Valley, which provided competition to and a wider range of choices than the services offered by AT&T and Comcast. Several co-working centers have sprung up to support entrepreneurs, freelancers, telecommuters and others. City government has proactively supported construction of fiber connections, worked to put more municipal operations online and included broadband connectivity as a master plan element. Taken together, these policies produced a broadband-ready attitude in the business community and amongst local agencies. In some respects, San Leandro’s current initiatives and policies are even more advanced. By extending some and focusing others, the City can gain the same kind of benefit, perhaps to an even greater degree. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 5 3 “Broadband” refers generally to any telecommunications service capable of supporting digital data transmission at high speeds. These services can include and/or support Internet, television, telephone, private data networks and various specialized uses. Broadband service can be delivered in a variety of ways, including telephone lines (e.g. DSL), coaxial cable (e.g. cable modem), fiber optic cable (e.g. Lit San Leandro), wireless cellular/mobile service (e.g. cell phones, tablets, wireless modems), WiFi, pointto-point and point-to-multipoint wireless service (e.g. TelePacific, Etheric) and hybrid networks (XO Communications). Although different organizations use different criteria, the California Public Utilities Commission considers 6 Mbps download and 1.5 Mbps upload speed to be a standard for adequate broadband service availability. Unless otherwise stated, this report uses the CPUC definition. 2.2. Summary of research The assessment of commercial broadband availability, speed and service levels began with: • Two broadband workshops for local businesses. • Meetings with individual businesses and property owners. • An online survey of the San Leandro business community. • Meetings with Internet service providers. • Meetings with the San Leandro and San Lorenzo School Districts. • Follow up contact to obtain additional information. • Evaluation of state data and initiatives. 2.3. Workshops The first workshop was a lunch meeting held on July 19, 2011 at the City’s Senior Community Center and the second was a morning session on July 26, 2011 at the Davis Street Transfer Station Education Center, which is located in an area previously identified as lacking commercial broadband availability. In total, 23 people from 16 local businesses, non-profits and the public attended, including representatives from AT&T and Comcast. The comments, ideas and concerns expressed in the two workshops were generally consistent, focusing on specific areas which lacked access to commercial or industrial grade4 broadband service, ideas for improving broadband service and support for the Lit San Leandro project, albeit with some questions regarding benefits and risks for the City. Concerns expressed included reservations about how broadband would be regulated and where it would installed but, equally, participants were worried about the economic impact on the City if broadband projects weren’t pursued. Participants discussed various issues they were having with broadband availability, and identified specific locations where commercial grade broadband service was not available. Problem areas mentioned included Downtown San Leandro and industrial areas along I-880 and to the west. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 6 4 As used in this report, “commercial grade” service is defined as being similar to residential service in that the provider takes effectively all responsibility for for installing, maintaining and supporting the service. Speeds are similar (6 to 100 Mbps), but service levels, reliability, consistency and pricing are higher. “Industrial grade” service refers to service where the customer plays a much greater role in provisioning and supporting the service, including buying different elements from different vendors and managing installation and support. Speeds would be higher – perhaps as high as a Gigabit per second or more – and quality of service levels could be as high as Tier 1. Comcast’s Business Class service or AT&T’s business DSL service are examples of commercial grade service. A DS-3 or dark fiber strands are examples of industrial grade service. 2.4. Online survey The City of San Leandro posted an online survey (see Appendix A) regarding commercial broadband availability and satisfaction, and encouraged local businesses to participate. Businesses were informed of the survey via press releases and email notifications by the City and the San Leandro Chamber of Commerce. A total of 44 responses were received, most (40) in July of 2011, with the remainder posted between August 2011 and January 2012. Table 2.1 Online survey responses Question 5 point scale response How satisfied are you with the speed of your current broadband service? 2.8 How satisfied are you with the reliability of your current service? 3.3 How satisfied are you with the value you are currently receiving? 2.7 How satisfied are you with the range of broadband options available at your location? 2.2 How important is broadband availability to your business operations? 4.6 1 = not satisfied at all, 5 = extremely satisfied Table 2.2 Online survey responses What improvements would you most most like to see in broadband availability for your business? Improved Reliability 19% Improved Speed 38% Lower Cost 24% More choices of service providers 19% Respondents were not generally pleased with the range of broadband options available to them at their business locations, with better speed being the most desired improvement. Availability of broadband was generally seen as “absolutely crucial” to businesses. Although respondents were not required to provide their address, most did and this information was used to help identify priority areas. The majority of San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 7 respondents who were not pleased with the broadband options available to their businesses were in the downtown areas, with a smaller number reporting problems in the City’s industrial areas. 2.5. Service provider follow up and gap identification In general, the two primary Internet service providers in San Leandro – AT&T and Comcast – have focused their investments on improving television and consumer grade Internet service in residential areas. AT&T’s recent service upgrades are focused in residential zones, not commercial or industrial districts, and the information provided by Comcast regarding its high speed broadband services, and confirmed by local businesses, is consistent with this pattern as well. Specifically, the workshops and online survey produced a consistent picture of broadband service gaps in the commercial and industrial areas of San Leandro (see Appendix A for details). This information was provided to the two major broadband companies serving the City – Comcast and AT&T – for their evaluation and response. Comcast responded with a breakdown of broadband service availability in some of the City’s commercial districts and AT&T displayed a map of its Project Lightspeed service nodes. This information was consistent with data collected