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street cuts are made and generally requires open access to conduit when space is available. In Santa Cruz, California the city council has enacted an open data policy and embarked on a project to provide a greater degree of online access to public documents and to San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 20 6 The State of Connectivity: Building Innovation through Broadband, final report of the California Broadband Task Force, January 2008. make it easier for the public to conduct business with the City online. Other California cities, such as Victorville, Corona and Grover Beach have developed plans and policies to encourage broadband deployment and use. These plans address the particular needs of each community, and concern issues such as residential and commercial service gaps, future institutional network needs and construction standards, and the impact of large scale greenfield developments. 4.2. Benchmark analysis Existing broadband-related policy in San Leandro was evaluated on the basis of how well it supports development, construction and access to commercial and industrialgrade service. Four policy goals were benchmarked: • Facilitation of infrastructure development. • Support for smart infrastructure and connected communities. • Protection for environmental quality and visual aesthetics. • Efficiency of government operations and delivery of services. Specific benchmarks for those goals, as adopted by the State of California, the California Emerging Technology Fund (CETF) and other California local governments, were used to evaluate San Leandro’s current policies. A complete list of goals and benchmarks is in Appendix D. The benchmarks used in this study are, to a large degree, derived from work done by CETF. It was established by the CPUC with the mission to “close the digital divide by accelerating deployment and adoption of broadband to unserved and underserved communities and populations.” Among other initiatives, CETF has published a broadband policy guide7 for local and regional governments. 4.3. Existing San Leandro practice meets or exceeds best practices In many respects, San Leandro’s broadband related policy is consistent with or better than the standards adopted at a state level and elsewhere in California. Particularly, San Leandro has a straightforward process for reviewing proposed projects, conditional use permits and encroachments. For the most part, high technology projects, including broadband infrastructure, tend to be evaluated within traditional planning and operational frameworks on a common sense basis. Staff generally consider high technology uses as having a positive effect on the community while giving due consideration to any specific negative aspects on a timely basis. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 21 7 Getting Connected for Economic Prosperity and Quality of Life, California Emerging Technology Fund, October 2010. Table 4.1 San Leandro policy meets or exceeds best practices Meets or exceeds best practices San Leandro Status Strategy Delineates the process for ensuring fairness and competition, including transparency, public notice and timetables and deadlines for timely review of any required local permits. Yes. Broadband related projects handled routinely, standard 3 to 5 month process if a conditional use permit is required. City’s work performed on a cost recovery basis. Consistent with current needs, review when commercial broadband build out is complete. Accommodates high technology, broadband intensive businesses in zoning ordinances and procedures. Yes. High tech/broadband not specifically named, but considered routine and covered by existing use definitions. Incorporates routine placement of broadband conduit into utility undergrounding programs. Yes. No change needed. Sets forth the process and procedures for preventing and/or mitigating environmental impacts and protecting and/or preserving visual integrity integrity of jurisdiction. Yes. Promulgates procedures to streamline the approval of easement encroachment permits consistent with principles of fairness and competition for all providers. Yes. Transportation and Engineering Department reviews in a timely manner. Makes the use of public assets available to all providers on a competitive basis, commensurate with adopted policies regarding public benefits. Yes. Establishes an ongoing role for the City to play in identifying broadband needs and working proactively with businesses and service providers to meet those needs. City staff actively engaged, but no formal policy. Articulate the interest of the jurisdiction in monitoring the reliability and quality of broadband connectivity in the local jurisdiction and ensuring appropriate speed availability. Community Development Department plays active and ongoing role. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 22 One example is the approach, described above, that the City of San Leandro took to a request by AT&T to place more than 100 utility boxes on public right of ways for its Project Lightspeed system upgrade. Although the project was out of the ordinary, standard practices were adapted to the task. The result was a well defined process that minimized uncertainty and efficiently provided answers to the applicant while safeguarding City interests such as public safety and aesthetics. One area where the City’s planning process specifically addresses broadband-related issues involves the review and approval of wireless towers, antennas and related facilities. The City makes a clear distinction between smaller broadband links installed by end users and larger carrier sites that serve the general public, and treats both types of facilities appropriately. The City’s policy tends to encourage colocation by multiple carriers and does not impose any significant obstacles to expanding or upgrading wireless broadband availability, while still safeguarding legitimate City concerns such as public safety and aesthetics. Many of the policy areas where the City meets or exceeds statewide benchmarks involve construction, maintenance and upgrading of broadband facilities, providing the most basic, and consequently most important, support for expansion of commercial broadband access. 4.4. Recommendation 1: formalize broadband-friendly policies The City of San Leandro’s existing policy and practices regarding development of broadband facilities, monitoring broadband availability and issues, and working with telecommunications providers are competitive advantages. Formalizing these practices and promoting them to business relocation and expansion prospects, real estate developers and telecommunications companies will allow the City to maximize the opportunities that those advantages create. The process followed by the City in approving AT&T’s Project Lightspeed upgrade should be considered to be a model for future broadband projects and, along with its current wireless facilities policy and expeditious review process, communicated to service providers as a way of capitalizing on these broadband friendly competitive advantages. The same should be done with the City’s practice of making public facilities available to service providers on a non-discriminatory basis,with its ongoing proactive broadband development efforts within the local business community, with prospective new businesses and with current and prospective telecommunications service providers. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 23 5. Broadband as a Development Policy Component 5.1. Broadband infrastructure standards The City of San Leandro does not include broadband facilities, such as empty conduit or fiber optic lines, in its review of private development plans or permit applications, for either new construction or major remodeling projects. However, broadband facilities, such as fiber optic lines, are routinely integrated into plans for City projects. Table 5.1 Broadband infrastructure standards Broadband facility, construction and development standards San Leandro Status Strategy Sets forth the process and procedures for incorporating broadband into all public infrastructure projects. No current policy. Develop a simple and consistent set of broadband facilities and construction standards. Requires projects to provide broadband connectivity and include the infrastructure components necessary to support broadband. No current policy. Encourages broadband providers to size underground and overhead facilities to accommodate future expansion, changes in technology, and where possible the facilities 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 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. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 24 On the other hand, the City does have standard practices that encourage improvement of broadband facilities, but not a formal, stated policy. As a result, the City may not always fully realize the opportunities and benefits its broadband friendly policy brings. Table 6.1 identifies broadband-development and planning policy issues that have been addressed in other California communities and statewide. These policy issues affect both public projects and private development. The most aggressive policies regarding broadband deployment in private developments are usually found in communities where extensive greenfield residential construction is planned. For example, requirements regarding installation of fiber optic trunk lines can be appropriate when a large development involving significant new street construction is concerned, but might not make sense when reviewing a remodel proposal for a single parcel. Since private construction in San Leandro is infill and redevelopment oriented, it is not appropriate to to benchmark broadband policy against the comprehensive approaches adopted by rapidly expanding communities. On the other hand, many specific policies addressing major private sector redevelopment, remodel and infill projects, and telecommunications facilities are applicable. Policies involving publicly funded projects are more universally applicable in nature. San Leandro’s current policies and practices are either consistent with or neutral towards these benchmarks, and do not create an obstacle to deployment or adoption of commercial broadband facilities and service. Formally addressing some or all of these issues as a matter of policy will allow the City to take long range broadband development goals and cost-benefit calculations into consideration when reviewing or implementing projects. The construction of telecommunications facilities is capital intensive and decisions are based on both short term and long term return on investment. 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 16 July 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 due to planning based on the City’s telecommunications needs, which in many ways parallel private development needs. Going forward, the more consistently public infrastructure projects take public and private 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 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. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 26 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. 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 16 July 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 16 July 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 16 July 2012 Tellus Venture 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. A proposal to fund construction of lateral connections to the Shoreline, the 880 Indutrial Corridor and the Davis/Doolittle/Adams Tract area has been submitted by the City to the federal Economic Development Administration. The application is currently being evaluated by EDA staff. Other 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 San Leandro Commercial Broadband Strategy 16 July 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. 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. 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. San Leandro Commercial Broadband Strategy 16 July 2012 Tellus Venture Associates Page 31 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. 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 16 July 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, with two already signing up for service. It will also provide backbone connectivity to commercial-grade 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 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 16 July 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. One way for the City to ensure that Lit San Leandro is successful is to cooperate with Dr. Kennedy and other stakeholders (such as the Chamber of Commerce) to target key industry groups that are likely to benefit from this high level of commercial and industrial broadband availability. Although San Leandro businesses are generally aware of Lit San Leandro and