2A Work Session 2012 0409 Attachment

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San Leandro Commercial Broadband Strategy City Council Workshop Draft 9 April 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 15 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 Fiber-to-the-basement 31 Interim wireless solutions 31 8. Lit San Leandro 33 8.1. Recommendation 5: support Lit San Leandro on a non-discriminatory basis 34 9. Downtown San Leandro Hotspots 35 9.1. Recommendation 6: limited, free WiFi 35 10. City Business Assistance Grants 36 10.1.Recommendation 7: support business connections to broadband services 36 11. Potential Funding Sources 37 12. Appendix A – Research 39 12.1.Online survey questions 39 12.2.Business workshop responses and notes 40 13. Appendix B – City Policy Documents 44 14. Appendix C – Maps 50 15. Appendix D – Broadband Policy Benchmarks 58 16. Appendix E – Reference Material 60 17. Appendix F – Glossary 62 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. 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. 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 San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 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 2010. 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. 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 – City Council Workshop Draft 9 April 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 – City Council Workshop Draft 9 April 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 – City Council Workshop Draft 9 April 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 – City Council Workshop Draft 9 April 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 – City Council Workshop Draft 9 April 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 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 required to provide their address, most did and this information was used to help identify priority areas. The majority of respondents San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 7 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 and mapped by the City. Project Lightspeed is AT&T’s ongoing program to upgrade residential broadband service to speeds and service levels that can support video services similar to those provided by cable television companies. Although it is not designed with businesses in mind, it can support commercial grade service where it’s available and, in general, upgrades made for the purposes of the project result in better overall infrastructure. For the purposes of analysis, the Project Lightspeed nodes were mapped by the City using the assumption that each node had a uniform service radius of 1,500 feet. While this approach is too rough to predict service availability at a particular location – the actual coverage pattern of any given node is subject to many variables – it paints a useful picture of which areas of the City have been targeted for upgrades by AT&T and which have not. When Comcast was provided with a sample list of problematic addresses, its representatives initially responded quickly with an estimate that approximately a quarter might have had problems in the recent past but should be able to order service now or in the near future. About half were addresses that Comcast would consider deploying service to if the business or property owners were willing to pay some or all of the cost of constructing the necessary facilities – the company’s existing budget for these types San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 8 of upgrades is relatively small and is spread over the entire region. The remaining quarter or so were unlikely to be served by Comcast in the foreseeable future. A Comcast representative made it clear that the company is not interested in paying for extensions of service to vacant commercial properties. Meetings were also held with representatives from the San Leandro and San Lorenzo school districts. School sites located within the City of San Leandro are primarily located in or near residential areas, and do not generally have problems obtaining adequate broadband connectivity. Much of the cost of educational broadband connections is paid for by federal and state grants and connectivity is provided primarily by AT&T under multi-year contracts. Internet bandwidth is provided by the Corporation for Educational Network Initiatives in California (CENIC), a non-profit corporation that provides educational Internet access throughout the state. Long haul and metropolitan fiber optic cable routes were identified identified from information previously obtained by the City, released by long haul carriers and provided by local business. These fiber lines are vital for providing connectivity in and out of the City as a whole, but have limited usefulness for delivering broadband service to individual locations. Finally, information regarding broadband service availability collected by the California Public Utilities Commission (CPUC) was obtained. This data was provided to the CPUC by AT&T, Comcast and competitive carriers. The information gathered from San Leandro businesses and residents, provided by carriers and collected by the CPUC was combined into a multi-layered map by City GIS staff. The pattern of this data is consistent with the information obtained locally. A full set of maps is contained in Appendix C. These maps contain additional detail regarding broadband service availability from Comcast and AT&T, availability analysis by CPUC staff, Project Lightspeed and Lit San Leandro information and locations of problem areas. There are a number of smaller service providers that offer commercial broadband service to businesses in the East Bay Area, including San Leandro. However, these companies do not generally own their own fiber or wire line facilities in the City and depend on either wireless connections or lines leased from AT&T to deliver service to end users. San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 9 Figure 2.1 Map showing broadband availability data collected by CPUC. A full size map can be found in Appendix C. CPUC’s service availability data indicates that at least some land line-based broadband facilities in the commercial and industrial areas of San Leandro are substandard. As local businesses and smaller carriers reported and, in some cases, AT&T confirmed, leasable lines capable of supporting high speed, reliable Internet service are not available in several commercial and industrial areas of the City. Wireless broadband service is theoretically available throughout the City from cellular carriers, from companies (such as TelePacific and Etheric) that offer general service over a wide area from scattered towers and from providers that offer customized, pointto-point connections. However, wireless broadband facilities operate within cost, coverage, reliability, speed and quality of service (QoS) parameters that are not suitable for all commercial uses or acceptable to all users. For example, a major software company will have bandwidth and QoS requirements that exceed wireless standards. Medical organizations have reliability needs that wireless service providers can rarely, if ever, meet. These types of users will occasionally employ wireless links for back up, mobility or other auxiliary purposes, but will not depend on it for primary service. F0 0.25 0.5 1 Miles © City of San Leandro. All rights reserved. Geographic Information Systems. March 2012 ATT greater than 6 mbps (downloadspeed) Comcast greater than 6 mbps (downloadspeed) ATT and Comcast greater than 6 mbps (downloadspeed) US Dept of Commerce, National Telecommunications and Information Administration, State Broadband Initiative (CSV format June 30, 2011) CITY OF SAN LEANDRO AT&T Lightspeed Locations San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 10 Broadband service problems have been identified in key commercial and industrial areas of San Leandro. These gaps can only be filled by upgrading existing land lines or deploying new ones. 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. 2.6. Specific priority areas Map-based analysis points to four specific areas in San Leandro where a higher level of commercial broadband availability would enable businesses and property owners to meet the expectations of high technology enterprises. The information used included detailed service reports provided by carriers to the CPUC, data collected in the course of this study and anecdotal reports. Figure 2.2 Map showing broadband development priority areas identified by research. A full size map can be found in Appendix C. Downtown San Leandro Downtown San Leandro is, and will remain, the focal point for office and professional uses in the City. Creekside Plaza is currently the City’s only class-A office development and is home to over 1,300 high-quality jobs. OSIsoft and Wells Fargo also have sizable facilities in Downtown San Leandro. Additionally, the City’s 2007 Transit Oriented Development Strategy laid the groundwork and provided environmental clearance for San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 11 over 700,000 square feet of new office development downtown. Commercial-grade broadband availability will be essential if the City is to be successful in attracting and retaining office tenants and quality jobs in growth industries. Unlike the Davis/Doolittle/Adams area, AT&T has installed some Project Lightspeed nodes in Downtown San Leandro. However, the pattern of placement is more consistent with a coverage plan intended to extend consumer services (including video) into residential areas than it is with directly supporting commercial grade service. Businesses and property owners in Downtown San Leandro report problems obtaining reliable, commercial grade DSL or cable modem service, stating that it is completely unavailable or subject to lengthy – sometimes several months long – installation delays. The same is true of industrial grade service. These problems are anecdotally said to occur throughout the Downtown San Leandro area, but there is a cluster of reported broadband availability problems in the area bounded by Parrott Street/Dolores Avenue, Santa Rosa Street, Hayes Street and Estudillo Avenue. Broadband availability data provided by the CPUC is consistent with these reports. This lack of broadband availability is seen as a disadvantage for the area. Improving commercial broadband availability will benefit smaller offices as well as larger, planned developments such as OSI Soft’s office expansion and Town Hall Square. Lack of broadband service can even inhibit foot traffic as some shoppers, visitors and business people prefer to go where wireless Internet service, for example from WiFi hotspots, is more widely available. WiFi Internet access is an amenity that can attract visitors and add value for the local business community. Davis/Doolittle/Adams area The industrial zoned area surrounding Davis Street, Doolittle Drive and Adams Avenue is particularly problematic. Downtown E 14THST DAVIS ST ALVARADO ST CLARKEST WILLIAMSST SANLEANDRO BLVD PARROTTST CARPENTIER ST CALLANAVE CASTRO ST WASHINGTON AVE W W JUANA AVE PACIFIC AVE ESTUDILLO AVE JOAQUIN AVE ORCHARDAVE JUANAAVE HARLANST MARTINEZST CHUMALIA ST TOLERAVE DOLORES AVE HYDE ST MAUDAVE WAYNEAVE HAYSST WESTUDILLO AVE MAGNOLIALN THORNTON ST W JOAQUINAVE ARROYOAVE ELSIE AVE HARRISONST LILLEAVE HUFFAVE CALIFORNIAAVE DABNERST PERSHING DR TIVOLI ST LOLAST ANTONIOST JEFFERSON ST HAYS ST THORNTON ST THORNTONST WESTUDILLOAVE F0 0.0625 0.125 0.25 Miles © City of San Leandro. All rights reserved. Geographic Information Systems. March 2012 CITY OF SAN LEANDRO Priority Area -Downtown San Leandro Commercial Broadband Strategy – City Council Workshop Draft 9 April 2012 Tellus Venture Associates Page 12 Wireless carriers claim to serve this area but, as noted above, wireless service is not always actually available in claimed service areas and does not support the full range of service standards applicable to industrial and, frequently, commercial grade service. Comcast claims to provide cable modem service to one street in the area. Otherwise, the area depends solely on AT&T's legacy copper wires5 for broadband service. Business owners in this area and smaller service providers report that these lines cannot support even the minimal, decades-old T-1 service standard. For example, staff of a chemical company located in this area reports that they have had trouble obtaining reliable commercial grade broadband service. Originally, they used a microwave-based service that delivered adequate performance, but that service is no longer available. Currently, they are paying for a T-1 class connection, but it is unreliable and only performs at about two-thirds of its rated speed. The company considers this situation to be unacceptable