[Davisgig] Dueling OpEd's in the Enterprise

Robert Nickerson rob at omsoft.com
Sun Jun 2 10:03:48 PDT 2019


Hi

Drama!

The first time I met DC he was negative on municipal broadband, and has 
refused to meet with DavisGIG. Other residents have talked to him on the 
subject and  they report him as very pessimistic and negative. He ha as 
hardened it seems. There is language used here that I heard about a 
month ago from a report on one of those meetings, and so he seems 
determined to shut it down, and has likely convinced the rest of the CC 
to do the same.

To get him so agitated to put out such a strong hit piece means 
something. The city staff report too is trying to shut this off hard at 
the next meeting.

Methinks they doth protest too much.  Whether is covering for the 
Comcast franchise debacle, or huge corporations are their friends, or a 
personality conflict I cant say.

Here is a link to the OpEd you all helped create that went live this 
morning:

https://www.davisenterprise.com/forum/opinion-columns/commentary-kicking-the-tires-on-broadband/

At this point, I'm carrying on with my final letters to CC today, will 
speak at the meeting, but we will have to see where it goes from there. 
It would be prudent to ask CC not to make any major decisions about this 
at that meeting, but to hopefully give it more time and consideration.

Any thoughts?

Take Care

RAN




---


  Commentary: Municipal broadband network would be a huge risk


          By Dan Carson
          Special to The Enterprise

This Tuesday, the Broadband Advisory Task Force will step forward with 
its final comments on whether the city of Davis should build and operate 
a municipal fiber network that could bring higher broadband speeds and 
new services and technology to our community.

BATF’s community broadband advocates wrapped up three years of hard work 
as citizen volunteers with a letter endorsing such a venture in concept. 
The panel did not offer a specific plan to accomplish their dream, 
calling instead for more financial and technical studies of building 
such a system. All Davis citizens should read and consider the 
conclusions of BATF and its response by city staff. I welcome their 
advice and thank them for their public service.

But don’t just read their latest letter — read all of the information 
the task force produced. Under the auspices of BATF, the city hired one 
of the top teams of telecom experts in the country, CCG Consulting and 
Finley Engineering, to assess the feasibility of a municipal fiber 
network in Davis and whether local residents would sign up for it. They 
determined that a municipal broadband project would be costly and risky 
and that community interest in committing to pay for such a service is 
weak. Specifically, they found that:

* Building such a network in Davis would be costly. The entire system 
would have to be buried underground. Our high population density means 
conduit and fiber must be laid down both sides of residential streets, 
instead of the customary one side. High labor costs would boost 
construction and operating costs.

* The total cost of construction would exceed $100 million, comparable 
to the cost of a new water system or sewage treatment plant. Bond 
issuance fees, working capital, capitalized interest and a debt service 
reserve would bump up borrowing costs for construction to as much as 
$140 million.

* Similar ventures have failed in Monticello, Minn., Crawfordsville, 
Ind., and Alameda.

* Because investors view broadband revenue bonds as pretty risky, the 
city might have to pursue a general obligation bond (requiring 
two-thirds voter approval) and make our General Fund a backstop for 
paying off bonds if the broadband venture failed. That could put 
pressure on the funding source used to pay for police, fire, parks, and 
roads.

* Even under fairly optimistic assumptions about the number of customers 
who would sign up for municipal fiber, the consultants said, “the 
financial projections for building fiber within the city were not as 
good as the city had hoped for.” Operating losses would occur on Day 1 
and range from $34 million to $81 million over 25 years. Competitive 
pressures mean that the system would be unable to charge higher rates to 
customers to match Davis’ higher costs.

* Because customer fees would likely fall short of supporting a 
municipal fiber system, the city would have to seek voter approval for a 
tax hike to provide between $33 million and $60 million in taxpayer 
subsidies. A sales tax increase of a half-cent or more is considered 
most likely. Locking up tax money for a municipal fiber system would 
require two-thirds voter approval. The consultants said winning over 
Davis voters, who recently rejected a parcel tax hike for road repairs, 
“would undoubtedly require a major effort to educate the public and get 
community buy-in.”

* Comcast, our biggest local broadband provider, has a track record of 
cutting rates and improving its bundled services to crowd out 
competitors. A Davis municipal broadband network might need even more 
public taxpayer dollars to compete.

* Davis has good broadband options today, even without the development 
of a municipal fiber system. Comcast is now advertising 1 Gbps and 2 
Gbps internet download speeds in their “Gigabit” and “Gigabit Pro” 
packages. Only 16 percent of Davis residents are unhappy with their 
internet services.

* A college town could be tough for Davis broadband, with students 
likely to be fickle customers. Moreover, large student apartment 
complexes in Davis have locked in long-term deals with various private 
providers for internet and cable services, and Comcast and AT&T are 
moving aggressively to lure more such customers.

* Only 21 percent of Davis residents said they would definitely buy 
their service from a city system. “This is significantly lower than what 
we have seen in other markets,” the consultants stated, and “indicates a 
market that is not massively unhappy with the incumbent providers and 
not wildly enthusiastic about fiber. It’s a market where a new provider 
would need to prove themselves and expend significant marketing effort 
to win over customers.”

Recent developments make a large public investment in broadband seem 
more risky than ever in a highly competitive, and increasingly 
disruptive, broadband marketplace.

The FCC last year opened the gates for cellular wireless 5G service by 
imposing strict time limits for cities to allow the installation of 5G 
equipment on utility and light poles. Two companies have already filed 
permits to establish 5G networks in the city of Davis – permits it has 
no legal choice but to approve. And, the master of all business 
disrupters, Amazon, has begun launching thousands of low-level 
satellites into orbit capable of providing broadband worldwide. 
Competitors like SpaceX**are hot on their heels. Broadband technology is 
morphing rapidly and the market is fragmenting.

Despite the troubling findings in the CCG and Finley Engineering 
reports, task force members remain steadfast in their support of the 
concept of a municipal fiber system. They are asking the city to spend 
more money on studying such ideas as building a municipal fiber network 
in stages or levying assessments instead of taxes to pay for it.

I look forward to hearing more about these ideas, but worry about a 
bullet train-style boondoggle in which construction starts only to find 
out that the rest of the money needed to finish a network isn’t coming. 
Davis could end up building a “network to nowhere.” Imposing citywide 
assessments or taxes could force Davis consumers who want to keep their 
Comcast or AT&T bundles to pay a second time for a municipal broadband 
system they don’t want. That doesn’t seem fair.

Nobody disputes the benefits of improved high-speed broadband for 
economic development, education, technological innovation and addressing 
the digital divide. The question is, how do we get these benefits 
without saddling our taxpayers with huge financial risks? We already 
face an $8 million a year funding gap for basic city services over the 
next 20 years.

This Tuesday, I would also like to get the community’s feedback on a 
different approach I call, “If you can’t beat ’em, join ’em.” Instead of 
further studies of municipal broadband, should we explore how we can 
forge innovative partnerships with the private sector and UC Davis to 
foster high-speed broadband competition that will improve service and 
reduce monthly bills for Davis businesses and residents?



On Saturday, June 1, 2019, 10:42:45 AM PDT, Robert Nickerson 
<rob at omsoft.com> wrote:


Hi

I'd get your coments in early. They dont want to be reading this stuff 
at the last minute.

As this could be our last hurrah, Im sending 3 emails, past present future.

Attached is the first one, I hope to have the others out tonight.


Is this too strong or  offensive a thing to say something like:

"City Staff has been wrong all along. Harriet was wrong about Comcast. 
Astound on consent with no BATF input was wrong. This staff report 
analysis of municipal fiber is also wrong...etc"


On 6/1/2019 10:26 AM, Matthews Williams wrote:
To facilitate this process I have attached three Word documents

        (1) the original BATF memo to Council from 2018,
        (2) the side-by-side discussion document that has what Chris
        proposed as the text of the second BATF memo to Council on the
        left, and (most of) the suggested revisions on the right,.
        (3) the various suggestions provided by BATF members in the
        April BATF members

Being able to copy and paste from those documents should help avoid 
unnecessary retyping between now and Tuesday.

Matt


On Saturday, June 1, 2019, 8:35:07 AM PDT, Lorenzo Kristov 
<lkristov at cal.net> <mailto:lkristov at cal.net> wrote:


Good suggestion Jim. I will try to talk with Lori about that today.


 > On May 31, 2019, at 10:13 PM, Jim Frame <jhframe at dcn.org 
<mailto:jhframe at dcn.org>> wrote:
 >
 > Mike Webb made it clear to me that city staff isn't going to solicit 
a contract from Lori Raineri unless the CC directs them to do so.  My 
suggestion would be for Lori to draft a contract, package it with a CV 
and a cover letter, and submit it to Mike with cc's to the 
councilmembers.  Although it's too late to get that onto the Tuesday 
agenda, it would introduce the city players to the possibility.  Even a 
letter of intent from Lori (along with a CV; that's important because 
Mike told me doesn't know anything about her) would be better than nothing.
 >
 > On 5/31/2019 1:05 PM, Lorenzo Kristov wrote:
 >> The BATF did recommend working with a muni finance expert on funding 
options, that was one of the two next steps recommended, it just didn’t 
name Lori.
 >>> On May 31, 2019, at 12:34 PM, Robert Nickerson <rob at omsoft.com 
<mailto:rob at omsoft.com> <mailto:rob at omsoft.com <mailto:rob at omsoft.com>>> 
wrote:
 >>>
 >>> Hi
 >>>
 >>> Since it didn't come from the BATF the city wont consider it. If we 
could get actual BATF members to sign off on it they might be more 
receptive.
 >>>
 >>> As a BATF member how do you feel about Staff seemingly going 
totally against the BATF recommendation as expressed in  its letter? 
Anything we 'd need to do should be sent out by tomorrow am at the latest.
 >>>
 >>> Thanks
 >>>
 >>> RAN
 >>>
 >>> On 5/31/2019 12:00 PM, Lorenzo Kristov wrote:
 >>>> Just thinking out loud, but in the interest of time I’ll send 
these initial thoughts for y’all to react to.
 >>>>
 >>>> Staff is recommending the entire municipal effort be put to rest, 
and the big fear they’re playing on is cost. So my thought would be to 
bring CC a next step recommendation that costs almost nothing and could 
make the project seem more feasible from a cost perspective. That is, 
recommend that city execute a pro bono contract with Lori Raineri to 
explore and lay out potential financing approaches, working with a city 
staff person and a small group of citizen volunteers from among this 
email list, perhaps others. But small (3 people or so) so it can start 
moving quickly and minimize scheduling problems, and report back to CC 
in a couple months. I’d emphasize including someone with financing 
expertise (e.g., Matt, David) and focus narrowly on the funding aspects 
of the project rather than the technical.
 >>>>
 >>>> On a parallel track, it might make sense for a few more 
technically oriented folks (e.g., Rob, David, Jeff) to sketch out what 
would be needed from a consultant to address the second BATF recommended 
next step, the technical. I wouldn’t expect city staff to be working on 
this yet, since Diane did say they’re planning to come back with the 
Wave contract. But if CC approves step 1 to begin working formally with 
Lori, then we could have step 2 ready in a month or so, to lay out a 
rough SOW for a consultant on the technical, cost, etc. elements of the 
phased implementation. A main argument for Wave is that “there is no 
other proposal on the table.”
 >>>>
 >>>> Other thoughts?
 >>>>
 >>>> — Lorenzo
 >>>>
 >>>>
 >>>>
 >>>>> On May 31, 2019, at 9:41 AM, Robert Nickerson <rob at omsoft.com 
<mailto:rob at omsoft.com> <mailto:rob at omsoft.com <mailto:rob at omsoft.com>>> 
wrote:
 >>>>>
 >>>>> Hi Folks
 >>>>>
 >>>>> Yowch folks, take a look at Diane Parro's staff report. It reads 
like it was written from the POV of a large incumbent carrier, lol.
 >>>>>
 >>>>> I suppose anything we send in support needs to counter Diane's 
points one at a time. There is absolutely no positive evidence about 
this presented in the staff report.
 >>>>>
 >>>>> Any ideas on how to go from here?
 >>>>>
 >>>>> Thanks
 >>>>>
 >>>>> RAN
 >>>>>
 >>>>>
 >>>>>
 >>>>>
 >>>>> -------- Forwarded Message --------
 >>>>> Subject:     [Davisgig] PLEASE READ Staff Report
 >>>>> Date:     Thu, 30 May 2019 22:10:13 -0700
 >>>>> From:     rob <rob at omsoft.com <mailto:rob at omsoft.com>>
 >>>>> To: davisgig at list.omsoft.com <mailto:davisgig at list.omsoft.com>
 >>>>>
 >>>>>
 >>>>>
 >>>>> HI All
 >>>>>
 >>>>> The agenda is out and the staff report item on community 
broadband is out. I don't think we are going to have any luck as Diane 
Parro is saying this should be shut down. None of the points in this 
memo were covered at any BATF meetings, the product of which was the 
attached letter.
 >>>>>
 >>>>> Thanks
 >>>>> RAN
 >>>>>
 >>>>>
 >>>>>
 >>>>>
 >>>>>
 >>>>> --
 >>>>> This message has been scanned for viruses and
 >>>>> dangerous content by *MailScanner* 
<http://www.mailscanner.info/>, and is
 >>>>> believed to be clean.
 >>>>> <08-Broadband-Task-Force-Final-Report.pdf><Attached Message Part.txt>
 >>>>
 >>>>
 >>>> --
 >>>> This message has been scanned for viruses and
 >>>> dangerous content by *MailScanner* <http://www.mailscanner.info/>, 
and is
 >>>> believed to be clean.
 >>> --
 >>> Robert Nickerson
 >>> UCD Class of 1996
 >>> CEO, Om Networks
 >>>
 >>> cell: 5308483865
 >>> www.omsoft.com <http://www.omsoft.com>
 >>>
 >>>
 >>> --
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and is
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 >
 > --
 > ---------------------------------------------------------------------
 > Jim Frame jhframe at dcn.org <mailto:jhframe at dcn.org>               
530.756.8584
 > Frame Surveying & Mapping        609 A Street        Davis, CA 95616
 > -----------------------< Davis Community Network >-------------------
 >
 > --
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-- 
This message has been scanned for viruses and
dangerous content by MailScanner, and is

believed to be clean.

-- 
Robert Nickerson
UCD Class of 1996
CEO, Om Networks

cell: 5308483865
www.omsoft.com  <http://www.omsoft.com>

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