[Davisgig] Dueling OpEd's in the Enterprise
mattwill at pacbell.net
Sun Jun 2 13:41:39 PDT 2019
I agree with Rob, Council member Carson's strategically timed OpEd is a clear indication that his position against Municipal Fiber has hardened. He does seem determined to shut Municipal Fiber down.
Where Rob and I differ is in the statement "has likely convinced the rest of the CC to do the same." I believe the opposite is true. If Dan has truly convinced his fellow CC members there would be no necessity for the overt public lobbying of today's OpEd. If there ever was atime to reach out to the five Council members (including Dan), now is the time., The e-mail address to reach all five at once is citycouncilmembers at cityofdavis.org
I realize not everyone will agree, but reasonable people can agree to disagree reasonably.
On Sunday, June 2, 2019, 10:03:56 AM PDT, Robert Nickerson <rob at omsoft.com> wrote:
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 has 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:
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.
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:
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.
On Saturday, June 1, 2019, 8:35:07 AM PDT, Lorenzo Kristov <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> 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>> wrote:
>>> 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.
>>> 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>> 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?
>>>>> -------- Forwarded Message --------
>>>>> Subject: [Davisgig] PLEASE READ Staff Report
>>>>> Date: Thu, 30 May 2019 22:10:13 -0700
>>>>> From: rob <rob at omsoft.com>
>>>>> To: 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.
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>>> Robert Nickerson
>>> UCD Class of 1996
>>> CEO, Om Networks
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