Santa Cruz, California, and its 62,000 people with poor Internet connectivity near Silicon Valley, could be one of the larger municipalities to develop a citywide fiber network. The Santa Cruz Fiber project, which was announced on June 24, 2015, would be an open-access public private partnership (PPP) with the city constructing the network and a private company, Cruzio, serving as network operator. The plans are preliminary, but the announcement highlighted the project’s emphasis on local ownership:
“A locally-owned, next-generation broadband network operated openly and independently and built for Santa Cruz, [the Santa Cruz Fiber Project] is uniquely tailored to fit the diverse needs of the Santa Cruz community.”
Cruzio is one of the oldest and largest Internet service providers in California. Completely locally-owned and staffed, Cruzio is rooted in Santa Cruz County. The company’s name perfectly describes it. Cruz- from Santa Cruz and -io from I/O (Input/Output, communication between an information processing system and the rest of the world). Our Christopher Mitchell is gushing over the name and says: “I seriously love it.”
Fiber is not a new commodity in Santa Cruz. Since 2011, Cruzio has installed fiber in several of its projects, and the fiber has wooed some 30 entrepreneurs and solo practitioners to stay in the downtown area at the Cruzio Works, a co-working space. Last November, Central Coast Broadband Consortium commissioned a study of the fiber networks in Santa Cruz (paid for with a grant from the California Public Utilities commission). They discovered more fiber under the city of Santa Cruz than in any other city in the counties of Santa Cruz, Monterey, and San Benito. Unfortunately much of it belonged to incumbent providers like Comcast and AT&T who are loath to lease dark fiber or make affordable fiber connections available to local businesses and residents.
Then, just this past June, Comcast announced the planned rollout of Gigabit Pro near Silicon Valley, but not Santa Cruz. Even if Comcast changes its mind, the city has already found a local private partner in Cruzio. This local public-private partnership will almost certainly result in far more benefits to the community than Comcast’s Gigabit Pro. This network will be under local control and responsive to community needs.
The intention of the partnership is to pursue an open access model. At first, the network will be solely a public-private partnership where the City of Santa Cruz will own the network and Cruzio will construct and operate it. During the initial stages, Cruzio will provide the expertise in network management that the city of Santa Cruz does not necessarily have. After a number of years, the network will open up to more service providers in order to promote competition, which is how Westminster has arranged its partnership with Ting in Maryland.
The goal of the FTTH project proposal according to Cruzio is to connect 6,000 households and businesses by the end of the third year. Currently, the construction costs are estimated at $52 million. The City staff will present a report to city council by the end of this September on the potential Fiber Project’s feasibility. Early project estimates suggest the network would be mostly completed by late 2018. If the take-rate is feasible, the city intends to back the network with municipal revenue bonds. Revenue bonds are repaid through the sale of networking services, not through taxes. This ensures that those who use the network will pay for the network. Cruzio is now surveying residents to determine interest and creating an engineering report.