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Rewriting the Rules, Santa Cruz County Encourages Competition

South of California’s Bay Area with its buzzing tech startups and expensive housing, Santa Cruz County has been overlooked by the big Internet Service Providers (ISPs). The city of Santa Cruz had less than stellar connectivity, and the rest of Santa Cruz County was no better. That’s when county leaders decided to rewrite the rules.

Throughout 2014 and early 2015, the Board of Supervisors for Santa Cruz County developed a broadband master plan, created a “dig once” policy, and streamlined the regulatory permit process. Cutting down red tape at the county level encouraged both small and large ISPs to reconsider investing in Santa Cruz.

Streamlining To Increase Competition

Although large ISPs have enough money and personnel to focus exclusively on permit acquisition, smaller ISPs must find a way to contend with the permitting process with limited resources. Santa Cruz County's new policies and processes enable all ISPs interested in Santa Cruz County to compete on better terms. Under these new rules, ISPs have a more equal playing field.

The policies reduce the amount of time spent on the regulatory process for ISPs building fiber networks. A master lease agreement simplifies the procedure to use county assets for networks. Modified ordinances enable ISPs to easily install or upgrade infrastructure in the county’s right-of-way. (Right-of-way is public land managed for the public good, especially boulevards and medians along roadways.)

We spoke with Santa Cruz County Board Supervisor Zach Friend about the impact of these policies and the Santa Cruz County master broadband plan. He credited the new policies for encouraging providers to offer better services. (Cruzio is building a fiber network in the city of Santa Cruz, and Comcast decided to increase speeds without raising prices in Santa Cruz county.) Supervisor Friend also emphasized that the public discussions brought attention to the need for improved Internet access in the community.

A Model For Other Counties

In late 2014, the California Broadband Council highlighted the work of Santa Cruz County and the draft policies that Supervisor Friend presented. Now most jurisdictions within Santa Cruz County have adopted similar policies, and Supervisor Friend has presented drafts of the policies to several other areas throughout California. 

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Dig Once: The "dig once" policy lays out how all construction or repaving of a county right-of-way will include measures for installing cable or conduit. Any project that involves digging in or adjacent to the County of right-of-way has to include installation of cable or conduit. The policy puts the Director of Public Works in charge of administering the program, exempting projects, inspecting projects, and issuing citations. Violating the rule is considered a public nuisance.

Master Lease Agreement: The master lease agreement ensures that all providers get similar, fair treatment in getting access to County right-of-way, conduit, and other facilities. The lease is designed for a five-year term, with an option to extend another five years. Each year the payment increases by about four percent. Knowing how the County has treated other providers creates consistency, and a draft lease agreement cuts down on paperwork for the County. 

Necessary Infrastructure

Santa Cruz County wants to treat telecommunication infrastructure like a utility: less permits, less paperwork, and more access. Read the “dig once” draft policy and the draft conduit specifications, master lease agreement, and telecommunications ordinance as presented to the California Broadband Council.

Santa Clarita Leases Dark Fiber For Better Connectivity And Revenue

Santa Clarita, a community of 220,000 in Los Angeles County, California, recently signed a dark fiber lease agreement with Southern Californian telecommunications provider Wilcon. The city hopes to improve high-speed Internet access for local businesses; this ten-year contract allows Wilcon to provide services via publicly owned fiber-optic cable originally buried for traffic controls. 

The New Agreement

From the City Council’s June 28th agenda, the new agreement includes the following:

  • Initial anticipated annual revenues of $72,256 based on $840 per year per fiber mile.
  • Annual fiber lease rate adjustment based on [Consumer Price Index] (CPI) for the Los Angeles area.
  • Initial anticipated lease of 86.02 total fiber miles.
  • City maintains control and ownership of all fiber at all times.
  • Lease of dark fiber is not exclusive to Wilcon.
  • City may opt out of the contract without cause after ten (10) years.

Santa Clarita and Wilcon can extend their agreement on identical terms for three consecutive periods of five years following the original ten-year term, leading to a potential contract length of twenty-five years. 

Using Existing Assets To Promote Business Connectivity

The third largest city in Los Angeles County is home to the Six Flags Magic Mountain amusement park, a handful of aerospace engineering firms, several medical equipment manufacturers, and a strong business community. Yet, local industry groups like Santa Clarita Business Journal (SCBJ) identified unaffordable Internet access as a major barrier for local businesses, as highlighted by its May 2015 publication

The City Council recently published its 2020 Goals, which include two Internet-specific objectives:

  • Work with the Economic Development Council (EDC) to provide recommendations and strategies on how to ensure high-speed Internet access to business parks.
  • Establish a revenue-generating program that utilizes existing infrastructure to leverage resources and potentially promote greater bandwidth access to the community. 

The lease agreement with Wilcon will move Santa Clarita toward achieving those goals. Although the lease will connect several business parks and individual businesses already located on the existing network, it will open the door for Wilcon or another Internet service provider (ISP) to expand the network to serve even more Santa Clarita businesses. 

Crosstown Traffic Lends a Hand

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As communities like Winston-Salem, North Carolina, and Kane County, Illinois, have shown, extra fiber cables already laid for traffic controls can act as the foundation for better local Internet access. We’ve also written about the city of Aurora, Illinois, received a $12 million grant from the Federal Highway Administration to construct 60 traffic signals. The city has now extended its network to schools, businesses, hospitals, and other community anchor institutions. 

Santa Clarita initially laid 96 strands of fiber to manage traffic signals and cameras starting in 2002, planning ahead for future growth. The City shared the initial expense of the $3.4 million infrastructure project with the Metro Transit Authority. Since then, Santa Clarita has incrementally expanded the network to over 70 miles, using state and federal grants to fund the expansions. Traffic operations take up less than one-third of the network's full capacity. For about four years now, the city has eliminated the cost of leased lines by using its fiber-optic network to interconnect its municipal facilities.

Freedom Dark Fiber Networks was the first private dark fiber provider to work with the city. Freedom used the network to provide services to a number of entities, including the Los Angeles Department of Water and Power, Southern California Edison, AT&T, and Verizon. The company leased small portions of city-owned fiber on a short-term basis to fill in gaps on its network. In 2013, Wilcon acquired Freedom Dark Fiber Networks. At that point, both the city and Wilcon decided it was time to renegotiate.

Dark Fiber = Bright Future

Even with up to eight strands dedicated to Wilcon’s network, about 50 percent of the city’s fiber remains unlit. Now it finds itself with a new revenue stream estimated at more than $700,000 over the course of the next ten years, thanks to its contract with Wilcon. In addition to reducing the cost of maintaining connectivity for its municipal facilities, Santa Clarita is providing an environment where businesses can get the fast, affordable, reliable, connectivity they need.

Grover Beach Conduit: California's New "Silicon Dunes"

The city of Grover Beach, California, recently finalized a 10-year agreement with Digital West, Inc., to bring gigabit speed fiber to local businesses. The coastal town in San Luis Obispo (SLO) County wants to attract tech companies like those making waves in Silicon Valley and the "Silicon Beach" in Los Angeles. 

Terms of Agreement

The agreement specifies that Grover Beach will maintain ownership of the conduit system and lease Digital West conduit access at an annual rate of 5.1 percent of total fiber revenue. Digital West will build, own, and maintain the fiber-optic network, several lines of which will be leased to the city for public administrative use. Upon approval from both parties, the 10-year agreement can be renewed in 5-year increments.

A May 2016 Grover City staff report provided an optimistic forecast from Digital West:

The forecasted revenue amount speculated by Digital West Network, Inc. for the City is estimated to grow from a first year projection of $4,437 to $112,302 in year 10, for a total over the 10 years of $602,285. This amount is much higher than the originally predicted 10 year projection of $32,038 per year represented by Digital West Network, Inc. in 2014. The increase projections are due to the fact that they plan to add the residential market to our options which is projected to fall under the lease agreement. This brings greater benefit to the community, as well as more revenue commission to the City. 

We outlined the network’s projected costs in a story last year.

Fiber Surfin’ USA

The Central Californian coastal city hopes its unique location near a trans-Pacific cable landing station will attract scores of investment and cause the moniker “Silicon Dunes” to stick. Pacific Crossing’s undersea cable is part of a four point fiber ring connecting the Japanese cities of Shima and Ajigaura with Harbour Pointe, Washington, and Grover Beach.

Initial plans call for connecting the city’s 727 businesses. With little more than 13,000 residents and a city area of only 2.3 square miles, locals are optimistic that the rest of the community will be hooked up in the near future. Grover Beach Mayor John Shoals stated in the press release:

“The agreement is a major milestone in moving the City’s Broadband Network Initiative forward and achieving the Council’s goal of strengthening the City’s economic base by attracting new business... We look forward to continuing our partnership with Digital West to bring this important project to the community.”

With the agreement finalized, city officials will soon seek bids to lay remaining conduit. Construction may be underway as early as the end of the summer. 

Soon, Faster Internet Service For Santa Cruz's Small Businesses

As the city of Santa Cruz and local Internet service provider Cruzio bring their negotiations to a close, the parties have been working diligently to dot all the i's and cross all the t's. Announced in June 2015, this public private partnership intends to build a multi-million dollar fiber network throughout the city.

According to Cruzio's most recent blog update:

[W]e’ve been locked away in our Santa Cruz Fiber Project underground bunker with our partners at the City, engaging in high-level cogitation, extreme fine-tuning and the general hashing out of every little detail of the project and the agreement.

Local news station KION covered the benefits of faster Internet service, especially for the small business community in Santa Cruz. The news station also includes a clip from a recent “City Hall to You” community meeting where people learned more about the network.

A Small Business Town

“It's absolutely critical. Without high-speed Internet activity here, we would be dead in the water,”

Explained Susan Pappas, the owner of True Olive Connection, a local olive oil store. She described how her business would fall apart without high-speed Internet access. Everything from printers to inventory would stop working.

At the “City Hall to You” meeting, Santa Cruz Economic Development Manager J. Guevara laid out the facts, emphasizing how Internet access is not just for tech startups. High-speed Internet access makes small businesses function and helps job-seekers find employment. Guevara told KION,

“Over 82 percent of the businesses in the city of Santa Cruz are 10 or fewer employees. This is a small business town and Internet is the infrastructure that makes it all possible.”

Infrastructure from Santa Cruz and Cruzio

The $45 million dollar infrastructure project is a public-private partnership where the city will own the network and Cruzio will operate it. For the first few years, Cruzio will be the sole service provider. After that initial period, the network will become open access and other providers will be invited to offer competitive services. In December 2015, the city council unanimously voted to move ahead with the project.

Check out these Power Point slides from Guevara’s presentation in a May webinar presented by the Coalition for Local Internet Choice.

South Bay Workforce Investment Board Accepting Master Plan RFP Submissions

The South Bay Workforce Investment Board (SBWIB) is now accepting submissions from firms interested in developing a Fiber Optic Master Plan for the organization. Interested organizations need to act quickly, however, as the submission deadline is tomorrow, June 1st, 2016, 5:00 p.m. (PST).

For details on the project budget, the scope of the work, timeline, and other important information, check out the Request for Proposals (RFP) from the SBWIB.

You can also contact Chris Cagle, Regional Affairs Manager, via email at ccagle(at)sbwib.org with questions.

The SBWIB is a non-profit organization working to provide employment and training programs through its four business and career centers. The organization serves the California communities of Carson, El Segundo, Gardena, Hawthorne, Hermosa Beach, Inglewood, Lawndale, Manhattan Beach,  Redondo Beach, Lomita and Torrance.

Our "Open Access Networks" Resources Page Now Available

When communities decide to proceed with publicly owned infrastructure, they often aim for open access models. Open access allows more than one service provider to offer services via the same infrastructure. The desire is to increase competition, which will lower prices, improve services, and encourage innovation.

It seems straight forward, but open access can be more complex than one might expect. In addition to varying models, there are special challenges and financing considerations that communities need to consider.

In order to centralize our information on open access, we’ve created the new Open Access Networks resource page. We’ve gathered together some of our best reference material, including links to previous MuniNetworks.org stories, articles from other resources, relevant Community Broadband Bits podcast episodes, case studies, helpful illustrations, and more.

We cover: 

  • Open Access Arrangements
  • Financing Open Access Networks
  • Challenges for Open Access Networks
  • U.S. Open Access Networks
  • Planned Open Access Networks

Check it out and share the link. Bookmark it!

Palo Alto, CA, and Pikeville, KY, Release RFIs

Two new Requests for Information (RFI) were recently released in Palo Alto, California, and Pikeville, Kentucky. 

Pikeville, Kentucky

Pikeville is open to both public ownership and Gigabit service via privately owned infrastructure. This community of approximately 7,000 residents wants Fiber-to-the-Premises (FTTP) for businesses, community anchor institutions, municipal facilities, and residents. The regional Appalachian Mountain community, with many jobs lost due to the shrinking coal industry, is turning to connectivity as a way to spur economic development.

Pikeville’s RFI describes how service from existing providers is expensive and "sporadic." This RFI calls for a partner that will help the community develop an open access, affordable, financially sustainable network. In drafting the RFI, Pikeville’s officials made sure to note that low-income residents will not be left behind; bringing this asset to disadvantaged residents is a priority.

The city is the county seat of Pike County and home to a number of colleges as well as several large healthcare facilities. City, county, and federal government facilities are also located in Pikeville and need better connectivity. In 2015, the city obtained a $5 million grant for technology-based training and degree programs for residents in the area. A $1 million grant supplied funding for a Broadband Technology Center in Pikeville. Now the city needs fast, affordable, reliable Internet network infrastructure to complement the Center and to move the local workforce toward more information based industries.

Important Dates:

  • Letter of Intent Due: May 23, 2016
  • Questions Due: May 25, 2016
  • Final RFI Submissions Due: June 3, 2016

The city’s website has more information and details.

Palo Alto, California

Palo Alto is a Silicon Valley city of 67,000 residents; daytime workers coming into the community swell the population to approximately 125,000. Incumbents include Comcast and AT&T who have intimated they might be interested in bringing fiber to the city, but have yet to act. Community leaders are exploring all options with this RFI.

The community has a network of dark fiber serving commercial customers and the public school system. In fact, Palo Alto has experience with providing utility services, as it currently brings municipal electric, gas, water, and wastewater services to the community.

The RFI calls for partners, private or non-profit, to develop a Gigabit per second (Gbps), open access network in the community for every household, business, and institution. Palo Alto is willing to consider either publicly owned or privately owned infrastructure.

As the RFI notes, Google Fiber is still considering Palo Alto as another location for its fiber network. City officials want respondents to consider the implications, should Google Fiber decide to build and operate within the community and to address the possibility in their RFIs.

Important Dates:

  • Letter of Intent Due: May 27, 2016
  • Questions Due: June 3, 2016
  • Final RFI Submissions Due: June 24, 2016

Get more details on the city website.

Digital Northwest: What's Working?

Next Century Cities recently hosted "Digital Northwest," a summit for regional broadband leaders. Leaders from member cities all over the country gathered together to learn from one another and discuss digital inclusion, models for success, partnerships, and much more. 

Chris led a panel of mayors and city council leaders from cities with well-known municipal networks in a discussion of their networks and how their communities have benefitted. 

The panel featured: 

  • Mayor Jill Boudreau, Mt. Vernon, WA
  • Mayor Wade Troxell, Fort Collins, CO
  • City Council President Jeremy Pietzold, , Sandy OR
  • Councilmember David Terrazas, Santa Cruz, CA


Change.org Petition: CA Lawmakers, Vote for Greater Local Authority, Don't Abandon Copper Yet

The California State Assembly will soon vote on three bills that have significant implications for rural Internet access initiatives in the Golden State. An online Change.org petition is asking you to urge lawmakers to give local communities the authority to determine their own Internet access needs.

On April 20th, 2016, the State Assembly will vote on a bill to provide state funding for community-based efforts aimed at improving broadband access in rural areas. And during the current session this week, California Represenatives will vote on two additional bills, drafted by lobbying groups working for the telecom industry, which seek to give incumbent providers even greater power to control the quality and price of Internet access options that are available in these rural communities.

From the petition:

Bill AB1758 was drafted by rural broadband activists and sponsored by assemblymen Mark Stone, Eduardo Garcia, Marc Levine, and Mike McGuire. It extends state funding and grant programs to local agencies and consortiums to plan and build community based internet solutions in communities throughout the state that have been ignored by big telcom. The bill requires a super majority to move from committee to vote. Committee members need to hear from people around the state to move this bill forward. If it dies in committee, funding will cease, and rural communities around the state will be at the mercy of AT&T, Comcast, Time Warner, etc. AB1758 comes to discussion on April 20th, 2016.

The petition describes two other bills up for consideration, AB2130 and AB2395, which will greatly influence the use of California Advanced Services Funds, allowing large corporate cable and telecom incumbents access to those funds. Local communities will have very little opportunities to obtain those same grants under the proposed changes.

One of these bills will allow AT&T to retire copper lines; rural areas are not ready for such an abrupt change. We've covered how AT&T and other big incumbents have pressed state legislatures for the ability to abandon copper in favor for cheaper technology.

Check out the online petition for more detail.

Three Communities Make Big Moves Toward Municipal Fiber Networks

A March article in Broadband Properties Magazine spotlights three communities around the country that are making progress toward creating municipal fiber networks. The City of Centennial, Colorado announced that they have completed a feasibility study and a Master Plan detailing the city’s plans to develop a network. Additionally, the Cities of Indianola, Iowa and Rancho Cucamonga, California announced that they have begun studying the feasibility of starting their own municipal fiber networks. 

Indianola, Iowa

Indianola, Iowa is a city of about 15,000 just 20 miles south of Des Moines. As we wrote a few years ago, Indianola currently owns an open access Fiber-to-the Premise (FTTP) network which provides Gigabit speed Internet access, plus TV, and phone service to most businesses and select residents in Indianola. The study they recently commissioned will explore the feasibility of using this existing network for constructing a FTTP network to the entire community. 

Indianola built its existing fiber network, which they launched in 2012, out of frustration as CenturyLink refused requests from the community to upgrade their DSL network and the incumbent Mediacom began overcharging for their Internet services. Today, Indianola Municipal Utilities is the infrastructure owner and a wholesale provider of this fiber network while Mahaska Communication Group, an Iowa-based Internet Service Provider (ISP), performs the operations and maintenance services for the network. 

Rancho Cucamonga, California

The City of Rancho Cucamonga, California recently asked a private consulting firm to perform a study to determine the feasibility of creating a fiber optic network. City officials see a municipal fiber network in this city of just over 170,000 as a potential driver of economic development. The city is located about 45 miles east of Los Angeles.

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Like Indianola, Rancho Cucamonga owns existing fiber-optic infrastructure. They city owns 25 miles of 96 strand fiber and 5 additional miles of vacant fiber conduit connecting to numerous municipal facilities. The city plans to first create a network for municipal buildings and businesses. Later, Rancho Cucamonga will integrate the network into the city’s traffic system and expand the network to serve residents.

Centennial, Colorado

The City of Centennial, Colorado released the results of a feasibility study and Master Plan in March. The study and plan detail a strategy to expand an existing 48-mile dark fiber infrastructure to create an open access network in this Denver suburb of 100,000.

The Master Plan calls for the city to spend $5.7 million to expand its existing fiber infrastructure and create a municipal fiber network that will provide vastly improved Internet access to all of the schools, libraries, local government and public safety organizations in Centennial. The city is also designing the network to run close to major business and residential areas and will have enough capacity to serve businesses and households. The city would serve as a wholesale provider and lease the network infrastructure on a non-exclusive basis to private ISPs that would provide retail services to subscribers. 

Centennial uses its 48-mile fiber infrastructure to facilitate operations of the city’s traffic signal equipment and to connect its government facilities to privately owned Internet networks. In 2013, Centennial residents voted overwhelmingly in support of a ballot question to reclaim local telecommunications authority that had been hijacked in 2005 when the state legislature passed SB 152. The voters’ 3:1 approval of that referendum opened the door to other possibilities for their publicly owned fiber.

Centennial’s Mayor Pro Tem C.J. Whelan, the chair of Centennial’s Fiber Steering Committee, described city’s vision for the network:

“This plan provides the roadmap for a future fiber-optic network infrastructure that will become a key resource of the city and ultimately enable Centennial to pursue improvements to public services and enhance economic development.”

City Councilwoman Stephanie Piko added.

“The city will now be in a position to partner with anchor agencies, such as school districts and public-safety agencies to offer better alternatives for their technology needs and improve their services to our residents.”