Cautious Council Asks Staff to Return with Additional Information on Broadband

The Davis City Council is moving forward with interest on the municipal broadband proposal, asking staff to come back with additional information regarding the financial and technical options.

A number of public commenters pushed back on concerns raised by Dan Carson in op-eds in the Enterprise and Vanguard over the weekend.  Councilmember Carson, while not disputing the “benefits of improved high-speed broadband for economic development, education, technological innovation, and addressing the digital divide,” nevertheless questioned how to get those benefits “without saddling our taxpayers with huge financial risks.”

Other members of council had questions and concerns as well.  As Councilmember Will Arnold put it, “We can’t approve a municipal fiber network today, but we can kill it.  I’m not ready to kill it.”

So instead he asked staff to bring back, at a future meeting, a plan for further study of financial aspects as well a technical study that is needed to figure out how to make it work.

There was considerable pushback by the attending public against the caution of Councilmember Carson.

As one member of the public put it, the question is whether we should pursue the municipally owned broadband network, “we have our bat force [staff’s derivative commission, the Broadband Advisory Task Force, or BATF] saying yes we should pursue this, and staff is saying no.”  She said, “I was astonished to see Dan Carson’s editorial in the Davis Enterprise.  It would seem like he’s already decided…  in advance of today’s staff presentation and without hearing comment from the community or his own fellow councilmembers.  That he’s decided that Davis should not control its own broadband network.”

Rob Nickerson from Omsoft said “our initial proposition remains viable, community investment with municipal ownership.”  He said that they never wanted such an ISP to directly challenge the largest businesses in the market, but rather, “We do need to and have advocated for a change in the dynamics of the internet marketplace as it is today.”

He called for “internet access as a utility with a neutral, trusted party holding the infrastructure which is this municipality rather than a monopolist holding the infrastructure which we all need to use.”  He said this effort “would provide benefits across multiple sectors of our community.”

Dan Carson, while serving as a bit of a lightning rod, had his defenders among his colleagues.

Councilmember Lucas Frerichs responded, “I think it’s unfortunate that he was ridiculed for putting his perspective out there,” noting that a critical perspective was not only needed but helpful, even as he stated, “I don’t one hundred percent agree with it.”

Will Arnold stated, “I appreciated my colleague Dan Carson’s op-ed…  He is a cautious (person), very knowledgeable about finances…  There wasn’t really any point that he wrote that I disagreed with.  There are a lot of risks out there.  Whether they’re insurmountable, we’ll find out.”

He said, “Any suggestion that he should have… kept his mouth shut… I don’t want that – I don’t want that to be the takeaway for any of my colleagues.”

Dan Carson on Tuesday added to his comments from the weekend by noting that the more questions he has asked, the more confirmed he is that “this is going to be a dead end.”

He noted not only is it “too costly” but also that it has “weak support.”

The consultant’s survey showed, “Only 21 percent of those surveyed said they would definitely buy into a municipal system…  They’ve polled in a lot of places and they’ve never seen such weak support for this kind of a system.”

He said, “It suggests that even those numbers that (are) in that feasibility report are too optimistic.  It’s a more grim situation than that.”

Nevertheless, he said stated, “I’m not going to oppose my colleagues asking for more information.”

Mayor Brett Lee was also skeptical.  He told his colleagues, “I’m a little concerned about a public utility” where the city provides the network and infrastructure for access where “all residents are charged for that service,” regardless of whether they might want it.

He said he was curious at full buildout what the fee structure would look like, but noted on the flip side of Dan Carson’s point, a full 15 percent polled said they were not interested in broadband service.

“I think we need to be very careful when we talk about this digital divide, that there are people who choose not to spend their money on access,” he said.

“I’m supportive of doing further investigations,” he said.  “The key to me is unrecovered costs.”

Lucas Frerichs added, “I care about the costs…  I think it’s a major consideration for the possibility for us moving forward on something like this.”  He added, “I appreciate that there’s a variety of other factors that go into this.”

He noted that there are a number of reasons why California lags behind other states in municipal networks.  For him there are still some major questions out there, major pitfalls and “there are more answers that are needed.”

Gloria Partida noted, “The one thing that’s thrown out a lot is the digital divide as an argument for doing this – we’re doing this for the betterment of people, the people who don’t have access.  I’m a little uncomfortable with that because if we really wanted to do something about the digital divide, we would set up hotspots where people could access the internet for free.”

She noted that there are a lot of families for whom, if you gave them broadband, would not have the computer hardware to be able to access it.

Even Will Arnold, who seemed solidly behind the idea, acknowledged that, while he likes “the idea of having a municipal network,” at the same time, ‘There are legitimate questions that we don’t know.”  His answer: “Let’s find out.”

Moving forward, the council supported a motion for staff to bring back the proposal after further discussion.

“Direct staff to come back with a plan to provide council information on what a phased approach would entail technically and financially and potential cost mechanisms.”

Council was unanimously in support of this direction.

—David M. Greenwald reporting


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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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19 Comments

    1. Bill Marshall

      Your referent is verrrry interesting… never perceived DJU as particularly effective at communication (particularly as to timely)… many levels…

    1. Bill Marshall

      Methinks DJU is shorthand for DJUSD, aka Davis Joint Unified School District… might be wrong, but that would be a 0.0001% outlier…

  1. Matt Williams

    The deliberations by Council last night were remarkably similar to the deliberations by the BATF on May 22nd, when the letter to Council contained in the Staff Report was finalized.  There was an abundance of caution, and a bottom-line Next Steps suggestion that was very much like Will Arnold’s.

    As I said in my e-mail to Council yesterday:

    Note, I and my BATF colleagues are not saying move ahead full steam with the implementation of the project, but rather take on a very modest cost next step, especially modest because Lori Raineri has offered her financial expertise to the City pro-bono, to better know, both the downside fiscal risks associated with not going forward, and the fiscal costs associated with proactively going forward.

    .
    The next steps game plan that Council has asked Staff to bring back is already well described in the BATF letter, specifically,

    In order to move the project forward, it will require technical expertise beyond the volunteer BATF composition. The areas that were identified are the technical details and scoping of the network as well as the funding options.
     
    Financial Exploration

    Throughout the majority of the analysis that was performed by the BATF, one message was recurring more than any other. That was the need to spend some time and effort to understand thefinancial options that could be used to make this program a success. For this work to be completed with a level of confidence that is needed to move the project into a deployment phase, it will be critical that an expert in alternative financing options be consulted. BATF members informally met with a local government finance expert who indicated there are realistic options on how the City could finance such a project. It is the recommendation of the BATF that the City engage with someone with background and expertise in order to understand the financial possibilities that will make the deployment possible.
     
    Technical Details/Phasing
     
    In an effort to not only reduce the overall effort required but also to reduce the upfront costs associated with the build out of the network, it is a recommendation of the BATF that the City deploy the project through a phased approach. Taking this approach would allow the core of the network to be built and put into service while work is done to construct and deploy the other parts of the network. As the different phases are put into service, the communities served by the earlier phases will be a natural mechanism for showcasing the benefits and success of the network. It has been shown in other cities, this publicity often builds excitement that is not obtainable if the entire network is built in one phase. 

    From a starting point, the most natural option would be to investigate the network requirements and connectivity needs that are essential to satisfy the data needs once served by the iNet network. This will afford the city a first-hand account of the power a fiber network will provide the rest of the community. In addition, it sends the message that the City is willing to support the project to the extent it is using the network on a daily basis to run the City.

    From there, building the network around anchor tenants such as the downtown core and Davis Joint Unified School District would be critical next steps in the phasing. The footprint of the school district also provides a very natural demarcation of how neighborhood rings could be constructed and deployed. As with any major undertaking,the devil is in the details. Building a new fiber network is no different. Because of this fact, it is imperative that a technical group inclusive of the City engineers be put together to review the options that will detail the network buildout.

    Once the network design and electronics are defined, the group can then develop a rough order magnitude quote that can be used by the team identified above to investigate the financial options. This will not only allow for the accurate accounting of the costs related to the various components like trenching, equipment procurement and maintenance costs, but also the cost associated with being in the network provider business like installation services and emergency operations.

    1. Bill Marshall

      If the next study is competent and pro-bono, no problem in my view… but, everyone should realize that staff resources, that have real total comp GF costs (and ‘opportunity costs’… staff time on this comes at the ‘expense’ of the same time used for other [already approved] purposes), are in play… hope they are tracking that, for eventual ‘reimbursement’ if a new municipal utility comes into fruition… if not, it’s ‘sunk costs’, if I understand that term correctly.

      Ironic… my take-away was that folk are saying this is needed for ‘social justice’ reasons, yet in almost the same breath, acknowledge it will be “rolled out” in phases… can any one guess where it will be LAST rolled out?  Who will be the last to receive the benefits?

      And, as a municipal utility, will all City residents be assessed, whether they choose the service or not?  And will adjoining County folk (generally, higher financial resources — El Macero, Willowbank, Binning), insist on getting the benefit, without taking the financial risks, paying the same assessments?

      Enquiring minds want to know…

    2. Rik Keller

      Matt Williams: those all sound like well-reasoned and thought out suggestions.

      There is a real question about why Dan Carson wanted to kill further investigation and study of the options, even to the extent of penning an op-ed that broadcasted his position to his colleagues in advance of debate on this.

      1. Don Shor

        There is a real question about why Dan Carson wanted to kill further investigation and study of the options

        Your assertion is a clear falsehood.

        From Dan Carson’s op-ed:

        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?

        1. Bill Marshall

          That was also the sense I gathered from my watching the meeting… but there are zealots, who have several ‘agendas’, whether on this topic or others (some of which are ‘surrogate’ issues)… attack someone on one topic, because they don’t like their stand on un-related ones…

          Just saying… it happens… whatever…

          One of the problems with moderates, is wording “lies” as “falsehoods”…  guilty as charged… have the T-shirts… still, …

  2. Bill Marshall

    I sincerely hope any future analysis of the “municipally-owned” option clearly takes into account whether that would mean expansion of city staff (including all current and future total comp issues), including providing for operation/maintenance/billing/admin.

    I am of the opinion that the City should ‘tread lightly’… concept, I do not oppose on principle… but the principal, interest, etc. is a concern of mine…

    1. Mark West

      “takes into account whether that would mean expansion of city staff…”

      The approach that I believe would be most effective would for the City to pay for the backbone infrastructure using existing conduit whenever possible, then lease non-exclusive access to the backbone to the various ISP’s in town. Operating the backbone should be handled through an outside contract, not by City staff. In addition to the City, School District, and the University, the other first customers should be commercial property owners who would pay to connect their buildings to the backbone thus supplying high-speed access as a competitive advantage to their prospective tenants. The initial benefits to residents could be the free hotspots that Gloria mentioned.  I think it would be an extremely bad idea for the City to try to become the preferred ISP in town.

      1. Bill Marshall

        Mark, not disagreeing in concept… but…

        Placement of “stuff” in existing and/or municipally paid for conduit is inherently limited… hence, “non-exclusive access” is inherently limited.  Depends on your definition of ‘exclusive’… one, three, five, fifty?

         In addition to the City, School District, and the University, the other first customers should be commercial property owners who would pay to connect their buildings to the backbone thus supplying high-speed access as a competitive advantage to their prospective tenants

        Aye, we get to who would be served first… the one of the inherent “untruths” is that the those who would be the primary beneficiaries,  on a “social justice” basis, would be anywhere close to first… a subsidy to the top 5%?

        With all the risks borne by all?

        Operating the backbone should be handled through an outside contract, not by City staff.

        Neglects capital cost, maintenance(?) etc.?  No proposal on the table, one way or the other.  Basically agree with the ‘thrust’, but the capital/maintenance/replacement/upgrade costs are huge variables.  Not sure how you’d get away from additional Finance Dept costs/liabilities if it is a “municipal utility”… “assessments” to finance the concept, sure look like a tax…

        The City could never (if they follow law) make a ‘profit’… at best, the City would break even, but then there is the “risk” factor… should all residents pay for a system, benefitting few (in reality), putting up the capital costs, and cross fingers hoping to break even?  Those are questions that I believe should be addressed before decisions are made…

        I think it would be an extremely bad idea for the City to try to become the preferred ISP in town.

        On that, we are in total agreement.

        Am very skeptical of the entire concept of municipally owned BB… but can be convinced, but facts are not currently in evidence, IMHO.

        We were down this ‘road’ 30+ years ago… Davis Community Cable… results were not very good…

         

        1. Mark West

          “the one of the inherent “untruths” is that the those who would be the primary beneficiaries,  on a “social justice” basis, would be anywhere close to first”

          Nor should they be. The initial customers are the ones who are going to pay for the bulk of the installation, the City, Schools, University and large commercial interests. Not the end users, per se, but those who want direct access to the backbone. If we lease access to the ISPs in town, the end users access would come through their customer relationship with the ISP, not directly with the City. Free hotspot access expanding with the growth of the system is one way we might address the ‘social justice’ impact.

          “Neglects capital cost, maintenance(?) etc.?”

          Why do you assume that? All depends on the quality of the contracts that the City writes. Hopefully, the CC considered the applicants experience writing quality outsourcing contracts when they considered the new City Attorney’s position.

          “Placement of “stuff” in existing and/or municipally paid for conduit is inherently limited… hence, “non-exclusive access” is inherently limited.”

          Fiber allows for a great deal of capacity in a small amount of space. Staff proposed giving away exclusive access to the subsurface infrastructure in exchange for a few fibers for City use, thus creating a monopoly situation for the preferred vendor that would ultimately have harmed consumers. What I propose is the City installing far more capacity than the City needs, then leasing access to multiple entities and ISPs who then have to compete for the end users. How many vendors will depend on the interest, but the City could create a maximum limit on the percentage of capacity that one vendor may control (preventing a functional monopoly), and could also set aside a percentage for use by a community based non-profit providing access to those in need.

  3. Dave Hart

    I think that 32% willing to buy in now with another 21% interested is not a bad figure for a system that is coming out of the blue for most people.  Most people hate any kind of change and it takes energy to create momentum for anything new.  A campaign waged by the city and citizens who can see the benefits would likely win over most people.  Who in their right mind would be in favor of letting a mega-corp control something so important and continue to suck monthly subscription dollars out of town while throttling innovation for the same or higher price? Figures quoted last night at the CC meeting of $75/mo for 1G/s speeds (20 times what I have now) beats the $90/mo I pay Comcast not even counting the benefits of local control. This is a replay of Davis neglecting to get Berryessa water in 1956. Think ahead. Plan ahead. Yes, it’s risky, but there is a lot to gain and a lot to lose.

    1. Bill Marshall

      32% willing to buy in now

      It’s the other 68% who may well be required to buy in now that is my concern…  if only subscribers pay the cost, take the risks, no problem, they should go for it…

      We definitely have to get more information, and much more complete picture of costs, and how they will be financed, before decisions/commitments are made…

    2. Bill Marshall

      This is a replay of Davis neglecting to get Berryessa water in 1956.

      ‘Apples’ and calamari… no reasonable comparison… except ‘things eaten’…

      It is clear you want this to happen, no matter what… no matter who pays… to get what you desire… understood… K…

      Your “history” is flawed… had Davis bought into the Monticello dam project (there was no lake, until the dam was built… the town of Monticello (not Berryessa) had to be dismantled, graveyard contents disinterred, relocated … Davis or much of Solano would have still needed to acquire Sacramento River water … )… history and current events are FUNdamental…

      Just saying… fiber optic options in 2019 vs. water sources in 1956?  Really?

       

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