Guest Commentary: Opposition to the Proposed Astound Contract

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By Lorenzo Kristov

I urge the City Council not to approve the proposed Astound contract. The contract is seriously problematic in terms of both its substance and the process by which it was developed.

As to substance, the contract will kill any prospect for a Davis municipal fiber network before it’s ever been given a full and fair assessment, while Davis residents and businesses will be forced to subsidize the supposedly “free” services the City receives in the form of higher costs they will pay for decades to come (see below for details).

As to process, City Staff developed this proposed contract without consulting with the BATF or other resident experts, without examining its impacts beyond meeting the needs of city facilities, and without considering the crucial role of broadband internet service for the future of Davis.

I recommend that the City Council suspend action on the proposed Astound contract and direct City Staff to conduct and provide to the Council, in collaboration with a select group of Davis residents with relevant expertise, a thorough assessment of:

(a) the potential benefits to all Davis residents and businesses of a municipally-owned fiber-optic network that connects all Davis premises (municipal “fiber to the home”), including the ability to sustain societal values of universal access and net neutrality;

(b) a municipal fiber implementation plan that includes technical and cost details, staged implementation, and potential financing approaches;

(c) the impacts of the proposed Astound contract on the feasibility and financial viability of a Davis municipal fiber network, including such factors as the erosion of support for municipal fiber and the anti-competitive implications of Astound’s position in the Davis broadband services market, in addition to matters of technical feasibility; and

(d) the value to Astound of the proposed contract that rationalizes the millions of dollars of “free” services it would provide to the City.

No thorough examination of municipal fiber has yet been performed.

Despite the three years of effort put forth by members of the BATF to assess the potential benefits and feasibility of a Davis municipal fiber network, as yet there has been no formal effort to explore practical implementation options, and the July 30 Staff Report advocating approval of the proposed Astound contract does not address impacts of the contract on the viability of a municipal fiber network (beyond the technical detail of “room in the occupied conduit”).

City Council action is needed.

City Staff appear to have no interest in pursuing a municipal fiber network. So unless the City Council acts tonight to suspend action on the proposed Astound contract and direct Staff to pursue a more holistic and collaborative approach, a possible City infrastructure investment that will be vital to the future of all Davis residents and businesses will be thrown to the wayside.

All Davis residents and businesses will subsidize the “free” services City facilities receive from Astound.

Although the Staff Report and CCG Consulting attest to the value of the proposed contract to “the City,” that value accrues entirely to municipal facilities and UC Davis, not to all the other Davis residents and businesses. A fact not mentioned in the Staff Report is that Davis residents and businesses will be subsidizing Astound’s services to the City for decades to come through the higher prices we all pay for high-speed internet services (those of us who can afford them).

The proposed contract will kill the prospects for municipal fiber.

Regarding impacts of the proposed Astound contract on the feasibility of a future municipal fiber network, the Staff Report and CCG Consulting’s comments only address the technical matter of “room to add a municipal fiber” into the conduit. The Staff Report and CCG are silent on the bigger questions of commercial viability and community support for municipal fiber. An obvious problem is that once high-speed internet needs are met for the next 30 years for all City and UCD facilities, and after Astound cherry picks all the more lucrative commercial customers, we lose a large and important constituency for municipal fiber because all these entities will have met their needs. And with its competitive advantage gained by the proposed contract, Astound will be able to offer predatory pricing incentives to retain its customers and undermine the commercial viability of a municipal network. The Staff Report claims that Astound (and other major telcom companies) could establish an anti-competitive foothold in Davis even without the benefits afforded by the proposed contract. But if that’s correct, then why is Astound so eager to provide millions of dollars of “free” services to the City? The Council should be concerned that the long-term commercial benefits to Astound — a major one of which is to severely damage if not kill the possibility of a municipal fiber network — are being overlooked.

City Council should provide explicit direction to City Staff. I urge the City Council to defer action on the proposed Astound contract and to direct Staff efforts to work expeditiously as outlined at the beginning of this memo. Although the Council did direct staff at the June 4, 2019 meeting to pursue investigation of a municipal fiber network, Council’s direction did not include any requirement for Staff to work with former BATF members or other resident experts, among whom there is substantial relevant expertise, nor was there any required timetable for delivering results. Given Staff’s narrow focus on meeting only the needs of City facilities and the non-transparency of the process leading to the proposed Astound contract, more explicit Council direction is required.

The process used to consider Community Choice Energy offers a successful model for collaboration between Staff and resident experts. I recommend that Council require Staff to conduct a collaborative process similar to that used in investigating community choice energy, which led to the formation of Valley Clean Energy. In that process, from the beginning a small group of resident energy experts worked with staff to draft an RFP, select the consultant, refine the scope of work, meet regularly with the consultant to review progress, and participate in formulating the final report to Council. Consideration of a municipal fiber network for Davis deserves a comparable level of seriousness of inquiry and participation by local experts willing to donate their time to this crucial matter for Davis’s future.


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Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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