21 Feb

Taking Issue with the City Q & A on Broadband

City says: Under the proposed agreement, network and ISP operation would be contracted out, and no staff would be added.
We respond: We sure hope there are no new staff required; but, how is billing to be handled, who will interface with the provider, who will handle citizen concerns?

City says: Fiber networks are the state of the art for high capacity bandwidth. Cell companies place limits on data usage.
We respond: Fiber may be state of the art today but will it be for the next 30 years? Just remember that 30 years ago cell phones were not an everyday thing and only voice was available. 5G cell phones are coming, probably by 2020. And DOCSIS 3.1 which Comcast is bringing to its entire network increases speed to gigabyte levels and expands bandwidth. It will be in L.O. by 2018. T-Mobile has no data charges.

City says: Phone and cable TV systems have physical limitations that limit their capacity compared to a fiber-to-the-premises system.
We respond: Phone lines are limited but the hybrid fiber/cable lines that Comcast uses in L.O. can be upgraded to DOCSIS 3.1 which will provide gigabyte speed capability and increased bandwidth that some say is comparable to fiber optic.

City says: The utility would be self-supporting and not subsidized by taxes. Only those using the service would pay for it.
We respond: Does this mean that if less than 35% sign up the charge will be raised to cover the cost? If it does mean that then the user cost may well be more than $60 a month and go up anytime more people drop the service. If the rates do not go up, then the City’s General fund has to make up the difference. Which is it City?

City Says: This service would not compete for resources with other city utilities.
We respond: This is ONLY true if the City makes users pay the full cost of the service! So, if it is true expect that as people drop the service your cost will go up, just like Comcast!

City says: Bandwidth used by all households has grown steadily at an exponential rate. This trend has held consistently since the first days of the Internet.
We respond: Certainly bandwidth usage has grown; however, fiber optic cable is not the only method of expanding bandwidth. DOCSIS 3.1 expands bandwidth for hybrid cable/fiber systems like L.O. Comcast lines.

City says: …current estimates are that the total cost for gigabit Internet service plus phone and video service would range between $80 and $146 per month
We respond: Video services like Yondoo cost about the same as Comcast because they use the same source for content. ESPN does not give a cheaper price to Yondoo. Yondoo pricing in Sherwood is similar to Comcast ($20 for 20 channels; $90 for 100). If the Internet costs $60 we do not understand how cable and phone could be only $20 per month. There are other alternatives such as Apple TV but these do not have live TV.

City says: Fiber is not like a water line that you can tap into. To provide fiber optic service to all Lake Oswego homes and businesses would take over 18,000 individual strands of fiber, as part of a network designed for a fiber broadband system. Except for Frontier’s FIOS system on the far western edge of Lake Oswego, no such network exists in the city.
We respond: Comcast already has L.O. serviced by a hybrid fiber/cable network (they need that to provide on demand services); Comcast has cable to any house that wants it. With the new DOCSIS 3.1 any house will be able to have gigabyte service if it wishes.

City says: Even if the City decides to proceed with the public-private partnership, the project would not go forward until signups (secured with a deposit) reached a threshold target to ensure the project would be financially viable.
We respond: A deposit is not a “guarantee” people will pay for 30 years or even one year. The City is going to sign a contract worth $71 million over 30 years. Shouldn’t the people who use the service sign a contract? Should the City absorb the cost if usage falls below 35% over the 30-year period? We think not. If only 20% are using the service, then it will cost the City $1,000,000 per year; yes, one million a year. The risk of technological change over the next 30 years is so great that this proposal makes it a significant financial risk for the City.

The LOCAL Board

04 Feb

Questions about City Fiber Optic Idea

We have watched the City Council study session on fiber optic to the home and have done some research and thought additional information might be useful for public consideration. Again, we will follow the question and answer format.
The market research indicated that 34.7% of those polled definitely would or probably would sign up for the fiber optic service. Does that mean it would be success? It depends. It is unclear, particularly looking at the open-ended responses, as to why people would sign up. Some of them may think that the $60 cost would replace their entire cable bill. Of course, that would not be the case.
Exactly what is the financial risk to the City? The answer, once again, is “it depends” because it depends on just how many households sign up. A 35% sign up rate would be about 5,950 subscribers. If only, 30% sign up, then the City must cover the shortfall in payments. At a sign-up rate of 30%, that translates to over $300,000 per year from the City to “subsidize” the fiber optic network.
Couldn’t the City just charge more to cover the cost? Yes, it could. The cost would go to about $65 per month for the City to break even if 30% signed up. If only 20% signed up the cost would go to about $85 per month for Internet service only; no TV, phone or security would be included.
How would the network be built? The City would sign a lease with an outside firm that would build and operate the system. It is estimated there would be about 150 miles of fiber optic installed with about 60% underground.
How does it get to my house? Attached to the fiber optic network would be “pedestals” each serving up to 8 houses. The pedestal would be in the “right of way” not on your property. A trench would then be dug from the pedestal to your property and through your property to the point where it enters your house. The fiber optic cable would be installed in the trench. Once inside the house a wireless (and wired modem/router) would be attached to the cable to transmit throughout your house.
What will come over the fiber optic network to my house? Nothing! You will have access to the Internet so you can get email and browse the web. That is it. If you want anything else, you will need to sign up for it and pay for whatever you sign up for.
What about television? Various television options have been discussed. There is Apple TV for example. But Apple TV gives you access to television that has already been broadcast and is available on the web. There has been talk about Yandoo. Yandoo is a substitute for your cable company and charges the same amount in general. Depending on what programming options you purchase, charges could be $150 per month or more. However, you do get live TV from Yandoo.
What about telephone? There are VoIP (Voice over Internet Protocol) providers that allow you to keep your current number and receive and make calls over the Internet. Cost depends on which service you choose.
What cities have done this? There was a lot of talk about Sandy where there is about a 60% sign up. When Sandy started, there was NO cable service in Sandy. Beaverton and Hillsboro have both looked at a fiber optic network and decided against it because of expense. Sherwood built a fiber optic network and it has cost the city a great deal of money (totaling in the millions), as the sign up goal for residences was not achieved.
But how can we get fast Internet if we do not do this? Cable companies like Comcast/Xfinity that have a network that allows on-demand service are adopting a new type of transmission called DOCSIS 3.1 that brings high speed (perhaps up to 2 gigabytes) over existing cable. Comcast has already installed DOCSIS 3.1 in two cities and says it will roll out to all their customers by 2018. DOCSIS 3.1 provides speed and bandwidth greater than current cable service. The City Council has not asked Comcast to meet with the Council and discuss their plans.
We need fast Internet don’t we? Again, it depends. Very few things we do today on the Internet need gigabyte service. Only very large files or games need that speed. Most homes will be just fine with speed of 500 mbps and more bandwidth.
What is LOCAL’s position on this? Each of you has to make up your own mind whether you want the City to provide fiber optic service and if it becomes available whether you will subscribe. However, here are some things you might consider:
• Is it right for other taxpayers to “subsidize” Internet for users if less than 35% sign up? We think that is an issue of fiscal responsibility. Internet is not like water (which the City does provide as a necessity). There are alternatives to current cable providers (such as satellite); should people make their own decision on what alternative is best for them and then pay for it themselves?
• Our City’s budget does not have a surplus and there are increases coming in PERS. Where will the City get the money to pay for any sign up shortfall for the next 30 years?
• The company that will do this for the City has never done this before; however, the contractor they will use has. Is that too risky?
• Do you want the right of way and your yard trenched to get this service?
• Are you really going to save any money in total?
• Do you really hate your current provider’s offerings (such as the channels they offer) enough to change providers? The market research said customer service was a problem but is your actual cable a problem?
• Do you really think that the price of any service will stay the same for 30 years?
• Do you think it will be a hassle to switch from your current provider and get the new one set up?
• What guarantee is there that fiber optic will not be an obsolete technology in the future?
• Should the City be competing with private, tax-paying enterprise to provide such services that are otherwise already available or will be in the foreseeable future?

The LOCAL Board