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Monday, April 28, 2008

Portland's next fiasco: fiber

Every internet project that the City of Portland has touched has turned to trash almost instantly. We're still watching the goofball "free wi-fi" deal with MetroFi die a slow and painful death on traffic light poles around town. Those of us who have been around for a while also remember the city's quixotic lawsuit against the cable companies -- something about forcing them to carry other carriers' data across their lines. This legal action went nowhere, but at a huge cost to Portland taxpayers, for lawyers.

We thought that with the departure of "Opie" Sten, the city's obsession with dominating internet communications within its limits would die off. But no! Never underestimate the persistence of power-hungry politicians and bureaucrats. Our next venture into this completely unproductive realm is about to begin.

They're calling it FTTP -- "fiber to the premises."

Readers of this blog have been chattering about this with us for years, but it wasn't until we received this official notice from the city late last week that we saw it confirmed with our own eyes. The city government is about to undertake to build a "fiber network" that would run fancy city-owned cable to every home and business in town. Apparently your current, private, high-speed cable or DSL line just isn't good enough, and in order to save life in the city as we know it, you'll need to be buying your internet service from the city. The rumor we have heard is that it is going to run through the sewer system -- appropriate, perhaps.

Anyway, this latest development is completely consistent with Portland's bizarre reality disconnect when it comes to priorities. You know how you now pay your water bill to something called "City of Portland Utilities"? They didn't open a new bank account in that name for nothing. They've got plans. Think big. Think really big -- we're talking megalomania big. Maybe Fireman Randy will break through his intense separation anxiety and bring Opie himself back to run it.

Here are some of the highlowlights:

The City of Portland (“City”) Office of Cable Communications and Franchise Management (“OCCFM”) is issuing an RFP to hire expert consulting services to assist with developing, issuing and managing a Request for Interest (“RFI”) process for Private Sector entities to potentially partner with the City of Portland in developing Fiber To The Premises (FTTP) infrastructure in the City. Development of the RFI is a key outcome of the City’s Phase 2 FTTP Business Case and accompanying Staff Report (“Phase 2 Case & Staff Report”).

This Portland City Council held a work session on November 20, 2007, and authorized moving forward with an RFI in the manner recommended in the Phase 2 Case & Staff Report. This RFP for professional assistance in developing, issuing and managing the RFI is being issued pursuant to the direction of the Portland City Council at the work session, and subsequent funding by the Council, on the recommendation of Commissioner Dan Saltzman....

The Portland Community Fiber Network (“CFN”) as envisioned in the City’s FTTP Business Case and accompanying Staff Report (“Phase 2 Case & Staff Report”) will provide the infrastructure necessary to spur innovative technologies, job growth, economic development, sustainability, education, and community development in the City of Portland. High-bandwidth broadband is widely-recognized as a key driver of future economic competitiveness and is increasingly recognized as a potential driver of sustainability. Incumbent providers have elected not to provide FTTP infrastructure in Portland in the near term, and are therefore not expected to invest the necessary funds to upgrade their present systems to meet future City and community needs. Portland’s suburbs, meanwhile, are being wired with fiber potentially rendering Portland a technological bedroom community in the region.

The Phase 2 Case & Staff Report set forth a business case and the policy rationale for a municipally owned and financed Open Service Provider fiber-to-the-premises (“FTTP”) system in Portland. (Note: the Phase 2 Case & Staff Report, together with the Phase 1 Report and other relevant and essential background documents, remain posted on the OCCFM website at this link: http://www.portlandonline.com/cable/index.cfm?c=45468)...

OCCFM now seeks proposals from individuals, firms, teams or consultants, hereafter called “Proposer(s),” with demonstrated experience in developing an RFI and working and securing viable potential private sector partners and community support for a citywide Fiber-to-the-Premises (“FTTP”) broadband network. OCCFM proposes to engage the successful Proposer for the following services: Assist in designing and implementing an overall RFI process that will yield one or more partners so that the City can move forward with FTTP deployment. The title of the ultimate RFI is "Request for Interest"; this is a specific and deliberate choice that comes from Commissioner Saltzman's office. It is important that the ultimate RFI be framed to encourage action-oriented responses ("Interest") not merely passive responses ("Information").

We don't know about you, but we get all the fiber we need from these. At a time when the city needs to start thinking seriously about its debt and the threat it poses to basic services, another pet project and blank check are just about the last things on earth that the place needs. Especially when it has to do with computers, which the City of Portland simply has never handled well and probably never will.

Comments (25)

Tax collection made easy.

CoP can't wait to create a 'CoP access fee' to tack onto your monthly service detail. To get you in the mood look at your Qwest Comcast or Verizon bill today under monthly 'Taxes Fees & Surcharges': federal excise (3%), State 911 ($.75 per access line), Federal Universal Serv Fund (10.2%), Oregon Universal Service Surcharge (7.12%), Oregon PUC, Residential Service Protection Fund ($.05), Federal Access Charge ($6.50 per access line).

Isn't this what you socialists want?

Forget it - You know how this city works. Throw something out there as "free" (totally disregarding the tax cost), get the people who earn low incomes in a froth and monomaniacal about it (a la bike bridges and streetcars) and then let the shouting down begin.

So much for reasoned discourse in a democracy. WiFi was at least easy to shut down, fiber is going to be a lot more expensive (ask Ashland.)

Dear god, they can hardly keep sewers running efficeintly and now we are going to try fiber (there's gott be a connection, I just don't know it right now.)

BTW - I listened yesterday AM - Much more enjoyable once Mr Kremer tones it down.

Maybe it's just me, but isn't this something that should be handled by the private sector? Why should a Gov't entity be involved in this?

While I'm sure there are myriad ways to screw this up, perhaps with a bit of planning this makes some sense. If the city is going to have to dig up and replace these sewer lines anyway, why not run fiber while your down there and have the roads torn up.

It makes much more sense than the suburban MO of tearing up the road for FIOS and do a crappy patch job. Then again the next summer to expand the sewer lines and another crappy patch job. Then one more time to bury the electrical lines.

"If the city is going to have to dig up and replace these sewer lines anyway, why not run fiber while your down there and have the roads torn up."

What CoP wants to do is FTTP or to the premises this means from the curb into your house which is going to be v. expensive.

However, it will keep the Road Maint crew diverted from boring stuff like filling potholes. The fiber guys already have a ton of fiber in the streets.

As far as why CoP wants to do this, think revenue generation and taxing vehicles.

Maybe it's just me, but isn't this something that should be handled by the private sector? Why should a Gov't entity be involved in this?

Beacuse this is the "progressive" way. Government gives you everything you need.
Get ready...bread lines start soon.

Reggie Theus is disturbed by this story and is begining to see a running trend in CoP politics: the use of "incestuous amplification" in relation to the term sustainability.

Just as the Bush Administration's cronies kept leap-frogging off of each other's claims of WMD and imminent danger to show even greater degrees of danger, everyone keeps trumpeting the virtues of sustainability - leap-frogging off of previous statements to claim even greater benefits for projects and services that are simply not commercially viable to begin with. In the end, you get what you pay for: all hype and no value.

There's a reason Wi-Fi didn't work - the numbers didn't meet the marketplace. The cost to install FTTP is astronomically bigger than Wi-Fi. In the end, all it will do is produce a product that may be competitive with current broadband services (provided the city can actually pull it off). This will produce very little savings for the average consumer and will add to the ever-growing debt load of the city.

But, it allegedly enhances "sustainability," so it must be done.

FTTP is all about creating more union city jobs-the only employee growth segment of the city. Soon there won't be enough regular jobs to pay the tax bills to employ this growing segment. Get out of here.

Welcome to the People's Republic of Portland / Oregon

I demand an "open-access" policy be applied to the sewer lines so that the fiber of others may flow freely.

Wait. They can just open that access with a simple ordinance and nothing else.

But, the profit opportunity is like a clarion call for proprietary control and a demand for a state monopoly. After all, what good is monopoly power if it is not exercised. (Private monopoly and public monopoly are just the same to me.)

Are the sewers plugged now?

Maybe it's just me, but isn't this something that should be handled by the private sector? Why should a Gov't entity be involved in this?

Maybe, maybe not. We would not have the railroad system that we do today if the government had not stepped up in the 1860s-1880s.

Rural electrification was necessary to bring power to rural America.

The universal access fee was necessary to make sure telephone service was, well, universal.

I'm willing to hear an argument why fiber access is similarly necessary, but I'm not hearing one. It's not enough to simply state that the private sector is not providing fiber connections--they are. You can pay Verizon for one. And cable speeds may be sufficient for many for the next 5-10 years.

Commissioner Saltzman is the idiot behind this. The same guy who thinks trees have rights. How can he possibly know what a tree wants except to impose his own human belief system? Maybe trees are existential and just are, and could care less if they are alive or a piece of useful lumber. No thoughts about secondary effects. If I'm a property owner, I cut down any trees before the city gives the trees on my property rights. And if, I had any thoughts of adding a tree, forget it. Lastly, if the city won't let me cut down a tree that is threatening falling on a neighbor, I'm suing the city if it does fall and hurt someone.

Evacuate PDX, for the loonies are in charge.

Are the sewers plugged now?

On the contrary. They flow freely into the Willamette with regularity.

I'm sorry, "flowing freely" and "regularity" were totally unintentional fiber references.

I think a lot of you are missing an important point. This will help with telecommuting. If we can increase the number of people working from home the number of commuters on the streets will go down significantly, thus reducing congestion, air pollution and any number of the problems caused by cars. Since this is a city that is seeing an increase in the number of creative people living here this only makes sense.

da Bum

"I think a lot of you are missing an important point. This will help with telecommuting."

OK, my counter, right now it costs $45/month to get cable modem access for 99%+ of telecommuters. I do not think changing this to fiber will add one telecommuter, in addition, if the city charges for it, the service will cost $145/month and probably discourage more telecommuting than encourage.

Unless, you can find me one person who says he can't telecommute with a plain old cable modem and needs fiber. Than I'd tell him to lobby Verizon to install FIOS (which is what Portland should be doing.)

We know that many of Portland's sewer pipes are failing and will require replacement or relining. This is especially true in Portland's older residential neighborhoods.

It is illogical to install fiber optic lines in those very same sewer pipes: it can only make their eventual repair/replacement unduly expensive and complex.

I'm surprised that an engineer (like Dan Saltzman) is willing to support such a proposal.

If they want to improve neighborhood infrastructure, why not a massive sidewalk/drainage proposal for those many Portland neighborhoods that have none? If every new fiber optic line included a new sidewalk, then count me in.

Absent that, there is no economic reason for the City of Portland to enter into competition with Qwest, AT&T, and Comcast.

Because the City of Portland will lose that competition and burden city taxpayers with the subsidies necessary for them to compete.

In the abstract, a municipal FTTP ISP is actually a GREAT idea. (Though running it through sewers sounds pretty stupid.) However, we don't live in the abstract, we live in Portland.

I felt the same way about the PGE takeover. If you look at what it has done for Eugene, Bend, Seattle, or any number of other cities, it is impossible to argue with the positives. But, how do you argue with those who say the capacity to manage it isn't here? You can't.

"It is illogical to install fiber optic lines in those very same sewer pipes:"

Just for clarification since I am familiar with it - Fiber lines go into their own conduit under the street, not into sewer lines, they are somewhat sensitive and need extra sheilding from the elements.

Having said that, people like Verizon, AT&T et al already have miles of fiber in the street. The price for high-speed data has dropped an order of magnitude due to all of the unused capacity - so that is not a problem. Even if it is, it is not hard to put in extra fiber from router to router.

What Portland wants to do, if FTTP is their goal, is to go from the corner router to inside your house ("the last mile") and not in the street (I don't think they are that stupid to install redundant fiber - I hope they aren't listening.)

I assume they would want to own that fiber and "rent" it to you and then probably rent the modem inside your house to you also. This would be the best way to automatically bump up the tax collection and stick a road fee on it ("at only pennies a day.")

Ashland's city-owned electric company moved to improve the city's Broadband Internet access in 1999 by creating the Ashland Fiber Network (AFN), which built a $8.5 million fiber optic ring inside the city boundaries. This supports 3,700 cable modem customers (an estimated three-quarters of the market), and splits the local cable television market with Charter Communications. However, in 2006, the city faced difficulties servicing AFN's debt load, which was approaching $15.5 million. The city hired a new AFN director, Joe Franell,[1] who suggested scrapping cable television service while retaining the more-profitable high-speed Internet access.[2] In October, 2006, the cable television service was transferred to a local company, Ashland Home Net, while the City retained both the infrastructure and the wholesale Internet business. [15] AFN has also added telephone and wireless Internet service to its offerings. [16]
(From wikipedia)

I assume they would want to own that fiber and "rent" it to you and then probably rent the modem inside your house to you also. This would be the best way to automatically bump up the tax collection and stick a road fee on it ("at only pennies a day.")

This nonsense makes perfect sense now, in light of what you just said. I'll just assume that the usury will have the usual crap slopped all over it about saving the world, for the children, etc.

The city's plan sounds a lot like this one, proposed by Google at the start of last April.

I started my comments out to be humorous, but thought hey let's see what real world comments come in. Personally I think Portland City hall should be dissolved.

da Bum

Can't we spend money on core services? Core services, Core services, Core services. It should be tattooed on the next Mayor's forehead.

Wow! $500 million dollars, just so THE City of Portland can compete with Qwest, Comcast, and AT&T? Plus new City of Portland salaries totaling $750,000 in the second year?

I guess they decided to create their own utility since they couldn't buy PGE.

Anybody want to place a bet on the year that Portland defaults on their first bond issue?

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