Wireless access points for City use (e.g., mobile broadband for City departments and apublic safety network), in addition to commercial and public use; and
Developing communication infrastructure necessary to support future Smart Gridapplications such as an Advanced Metering Infrastructure (AMI) system.Tellus Venture’s scope of work focused on market research to assess the amount of newcommercial, industrial and institutional demand for dark fiber service connections in Palo Alto.This market research will guide staff in the identification of prospective Capital ImprovementProjects to extend the fiber network deeper into areas of Palo Alto where there may be asignificant concentration of additional demand for dark fiber service connections and a cost-benefit analysis indicates a sufficient return on investment. This market research also identifiedcommercial multi-tenant buildings that could possibly be pre-connected with dark fiber tosupport business attraction, business retention and economic development efforts that will beenhanced by the availability of dark fiber service connections for commercial or industrialenterprises and community anchor institutions requiring large amounts of bandwidth.In addition to analyzing the existing fiber network and opportunities to expand it for new dark fiber licensing opportunities and other broadband expansion initiatives, the reports from CTCand Tellus provide an overview of the residential FTTP market and addresses the business casefor another provider of broadband services overbuilding AT&T and Comcast in Palo Alto withan all-fiber network.
The following is a summary of CTC’s findings and recommendations related to the existing fibernetwork and opportunities for expansion:
CPAU should continue to develop its commercial dark fiber licensing service based onidentifying specific “targets of opportunity.” For example, these opportunities include pre-connecting multi-tenant commercial buildings or extending the fiber network deeper intocommercial and industrial areas where there is verified demand for dark fiber serviceconnections and a cost-benefit analysis shows a sufficient return on investment. There mayalso be commercial or industrial areas that should be evaluated in terms of enhancingeconomic development efforts.
The existing fiber network provides sufficient capacity and coverage to allow for newcustomers. The network was designed and constructed with significant excess fiber capacityin the form of discrete fiber strands with abundant dark fiber inventory available.
If market research indicates there is significant new demand for commercial dark fiberservice connections in certain commercial and industrial areas of Palo Alto, there should bean effort to enhance outbound marketing and sales efforts to validate this demand andpotential customer uptake before specific extensions are considered.
From a competitive perspective, licensing dark fiber to a variety of end users is a uniqueservice in that it is not normally associated with the traditional telecommunication serviceproviders such as AT&T and Comcast. These providers have traditionally rejected theconcept of licensing dark fiber, choosing instead to offer only “managed” network services
retail options. In terms of wholesale services, licensing of dark fiber is the most frequently offered option, with an estimated 39% of utilitiesoffering this service. Physical collocation of third-party communication assets on utility facilities (e.g. utility poles, conduit and substations) isthe second most frequently offered service, with an estimated 34% of utilities offering this service, followed by wireless collocation (27%),Ethernet (16%), lit fiber (15%). The study estimates that wireless collocation services are the top revenue generator among wholesale options,followed by lit fiber services and dark fiber licenses.