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Growing Interest in Dark Fiber and Pricing Details

Dark fiber is a growing business for both private and publicly owned networks. Data transport, data centers, ILECs, and CLECs are some of the most common users. Increasingly, wireless providers are turning to dark fiber for backhaul.

A May Fierce Telecom article reports that 14 percent of Zayo's wireless backhaul services are dark fiber solutions:

"We're seeing a shift with wireless backhaul contracts to dark fiber to the tower and we're starting to see that show up as the trend over the last couple of quarters," [Chairman and CEO Dan] Caruso said … "And you see it more pronounced in the current quarter where 14 percent of our product mix for fiber to the tower is dark fiber to the tower and you see that's grown and taken on a bigger piece of the pie."

Dark fiber leases have played an important role in developing revenue for municipalities that have invested in fiber infrastructure. Dark fiber leasing can be the only option in places where state barriers limit local options.

Santa Monica, Columbia in Missouri, and Maryland's Howard County, are only a few communities that lease dark fiber to ISPs and other commercial customers. A few networks, including Metronet Zing in Indiana, offer only dark fiber services. It is worth noting that, as Santa Monica discovered, the vast majority of businesses and residents prefer and easy, affordable, and reliable lit service rather than dark fiber. But the dark fiber niche is growing.

As more customers look for the service, negotiating leases and pricing models can be challenging. Municipal networks seeking guidance can start with a 2012 report from CTC Technology & Energy, Dark Fiber Lease Considerations [PDF].

The report covers pricing models, various methods for pricing dark fiber, and offers some examples. CTC also helps identify potential customers and makes general recommendations. It is always advisable to seek out the advice of professionals with significant experience in negotiating dark fiber leases, but the CTC report can provide a foundation to begin exploring options and weighing risks.

From the report summary:

This memorandum presents a brief framework for pricing and marketing of dark fiber. With the obvious caveat that a detailed analysis requires an in-depth evaluation of a given project or market, this general overview may help you in determining such matters as how to price your dark fiber—for example, to balance encouragement of use (and opening up of the dark fiber market) and rationing of strands, while maximizing potential dark fiber net revenues.

Vallejo Commits to Develop Fiber Master Plan

Vallejo recently hired Jory Wolf, CIO from Santa Monica, to help develop a fiber optic master plan, reports the Times Herald. A fiber network now controls the city's intelligent transportation system (ITS) and Vallejo wants to build off that asset to encourage economic development.

Wolf was the key player behind Santa Monica's master plan, which led to the development of its Institutional Network and CityNet, a fiber optic network for business connectivity. According to the article, Vallejo's master plan is expected late this fall. 

Last year, we highlighted a letter to the editor from resident Chris Platzer who suggested using Vallejo's ITS fiber network as the foundation to deploy a municipal network. A number of communities we study take advantage of fiber assets and conduit put in place as part of transportation control, including Martin County in Florida; Arlington, Virginia; and Aurora, Illinois. The Vallejo ITS includes approximately 11 miles of fiber and was built in the 1990s.

In March, city staff included the same idea as part of their recommendations. They also advised developing a joint trench ordinance and fiber upgrade policy, collaborating with nearby Benicia, and joining Next Century Cities. 

From the article:

According to staff, a joint trench ordinance would be essential in upgrading municipal infrastructure as it would allow the timing of installation of conduit to coincide with other underground construction.

Staff is also investigating the possibility of the city drafting a cooperative agreement with Benicia, to provide “better telecommunications service, faster implementation, lower costs ...”

Also on Thursday, the city announced that it has joined Next Century Cities.

Over 80 communities belong to Next Century Cities, an organization of local and regional leaders advancing fast, affordable, reliable Internet access. They provide support, resources, and collaboration to assist communities like Vallejo that want to exercise local control to improve connectivity.

From a city press release:

“Jory brings a wealth of unique experience to Vallejo in terms of how you build, operate and manage a municipal fiber network that will improve internet access and affordability, attract businesses and jobs, and generate revenue for the city,” said Mayor Osby Davis. “The City Council identified the development of a fiber network as a top priority in 2014 and 2015, and retaining Jory represents a significant step towards this goal.”

San Francisco Looks to Expand Muni Fiber and Wi-Fi

San Francisco has long been considered a modern, glittering, tech capital. For years its leaders have struggled with ensuring residents and businesses actually had next-generation Internet access as AT&T and Comcast only provide the same basic services that are available in most cities. In a recent Backchannel article, Susan Crawford discusses how the City by the Bay is taking steps to develop its vision, its long-term plan, and hopefully a network that will improve connectivity in a city of over 800,000 8.5 million.

San Francisco has developed an Information and Communication Technology Plan, which still needs approval from the City Board of Supervisors. According to the article, the plan calls on the city to take an incremental approach on its path to improved connectivity. They plan to use a similar method as Santa Monica by connecting municipal facilities - many of which are already connected via fiber - and then shedding expensive leased circuits. By eliminating that expense, the city will cut $1.3 million for Internet access and networking services from its connectivity costs.

Last year the City also put dig once policies in place, a decision other communities attribute as one of the keys to a cost-effective deployment. Like Santa Monica, the City currently leases dark fiber to ISPs. They plan to entice more ISPs who want to bring broadband to residents and businesses by expanding that practice. San Francisco plans to streamline the process and work with developers on strategically linking new developments to Internet hubs with dark fiber.

As Crawford notes, the City has created free Wi-Fi in select areas of town with plans to serve public housing and commercial corridors. Miquel Gamiño, San Francisco's CIO, told Crawford they hope to make Wi-Fi available on a larger scale:

Gamiño’s dream is that San Franciscans and visitors will be connected to that service at all times: “I would love for people to come here, or live here, and feel as if they are just connected, woven into this fabric that exists in thin air,” he says. Consolidating the brand so that every public open network is labeled #SFWiFi will ensure that users perceive the city’s role in providing public WiFi. 

Crawford believes the City is on the right path by investing in more fiber throughout the community:

In the bigger picture, San Francisco will require fiber to businesses and homes. You can’t have a WiFi connection without a wire — that would be like having an airplane but no airports. And the WiFi connections used by both citizens and city infrastructure (“phoning home” via sensors about weather, water, air pollution, transport, energy use, and a host of other indicators of the city’s wellbeing) will be generating — uploading — mountains of data that will need wires on which to travel anywhere at all.


Fiber and WiFi are complementary, in other words. And that’s where long-term planning will be essential.

For more about Santa Monica's incremental approach, check out Chris's interview with CIO Jory Wolf in Episode #90 of the Community Broadband Bits podcast. You can also learn about their strategy in our detailed report, Santa Monica City Net: An Incremental Approach to Building a Fiber Optic Network. 

Community Broadband Media Roundup - October 17

This week, cities took the stage and made some very important moves to restore their local authority. From cities resisting big media mergers, to those choosing to join the new Next Century Cities initiative, it is a good time to be a part of municipal government efforts. 

Broadband Cities

Boulder, CO officials are looking ahead at their Longmont neighbor's gig network and exploring ways to make sure their own businesses are not left in the dust. Boulder’s chamber is pushing for an approval of ballot issue “2C”. Gavin Dahl of Boulder Weekly writes that the ballot question would open the way for the city to offer competitive gig services, helping the city keep existing businesses happy, and entice others to move in.

But according to Boulder News’, Erica Meltzer, opponents still seem to have their heads in the sand; The libertarian Independence Institute says if there was a market for fiber in the city, “some business” will find a way.  Maybe they think competitive, affordable Internet will just appear.

Meantime, Columbia, Missouri government officials may be facing an uphill battle. The city is exploring how to light its dark fiber infrastructure. Opponents say the plan goes against state restrictions on the city offering such services directly to customers. We believe the move would encourage competition among ISPs that would otherwise not be able to operate because of a lack of capital required to build fiber networks.

Cities choosing to keep ownership of their fiber infrastructures is often a sound decision, and North Kansas City, Missouri residents may soon be appreciating the city’s most recent announcement. In an effort to “give back” to residents, LiNKCity officials say that beginning in 2015 residential customers can get free Internet service. The decision is thanks to a unique partnership with a server farm company. 

From GovTech’s Colin Wood:

“I don’t think I’ve seen anything like this, in fact,” said Chris Mitchell, adding that he guesses DataShack intends to boost profits by gaining more local businesses as customers, and will do so by offering additional services like cloud-based storage -- services the city did not offer.”

Add Baltimore to the list of cities that are “fighting for fiber,” according to the Baltimore Sun’s Scott Dance. The Baltimore Broadband Coalition is working to convince citizens and city officials to explore municipal fiber. Harlem entrepreneurs are exploring how gigabit speeds can be a boon to businesses and startups, but also have a positive community impact:

"A lot of the broadband announcements were around wireless ... and that has a ways to go in terms of being effective…  it's important for the community to understand that broadband is essential to lowering crime, increasing education opportunities and closing the wealth gap."

Just outside of San Antonio, the community of New Braunfels, Texas is moving forward with a feasibility study. And not one but three Connecticut communities are taking broadband futures in their own hands. Mayors from New Haven, West Hartford, and Stamford are banding together to solve the state’s broadband problems. GovTech’s Colin Wood tapped Chris Mitchell for insight:

“I watch with a sort of nervous excitement. It’s exciting to see these cities working together and recognizing that they have a need. But I get nervous because I feel like they’re going to get responses to their RFQ, and the easiest thing to do will be for some ISPs to commit to only building out some areas of town. And I think that’s dangerous fundamentally.”

Next Century Cities

Solidarity and learning from city successes and challenges are core values of the newly launched Next Century Cities initiative. Mayors and city leaders from all over the country converged on Santa Monica, to support each other in their broadband efforts. From Sandy, Oregon to Morristown, Tennessee, 32 cities announced their commitment to six basic principles that will help lead communities to self-determination in their broadband endeavors.

Before heading to Santa Monica, one of the major voices for broadband, Chattanooga Mayor Andy Berke, spoke on a panel in Boston to urge cities to move forward independent of federal programs. Do yourself a favor and head to twitter, type #NCCLaunch and read the stream of comments. Then head to the initiative web page, watch the webcast, educate yourself and urge your city officials to take action.

Comcast/TWC Merger

Franchise agreements between cities and Time Warner Cable may be key to blocking Comcast and TWC’s proposed merger. More and more cities are standing up and demanding real choice in their communities; this week several stepped forward.

According to Ars Technica’s Jon Brodkin, city council leaders in Lexington, Kentucky say TWC’s refusal to address customer service complaints are the reason they are denying transfer of ownership. Consumer advocates like John Bergmayer hope others follow suit. 

"I suppose the broader question is whether a single municipality by itself can stop this merger. Maybe not, but it’s unlikely that any one town would be acting alone. If I were Comcast or Time Warner, I’d be looking nervously at my other franchise agreements in towns around the country, and at the states. Taken together these actions could imperil the merger—and might give the FCC [Federal Communications Commission] and DoJ [Department of Justice] even more incentive to act."

And city council leaders in Worcester, Massachusetts are attempting to block Comcast from entering the area this week as well, it seems “substandard customer service” is finally beginning to bite the company back. The Daily Dot’s Patrick Howell O’Neill has the story:

"It's a terrible company," City Councilor Gary Rosen said. "In my opinion, they should not be welcome in this city. Comcast is a wolf in wolf's clothing; it's that bad. They are awful, no doubt about it. Maybe we can't stop it, but that doesn't mean we shouldn't speak out."

Next Century Cities Launch Webcast on October 20

Municipalities are increasingly realizing they need to take steps to ensure fast, affordable, reliable Internet access for local citizens. Some are doing the work themselves with publicly owned projects while others seek public-private partnerships. In order to capitalize on collaboration, a group of city leaders are now forming Next Century Cities.

On October 20, 2014, they will webcast the official launch from Santa Monica at 9:30 a.m. - 1 p.m. PT / 12:30 p.m. - 4 p.m. ET. From the announcement:

We're proud to announce the official launch of Next Century Cities. Next Century Cities is a new, city-to-city collaboration that supports community leaders across the country as they seek to ensure that all have access to fast, affordable, and reliable Internet. Founding Partners represent dozens of cities from across the United States.

On October 20, we will be officially launching at Cross Campus in Santa Monica, CA. Our event will bring together mayors from communities across the country, as well as successful technologists who have helped to implement and run some of the nation's most impressive broadband networks. We're proud to host mayors and leaders from across the country for a series of thought-provoking discussions about how high-quality broadband Internet has begun to empower American communities.

Featured speakers will include

As part of the event, Susan Crawford will moderate a panel discussion with Mayors and city leaders from a variety of communities.

The event will also include a panel discussion moderated by Christopher Mitchell with information and innovation leaders from the cities of Santa Monica, Boston, Kansas City, Portland, Raleigh, and Lafayette.

You can register online for the free event.

City Net Brings 100 Gbps to Santa Monica, California

For one of the fastest municipal networks in the U.S., travel to Santa Monica and sample City Net. The City just announced network capacity and speed upgrades to 100 Gbps. City Net is available to many local businesses and connects key community anchor institutions.

The entertainment, tech, and healthcare industries have a strong presence in Santa Monica and City Net officials expect them to be among the first to take advantage of the upgrade. Other area businesses are applauding the upgrade. From the press release:

Jeremy Foint, IT Manager of Loews Santa Monica Beach Hotel overwhelmingly approves, “With the annual American Film Market campus, tech expos, and Fortune500 corporate events convening in Santa Monica, it’s comforting to know Loews can accommodate the most demanding network requirements. I know CityNet will take care of us.”

We dug deep into the story of this publicly owned network for our case study, Santa Monica City Net: In Incremental Approach to Building a Fiber Optic Network. We also spoke with CIO Jory Wolf for episode #90 of the Community Broadband Bits podcast. Santa Monica took a measured approach by reinvesting funds they saved when they ended leased services. They now offer dark and lit fiber. The community has won numerous awards.

Business, Education Call on Culver City to Invest in Muni Fiber in L.A. County

Last fall, Culver City hired a consultant to develop a design and business plan for a possible fiber network project. Recently, prominent business leaders and parents of local school children have publicly expressed their support for a municipal network.

Culver City, also known as "The Heart of Screenland" is situated in west L.A. County, surrounded primarily by the City of Los Angeles. Approximately 39,000 people live in this community that is beginning to draw in the tech industry. In addition to Disney's Maker Studios, Apple owns Culver City's Beats Electronic, known for high-tech headphones. Culver City wants to stay current to compete with Santa Monica, home to a number of tech businesses that connect to its publicly owned City Net.

The L.A. Weekly reports billionaire Patrick Soon-Shiong, owner of NantWorks, has encouraged city leaders to move forward with the project. His specific request is that five business districts be included in the network deployment. NantWorks, located in one of those districts, provides cloud-based operating systems to support telehealth. According to the article, Soon-Shiong is rallying other business leaders:

Soon-Shiong has been encouraging other business owners in the area to support the plan, which is expected to come before the City Council sometime in October.

"He feels this is key," said Mike Sitrick, a spokesman for Soon-Shiong. "He’s talked to various city officials and told them how important he thinks it is, not only to his business, but to attracting additional businesses to Culver City."

Local elected officials report positive feedback as the city reaches out to determine interest in the project:

"We're still attempting to gauge the degree of interest," said Councilman Andy Weissman, though he added, "I'm confident it's going to happen."

The business community is not the only sector in Culver City seeking better connectivity. The Front Page Online recently published an op-ed from the group United Parents of Culver City. Regarding Soon-Shiong's statement about the importance of the project, the President of the parents' organization writes:

We agree.

We will take it a step further: This is key to the future of our schools, too.


Parents interested in technology issues are well aware that bandwidth limitations have created problems in our district. Those problems only will grow worse as technology becomes more integrated in the classroom environment and as online testing becomes more prevalent.

Exploring Santa Monica's Incremental Fiber Approach - Community Broadband Bits Episode 90

Just a few weeks after releasing our case study of Santa Monica's City Net, we have an opportunity to interview Jory Wolf, CIO of Santa Monica, and the chief driver of City Net. This is episode #90 of the Community Broadband Bits podcast.

We talk about how City Net got its start with a smart approach to the cable franchise negotiation. Adelphia built a number of fiber paths that Santa Monica would mange to connect anchor institutions. The savings from no longer leasing services provided the basis for expanding a network that would meet Santa Monica's needs long into the future.

They took that network and added on, eventually serving businesses with dark fiber and even some lit service. The model is applicable to any local government - financed by saving money and reinvesting that back into the network.

Read the transcript from this episode here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 20 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to Valley Lodge for the music, licensed using Creative Commons. The song is "Sweet Elizabeth."

Santa Monica City Net Case Study

Publication Date: 
March 5, 2014
Eric Lampland
Christopher Mitchell

Santa Monica has built a fiber network called City Net that has lowered its own costs for telecommunications, helped to retain businesses, and attracted new businesses to the community. Built incrementally without debt, it offers a roadmap any community can draw lessons from.

Unlike the majority of municipal fiber networks, Santa Monica does not have a municipal power provider – City Net is run out of the Information Systems Department. The vision for the network and its expansion was created in the Telecommunications Master Plan in 1998, standardizing the procedure that we now call “dig once.” Careful mapping and clever foresight laid the foundation for growth.

Santa Monica's Telecommunications Master Plan

In 1998, Santa Monica created a Telecommunications Master Plan that has guided it for the past fifteen years in building an impressive fiber network connecting all community anchor institutions and many business districts. We have just released a case study detailing this effort, entitled: Santa Monica City Net: An Incremental Approach to Building a Fiber Optic Network.

Below, you will find the original Master Plan and Exhibits. Santa Monica got it right - this document can still be a model today for communities across the United States. This document is particularly important for local governments that do not have a municipal electric department because it offers an alternative model run out of the IT department.