Subject: [NEXTEL-1] Pacific Bell aims its guns at Palo Alto

From: Marcel <[email-masked]>
Date: Thu, 12 Dec 2002 15:51:39 -0500

-------- Original Message --------
From: [email-masked]
Subject: Pacific Bell aims its guns at Palo Alto

http://www.paweekly.com/paw/morgue/2002/2002_09_27.ftth27.html

Publication Date: Friday, September 27, 2002
Palo Alto Weekly

Pacific Bell aims its guns at Palo Alto 
Fiber utility would be too costly for city, company says 
by Pam Sturner 

Palo Alto still has many questions to sort out about its fiber-to-the-home 
Internet utility. But while cost, scope and other parameters have yet to be 
set, one aspect of the proposed system remains a constant: It is still a thorn 
in Pacific Bell's side. 

Having failed to dissuade the city from launching its fiber-to-the-home trial 
last year, the telecommunications giant took another swing this week. The 
company dispatched a representative to meet with City Council members, in part 
to warn them about pitfalls of entering the telecommunications business. 
Armed with PacBell's "position paper" on the proposed utility, Stacey Wagner, 
the company's director of external affairs, made her pitch to Councilwomen 
Nancy Lytle and Dena Mossar on Wednesday. 

In addition to the position paper -- which criticized the city's cost 
estimates -- Wagner also gave them a memo titled "MuniToons: The folly of 
municipal ownership of broadband facilities." It offered examples of failed 
municipal telecoms, although none designed exactly like Palo Alto's, in which 
the city would provide the infrastructure but leave the sale of services to 
businesses. 

While noting that Wagner was frank about PacBell's desire to head off 
competition from the city, Mossar found the meeting echoed some of her own 
longstanding concerns about the project. 

A point Wagner raised was that if the city offers video, phone and high-speed 
data capacity, it could then be subject to regulation by the federal 
government -- something Mossar thinks the city should avoid. "Why add another 
layer of complexity to running the city?" she asked. 

Mossar also took interest in PacBell's cost analysis, which suggested that the 
city's estimates were low. "I haven't seen all the details, but my gut tells me 
it probably isn't something that's affordable," she said. 

Another possible factor for consideration is a report released Monday by the 
U.S. Department of Commerce's Office of Technology Policy, announcing only one 
in 10 Americans with Internet access uses a broadband connection. The U.S. lags 
behind South Korea, where more than 50 percent of Internet users surf the web 
using high-speed access, Hong Kong, with 25 percent broadband usage, and Canada 
at 20 percent. 

The study said most Americans view broadband as a luxury item due to its high 
cost -- usually upwards of $50 per month. 

Lytle said Wagner described alternatives to a city-run utility that PacBell 
could provide, a proposal that she received with interest. "I'm always open to 
information," she said. 

Both Lytle and Mossar referred Wagner to the city staff to present her 
arguments. As of press time, neither the city manager's office (nor the 
utilities department) had heard from her. 

Wagner did not return repeated calls for comment. E-mail Pam Sturner at 
[email-masked]

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