December 20, 2005
SUBJECT: Wireless Services in the Downtown Area (Study Issue)
REPORT IN BRIEF
Wireless fidelity (wi-fi) networks are becoming increasingly common in cities across the country. The 802.11 broadband wi-fi network is designed to provide secure wireless access to the Internet for mobile computer users. Wi-fi is an inexpensive, short-range wireless technology that uses unregulated radio frequencies to connect properly equipped devices to the Internet. Wi-fi networks use a system of radio transmitters that provide line-of-sight communications to users. The technology relies on small coverage areas ranging between hundreds to a few thousand feet, known as “hot spots” or collectively as a “hot zone”, to deliver multi-megabit speeds directly to end users. The transmitters are typically installed on streetlight poles and building roof tops to produce maximum coverage in the area. A variety of devices including laptops, personal digital assistants (PDAs), cellular telephones, digital cameras and even desktop computers are now enabled for wi-fi.
Cities and businesses find wi-fi attractive for several reasons. First, because it can be deployed without cabling, wi-fi is much less expensive than the traditional hard-wired broadband services like a fiber optic network and can be hosted in areas where cabling is not possible, such as outdoors. In addition, the radio spectrum used by wi-fi is unregulated, resulting in more flexibility for innovation without regulatory oversight. There is a global set of standards for wi-fi, and this has resulted in a wide variety of wi-fi products and vendors from which users may choose. Because there is so much competition for both wi-fi products and vendors, the costs to users are relatively inexpensive, and are competitive with traditional hard-wired services and products. For these reasons and many more, wi-fi is seen as a key factor in economic development; i.e., having wi-fi is a positive incentive for businesses to locate in the City and for visitors and residents to shop and eat in the downtown area.
Wi-fi networks are being installed not only in downtown areas but, in some instances, throughout entire cities. In September 2004, Philadelphia officials announced a $10 million plan to install wireless hot spots throughout 135 square miles of the city by placing cells on streetlight poles and other devices. The City of San Mateo operates a wireless network in the central part of the city for the Police Department so that officers can access databases from their car laptops. In St. Cloud, Florida, residents and visitors can surf the web for free using a wireless network created by the city that covers a 12 block square downtown. Long Beach began offering free wireless Internet access in January 2003 in a 4 block downtown area.
The City of Sunnyvale has already taken steps to bring wi-fi to the community. In December 2004, Council approved a non-exclusive franchise agreement with MetroFi, Inc. to install its wireless network in residential areas of the City (RTC No. 04-416, Award of Wireless Communications System Franchise to MetroFi, Inc.). The City approved an initial installation of MetroFi’s equipment on 114 City-owned streetlight poles; MetroFi expects to complete these installations by December 31, 2005 (see Attachment A for the coverage area). For the next phase of their network deployment, MetroFi plans to request placement of their equipment on an additional 100 streetlight poles in the City, resulting in coverage for approximately two-thirds of Sunnyvale’s residential areas. As with the initial request, the City will review and approve the streetlight pole locations, and will inspect the installations once they are complete. In addition, MetroFi has expressed an interest in providing the downtown hot zones although no formal discussion has been held.
Initially, MetroFi intended to offer their wireless Internet services in Sunnyvale at a monthly cost of $19.95 with a modem rental included or $14.95 if customers chose to purchase the required modem; access speeds are up to 1 megabit per second. More recently, in December 2005, MetroFi launched a free version of their service in Sunnyvale, which is advertising-sponsored; it is our understanding that users will see what looks like a toolbar in their browser window with rotating ads when using this service. MetroFi reports that they already signed up 25 businesses, many of them local, to participate in the free service. Residents still have the option to pay a monthly fee for MetroFi’s services ($19.95 or $14.95, as described above) if they do not wish to view the advertising toolbar.
Staff recommends that the City work with MetroFi to provide free wi-fi services in the downtown area. The City already has a franchise agreement with MetroFi, and MetroFi has met all City requirements to enter into that agreement. MetroFi has already entered into a separate agreement with PG&E for the use of the electricity to power the devices from the unmetered streetlight poles. MetroFi has tested technology that is proven to work, and to work reliably. MetroFi will have completed installation of the first phase of their network in Sunnyvale by December 31, 2005, and already has plans to deploy equipment on 100 additional poles. Furthermore, MetroFi has expressed an interest in providing free wi-fi services in the downtown area.
BACKGROUND
City Council prioritized the study issue to review wireless services in the downtown area that was initiated by Councilmembers Hamilton and Lee at its December 2004 Study Issues Workshop. Council directed staff to identify different options for bringing wi-fi to the downtown area, and the advantages and disadvantages of each. In addition, council directed staff to include a review of the City’s franchise requirements and zoning regulations.
Around the same time that Council prioritized this study issue, MetroFi approached the City with a request for a non-exclusive franchise agreement to install their equipment on City streetlight poles, with the intent of offering wi-fi services to residential areas in Sunnyvale. Council adopted an ordinance in December 2004 granting the agreement. Since that time, MetroFi has installed approximately 100 transmitters, and in December 2005 began providing free and low cost coverage to one third of residential Sunnyvale.
EXISTING POLICY
Telecommunications Policy, 1996
Goal D – Promote use of telecommunications technology, where appropriate and within the scope of available resources, to enhance the economic vitality of Sunnyvale.
Policy E.1.a – Promote creation of a broadband, high-speed digital infrastructure available to all Sunnyvale citizens, businesses, industries, schools and agencies.
Community Participation Sub-Element Policy 7.2A.4
Identify communications media and telecommunications technology that are appropriate and cost effective to provide information to and access for the community.
Article XVI, Sunnyvale City Charter
A franchise agreement would be required according to Article XVI of the Sunnyvale City Charter. Article XVI provides that any “person, firm or corporation” who wishes to engage in a “franchised privilege” in the City must obtain a franchise from the City Council. The Charter defines a “franchised privilege” to include the provision of communication services to inhabitants of Sunnyvale. It also includes the use of public streets, ways, alleys or “places in the City of Sunnyvale as the same now or may hereafter exist”, or “traversing any portion of the City for the transmitting communication services.”
Wireless Telecommunications Code, Title 19 (Zoning), Sunnyvale Municipal Code
The Wireless Telecommunications Facilities Code in Chapter 19.54 of the Sunnyvale Municipal Code regulates the location and appearance of private wireless telecommunications facilities in Sunnyvale in all areas of the City. The code provides for review of wireless facilities such as cellular sites in certain areas of the City and streamlines the process for issuing necessary permits while ensuring compliance with all applicable zoning, building, health and safety requirements in Zoning Code Chapter 19.54. The Code was written in 1997 and did not include specific reference to broadband wi-fi or mesh networks. However, a “wireless telecommunication facility” was defined as “a facility that transmits and/or receives electromagnetic signals, including antennas, microwave dishes, parabolic antennas, directional antennas and other types of equipment for the transmission or reception of such signals, towers or similar structures supporting the equipment, equipment buildings, shelters, cabinets, parking area and other accessory development.”
DISCUSSION
Wireless technology and products are evolving at a fast pace and wi-fi is a “hot” issue in local government. Many municipalities are exploring and beginning to install a citywide network infrastructure that will deploy and extend the public wireless network across the city. This Report focuses on the issue of providing wireless services to residents, businesses and visitors in the downtown area specifically, which is defined as the section bordered by Iowa Avenue to Sunnyvale Avenue, north to Evelyn Avenue and west to Mathilda Avenue, including the train station (see Attachment B). It is expected that a wi-fi network in the downtown area will use existing streetlight poles or perhaps buildings to mount the wi-fi transmitters, at no direct cost to the City. The selected provider will be required to enter into a separate agreement with Pacific Gas & Electric (PG&E) for the use of the electricity to power the devices from the unmetered streetlight poles.
While, as discussed in the Report in Brief, wi-fi is an attractive option as Cities try to make sure as many individuals as possible have equal access to the Internet for free or at an affordable rate, there are issues and concerns critical to local government with the wi-fi technology. For instance wireless networks are not secured like hard-wired networks; which can limit the use of the technology in applications that require high security (such as public safety). In addition, there is the potential public liability if someone were to use these less secure networks to steal another person’s identity, or if an under-age user accesses unauthorized websites. Since wi-fi is on an unregulated radio spectrum, no city can guarantee exclusivity; other providers can install competing equipment on private buildings that can interfere with an installed wi-fi network. Weather, building locations and tree foliage can also interfere with the network. Furthermore, there is a risk that if the provider does not generate a return on investment they may choose to end their service, or to abandon the network, leaving the City with responsibility for it. Finally, as technology constantly changes, any system installed today may become obsolete in a very short time period.
Surrounding cities already have established hot zones. San Jose installed free wi-fi hot spots in its downtown areas, including Plaza de Cesar Chavez, San Pedro Square and Circle of the Palms, in March 2004 as a result of a partnership with Cisco Systems and Global Netoplex. In addition, San Jose recently approved the expansion of the downtown wi-fi coverage. Cupertino has free wi-fi services in its downtown area that are supported by a third party. AnchorFree provides free wi-fi services in the downtown areas in Palo Alto, certain districts in San Francisco and in the downtown shopping area of Burlingame. In most cases, vendors approach cities with requests to install hot zones. One exception is Sacramento who prepared a Request for Proposals (RFP) after receiving an unsolicited offer from a local developer.
In researching what other Cities are doing to bring wireless to their communities, staff found that while many cities seem to work with the company that approaches them there are a number of other options. Several cities host wireless services internally; several entered into non-exclusive franchise agreements; some entered into exclusive agreements; in Culver City, California, the Redevelopment Agency provides funding for one square mile of free wi-fi in the downtown area. The Redevelopment Agency also provides funding for Fullerton, California, but only for the network and one year of operating costs.
Staff would also like to make Council aware of a regional effort that is underway as it considers wireless solutions for the downtown area specifically in Sunnyvale. The Joint Venture: Silicon Valley Network initiated a Wireless Silicon Valley Task Force in March 2005. The Task Force consists of information technology managers (including Sunnyvale), economic development managers and local utilities representatives. The group was formed to review the interest in developing a regional wireless infrastructure making broadband Internet access more affordable and to encourage the growth of local businesses that make wireless products and services. As a result of the citywide efforts of Philadelphia, San Jose, Cerritos, Los Angeles, New York City and San Mateo and other agencies throughout the country, the Task Force determined that there is significant interest in creating a regional wireless infrastructure covering 1,500 square miles of Silicon Valley including the counties of Santa Clara, San Mateo and Alameda. Brian Moura, Deputy City Manager for the City of San Carlos is the co-chair of the Task Force. The Task Force recognizes that the development of such a regional wireless infrastructure requires significant funding as well as joint partnerships with participating agencies. After the Executive Board of the Task Force met with Intel’s Solution Services consulting group in October 2005, the Task Force began developing a Request for Proposals and expects to distribute it during the first half of 2006.
At this time, the Task Force is still working to define what cities want from a wireless broadband provider in terms of services, coverage, compensation, city network use and features for use in developing the RFP. The Task Force is also interested in finding a vendor who may want to provide citywide coverage to multiple agencies, offering the possibility of countywide or even regional interoperability for various wi-fi applications. Once it is developed, cities will have the opportunity to sign onto the RFP in order to take advantage of the results. Once a contract is approved, each city will contribute a share of the costs.
Options for Providing Wi-Fi Services Downtown
If the City decides to move forward with providing free wi-fi services in the downtown area, there are several available options:
· Staff could work with MetroFi. As stated previously, the City already has a franchise agreement with MetroFi to provide wi-fi services in residential areas, and MetroFi has already expressed interest in expanding their deployment to include hot spots in the downtown area. The City would need to provide access to a building or other structure for MetroFi’s installation of a transmitter site, in addition to the devices on the streetlight poles.
· There is also the option of adding a wireless component to the City’s network infrastructure and extending wireless services to the downtown area. Although the IT Department has developed a secure wireless configuration for use by the Department of Public Safety in the event the Emergency Operation Center is activated and for the property barcode application, no other wireless services are currently being deployed. However, the IT Department is reviewing the possibility of deploying wireless hot spots at City Hall and the Library. Additional IT staffing resources would be required to design, install and support these wireless services.
· Another alternative is for the City to issue a Request for Proposals (RFP) with specific requirements and award the contract to the best, most responsive proposer. Staff has access to a number of RFPs issued by other jurisdictions and anticipates that a RFP can be distributed by the end of March 2006. When the RFPs are evaluated, staff will analyze any costs and make a recommendation to the City Council. According to the City Charter, the successful proposer would also need to apply for the appropriate planning permits and encroachment permits, as well as enter into a Council approved franchise agreement with the City.
· Yet another option is that the City could leave the responsibility of bringing wireless services to the downtown with the individual business owners. Regardless of Council action, business owners have the option to contract with a service provider of their choice to provide wireless Internet connections at their respective business sites. In fact, Coffee and More and the Bean Scene, both businesses on Murphy Avenue, already have free wi-fi hot spots. The City would have no control or interest over wireless services provided by business owners; this has both advantages and disadvantages. Advantages are the City does not incur any costs, and is not liable for the wireless services or their associated risks (listed above). It is hard to know the disadvantages; it may be a disadvantage to have a wide variety of wireless providers competing in the downtown area. It may not promote healthy relationships between downtown businesses. Additionally, the City will not have control over the availability, or the terms or conditions of the wireless services offered to residents if the local businesses are responsible. As with other options, any wireless provider operating in the City would need to apply for the appropriate planning permits and encroachment permits, as well as enter into a Council approved franchise agreement with the City.
· The City could incorporate providing wireless services in the downtown area into its cable television franchise agreement with Comcast Cable, Inc. However, to our knowledge, Comcast does not have plans to offer wi-fi to residents of Sunnyvale. It is uncertain at this time if or when they will begin offering wi-fi to residents. Comcast currently offers Internet connections over a hard-wired cable network. Their customers are able to use a modem and router to connect wirelessly to the cable network installed in their residence. Comcast offers a similar option to businesses; Comcast connects the businesses to the cable network, and then businesses use a wireless router to connect to the network. This is not a wi-fi network, and is not comparable to the other options listed.
The Information Technology Department worked with the Community Development Department, Planning and Economic Development Divisions, as well as the Public Works Field Services Division to review the options and concerns for offering wi-fi services in the downtown area.
Based on the exposure to and prevalence of discussions on wireless technologies, City staff felt it was not necessary to consult with an expert in wireless technologies. Over the past year, Information Technology Department staff have acquired sufficient knowledge in the wireless arena, and feel comfortable in addressing this downtown wireless study issue.
FISCAL IMPACT
In most cases, staff expects that there will be no direct cost to install wireless Internet services in the downtown area to the City. Whether the City opts to work with MetroFi, to issue an RFP, or to leave it to business owners to contract with the service provider of their choice, it is anticipated that the City will receive a reasonable fee for use of the light poles or electric fixtures and that the vendor will bear all costs for the equipment, installation and maintenance of the network.
For example, under the current franchise agreement, MetroFi pays an annual fee of $36.00, with an annual Consumer Price Index (CPI) adjustment, for each streetlight pole on which a transmitter is installed. This fee is comparable to the $40 per pole fee paid by MetroFi to the City of Santa Clara for similar service, the difference being Santa Clara’s ability to discount the cost of powering the radio transmitters because it operates its own electric utility. In Sunnyvale, MetroFi has negotiated the cost of electric service directly with Pacific Gas & Electric (PG&E). The fee is also comparable to the $36 per pole fee paid by MetroFi to the City of Cupertino and to the City of Mountain View.
In addition, MetroFi also provides a security deposit per pole for equipment repair, removal or relocation should MetroFi default on any of the terms and conditions of the franchise. The City also entered into a Right of Entry (ROE) Agreement with PG&E, granting access to PG&E to the City-owned streetlight poles. The ROE Agreement also indemnifies the City from liability for damages resulting from MetroFi’s operations. In a separate agreement between MetroFi and PG&E, MetroFi provided a letter of credit to PG&E to cover costs of removing the equipment in the event of any breach of terms and conditions of the agreement.
The exception to this is if the City opts to host wireless services. In that case, there will be significant costs in the form of additional resources and staff hours for the maintenance and support of the network. These costs cannot be absorbed within the current Information Technology Department budget.
Conclusion
Many municipalities have installed wi-fi services in downtown areas. Wi-fi is an inexpensive, short-range wireless technology that provides access to the Internet for mobile users. Wi-fi services in the downtown area are desirable and promote economic activity, especially for visitors, residents and businesses.
There are some issues with regard to security of wi-fi services and reliability of the network. The technology is constantly changing so that a system installed today has the possibility of becoming obsolete in a very short timeframe.
The City could negotiate with MetroFi, Inc., to provide free wi-fi services in the downtown area. Some cities elect to expand the network infrastructure used for business purposes to include hot zones in the downtown area, and either contract with a private vendor or use city resources to maintain and operate the network. In other instances, a city could solicit responses by distributing a Request for Proposals with specific requirements.
PUBLIC CONTACT
Public Contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and City Clerk’s Office.
ALTERNATIVES
1. Direct staff to work with MetroFi to provide free wi-fi services in the downtown area.
2. Direct staff to expand the network infrastructure used for City business purposes to include wi-fi coverage in the downtown area.
3. Direct staff to issue a RFP soliciting proposals for the design, installation and operation of a wi-fi network in the downtown areas as defined in this Report for providing free wireless Internet broadband services.
4. Defer consideration of a wi-fi pilot project in the downtown area.
RECOMMENDATION
Alternative #1, Direct staff to work with MetroFi to provide free wi-fi services in the downtown area.
Wi-fi services promote economic opportunities in the downtown area for businesses, residents and visitors. MetroFi already has a franchise agreement with the City for providing wi-fi services in the residential areas of the City. The City could negotiate with MetroFi to provide hot zones in the downtown area. MetroFi has tested their technology and has documented that it is reliable. There is no direct cost to the City for allowing MetroFi to install their wi-fi services in the downtown area.
Give the non-exclusive nature of the MetroFi’s franchise agreement, this would not preclude other businesses from approaching the City to provide wi-fi services. In addition, the City will still be able to join with regional wireless efforts, such as the Wireless Silicon Valley Task Force effort (discussed above).
Reviewed by:
Shawn Hernandez, Director, Information Technology
Prepared by: Marilyn Crane, Manager, IT Services
Approved by:
Amy Chan
City Manager
Attachments
1. Attachment A – MetroFi Coverage Area (.pdf)
2. Attachment B – Proposed Sunnyvale Downtown Hot Zone (.pdf)
3. Attachment C – 2005 Study Issue, ITD-2, Feasibility of the city Providing Wireless Services in the Downtown Area (.pdf)