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Palo Alto Dark Fiber Brings $2.1 Million Per Year, Expansion Plans Developing

| Written by Lisa Gonzalez | No Comments | Updated on Apr 29, 2013 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/palo-alto-dark-fiber-brings-2-1-million-per-year-expansion-plans-developing/

The city owned dark fiber network in Palo Alto is bringing in a steady stream of revenue that may lead to better connectivity for the entire community. According to a Gennady Sheyner Palo Alto Online article, the Utilities Department recently reported to the City Finance Committee that the city Fiber Fund yields $2.1 million per year. The revenue comes from dark fiber leases to approximately 80 commercial customers. From the article: 

Viewed as a risky investment two decades ago, the fund has in recent years become a plump cash cow. According to a new report from the Utilities Department, its reserves stand at $14.6 million in the current fiscal year and are expected to nearly double by 2018. [emphasis ours]

Commissioners want to get back to the idea of a city-wide FTTP network to serve residents and spur economic development. The city is now working with the school district on a possible expansion to all local schools. 

In his February March State of the City address, Mayor Greg Scharff declared 2013 as the “year of the future,” describing fiber as “the key to assuring Palo Alto’s long-term position as the Leading Digital City of the Future.”  This year the City Council made “technology and the connected city” a priority.  Also from the article:

Commissioner Jonathan Foster noted that the idea of a citywide fiber network has been floating around Palo Alto for many years and said his views on the project have changed since last year, partly because of the council’s new attitude about fiber. Before, when economics were the main driver of the conversation, he was more or less neutral, Foster said.

“Now, my approach is — let’s find a way to make this happen,” Foster said. “I’m not sure we’ll get there but let’s come back with the best proposal we can,” Foster said.

Commission Chair James Cook voiced a similar sentiment.

“I think this is probably a good idea whose time has finally come,” Cook said. “Maybe now it’s just gotten the right kind of momentum.”

We spoke with Josh Wallace from Palo Alto Utilities in Episode 26 of the Comunity Broadband Bits Podcast. He shared details about the city’s commercial dark fiber network. Durango, Colorado and Staunton, Virginia have also turned fiber assets into revenue and provide reasonably priced access to local businesses. As more communities see the benefit, more offer dark fiber leasing.

Dark fiber tends to be useful only to a minority of tech-savvy businesses but it can form the backbone of a future network and rarely encounters regulatory restrictions.