Mayor McElvain’s Fiber Optic Dream

Image taken from the City of Redding’s Fiber Broadband Project Page

I began this project with the knowledge that it should never take any money from the General Fund. General Fund money is desperately needed for public safety.” -Mayor Adam McElvain

Redding’s new Mayor, Adam McElvain, has had a dream of bringing high-speed internet to Redding since 2007. Thirteen years later, now as an elected official, he’s developing a plan for a citywide publicly owned internet utility that would bring fiber optic access to all Redding residents.

Almost 100 years ago, Redding was taking a similar risk, when the City bought a local electric utility from a predecessor of today’s PG&E. It seems to have paid off. McElvain’s initial white paper proposing high speed internet in Redding, calls Redding Electric Utility (REU) “to-date, Redding’s most significant economic advantage over other mid-sized cities.”

Better yet, according to McElvain, with hundreds of municipalities now launching publicly owned internet utilities, REU is one reason Redding is positioned for success. After meetings with the city manager, REU engineers and Public Works officials, he says existing REU infrastructure can reduce the costs of building out a fiber optic network. And the fiber optic needs of REU and the City of Redding will increase the financial benefits of a publicly owned internet utility.

A Downtown Pilot high speed internet project has been in the works for several years in Redding. And McElvain decided early on that it was imperative not to spend Redding’s General Fund money on the project. Instead, he utilized free, and valuable, partnerships, notably the North State Planning and Development Collective and Broadband USA (a subset of NTIA under the Department of Commerce). Both contributed significant time and expertise to the City, free of charge, helping to develop the City of Redding Broadband Plan which was presented to the Redding City Council in April 2019. This plan estimates that high-speed internet could be installed in a section of downtown Redding at a cost of $2.5-3 million. And McElvain believes the costs will actually be lower, between $1.9-2.6 million, due to previously mentioned synergies with REU.

The next step, a study by Entry Point, determining the feasibility of a citywide internet utility (of which Phase 1 would be the Downtown Pilot) is now in process. And while the City has paid $30k for this study, McElvain was quick to assure me that no General Fund money was used. Instead, half the funds came from REU and half from the City’s IT fund.

Better yet, the build-out of both the Downtown Pilot and later phases of a citywide high-speed internet utility could be mostly funded by grants.

McElvain said, “We are in an opportunity zone here in Shasta County, and this means that we have access to more grant money. We are looking into applying for an EDA grant and think we are a prime candidate. Two other public fiber companies in California have received these grants, totalling 50% of their costs. But because we are in an opportunity zone, any grant given to us will be an 80/20 match.”

Most importantly, he added, “The plan is certainly not to spend any General Fund money at all.”

McElvain told me his original vision was for Redding to be a traditional internet service provider (ISP), much like Charter or AT&T. Now, after more research, he’s leaning toward something a little more unique – an open access network. This would allow the City of Redding to put in fiber, and operate and maintain it without providing the related services. Instead, the City would create a digital marketplace, allowing any ISP to participate and market internet services to residents. Such a network would require residential users to pay the City a standard fee to bring fiber to their residence, perhaps $30-40 monthly, which would cover operation and maintenance costs. On top of that fee, users would subscribe to an internet provider of their choice.

According to McElvain, only a handful of other cities have tried this solution, which has the obvious advantage of encouraging competition and driving down costs.

And while he has been pushing hard for exploration of this project, it’s also obvious he is highly aware of the risks.

He said: “Council members expressed an interest in private/public partnerships like the ones I found with an open access network. I looked at what other cities have done and I purposely looked at the ones that failed much more closely than I looked at the ones that succeeded. The number one reason for failure I found was when cities bit off more than they could chew. The number two reason for failure is when government groups partnered with private third parties that did not follow through. This second reason caused catastrophic failure.”

Moral of the story? While an open-access fiber optic network can be what he calls the “perfect nexus of private/public partnership,” it can also be a disaster. Proceed cautiously.

But the possibilities are exciting. McElvain gave me an example of what Redding could look like as a so-called Smart City. It’s the kind of tidbit that gets you thinking on a whole new level.

“For example, if a gun is fired in a school within the network, a sensor can pick it up, relaying the location, he said. “Then a camera attached to the network could begin feeding live video within three seconds and screen shots to first responders within fifteen seconds.”

Similarly, McElvain said, REU has already been looking into how fiber optics built between substations could allow them to monitor fire using infrared sensors and fire-spotting cameras. The City has already put aside $800k in their biennial budget towards developing this, he said.

But he was clear that some of the most interesting applications of technology in a Smart City could also be among the most concerning, specifically mentioning facial recognition technology and license plate readers and the data they collect.

“I’m not a fan of surveillance,” he said.

But from his perspective, running Smart City applications through a City-owned network allows Redding to set terms that will protect residents. And, according to McElvain, the City is already considering hiring a Director of Cyber Security to help manage these concerns.

But will a publically owned internet utility succeed? Some would say, if they can do it in Ammon, Idaho (population 16,500) then why not here? Others would point to the number of failed internet utilities nationwide, and give McElvain’s Fiber Optic Dream a thumbs down.

I saved the multi-million dollar question for last: Could MvElvain’s dream of a publicly owned internet utility turn out to be just another Stillwater Business Park?

(For those unfamiliar, the City of Redding spent between $23-40 million dollars in bond debt to develop Stillwater Business Park, for the purpose of attracting new jobs to Redding. Thus far Stillwater has not brought any new businesses or jobs to Redding.

I was pleased that Adam did not shy away from this question, instead making direct eye contact, clearly engaged.

“That’s a good question and one we should be asking ourselves,” he said. “One of the key differences between this and Stillwater is that a fiber optic network can and will be used immediately, unlike Stillwater which was banking on future companies moving to Redding.”

“And to increase our chances of success, before we put in any fiber optic service we will look at adoption rates. We want 30-35% adoption in our Downtown Pilot. That means 30% out of about 800 customers who have committed to using the service. This percentage of users means our customer fees will cover operations and maintenance cost.”

Notably, also unlike Stillwater, the City is not currently considering bond debt to fund the project.

I look forward to your thoughts in the comments.

Annelise Pierce
Annelise Pierce is fascinated by the intersection of people and policy. She has a special interest in criminal justice, poverty, mental health and education. Her long and storied writing career began at age 11 when she won the Louisa May Alcott Foundation's Gothic Romance short story competition. (Spoiler alert - both hero and heroine die.) Annelise welcomes your (civil) interactions at AnnelisePierce@anewscafe.com

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18 Responses

  1. Avatar Russell K. Hunt says:

    The proposed downtown area , as the pilot, will be a crash landing for lack of customers needing that much capacity. The hospital and the Courthouse already have there own direct connections to the Google Tube next to the railroad.

    • Steve Towers Steve Towers says:

      For small businesses, enthusiasm will probably depend largely on comparative cost. Before abandoning downtown (for reasons other than infrastructure), my business was never hamstrung by Charter-Spectrum’s 100Mbps download speed—not even close. The cost was ridiculously affordable relative to the expensive, slow, and unreliable options we have out here in Palo Cedro.

    • Avatar Anon says:

      I don’t know what a Google tube is but there isn’t one. The fiber backbones are owned by companies like Level3, ATT, etc. To get into those at the local level, even for government and hospitals, they buy a fiber circuit from ATT, Charter, maybe Frontier (if they’re really unlucky). Obviously it’s nothing like what you’d be getting in your house and somewhat of a project to get going but why wouldn’t they be able to buy an identical circuit from the City if it costs less? They aren’t going to jump right into it unless it proves to be at least equally stable for some time but it’s not unrealistic.

  2. Steve Towers Steve Towers says:

    Thanks, Annelise. I’d probably have been tempted to push McElvain on the personal benefit issue, but upon reflection, I think that’s a red herring. Sure, his business will benefit directly. Likewise, his business is likely to benefit from every single decision made by City Council that improves Redding, including public safety votes. I know it’s a matter of degree, but should he and other City Council members who have business interests in Redding rescue themselves from every such vote? That seems ridiculous.

    I do have misgivings about the potential for increased surveillance, though. For me, those red light cameras downtown already cross the line between standard law enforcement and Big Brother surveillance/capitalization.

  3. Avatar Annelise says:

    Steve, I agree with you. More people should be thinking ahead about surveillance, especially surveillance by law enforcement. Personally I was impressed that McElvain brought it up.

  4. Avatar Jist Cuz says:

    Coucil has stymied, stalled and deverted for years now all the while looking for ways to declare a STATE of EMERGENCY per homeless crisis to recieve outside assistance. They spent $150K for a plan that when implemented has cleaned up cities in California. It went into the #86 file while they exhaust and frustrate the police criminalizing people trying to survive, the homeless polulation. They did a study and then turned a blind eye to the fire danger and are now being sued for BILLIONS! My question is: AM I THE ONLY ONE SEEING THE NEGLIGENT INSANITY WHILE THEY EXPAND THEIR PALACIAL VIEW?

  5. Avatar Candace says:

    The potential for increased surveillance (and possible abuse thereof) of private citizens by law enforcement is very concerning to me. While it sounds like there are benefits to this endeavor, for me, at this juncture, the potential for abuse of power regarding surveillance leaves me cold. I appreciate our mayor’s candidness and willingness to “go there” rather than shying away from your surveillance question. Thank you, Annelise, for asking important questions and sharing the conversation with us, I appreciate it.

  6. Avatar Jist Cuz says:

    Google: CA SB 178 and STAFFIN v BOSENKO et al.

  7. Avatar Bruce Vojtecky says:

    In a low crime area like Redding public surveillance may seem like Big Brother but here in Phoenix it is a useful tool for crime solving. Right here on our El Mirage Neighborhood watch group the police will show video of suspected robbers and thieves and many are identified from public input. Only criminals need fear police surveillance here.

  8. Avatar Annelise says:

    Bruce, that’s what they always say.
    https://www.aclu.org/other/whats-wrong-public-video-surveillance

    Also thanks for referring to us as a low crime area. Great perspective.

  9. Avatar Candace says:

    Annelise, thank you for the ACLU link. The reasons given regarding the dangers of abuse and “mission creep” are the precise reasons that leave me cold regarding the promotion of increasing a broad reach of electronic police surveillance of law-abiding private citizens. To me that’s one scary slippery slope and I’m no criminal.

  10. Avatar Chad Magnuson says:

    How will the 800 COR users in downtown pilot area benefit from high speed internet service over what they already have? How many of these 800 users will benefit in a business manner versus personal use?
    Living in a rural part of the area I would love a more reliable and high speed service for personal use.
    Not sure I want to subsidize businesses for the same service.

    Regarding security for schools I’m all in.
    But perhaps stricter gun laws would be an even cheaper proposal.

  11. Avatar Chad Magnuson says:

    Funny how the COR leaders voted to shoot down the immediate benefit to residents concerning the solar power initiatives but want to promote a program for internet services that is at the minimum speculative.

    • Avatar Annelise says:

      Chad, what I find interesting about this project is how much can be accomplished when someone decides to champion something.

      • Avatar Chad Magnuson says:

        Yes I agree.
        When someone steps up to champion a cause it makes a difference.
        The past has seen many champions of causes in our area. Stillwater comes to mind. But the foresight of those championing it was not very thoughtful.
        I can’t remember how many have championed homeless with nothing but futile results.
        Gentrification of downtown has certainly been championed by those with vested and financial goals in mind. We’ll see how that pans out.
        The one cent sales tax has been championed by mostly LE and business only to fail miserably, as I predict it will fail again this time.
        Programs that benefit the majority are the ventures that succeed.
        High speed internet, at this time looks to only benefit a few with the COR pilot program.
        If it were to benefit the majority I see success. To benefit a handful of businesses within the area is a losing proposition.

  12. Avatar Anon says:

    Charter is between $70-$75 a month now for 100/10 Mbps residential. They can and will continue to creep that up because there is no real competition here and never will be as giant ISP’s continue to merge. There is absolutely nothing you can do about it but switch to nearly unusable DSL from ATT. I think there is way more benefit in municipal broadband than is being given credit, even from McElvain.

    Also something to consider, support from these huge ISP’s is a circus. Try to get a new fiber circuit connected from ATT and count how many hands it passes through, how many people come out to your facility and fiddle around with something for 2o minutes while months go by, more random people show up from Sacramento unannounced, etc. before they actually light circuit up your circuit. They don’t really care, what are you going to do about it? I just can’t imagine REU can do a worse job than that, our electrical infrastructure seems pretty well taken care of at a decent price.

  13. Avatar Susie EW says:

    I don’t believe it is appropriate for government to invest public dollars to compete with private business (don’t care if its by way of a grants or other sources – you can usually follow the money back to consumers pocketbooks) I understand the concern about ISP’s current pricing but price is generally driven by supply and demand. These fiber networks have been developed over decades of investment in research and infrastructure. Charter, in particular, has been successful with their internet product because they have invested millions of private investor dollars creating a robust internet business. On the other hand, it Redding was such a hot bed of “internet demand” why hasn’t ATT or someone else jumped in to upgrade their services to compete with Charter’s product. If the demand is really there the existing ISP’s are the professionals – let them do the business plan, invest the private dollars, take the risk and manage/maintain the network. The City has a hard enough time managing the budget, departments, utilities, retirement plans, unions, parks, streets, homeless, crime, etc. why in the world would they undertake this project. If you really think this is important try Incentivizing private business professional to build the project. Just my two cents? And yes, I am retired from the telecom business.

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