Los Angeles wants to bring fiber-based broadband to all of its residents and businesses and build a citywide Wi-Fi network at the same time. The best part for LA is that the buildout won't cost the city a dime.

Further Reading Bigger than Google Fiber: LA plans citywide gigabit for homes and businesses

"My first reaction is 'I look forward to their RFP for a unicorn supplier, because I think it's about as likely under these terms,'" Harold Feld, senior VP of the technology-focused consumer advocacy group Public Knowledge, told Ars.

There would be benefits to a winning bidder in LA's fiber bonanza, though. While the vendor would have to provide free Internet to everyone at the network's slowest speeds (potentially with ads to support the service), it could also charge a premium for everything up to gigabit lines and could sell TV and phone service to everyone in LA. Moreover, the winning bidder could get contracts to provide the city government with data center hosting and perhaps other IT services like e-mail.

"I like to think of it as limited at this point only by your imagination," Los Angeles City Council member Bob Blumenfield, who came up with the idea, told Ars.

Blumenfield wants city residents to have completely portable Internet connections, available both at home and on Wi-Fi hotspots wherever they go in Los Angeles. "While I may be getting five megabits as Joe on the street wanting to connect, if I'm a customer of the vendor then I have portability. I can get the same high speed access I would get in my home anywhere in Los Angeles," he said.

The Wi-Fi component of the project would cost less than $100 million, he said. "When completed, Los Angeles would be the largest city in the United States with free universal access to wireless broadband," Blumenfield's office said in a press release.

The problem is that the city needs to bring something to the table to make the construction costs worthwhile to the vendor, Feld said.

"If there were a lot of municipal fiber in the ground already so you didn't have to pay to deploy the asset, and the issue was 'we're looking for a manager to take over management of existing urban fiber and turn that into an open system,' that would be one thing," Feld said.

Los Angeles Information Technology Agency GM Steve Reneker told Ars, "The city is going into it and writing the agreement, basically saying, 'we have no additional funding for this effort.' We're requiring the vendors that respond to pay for the city resources needed to expedite any permitting and inspection associated with laying their fiber."

Reneker further said the winning bidder would hopefully be able to provide not just fiber Internet but also cellular service and data center hosting. That potentially limits the field to AT&T and Verizon.

"There are only two companies that could do that for both wireless and fiber, and neither one of them is going to take those terms," Feld said.

We've asked AT&T and Verizon if they would bid on the project, but we didn't get an answer.

The city previously considered a citywide Wi-Fi initiative in 2007, but a report completed by 2009 determined that it would be too expensive.

“It’s kind of a mystery to me”

Feld's views were echoed by Christopher Mitchell, director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance. "I was looking back over the LA thing to make sure I didn't miss anything. It's kind of a mystery to me," he said. "As I understand California law at this point, LA would be asking someone to do something that they could do now. LA doesn't appear to be giving them any specific inducement to do so. And a lot of providers, if they were going to do this they would just pick a part of LA and do it there. There's no reason they would choose to do it everywhere."

The offer of a contract to provide data center hosting and other services to LA isn't enough to lure a vendor to build out the whole fiber network, Mitchell said.

One more realistic, albeit slower, approach LA could take is to install fiber or conduit (essentially a placeholder that makes it easier to install fiber in the future) each time the city rips up the road for another project.

"If you're already digging up the streets to fix the road or put in water pipes, the cost of adding conduit and/or fiber can be about 1 percent of that project cost, so it's incredibly affordable," Mitchell said. "Santa Monica has done this over a period of more than 10 years, and they've built a substantial network."

Just how much fiber does Los Angeles have already? Blumenfield said it's not clear. "DWP [LA's Department of Water and Power] has a fair amount of fiber in the ground, some of the research institutions have fiber in the ground, the movie studios have some fiber. I don't know, frankly, if anybody has done a complete catalog of what's out there."

Feld and Mitchell wondered if more details on LA's current fiber would be available once the RFP is issued, but it doesn't appear that this will be the case. "The opening RFP is going to be pretty broad; it's going to come out in the next couple of weeks," Blumenfield said.

The initiative unanimously approved by the City Council this week instructed the tech department to "[d]evelop a City of Los Angeles Broadband Request for Proposal with a list of available assets and services that would entice a vendor to provide a build out of some level of free broadband service to all City residents while respecting the commercial carrier's basic levels of service and to not significantly influence carrier competition."

"It's potentially a huge value proposition for them to be able to leverage the city's assets," Blumenfield said. Those assets include "light posts on every street that have power," providing a place to put Wi-Fi access points. The city would also make it easy for the vendor to get all the required permits, he said.

Which companies does Blumenfield expect to place bids? "I would certainly expect AT&T, Verizon, Time Warner, some of the big tech companies. Maybe Google, maybe Microsoft. There would be partnerships between these different companies," he said.

LA wouldn’t be the first, but it might be the biggest

Citywide fiber rollouts have been achieved elsewhere in the US, if not in metro areas the size of LA. EPB, the community-owned electric utility in Chattanooga, Tennessee, started building a fiber network in 2008, served its first fiber Internet customers in 2009, and had the whole network done by 2011.

Installing 8,000 miles of fiber optics cost about $97 million, EPB communications VP Danna Bailey told Ars. The Internet service, which has 60,000 customers out of a potential 170,000 homes and businesses, offers 100Mbps connections for $57.99 a month and gigabit connections for $69.99 a month. TV and phone service are offered as well. The network spans Chattanooga and the surrounding rural areas.

It's already turning a profit. "It absolutely has paid for itself and is putting money back into our electric system as well," EPB Chief Operating Officer David Wade said. "This year our fiber communications portion of the company will probably put about $20 million back into our electric system."

EPB modernized its electric system with 170,000 smart meters at the same time that it installed fiber.

"I think we would have welcomed the incumbents to come into town and to have done some of this work, but frankly no one was interested in doing it," Bailey said. After the network launched, incumbents Comcast and AT&T finally started upgrading their services, EPB officials said. The project thus benefited nearly everyone, not just people who signed up for EPB Internet service.

It would be easy to conclude that LA should follow a Chattanooga model, building out the network itself. Mitchell said that this would provide the city the advantage of having greater control over the quality of service for one of its most important assets.

With 3.5 million residents, LA is very different from Chattanooga, however. The huge city may well be able to entice vendors to build something, if not something as ambitious as what the planned RFP proposes.

For EPB's part, Bailey said, "we are very excited that LA is looking into building a fiber-to-the-home system."

An “opening gambit?”

We'll find out soon enough whether broadband companies will submit bids to LA. Mitchell speculated that LA's RFP is "an opening gambit to see how the industry responds."

"I understand, big cities simply don't want to do something if they don't have to, and I think some big cities haven't understood they have to get involved to a greater extent," Mitchell said.

Feld said the proposal seems more like LA is "laying out their priorities and agenda rather than a serious RFP."

"The cities that have fiber have funded it themselves," he said. "The typical city experience, when they want to do a commercial fiber network and can't attract FiOS or something like that, is they put together a municipal corporation and fund it themselves through a bond offering or something. So the city becomes the ISP."

A city could also contract with a vendor, but in those cases the vendor often gets exclusivity provisions that would be at odds with LA's desire for an open network available to any vendor that wants to provide services over the fiber.

Blumenfield acknowledged that the city could ultimately opt for a compromise if it can't get everything it wants. "We could end up with some sort of hybrid, where you've got fiber in major sections, and then you've got coverage with Wi-Fi in other sections, and you could even have 4G coverage on some of the harder-to-capture sections," he said. "You could have some sort of a deal there where you cover everything."

But as for details, there just aren't many yet. When asked to be more specific about what assets and incentives the city could offer a vendor, Blumenfield replied, "You're asking me to define these things and at this point I'm hesitating to define them, because at this point we're just really at the early phases. It's what you imagine it to be. We're issuing these RFPs to get people to think big and to bring forth proposals to the city of how they would partner with the city."