San Francisco is trying to find network providers to build a city-wide, gigabit fiber Internet service with mandated net neutrality and consumer privacy protections. It would be an open-access network, allowing multiple ISPs to offer service over the same lines and compete for customers.

The city yesterday issued a Request for Qualifications (RFQ) to find companies that are qualified "to design, build, finance, operate, and maintain a ubiquitous broadband FTTP [fiber-to-the-premises] network that permits retail service providers to lease capacity on the network." The project would also involve a free Wi-Fi service for city parks, city buildings, major thoroughfares, and visitor areas. Low-income residents would qualify for subsidies that make home Internet service more affordable.

ISPs offering service over the network would not be allowed to block or throttle lawful Internet traffic or engage in paid prioritization. ISPs would also need customers' opt-in consent "prior to collecting, using, disclosing, or permitting access to customer personal information or information about a customer's use of the network."

San Francisco started considering the network even before the federal government repealed broadband privacy rules and net neutrality rules. A city-wide fiber network would benefit residents and business regardless of whether those federal rules exist, but the gutting of the rules adds urgency to the project in the eyes of city officials.

"Trump's hand-picked FCC and Republicans in Congress have dismantled crucial net neutrality, privacy, and consumer protections," Mayor Mark Farrell said in an announcement yesterday. "We will provide an alternative that favors the general public and San Francisco values, not corporate interests. Through this project, we will close the digital divide, ensure net neutrality, and create a truly fair and open Internet in San Francisco."

About 100,000 people—12 percent of the city's residents—lack Internet access at home, the announcement said. "About 15 percent of the City's public school students do not have Internet access, a number that increases to 30 percent for African American and Latino students," the announcement also said. "The cost of Internet services has been repeatedly cited as a barrier to access for low-income families."

City will foot some of the bill

The city says it will cover a portion of the costs for the multi-billion dollar project and provide or lease access to necessary city property and infrastructure. But San Francisco isn't planning to build the network itself, a step that hundreds of smaller cities and towns have taken.

The winning bidder is "expected to assume the full performance risk," including "all risks related to design, construction, financing, operation, and maintenance" of the network, the RFQ says. As a result, the biggest challenge may be finding companies willing to meet all of San Francisco's demands.

The network would have to cover San Francisco's land area of 46.7 square miles and a population of more than 860,000. The city estimates construction would take three to five years.

On the plus side for bidding entities, San Francisco would provide payments to the builder when construction milestones are reached. The private builder would also get a share of the network's revenue.

San Francisco says it will also "provide or lease access to City fiber, communication assets, and conduits to reduce capital costs and construction; [and] provide or lease space on City properties suitable for placement of data centers, fiber hubs, or central offices at a reasonable rate."

The RFQ seeks up to three qualified consortia or joint ventures; only those three would be eligible to bid on a Request for Proposals, the next step in the process. The RFQ deadline is March 26.

The RFQ anticipates that the city would sign a 15-year agreement with the winning bidder. Respondents are expected to submit specific financing plans.

The network "will serve as a platform for multiple [ISPs] to reach subscribers over a shared infrastructure," the RFQ says. ISPs "will be able to connect to the network and deliver services to their subscribers. This shared last-mile fiber will reduce the cost for new service providers to enter the market, reduce redundant and costly builds to reach subscribers and give subscribers more choices for service providers to meet their connectivity needs."

Stalled project in LA

Los Angeles issued a similar Request for Proposals in 2013. Another request followed in 2015, but "the city never received a workable proposal from a private company to build out the network," according to an article last month in Curbed Los Angeles.

The LA project may have been doomed by LA's decision to discourage proposals that required any financial support from the city. By contrast, San Francisco is willing to chip in some money.

Bringing fiber to all San Francisco residences and businesses would cost a few billion dollars, according to a report commissioned by San Francisco that was released in October. A "dual" fiber scenario would involve a "lit fiber" network (estimated to cost at least $1.8 billion) and "dark fiber" (estimated to cost at least $1.4 billion).

Alternatively, the report says the city could find a partner to build the dark fiber network "and then lease dark fiber to competing service providers who would light and operate the fiber."

Average prices of $51 per month for residential customers and $73 per month for businesses "would cover all of the project costs" and make the service financially feasible, the report says. If San Francisco's planning is correct, the revenue would also cover a subsidy that would allow low-income residents to pay only $10 a month.

The report acknowledged that there are significant "uncertainties related to capital costs" and financing.