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S.F. hits brakes on Farrell’s high-speed internet plan

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Plans for a citywide broadband internet service backed by Mayor Mark Farrell have been put on hold after a survey found weak support among voters for a revenue measure intended to finance it. (Mike Koozmin 2013/S.F. Examiner)

San Francisco’s effort to create a citywide broadband internet service for all residents and businesses has suffered a setback as outgoing Mayor Mark Farrell will not place a tax measure on the November ballot to fund the project before he leaves office in the coming weeks, the San Francisco Examiner has learned.

Farrell, who is expected to leave office mid-July, has been leading the citywide fiber internet project, which had the support of the late Mayor Ed Lee, for several years. Most recently The City had selected three teams of companies who could potentially build and operate it.

San Francisco would be the first large city to create a municipal citywide fiber internet service.

SEE RELATED: Farrell’s citywide internet plan could benefit transit, public health agencies

But Farrell told the San Francisco Examiner he has decided not to move forward with a revenue initiative for the November ballot to pay for the project, as was previously contemplated. The deadline for Farrell to submit a tax proposal is Tuesday.

The revenue initiative would have generated $1.7 billion over 25-years, the estimated cost of the project. But a poll showed it was just short of the two-thirds needed to pass.

The City had intended to issue a request for proposals this month for the three teams to bid on, but that has now been put on hold indefinitely.

The Office of Contract Administration sent a June 13 letter to the three bid teams informing them of the delay. “The City and County of San Francisco has decided to further consider factors essential to the success of the project prior to issuing a Request for Proposals (RFP),” the letter said. “Given the groundbreaking nature, complexity, and cost of this project, it is important that we reduce uncertainties to the extent possible prior to issuing an RFP.”

The letter continued, “In the coming months, the City intends to research a number of factors, including how market conditions and the construction environment would affect the project.”

The City hasn’t released the names of the companies, but the Examiner was able to confirm one bid team is comprised of Monkeybrains, Black and Veatch, Zayo and Nokia.

“The RFP was intended to be released in June, but will not be released this summer,” Brian Roberts, a policy analyst with the Department of Technology, which is overseeing the project, told the Examiner Friday. He said while the department continues with further research “we will inform the bid teams and the public of our progress and proposed next steps.”

For Farrell, the project could have given him a significant political boost and build on his legacy. And while he has denied he would run for mayor in November 2019, many political observers have opined it remains a possibility for the venture capitalist and Marina resident.

He leaves behind the project for the next mayor, Board of Supervisors President London Breed, who is expected to be sworn into office on July 11, after the election results are certified on July 10.

Tensions between Breed and Farrell have existed ever since the moderate Farrell allied himself with progressive board members when he was District 2 supervisor to remove her from her role as acting mayor, which she assumed when Lee died, and instead appoint him as the mayor for six months. The move could have weakened her mayoral bid.

Breed declined to comment Friday on the fiber project.

Farrell, however, said his vision for the fiber network remains within reach. “Through this project we can eliminate the digital divide and connect all of San Francisco to fast and affordable internet,” Farrell said in a statement. “These next steps will lower the cost burden on taxpayers and The City while also providing crucial information to help this project succeed.”

Farrell has directed his staff to compile a briefing binder for Breed about the project, including ways to make it a reality.

The department’s planned additional research includes a market study to determine how much revenue The City could generate by leasing the fiber broadband network to lower the project’s overall cost estimate. Farrell has also asked the bid teams to figure out how to assume more financial risk upfront in exchange for higher returns on the network.

He added, “I pledge my full support to Mayor-Elect Breed and entire project team to help see this project through to provide a more equitable future for all San Franciscans.”

The City has estimated about 100,000 residents lack internet access, about 12 percent of the population, and 15 percent of public school students lack internet access.

It was estimated that a 1 Gbps data service would cost residents between $26 and $67 a month and businesses between $38 and $97 a month, according to a report issued in October by city consultant Maryland-based Columbia Telecommunications Corporation. The project assumes there would be a subsidized service for low-income users.

The last time San Francisco attempted to create a citywide internet service was more than a decade ago. The City’s proposed partnership with Google and Earthlink for ubiquitous wireless service fell apart in 2007.

jsabatini@sfexaminer.com

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