San Leandro Explores Fiber Optic Loop

Could the next Facebook choose to locate in San Leandro? Not with the city’s current slow and pricey fiber optic network, business leaders say.

But the city is beginning to explore a project that proponents say could revitalize San Leandro’s economy by installing the technology needed by an ever-increasing number of businesses in this ever more digital world.

Under the proposal, a broadband network would be installed along an 11-mile loop around the city’s primarily industrial and business zones, using the city’s existing conduit. Businesses could then link up to the network, enabling a much faster and cheaper Internet connection. 

Patrick Kennedy, founder and CEO of San Leandro-based OSIsoft, put forth the proposal to the city and would finance the installation. The city would pay for consultant fees and city staffing and legal costs on the project.

“This is a huge opportunity, and from our perspective, an imperative,” said Dave Johnson, CEO of the San Leandro Chamber of Commerce, at a May 12 meeting where the plan was presented to the City Council Business and Housing Development Committee.

Fast, cheap Internet connections have helped make places like Palo Alto hubs of high tech industry. But San Leandro has lagged behind many Bay Area cities in installing the infrastructure required for high-quality connectivity.   

Even small businesses as mundane as a dental office are likely to feel an increasing need for a quick, high-capacity, dependable Internet connection, experts say.  

“Good data connections are becoming essential for just about anybody,” said Stephen Blum, president of Tellus Venture Associates, a broadband consulting group. Blum has been recommended by city staff as a consultant on the fiber loop project.

The demand for better connections is expected to grow rapidly in the coming years, Blum said, as so-called “cloud computing” takes the place of traditionally software-based computer tasks (think Google Docs versus Microsoft Word).

Some cities, like Palo Alto and Santa Clara, have installed their own fiber networks, while in other cities, private companies have laid fiber around the city and then leased access to businesses.

According to a draft plan for the San Leandro loop, prepared by Kennedy of OSIsoft, the project could cost $2 million to $3 million, mostly in fiber and installation expenses. The City Council is expected to vote soon on a contract granting exclusive negotiating rights for the project to Kennedy. It will also vote on a contract to hire Blum as the project consultant, for a fee of $45,000.

Kennedy says he’s proposing the project not to make money, but rather to avoid having to relocate his expanding software business and to help keep the city competitive. 

“It’s a huge need,” Kennedy said. “The biggest weakness San Leandro has for a software company is just terrible access [to the Internet],” Kennedy said.

OSIsoft, which makes real-time data and event management systems, has outgrown its small campus near the San Leandro BART station. In January, the company from two prominent Silicon Valley firms, accelerating its expansion.

Kennedy, who lives in San Leandro, says he could easily move his company to the South Bay, but would prefer to stay. Having better connectivity is the essential, and currently missing, glue.

San Leandro prides itself on its excellent location and industrial infrastructure, including a special sewer system for industrial users, a major gas line and a large electrical substation, Kennedy noted.

“It’s all set up for manufacturing except it’s missing this one thing,” Kennedy said, “and that is connection to the information world.”