City launches competitive fiber service pilot targeting Xfinity and AT&T markets

Palo Alto's Finance Committee meeting on June 3, 2025, spotlighted the city's competitive strategy in the broadband market, particularly as it prepares to launch its fiber internet pilot program. The discussion revealed a clear focus on differentiating the city's offerings from established providers like Xfinity and AT&T.

Key to the conversation was the competitive landscape, illustrated through a coverage map showing Xfinity's 2-gig service availability in about 50% of the pilot area, contrasted with AT&T's nearly universal fiber-to-the-home service. While Xfinity offers high download speeds, its upload speeds lag significantly, a point emphasized by city officials who highlighted the advantages of symmetrical speeds provided by fiber.

The committee outlined plans to offer 1-gig and 5-gig services, noting that Xfinity does not provide a 5-gig option, which could position Palo Alto favorably in the market. The city aims to attract customers not through aggressive pricing or promotional gimmicks, but by emphasizing service quality, reliability, and local responsiveness.

Concerns were raised about the pilot's location, which overlaps with existing fiber coverage. Officials explained that this choice allows for better learning opportunities regarding customer uptake and pricing strategies. They acknowledged the challenges of competing against larger companies with deeper pockets for marketing and promotional rates but expressed confidence in their ability to build trust within the community.

The financial implications of the pilot were also discussed, with an estimated cost of $4.5 million for the first thousand customers. The committee noted that while underground construction is significantly more expensive than overhead, aligning with existing utility projects could mitigate some costs.

As the city moves forward, it remains committed to transparency and reliability, aiming to provide affordable internet access while navigating the complexities of a competitive market. The pilot program is set to begin construction in July, with officials optimistic about its potential to reshape broadband access in Palo Alto.