CityNet Unplugged: Why San Bruno (CA) Gave Up on Its Public Broadband
San Bruno CityNet Services, established in 1971, among the first municipally owned cable television systems in the country and one of the last still operating in California, aimed to provide residents with reliable and affordable access to television content while generating additional revenue for the City. Over the years, the service expanded to include internet and voice services, growing into a comprehensive telecommunications provider. By 2024, CityNet served approximately 6,000 residential and business customers via 89 miles of hybrid fiber-coaxial and fiber optic cables. CityNet, however, faced significant financial challenges, accumulating a fiscal deficit of $21.5 million with the City of San Bruno’s General Fund, leading to the city to explore privatization and other exit strategies. The escalating costs of programming and infrastructure maintenance, coupled with mounting debt and an inability to keep pace with rapidly evolving broadband technology, rendered the system financially unstainable. Consequently, in early 2025, the San Bruno City Council voted unanimously to sell CityNet to Comcast for $8 Million, marking the end of the city’s 54-year venture into municipal broadband services.
San Bruno’s municipal broadband network ultimately failed due to a combination of financial strain, aging infrastructure, and pressures from the private market. Despite collecting between $8 million and $10 million in annual revenue, CityNet consistently operated at a loss, with negative net income every year from 2018 through 2023. In 2022-2023 alone, the service posted a $850,000 deficit. These losses were driven by both rising internal costs and stagnant service uptake. By 2023, the system had accrued approximately $21.5 million in debt, making it increasingly burdensome for the city to maintain.
CityNet could also not keep up with technological advancements. Although a portion of the network had been upgraded to fiber optics, completing a full fiber conversion would have cost an estimated $20 million, a sum the City Council declined to invest in by 2023. Meanwhile, larger private providers such as Comcast were offering faster, more reliable service, steadily eroding CityNet’s market share. By the time the City decided to sell, only about 40% of households subscribed to CityNet, yet all San Bruno residents were subsidizing the service through their tax dollars. Without the scale or resources to compete, and with no public-private partnership in place to share the burden, the city voted to exit the broadband business altogether last year.
In June 2024, San Bruno City Manager initiated negotiations with Comcast to sell CityNet Services. The final agreement consisted of a purchase price of $8 million, contingent upon specific conditions. The conditions included the physical interconnection of Comcast’s cable system with CityNet’s network and the retention of at least 5,400 customers prior to closing. Comcast, which has invested “nearly $4 billion in technology and infrastructure in the past three years in California alone,” emphasized its interest in a smooth transition. During the six month transition period, San Bruno will continue operating CityNet while Comcast handles infrastructure upgrades and customer migration. The city is expected to incur $1.7 to $1.9 million in operating expenses during this time, but despite these costs, city officials concluded that selling was the most financially sound option.
The failure of San Bruno’s CityNet highlights broader lessons about the limitations of municipal broadband in competitive markets. One key takeaway is that public networks struggle to survive when private ISPs already dominate the local market. In San Bruno, residents had access to well-established providers like Comcast and AT&T, which offered faster internet speeds, better bundling options, and consistent infrastructure investment. CityNet simply couldn’t keep up with those advancements without pouring millions more into system upgrades. Another important observation is that San Bruno may have been better served by pursuing a public-private partnership (PPP) rather than continuing to operate a standalone public network. A hybrid model could have preserved some public oversight while leveraging private-sector capital and technical expertise to modernize the system. Instead, CityNet became a financial burden shared by all taxpayers—even though only about 40% of households subscribed—ultimately forcing the city to offload the system at a loss.