Palo Alto's exhausting effort to expand its "dark fiber" ring and make ultra-high-speed internet broadly available to businesses and residents took a new direction Monday night, when the City Council directed staff to design a system of neighborhood "nodes" that would allow residents and businesses to plug into the growing network.

In a marked departure from the "Fiber to the Premises" effort that the city has been studying for the past two decades, the council voted 6-2 on Monday night to explore a shift to what's known as "Fiber to the Node." Instead of bringing fiber-based internet access to every location, the new plan would bring it into each neighborhood and rely on residents, business owners and the private sector to supply the "last mile" connection.

In directing staff to develop a business case for "Fiber to the Node," council members agreed that the effort has consumed far too much time and energy. They had some disagreements, however, over what the government's role should be in the growing system. Councilman Tom DuBois supported staff's proposal for the new service model and argued that the city has an opportunity to provide a valuable service that current incumbents AT&T and Comcast are not offering.

Councilman Greg Tanaka and Councilwoman Karen Holman, the only dissenters in the council's vote, favored an "open access" approach in which the city would have less direct involvement. Under Tanaka's proposal, the city would offer telecommunication firms subsidies to build "open access" networks. This approach, Tanaka argued, would allow other providers to plug into these networks, spurring competition and lowering costs.

Tanaka, a tech entrepreneur, pointed out that AT&T and Comcast currently offer connections that fall well short of the performance standards the city is seeking. Cities and countries that follow the open-access model have far more competition and, as a result, much better services than Palo Alto. Adopting this approach, he argued, would make sure that Palo Alto has "the fastest, cheapest broadband."

"You have to enable competitors to come in," Tanaka said. "I believe that if we set up a competitive environment, this would encourage a lot of ISPs (internet service providers) to provide services."

The approach that the council approved does not preclude exploration of an open-access policy. But rather than merely spurring competition, it would pit the city against private-market competitors. In recent years, staff from the Utilities and Information Technology departments had been cautious about taking on the likes of Google, Comcast and AT&T, pointing at recent proposals by the giant firms to expand their broadband offerings.

But things haven't gone as planned. After much hoopla, Google suspended last year its plan to bring "Google Fiber" to Silicon Valley and the other companies have been focused on developing "next generation" wireless networks with gigabit-per-second speeds. The shift is part of a broad push to enable what's known as the "internet of Things" -- the ability of devices such as home appliances, security cameras and wearable technology to plug into the web, Chief Technology Officer Jonathan Reichental told the council Monday.

The approach proposed by Reichental calls for an incremental approach in which the "Fiber to the Node" system would provide an access point for neighborhood-area links. Building a FTTN network, a new report from the Information Technology Department states, may "lower barriers for potential FTTP providers to build the 'last mile' from neighborhood access nodes to individual premises."

"FTTN would provide the City with a phased and economically viable deployment approach to push fiber closer to residential neighborhoods and create a potential 'jumping off point' to bring fiber to individual premises (i.e. building the 'last mile')," the report states. "Ancillary benefits would also occur by expanding the functionality and the choices of technology that can be implemented for Utilities and Public Safety and to support Smart City, Smart Grid and wireless applications depended on fiber-optics communication links."

Reichental acknowledged the many years of exploration that have already been invested in "Fiber to the Premise" but argued that the changing market warrants a new approach.

"We can't continue to exhaust every angle when the economics and the environment has fundamentally changed," Reichental said, noting that most people now access the internet through their smartphones rather than through their computers.

DuBois agreed that this approach could be a viable model, though he also suggested that the city can play a prominent role in creating a new system -- well beyond simply enabling more private-sector competition.

Such a system, he noted, need not be a money drain. The city's fiber-optic ring, which currently serves dozens of commercial customers, has generated more than $25 million in revenues -- money that can be used to expand the service and bring it to more people.

"This isn't a policy discussion about speed; it's a discussion about who wants a physical infrastructure and whether it's public or private," DuBois said. "If it's private and it's owned by a monopolistic company, will we continue to have backups in service?

"City-owned infrastructure provides the city an opportunity to provide its residents a great service at great prices," DuBois said.