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07/10/2014 - City Council Finance CommitteeFINANCE COMMITTEE MEETING THURSDAY, JULY 10, 2014 10:00 A.M. CONFERENCE ROOMS 2 A &B AGENDA I. AGENDA ADOPTION II. ACCESSEAGAN BUSINESS PLAN III. OTHER BUSINESS IV. ADJOURNMENT Agenda Information Memo Finance Committee Meeting July 10, 2014 II. REVIEW DRAFT AccessEagan BUSINESS PLAN DIRECTION TO BE CONSIDERED: Review AccessEagan Business Plan draft and provide direction(s) for short and long -term budget priorities. FACTS: • On June 2, 2011 the Finance Committee previously "recommended a funding allocation of up to $2 million to get through the 4th year of the [fiber] project." This was ratified by the City Council on June 21, 2011 and on July 5 of that year the City Council took action to designate that the first $1 million would come from tower lease revenues (non -tax dollars). The funding source for the second $1 million has yet to be identified. • Additionally, it has been nine months since the AccessEagan fiber network was brought to market, and the internal fiber team would like to update the Finance Committee on the progress and the essential work completed in the two years since the now 17 -mile network was fully installed. • Staff seeks Finance Committee review of and comment upon the proposed AccessEagan Business Plan covering the next 18 months. • Building on the success of the City's data center strategy in attracting DataBank, the City Council asked staff what steps would be necessary to maximize the present opportunity with the AccessEagan network. • Based on what staff has learned, extending AccessEagan fiber into local data centers and placing key equipment there to receive and hand -off traffic to /from regional providers would ideally position AccessEagan's network for the future. This would require an additional investment of approximately $1 million, but that would sustain operations through 2019, at which point updated projections indicate the project would then positively cash flow. • The second packet attachment poses several financial and public policy questions the Finance Committee is asked to address so that with the Committee's direction and priorities, staff can complete the Business Plan and 2015 proposed AccessEagan budget for submittal in August. ATTACHMENTS: • Business & Marketing Plan for AccessEagan, June, 2014 draft • Financial and Public Policy Questions Public Policy Questions: 1. Is the Finance Committee /Council comfortable with the proposed marketing /targeted customer approach outlined in the business plan? 2. What should guide the financial goals of AccessEagan? —Cover expenses? — Make a profit? —Act as an economic development incentive to attract and retain businesses? 3. Is the Finance Committee comfortable with taking a patient approach to AccessEagan? If so, over what time period should it cover expenses, make a profit, or act as an economic development incentive? Discuss how the FC /Council would define success. 4. Given the length and complexity of the Business Plan, what aspects of the plan should be included for discussion as the process moves forward? Financial Questions: 1. While prior approval was obtained for the first $2.0 million dollars to operate AccessEagan, previous direction designated a funding source (antennae lease revenues) for only the first million. To date the City's investment in the system is $1.8 million and it is expected to be $2.1 million by the end of 2014. Where would the Finance Committee recommend the second $1.0 million be drawn? Options might include antennae lease revenues or the General Fund balance (see page 5 of Business Plan). 2. To make optimal connections and sustain network operations through to 2019 (cash flow positive), it is anticipated that an additional $1.0 million will be necessary. Does the committee want to authorize up to $1 million more to operate through 2019 to see the project into the black? If so, what is the desired funding source for that investment? o The same funding sources as with question one (above) exist. It should be noted that about $3.5 million in retained antenna lease revenues remain. Staff recommends antenna lease revenues as the source for continuing funding of AccessEagan. 3. Is there any other financial - related direction the Committee wishes to make? Additional Background: • In a very real sense, AccessEagan is just getting started. While most of the physical infrastructure was in the ground by the end of 2012, the development of internal and external business processes, and the development of marketing strategies, messages and distribution channels (Website, collateral materials, businesses contact database, provider relationships) took significant time before a marketing launch could be made in September of 2013. (See pages 3 -4 of business plan and the timeline on page 20.) • All along, but especially following that launch, there was a learning curve to speak the same language as local providers and establish market - appropriate pricing. Now that these things have been done, AccessEagan is launching the proposed fine -tuned strategies and tactics outlined on pages 11 -15 of the business plan. • Per the previous 2014 budget authorization, we anticipate hiring an IT support person now that the first customers are coming on board. • Further information will be shared with the Committee, but 2015 estimated revenues are $112,000. Even with network expenses and contemplated core switch installation, 2015 expenses are not expected to exceed $600,000. Based on current projections AccessEagan should make a modest profit of slightly more than $28,000 by 2019. City of Eagan Business & Marketing Plan for AccessEagan* 4'AAN A fiber service for business July, 2014 *Restricted Distribution Prepared for the Finance Committee by: Tom Garrison, Communications Dir. Dan Cook, IT Manager Crystal Couillard, Strategic Mktg. Coord. Reviewed by: Eagan Technology Working Group Members City of Eagan Broadband Consultants Internal Admin /Finance /Fiber Team City of Eagan Table of Contents Section1: Executive Summary ............................................................. ..............................1 Product................................................................................................................... ..............................1 Customers............................................................................................................. ..............................1 WhatDrives Us .................................................................................................... ..............................1 Section2: Company Description ......................................................... ............................2 -5 MissionStatement ............................................................................................... ..............................2 CompetitiveAdvantage ...................................................................................... ..............................2 PrincipalMembers ................................................................................................ ..............................2 Background......................................................................................................... ............................3 -5 FundingSource .................................................................................................... ..............................5 Section3: Market Research .............................................................. ...........................6 -10 Industry............................................................................................................... ............................6 -8 Strengths /Opportunities & Accomplishments to Date ................................. ..............................8 Weaknesses & Challenges To Date .............................................................. ...........................9 -10 Revisions & Adjustments ................................................................................. .............................10 Section4: Marketing Plan ................................................................ ..........................11 -15 TargetMarkets ................................................................................................ ..........................12 -13 Strategies, Tactics & Resources ..................................................................... .............................11 Growth& Projections ...................................................................................... ..........................13 -14 Competition.......................................................................................................... .............................14 Technology........................................................................................................... .............................14 Staffing................................................................................................................ .............................15 Socio - Political Environment ............................................................................. .............................15 Summary Conclusions .................................................................................................. .............................16 Appendix.......................................................................................... ..........................17 -22 Section 1: Executive Summary AccessEagan is a 17 -mile wholesale fiber optic network through Eagan's central business districts. Called an open access network, it is carrier neutral and open to any provider who signs a standard agreement to be on the network. It was developed to broaden fiber availability and redundancy within the community, to help foster price competition, and to help stimulate greater choice of service providers for small and mid -size businesses. Operational since September of 2013, AccessEagan also supports the City's economic development goals by 1) providing state -of- the -art broadband infrastructure and 2) helping to keep and attract knowledge workers in the Talent Economy'. Following a concentrated review of the entire AccessEagan marketing strategy, this business plan addresses specific tactics to focus upon the target markets that AccessEagan is best positioned to pursue. Product AccessEagan is a wholesale, open- access high - ,performance fiber network built by the City of Eagan to increase broadband access and choice for businesses in the central business districts. A wide range of bandwidth options are available, up to 10 Gig. AccessEagan offers affordable, scalable and symmetric fiber optic connections directly to smal`I businesses, mid -sized firms and multi- tenant facilities via the provider or carrier of their choice. Customers The AccessEagan fiber is built to support Eagan businesses. The target customers for the City of Eagan's wholesale fiber are telecom carriers and providers., as well as aggregators and other third -party providers offering services that enhance the competiveness of Eagan businesses. What Drives Us AccessEagan helps the City of Eagan continue to position itself as a dynamic and technologically - focused job center. We do this by' helping providers expand their reach and bringing secure and competitive so'lutions to Eagan businesses. ' "What the open source model did for software development, the open talent economy is doing for work. Today's younger, connected, and mobile workers are managing their careers on their own terms and often outside categories that have defined the workforce for decades." They have choices of where to live and where to work that will be influenced by broadband availability to do what talented workers want to do. Deloitte University Press: Jeff Schwartz, Andrew Liakopoulos & Lisa Barry, July 24, 2013. See http: / /dupress.com /articles /the- open - talent - economy/ Section 2: Organization Description Mission Statement Powering business for the future through fiber Competitive Advantage AccessEagan is the hometown team, a fact not played up until now. It offers customers and providers the only vendor - neutral approach and can create competition for services and pricing. It is currently the only fiber provider into the new outlet mall. It offers scalable and synchronous solutions with more upload and download bandwidth than traditional offerings from the incumbent phone company or the cable company. Being small and nimble, AccessEagan is in a position to respond quickly. There have been complaints about service responsiveness and slow turnaround times with larger carriers. Principal Members AccessEagan is currently managed by three principal staff internally with support of other departments and key consultants. From a marketing and technology perspective, Communications Director Tom Garrison and IT Manager Dan Cook provide the day -today direction, with strategic marketing support from Communications Specialist Crystal Couillard. These three are aided by an internal Fiber Management team including Finance Director Tom Pepper, Assistant City Administrator Dianne Miller and Streets Supervisor Tim Plath, representing Public Works. Additionally, and as needed, the City is advised by: Technology Management Corporation is an independent IT consulting firm based out of the Twin Cities providing technology consulting for companies and institutions worldwide, has a specialized knowledge of the local telecom provider community and the technology needs of companies of all sizes. TMC advises AccessEagan on local pricing and prospect development. TMC has also been retained by the Minnesota Vikings to design the technology in the new stadium as well as the upcoming Target Center renovation. Design Nine is a national consultancy based out of Blacksburg, Virginia specializing in technology advice for community and public clients and open access broadband networks. The firm provides consulting and design services for municipalities in the U.S. and Canada. Dr. Andrew Cohill's firm has performed studies for the City of Eagan in 2008 -2010, and designed the AccessEagan system. Design Nine was also recently retained by Dakota County for its broadband study. • Elert & Associates is a vendor neutral Minnesota -based consulting firm. Felix Fayngersch has a national practice as an Electrical Engineer specializing in technology construction management and fiber optic system design. He has who has overseen construction and design for many of the City of Eagan's fiber installations. Background The City of Eagan formed its first broadband task force in 2004. This public /private industry advisory group became the Eagan Technology Working Group and continues today with representatives from some of our largest employers (Thomson Reuters, Blue Cross Blue Shield of MN, Delta Airlines, a remaining division of Lockheed Martin, and Prime Therapeutics), plus the Dakota County Regional Chamber of Commerce, home -based businesses, and an Eagan Advisory Planning Commission member along with City staff. The staff liaison to the Working Group is Tom Garrison. Community Development Director Jon Hohenstein and Strategic Marketing Coordinator Crystal Couillard also attend the Working Group sessions. All have stated they find continuing value in broadband and technology planning for the community. Members have stated they find continuing value in the planning efforts and their companies have reaffirmed their continuing participation. The task force and Working Group's first priorities were mapping what broadband services were available at what speeds at in the community. Despite industry claims to the contrary, it was discovered that only between 40 -45% of the community had DSL'in 2005. Focus quickly shifted to higher speeds and fiber optic broadband. Beginning in 2008 the City of Eagan hired Design Nine out of Blacksburg, Virginia for the first of two broadband reports, In 2009, after examining at least five potential broadband strategies and gathering feedback from the business community and the Tech Working Group, the strategies were narrowed to two by the Eagan City Council: ■ Make City fiber available to commercial and retail businesses using an open access model with private sector service providers. ■ Build, or cause to be built, a modest co- location facility for service providers to place their equipment and to be able to cross- connect. Preliminary Recommendations Look for public /private partners for a broadband initiative Expand the City's own fiber and conduit network Start two pilot projects Community media master plan (Ta ke advantage of broadband stimulus funding with a shovel - ready project Final Recommendations Consider using City fiber to create a business class network for enterprise, small business, and retail use in Eagan Work with the local business community to build a modest colocation facility to support the fiber network and as redundant data center for Eagan businesses and others needing off -site data storage A subsequent 2010 report provided additional insights and recommended pursuit of a colocation /data center that would help widen the choice of telecom and Internet Service providers and products, and enhance future economic development including local and regional disaster recovery options. Specifically, the report highlighted the regional need to: ■ Provide an alternative to the Minneapolis 511 Building Concentrate on helping to provide a Southern Route exiting the Twin Cities south or west without dependence on the 511 Building. The City Council endorsed the conclusions in November, 2010,,but indicated that the data center would not be City- owned. After a competitive bidding process a consolidated business team consisting of Jones Lang LaSalle's Mission Critical Group, Five ',Nine's Digital and XO Communications was hired to produce a colocation data center feasibility report to determine if Eagan met industry location criteria and, if so, identify acceptable bare land (green field) sites. [Retrofitting existing buildings was not part of that analysis.] At least three bare land sites were deemed appropriate for potential data center development and the firm, conducting the study was given the right of first refusal to initiate plans to get a data center built using Eagan's study, but private capital. In January, 2011, the City Council ,passed a resolution declaring "the placement and construction of a colocation facility /data center and extension of city owned fiber infrastructure to be in the public interest and necessity as.criticai infrastructure. " On November 15, 2011, Five 9s Digital announced its intent to build a 138,000 square foot carrier neutral colocation /data center on a privately owned site along Yankee Doodle Road, west of Pilot Knob. That land agreement subsequently fell apart lin mid- 2012. Five 9s directed its attention to getting tenants for a "powered shell" conversion of an existing building, the Taystee Bread site on Lexington Avenue; however, 'Five 9s dropped its contract on the bu'i'lding and ultimately withdrew from the Twin Cities market in May of 2013. Yet, the leads it developed with Jones Lang LaSalle ultimately led to the current entrant,, Data Bank, taking an interest in the former Taystee Bread site to convert it into a colocation /carrier hotel. The City Council modified its financial assistance policies and on June 17, 2014 all necessary approval were granted for an 88,000 square foot facility with 48,000 square feet of raised floor space to proceed with completion anticipated by late November 2014. It had originally been envisioned that the data center goal would be accomplished first and then the deployment of city -owned fiber for business use would follow, once it was known where that fiber should terminate. As it happened, two ;phases of AccessEagan fiber were constructed in 2011 and 2012 in central business districts of the City. A third phase was envisioned, but the City Council directed that operations begin before any further deployment of business fiber (particularly to the southern third of Eagan) was undertaken. Without a colocation data center /carrier hotel being built, this meant the AccessEagan fiber did not yet have connectivity to the Internet so that it could become operational following lighting and testing of the fiber. The focus of 2013 was to attract service providers to the network, and that was accomplished with signed agreements for: Frontier Communications (May 21), Arvig (July 15), and Velocity (July 30). Marketing materials and an AccessEagan Web site were developed. On September 25 an informational seminar and open house was held by AccessEagan and its three providers at the Eagan Community Center with 27 attendees. Following completion of a Conduit Space License legal agreement with the owners of a new 100 - store outlet mall under construction in Cedar Grove, AccessEagan was granted exclusive use of a conduit bank and right of entry to the site from two different directions. The installation of the main AccessEagan fiber line was completed April 15, 2014, with a second redundant connection to the site to be completed in mid -July. Granite Telecommunications was approved June 3, 2014 as :l the 4th AccessEagan provider. Mall stores and management may choose to use any provider they wish because the wholesale network is vendor- neutral and open to all providers. Funding Source To date, about $1.75 million has been invested in AccessEagan. In 2011, the Finance Committee recommended funding of fiber infrastructure investment up to $2.0 million through the fourth year of the project. The Council identified retained antenna lease revenues as the source for the first $1 million invested, but has not specified a source for the second $1 million. In the interim, AccessEagan has borrowed internally from other City funds on hand. In addition to funding the balance of the infrastructure built to date, future capital improvements and anticipated operating deficits in the first few years of operation will require a funding source and /or internal financing mechanism. Possible funding sources include: Retained antenna lease revenues (Utilities Fund) —Since 1998, the City has collected lease revenues from cellular antennas mounted on various .City water reservoirs. Annual collections now exceed $800,000. Approximately $300,000 is designated each year to balance the operating budget for the Community Center, and $30,,000 is designated each year to fund Holz Farm operations. The $'1 million investment in AccessEagan noted earlier is the only other use designated by the Council. The current balance of retained antenna lease revenues is $3.6 million. General Fund balance —The Council's policy is to maintain a General Fund balance of 40- 45% of next year's expenditures. At the end of 2013;, the General Fund balance was 50.1 %, or about $1.5 million above the 4'5% upper end, of the target range. Based on marketing strategies outlined in this business plan, staff has revised financial planning documents and produced an updated pro forma, with further refined projections of expected revenues and payback strategies. Section 3: Market Research Industry The Twin Cities region is a robust market for telecommunications. While no specific figures are available for the size of the Eagan market, our fiber maps indicate at least 12 telecommunications providers with service lines running through the City. The Business Journal and industry sources indicate at least 16 carriers have a significant presence in the Twin Cities market, although the Unisys data center has five major carriers and another 23 that lease connections from and ride on those five. (Some carriers transit through Unisys but do not provide widespread retail services in Eagan.) The 511 carrier hotel in downtown Minneapolis is thought to have some 70 carriers including Internet Service Providers. Centuryl-ink, Comcast2, AT &T and Verizon are the largest industry players and with the exception of Verizon have about 2,000 Minnesota employees each3. Eagan's earlier studies found that while large employers can purchase and get the services they need, small and mid -size Eagan companies had little choice in service providers either because one carrier owned the connections to their building, or because price points were high relative to the bandwidth delivered. The growth in smartphones and personal electronic devices along with increasing demands for bandwidth based on video content mean that from last year through the end of 2014, smartphone growth alone is expected to climb by nearly 20 million customers in the U.S. according to Statistica. Number of smartphone users in the U.S. from 2010 to 2017 (in millions) 250 200 C ]so 100 a' s0 207.4 2010 2011 2012 2013* 2014" 2015` 2016° 2017° Additional Information Sign up for Free Basic Account Source: Sign Up for Free Basic Account © Statista 2014 2 Comcast announced in April that it was spinning off the Twin Cities market to resolve regulatory concerns over its merger with Time Warner Cable. It is unclear if Comcast Business services would divest as well. If so, the as yet unnamed "SpinCo" would be managed by Charter Communications. 3 Top 25 Telecom Service Providers per the 2014 Minneapolis /St. Paul Business Journal Book of Lists 6 High bandwidth fiber is 100 times faster than average broadband, and the higher the bandwidth the faster a business can upload files or photos, and the better one is able to stream video or video conference. Demand for video bandwidth, according to a 2013 report, is growing 80 percent a year. Since 2003 the Federal Communications Commission has recognized the importance of redundant communications capability. Starting in 2007, cooperative agreements between the Centers for Disease Control and local hospitals and state health departments have required redundant communications. A Wisconsin report noted that landline phone systems are typically built for just 18% capacity so on 9/11 or even Mother's Day traditional circuits can easily be overloaded. The same is true for cellular telephone systems which are also typically built for 18% capacity. Modern Voiceover Internet Protocol (VoIP) systems typically boast of their "built -in equipment redundancy" and that if "business phone system equipment at one location goes down, calls are seamlessly re- routed using another location." That premise only works if there are no single points of failure in the Wide Area Network (WAN) and there is fiber route redundancy should a primary route fail. Post - Hurricane Sandy some insurers are now inquiring of business owners to see if they have adequate fiber and route redundancy before they will grant business continuity insurance. Some local and national carriers complain when municipalities build additional fiber capacity, claiming that they already serve a given area or business district, and yet the City has received inquiries from site selectors who will not look at a location unless redundant fiber routes are available using separate conduit banks. A major national firm specializing in disaster recovery solutions indicates that less than 10% of business enterprises have direct access to redundant Network Access Points. Both the Eagan Technology Working Group and Greater MSP have noted that in the event of a major shutdown of A) the Twin Cities only major carrier hotel, or B) the telecom industry's major route from Minneapolis to Chicago, that the "latency" of alternate routes to other cities either could not support all the carrier traffic or the performance of those connections would slow way down to unacceptable levels.' So with bandwidth demand continuing to grow, with the business continuity imperative for redundant fiber route capability increasing, and with the economic development advantage that cities like Eagan can seize by concentrating on these issues, the Eagan City Council has chosen to take a long and sustained focus over the last decade on furthering broadband capabilities within Eagan and the region. One other note must be made which is relative to pricing. Numerous studies have shown that Americans pay more per megabit of Internet broadband than virtually any other major industrialized country in the world. In fact, a 2013 New America Foundation report on the top 24 locations in the world with the highest available bandwidth at the lowest possible prices found that: • While U.S. cities had more expensive broadband than several other major cities of the world, four U.S. cities that offered gigabit speeds at the lowest domestic prices are either municipal projects or private /public partnerships like Google in Kansas City. • Further, the report found that "the most affordable and fast connections are available in markets where consumers can choose between at least three competitive service 4 Source: Greater MSP. Study by NEF, 2013 providers. "s Yet, it noted only nine percent of Americans have genuine access to three or more providers; the majority are limited to one or two providers. To be fair, the NAF study was on consumer/ residential broadband, not on business broadband availability, however analysts believe the same competition /lower price relationship exists with business telecom services. Indeed, both Chattanooga, TN and Lafayette, LA (municipal fiber systems) report growth in businesses coming to their cities because of high capacity broadband at affordable prices. Strengths /Opportunities & Accomplishments to Date After concentrating on technology and infrastructure issues over the last 10 years, particularly as it relates to data centers, Eagan is becoming known as a city to consider when placing facilities. Data Bank officials acknowledged that with regard to their recent siting decisions. Eagan's focus on route mapping of fiber, building a fiber backbone, identifying crowded rights of way to ensure access, and work prior to road and bridge projects (for open trench opportunities to improve connectivity and redundancy) have been praised again and again in business recruitment meetings (see appendix for fiber map). Eagan is seen as a community that takes broadband seriously and one that is making smart technology investments. • Eagan is the only city to have had two participants on the first State Broadband Task Force • One of Eagan's strengths (and a credit to the City Council) is the ability to be patient in developing its opportunities and the ability to receive ongoing advice and counsel from the Eagan Technology Working Group. Broadband planning work has been authorized by the City Council since 2004. The City has surveyed on the topics since 2005, and broadband infrastructure has been part of the City Council's Goals since 20076 • As it relates to AccessEagan specifically, at present it is the only fiber provider into the outlet mall. Our ability to examine development projects as they come in and spot opportunities is a strength. • Another of our strengths is the carrier neutral approach and focus on what's best for the business. Eagan has not had the legal /political entanglements Monticello, St. Paul and other cities have had related to fiber systems. And because the initial $2 million investment was rather modest compared to proposals in other cities, and because expenditures to date have been paid from non - taxpayer revenues (antenna leases) we have not had the attendant controversies others have. • Some 17 miles of fiber have been placed in the ground and fiber service has been provided to the MVTA. City conduit has been leased to three separate telecommunications 5 New America Foundation —The Cost of Connectivity 2013 6 2007 -08: "Pursue world class Internet speeds, connectivity and access to all Eagan residents and businesses by developing a master plan, including finance options and policies, for the installation of high speed fiber optic broadband. 2009 -10: "Ensure the economic competitiveness of Eagan's business and residential communities in the global marketplace by anticipating and addressing evolving'infostructure' bandwidth, capacity and speed needs of Eagan residents, businesses and employers." 2011 -2012: "Encourage growth in Eagan's employment and tax base by implementing leading technologies to support the evolving'infostructure' needs of residents and businesses, by attracting additional technology /R &D sector business to Eagan and by enhancing communication with the community." 2014 Priorities: Renew efforts to provide state of the art broadband service in the City of Eagan. 8 companies. A network switch was installed and 24 -7 secured access procedures were established at the Fire Safety Center. Weaknesses & Challenges to Date In any SWOT analysis or business planning, it is important to assess weaknesses and threats before suggesting how those challenges could be addressed. As of June 3, 2014, the City of Eagan has signed four telecommunications providers on the AccessEagan network. After five months of selling opportunity by the providers on the network, there are no end user /customers utilizing the service other than the MVTA. Since June 3 there has been a significant uptick in inquiries related to AccessEagan services, particularly to the mall, and indications from two or more of our providers of customer interest in circuits. After significant conversations and analysis, at least six significant challenges have been identified. In no particular order, they are: Lack of Awareness —As noted in the background, the AccessEagan service was not able to be launched until late September 2013, leaving only two months in the construction season before the winter shutdown /slow down. With the "polar vortex" winter, sales opportunities really did not pick up again until late February 2014. In 2013 AccessEagan launched a website, created collateral marketing materials, produced two informational videos (one for businesses, one for providers) and also did one mailing to all businesses along the route. It also conducted, along with our providers, a joint information seminar for potential customers. Nevertheless, the AccessEagan name and availability of the wholesale service are barely known at this point. 2. Initial Offerings Were Off the Mark —The initial pricing of the AccessEagan services were validated both locally and nationally but were appropriate to generally smaller cities where there was a scarcity of fiber providers. In addition the terminology used in the first marketing materials needed revision to reflect the way telecom terms are used in the Twin Cities market. Staff, too, needed to get up to speed on industry jargon to "speak their language." 3. Reaction Time —Every market action has a market reaction. Whereas in 2008 there was little evidence of cable services for businesses in Eagan or affordable cable services for business (including Internet and phone), in 2013 when the business cable market started underselling its traditional competitors by as much as 50 %, AccessEagan and its providers were slow to react. Compounding that challenge, the City was unable to hire its strategic marketing specialist until the end of October to assist in marketing AccessEagan. Also, per direction of the City Council, and lacking a first end - user /customer, IT was unable to hire a planned position to more quickly respond to requests from providers for services and installation cost estimates. 4. Subcontractors —It quickly developed that a significant sticking point to closing deals with end users was the connectivity cost or the cost of the "last mile" drop from the curb into the place of business. While AccessEagan through RFP had selected two qualified installers, pricing from those subcontractors came back more slowly and significantly higher in cost than projected by our consultants, requiring new solutions to be found. 5. Dependence on Others —In a wholesale business model, the City, its network, and its reputation, are dependent on the speed and performance of its providers to market to prospects, to develop leads, and to follow through on leads provided to them. Further, when Simon took part ownership from Paragon and an operating management role in the new outlet mall, that caused uncertainty and delay in the final technology approach for the design of telecom services for the new mall. Finally, even the providers on AccessEagan will always do what is in their best interest. There is little to stop a provider taking an AccessEagan lead and installing their own fiber, or if they are a reseller for major providers not on the network, to close deals using whichever one has the lowest available pricing. 6. Future Funding —While an initial $2 million allocation was made by Council for the purchase, design, installation and marketing of the AccessEagan fiber using Antenna Lease (non -tax) revenues, a funding source for ongoing operations of AccessEagan has not yet been designated. At least one competitive threat should be acknowledged. Even though AccessEagan fiber is open to all retail telecom providers on carrier neutral and open access basis, for those well- funded providers who will only use their own infrastructure and do not like competition, there is always a danger that they will exert lobbying influence to ban or severely restrict municipal involvement in broadband. As a policy matter the City must be committed to defending the public interest should such threats emerge. Revisions & Adjustments To address the challenges identified above, the internal fiber team has taken the following steps to improve competitiveness and address shortcomings, with still other steps to be taken, as noted: Awareness —SEO (Search Engine Optimization) tools have been implemented to ensure AccessEagan displays with the highest visibility related to fiber providers in Eagan. As outlined in the marketing ,section, plans call for additional mailings to Eagan businesses, participation in appropriate local trade shows, appearances before civic organizations such as Rotary, increased business newsletter.and trade industry coverage, use of targeted social media, recording of testimonials from first customers and appearance on Inside Eagan and webstream'ing of promotional messages stressing the business benefits of AccessEagan fiber. • Revised Offerings -With the advice of our consultants and telecom providers, the City has revised base pricing,, terminology and strategy for opportunities along the fiber route, within the Outlet Mall and in relation to future opportunities. • Reaction Time—More remains to be done, but beneficial information sharing from other departments has improved lead generation and reaction times. The City Council has granted authority to the AccessEagan team to react to price competition in the same way any business might by offering its own specials and market solutions without having to come back to the City Council for approval —as long as it stays within approved budget amounts. Also, additional IT staff is proposed. ■ Subcontractors —The City has initiated a process to identify more nimble and cost - effective options for fiber installer subcontractors. ■ Dependence on Others —While this issue never totally goes away in a wholesale arrangement, the City will be stepping up communication with its providers, attempting to add additional providers, and reminding existing carriers on the network of their contractual obligation to produce a plan for how they will market the availability of AccessEagan fiber. 10 Section 4: Marketing Plan The AccessEagan fiber team has identified at least six target market segments and is in the process of identifying target customers within each segment. In addition, after revised pricing and analysis, it has identified several key strategies in its approach going forward. Because virtually all the other retail providers use a shared bandwidth vs. dedicated bandwidth approach, AccessEagan is best positioned to provide high -end scalable bandwidth to Eagan business customers who need that. Our strength is not at the lower end of bandwidth needs, we gain competitive advantage the higher the broadband speed need requirement becomes. Unlike its competitors who either can't or can't afford to offer equal upload and download speeds, AccessEagan can offer synchronous speeds on up to 1 Gigabit speeds. It is on higher end bandwidth needs, scalable solutions that create increased competition and economic development that the wholesale network must concentrate. AccessEagan is the home town team, the only entity focused on our businesses' success and appropriate long -term payback of its investment rather than short -term maximized profits. Target Markets New Developments — Development activity and interest is hopping within Eagan now. The City is in an ideal position to track new developments, monitor permit applications and share contact information with our providers. There are approximately 5 -10 new commercial projects in Eagan each year. New builds typically do not have the same "last mile" drop cost issues as existing businesses, because the cost is factored into overall construction not subtracted from operating budgets. Estimate: 4 new customers in 2014/15. Existing MDUs /MTUs— Similarly, Multiple Dwelling Units or Multiple Tenant Units do not have the same magnitude of drop cost issues as single tenant buildings do, and the ability to achieve payback of`any incentives is greater within multiple tenant buildings. AccessEagan currently estimates the number of quality opportunities for MDU /MTU locations along the route at 50. Existing MTUs likely have three year contracts, meaning only 1/3 would be up at any one time. Estimate: 1 -2 new customers of known MTU's + 1- 2 additional from our providers existing relationships. Data Center Customers /Those Needing Southern Route Solutions —With a new carrier neutral.data center coming to Eagan those entrants from outside the Twin Cities market and those entrants within the Twin Cities who do not have many route miles within Eagan can have 'instant access to our nearly 17 miles of business fiber if they become one of our providers. The new data center expects to have at least ten carriers in the first year of operation and is Intent on being both a colocation facility and a carrier hotel. In other markets they have up to 27 carriers. The Unisys Data Center, also near AccessEagan fiber, has 5 providers and a number of other carriers that ride those five. Those companies worried about single point of failure potential with exclusive reliance on the 511 building in downtown Minneapolis for Internet and Data connections can potentially reach any of Eagan's data centers (Delta Airlines /Digital Realty Trust, Unisys or the new Data Bank location) via AccessEagan fiber. With the MN Vikings new stadium construction and new high rise projects in Minneapolis, the opportunity to connect to at least two southern route solutions in Eagan that are not dependent on the 511 building can be an attractive alternative for those who seek additional redundancy and bigger circuits. Estimate: 1 new customer in 2015 based on completion schedule for data center in late 2014. 11 • Virtual Local Area Networks (VLANs), and offices with multiple locations requiring Local "Middle Mile" within Eagan— Companies having more than one office in Eagan or surrounding communities who need to get connectivity from one office to another can find a cost- effective solution via AccessEagan. Estimate: 1 new customer in 2014/15 Technology Intensive Companies (both here now & needing to locate near big broadband /redundancy) —The City of Eagan is attempting to develop a mechanism to screen what types of companies tend to be technology companies and heavily technology dependent companies. This screen will be used to identify those companies lacking high bandwidth solutions within Eagan, but working with site selectors and state and regional development partners, we will better promote the availability of scalable bandwidth solutions, and business continuity /redundancy options within the City utilizing AccessEagan fiber. Estimate: 1 new customer in 2014/15 • Leads from AccessEagan Providers —We will work with our providers to produce marketing plans for how they will reach customers along the AccessEagan route and encourage them to develop their own specials that leverage AccessEagan's reduced pricing. Estimate: 1 new customer from each provider, with a second possible from one of the providers. Strategies, Tactics & Resources Staff will get out early to all new developments to stress the importance of the business owning its own connection (or allowing AccessEagan to own) the fiber connection into the business premise. In this way the business is not beholden or locked into any one provider and maximizes its opportunity for price and service competition. With an emphasis on getting those first customers who can provide testimonials, we propose to prime the pump by making a City contribution on connectivity cost of the cost of the "last mile" connection from the cub into the place of business for those businesses that are willing to sign longer -term contracts to use more bandwidth and own the fiber access into their building. In this way, if they are not happy with their provider they preserve their options to always get competitive pricing. Getting fiber as opposed to copper into buildings helps future proof the community and extend broadband capability. New MDU pricing has been developed to compete with what's happening "on the ground." Outline how you will reach your objectives - steps you will take in planning, production and marketing to meet your targets. Working jointly with new and existing data centers in Eagan to identify new market entrants and traveling to at least one national data center trade show attended by carriers, the AccessEagan team will target new providers on the network who have the potential to offer new services or competitive prices to Eagan businesses. Additionally, working with our partners in the electric utilities, and at Greater MSP and the Department of Employment & Economic Development to identify companies that need constant uptime or highly redundant connections, the City will target those specialized users. Letters will be sent to those large businesses not in Eagan for whom their distance from us would make the City desirable for business continuity or as the middle mile connection within Eagan to those southern route options available via Arvig and XO Communications ■ Business list development and refinement will be done to better identify IT- related contacts at: 1) businesses along the route, 2) businesses having multiple locations within 12 Eagan or within Eagan and nearby communities, 3) and technology- dependent or technology - intensive companies both within Eagan and for whom site selectors are trying to identify technology - enabled communities. We need to continue to strengthen City staff interaction with AccessEagan. We have made great strides with the ROW tool and new business development. However, we need to keep identifying opportunities for collaboration and information sharing between multiple departments. • And finally, AccessEagan will continue to gather feedback from our providers about what works and what doesn't in an effort to make continuous improvements, while making sure to push the providers to match or pass along savings to end customers and have a plan for marketing to those companies along the route. Growth & Projections: In connection with the Target Markets identified, the network is well ;positioned to achieve connections to 10 -14 identified prospects in the corning year. Those break out as follows: ■ 4 new developments ■ 2 -4 Existing Multiple Tenant /Dwelling Unit buildings ■ At least one existing prospect along the .Route ■ For conservative planning purposes we are assuming one customer each from the Data Center, the VLAN strategy marketing to tech intensive companies and we are expecting our providers each to each land one new prospect not identified above, and we believe Velocity may iand,'two. Telecom purchasing is expected to grow 16% between now and 20187. According to local industry data, the smallest companies spend between $1,600- $3,700 a month for Voice /Data /Internet. The'next size up spends between $3,100- $4,100 a month for those services, not counting 'long distance idharges. ;'By contrast, 'larger companies spend anywhere from $9,100 - $24,000 on up (not counting Tong distance) for telecom services monthly. As few as half of the small /mid -size Companies have redundant connections to their business, and if they do, it is often a cable modem connection, backed up by a "low speed and low capacity DSL line.8 AccessEagan's new offer to cover build out costs for the first 10 customers who sign a three year contract with one of our providers for a minimum of 50 Mbps would equal at least $4,800 per contract per year. The cost for these build outs ($55,000) is a budgeted promotional expense in 2014/2015. The pro forma outlines revenues & expenses in detail. For 2015, estimated revenues are $112,000. Even with network expenses and contemplated core switch installation, 2015 expenses are not expected to exceed $600,000. The pro forma estimates AccessEagan will be making a profit by 2019. insight research corp, 2014 8 TMC citing local industry sources. 13 Competition CenturyLink and Comcast are the dominant two providers in most of Eagan but there are a variety of other providers from Verizon to Sprint to TW to Enventis, Level 3, Zayo, Velocity, Frontier, Arvig, and XO Communications having some presence in Eagan. Again, except for their larger customers, most of these companies provide non - symmetrical bandwidth solutions at higher price points per megabit of service. Some do not enjoy strong reputations for customer service. Technology So far, nothing faster than the speed of light through fiber optics is available for commercial application. There is always the possibility that a newer /faster /better technology could be developed and that would not be a bad result if as a result of Eagan's efforts, the private sector chose to deploy newer technologies in Eagan. As it stands AccessEagan is able to offer a 99.9% reliability guarantee for its network. That reliability could be or should be further strengthened by direct deployment to at least two data centers in Eagan (Unisys and Data Bank). AccessEagan provides three types of wholesale transport lit fiber solutions: symmetric, point to point, and asymmetric. It is currently reviewing whether to offer a dark fiber price as well. The following circuits are available and being delivered over a very reliable Cisco 7600 series core switch: 10/10, 50/50, 100/100, 200/200, 500/500, 1 Gbps, 25/5, 50/10, and 100/20. The service providers on the AccessEagan network will use state -of- the -art customer premise equipment (CPE) from vendors such as Cisco and Planet systems to service their customers with assurance and reliability. In most areas, the City has deployed a sufficient amount of fiber but depending on the situation, AccessEagan may decide to utilize transceivers that take advantage of a single fiber in areas where fiber resources are limited. This is relatively new technology that allows companies and organizations to conserve future fiber strands. Staffing Service contract templates, provider contracts, a marketing website, marketing videos, folders, brochures, rate sheets, pop up banners and information sheets were drafted and produced. Internal protocols to track inquiries and respond to them were established and a strategic marketing specialist who spends 5 -8 hours a week developing contacts, leads and needed materials. At present, the Communications Director & IT Manager also contribute an average of 10 hours a week to the efforts, with peak weeks needing up to 25 hours of time for pre -sales meetings, preparation of documentation, consulting contacts, planning, etc.) The lack of additional IT staff to this point has hampered the ability to answer technical questions from potential customers and secure opportunities. Most of the available staff time and resources are being dedicated to the outlet mall, so there has not been sufficient time to effectively design and coordinate the pre -sales tasks needed to effectively market to opportunities along the rest of the route. In addition, one of the budget items for 2014 is to place AccessEagan's second core switch into a data center within Eagan to strengthen the network and add reliability to the network. Additional staff time will be necessary to conduct analysis on where to place the network's core switch (DataBank, Unisys, or both). 14 There are more pre -sales tasks involved in supporting AccessEagan then was ever imagined. Because of this, whoever is eventually hired will need to be a very well- rounded individual with a lot of customer service /sales experience. In addition to that, this person will need to be technical enough to handle day -to -day network tasks. This will be a challenge to find these two skill sets together. Because of this, it may take longer to find and hire the right individual. Socio- political environment See threats under Weaknesses & Challenges. Also note that as with any elected body there is a chance for changes to the make -up of the City Council or to their long -term commitment to technology infrastructure. Other Dakota County is conducting a fiber feasibility study county -wide that may or may not identify market opportunity by collaborating with other local government assets. 15 Summary Conclusions For 201412015 the evidence is clear that having refined its market approach, there are significant opportunities in several sectors that conservatively achieve the goal of 11 or so paying customers in a full year of operation, which was the same assumption by our consultants in the original pro forma for an operational year. Further, with the arrival of a new data center in Eagan, with the as yet undetermined opportunities as part of the Dakota County fiber planning, with a focused marketing plan and staffing to develop messaging to the target markets, it makes sense to take a patient approach for 2014 -2015 and reassess where the Network is after pursuing these strategies. We are confident that with revised pricing, sharpened strategies and marketing messages, with four providers on the network, that we will have initial customers from whom we can obtain testimonials to help us secure additional customers through continued relationship - building and execution. Tighter coordination internally with more integrated support from City- departments and appropriate. staffing will lead to timely market response and growing awareness through marketing. Continued involvement with broadband, as we've seen, supports the City's,,broader economic development messaging and brand identity, as we seek to attract next generation knowledge workers, high tech companies, aided by first class 'infostructure. " The presence of AccessEagan and its commitment to technology were cited by DataBank officials in its location decision in favor of Eagan. 16 AccessEagan Fiber Map Map Date: January, 2014 0 2,100 4,200 8,400 Feet IV 17 City of Eagan Fiber Map City of CaQaa High Speed Telecommunication Fiber /Conduit Map T 1. mep le provwedforrar.a eouae only and la hazed anIwormallon provided to the City bya a -N.91m of Cky dghtorvray —le nap. and provider coverage Informatlon. The mep I, Intended to Chow %a general location.M,m —of a.., high peed tel— ramuwc,llo.......ge Atol, Ne Clb of E.-. end may nol,ep,e,<M,tl a.—ra. The City 0..gan da„ not ea iha ac cure of Ihia Info,mellon ..,11. at ., ... We Far.rrora. omiavlana Inaec—I.. ar-.a, or the mrormagon conWlnted Mhln The Clry of E,gm doe, not promote or dlacourage tho ua, of 1C, ap in, provider ahown on two .p. Map Date; May 2, 2013 Map created by City of Eagan Community Development Department 18 Legend AccessEagan Fiber s AocessEagan.Fiber CAD IS0 196 Fiber Loop and City Conduit ® City Installed Fiber —E'-Y' City 6" Conduit CZMW Municipal Boundary 111117� Woe 0.6 1 TCG Minnesota -mil Century Link Conduit o Frontier ® MCI ® Time Warner O McLeod USA ® Sprint - locatedvAthlnMcLeodConduit �� • XO Communications ® Enventis ® Zayo Fiber Ring Velocity N U ComcastCoverageArea AccessEagan Pricing Sheet ACCESSEAGAN Dedicated Ethernet Pricing Wholesale Transport Pricing Price list as of March 2014 Access Size Monthly Recurring Non- Recurring Cost Access Cost (MRC) (NRC) 10 Mbps $190 individual case basis 50 Mbps $400 individual case basis 100 Mbps $450 individual case basis 200 Mbps $550 individual case basis 500 Mbps $785 individual case basis 1 Gbps $835 individual case basis Access services sold using the Dedicated Ethernet prlcepoints are for single customers only and may not be resold to multiple users under any circumstance. Formultiple users, please see Multiple Tenant pricing below. Asymmetric Circuit Pricing Download/ Monthly Recurring Non - Recurring Cost Upload Speed Access Cost (MRC) (NRC) 25/5 Mbps $55 individual case basis 50/10 Mbps $110 individual case basis 100/20 Mbps $125 individual case basis MultipleTenant Unit Pricing Access Size Monthly Recurring Non - Recurring Cost Access Cost (MRC) (NRC) 100 Mbps $775 individual case basis 200 Mbps $900 individual case basis 500 Mbps $1175 individual case basis 1 Gbps $1450 individual case basis Multiple Tenant Unit Is defined as a mail, campus development, multiple dwelling unit building, hotel or data center. MTU pricing Is only available for circuits 100 Mbps or fasterand is subject to the discretion of theAccessfagan tear. 19 Pricing Overview AccessEagan offers carriers and providers Layer 2 transport circuits on a wholesale -only basis. Circuits on the AccessEagan network are distance independent. Carriers and providers determine how their own Ethernet -based services are managed. Pricing and terms are current as of 3/10/14 and are subject to revision if needed. The listed price will be honored for the length of the signed contract. Questions? PI ease con tact AccessEagan: 651 - 675 -5150 info @accesseagan.com #IF City of Evan AccessEagan Milestone Timeline Broadband Task Force Founded First Survey of Residents about Broadband 20 First Survey of Businesses about Broadband Design Nine Hired Five 9's Looks at Taystee Site Five 9's Drops Yankee Doodle Land Contract i Agreement Signed to Provide Network Support i Data Center Report bylones Lang LaSalle Phase 1 Fiber Installed f Broadband Study by Design Nine i Colocatlon Recommendations by Design Nine Critical Infrastructure - - - - - -• Resolution Passed Data Center Feasibility Report -- -- Completed Marketing Materials Developed and Web Site Went Live Fiber Installed Arvig TCPO - Signed DataBank Frontier ! Approved for Signed i Taystee Site i Core Switch ! -_ - AccessEaga Installed Roil Out I Velocity Signed Phase 2 Five 9's Fiber -- Withdrawsfrom Installed Eagan MVTA Service Initiated Five 9's Announced Intent to Build Data Center at Yankee Doodle site Granite AccessEagan Brochure for Twin Cities Premium Outlet - Front FOR TELECOM SERVICES AT TWIN CITIES PREMIUM OUTLETS, CALL 651 - 675 -5150 OR VISIT ACCESSEAGAN.COM AccessEagan affordable ch telecom provider's last-mile connection • you AccessEagan is a high - performance fiber network built by the City of Eagan, Minnesota that is available to any telecom provider. This network offers network services up to 10 Gig directly to your store at the Twin Cities Premium Outlets via the telecom carrier of your choice. Have a specific provider you prefer to work with? AccessEagan can cost- effectively connect your existing preferred provider to your store because our fiber infrastructure is already in place at the Twin Cities Premium Outlets and is open to all providers. Your current provider could also partner with an existing AccessEagan provider to connect to the mall. Need a provider in Eagan? AccessEagan can immediately connect you with the local, quality providers already on the network who offer affordable solutions for all your telecom needs. Make sure your telecom management partner knows about AccessEagan Make AccessEagan the first call for your information technology service team. Our representatives are available as your local resource to answer questions about network capabilities. You will save time and money at the Twin Cities Premium Outlets by working with our providers and their competitive pricing and products. 5040 AccessEagan is here to help you with your telecom and network needs at the Twin Cities Premium Outlets: • Save time & money. The AccessEagan Infrastructure is already at the mall —It is easy and affordable to get connected. • Support current & future technoingy nee +Js. The AccessEagan network seamlessly supports any digital and data needs you have today, from POS to inventory management to streaming video content. The network is also fully scalable to support your growing business needs. Nlaxirnize speed & efficiency. No copper here. Our 100% fiber optic network gives you high performance access to fast, scalable and synchronous Internet and data connections up to 10 Gig. • Ensure reliable connections. AccessEagan partners provide you with a back up plan to ensure that you are never without service. AccessEagan also has a Network Reliability Guarantee. • Dhoose your provide . We can help bring your national provider or your choice of local providers with competitive pricing for Internet, phone and data needs directly to your door. 21 AccessEagan Brochure for Twin Cities Premium Outlet - Back About the Fiber NetlnjOrk Key Technical Features of AccessEagan AccessEagan's wholesale, open- access fiber network is dedicated to Eagan businesses. You can use any preferred telecom provider or request quotes from a variety of existing service providers. Fiber is the smart option for your new site at the Twin Cities Premium Outlets. Fiber optic connections are faster, have higher speeds and can grow with your business better than a traditional T1 or copper connection. Scalable from 10 Mb to 10 Gig, AccessEagan is a carrier -class network and Is designed to support your current and future business needs.* A wide range of bandwidth options are available, up to and including Gigabit, 10 Gig, and lightpaths. Our Network Availability Guarantee means the network will be available and capable of forwarding packets 99.99% of the time, averaged over a calendar month. The fiber network provides dedicated bandwidth and offers the choice of equal or asynchronous upload/ download speeds to meet your data needs. The colocation facility is located inside Eagan's Fire Safety Center and is monitored 24 hours a day. AccessEagan can also offer new choices for fiber paths exiting the Twin Cities. AccessEagan is the smart network connectivity choice for today, tomorrow and into the future. Contact us today to learn how AccessEagan connectivity and services can help your new location in Eagan — call 651 -675 -5150 or send an email to info(@accesseagan.com • - rte, .... ............................... flit o n .er- arvig Velocity �gGrane ,t, Commumwuans a TELEPHONE "AccessEagan is not anise and it does not provide direct or retail services to end users. AccessEagan is a wholesale service brought to you by the City of Eagan 2014 City of Eapri. Minnesota 22 Following action at last Tuesday night's City Council meeting, the Governor and regional economic development officials are praising the decision by Data Bank to locate a major colocation data center and 'carrier hotel" in Eagan. The decision culminates a major four-year effort to secure such a specialized facility in Eagan that would utilize multiple fib erentrypoints fo r tel e co m p rovi de rs to serve the region. "The City of Eagan presented the perfect location for DataBank to expand in the Twin Cities," said Tim Moore, CEO of DataBank, "We intend to deliver the flagship multi - tenant data center in this region and between the robust Acces sEagan network and the support of their forwarding - thinking dty leadership, these guys just get it and made our choice simple," '61.3 ISIN D AT A B A N DataBank Announce s N ew Hi gh Quality Data C ent e & `Carrier H of el' in Minneapoli s The planned 26NDV facility wi)1 allow Twin GYties businesses the highest spec data center in the region with robust carrier access Mirmeapoll s -June 23, 2014 - DataBank Holdings, Ltd,, aIeading super - regional provider of data center colocation and managed services with fadlities in Dallas, Kansas City and Minneapolis, has today rel e as e d pl an s for development of a new, state -of -the -art, multi- tenant colocation data centerfacility in Eagan, MN, This will offerthe entire Twin Cities area a diverse entry - pointfor data and telecommunications providers to serve the entire metropolitan area, Design and construction plans on the facility are currently underway, DataBank worked dosely3Adth State and Local officials to fully realize the potential of such a facility and the positive impact it would have for businesses throughout the region, "DataBank's expansion is great news for Eagan and great news for Minnesota," said Minnesota Governor Mark Dayton, "We welcome this new development and congratulate the company on this important proj ect that c+411 create jobs in our state and provide an important telecommunications service to the entire region." The strategic location of the facility in the City of Eagan allows DataBank to leverage both a robust and diverse power grid from Dakota Electric and Great River Energy, as well as the city's advanced fiber- opticnetwork that boasts a number of tier -one carriers already interconnected, 'DataBank is nationally known for its data centers and the major carriers and corporations it serves,' says Eagan Mayor Mike Maguire, "The syne rgyfrom those relationships complement and leverage our own strategic investments in Access Eagan," a 17 -mile wholesale fiber optic network open to all broadband and telecom providers. "Together, we make the region stronger and Eagan even more competitive.' "DataBank's planned colocation data center facility in Eagan is another sign of our region's evolving innovation strength," said Michael Langley, CEO of GREATER MSP (Minneapolis Saint Paul Regional Economic Development Partnership),'lVs a-Mn- winfor DataBank, the cityof Eagan, our region, andthe state of Minnesota" DataBank currently owns and operates data center facilities totaling over 180,000 square feet of data center space inthe Dallas area, 15,000 in Kansas Cityand another 15,000 in Edina, MN, This new 88,000 square foot facility will encompass over 48,000 square feet of raised -floor data center space thatwill be purpose - builtto the highest specifications for a multi- tenant data center inthe region. 23 "This announcement represents an important benchmark in DataBank 's regional plan," said Tim Moore, CEO of DataBank. 'The facility infrastructure and service -level we can offer will be unparalleled in this market. This will provide a great advantage for the growth of both our current client -base as well as meet demand from a wide diversity of businesses here in the Twin Cities." Moore continued, 'This investment exemplifies our commitment to the market, and we couldn't be more excited to be a part of this thriving business community." The DataBank'Carrier Hotel' will employ a modular design that starts with two large scale MMRs (Meet -Me- Rooms) and the first 10,000 square foot data hall of a multi -pod configuration which will allow built -to -suit caged enclosures and private suite space to service highly customizable customer requirements. When fully completed, the facility specifications will include 20MW of utility power using diverse feeds, configured in a true 2N (complete redundancy) system with a matching on -site power generation plant, as well as a layered high- density data center power delivery system. To learn more about DataBank data center facilities and suite of service solutions please visit the company site at www.databank.com. About DataBank DataBank is a leading provider of enterprise -class data center solutions aimed at providing customers with 100% uptime availability of data, applications and deployed infrastructure. DataBank offers a suite of managed services anchored in world -class data center facilities along with highly available and robust Internet access. Our customized customer deployments are designed to effectively manage risk, improve their technology performance and allow them to focus on their core business objectives. DataBank is headquartered in the historic former Federal Reserve Bank Building, in downtown Dallas, TX and has additional data centers in Dallas, Minneapolis and Kansas City. For more information on DataBank locations and services, please visit www.databank.com or call 1(800) 840 -7533. E711id 24