12/03/2007 - City Council Finance CommitteeAGENDA
FINANCE COMMITTEE MEETING
MONDAY
DECEMBER 3, 2007
8:00 A.M.
CONFERENCE ROOMS 2A & 2B
1. AGENDA ADOPTION
II. REVIEW CITY COUNCIL BROADBAND GOAL, DISCUSS
OPTIONS AND RECOMMENDATIONS OF TECH WORKING
GROUP
III. NEXT STEPS & DEFINE PROCESS FOR REVIEW BY CITY
COUNCIL AS A WHOLE
IV. UPDATE (if time allows)
A. Progress of statewide Broadband Bill and Eagan positioning
B. Governor's Broadband approach
C. Long-term interests
V. OTHER BUSINESS
VI. ADJOURNMENT
Agenda Information Memo
December 3, 2007
Finance Committee Meeting
8:00 a.m.
II REVIEW CITY COUNCIL BROADBAND GOAL, DISCUSS OPTIONS AND
RECOMMENDATIONS OF TECH WORKING GROUP
BACKGROUND:
A. Recap of Council Broadband Goal
• In February 2007, the Eagan City Council passed as part of its 2007/2008 goals the
following broadband goal:
"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. "
• The Eagan Technology Working Group was encouraged to have conversation with all
current providers (incumbents) and potential new providers desiring to serve the Eagan
market to gauge their interest in meeting the City Council's stated goal.
• For six months the Working Group, in association with Eagan's business community,
studied numerous broadband business models in use across the country and
internationally, and specifically interviewed eight different firms, including three
incumbent providers.
Agenda Information Memo
December 3, 2007
Finance Committee Meeting
8:00 a.m.
II REVIEW CITY COUNCIL BROADBAND GOAL, DISCUSS OPTIONS AND
RECOMMENDATIONS OF TECH WORKING GROUP
BACKGROUND:
B. Options Bearing Further Scrutiny
1. Differences between business models/approaches
There are numerous business models and options to potentially reach the City
Council's goal of providing world class Internet access in Eagan, including but
not limited to:
a) Encouraging the private sector to supply advanced broadband services on
its own;
b) Exploring public/private partnerships for "last mile" solutions;
c) Considering an "anchor tenant" relationship with a provider in exchange
for providing improved broadband services to the community;
d) Considering a non-profit structure with local corporations, the City and
potential other entities jointly owning to provide ultra high speed
broadband in Eagan either wholesale or retail, with or without a
management company;
e) Or considering City-owned infrastructure/utilityto provide ultra high speed
broadband in Eagan either wholesale or retail, with or without a
management company
• Though there are signs that current providers are beginning to increase their available
broadband speeds', testimony at a recent Minnesota House field hearing in Eagan
indicated that the median upload speed in Minnesota is slower than the national average
and seven times slower than in Japan.2 Further, Americans pay more per megabit of
service than almost any major industrialized country.3
Qwest has given indication that it is installing fiber down the major streets in Eagan (called FTTN or Fiber to the
Node) to utilize existing copper connections to the home to increase its current DSL speeds from 1.5 Megabits Per
Second to 6-7 Mbps with a potential for service up to 40Mbps. Comcast has given local indication that they will
double their modem speed (download) from 6-12 Mbps in early 2008 and within a year - 18 months move to 50
Mbps download x 10 Mbps upload speed for business, and 50 x 5 for residences. This is at variance with Comcast's
CEO, Brian Roberts, who was quoted recently in Fortune Magazine stating that beginning in 2008 Comcast will
begin to rollout in certain markets a revised DOCSIS 3.0 technology with speeds of "up to" 160 Mbps (the latter
number perhaps referring more to capacity, rather than intended service level offering.)
2 Mr. Rick King, Chief Operating Officer of Thomson West, MN House Telecomm Hearing, Eagan, MN, October
17, 2007, advocating for a minimum 250 Mbps upload & download speed goal in Minnesota to be world class.
California and Singapore have both stated intentions to pursue an even higher speed goal of 1 Gigabit speeds by
2010. Mr. King also noted that watching a '/z hour video online is the equivalent use of bandwidth of more than 200
e-mails a day for a whole year. Watching it in High Definition is the equivalent of 35,000 e-mails, making
bandwidth capacity an important topic if Eagan wishes to "future proof' its community.
3 In Japan, for example, 100 Mbps of symmetrical phone, video, and Internet costs just $40 a month. For prices we
pay here, in Europe consumers receive speeds download speeds 3-13 times faster, with much faster uploads.
• The inability of employees to have sufficient upload speeds to continue their work or
training from home was of concern to at least four Eagan companies testifying at the
hearing.4
• From March through August, members of the Eagan Technology Working Group and the
local Eagan business community met more than once with current and potential providers
gauge their interest in meeting the City Council's stated goal.
• Only one of Eagan's current providers (Frontier) submitted a written statement describing
their interest. Despite two meetings each with Comcast and Qwest, and general
expressions of wanting to work together, nothing has been received in writing from either
company.
• In September the full Eagan Technology Working Group recommended that four options
deserve further study. (See attachment for Brilliant Cities, Dynamic Cities/PacketFront,,
Frontier and Lookout Point Communications.)
2. What other cities are doing
Other Minnesota cities are potentially changing the landscape by their
broadband decisions and recommendations: Monticello, Burnsville, Lakeville,
Eden Prairie, Red Wing, St. Paul, Burlington, VT. Director Garrison will
provide an overview
a) Chapter 429 approach municipal fiber loop with assessments
DISCUSSION & PUBLIC POLICY QUESTIONS:
• Are there any business models or options the Finance Committee is not comfortable
pursuing?
• Are there additional options the Finance Committee would like to see included?
ATTACHMENTS:
See copfidential restricted distribution comparison matrix of Eagan Broadband Options
pager
See Se tem ber 2007 background memo for the Eagan Technology Working Group on
page - Le
See ThisWeek article on Burnsville municipal fiber loop approach on page
4 Thomson West, Northwest Airlines, Intertech, & Gorton Studios testified. In addition, lack of sufficient Internet
speeds and upload capacity is a problem for many of Eagan's estimated 1,600 home-based businesses.
3
Broadband Background Document
Eagan Technology Working Group
September, 2007
OVERVIEW
Heading into the next decade, and even today, businesses and residents in Eagan face a
number of broadband challenges. There is the auto repair shop that cannot quickly
download repair specifications or training videos. There is the small insurance firm that
has been quoted a cost of more than $3,000 for a "last mile" connection to their office.
There are home-based businesses and employees working from home who do not have
sufficient upload speeds to be able to efficiently and sufficiently keep work moving from
home.
As the first Tech Task Force found in 2004-2005, large corporations in Eagan are
particularly well served by high speed broadband options with abundant fiber optic routes
particularly in the northeast and north central portions of the city. However, small and
medium-sized businesses are less well served by affordable broadband options and
residents are largely confined to two choices, lower speed DSL and cable modem service.
Specifically:
• 24% of Eagan residents surveyed in 2006 report that their currently available
Internet speed in Eagan is too slow.
• 77% of the nearly 5,000 Eagan residents who responded to the survey were
concerned that the U.S. is falling behind in developing next generation Internet
capabilities.
• 88% of Eagan businesses surveyed in 2007 said high speed Internet is important
to their business. (72% said it is very important.)
• 91 % of businesses surveyed said information storage on a broadband connection
to an off-site data back-up location is important. (76% said it is very important.)
• 75% of businesses said it was important to have more than one hub in the Twin
Cities for business Internet lines to minimize disruption of service.
• While more than3/4 of respondents do not want to pay more for higher broadband
services, 52% of businesses would favor sharing the costs of Internet service
improvements with other businesses, city government and residents if it meant
improved broadband Internet service or long-term cost savings.
ENVIRONMENTAL SCAN
Research compiled by the Eagan Technology Working Group reveals:
• We have significantly slower broadband than our global competitors
• We pay more for broadband per megabit than our global competitors. (In Japan,
for example, 100 Mbps of symmetrical phone, video and Internet costs just $40 a
month.)
• Communities that have and use broadband grow faster than those who don't.
• The US has fallen from first to 160' in the world in broadband market penetration,
and during the last half of 2006, the US had the 2nd lowest growth rate of the 30
industrialized nations student.
• Both the Intemet2 Consortium and the IEEE-USA have policy statements urging
the US to adopt next generation Gigabit networks to improve US competitiveness
S_
and prepare for the convergence of voice, video, image and data which will
consumer ever-growing amounts of bandwidth.
Responding to these concerns, the Eagan City Council in February, 2007, adopted the
following two-year goal:
Pursue world class Internet speeds, connectivity, and access
to all Eagan residents and business by developing a master plan,
including finance options and policies, for the installation
of high speed fiber optic broadband.
TECH WORKING GROUP EFFORTS
Responding to the task and charge from the Eagan City Council, the Tech Working
Group, staff or the local business community have:
• Met with representatives of at least eight current or potential broadband providers
including all current incumbent telecommunications providers into Eagan
• Continued work on identifying significant conduit installation opportunities, and
developed suggested lease pricing for Council consideration, as a first step
towards creating an overall business plan for repaying these investments (along
Highway 149 and the 11.5 mile 196 conduit route.)
• Met with the Eagan Planning Commission in a work session to suggest code
authority to require conduit or fiber installation to all new developments
• Met with the new master developers of Cedar Grove to identify "green field"
opportunities for FTTP/FTTH deployment in whatever is built in that
redevelopment district.
• Begun to identify best practice code requirements to encourage technology
deployment
• Met with Dakota County mayors and managers to explore the potential for
broadband partnerships and with a federation of counties exploring broadband
partnerships.
• Pushed for the enactment of statewide legislation to set a statewide broadband
speed goal and establish policy and a framework for achieving those speeds.
POTENTIAL NEXT STEPS:
• Consider prioritizing the list of high speed broadband options to be forwarded to
the Eagan City Council or its designated sub-committee(s).
• Consider recommending a process to assist the City Council in being able to
determine its best option(s) to meet its stated goal and additional questions that
may need follow-up.
• Consider requesting the City Council send a letter to any potential provider who
has not responded with a written statement of interest, to further define the
potential for working with them to achieve the City Council's stated goal.
• Consider making a formal recommendation to the Planning Commission, staff, or
the City Council regarding policy steps it could make to enhance responsible
technology deployment in Eagan.
• Consider making any other Work Group recommendations based on its review
and study these past few years.
TM SGVEEK Gcsro(_, 13 21107 9A
High-speed fiber
City will ask Larc. business owners whether
they want to connect to municipal loop
bvJohn Gessner prospective new businesses, he
tl,'AI= i \t: t411'a r'[. 5 said.
Last year the City Council Last year the council stud-
decided against building an red but decided against build-
open-access fiber network ing a $50 to $70 million munic-
to blanket Burnsville with ipal network that broadband
high-speed Internet capability. providers could access for a
But it group of north Burns- fee.
vine businesses might be able Instead, the council Said
to train access to it fiber loop broadband providers - chief-
the city is budding for its tail- ly Qwest. Comcast and Fron-
itv system. tier should be encouraged
The council agreed at an to expand their offerings.
Oct. 9 work session to stir- The city is seeking one
ver owners of 115 properties of the companies to provide
in the Lars Industrial Area, broadband service through
Burnsville'; oldest industrial the city fiber that would be ex-
par: tended to the businesses.
The question for owners is An agreement with a pro-
„hethcr to pay S1.3 million in eider will be needed before the
assessments for the extension fiber is extended. according to
of 'fiber to their buildings. city staff.
Assessments are estimated At least one provider "may
at $750, twice a year, over 10 agree to begin more serious
years. Once the survey is done. discussions." said a city staff
its up to the council whether report.
to go ahead with the project. Under an agreement, the
.`I predict its going to be provider would be responsible
a very close margin. 50 to 60 for managing and maintaining
percent, that will be in favor the fiber loop in exchange for
of it," said Council Member access to it.
Charlie Crichton, adding that The city is building the 53
he wouldn't support the proj- million loop in north Burns-
cet ?srti, such thin approval, ville to connect utility sties
Council Member Dan Gus- such as wells, lift stations and
tafson said the city connection the water-treatment plant. The
will be cheaper than what busi- loop will be part of a system
ncsscs Gvould pay the phone or that collects data from the
cable company for a fiber con- sites.
nection.
giber would also make the John G< suer is at hurnrr•itle.
properties more attractive to thisiceek',€r?rrr-irzc.t??rzr.
7
Agenda Information Memo
December 3, 2007
Finance Committee Meeting
8:00 a.m.
II. REVIEW CITY COUNCIL BROADBAND GOAL, DISCUSS OPTIONS AND
RECOMMENDATIONS OF TECH WORKING GROUP
BACKGROUND:
C. Tech Working Group Recommendations
• On September 24, the Eagan Technology Working Group reviewed Eagan's potential
options to meet the City Council's stated goal of Eagan becoming world class in
Internet speed, connectivity and access for Eagan residents and businesses and
indicated four specific companies or approaches bear further study.
• Specifically the Working Group also:
1. Suggested hiring a technical consultant to narrow the choices
2. Suggested Council letter to incumbent providers who did not respond
• Staff would also recommend defining a process for ultimately bringing final
recommendations back to the City Council for a decision.
D. Eagan potential as a site for investment capital
• Investment decisions move quickly in the private sector, and two of the four options
appear to have limited windows of opportunity. Feedback is needed for how to best
position Eagan should it wish to take advantage of those opportunities.
1. Brilliant Cities approach
2. New information from PacketFront as of 11/30
PUBLIC POLICY QUESTIONS:
• Should the City of Eagan retain a business/technical consultant with the requisite skills to
further refine Eagan's broadband options and bring those back with recommendations?
• Or do any of options presented constitute such a superior choice that Eagan should
negotiate exclusively on that one specific opportunity?
• If yes to the first question, or if the City wishes to have its own expert negotiating with
one or more of the options, what is the recommended source of funding for this
expertise?
• What governance process makes the most sense for bringing recommendations back to
the Finance Committee and full City Council?
ATTACHMENTS:
• See memo from Director Garrison about limited window of opportunity on some
broadband options pages through 1.
• See confidential letters from two providers regarding its time-sensitive broadband
througl
opportunities. Pages ?? .
City of Evan MeMo
To: CITY ADMINISTRATOR HEDGES & CITY COUNCIL
COMMUNICATIONS COMMITTEE MEMBERS
From: COMMUNICATIONS DIRECTOR GARRISON
Date: November 30, 2007
Subject: LIMITED WINDOW OF OPPORTUNITY REGARDING
BROADBAND OPTIONS?
Since the scheduling of the Communications Committee, the City of Eagan has been
contacted again by two of the four companies whose approaches the Tech Working
Group believes have significant promise in meeting the City Council's established goal of
providing world class Internet speeds, connectivity and access to all Eagan residents and
businesses.
Brilliant Cities, of Minneapolis, and PacketFront of Colorado (which purchased the
former Dynamic Cities) have each relayed updated proposals they wish shared with the
Communications Committee. Additional information regarding the other two options the
Tech Working Group recommends studying (Frontier & Lookout Point) will be available
at the meeting but are not included in the packet so as not to overwhelm your reading,
and because staff recommends a technical consultant sort through specifics of the four
proposals.
Nonetheless, while aware of staffs recommendation to evaluate all four approaches on
their merits, the two firms first mentioned believe their separate approaches, the changing
marketplace and Eagan's desire to lead in broadband, justify working exclusively with
one of them to take advantage of what they regard to be a limited opportunity to establish
Eagan as the "Breakout City" that sets the standard.
Whether this is just marketing-speak remains to be determined, but specifically in the two
attached documents,
Brilliant Cities proposes to:
• (In return for Eagan's commitment to be the "breakout city,") help Eagan build an
$80 million (+/-) advanced generation fiber to the premises (FTTP) broadband
network that could attract upwards of $40 million direct investment into Eagan
and an increase of market value for residents of between $3000-$5000.
• Seek proposals from investment bankers to capitalize Eagan's FTTP Network.
9
• Convene Eagan's corporate citizens to see if they would provide written/financial
support for the network to attract outside investment.
• Evaluate and recommend the best financial option/proposal for "full financing"
from investment bankers of the Eagan opportunity and build it by 2010.
PacketFront proposes to:
• Utilize experience in Vasteras, Sweden and 72 customers in 25 countries to
implement a next generation open network in five phases for Eagan.
• Work with any of the City's preferred partners to conduct a strategy workshop
with City staff and key business stakeholders to define the opportunity.
• Create a draft fiber ring design to match that vision, but allow stakeholders to
review and revise.
• Utilize the data already conducted for Eagan by them (formerly Dynamic City)
and tap City staff and GIS to successfully complete strategy workshop.
• Provide and coordinate financial assistance either from PacketFront or investment
banks, underwriters, the local business community, etc., to assist the City in
financing the network.
• Use a phased approach to only build out to areas when 50% of those in that
quadrant want it, thereby controlling costs.
• Depending on the business model chosen, costs for such a network would be
between $30-70 million.
• Fees for these services will be quoted on request.
City staff will obviously need direction whether one of these approaches deserves
consideration in advance of the others. While the Tech Working Group has solid
expertise, these are volunteers with limited time availability. It is clear from their
recommendations that we are entering a phase where solid professional engineering and
financial advice will be necessary to evaluate and recommend the final best solution for
Eagan to achieve its broadband goals.
I will be happy to attempt to answer any questions you may have.
/0
Brilliance es
Confidential Information
November 19, 2007
Tom Garrison
Communications Director
City of Eagan
3830 Pilot Knob Road
Eagan, Minnesota 55122
Dear Tom:
The objectives of this letter are to define the:
The direct economic benefits of a FTTP network
• The opportunity for Eagan to be the FTTP "Breakout City" that sets the standard
Immediate roles that Brilliant Cities can play for the City of Eagan
The Economic Benefits Of FTTP
The deployment of a FTTP network in Eagan will cost about $80 (+/-) million depending on the
final engineering plans. The economic implications of an FTTP network include:
1. A $40 million direct investment in Eagan (labor and services)
2. An increase of $3,000 to $5,000 on average market value for residences (Verizon market
study), total impact would be $73 to $121 million increase in market value of Eagan
residences
3. Increased efficiency in government services, education, health care delivery, and public
safety
4. More remote working and less traffic
The "Breakout City" Opportunity
The initial design of the FTTP network and its central operations office, determines much of a
network's future ability to serve the community through the delivery and monetization of new
services and applications.
To date, deployments of fiber optic cable to the premises (FTTP) networks primarily replicate
the traditional service models of voice, video (cable), and internet-ISP, "the triple play." Such
models marginalize the value of the FTTP network to the community and providers who seek to
deliver advanced applications. Fiber's potential to serve a community is far beyond the triple
play.
1300 Godward Avenue North East - Suite 3000 - Minneapolis. Minnesota 55413
Page 2
Corporations and individuals within telecommunications, technology, content, advertising,
online services, and applications are looking for optimal FTTP network, one that sets the
standard for FTTP networks. They are seeking a community with the population size and
demographics that Eagan possesses....a city that is also bold and seeks to set the standard for
FTTP networks. They are looking for a "breakout city" that defines FTTP's capabilities in the
present and the future.
Eagan
Over the last several years, Eagan's due diligence in researching and analyzing its needs in
telecommunications was far beyond all major cities in the United States. Its recognition that
FTTP was its future, when others were seeking wireless or perceived the incumbent's cable or
DSL was all they needed, was visionary.
Eagan's visionary FTTP lead, has been eroded by cities about to deploy FTTP networks such as
Lafayette, Louisiana and Chattanooga, Tennessee. Behind them are major cities such as Seattle
actively seeking FTTP and many smaller cities somewhere in the process of evaluation to
acquiring FTTP.
Within Minnesota, Burnsville is moving forward with its FTTP plan. St. Paul recently issued it's
an internal study recognizing that FTTP is the future, which places it in the same position as
Eagan. Monticello has completed its feasibility study, passed a community referendum and
issued RFPs for capitalization. Roseville has long sought ultra high broadband and we believe
that they may partner with St. Paul. St. Croix County is active in the pursuit of FTTP. From
recent discussions, we believe that a number of other communities will soon announce their
intention to seek FTTP.
It would be a great loss for the City of Eagan and its citizens if this would to occur. To lose the
benefits of leadership and recognition of the first major city to deploy an advanced FTTP
network would be a significant loss. From our discussions with those within major industries,
we believe that the "breakout city" could potentially reap significant support from those
industries. The exact nature of such support could only be determined once a city has made a
strong to total commitment to be the "breakout city."
Recapturing The Lead
In the "Project 2010" materials we provided, the process to FTTP implementation is well
defined. To move the project ahead with minimal expenses and the greatest progress, we
propose that Brilliant Cities be authorized by the City of Eagan to:
• Seek proposals from investment bankers for capitalization of Eagan's FTTP network
• Work with the corporate citizens of Eagan to gain their written support for the FTTP,
necessary to acquire the optimal terms from the investment bankers
• Evaluate and recommend the investment banker proposals in cooperation with City of
Eagan
Once we have completed this process, we can move to the implementation of "Project 2010."
1C?
Page 3
Summary
Eagan is the right city, with the right leadership, and corporate base to acquire an
advanced FTTP network
It is necessary to act in an expedient manner to reestablish Eagan's leadership and to
acquire the benefits of being the "breakout city" and set the standard for advanced FTTP
network
Brilliant Cities is offering to work with the capital markets to solicit financial proposals
for full financing of "Project 2010"
Let me know your thoughts.
Regards,
Tom Coleman
16
CONFIDENTIAL
kSTRICTED DISTRIBUTION
roj,iosC", for
City of Eagan
l?
tll/p
Proposal for Professional Services
City of Eagan
Eagan's Vision ...........................................................................................................................1
Proposal for Eagan ..................................................................................................................3
Potential Partners ...................................................................................................................... 3
Five Phases for Launching FTTH in Eagan ..............................................................................3
Strategy Workshop 4
Ring Design ............................................................................................................................ 4
Deliverables to the City .......................................................................................................... 4
City Commitments ................................................................................................................... 4
Financing Assistance .............................................................................................................. 5
Fee Consideration ..................................................................................................................... 5
PacketFront Highlights .............................................................................................................6
Customer References ...............................................................................................................7
PacketFront Contact Information .............................................................................................8
Copyright 0 2007 PacketFront, Inc. All Rights Reserved. The contents of this document are unpublished, proprietary
and confidential and may not be copied, disclosed, or used, in whole or in part, without the express written permission
of PacketFront except to the extent required by law and insofar as is reasonably necessary in order to review and
evaluate the information contained herein.
iS
Professional Services Proposal
City of Eagan
Eagan's Vision Eagan is on the path to be a world-class city. It already boasts the significant facilities
of some of the nation's most innovative businesses, including Thomson, Northwest
Airlines and BlueCross BlueShield. The path to world-class leadership is dependent,
in part, on having adequate and quick access to information-the lifeblood of today's
economy. A future-proof transport system will benefit residents, businesses, and other
healthcare, education, entertainment and social networking organizations in ways we
have yet to imagine.
While cities across the world seek to make investments in infrastructure to stay viable,
only a few cities have implemented a true broadband infrastructure matching world-
class vision. One of these, a PacketFront client located in Vasteros, Sweden, has
implemented a next-generation network to match their world class vision. The
following highlights some of their accomplishments:
City:
Network name:
Population:
Infrastructure:
Business model:
No. of providers:
No. of services:
Take rate:
Vasteras, Sweden
MalarNet
120,000
Fiber-to-the-premise
Open
30 (Approx)
125 (Approx)
65%
Key stakeholders of the MarlarNet fiber project created a mission and vision and
followed it through-not just with the fiber infrastructure, but with the systems and
tools that have resulted in real value to its residents and businesses. In so doing,
Vasteras has become a world leader in delivering on the promises of fiber. To
underscore the value MalarNet is creating for the city, one only has to look at the web
portal-
This can be viewed live at: http://www.malametcity.se/
PocketFront
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r ,';!1 ) -_VI?'_ 1 x.11 ?? •l ! ,tr'. 71E`?li
The portal allows users, both in the city and outside, to communicate, conduct
commerce, connect to city functions, chat with politicians, work in business forums,
identify local businesses and more. Each building in the graphic represents a well-
know landmark in the city, so users intuitively know how to navigate the site by
clicking on a familiar landmark. Government services, shopping, religious services,
media, sports and recreation, healthcare, applications and services, business
connections, and social networking are among the links offered here.
Popularity of the site is unprecedented. Some statistics from MalarNetCity portal are:
• More than 1,000 web pages loaded per hour
• More than 1,000,000 hits per month
• More than 70,000 unique visitors per month
• Site conducts active e-shopping with secure credit card transactions for local
businesses
• Constituents have live chats and political forums with elected officials
• Over 40,000 private blogs created on the site in the last two years
MalarNet officials credit the great success of their network and portal to the open
business model. Once signed up on the MalarNet fiber network, business and
residential users select their services through the portal on screens such as this:
SOker au eftw nigot+
'. MbJlfyhetet PE MNC m !&eu1 . ,
MalarNet City
Vlster8s Stidsportal
•
{ir SUO.nR VwauN.w ef.W.rYaSY
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l seen 18.. [ °, ysy ".a. ?+' dfmia..
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?xyk ? l,.ev,e2 I _. _. _. _J
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Healthy competition among the providers has led to innovative services and more
competitive offerings. Service and application providers are connecting everyone to
everyone else, today through the MalarNet portal. The approach that the City of
Vasteras has taken with their network has opened up limitless possibilities for service
innovation for decades to come.
PacketFront
17
o : ) o I- o [!IC mr;l Srv i P'iT?Y?i
Proposal for The City of Eagan has reached a milestone in its fiber-to-the-
Eagan home (FTTH) initiative-an effort to enhance economic
development and quality of life for its residents and
businesses, and ultimately to become a world-class city. ,
PacketFront is pleased to provide this proposal to the City of ,
Eagan to assist the City on its path toward a fiber network
infrastructure.
Every municipality is unique, and brings different
expectations, assets, strengths and weaknesses to the table when beginning a
broadband initiative. As a world leader in designing, building and operating municipal
broadband networks, PacketFront is experienced in models and approaches for
successful FTTH projects. But like so many other infrastructure projects, what is best
for Eagan will be different than what is best for other cities.
PacketFront (formerly, DynamicCity) appreciates the opportunity to have worked with
the City for more than two years. We have added our work with Eagan to the breadth
and depth of industry knowledge that PacketFront has gained locally, nationally, and
globally. With over 72 customers in 25 countries, PacketFront can design, build, and
operate networks in a variety of business approaches-including fiber networks that
run an open or closed business model.
Because there are no cookie-cutter approaches to municipal broadband, PacketFront
recommends that the City's network project be defined by five distinct phases.
Following this path enables the City to fully create, evaluate, and embrace its own
specific goals and objectives, and then to create a broadband network that is uniquely
designed to meet precisely those objectives.
Potential We acknowledge that Eagan may have current partnerships
and business relationships with various vendors and firms
Partners that it may wish to leverage as it designs and builds its
fiber ring. PacketFront is prepared to work with any of the
City's preferred partners or other shortlisted finalists
throughout the City's investigation process.
Complementary organizations will add value in the areas of:
• Finance
• Applications and Services
• Engineering
• Construction
Local firms may especially add significant value to the project because of their local
knowledge and influence. We look forward to more discussion with the City regarding
these and other decisions.
Five Phases for The five phases we recommend include:
Launching FTTH 1. Strategy Workshop
in Eagan 2. Ring Design
3. Construction
4. Marketing Plan Creation
5. Network Launch
For the purposes of this proposal, we specifically address steps 1 and 2, the Strategy
Workshop and the Ring Design. Steps 3-5 will be addressed separately as the project
progresses, so there is a fuller understanding of the objectives of Eagan's network.
PacketFront
41
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Sirateay Workshop The strategy workshop is designed to be a fully interactive, participatory session for
City staff and stakeholders. This workshop uses cutting edge tools that enable key
stakeholders to engage equally in the discussion and decision-making process.
During this one to two-day workshop, the City will reach a consensus on:
• Vision statement
• Mission statement
• SWOT analysis ?rw
• Five Force model
By coming to a true consensus on these important ideas, the City of Eagan will be able
to quickly use these ideas as the foundation upon which all other decisions are made
regarding the design, reach, services, and technology of the network.
And by using this very unique strategy process, the City will avoid the weeks of long
meetings, back-and-forth correspondence, disagreement and dissention that are usually
the hallmark of more traditional "strategy sessions". PacketFront's process will enable
the city to begin moving forward with solidarity among key stakeholders, which is
fundamental to any successful project.
Ring Design After the City has designed its vision and mission, PacketFront's GIS and financial
analysis teams will design a network backbone ring for Eagan that will be specifically
designed to help the City achieve its mission, both short- and long-term. The path and
location of the City's ring will be largely determined by how it plans to implement the
fiber, and the City's goals for future expansion. Existing
conduit and fiber already owned by the City will be taken into
'?1 account.
During this time, plans for the next three phases-
Construction, Marketing Plan Creation, and Network Launch-
will be derived. These plans will also be directly tied to the
` City's defined network mission.
Deliverables to For the purposes of this proposal, PacketFront commits to deliver to the City the
file City following deliverables:
• A one or two-day Strategy Workshop, during which the City stakeholders will
devise the network's Vision, Mission, and analyze the initiative using SWOT
and the Five Force Model.
• Based upon the results of the Strategy Workshop, PacketFront will design a
path for the City's network ring. These will be "lightly engineered", meaning
the plans will be drawn with enough detail to allow stakeholders to review
and revise. (Detailed engineering of the final ring route will be completed as
part of the Construction phase.)
City Commitments As part of this process, the city must dedicate the staff and resources necessary to
successfully complete the Strategy Workshop. As part of the ring design, the City
must deliver to PacketFront all available city GIS data.
PocketFront
19
Financing PacketFront welcomes the opportunity to work with Eagan's existing financial
Assistance advisors, banks, underwriters, local business community, and other financial partners
that have expressed interest in assisting the city in financing the construction of a fiber
network.
PacketFront will assist in Eagan's financing efforts. We have relationships with
managers at major investment banking firms who have previous experience in
municipal telecom, public/private partnerships, and fiber networks. These firms would
either bring their own capital or assist in the capital raise process, depending on the
city's needs.
PacketFront estimates the City's cost to build a fiber infrastructure between $30 M and
$70 M. The difference between these figures depends entirely on the business model
and scope the City chooses. PacketFront is pleased to refine the City's approach, and
work with the best qualified financial institutions to implement the project.
Fee Fees for these professional services will be quoted upon request.
Consideration
PocketFront
PacketFront
Highlights
PacketFront designs builds
and operates lost mile
fiber-optic projects
providing clients true
broadband, service provider
independence, economic
infusion, and life-enhancing
services.
PocketFront
PacketFront is the catalyst for the digital revitalization of metro markets across
America. It creates community-owned communication networks that deliver true
broadband connections, service provider independence, and life-enhancing services to
residents and businesses.
PacketFront is the world leader in developing, engineering, and operating solutions for
open access fiber networks. Our service management platform, a system composed of
software and hardware, was the first solution on the market to enable customers to self-
provision multiple services from multiple service providers. Our knowledge of the
best practices in business approaches and operational issues relating to multi-play
networks comes from years of experience in pioneering efforts around the world.
We continue today to build upon our early innovations, drawing upon our extensive
industry experience and working with our global customers to ensure they have the
latest technologies and business intelligence required to succeed.
PacketFront was founded in 2001 by former employees of Cisco and Bredbandsbolaget
(B2) in Sweden. Our founders were industry leaders from diverse backgrounds
including CFOs, hardware engineers, software developers, lawyers, CLECs, and
operations.
While the broadband network market was growing in Sweden in the 1990's, the lack of
a complete solution to the problem of deploying and operating profitable open-access
networks spurred the birth of PacketFront. The company was formed as a response to
real world problems experienced by the founders as they began deploying community
networks.
Today, PacketFront has over 70 commercially-deployed customers in more than 25
countries. PacketFront's customers come from a variety of industries and communities,
including cities, utility companies, the hospitality industry, economic development
entities, real estate owners, regional and federal governments, and independent telcos
and cable companies.
In August 2007, PacketFront acquired DynamicCity, Inc. in order to enrich its total
suite of offerings to customers. PacketFront is now able to provide a complete Design-
Build-Operate approach to networks across the Americas.
PacketFront leads the way to community-owned advanced fiber networks by helping
municipalities design, build, and operate these networks. Its comprehensive solutions
make it possible for any qualified community to deploy and. implement superior
network infrastructure and services.
Services currently provided to PacketFront customers include:
• Planning
• Organization and Governance
• Financing
• Implementation
• Construction Management
• Outside Plant (OSP) Geo-Spatial Database
• Asset management (Network Operations)
• Customer Acquisition and Marketing
• New Subscriber Activation
• Project Expansion
In addition to these professional services rendered by highly skilled and experienced
staff, PacketFront designs and manufactures hardware and systems for broadband
networks that are purpose-built for open access networks, drastically reducing
operational costs and automating tasks that were once manual and labor-intensive.
a/
Hardware currently designed and marketed by PacketFront include network access
layer equipment such as:
• Automated Services Routers (ASRs)
• Digital Residential Gateways (DRGs)
• Fiber Termination Units (FTUs)
Network automation systems architected by PacketFront include:
• BECSTM--Control and Provisioning System
• SSP-Service Selection Portal
• SMT-Subscriber Management Tool
• HMT-Helpdesk Management Tool
Customer PacketFront serves more than 72 global customers with a growing customer base in
References North America.
11+r rt n
v.wF
One of those North American clients, UTOPIA, came to PacketFront through its recent
The UTOPIA project is the acquisition of DynamicCity. UTOPIA (Utah Telecommunication Open Infrastructure
largest municipal Fiber-to- Agency) is Utah's landmark FTTH implementation consisting of 16 cities joined
the-Premises project in the together through a Joint Powers Authority (JPA).
United States DynamicCity designed the business plan for UTOPIA, and PacketFront now completes
cost and revenue analyses for communities in Utah as they begin the process of
becoming UTOPIA members.
The largest municipal fiber network project in the country, UTOPIA embraces 14
founding member cities and 160,000 potential subscribers throughout Utah.
Approximately 60% of Utah's population lives in cities adjacent to the members,
suggesting opportunity for significant expansion.
Initial construction began towards the end of 2004 with completion projected for
sometime near the end of 2008. Services began to roll out during Q1 2005. Phase II
construction is currently underway.
Contact information for UTOPIA:
Jim Reams
UTOPIA
2175 S. Redwood Rd.
West Valley City, UT 84119
Phone: (801) 990-5450
Fax: (801) 908-7225
jareams@orem.org
www.utopianet.org
aan -fibre
'NETWORKS
NanoFibre is a private company that is building FTTH networks in communities in
British Columbia, Canada. PacketFront is providing hardware and network automation
systems, and also has a contract to provide asset management services for NanoFibre's
networks.
PacketFront
a?
PacketFront
Contact
Information
PacketFront
NanoFibre Networks has begun construction of its fiber optic network in Radium Hot
Springs. In early 2007, NanoFibre installed wireless towers and began providing free
service to residents and visitors in the downtown area.
Contact information for NanoFibre:
Mark Ilalwa
NanoFibre
Box 7
Radium Hot Springs, BC VOA I MO
Phone: (250) 342-7317
Fax: (866) 340-8449
mark.halwa@nanofibre.ca
www.nanofibre.ca
We look forward to working closely with Eagan officials and staff as the City reviews
this proposal. For follow-up information or to schedule a live presentation or
discussion, please contact:
Primary Contact:
Matt Jolley
801-443-6517
mattjolley@packetfront.com
Secondary Contact:
Tim Scott
978-204-1452
tim. scott@packetfront. com
a3
Agenda Information Memo
December 3, 2007
Finance Committee Meeting
8:00 a.m.
III. NEXT STEPS AND DEFINING PROCESS FOR REVIEW BY CITY COUNCIL AS
A WHOLE
A. Finance Committee Recommendations
B. Direct to December 10 work session?
C. Any additional information needed by then?
D. If consultant is hired, suggested process for reviewing
findings/recommendations?
a4