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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/09/2017 - BROADBAND STRATEGIC PLAN UPDATE MAY 2017DATE: STAFF: May 9, 2017 Seonah Kendall, Economic Policy & Project Manager Mike Beckstead, Chief Financial Officer WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Broadband Strategic Plan Update May 2017. EXECUTIVE SUMMARY The purpose of this item is to provide Council an overview of the Broadband Strategic Plan work. The discussion will focus on the work since the December 2016 work session including: additional community visits/learnings, meetings with incumbents, research on peer communities, retail model business plan, debt capacity and the third party alternative due diligence. Additionally, due to recent development, staff will be seeking business model guidance and next steps. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Which alternative would Council recommend pursuing? 2. Does Council support dedicating the resources required to support the Retail Model? 3. Does Council support the development of ballot language for a November 2017 election to be discussed on July 11? BACKGROUND / DISCUSSION City Broadband Strategic Objectives The City’s 2016 Strategic Plan includes Strategic Objective 3.9 - “Encourage the development of reliable high speed internet services throughout the community”. The overall objective of the Broadband Plan is to bring reliable, Gig speed internet to the city of Fort Collins, while making an informed decision through evaluation of risk and opportunities. Broadband is defined by the FCC as internet download speed of 25 megabits per second (“Mbps”) and upload of 3 Mbps or faster. Additional objectives include:  Competitive pricing (residential market pricing at $70/month or less for 1 Gbps and an affordable internet tier);  Universal coverage across the Growth Management Area;  Underground service for improved reliability; and  Timely implementation to providing services within a reasonable timeframe (less than five years). The FCC has noted that the real culprit of slow, expensive internet in the U.S. is the lack of competition among providers. New broadband entrants into the market have a substantial impact on price and service. During fall 2016, City staff presented four different model options to City Council and the community: retail, wholesale, private third party (formerly known as “franchise model,” and moving forward as “3rd Party alternative”) and do nothing. At the December 20, 2016 work session, City Council provided feedback to continue to explore both the third party alternative and retail model. May 9, 2017 Page 2 Municipal-owned Retail (Retail Model) The municipal utility/retail model is similar to the model that Longmont, CO is providing. The municipality would build and maintain the physical fiber infrastructure network to pass all premises. The municipality acts as the internet and voice service provider and manages all customer acquisition and services. The current model does not include video services; however, based on input from other communities, staff is still evaluating video as a potential option. In 2016, 68 percent of citizens “strongly supported” or “supported” the City providing retail broadband services. Currently, staff is developing a high-level business plan based on work completed in 2016 (anticipated delivery is June 1, 2017). However, developing an actionable business plan would require dedicated resources to support the project and implementation plan. Additionally, staff is re-evaluating the pricing model based on industry standards and ensuring long-term sustainability. The retail model requires modifications to the City Charter to allow the existing Light and Power (L&P) enterprise to expand into telecommunications. Initial analysis assumes financing the capital cost through revenue bonds issued and backed by the rate-making strength of the L&P enterprise. Another option for structuring the retail model would be the creation of a free-standing new utility enterprise for telecommunications, including broadband. This structure would not permit revenue bonds to be secured by L&P electric service revenues and financing may be an impediment. A more detailed analysis of funding options would be part of the next step business planning phase. Modification of the governance process for telecommunications would also be recommended to allow effective operations within a competitive environment, which is not part of the current L&P business model. Debt Capacity City staff worked with Jim Manire, Financial Advisor, to assess implications that a retail broadband network buildout of $125M - $140M would have to the City’s debt capacity. . If Fort Collins Light and Power Utilities (L&P) revenue bonds are utilized to fund the network buildout, early estimates indicate L&P debt capacity can support the bond issuance with the assumption that other L&P needs can be met with rate adjustments. Within the next two months, L&P staff will be evaluating and updating the capital needs and financial planning to reassess Utilities’ long-term needs. If general obligation bonds are utilized, the range of debt depends on new or existing revenue sources:  Without new revenue sources, range is between $75M - $100M;  With new revenue sources, range is between $125M - $150M; and  The Finance Office has already identified an estimated $45M in near-term debt projects including a downtown parking garage, police training facility and I-25 overpass. Third Party (3rd Party alternative) A third-party model is similar to Google Fiber in Kansas City and Allo in Lincoln, NB. The municipality would look to attract a third party to come into the community, finance the network, operate the network and provide services directly or through other retail providers. The City could potentially partner with the third party and encourage the private provider to enter into the market through utility fees; premises passed and expedited reviews. End user fees are not specified or regulated other than non-discriminatory pricing. The private provider builds and maintains the physical infrastructure and acts as the Internet Service Provider (ISP) who manages all customer acquisition and services. A disadvantage for a municipality is having less control of pricing, quality, availability and technological advances. Additionally, companies such as Google Fiber have moved away from this type of model and toward a public/private partnership. The City issued a Request for Information (RFI) in late August 2016. A team made up of staff and members of the Broadband Technical Group evaluated respondents based on their experience and capability, business model proposed, motivation and willingness to partner, business structure and financial strength. Four of the nine respondents were interviewed to learn more about the companies and their proposals. Of the four interviewees, staff identified Axia to continue further discussions. Axia had proposed funding, building and maintaining a ubiquitous Active Ethernet network throughout the city within 2 - 3 years. Axia treats fiber as May 9, 2017 Page 3 infrastructure and designs the network in a way that others can purchase access to the network on equal terms with flexible technical and financial options. As part of the City’s due diligence, staff met with the principals of Axia and Partners Group to understand their relationship and roles. Partners Group purchased Axia in July 2016 for $280M to provide infrastructure funding. At the time, Partners Group expressed their commitment to the business model rollout in the U.S. and believed the annuity revenue from the infrastructure investment would bring a healthy return on investment. Since December 2016, staff has spent significant time on the third party due diligence, including more than 12 hours on Axia’s experience and references, financials (both Axia and Partners Group), operations, planning and design, and service agreement details. Additionally, staff visited Axia’s headquarter in Calgary to meet with additional Axia leadership and review their network operations center. Staff has also been in discussions with the City of Boulder and Bloomington about their work with Axia. Staff was aware that Axia was presenting construction and financial feasibility of the Bloomington project to Partners Group in late March/April. On April 20, 2017, Boulder Chief Information Officer Don Ingle reached out to City staff to share that he had heard rumors that the their project had not been approved. By mid-afternoon on April 20, the rumors had been confirmed by both Axia leadership and Bloomington media. After discussions with Axia, City staff believes that Partners Group’s decision not to move forward surprised Axia, as Axia was anticipating approval of the project. Partners Group decision was based on structural business model issues in the U.S. market including adoption risk and the strength of the cable companies (cablecos) and telecommunication companies (telecos) in the U.S. Other Development In April 2017, discussions about possible legislation impacting broadband were discussed at the state legislature. The draft bill included:  A separate municipal broadband utility enterprise;  Prohibiting the use of other utility ratepayer funds;  Prohibiting bonding secured with other utility enterprise revenues;  Requiring compliance of commercial and financial information under CORA; and  Allowing private providers’ right to bring enforcement (including the reimbursement of the private providers’ reasonable legal fees to bring enforcement). Although this legislation is not likely to be introduced, it would have required the creation of a fifth utility for the City, use of general obligation bonds to support capital investment (at a higher rate than revenue backed municipal bonds), and would have created a competitive disadvantage to municipal-run broadband utilities due to Colorado Open Records Act (CORA). Should similar legislation come forward in future years the City would have the same concerns listed. Next Steps Several options exist for next steps: finalization of the development of the retail model, the exploration of a partnership, and/or the issuance of a Request for Proposal (RFP) for another third party alternative. Additionally, the work plan has identified a November 2017 Charter Amendment to propose the addition of telecommunication to the Utilities charter, as well as creation of a governance structure for both the retail and third party alternative. Staff is proposing that additional Broadband support be considered, in the form of two positions and/or consultants to support the development and implementation of a detailed municipal retail broadband business plan. Dedicated resources allow the City to bring in industry experts on the development, construction and deployment of FTTP networks to assist in the long-term planning of either the retail or partnership models. Additionally, these dedicated resources allows for the accelerated pace to deployment of the network (either provided by the municipality or other partners). The approximate cost for June - December 2017 is estimated at $215,000. The two positions and/or consultants would bring a level of expertise in technology, construction, public/private engagement and business acumen needed to create an actionable business plan of this magnitude. Without the dedicated resources, delayed pace/progress of the retail business plan could occur due to time constraints created by utilizing existing City staff. A sample of the job descriptions is provided. (Attachment 2) May 9, 2017 Page 4 ATTACHMENTS 1. Peer Cities Update (PDF) 2. General Job Descriptions (PDF) 3. Powerpoint presentation (PDF) PEER CITIES UPDATE State with Next Century Model City Restriction Cities Member Exploring Other California California Government Code 61100(af) Community service districts may provide broadband services if a private person or entity is unwilling to deploy broadband services. If a city builds its own network and then a private company shows up "ready, willing, and able to acquire, construct, improve, maintain, and or operate broadband," the city has to turn it over or lease it to the company at FMV. Santa Rosa No ‐ Residential fiber service is only available to 2% of people living in Santa Rosa. Santa Barbara No ‐ Cox, Frontier and Windstream Communications provide wired services, but does not offer 1G. Anaheim No ‐ For $44.99/month, Time Warner provides 100 Mbps upload, 10 Mbps download service. Palo Alto Yes P3 Leases Dark Fiber Optic Backbone Network; Developed a FTTP Master Plan and Wireless Network Plan. Burbank Yes N/A ONE Burbank offers business services ‐ dark fiber leasing, dedicated internet access (DIA), Virtual Private LAN services, Wave Lambda Services, Communication Transport Services. Offers free Wi‐Fi throughout the city using a "best efforts/as‐is" basis utilizing existing network from smart meters. Florida FL.Stat.350‐81, FL.Stat.166.047 Municipalities must hold public meetings that allow providers to comment on served and unserved areas. Florida requires a feasibility study or proof of profitability within four years or shut down, merge with a private company or seek an extension from municipal council or authority to continue providing services. State statute prohibits the use of taxpayer dollars to fund the network build Gainesville Yes Gainesville Regional Utilities built an Innovation Zone Network that serves businesses, multi‐dwelling units (MDUs) and greenfield development. Coral Springs No AT&T GigaPower Network serves the Coral Springs area. Michigan MI Laws Ann.484.2252 A public entity may provide telecommunication services within its boundaries if the following requirements are met: a request for competitive bids to provide telecommunication services is issued, less than three bids are received, and 60‐days pass from the date the request for bids was issued. The Michigan Broadband Development Authority (MBDA) is a state agency that assist in attracting private sector investments in Internet infrastructure. Ann Arbor No AT&T GigaPower Network serves the Ann Arbor area with FTTP 1G service at $80/month symmetrical. Nebraska Neb.Rev.Stat 86‐ 575, Neb.Rev.Stat 86‐ 594 Statutory language prohibits retail municipal broadband, telecom, or cable services. Lincoln/Lancaster County Yes 3rd Party Partner with Allo, 3rd Party, by leasing conduit. 1G service is $80/month symmetrical. State ATTACHMENT 1 PEER CITIES UPDATE State with Next Century Model City Restriction Cities Member Exploring Other State North Carolina NC Chapter 160A, Article 16 A referendum is required by localities (similar to Colorado SB05‐152) seeking to offer broadband services. Cities have to prove that at least 50% of its residents don’t already have broadband. Service is permitted only within municipal limits. The pricing of communications service below the cost of providing service is restricted. Asheville No AT&T GigaPower Network serves the Asheville area. Texas Tex.Utilities Code 54.201 and 202 Statutory language prohibits municipal broadband. Garland No Frontier Fiber provides 50 Mbps at $40/month; Time Warner Cable is $44.99 for 100 Mbps download, 10 Mbps upload. Denton No Similar to Garland, TX Irving No Similar to Garland, TX Richardson No Similar to Garland, TX Utah Utah Code Ann.10‐18‐201, 202, 203, 204 Similar to Colorado SB05‐152, a referendum is required if municipalities would like to provide broadband services. In addition, a feasibility study must be able to show profitability within five years. State legislation requires open access model. Provo Yes 3rd Party iProvo struggled with finding providers on the open access network. Sold to Google Fiber for $1; however, residents are still paying $5.35/month for the original debt to build the network. Google Fiber 1G is $70/month for service; 100 Mbps is $50/month. Virginia VA Code 15.2‐ 2160, 56‐ 265.4:4, 56‐ 484.7:1 Municipalities that operate an electric distribution system are allowed to provide telecommunication services if a certificate is granted from the State Corporation Commission. Municipalities that provided services prior to 2002 may provide services within 75 miles of the existing system. Charlottesville No 3rd Party Ting Mobile purchased BlueRidge Internet Works, which had worked to lay fiber within Charlottesville. Ting will offer 1G residential services for $89/month + startup costs and $139/month + startup costs for businesses. Ting will be coming to Centennial, CO in 2017. Washington Washington Rev.Code Ann.54.16.330 State law prohibits municipal broadband. Public utility districts (PUDs) are not authorized to provide telecommunication services to end users. PUDs may deploy broadband infrastructure in order to provide wholesale services to other carriers. Open Access Networks are seen here. Tacoma No Muni Cable Provider Tacoma’s Click! Network has struggled. Bellevue No Bellevue’s policy is to support/cultivate partnerships, policies and priorities to increase speed instead of providing the service. PEER CITIES UPDATE State with Next Century Model City Restriction Cities Member Exploring Other State Peer Cities Not Restricted by State Statute Next Century State City Cities Member Other Idaho Boise Yes Staff have inquired but have not received any information back. Iowa Cedar Rapids No a company called, ImOn, provides fiber‐to‐the‐premise in some locations. Residential customers will pay $150/month for 1G service. Georgia Athens No AT&T Fiber offers 1G service at $80/month. Kansas Olathe No Served by GoogleFiber at $70/month for 1G service. Oregon Eugene Yes leases dark fiber data services to businesses. Ordinance 20083 is a 2% telecom tax on providers operating in Eugene that assess fees and taxes for use of public rights of way compensation and a business privilege tax (called a registration fee). The tax is used for program management and new City projects of community benefit that re‐invest in telecommunication infrastructure. Funds were dedicated for 2017 to the downtown pilot project. City of Fort Collins Classification Description Title: Customer Experience/Business Services Service Area: Service Area FLSA Status: Exempt Approved Date: __________ SUMMARY The Customer Experience/Business Servcies is responsible as a subject matter expert in the design and operations of activities which contribute to the acquisition, satisfaction and retention of customers of the FFTP network. These activities include product development, marketing, customer acquisition, customer interaction and billing. This position will work closely with team members to insure a consistent and effective message is delivered to customers and business process are in place to exceed customer expectations. This position will play a significant role establishing company's FTTP vision. ESSENTIAL DUTIES AND RESPONSIBILITIES: Overall Scope of Responsibilities x Establishes business processes for product development, marketing, customer acquisition, customer interaction and billing. x Develop service procedures, policies and standards. x Set Best in Class Customer Experience as a clear mission and deploy strategies focused towards that mission. x Create engaged customers and facilitate organic growth. x Take ownership of customers issues and follow problems through to resolution. x Establish systems for competitive analysis, market analysis and managing product lifecycle. x Keep accurate records and document customer service actions and discussions x Analyze statistics and compile accurate reports x Maximizes performance by monitoring activities at customer touch points. x Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations. x Provide training to operational units on customer communication and exceeding customers expectation every time. x Translate customer requirements into feasible solutions and work with teammates and cross-functional teams to design, plan, communicate, and implement those solutions x Interface with vendors in order to find ways to more efficiently solutions. x Performs as project manager, as required SUPERVISORY RESPONSIBILITIES x This position provides guidance and direction to fellow team members and may have supervisory responsibilities. The City of Fort Collins Classification Description Title: Outside Plant Engineer Service Area: Service Area FLSA Status: Exempt Approved Date: __________ SUMMARY The Outside Plant Engineer is responsible as the subject matter expert in the design, build, and maintenance of fiber transport, distribution and access network to support the delivery of next generation Triple Play services, Carrier Ethernet, MPLS and DWDM products. This position plays a significant role in long-term strategic planning; including the implementation of deployment budgets, deployment standards and practices, troubleshooting these networks, and initiatives focused on overall operational excellence. This position will also be responsible for related work in the field. This position will play a significant role establishing company's FTTP technical vision. ESSENTIAL DUTIES AND RESPONSIBILITIES: Overall Scope of Responsibilities x Establishes Outside Plant environment by architecting system, directing network installation; defining, documenting, and enforcing system standards. x Maximizes network performance by monitoring performance; troubleshooting network problems and outages; scheduling upgrades, collaborating on network optimization. x Documents network problems and resolution for future reference. x Establish technical standards and ensure adherence to them for product development x Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations. x Provide technical training to operational units on features that are currently deployed in the network or will be in the future. x Provide technical support to field technicians during the installation phase of network projects. x Translate customer requirements into feasible solutions and work with teammates and cross-functional teams to design, plan, communicate, and implement those solutions x Interface with vendors in order to find ways to more efficiently provide network solutions x Performs as project manager, as required SUPERVISORY RESPONSIBILITIES x This position provides guidance and direction to fellow team members and may have supervisory responsibilities. QUALIFICATIONS The requirements listed below are representative of the knowledge, skills, and abilities required to perform the necessary functions of this position. KNOWLEDGE, SKILLS, AND ABILITIES x Ability to understand FTTH passive network design and its concepts x Experience with transport and access technologies including Carrier Ethernet, MPLS, DWDM, and GPON. x Cabling standards such as Passive Fiber Optic cables and structured cables (BICSI etc.), fiber optic cable deployment schemes such as color coding etc. x Knowledge of passive optical components and concepts such as: FDMS, types of fiber optic cable, connector types, splitters types, link losses and link budget, bend radius etc. x Knowledge of fiber testing and quality control techniques x Must be proficient with CAD applications, GIS databases and the Microsoft Office applications x Accomplished and proven critical thinking skills, strong analytical thought process and adept business acumen. x Effectively able to manage multiple projects, diverse team members and competing priorities x Strategic critical thinking in approach to problem solving, issue resolution and solution development drawing upon acute business acumen and perspective gained from a wide range of experience. x Ability to effectively summarize and communicate complex problems and analytics to highest level of organization and public. x Advanced / Expert in data query, extraction, and normalizing. Extremely adept and efficient at incorporating and utilizing data in a variety of reporting tools and financial software packages. x Ability to communicate at executive level and influence effectively both up / down the chain of command, and cross functionally. EDUCATION and EXPERIENCE x Understanding of OSP/ISP construction. x Experience with Fiber Optic Cable installation and fiber splicing. x Management/Supervisory experience in construction management, telecommunications fiber techniques and procedures. x Knowledge of construction industry, including project supervision, construction regulations, document review, cost estimating as well as technical skills and knowledge of construction methods. x Knowledge of construction project administration, contract compliance monitoring and claims processing and construction methods. x Candidates must be familiar with OSP Engineering standards, practices, and construction methods. x Advanced knowledge of Public and Private right of way project deployment, including regulatory and permitting processes x Ability to read and understand blueprints along with civil inside & outside plant construction methods. infrastructure design, procurement, build and testing of the communication network. EDUCATION and EXPERIENCE Minimum of ten (10) years of construction experience with 3- 5+ years of fiber engineering and construction experience, telecom experience preferred. LANGUAGE and PRESENTATION SKILLS Ability to read, analyze and interpret technical journals, financial reports, and legal documents. Capability to appropriately respond to complex inquiries from executive management, complaints from customers (both internal and external), regulatory agencies, or members of community. Effectively create presentations and communicate to a wide audience including council, citizens and executive level management REASONING ABILITY Skillful capabilities to identify root cause of problems, transform data into information, draw insightful defensible conclusions, and adapt to changing environment by overcoming obstacles. Ability to interpret an extensive variety of complicated technical instructions (mathematical or diagram form) and communicate / teach meaning and impact. CERTIFICATES, LICENSES, REGISTRATIONS not applicable PHYSICAL DEMANDS The physical demands described here are representative of those that must be met by an employee to successfully perform the essential functions of this job. While performing the duties of this job, the employee is regularly required to sit. The demands on the visual sense are very high. The employee is occasionally required to stand, walk; use hands to finger, handle, or feel; stoop, kneel, crouch or crawl; and talk or hear. The employee must occasionally lift and/or move up to 25 pounds. WORK ENVIRONMENT The work environment characteristics described here are representative of those an employee would encounter while performing the essential functions of this job. Normal office environment with moderate levels of noise. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. POSITION SPECIFIC APPENDIX: QUALIFICATIONS The requirements listed below are representative of the knowledge, skills, and abilities required to perform the necessary functions of this position. KNOWLEDGE, SKILLS, AND ABILITIES x Knowledge of principles and processes for providing customer services. This includes customer needs assessment, meeting quality standards for services, and evaluation of customer satisfaction. x Knowledge of principles and methods for showing, promoting, and selling products or services. This includes marketing strategy and tactics, product demonstration, sales techniques, and sales control systems. x Knowledge of business and management principles involved in strategic planning, business systems, and coordination of people and resources. x Understanding of product life cycles. x Understanding of triple play services, FTTH, and network services like GPON, Carrier Ethernet, MPLS and DWDM. x Accomplished and proven critical thinking skills, strong analytical thought process and adept business acumen. x Effectively able to manage multiple projects, diverse team members and competing priorities x Strategic critical thinking in approach to problem solving, issue resolution and solution development drawing upon acute business acumen and perspective gained from a wide range of experience. x Ability to effectively summarize and communicate complex problems and analytics to highest level of organization and public. x Advanced / Expert in data query, extraction, and normalizing. Extremely adept and efficient at incorporating and utilizing data in a variety of reporting tools and financial software packages. x Ability to communicate at executive level and influence effectively both up / down the chain of command, and cross functionally. EDUCATION and EXPERIENCE ͻ Bachelor's degree in Business Administration, Marketing, Telecommunications or a related field. ͻ Seven years of related leadership experience with Triple Play service provider or similar. LANGUAGE and PRESENTATION SKILLS Ability to read, analyze and interpret technical journals, financial reports, and legal documents. Capability to appropriately respond to complex inquiries from executive management, complaints from customers (both internal and external), regulatory agencies, or members of community. Effectively create presentations and communicate to a wide audience including council, citizens and executive level management REASONING ABILITY Skillful capabilities to identify root cause of problems, transform data into information, draw insightful defensible conclusions, and adapt to changing environment by overcoming obstacles. Ability to interpret an extensive variety of complicated technical instructions (mathematical or diagram form) and communicate / teach meaning and impact. CERTIFICATES, LICENSES, REGISTRATIONS not applicable PHYSICAL DEMANDS The physical demands described here are representative of those that must be met by an employee to successfully perform the essential functions of this job. While performing the duties of this job, the employee is regularly required to sit. The demands on the visual sense are very high. The employee is occasionally required to stand, walk; use hands to finger, handle, or feel; stoop, kneel, crouch or crawl; and talk or hear. The employee must occasionally lift and/or move up to 25 pounds. WORK ENVIRONMENT The work environment characteristics described here are representative of those an employee would encounter while performing the essential functions of this job. Normal office environment with moderate levels of noise. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. City of Fort Collins Classification Description Title: Network Engineer Service Area: Service Area FLSA Status: Exempt Approved Date: __________ SUMMARY The Network Engineer is responsible as a subject matter expert in the technical design and operations of the advanced fiber based Triple Play services network and other networks such as GPON, Carrier Ethernet, MPLS, and DWDM networks. This includes a heavy emphasis on system architecture, central office design and engineering, providing engineering solutions for Transport/Access platforms, troubleshooting these networks, providing technical solutions, new product design and implementation, implementing and maintaining existing products and services, as well as providing technical assistance and consulting to internal and external customers. This position will play a significant role establishing company's FTTP technical vision. ESSENTIAL DUTIES AND RESPONSIBILITIES: Overall Scope of Responsibilities x Establishes networking environment by architecting system, designing system configuration; directing system installation; defining, documenting, and enforcing system standards x Develop and implement routing architectures for the data, video, and voice products. x Manage routing and switching configurations changes as part of day to day operational support or planned/engineered changes x Maximizes network performance by monitoring performance; troubleshooting network problems and outages; scheduling upgrades; collaborating with network architects on network optimization. Documents network problems and resolution for future reference. x Secures network system by establishing and enforcing policies; defining and monitoring access. x Establish technical standards and ensure adherence to them for product development x Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations. x Provide technical training to operational units on technologies and features that are currently deployed in the network or will be in the future. x Provide technical support to field technicians during the installation phase of network projects. x Translate customer requirements into feasible solutions and work with teammates and cross-functional teams to design, plan, communicate, and implement those solutions x Interface with vendors in order to find ways to more efficiently provide network solutions x Performs as project manager, as required SUPERVISORY RESPONSIBILITIES x This position provides guidance and direction to fellow team members and may have supervisory responsibilities. QUALIFICATIONS The requirements listed below are representative of the knowledge, skills, and abilities required to perform the necessary functions of this position. KNOWLEDGE, SKILLS, AND ABILITIES x IP routing protocols such as BGP, ISIS, and OSPF. x Advanced network protocols/features like L3 VPRNs (MPLS), VPLS, Classes of Services, IPSEC/GRE tunnels, Internet BGP load balancing, or Firewalls rule sets. x Transport and access technologies including Carrier Ethernet, DWDM, and GPON. x Experience with VoIP technology and industry standards such as SIP, COPS, TRIP, SCTP, and MGCP including PSTN, call routing. x Practical knowledge of hardware/software network security platforms (firewalls, security zones, security rules...) x Accomplished and proven critical thinking skills, strong analytical thought process and adept business acumen. x Effectively able to manage multiple projects, diverse team members and competing priorities. x Strategic critical thinking in approach to problem solving, issue resolution and solution development drawing upon acute business acumen and perspective gained from a wide range of experience. x Ability to effectively summarize and communicate complex problems and analytics to highest level of organization and public. x Advanced / Expert in data query, extraction, and normalizing. Extremely adept and efficient at incorporating and utilizing data in a variety of reporting tools and financial software packages. x Ability to communicate at executive level and influence effectively both up / down the chain of command, and cross functionally. EDUCATION and EXPERIENCE ͻ Bachelor's degree or advanced vocational training in Computer Science, Electrical Engineering, Telecommunications or a related field. ͻ 3-5 year’s experience with detailed complex network design in a service provider environment. ͻ Experience designing/engineering with different transport and access technologies including Carrier Ethernet, MPLS, DWDM, and GPON. ͻ Certifications: CCNA, CCDA, CCNP, CCDP, Alcatel/Lucent 7750, 6850, 7360, SAM, AMS, Juniper OS. LANGUAGE and PRESENTATION SKILLS Ability to read, analyze and interpret technical journals, financial reports, and legal documents. Capability to appropriately respond to complex inquiries from executive management, complaints from customers (both internal and external), regulatory agencies, or members of community. Effectively create presentations and communicate to a wide audience including council, citizens and executive level management REASONING ABILITY Skillful capabilities to identify root cause of problems, transform data into information, draw insightful defensible conclusions, and adapt to changing environment by overcoming obstacles. Ability to interpret an extensive variety of complicated technical instructions (mathematical or diagram form) and communicate / teach meaning and impact. CERTIFICATES, LICENSES, REGISTRATIONS not applicable PHYSICAL DEMANDS The physical demands described here are representative of those that must be met by an employee to successfully perform the essential functions of this job. While performing the duties of this job, the employee is regularly required to sit. The demands on the visual sense are very high. The employee is occasionally required to stand, walk; use hands to finger, handle, or feel; stoop, kneel, crouch or crawl; and talk or hear. The employee must occasionally lift and/or move up to 25 pounds. WORK ENVIRONMENT The work environment characteristics described here are representative of those an employee would encounter while performing the essential functions of this job. Normal office environment with moderate levels of noise. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. POSITION SPECIFIC APPENDIX: BROADBAND May 9 2017 ATTACHMENT 3 Overall Policy Objectives Strategic Objective 3.9 • Encourage the development of reliable, high speed internet services throughout the community Secondary Factors • Network reaching all residents of Fort Collins GMA • Timely implementation requires base network build <5 years • Competitive market pricing • Outstanding customer service 2 Options Reviewed 3 •MOST COSTLY • MOST CONTROL •COSTLY • SOME CONTROL •NO COST • NO CONTROL • MARKET DRIVEN ABCD Updates Since December • Community Visits/Learnings Lessons learned from communities that have had challenges Staff visit and discussions: Tacoma, Alberta, Seattle & Provo • Comcast/Century Link Met with the incumbents No clear indication of when they will provide fiber to all of Fort Collins • Peer Cities 20 out of the 25 peer communities are in one of 20 states that prohibit or restrict municipal broadband 4 Updates Since December Cont. • Retail – Business Plan High level business plan in process. Target completion June 1 Detail behind feasibility study, council questions, pricing updates, additional findings • Debt Capacity Review • Consultant Hired  Brought on Colman Keane, industry expert from EPB Chattanooga • 3rd Party Due Diligence 5 Retail Model • City is the Internet Service Provider (“ISP”) • City builds and operates the network • Est. cost is $125M - $140M • Need 30% subscribership to pay off debt within 15 years • Rate payers responsible for debt if not successful 6 Retail Model • In 2016, 68% of citizens strongly support or support the City providing retail broadband services • High Level Business Plan in development  Existing staff are deployed  Anticipated delivery date – June 1, 2017  Reviewing pass rate and pricing model • Dedicated resources required to support the project and implementation. 7 High Level Business Plan Table of Contents I. Executive Summary II. Mission III. Broadband Market Profile IV. Fort Collins Customer Profile V. Competitive Environment VI. Operating Plan VII. Network Architecture VIII. Financial Model IX. Opportunities and Threats X. Conclusion XI. Appendix 8 Pricing Examples 9 Area 30 Mbps 50 Mbps 100 Mbps 1 Gbps RS Fiber - Minnestoa $50 $70 $130 Arrowhead Electric - MN $60 $70 $100 Reedsburg, WI $45 $75 Sandy, Oregon $60 Sebewaing, MI $35 $55 $105 $160 Chatanooga $58 $58 $70 Lafayette, LA $63 $110 Longmont, CO $40 $50 Cedar Rapids, IA $46 $105 Co-Mo Connect - MO $100 Ozarks Electric - AR $50 $80 Average $45 $58 $67 $94 Debt Capacity • Implications to Fort Collins L&P Utilities if Revenue Bonds Early estimates indicate debt capacity exists with L&P to support bond Assumes L&P needs can be met with rate adjustments and not debt L&P updating capital needs and long term financial plan Staff intends to reassess over the next 2 months • Implication to City of Fort Collins Bond Rating if GO Bonds Financial Advisor assessment in 2015 indicated • The answer is a range that varies based on the type of debt and multiple factors • Without new revenue sources – range is $75M to $100M • With new revenue sources – range if $125M to $150M Near term debt requirements of $45M -parking garage, police training, I25 overpass 10 3rd Party RFI • Request for Information Issued late August 2016 Staff interviewed 4 out of 9 respondents Axia was selected to continue further discussions • Meeting with principals of Axia and Partners Group Nov 2016 Axia proposes privately-funded business model  Axia privatized July 2016 to provide infrastructure funding Partners Group questioned on their funding role  Purchased Axia for ~ $280M in July 2016 for opportunity to invest in infrastructure  Expressed commitment, business model was annuity revenue from infrastructure investment 11 Update • Staff was aware Axia was presenting Bloomington info for approval • Conversations on April 20, 2016 Morning conversation with Boulder CIO – rumor Bloomington had not been approved Copy of Bloomington press release forwarded mid afternoon Call with Art & Rob late afternoon confirmed Axia letter to FC 4/21 – unable to deliver business model as proposed Axia email to Loveland – “not pursuing this type of business model in the US at this time” • Axia Discussion & Rational Partners Group decision…..Axia was anticipating approval Axia believed PG was on board with model funding with appropriate financial ratios PG - Structural business model issue in US market Strength of the cablecos and telecos within US market Associated adoption risk 12 Other Developments 13 Possible Legislation Proposed at the State • Municipal BB separate utility enterprise • Prohibit use of other utility enterprise ratepayer funds • Prohibit bonding secured with other utility enterprise revenues • Require CORA compliance of commercial & financial information • Private providers right to bring enforcement Implications  Require creation of a 5th Utility  Require GO bonds to support capital investment  Create uneven playing field without equal access to private information Do not anticipate this legislation going to the floor this year Question concerning applicability to FC Next Step Alternatives 14 Retail Model • Finalize High Level Business Plan • Ballot Question Nov • Teleco within L&P Enterprise • Governance •5th Utility • Possible Bonding Requirement • Requires dedicated resources • Expertise & experience •Time Issue RFP for Partner • RFP specific to a partnership model • Attract other 3rd party interests • Shared risk & investment • Find industry experience Timeline 15 May June July August September October November December January February Potential Ballot Charter Amendment: July 11 Council Work Session July 25 1st Reading; Ballot Language Aug 15 2nd Reading Ballot Language Silent Period Nov 7 Election May 9 Council Work Session • If Retail Model • Ballot specific to allowing telecom & governance • Dedicated resources needed • If Partnership Model • Ballot specific to allowing telecom, governance, possibly bonding • Communications challenge – City Retail or Partnership messaging • RFP and discussion – resolution well into the fall Resource Needs Experience / Skill Set • Industry expertise – broadband & fiber • Deployment & construction of Fiber to the Premise (“FTTP”) • Technology - GPON, Active Ethernet, etc. • Voice and data communications hardware and software • Marketing & customer service • Long term planning and implementation • Business start-up and financial leadership Duties • Overall project leadership & management • Development Retail Broadband Business Plan • Ballot coordination and support • Community & City coordination, issue resolution • Establish technical architecture and design standards • Design & construct network, manage contractors and business start-up • Manage relationships with internal and external partners • Develop service procedures, policies and standards • Establish business processes for product development, marketing, customer interaction, etc. 16 2 FTEs Required Direction Sought 17 • Which alternative(s) would Council recommend staff continue pursue. • Does Council support dedicating resources for the FTEs required to support Retail Model? • Does Council support the development of ballot language for a November 2017 election? BACKUP 18 Critical Retail Model Variables 1. Passing Cost ~ $1,000/premises • average cost to get close to each premise in Fort Collins 19 3 Variables Account for the Majority of Results…. Staff Anticipates $70 gig Price and $50 - $60 mbps Price 2. Take Rate – 30.2% • Percentage of households that will subscribe to service 3. Pricing - Model est. $50 gig speed charter rate ($100 non-charter rate) • Monthly cost to subscriber 50 mbps $40 Model Driving Variables - PRICING 20 1% 79% 18% 2% 10% 43% 44% 3% I Would Switch to Comcast I Would Switch to Ft Collins I Would Retain My Current Service Don't Know Comcast $70/City $50 Both $70 Demand for 1G is highly price elastic Customer Willingness to Switch to Fort Collins Service from Current Service Decreases Significantly if Pricing is Neutral Investment 21 $117M Bonds I. $80M = Network Construction II. $29M = Equipment, Facility, Install, Engineering III.$8M = Bond issuance cost, capitalized interest IV.Additional $15M needed with a take rate of 50% $8M Working Capital $125M Total Investment + External borrowing of $117M - $132M. Internal working capital of $8M funding TBD Total investment increases if take rate exceeds 30.2% or add video Base Case Results – CASH FLOW 22 ($40) ($30) ($20) ($10) $0 $10 $20 $30 $40 $50 $60 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Earnings Before Taxes and Depreciation Capital Spending Cash Flow $M Base Case Results – PAYBACK 23 ($140) ($120) ($100) ($80) ($60) ($40) ($20) $0 $20 $40 $60 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Cash Reserves Long Term Debt Short Term Debt Total Net Cash $M Sensitivity Analysis 24 ($150,000,000) ($100,000,000) ($50,000,000) $0 $50,000,000 $100,000,000 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Baseline 25% Over Construction & 2x Upgrade 50% Take Rate 25% Take Rate Retail Model STRENGTHS & RISKS STRENGTHS • City Brand & Customer Service • Control of build out and customer service standards • Strong local support 25 RISKS • Business Start-up / Competition • Governance & Culture • Technology – the Unknown • Financial - Worst Case - $16mo. for term of debt Wholesale Model • City builds and owns the fiber network • City leases the network to any interested provider • Costly-$88M • Success dependent on interested operators • Pricing and service level market driven 26 3rd Party Model STRENGTHS & RISKS STRENGTHS • Experience - fiber design and build • Experience as an ISP • Financial Partner & Resources • Better Technology 27 Viable Alternative – Experience & Financial Resources RISKS • Loss of Control - Customer service and technology -Pricing • Partner Change of Control • Time – delay if Partner not successful Axia Due Diligence 28 • Talent • Merchant services • Entrepreneurship/Small Businesses Due Diligence Meetings • RFI Process • Learnings • Experience in large fiber builds – Alberta, Singapore, France, Massachusetts • 1.5M homes connected, ISP in Canada & France, network operations in Massachusetts • 18 year history, financial strength thru parent Axia - Experience 29 Alberta Province: • Partnered with Government & Telco • Built Fiber Supernet - Connects 429 communities • 5k Gov offices, hospitals, schools served • Axia is the network operator • Open Access – 66 carriers & service providers • In 2015, starting FTTP • Serving 11 communities to date • Manages design & build - uses contractors • 12k ISP retail customers served •3rd party Tier I call center, inhouse Tier II & III Covage France: • 50% partnership with French construction co • Builds and operates network low density areas • Pricing regulated, grant support for build • Private takes risk cost & adoption • 30k premises served, soon to serve 319k • Not the ISP Singapore • Singapore official asked for similar SuperNet • Axia partner in consortium – 4 partners • Lead executives from Axia, hired local support • Built fiber network to 1.2M premises • 60% market share • Not the ISP Axia - Bio 30 Axia NetMedia Corporation: • Company Founded in 1998 • Focus – Fiber construction, network operations, ISP • 2015 revenues – Global, $141M – North America $64M • Corporate office in Calgary, 213 employees • Public Co until June 2016 - Purchased by Partners Group Partners Group: • Formed in 1995, Public company since 2005 • Focus – Infrastructure Asset Management • $46B of assets under management • 2015 revenues - $619M, Market capitalization $10B • Corporate office in Switzerland, 18 offices worldwide • 840 professional staff Business Model • Build open access fiber networks in NA • Within 50k-150k population communities • Provide internet services • White Label Services for other internet uses • Lease Dark Fiber • Invest in long term infrastructure • Fund NA network buildout • Financial returns from infrastructure Axia – FC Proposal 31 Axia Design, build, own, operate and manage ubiquitous network covering entire GMA of FC • Design fiber grid to ensure infrastructure is available on a community wide basis • Fund network & systems implementation to all businesses and residences within GMA boundary • Manage construction, provide quality assurance and comprehensive testing to ensure specs met • Design and installation of fiber drops to each premise when a customer orders Axia Service • Provide Internet Services (ISP) to all premises requesting service • Open Access to all other carriers and service providers without charge at the request of premises • Lease Dark Fiber as requested by businesses • Pricing - $60 100mbps, $80 1gig Fort Collins • Partner with Axia to ensure all residents & businesses are aware of the FTTP network benefits • Help facilitate a culture of broadband use • Access and Building Permits for network implementation Axia – Service Agreement 32 • Outlines 4 major process steps to Launch (illustrated above) • Preliminary Assessment – Axia staff in FC, network design, competitive analysis, talk community • Business plan presented to Partners Group – decision on funding • Both parties can exit, if Axia – share design/plan, if FC – pay for design work • EOI Campaign – acquire 40% of premises Expression of Interest (non-binding) • Multi-prong – hit streets, CSU, festivals, grocery stores – wherever people are • Axia can exit if 40% not achieved • If Axia fails to complete build out, FC option to buy assets at cost or receive $5M liquidated damages • If Axia defaults – City may purchase business at “Fair Market Value” – independently determined • Change of Control – City first right to purchase at “Fair Market Value” • Commitments - Call Center in NA, network availability, MTTR & call wait time • Still working on low-income rate alternatives Signed Service Agreement Preliminary Assessment Period – 3mo Expression of Interest Campaign – 3mo Commitment to Build – 24-30mo Service Agreement Details Comparison Axia Municipal Meet Fort Collins Strategic Objectives Fiber to the Premise Technology Active Ethernet GPON Governance Private ? Financial Risk Private Community • $125 - $140M Market Competitive Pricing Revenue Model Open Access (3 Revenue Streams) Retail; Dark Fiber Leases 33 Community Engagement Staff & Axia met with: • Broadband Technical Group • Citizen Advisory Board • Broadband & Brews Responses: • Retail • Third Party • All Support the goals set forth 34 Axia – Summary 35 • Achieves Fort Collins Strategic Objective 3.9 • Encourage the development of reliable, high speed internet services throughout the community • Open access model – Internet services, White Label services, Dark Fiber lease • Leverages Public Private Partnership • Partner with 20 years of industry experience and expertise • Delivers broadband to the community faster than current retail model plan • Risk Mitigation • Avoids city entering new evolving technology business and borrowing $125M-$140M • Includes • Service Commitments – Open Access ISP, White Label, Dark Fiber, Reliability & Response • Change of Control and Completion Continuity Options Axia Next Steps 36 May June July August September October November December January February Potential 3rd Party Timeline: Service Agreement Signed Partners Group Approves Axia Completes Detailed Engineer Design Axia Begins Build Out of Network 40% Expression of Interest Campaign Potential Ballot Charter Amendment: July 11 Council Work Session July 25 1st Reading; Ballot Language Set Aug 15 2nd Reading Ballot Language Silent Period Nov 7 Election