1 Telecommunications in Auburn: Opportunities to Consider A Presentation to City Council April 1, 2003 Scott D Bowles, P.E. President, Spectrum Engineering

1

Telecommunications in Auburn:Opportunities to Consider

A Presentation to City CouncilApril 1, 2003

Scott D Bowles, P.E.President, Spectrum Engineering

Christopher W Schweitzer, AICPIS Manager, City of Auburn

2 Telecommunications in Auburn: Opportunities to Consider / Information Technology Master Plan Review & Update

Overview

• Aim of this discussion– Spark discussion around telecom opportunities

in Auburn

• Context of discussion– Information Technology Master Plan

• ITMP Phase I – review & update• ITMP Phase II – review

– Local research & discovery– Trends in the telecom industry– Opportunities to consider – converged services


ITMP

• Information Technology Master Plan• Phase I: plan for improving

government info-structure – Communications– Knowledge / information management– Decision making / analysis– Delivery of improved services

• Phase II: catalyst for exploring opportunities to improve telecom services in Auburn


ITMP – Some History

• 1998 resolution establishing IT policy and technical committees– IT Policy Committee

• Charged with identifying areas for improvement in community (focus on technology)

• Build community consensus for initiatives• Key reps from healthcare, commercial, industrial,

government, education, finance

– IT Technical Committee• IT advisor to Council / BOW• Forum for consensus building / standards

development• All departments represented


ITMP – Organizational Chart

Council BOW Mayor

IT Policy Committee IT Technical Committee

Health

Education

Commercial

Industry

Finance

Government

Mayor’s Ofc Clerk’s Ofc

Engineering

Police

Fire Parks

Street

Water

Electric

WPC

Citizen Liaz Info Sys

Bu

ild C

om

mu

nity

Su

pp

ort

Technology Identification,Recommendation


ITMP – Some History

• August 1998 ITMP adopted by Council

• 1999 funding secured for Phase I• Phase I - $2.65 million investment

– Networking/computing/training– Utility billing / CRM / accounting– GIS– Telephony


ITMP Phase I - Networking

• Status: complete• Investment

– Network ($641,105.13)– Computing ($250,318)– Training ($18,608)– Other ($51,012)

• Highlights– Foundation for all subsequent projects– Departmental connectivity– County participation / cost sharing– Multi-Jurisdictional– Communications


ITMP Phase I - GIS

• Status: multi-components (in progress)• Investment

– Orthos / visible features ($250,571) 100%– Cadastral ($ 55,494.61) 25%– Electric ($198,500) 20%– Water / sewer / other (In-house) 15%– GPS unit ($44,449)– GIS software ($89,421)

• Highlights:– County-City partnership– ESRI Special Achievement in GIS Award 2001– Floodplain mapping project (FEMA, IDNR, Regional,

Local Gov)– Cooperative CORS (NGS Partner)– Use in work of City Government


ITMP Phase I - Telephony

• Status: 95%• Investment: $263,03.25• Highlights

– Centralized phone system– Unified Messaging (email, voice, fax)– Process integrated

• Utility problem notification• Utility locate requests

– E911 Emergency Responder– Annual phone service savings ($7500)


ITMP Phase I - Accounting

• Status: discovery and planning• Planned investment: up to $550,000• Highlights / project goals

– Comprehensive accounting– Comprehensive utility billing– Asset management / GASB 34– Customer relationship management (CRM)– City wide, integrated, departmental

standards– Enterprise resource planning (ERP)


ITMP Phase I – Other Costs

• Cost of issuance: $51,203.35• Underwriting: $52,000• Contingency: $82,064.20


Phase II

• Recommendations for pursuing a community business plan

• Framework for… – Obtaining understanding of legal

framework– Organizing a planning team– Defining mission / goals / objectives– Performing research and analysis– Identifying opportunities– Developing strategies / business plan


Phase II - Local Research

• Local research– Goals of research

• Obtain context for discussion• Sense for what works, what fails• Sense for Markets pursued by Municipal Telecom

– Sturgis, MI– Bryan, OH– Richmond, IN– Potential private-sector partners

• Indiana Data Center• Titanium Solutions• Platinum

14 Telecommunications in Auburn: Opportunities to Consider / Local Research & Discovery

Local Research: Sturgis, MI

• Visit date: Feb 8, 2002• Service(s): Highspeed Internet• Structure: Division of Electric

Department• Market: Commercial (8 customers)• Utility Customers: 5,821• Community Population: 11,285• ROI: 1-2 Years• Notes: Limited deployment / Pilot


Local Research : Bryan, OH

• Visit date: March 18, 2002• Service(s): Cable TV / high-speed

Internet / web hosting• Structure: separate dept (began as

division of Electric Dept)• Market: Residential (1900 cable, 600

Internet)• Utility customers: 4,778• Community population: 8,333• ROI: 5-8 years


Local Research: Richmond, IN

• Visit date: April 17, 2002• Service(s): dialup / high-speed Internet /

web hosting• Structure: division of Electric Dept• Market: residential / commercial (1500

dial-up, 30 high-speed)• Utility customers: 18,749• Community population: 39,124• ROI: 2 years• Notes: bought out local ISP


Public / Private Partnership Opportunities

• Auburn has been approached by private sector (Unsolicited!)

• Appears to be interest– Sole providers, using City infrastructure

and funding– Complimentary providers

18 Telecommunications in Auburn: Opportunities to Consider / Trends in the Telecom Industry

Telecommunication Developments

• As technology and market demands improve and increase, existing telecommunication infrastructure will become obsolete

• This will initially take place in three primary telecommunications arenas of VOICE, VIDEO and DATA


Voice

• Developed in the 1800’s, the telephone became a necessity by the mid-1900’s

• This traditional service has been referred to as a POTs system, or Plain Old Telephone

• By the 1950’s, most households had one phone

• By the 1960’s urban businesses began demanding more multiple private lines

• As the strain on traditional POTs equipment was maximized, QOS issues became a constant concern

• The Telecommunication Act of 1996 has seen new competitors and greater services (particularly in the larger metropolitan areas), creating even more demand by consumers in all markets


• Developed in the 1940’s for communities unable to receive TV signals due to terrain or distance limitations

• Termed CATV, or Community Antenna Television• The 1970’s CATV systems began to expand as

Americans demanded more and better television• The 1980’s saw exponential growth in this business,

making it nearly commonplace in most of the U.S.• The 1990’s saw even more demand for

programming and the advent of Internet access via cable modems

• Today literally hundreds of channels from all across the world are available, increasing demand in all markets

Video


• 1969 ATT builds high speed 50Kb link between UCLA and University of Utah; termed “Internet” in 1973

• 1984 Domain Name System is introduced and in 1985; Symbolics.com is first registered domain name (3/15/85) and Purdue.edu is among second (4/24/85)

• 1984-1989 Number of hosts grows from 1000 to 100,000 • 1991 World Wide Web released • 1992 Number of Hosts exceeds 1 Million• 1998 2 millionth domain name registered and number of

Hosts exceeds 36 million• 2000 Internet2 backbone deploys and number of Hosts

exceeds 100 million• 2002 Number of Hosts exceeds 200 million • Coined “the Information Superhighway”, access and use of

the Internet has grown exponentially since “www” was introduced in 1991

Data


"I think there is a world market for maybe five computers.“Thomas Watson, Chairman of IBM, 1943)

"There is no reason anyone would want a computer in their home.“ (

Ken Olson, President, Chairman and Founder of Digital Equipment Corp., 1977)

“640K ought to be enough for anybody.” (Bill Gates, Microsoft Founder, 1981)

Past


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Present


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Bandwidth Example


The Infrastructure Dilemma

• By the 1970’s, massive copper cables, containing hundreds of twisted-pair wires were becoming unmanageable and inefficient

• In the 1990’s, coaxial cable had reached its limits for programming and quality, especially given the promise of what digital signals could provide

• By 2000, demand for more than “dial-up” service to access larger and larger files from the Internet was driving the need for a “national solution”


Fiber’s Value

• Scalable bandwidth• Lower lifetime costs (“future-proof”)• Higher revenue potential• Platform for converged services• Significant competitive

differentiation


What about other technologies?

• Wireless– Radio – limitations, bandwidth, security,

reliability– Satellite – limitations, bandwidth, security,

reliability

• DSL– Bandwidth limitations– Speed differs by direction

• Hybrid Fiber Coax (HFC) – Bandwidth limitations– Speed differs by direction


Bandwidth needs: Will only increaseInfrastructure: Must be scalable

3 DTV MPEG Video Streams (VOD)

15.00 Mbps

Telecommuting/VPN 2.00 Mbps

Video Conferencing 1.00 Mbps

Web Surfing 1.50 Mbps

Interactive Gaming 1.00 Mbps

High Definition TV 19.20 Mbps

4 Phone Conversations 0.25 Mbps

Fiber Can Scale To Future Demands


Fiber has the Capability

• A single fiber of fiber optic cable can…• support more than 218 billion simultaneous

phone conversations (assuming no compression)

• support more than 2.3 million standard Video signals/channels (assuming no compression)

• support up to 14,000,000Mb/s Of data information , both up and down

• perform a combination of all 3 of these functions simultaneously

• Electronics are the limiting factor


Fiber has Reliability and Flexibility

• Primary reason fiber was selected for the high speed relay and control communications between substations

• Unlike traditional wire lines, fiber does not conduct electricity, but lightwaves, providing better reliability during storms

• Fiber based systems offer the quality of service demanded by today’s users

31 Telecommunications in Auburn: Opportunities to Consider / Opportunities Through Converged Services

Video SP 1 RF Video

Video SP 2 DBS Video

Video SP 3 Digital Cable

EDFA

edgeGEAR

Video PON

Voice & Data EPON

IP Router

Class 5 Switch

Voice, Data Network

IP Data Network

SP Video Feeds

Mux

Video SP 1 RF Video



EDFA

edgeGEAR

Video PON

Voice & Data EPON

IP Router

Class 5 Switch

Voice, Data Network

IP Data Network

SP Video Feeds

Mux

Video SP 1 RF Video



EDFA

edgeGEAR

Video PON

Voice & Data EPON

IP Router

Class 5 Switch

Voice, Data Network

IP Data Network

SP Video Feeds

Mux

Video SP 1 RF Video



EDFA

edgeGEAR

Video PON

Voice & Data EPON

IP Router

Class 5 Switch

Voice, Data Network

IP Data Network

SP Video Feeds

Mux

SP Video Feeds

Mux

Converged Services


• Fiber to the User (Home, Business, etc)– “It is important to note here that the

current generation of broadband technologies (cable and DSL) may prove woefully insufficient to carry many of the advanced applications driving future demand. Today’s broadband will be tomorrow’s traffic jam, and the need for speed will persist as new applications and services gobble up existing bandwidth.”

Source: Understanding Broadband Demand, A Review of Critical Issues” Office of Technology Policy, U,S. Department of Commerce, Sept. 23 2002.

FTTx: The Right Choice


Driving Considerations

• Can offer superior services for schools, medical community and other civic functions (County, etc.)

• Positively differentiates the Auburn community

• Economic development – expanded market potential

• Improved quality of life• Telemedicine• Distance learning initiatives• eGovernment


Who Should Drive This Change?

• The large incumbents have typically bypassed communities like Auburn in favor of larger markets

• Corporate consolidations have driven the focus away from a community-base to a stockholder-base

• New players (e.g., CLEC’s) are struggling to get funding for new projects


Community Options

• Wait for corporate priorities to change

• Moan and groan• Take charge and drive forward


• The City does not respond to stockholders demands – but instead responds to constituent and customer demands!

• The City is experienced with utility services and meeting customer needs

• The City has the initial components of the infrastructure and has been successfully operating a MAN for 3 years

• The City is locally focused and has a strong, vested interest in its citizens and the vitality of the community

Auburn’s Advantages


The City Today

• Existing fiber infrastructure• Municipal Area Network (MAN)• Expanded services to the County• Desire to expand this to related

community services


Who Should Drive This Change?

• Federal initiatives encourage new market entrants and are especially favorable toward municipal involvement

• The State is providing encouraging support for these types of developments at the local level

• Legal support is in favor of Auburn, if they should choose to extend services beyond the local government


Legal Aspects

• The FCC strongly encourages and supports municipal entrance into the telecom arena.

• Indiana is a “Home Rule” state. As such, municipalities are generally able to exercise any powers, and perform any functions, that are not specifically denied.

• There is no express denial of such authority anywhere in the statutory provisions.

• As a municipality, Auburn has a considerable amount of latitude in offering converged services


Who Else Is Doing This?

• 70 communities– Single developments through entire

communities

• 29 communities implementing full FTTx – Population average - 13,258

• Reedsburg, WI - 7,827• Sylacauga, AL – 12,616• Bristol, VA – 17,367


Next Steps to Consider

• Determine support by Community Leaders for the concept and goals– Council, BOW, Mayor – After the April 1st Discussion

• Perform Institutional Interviews– Informal discussions with potential customers

• Facilitate legal foundation• Conduct market research

– Current / projected demand for services• Feasibility Study

– Identify business models, legal issues, technology, finance, costs, etc

• Business Plan– Select business model, resolve legal issues, select technology,

marketing plan, select materials, vendors, etc• Implementation / Delivery of services


The Process

InstitutionalInterviews

InterestY/N

MarketSurvey Feasible

Y/N

InterestY/N

DetailedFeasibility

Legal Issues

Assess Competition

Prelim Marketing Plan

Technology Review

Business Case Models

Staffing

Pro Forman Financial Models

Cont’dNextPage

No = StopNo = Stop

No = Stop

Yes

Yes


The Process (cont’d)Cont’d

PreviousPage

Resolve Legal Issues

Select Design Firm

Finalize Marketing Plan

Acquire Financing

Develop Business Plan

Select Materials

Select Pilot Area (Opt)

MarketRollout

Deploy

Acquire Staffing


A Better Life Through Broadband

• FTTx is the future• Key success factors:

– Community leadership– Marketing– Partnerships

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Thank You!

• Questions / Discussion

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Appendix

• Fiber Backbone – United States

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Appendix

• Fiber Backbone - Indiana

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Appendix

• Internet Growth

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Appendix

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Sourc

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OSI 2

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2Appendix

• Typical Revenue Model

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Appendix

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Appendix

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Appendix

Documents

1 Telecommunications in Auburn: Opportunities to Consider A Presentation to City Council April 1, 2003 Scott D Bowles, P.E. President, Spectrum Engineering