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The Dawn of a New Era Do More With Broadband June 25, 2018 Jeff Christensen ---PAGE BREAK--- Key Questions and Concepts LLC – Confidential – All Rights Reserved Page 2 Is broadband infrastructure essential infrastructure? Is this the domain of the City? How should these networks work? The current model is broken. Why? The goal is to disrupt the current model… not the companies that currently operate the model. How do we pay for these networks? ---PAGE BREAK--- Infrastructure LLC – Confidential – All Rights Reserved Page 3 Broadband Infrastructure - Is this the Domain of a City? ---PAGE BREAK--- Is Broadband Essential Infrastructure? Communication is not just a sector of the economy. Communication is the economy. – Kevin Kelly, New Rules to a New Economy LLC – Confidential – All Rights Reserved Page 4 ---PAGE BREAK--- Municipal Network of the Future LLC – Confidential – All Rights Reserved Page 5 Smart Grid ISP Internet Education Smart City / IoT Transportation Tele-Medicine Public Safety Aging in Place Emergency Communications Innovation ---PAGE BREAK--- Current Model LLC – Confidential – All Rights Reserved Page 6 Network Operators Service Providers Who Should Networks Serve? Subscribers ---PAGE BREAK--- Future Model LLC – Confidential – All Rights Reserved Page 7 Network Operators Who Should Networks Serve? Subscribers Service Providers ---PAGE BREAK--- Incumbent Control Model LLC – Confidential – All Rights Reserved Page 8 Subscriber Pays ISP Has Control Misaligned Interests No Competition Throttled Innovation Scarce Bandwidth Inflated Prices Permission Required Subscribers Incumbents ---PAGE BREAK--- Essential Infrastructure LLC – Confidential – All Rights Reserved Page 9 Closed Broadband Networks Incumbent Infrastructure Open Broadband Networks or Broadband as a Utility Municipal Infrastructure ---PAGE BREAK--- Control LLC – Confidential – All Rights Reserved Page 10 Whoever Controls the Infrastructure has Control. Rule #1 ---PAGE BREAK--- Municipal Broadband Value Proposition LLC – Confidential – All Rights Reserved Page 11 The Unique Value Proposition of Municipal Networks… Create Local Control and Ownership of Network Infrastructure ---PAGE BREAK--- Guiding Premise LLC – Confidential – All Rights Reserved Page 12 Municipalities should own and control broadband infrastructure. The Private Sector should provide services running over that infrastructure. ---PAGE BREAK--- A Platform of Possibility LLC – Confidential – All Rights Reserved Page 13 Economic Development Smart City / IoT Education Livability Public Safety Smart Grid Efficient Government Transportation Aging in Place Tele-Medicine Innovation Emergency Communications Affordable Communications ---PAGE BREAK--- The Power of Virtualization LLC – Confidential – All Rights Reserved Page 14 ISP Fast Internet Traditional Closed Broadband Network Illustrated cross-cut of a single fiber strand containing a traditional single ISP service. ---PAGE BREAK--- The Power of Virtualization LLC – Confidential – All Rights Reserved Page 15 ISP Public Safety Tele-Health Smart Grid Smart City Distance Learning Netflix Gaming Etc. Multiple Virtual Private Networks for Off-Internet Services Requiring Greater Privacy, Security, and Reliability Illustrated cross-cut of a single fiber strand containing multiple virtual private networks. Aging in Place Fast Internet + Virtualization Open Virtualized Broadband Network ---PAGE BREAK--- The Power of Virtualization LLC – Confidential – All Rights Reserved Page 16 “We are at the dawn of a new era: Software Defined Infrastructure; a starting point of a very deep revolution that will reshape our global computing infrastructure. Today’s internet will run in just one “slice” across this infrastructure, with many other novel services populating other slices.” – National Science Foundation - February 2016, Workshop ---PAGE BREAK--- 5G Wireless LLC – Confidential – All Rights Reserved Page 17 Wireless works best the faster it gets back to fiber ---PAGE BREAK--- Power of Abundant Bandwidth LLC – Confidential – All Rights Reserved Page 18 Abundant Bandwidth Leads to Flourishing Economic Growth – Innovation – New Applications Scarcity Abundance ---PAGE BREAK--- Subscriber Portal Demonstration LLC – Confidential – All Rights Reserved Page 19 Video Demo of the Subscriber Experience ---PAGE BREAK--- Financial Model LLC – Confidential – All Rights Reserved Page 20 How To Finance The Network ---PAGE BREAK--- Paying for the Millcreek Fiber Network LLC – Confidential – All Rights Reserved Page 21 Premises (Homes / Businesses) 22,000 Average Internet Cost $70.00 Annual Internet Spend $18,480,000 20 Year Internet Spend $369,600,000 www ---PAGE BREAK--- Risk Allocation LLC – Confidential – All Rights Reserved Page 22 Funding should come from the property owners who sign-up voluntarily Residents voluntarily “Opt-In” to the Broadband Improvement District ---PAGE BREAK--- Broadband Improvement District LLC – Confidential – All Rights Reserved Page 23 Makes Subscriber’s Owners not Renters ---PAGE BREAK--- Three Cost Categories for Subscribers LLC – Confidential – All Rights Reserved Page 24 Infrastructure Expense Maintenance & Operations ISP Internet Services www ---PAGE BREAK--- True ISP Competition in Ammon, Idaho LLC – Confidential – All Rights Reserved Page 25 $50 $25 $0 Sept 2016 Feb 2017 July 2017 $44.95 ISP 100/100 Mbps $39.99 ISP 100/100 Mbps $9.99 ISP 100/100 Mbps ---PAGE BREAK--- Three Cost Categories in Ammon, Idaho LLC – Confidential – All Rights Reserved Page 26 Infrastructure Expense $17.00 Maintenance & Operations $16.50 Total Cost to Subscriber $43.49 Best ISP Value Currently (100/100 Mbps) $9.99 www ---PAGE BREAK--- Total Cost Reduction in Ammon, Idaho LLC – Confidential – All Rights Reserved Page 27 $100 $75 $50 $25 $0 July 2016 July 2017 $90.00 30/5 Mbps 2 Year Contract $43.50 100/100 Mbps No Contract ---PAGE BREAK--- ISP Bandwidth Speeds in Ammon, Idaho LLC – Confidential – All Rights Reserved Page 28 100 Mbps 75 Mbps 50 Mbps 25 Mbps 0 Mbps July 2016 July 2017 Up To 30/5 Mbps Shared Connection 100/100 Mbps Dedicated Connection ---PAGE BREAK--- Key Differentiators LLC – Confidential – All Rights Reserved Page 29 The Model Reinforces the Complete Separation of Infrastructure and Services Lit Fiber Network Infrastructure is Organized as a Utility Service are NOT Part of the Utility. Network is not dependent upon revenue from Services. The Model is Much Lower Risk for the Municipality This Model is Different… ---PAGE BREAK--- Network Sustainability LLC – Confidential – All Rights Reserved Page 30 This Model is Sustainable Because… Success is not dependent on take rates Subscriber’s become partners with city Success of the municipal network is not dependent upon the success of services ---PAGE BREAK--- Who is going to control your cities future? LLC – Confidential – All Rights Reserved Page 31 If this is true… Why would Millcreek leaders place our economic future in the hands of a few private companies whose interests are not aligned with the interests of the City and it’s residence? Communication is not just a sector of the economy. Communication is the economy. – Kevin Kelly, New Rules to a New Economy ---PAGE BREAK--- The End LLC – Confidential – All Rights Reserved Page 32 Thank You