2008.06.10 CC Committee Meetings Agenda PacketAGENDA
City Council Committee Meetings
Council Chambers, Public Safety Complex
250 5th Avenue North, Edmonds
June 10, 2008
6:00 p.m.
The City Council Committee meetings are work sessions for the City Council and staff only. The meetings are open to the public but are not
public hearings. The Committees will meet in separate meeting rooms as indicated below.
1. Community/Development Services Committee
Meeting Room: Council Chambers
A. AM-1608
(10 Minutes)
Discussion regarding underground parking garages and gates.
2.Finance Committee
Meeting Room: Jury Meeting Room
A. AM-1584
(5 Minutes)
PUD boilerplate "Pole Attachment License Agreement for Municipal Entities."
B. AM-1605
(10 Minutes)
Contracting with former employees.
C. AM-1606
(15 Minutes)
Edmonds Fiber Optic Program.
D. AM-1607
(10 Minutes)
Cable Franchise Fee Ordinance.
3.Public Safety Committee
Police Training Room
A. AM-1609
(15 Minutes)
Change handicap parking to 4 hour limit.
Adjourn
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AM-1608 1.A.
Parking Garages and Gates
City Council Committee Meetings
Date:06/10/2008
Submitted By:Duane Bowman, Development Services Time:10 Minutes
Department:Development Services Type:
Committee:Community/Development Services
Information
Subject Title
Discussion regarding underground parking garages and gates.
Recommendation from Mayor and Staff
A code amendment to add code language to, at a minimum, require gates to require parking in
garages in commercial zones be open during normal business hours. This issue should
be forwarded to the Planning Board for review and recommendation.
Previous Council Action
Narrative
A question has been raised regarding the circumstances where the City requires parking for a
building within the commercial areas and gates are placed on entrances to parking garages.
Presently, the Edmonds Community Development Code (ECDC) is silent on this issue. Examples
the two new buildings on the northeast and southeast corners of 5th and Walnut.
Inherently it would seem that required parking should be available during normal business hours.
Gates on the required parking then forces parking out onto the street. The City should add code
language to at a minimum require gates to be open during normal business hours.
Fiscal Impact
Attachments
No file(s) attached.
Form Routing/Status
Route Seq Inbox Approved By Date Status
1 City Clerk Linda Hynd 06/05/2008 02:46 PM APRV
2 Mayor Gary Haakenson 06/05/2008 04:55 PM APRV
3 Final Approval Linda Hynd 06/06/2008 08:15 AM APRV
Form Started By: Duane
Bowman
Started On: 06/05/2008 01:32
PM
Final Approval Date: 06/06/2008
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AM-1584 2.A.
Pole Attachment License Agreement for Municipal Entities
City Council Committee Meetings
Date:06/10/2008
Submitted By:Carl Nelson, Administrative Services Time:5 Minutes
Department:Administrative Services Type:Action
Committee:Finance
Information
Subject Title
PUD boilerplate "Pole Attachment License Agreement for Municipal Entities."
Recommendation from Mayor and Staff
Enter into an agreement with PUD to use space on their poles to hang fiber optic cable.
Previous Council Action
Narrative
Attached you will find the proposed agreement.
To place fiber optic cable between buildings or data cabinets often requires using the
communication space on PUD poles to hang the fiber. The PUD has a standard agreement it uses
to allow for the proper engineering, placement, maintenance, and repair of fiber on PUD poles by
municipalities.
The current planned fiber runs for Stevens Hospital, Edmonds Community College, and Edmonds
School District all anticipate the use of PUD poles. Future Public Works, Public Safety, and
Information Services fiber optic runs are anticipated use PUD poles.
The current "contact" fees vary from $6.83 (for jointly owned pole) to $10.69 (for a PUD only
pole) per pole per year.
The City attorney has reviewed the agreement and "The agreement is approved as to form (just
don't particularly like the form)."
Fiscal Impact
Attachments
Link: PUD Pole Attachment Agreement
Form Routing/Status
Route Seq Inbox Approved By Date Status
1 Admin Services Dan Clements 05/23/2008 07:41 AM APRV
2 City Clerk Linda Hynd 06/02/2008 03:39 PM APRV
3 Mayor Gary Haakenson 06/02/2008 03:59 PM APRV
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4 Final Approval Linda Hynd 06/05/2008 09:15 AM APRV
Form Started By: Carl
Nelson
Started On: 05/22/2008 07:20
PM
Final Approval Date: 06/05/2008
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AM-1605 2.B.
Contracting with Former Employees
City Council Committee Meetings
Date:06/10/2008
Submitted By:Dan Clements, Administrative Services Time:10 Minutes
Department:Administrative Services Type:Action
Committee:Finance
Information
Subject Title
Contracting with former employees.
Recommendation from Mayor and Staff
Approve attached contracting ordinance.
Previous Council Action
April 8, 2008: Finance Committee requested draft ordinance;
May 13, 2008: Finance Committee reviews several municipal ordinances, recommends direction
Narrative
Due to potential conflicts of interest involved with awarding contracts to firms who employ
former City employees, staff were requested to prepare an ordinance establishing guidelines for
this type of activity.
The attached ordinance is similar to Snohomish County's, but contains an "exception" clause
modeled after Spokane.
Fiscal Impact
Attachments
Link: Contracting
Form Routing/Status
Route Seq Inbox Approved By Date Status
1 City Clerk Linda Hynd 06/05/2008 09:14 AM APRV
2 Mayor Gary Haakenson 06/05/2008 12:40 PM APRV
3 Final Approval Linda Hynd 06/05/2008 02:46 PM APRV
Form Started By: Dan
Clements
Started On: 06/05/2008 08:04
AM
Final Approval Date: 06/05/2008
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{BFP696127.DOC;1/00006.900000/} - 1 -
0006.90000
BFP:
5/21/08
ORDINANCE NO. _______
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, AMENDING THE PROVISIONS OF TITLE 3
ECC, REVENUE AND FINANCE, TO ADD A NEW CHAPTER
3.70 ECC, CONFLICT OF INTEREST, REGARDING
CONTRACTS WITH FORMER EMPLOYEES; PROVIDING
FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE
DATE.
WHEREAS, the city has contracted for professional services with firms that have
hired former city employees; and
WHEREAS, Chapters 42.20 and 42.23 RCW, which regulates conflict of interest
in municipal contracting, does not specifically address dealings with former employees; and
WHEREAS, the City Council finds to be in the best interest of the city to adopt
regulations establishing criteria for contracting with former employees or firms that hire former
employees; NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO
ORDAIN AS FOLLOWS:
Section 1. A new Chapter 3.70 ECC, Conflict of Interest., is hereby adopted in
Title 3 ECC, Revenue and Finance., to read as follows:
Chapter 3.70
CONFLICT OF INTEREST
3.70.000 Definitions.
3.70.010 Restrictions on future employment of city
employees.
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{BFP696127.DOC;1/00006.900000/} - 2 -
3.70.020 Disclosure of Privileged, Confidential, or
Proprietary Information.
3.70.030 Exemption.
3.70.040 Penalties.
3.70.000 Definitions.
The definition of words used in Chapter 3.70 ECC shall be
consistent with the definitions, context and usage of the terms in
Chapter 42.23 RCW, and their interpretation by Washington
Courts.
3.70.010 Restrictions on future employment of city
employees.
1. No former city official, officer or employee may, within a
period of one year from the date of termination or city
employment, accept employment or receive compensation
from an employer if:
(a) The former city official, officer or employee, during the two
years immediately preceding termination of city employment,
was engaged in the negotiation or administration of one or
more contracts on behalf of the city with that employer and
was in a position to make discretionary decisions affecting the
outcome of such negotiation or the nature of such
administration; and
(b) Such a contract or contracts have a total value of more than
ten thousand dollars; and
(c) The duties of the employment with the employer or the
activities for which the compensation would be received
include fulfilling or implementing, in whole or in part, the
provisions of such a contract or contracts or include the
supervision or control of actions taken to fulfill or implement,
in whole or in part, the provisions of such a contract or
contracts. This session shall not be construed to prohibit a city
elected or appointed official or a city employee from accepting
employment with a city employee organization.
2. No former city official, officer or employee may, within a
period of one year following the termination of city
employment, have a direct or indirect beneficial interest in a
contract or grant that was expressly authorized or funded by
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specific legislative or executive action in which the former city
official, officer or employee participated.
3. No former city official, officer or employee may, within a
period of one year following the termination of city
employment, represent any person before any city board, body,
agency, department, committee, examiner, adjustor, or
commission regarding a specific project the former official or
employee worked on, and was in a position to make
discretionary decisions or recommendations, during his/her
term of service or employment unless:
(a) The former city official, officer or employee receives no
compensation for representing that person; or
(b) The specific project was a legislative issue; or
(c) The matter involved in the representation by the former city
official, officer or employee directly affects properties owned
by the former city official, officer or employee.
4. Any elected or appointed official having the power to perform
an official act or action shall, for a period of one year after the
termination of his or her employment or term of service, refrain
from lobbying the city department, agency, elected body,
commission, or board on which they last served unless:
(a) The former city elected or appointed official is receiving no
compensation for such lobbying; or
(b) The matter being lobbied directly affects properties owned
by the former elected or appointed official.
3.70.020 Disclosure of Privileged, Confidential, or
Proprietary Information.
No former city official, officer or employee shall disclose or use
any privileged, confidential, or proprietary information gained
because of his or her service or employment with the city.
3.70.030 Exemption.
1. The prohibitions of ECC 3.10.010 notwithstanding, the city
may contract with a former city official, officer or employee
for expert or consultant services within one year of the latter’s
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leaving city service upon determination and approval by
resolution from the City Council that:
(a) It is important for the city to obtain the services in the
contract, and time is of the essence;
(b) The former city official, officer or employee is best
qualified to perform the services, and contracting with another
would result in undue burden on the city; and
(c) The interests of the city, including but not limited to legal,
financial and operations, will not be undermined as a result
thereof.
2. The prohibitions of ECC 3.10.010 shall not apply to a former
official, officer or employee acting on behalf of a governmental
agency, if the City Council determines that the service to the
agency is not adverse to the interest of the city.
3. Nothing in this ordinance shall prohibit an official elected to
serve a governmental entity other than the City of Edmonds
from carrying out his or her official duties for that government
entity.
3.70.040 Penalties.
Any person violating any provision of ECC 3.70.010 and ECC
3.70.020 shall be guilty of a gross misdemeanor and subject to
punishment in accordance with ECC 5.50.020.
Section 2. Severability. If any section, sentence, clause or phrase of this
ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction,
such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other
section, sentence, clause or phrase of this ordinance.
Section 3. Effective Date. This ordinance is subject to referendum, and shall
take effect thirty (30) days after passage and publication of an approved summary thereof
consisting of the title.
APPROVED:
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{BFP696127.DOC;1/00006.900000/} - 5 -
MAYOR GARY HAAKENSON
ATTEST/AUTHENTICATED:
CITY CLERK, SANDRA S. CHASE
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY:
BY
W. SCOTT SNYDER
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL:
PUBLISHED:
EFFECTIVE DATE:
ORDINANCE NO.
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{BFP696127.DOC;1/00006.900000/} - 6 -
SUMMARY OF ORDINANCE NO. __________
of the City of Edmonds, Washington
On the __ __ day of _____ ______, 20 08, the City Council of the City of
Edmonds, passed Ordinance No. _____________. A summary of the content of said ordinance,
consisting of the title, provides as follows:
AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON, AMENDING THE
PROVISIONS OF TITLE 3 ECC, REVENUE AND FINANCE, TO ADD A NEW CHAPTER
3.70 ECC, CONFLICT OF INTEREST, REGARDING CONTRACTS WITH FORMER
EMPLOYEES; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE
DATE.
The full text of this Ordinance will be mailed upon request.
DATED this _____ day of ________________, 2008.
CITY CLERK, SANDRA S. CHASE
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AM-1606 2.C.
Edmonds Fiber Optic Program
City Council Committee Meetings
Date:06/10/2008
Submitted By:Dan Clements, Administrative Services Time:15 Minutes
Department:Administrative Services Type:Action
Committee:Finance
Information
Subject Title
Edmonds Fiber Optic Program.
Recommendation from Mayor and Staff
Recommend that the City continue expanding its fiber system with respect to internal and
interjurisdictional uses, and not proceed with fiber to the premesis at this time.
Previous Council Action
The City has previously authorized creation of a fiber network , expansion of the service to
Netriver, Edmonds School District, Edmonds Community College, and Stevens Hospital.
Additionally, Council approved preparation of a feasibility study for fiber to the premesis.
At their May 5 meeting the Community Technology Advisory Committee approved forwarding
this draft report to the Finance Committee for their recommendations.
Narrative
At their May 5 meeting the Community Technology Advisory Committee approved forwarding
this draft report to the Finance Committee for their recommendations.
Fiscal Impact
Attachments
Link: Fiber_Recommendations
Form Routing/Status
Route Seq Inbox Approved By Date Status
1 City Clerk Linda Hynd 06/05/2008 12:27 PM APRV
2 Mayor Gary Haakenson 06/05/2008 12:40 PM APRV
3 Final Approval Linda Hynd 06/05/2008 02:46 PM APRV
Form Started By: Dan
Clements
Started On: 06/05/2008 10:46
AM
Final Approval Date: 06/05/2008
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City of Edmonds
BROADBAND ISSUE PAPER
Administrative Services Department May 12, 2008
C:\Documents and Settings\Dan\Desktop\Fiber Recommendations\Fiber Optic Network Recommendations.doc
FIBER OPTIC NETWORK RECOMMENDATIONS
For several years the City of Edmonds has been working on establishing a fiber optic network
whose primary use to date has been to reduce municipal telecommunications costs while increas-
ing functionality. The City has also examined two other uses for this network: providing high
speed broadband access to other local governmental and not-for-profit entities, and expanding
the network to provide fiber to the premises services for residents and businesses.
This background paper will present staff recommendations in the three business areas of internal,
intergovernmental, and general public access.
Background
From a broad overview perspective, our recommendation is to continue aggressively moving
ahead in the development of the Edmond’s fiber optic network for internal and intergovernmen-
tal uses. Internal utilization will continue to reduce telecommunications costs, as well as labor,
vehicle, and fuel expenses.
The City has currently agreed to contract terms and conditions to provide broadband services to
the Edmonds School District, Edmonds Community College, and Stevens Hospital. While the
school district contract is currently on hold due to current budget discussion, we see a substantial
market for broadband services to local governments, especially if the City can be designated a
State Intergovernmental Service Provider.
With respect to fiber to the premises for City residential and commercial use, our analysis con-
cludes that, at present, simple economics do not justify a full deployment. The Fiber to the Prem-
ises Business Plan presented in Appendix 4 estimates that a 38% market penetration rate would
be needed to finance a full $26.4 million City wide deployment. However, as will be discussed
shortly, it may make financial sense to offer surplus broadband capacities to various content pro-
viders and users on a selected basis.
Additionally, if the plan being presented is adopted, two of the four City locations identified for
major fiber optic switching locations (East-Public Works Shop and North- Seaview Water Res-
ervoir) will be up and operational. If and when finances and policy justify a full fiber to the
premises deployment, much of the “backbone” needed will already be in place, with only the
West and South locations needing to be established (see Appendix 3: Water Propagation Study,
and Appendix 4: Fiber to the Premises Business Plan).
Recommendations
Specific recommendations associated with moving these proposals forward include:
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1.) Issuance of one or more Water/Sewer Revenue Bonds in a total amount of $4.0 (?) mil-
lion for the acquisition of a “smart” water meters and related fiber runs, towers, and re-
lated system expenses;
2.) Establishment if municipal wifi zones along the smart meter fiber runs to support public
works and public safety “in the Field” initiatives;
3.) Implementation of a video arraignment system that will reduce the need for police offi-
cers to travel to Everett for arraignments;
4.) Adoption of a policy requiring installation of fiber optic conduit when streets are either
reconstructed, or dug-up for water/sewer/storm replacement, with the goal of having un-
derground fiber conduit to all neighborhoods within a ten year period; and
5.) Establishment of a group of southwest county educational, governmental, and public
health entities interested in forming a fiber consortium in this area.
Fiber Network Justification
Why should the City of Edmonds continue to develop and expand its fiber optic network? We
believe the justification for expanding the network fall into three areas: financial, environmental,
and policy.
Finances Looking at finances, currently 37% of the City’s meters are over 20 years old, and
a full 66% are over ten years old. In order to reduce operating costs, staff is rec-
ommending replacing these manually read meters with “smart” meter technology
that can be read at a central location.
To read meters centrally, several two reception points are needed to be located in
various parts of the City. These reception points would be connected to the central
office via an expansion of the City’s fiber optic backbone and fiber ring. The total
cost of meter replacement is estimated at just under $2.0 million. The gross added
costs of moving to smart meters is approximately $2.0 million. Figure 1 below
summarizes these costs.
FIGURE 1: SMART METERING COSTS
ITEM ESTIMATED COST
Replacement Water Meters $ 1,776,299
Meter Radios 1,254,875
Base Station 180,700
Sales Tax 285,857
Tower and Base 50,000
Fiber Run 100,000
Servers & Switching Equipment 75,000
WiFi Communications 300,000
Grand Total $4,022,731
This cost summary assumes that all City water meters are replaced as part of this
proposal. The rational is that crews can visit a neighborhood, replace all meters,
and “touch” an installation at one time. For some newer meters, it may make
sense to simply install meter reading radios, as opposed to replacing the entire
meter. This would reduce the above costs.
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These gross costs are off-set by three utility and one public safety factor in a nine
to ten year amortization period. These off-sets are described below.
1.) Annual reductions in personnel, vehicle, and equipment costs of approxi-
mately $92,600 per year in current dollars if all meters are replaced;
2.) Increased water system revenue due to more accurate meters. This recovery is
estimated at 1% of metered revenue, or $37,000 in 2007 dollars on metered
sales of $3,735,600; and
3.) By allowing public works crews to remain in the field longer by using a mu-
nicipal wifi system to log into central City servers for information on “as-
built” plans, utility locations, storm and sewer video, and building permit in-
formation, additional personnel, vehicle, and fuel reductions would occur. At
this juncture no value has been assigned these productivity increases.
4.) By moving to video arraignment for our Court, police prisoner transport time,
vehicle costs, and fuel expenses are reduced by $47,700 annually the first year
of operation.
These figures are summarized in Figure 2 below. The Water Utility would need to
be reimbursed for non-utility related broadband uses such as prisoner transport.
FIGURE 2: SMART METERING SAVINGS AMORTIZATION
Year
Water
Costs1
Water
Revenue2
PD Transport
Savings1
Cumulative
Savings
1 92,600 37,000 47,700 177,300
2 97,230 37,370 50,085 361,985
3 102,092 37,744 52,589 554,409
4 107,196 38,121 55,219 754,945
5 112,556 38,502 57,980 963,983
6 118,184 38,887 60,879 1,181,933
7 124,093 39,276 63,923 1,409,225
8 130,297 39,669 67,119 1,646,310
9 136,812 40,066 70,475 1,893,662
10 143,653 40,466 73,998 2,151,780
Notes:
1.) Assumes 5% annual cost escalator
2.) Assumes 1% annual cost escalator.
Environment The second rationale for expanding the City’s broadband network are environ-
mentally related. By using electronic systems for such tasks as reading water me-
ters, and conducting in custody hearings via video conferencing, the City is able
to reduce vehicle use and fuel consumption.
The two uses that have been examined for cost reductions, smart metering and
video arraignments, would result in annual mileage savings of approximately
17,000 miles, and result in a carbon footprint reduction of 8.34 tons (see Appen-
dix 5).
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As we are able to further quantify the advantages of public works and utility
crews being able to utilitize governmental wifi networks to remain in the field,
rather than return to central offices for information, these cost savings and carbon
reductions will grow considerably.
Policy The final justification for expanding the City’s broadband network relates to a
policy on open infrastructure. Our vision is that, in an ideal world, there should be
a single municipal fiber network open to all qualified content providers.
This has several advantages, the most notable being roads and family front yards
are dug up once for many content providers, rather than many times for several
content providers. This approach is less expensive for those providing digital
television, internet, and phone services, but it is also not a business model they
have chosen to embrace at this time.
The City has spoken with both Verizon and Comcast about the possibility of pro-
viding services over an open network, and neither local provider has expressed an
interest in doing so. Verizon is in the process of completing its FIOS fiber to the
premises program in southwest Snohomish County, and have chosen the proprie-
tary network approach. While the Verizon approach will provide greater band-
width and speed that is currently available in our area, it no where near matches
band width and speed available in parts of Europe and Asia.
At some point Comcast and other providers will need to up-grade their network
connections to fiber speeds in order to remain competitive. It seems prudent pol-
icy to try and avoid a duplication of dug up streets and impaired views resulting
from the recent overhead stringing of fiber cable and splice boxes on overhead
lines a second or third time.
Attachments & References
Attached are five appendices that were used as the foundation for the recommendations con-
tained in this paper. These attachments will provide much in-depth background relating to the
recommendations discussed earlier. These appendices are:
Appendix 1: Flexnet Meter and Radio Cost Estimate
Appendix 2: Underground Fiber Specifications
Appendix 3: Water Meter Radio Propagation Study
Appendix 4: Fiber to the Premises Business Plan
Appendix 5: Cost and Carbon Off-Set Calculations
In addition to these five appendices, Edmonds used a great deal of methodology and information
contained in an “Automatic Water Meter Reading Study” prepared by Grant and Osborne Engi-
neering for the City of Marysville. This study has not been included in this report, but is avail-
able from the City of Edmonds or Marysville.
Questions or Comments
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We hope the information and material contained in this report will be of assistance in under-
standing what we feel are the next steps for expansion of the City’s broadband network. Staff
look forward to responding to any questions, comments, or concerns you may have.
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APPENDIX 1: FLEXNET METER & RADIO ESTIMATE
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APPENDIX 2: UNDERGROUND FIBER SPECIFICATIONS
Recommend installation of (4) conduit in 1.25” or 2” diameter (4 x 1.25” or 4 x 2”). Conduit shall be SDR-11
HDPE , schedule 80 PVC or equivalent, meeting ASTM-3035 specifications. Conduit shall be connected using
compression couplers or heat fusion. Recommend installation of 10-12AWG solid trace or locate wire in trench.
At no time shall the pipe be deformed to make any bend. The minimum radius for any bend or sweep in the conduit
shall be thirty-six inches (36").
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APPENDIX 3: WATER METER PROPAGATION STUDY RESULTS
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APPENDIX 4: FIBER TO PREMISES BUSINESS PLAN
Broadband Business Plan for
CCCiiitttyyy ooofff EEEdddmmmooonnndddsss
Feburary 2008
1805 Shea Center Dr Suite 240
Highlands Ranch, CO 80129-2251
603.888.5100
fax 603.888.5101
www.packetfront.com
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City of Edmonds Broadband Business Plan
Table of Contents
Introduction and Scope.............................................................................................................................. 13
Benefits of Municipal Broadband—Looking Beyond the Triple Play ..................................................... 13
Scope of this Document........................................................................................................................... 15
Network Options ........................................................................................................................................ 17
Designing the Network ............................................................................................................................ 17
Building the Network............................................................................................................................... 20
Operating the Network ............................................................................................................................ 21
Operational Plan ........................................................................................................................................ 25
Who should run the network? City? Partners? Vendors?....................................................................... 25
How should the services be marketed?.................................................................................................... 27
How will customer service be provided?................................................................................................. 28
How should billing be done?................................................................................................................... 29
What types of service level agreements need to be developed?............................................................... 29
Organizational Plan ................................................................................................................................... 30
What type of organization or "entity" should build/own/operate the network?...................................... 30
What does the staffing model of the entity look like at the City level, regional level and who is
responsible for recruiting, training and supervision of the staff?........................................................... 30
How would the staff levels be expected to grow?.................................................................................... 31
Financing..................................................................................................................................................... 32
Who owns the assets once constructed?.................................................................................................. 32
What are the costs of financing and associated risks of the various financing options? ........................ 32
What are various cash flow alternatives in a best case, worst case, as well as a thoughtful likely case
scenario? ................................................................................................................................................. 32
Services........................................................................................................................................................ 34
UTOPIA................................................................................................................................................... 34
Västerås, Sweden..................................................................................................................................... 34
Nuenen, the Netherlands.......................................................................................................................... 35
Network Finances....................................................................................................................................... 36
Capital Expenses..................................................................................................................................... 36
Operating Expenses................................................................................................................................. 46
Conclusion and Recommendations........................................................................................................... 57
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IInnttrroodduuccttiioonn aanndd SSccooppee
• Benefits of Municipal Broadband—Looking Beyond the Triple Play
The core competency of communities is in building infrastructure for common use—such as
roads, water lines, and in some cases electric utilities. In many states and cities, telecommunica-
tions is now considered the “fifth utility,” because cities can implement such infrastructure ubiq-
uitously, often better than any private entity. In addition, there are many community-wide bene-
fits of a municipal network, including better connections for utility monitoring, government ser-
vices, education, healthcare, library services, and social networking and communication.
Cities are also much better equipped to understand and accept long-term financing scenarios, be-
cause the primary motivator for cities is to serve the public good rather than to appease stock-
holders. These facts place municipalities in an ideal position to deploy fiber-to-the-premise pro-
jects, and makes municipal ownership of these networks easier to support. Conversely, it would
be inadvisable for any community to hand over ownership of its network to any private firm, be-
cause it would then lose the ability to make decisions regarding the deployment, use, or operation
of that network.
While a community can and should own its FTTH network, not many cities are experts in broad-
band telecommunications or in operating networks. That’s where a third party operator can be
employed to provide critical expertise. The success of the network in terms of subscriber take
rates, service provider management, and construction management is reliant upon the experience
of the project management team. A third party team that is experienced in the deployment of
FTTH networks can help ensure the network’s success.
There are other management decisions to be made when building a municipally-owned fiber net-
work. One of the most important is whether the network will be open or closed in terms of how
services are offered. An open network is open for more than one service provider to use to offer
service. A closed network is contractually exclusive to just one service provider.
In order to meet community goals of competition and to preclude it from competing directly with
the private sector, our recommendation would be that the City of Edmonds build an open access
network. Building an open network doesn’t happen as a simple coincidence of an overall build
plan, but should be used as one of the core principles of the design, ownership, build and on-
going operations of the network.
Characteristics of a truly open fiber network include:
• Offers multiple services from multiple service providers—and can also be available
for new advanced services to run on the City-owned network, including community de-
veloped services, healthcare and educational services.
• Operates without prejudice—so that any qualified service provider can serve users on
the network without financial or operational barriers
• Provides carrier-class reliability—demonstrable 99.99% uptime
• Built on widespread industry standards—Ethernet is a standard that has been widely
adopted by both network applications and network devices, worldwide
• Uses easily scalable technology—so that an end user can easily make the jump from 100
Mbps to 1 Gbps bandwidth without affecting the other users on the network; open net-
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City of Edmonds Fiber Optic Network
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works will often use specialized hardware and software to make self-provisioning of ser-
vices possible, while supporting the service needs of service providers as well
• Provides an environment of bandwidth abundance—network electronics should never
be in the business of managing scarcity, but rather in providing optimum capacity to all
end users
When a city or municipality deploys an open access broadband network built on these principles,
the following benefits can be achieved:
• Supports economic growth—the vast capacity of an active fiber network will enable
businesses, educational facilities and health care facilities to improve their own service
offerings and internal operations. The availability of a world-class network will also be
very inviting for new businesses to locate to your community.
• Supports government applications—the ubiquitous deployment of an open network
provides a ready means to provide automated meter reading and automated meter intelli-
gence, as well as traffic monitoring, emergency response and law enforcement applica-
tions.
• Reduces the city’s carbon emissions—the availability of an advanced broadband net-
work has the potential to greatly encourage less driving through more innovative network
services, including—
o More telecommuting. Employers and their staff have a greater incentive to work
from home when they can rely on a network infrastructure with enough capacity
to meet their needs. Individuals and entities that transmit large amounts of data
will benefit even more.
o More teleconferencing. Instead of driving or flying to attend a meeting, one
could start a teleconferencing session. An active Ethernet fiber network provides
enough bandwidth to support very high quality visual communications applica-
tions by enabling high capacity and symmetrical upload and download speeds.
o More innovation leading to better services. Superior bandwidth will encourage
the growth, proliferation and better consumer use of e-services, including e-
commerce, entertainment, automated meter reading, e-government, etc. This
would lead to less driving and therefore fewer carbon emissions.
• Supports improved quality of life—high resolution visual communications, lower cost
true broadband connectivity, distance education, telemedicine, telecommuting (which is
made more viable with better-than-T1 capacity to each home), local community video
channels, home security, smart home technology and other services are direct results of
the availability of a true broadband open fiber network.
• Encourages innovation—large businesses, small businesses, educational entities, health
care institutions and residents alike benefit from the minimum 100 Mbps dedicated sym-
metrical capacity offered by an active fiber network. Businesses and “power users” can
subscribe to a 1 Gbps service, increasing the size of the ‘pipe’ they can access 24x7,
without affecting other users on the network. No longer limited by bandwidth scarcity,
this high bandwidth capacity can unleash creative forces to provide new and exciting ser-
vices and applications on the network. Consumers continue to increase the amount of
bandwidth they need and use, and will immediately see the benefits of the truly ‘fat pipe’.
• Encourages competition—the ability for multiple service providers to offer services on
the network encourages competition on price, service availability, and support. This is
good for residents and businesses, as it provides them with more choices and the ability
to change providers if they wish.
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• Scope of this Document
As part of its due diligence in regard to its conceived municipal broadband project, the City of
Edmonds contracted with DynamicCity (now PacketFront) to develop a Business Plan which
would cover several key areas of the project.
The Network Finances section of this document represents a financial framework with multiple
options that can be used by the City and the network stakeholders to understand the effects that
different choices will have on the financial outcome of the network. Once these choices are made
by the City (for example, the funding level contributed by the other stakeholders) PacketFront
can help Edmonds progress the business model and create a financing structure.
This Business Plan is designed to provide the following information:
• A review of the different options for the design, build and operation (DBO) of a munici-
pal network
• A recommended plan of operations
o Who should run the network? City? Partners? Vendors?
o How should the services be marketed?
o How will customer service be provided?
o How should billing be done?
o What types of service level agreements need to be developed?
• Organization Plan
o What type of organization or "entity" should build/own/operate the network?
Public Corporation; City Utility; Public Private Partnership; Private Industry?
o What does the staffing model of the entity look like at the City level, regional
level and who is responsible for recruiting, training and supervision of the staff?
o How would the staff levels be expected to grow?
• Financing
o How should the network be financed?
o Who owns the assets once constructed?
o What are the costs of financing and associated risks of the various financing op-
tions?
o What are various cash flow alternatives in a best case (rapid construction, enthu-
siastic consumer conversion rate), worst case (delayed construction, tepid con-
version rate), as well as a thoughtful likely case scenario?
• Services
o What services should be provided on the network?
o POTS, Internet access, video entertainment (broadcast & on-demand), mobile
Internet service (Wi-Fi), two-way interactive video (distance learning, remote
healthcare).
o What assumptions are built into the financial model regarding customer demand
and conversion rates for these services?
o What are the one-time costs to set-up and deliver the service?
o How much bandwidth does the service consume? As the technology continues to
evolve, what impact would the likely changes have on available bandwidth?
o What are the assumed gross margins of the possible services?
o What can the service provider expect to charge for the service?
o What would the network entity need to charge the service providers to cover the
costs of providing the particular service?
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City of Edmonds Fiber Optic Network
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o Based on the above, what are the various ROI assumptions for each service based
on various conversion rates?
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City of Edmonds Fiber Optic Network
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NNeettwwoorrkk OOppttiioonnss
• Designing the Network
As provided in the technological analysis submitted to the City previously, we believe that the
best solution for Edmonds’ purposes would lie in an open access, active Ethernet fiber network.
Any discussion of technological choices in networking needs to be anchored in the stated goals of
the network:
1. Generate replacement revenues for municipal government.
2. Create cost savings for residents, businesses, and municipal government.
3. Create a framework for competitive communications service providers to provide more
relevant service offerings and better customer service than is currently available today, or
will be available in five years.
4. Create a communications infrastructure that will attract for revenue-enhancing economic
development.
5. Create an open access platform capable of accommodating significant growth and inno-
vative communication services that will enhance the Edmonds civic experience.
To support these goals, the following decision factors should be used to help determine the cor-
rect network topology for Edmonds:
• Capital and Operational Expenses
The upfront cost to build, and the long-term cost to operate will influence the financial
outcome of the network and its ability to generate replacement revenue for the city.
• Global Standards
Open access platforms require compliance with common standards to support multiple
service providers.
• Bandwidth Capacity
The current and future need for bandwidth and advanced services for an increasing num-
ber of subscribers must be anticipated in the original design of the network.
• Scalability
The network should be easily expandable with little to no downtime and for the lowest
possible cost.
• Carrier Class Reliability
A network built for advanced services and multiple service providers must adhere to the
highest standards of reliability.
To summarize our main findings in regards to the Active Ethernet vs. GPON analysis:
Capital and Operational Expenses
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City of Edmonds Fiber Optic Network
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• The cost of the fiber plant is relatively comparable between active and passive designs.
The cost of construction management and contractors are far more significant in the total
cost of the plant than the active/passive decision.
• The active electronics are less expensive than passive electronics by about $100 per sub-
scriber.
• The engineering of an active network is less complex than a GPON.
Global Standards
• The Active Ethernet solution is based on a standard that has been stable for decades with
multiple deployments and enjoys a global market to support future cost reduction.
• Global and multi-vendor interoperability is immediate and continual for native Ethernet
solution.
• The current GPON standard has only been in use for a short period of time and there have
been multiple standards within that time period.
• It is likely that the current GPON standard will also be improved, making the current so-
lutions out of date and potentially unavailable.
Bandwidth Capacity
• The active solution delivers almost three times the bandwidth capacity to a given area for
a lower cost than a PON.
• The active solution allows the network to provide Gbps services to individual subscrib-
ers, increasing the ability to service high-end businesses and key end-users without im-
pacting the surrounding users.
• The ability to attract service providers is dependent on the network’s ability to offer the
provider access to a high bandwidth and a lower cost. An active network provides more
bandwidth at a lower cost that is more scalable.
Scalability
• Scaling bandwidth for all users is less complicated and dramatically less expensive in the
active environment than the PON. For example, reducing the split count on the PON re-
quires the purchase of additional expensive electronics.
• GPON networks require downtime to upgrade.
Carrier Class Reliability
• Because the distribution layer is closer to the subscriber, an active network is more reli-
able than a passive network with respect to cable cuts by approximately 10 times.
• In a PON design, the failure group size in the event of a cable cut is typically several
times larger than an active network.
We have completed some preliminary design work for the Edmonds network for the purposes of
estimating the construction costs for building. As the network plans proceed, more detailed engi-
neering work will be necessary in order to design the exact construction specifications for the
fiber plant, location of the cabinets, etc. We anticipate that Edmonds would use its prescribed
procurement process to issue an RFP for network engineering services for this purpose. It may be
possible to use a local firm for this work, if a qualified local firm exists; this would keep the reve-
nue from the project in the city or surrounding area.
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City of Edmonds Fiber Optic Network
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The City of Edmonds network as designed by the PacketFront GIS team.
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City of Edmonds Fiber Optic Network
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• Building the Network
Many contractors are experienced with building FTTH networks. A private firm may be con-
tracted to assist in this procurement process to help assess the proposals and the vendors’ suitabil-
ity in regards to the overall project.
Selecting the right construction firm can have an enormous impact on the overall project—both in
the quality of the work completed and the reliability of that work, as well as the financial out-
come of the network.
Bids solicited from construction firms should include reference sites as well as anticipated build-
ing timelines for sample footprints as well as for the network as a whole.
There are many elements in managing a network construction project; here are a few of the tasks
that should be completed by your construction manager. Your construction manager can be a
qualified local staff member or a contracted third party.
Construction Tasks – Implementation
1. Deliver project data to local ‘one call’ service (Blue Stakes, USA, etc.)
2. Oversee the procurement of the field engineering contractors. Identify experienced candi-
dates and initiate and manage bidding processes.
3. Field Engineering Management—contract with outside plant engineering subcontractors to
take the GIS line work done by PacketFront and engineer the construction plan in detail.
a. Identify and secure rights of way
b. Identify infrastructure running lines
c. Design fiber optic splice matrices
d. Design aerial pole attachment details
e. Generate and submit pole attachment requests (pole permits)
f. Provide to the owner and to the construction company/contractor the actual construc-
tion prints for building
4. Procurement of, and contract negotiations with, outside plant contractors
a. Excavation crews
b. Buried/underground crews
c. Aerial/overhead crews
d. Electrical crews
e. Structural crews
5. Provide construction standards to outside construction contractors
6. Host pre-construction meetings with the network owner, governing agencies
(city/state/federal), all construction crews
7. Obtain necessary permits for construction.
8. Construction Inspection
a. Ensure job site safety
b. Build community support and management
c. Act as public interface regarding construction process
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City of Edmonds Fiber Optic Network
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d. Provide as-built documentation to network operator to update the infrastructure data-
base daily
e. Use inspection reports (as-built data) to reconcile invoicing from contractors
9. Fiber splicing and testing
a. Supervise the testing of each fiber and span to ensure that it complies with network
standards
b. Review and accept/reject fiber optic testing data as provided by contractors
10. Quality assurance and control
a. Production tracking—document the progress of each construction crew on a daily ba-
sis
b. Incident management—manage and resolve issues such as foreign utility damage,
property damage, etc. that may arise during the course of construction
11. Billing support
a. Validate contractor invoices on behalf of network owner, based on as-built data from
field inspectors
12. Final project inspection
a. Examine the entire network holistically by involved field governing agencies, the net-
work owner and the construction management team
b. Verify that all installations are complete, documented accurately and all work areas
have been cleaned and restored
Construction Management – Operations
1. Change control and management
a. Manage and monitor installed infrastructure
b. Identify and manage network elements as needed due to ongoing changes in the field
(road widening, pole changes, moving aerial to buried, etc.)
2. Network Expansion
a. Follow all the above steps for additional communities or footprints added to the origi-
nal network.
3. Manage engineering and construction of large scale residential, commercial and business in-
stallations.
• Operating the Network
While Edmonds can and should own its network, we recommend that a third party network opera-
tions firm be contracted to manage the operations of the network. A third party network opera-
tions firm will lend crucial expertise to the day to day operation of Edmonds network, helping to
ensure its success.
Some of the tasks required for network operations include:
Service provider integration, interconnection, and management
1. Service Provider Recruitment
a. Target, recruit and develop prospective service providers, and enhance or increase re-
tail services of existing service providers.
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City of Edmonds Fiber Optic Network
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b. Enter into discussions with and negotiate service provider contracts on behalf of the
network owner.
2. Service Provider Management
a. Work collaboratively with the network owner to develop and implement a service pro-
vider strategy that creates value for the network owner.
b. Provide day-to-day management of service provider relationships and agreements and
for supporting the network owner’s service providers.
c. Monitor and report on the performance of the service providers against their contract
deliverables.
3. Service Provider Integration
a. Facilitate and monitor the physical and logical network interconnection of service pro-
viders to the network owner. Design, implement and monitor such interconnect
point(s) and provision virtual connections within the network in response to order ful-
fillment requests.
b. Provide necessary services to connect new service providers on the network.
4. Wholesale Services Pricing
a. Develop, recommend adoption of, and maintain pricing schema for wholesale services.
5. Service Provider Billing
a. Calculate applicable charges for each service provider and generate and send invoices
of such charges to service providers on behalf of the network owner.
b. Respond to and resolve billing and payment inquiries from service providers.
Select and manage sub-contractors
1. Administer contracts and manage relationships with network subcontractors on behalf of, and
in conjunction with, the network owner.
2. Monitor and report on subcontractor performance against the performance metrics found in
their contracts.
Work order fulfillment
1. Receive and validate works orders from service providers for retail services for adding, modi-
fying, or changing services for existing subscribers.
2. Receive and validate work orders for the report and maintenance of the network.
3. Allocate the work generated by work orders to the contractors for fulfillment.
4. Oversee work performed by subcontractors.
5. Ensure and verify billing to service providers.
6. Review and approve billing from contractors to network owner.
Fault & performance monitoring
1. Maintain EMS (element management system) to isolate, identify and resolve network alarms.
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2. Provide support desk for service providers for tier 2 & 3 issues.
3. Monitor and report on SLA performance.
4. Monitor network utilization.
Network element repair & maintenance
1. Manage equipment warranties and current maintenance contracts.
2. Repair / replace core distribution switches.
3. Repair damaged outside plant as necessary (accidental fiber cuts, damaged cabinets or hubs).
4. Provide mobile generator support in the case of power outages.
3. Install necessary firmware and software updates/upgrades.
4. Manage contractors for other repairs.
5. Verify contractor billing.
6. Maintain documentation on network configurations.
7. Act in the capacity of technology advisor.
8. Utilize lab to test and validate new firmware/software.
Capacity planning and network engineering
1. Continuously monitor performance, utilization and capacity of the network’s physical and
logical network inventory.
2. Maintain a testing facility.
3. Test and certify the compatibility of firmware and software maintenance updates prior to de-
ploying them to the network.
4. Create and maintain documentation of the physical and logical topology and configuration of
the network.
5. Act as a technology advisor; provide background and insight into changing technologies that
could affect or benefit the network owner.
6. Analyze and recommend upgrades and changes to the network where reasonable, including
recommendations for additional physical and logical network inventory and capacity.
Procurement & inventory management
1. Track physical and logical inventory of network elements and resources.
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Policy development and administration
1. Administer network technology and business policies for the network:
a. Network security
b. New service introduction
c. Addition of service providers
d. Escalation procedures
e. Wholesale pricing
2. Assist network owner is reviewing and revising such policies to reflect changes based on in-
dustry and economic trends, technology evolution, the acquisition of new products, services
and the like.
3. Define and recommend operational policies applicable to the network, including
a. Network addressing
b. Schema
c. Quality of service parameters
d. Network resource allocation schema
e. Network resource naming conventions
f. Approved product and services models
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OOppeerraattiioonnaall PPllaann
• Who should run the network? City? Partners? Vendors?
We can answer this question in part by defining what sorts of firms should not be enlisted to run
the City’s network.
Once the characteristics and principles of an open network are understood, issues regarding own-
ership and operations of that network become clear. A service provider or a construction firm
cannot build and provide network services on its own, if the network is to meet the criteria for
openness:
• Carrier-class reliability
• Uses widespread industry standards
• Uses easily scalable technology
• Provides an environment of bandwidth abundance
• Operates without prejudice
A service provider is in the business of providing services on a network. If such a firm builds and
operates a network, the service provider can and will build the network in such a way that makes
it very difficult—if not impossible—for other service providers to compete with them on the net-
work they built and operate—regardless of the city’s wishes. The network owner/operator is em-
powered to make operational decisions on the network, as it is their own bottom line that the ser-
vice provider needs to manage. On a network it owns, a service provider can and will set up tech-
nological or procedural road blocks for other service providers in order to protect their source of
revenue—the service retail fees.
A construction firm can be contracted to build the network, but a construction firm’s expertise
isn’t in designing, operating, or supporting a world-class fiber network. A bid from such firms
should be considered when the time is right to hire contractors to build the network, but such a
firm is not typically qualified to operate the network if the City wishes to implement a world-
class network infrastructure.
While service providers are necessary for network services, revenue and healthy competition, and
construction firms are needed to build the network, neither should be in a position to own or op-
erate the City’s network, if the City truly wishes the network to adhere to the principles of open-
ness on its network.
In order to help foster healthy competition and to ensure that the network is operated efficiently
and expertly, we highly recommend that the City utilize an experienced network operations firm
that is not in a position to collect direct revenue from the network. The City may also choose to
operate this network itself using qualified staff.
Some of the major facets of network operations include:
• Network design and planning
• Service provider recruitment, selection, ongoing management and billing
• Customer acquisition and marketing
• Network monitoring
• Policy development and management
• Construction management
• Finance
Packet Page 73 of 142
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City of Edmonds Fiber Optic Network
Page 27
• How should the services be marketed?
The success of the network is reliant upon sufficient take rates to make the network self- sustain-
ing over time. It has been our experience that service providers typically do not market their ser-
vices to their best advantage; they are not as motivated to do so as the network owner, because
they don’t undertake the same financial risks as the network owner.
This is a good reason for the network owner—Edmonds—to market and brand its network sepa-
rately from the service providers, to create a brand awareness for the network itself. There are
several good examples of this currently, including the municipal network in Vasteras, Sweden.
The MalarNet City network in Vasteras has a distinct identity, including a user self-service portal
that links the user to community resources, service providers, local medical resources, gaming,
and social networking applications.
Users on the MalarNet City network can click a link that takes them directly to a listing of all the
available services and providers on the network, including user ratings for those services, price
structures, etc.
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This approach to community network marketing makes it easier for consumers to immediately
understand the benefits of an open access network, because the competition between service pro-
viders is healthy and extremely evident.
In short, we recommend a combined approach to marketing; service providers can and should
market their own services to network customers, but the network itself should also be marketed
separately. It is for this reason that marketing expenses have been included in the operational
costs of the network, as shown in the Services and Network Finances sections of this document.
• How will customer service be provided?
Tier 1 customer service—that is, customer service to the end users—should be performed by the
service provider(s) on the network. This can also be one of the competitive and differentiating
factors among service providers on the network; good service will reduce churn on the network;
bad service will increase it. Customer service metrics should also be included as part of the ser-
vice level agreement (SLA) with the network’s service providers in order to ensure that only
qualified, functioning service providers operate on the network. Consumers don’t always make
the distinction between the service provider and the network, and when a service provider under-
performs, it can reflect poorly on the network in the minds of the users.
Tiers 2 and 3 customer service should be performed through the network operations firm. This
would primarily be a resource for the service providers as they troubleshoot consumer issues.
The network operations firm ultimately chosen by Edmonds should be able to demonstrate ex-
perience and expertise in providing Tier 2 and 3 network support.
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• How should billing be done?
Typically, billing of the consumers should be responsibility of the service provider(s) on the net-
work; this allows the service providers to maintain a direct link to its own customers and to allow
them to create and manage their own business practices. Inserting the network owner into the end
user billing process would be cumbersome and would create an unnecessary filter between the
service provider and their customers.
Billing the service providers would be the responsibility of Edmonds through its network opera-
tions firm. Part of the responsibility of the network operations firm would be to track service pro-
vider usage and bill accordingly on behalf of the City.
• What types of service level agreements need to be developed?
Essentially, there are two categories of Service Level Agreements (SLAs) that need to be devel-
oped. One outlines the responsibilities of the Network Owner/Operator to the Service Provider,
and the other outlines the responsibilities of the Service Provider to the Network Owner/Operator.
The intent is to structure and implement the SLAs in such a way that creates a well defined
framework for the two parties to operator under, and not necessarily a penalty book for collecting
fines when problems arise. In Appendix A, we have included sample SLAs which map out the
specific terms of these agreements.
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OOrrggaanniizzaattiioonnaall PPllaann
• What type of organization or "entity" should build/own/operate the
network?
This is based primarily on the goals, resources, and risk level the City is comfortable with – and
the additional resources and skills that may be available through the private sector. Simply put,
there is not one size that fits all. However, one core principle that we do believe strongly in is the
creation of a Public/Private Partnership (PPP). The overall success of a community broadband
effort will improve by including the various skills and resources from the private sector, and by
incorporating a model that shares risk across multiple parties. We advise against a business model
where the City is the sole party responsible for – and at risk for – all of the aspects of building,
operating, and maintaining the network.
That being said, a PPP can be created through two basic structures. In one model, the public and
private sector entities share overall ownership of the network, and together comprise the decision
making body for all business issues, policy creation, day-to-day operations, network construction,
writing of commercial contracts, and so on. The other PPP model is one that is structured purely
through commercial contracts and there is no shared ownership. This creates clear separation of
power for all decisions that impact network ownership, writing policies, and other various busi-
ness decisions.
Based on our discussions with the City of Edmonds, we feel that the most appropriate model is
one where the network ownership is held solely by the City, through the creation of a special use
entity or enterprise fund, and private sector partners are engaged through commercial contracts to
provide services to, or purchase services from the network. In this model, an efficient board level
structure is created, comprised of municipal representatives who make the final decisions on the
overall community broadband plan, business model, messaging, implementation plan, and finance
structure.
Private sector partners are engaged through commercial contracts for such arrangements as pro-
viding services on the network, network operations and maintenance agreements, market-
ing/advertising efforts, and providing an additional capital source and revenue stream for the city.
However, the private sector would not fill any seats on the municipal telecom board of directors.
This keeps a clear separation of power between the public and private sector, while still benefit-
ing from a public/private partnership model that leverages the strengths of both entities – and
shares risk across multiple parties.
PacketFront, in partnership with our municipal telecom counsel, is qualified to provide the legal
expertise to help guide our clients through the organization and governance processes, make spe-
cific recommendations on what the most appropriate structure would be, and draft the legal
documents to create the operating entities and commercial agreements.
• What does the staffing model of the entity look like at the City level,
regional level and who is responsible for recruiting, training and su-
pervision of the staff?
With the aforementioned model in mind, the broadband entity at the City level would be staffed
primarily by a board of directors, of approximately 4 to 8 members. This staff would have exper-
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tise in areas such as City Administration and Planning, Finance, Legal, Infrastructure and Com-
munications, and Economic Development. Furthermore, this staff would serve as a technical
steering committee for decisions that impact infrastructure design and implementation – and
manage the private sector partners through commercial agreements for such services as network
operations and maintenance, triple-play applications, and finance/lending.
If there are additional municipal bodies that would benefit the community broadband initiative,
they can be organized on a regional level through Inter-Governmental Agreements (IGAs).
• How would the staff levels be expected to grow?
Whether the City chooses to operate and maintain the network themselves, or contract with a pri-
vate sector partner to operate it on their behalf, we see moderate to no growth of the staff levels.
This reasoning is based on one of the unique aspects of the PacketFront FTTH solution, which is
a set of advanced software applications that automate the business processes for managing the
network and delivering services. Therefore, if the City chooses to operate the network them-
selves, there would be little to no staff level changes as the network grows in scale. If the City
decides to outsource the operational responsibilities to a private sector partner, then there would
be no staff changes over time, as this would be the responsibility of the party operating the net-
work on behalf of the City.
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FFiinnaanncciinngg
• Who owns the assets once constructed?
In the organization model recommended previously, the assets would be owned by the City.
• What are the costs of financing and associated risks of the various
financing options?
The two main municipal financing options are bonding and leasing. Both rates are primarily set
by market conditions, transaction size, and credit rating. Municipal bonds traditionally have a
slightly lower cost of capital, higher legal fees, and a higher level of risk as the bonds are typi-
cally backed by the full faith and credit of the municipality, and in some cases, require a tax
pledge. Municipal leasing has a slightly higher cost of capital, lower fees, less complexity and
time intensive, and a lower level of risk, as these programs typically include a non-appropriation
clause in the event that monies are not allocated for the lease payments. In both financing options,
the City owns the assets. The recommendation on which financing approach is a better fit (bond-
ing vs. leasing) will be determined by understanding the City’s credit rating, lending require-
ments, and risk appetite.
In support of the City’s financing activities, PacketFront works with a broad array of financial
partners who provide these types of lending programs, and can offer its services to conduct a
capital raise.
• What are various cash flow alternatives in a best case, worst case, as
well as a thoughtful likely case scenario?
As part of the financial planning steps, PacketFront will work with the City on determining what
the various cash flow projections would look like, under best case, worst case, and likely case
scenarios – and collectively make a decision on which model the City is comfortable planning
for. All of those variables were not forecasted in this document, only the likely cash flow case.
We would propose to hold that exercise in a workshop environment. In the event that there is a
financing need to cover operational losses or debt services, these funds can be capitalized in both
financing structures mentioned above. What follows are some of the risk categories for a munici-
pal network, including increased capital costs and lower than anticipated revenue.
Risk: Higher than anticipated capital costs
Possible reasons for higher capital costs include difficult construction conditions, less-than-
anticipated aerial plant, and higher overall footage than estimated.
Possible Mitigation Strategies:
• Increase bond size
• Issue additional bond(s)
• Identify source of contingency funds
Risk: Lower than anticipated take rate
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Possible reasons for lower than anticipated take rates include incumbent competition and service
provider issues (poor marketing, poor customer support, etc.).
Possible Mitigation Strategies:
• Increase marketing expenditures
• Identify additional provider(s)
• Increase bond size
Risk: Lower than anticipated Average Revenue Per User (ARPU)
Possible reasons for lower than anticipated ARPU includes price competition, provider-related
circumstances, substitution and innovation (such as Skype and Vonage being used in place of a
voice product on the network).
Possible Mitigation Strategies:
• Improve bundling incentives and cross-selling
• Identify new products, services, and revenue streams
• Increase/change prices
• Increase business marketing & sales
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SSeerrvviicceess
An open access, active Ethernet fiber network is capable of bandwidth capacity that is superior to
any other network infrastructure currently available. As such, it will accommodate all of the ser-
vices mentioned by Edmonds: telephone service, Internet access, video entertainment (broadcast
& on-demand), mobile Internet service (Wi-Fi), two way interactive video (distance learning, re-
mote healthcare).
Wi-Fi service has not been modeled into these design-build-operate scenarios, but could be done
upon request. However, a fiber backbone installed by Edmonds would support the addition of
Wi-Fi services.
We believe it is somewhat preliminary to engage in discussions with specific service providers at
this juncture, before the network has been approved or funded, but there are several qualified ser-
vice providers who may be interested in providing services on an Edmonds network. Edmonds’
projected subscriber counts would likely draw at least one triple-play provider to its network, and
1 or 2 smaller providers. An Edmonds network also has the potential to draw the interest of lo-
cally-created or managed niche providers, such as gaming services, social network services, co-
location services, etc.
In order to demonstrate the possibilities regarding services on a municipally-owned open access
network, following are a few examples of services available on similar networks.
• UTOPIA
The Utah Telecommunication Open Infrastructure Agency (UTOPIA) is a consortium of Utah
cities engaged in deploying and operating a fiber optic network to every business and household
in its member communities. Recognizing the need to provide their residents with superior com-
munications technology infrastructure—and the reality that current service providers in the mar-
ketplace were not delivering first-tier services—the communities banded together to create a
world-class, 100% fiber optic network for member communities. The ultra-broadband UTOPIA
Community MetroNet is open to multiple service providers to offer innovative and exciting ser-
vices to citizens in the UTOPIA cities.
Four service providers currently serve subscribers on the UTOPIA network
• 1 Triple Play provider
• 2 Voice and Internet providers
• 1 Internet provider (soon also to be adding voice services)
Three of the service providers also provide business-class services.
• Västerås, Sweden
Mälarenergi Stadsnät's business model is based on a system whereby the network owner and the
service providers share the revenue generated by the network, with the service providers offering
their services direct to the users instead of running their own broadband connections to the cus-
tomers they want. The service providers pay for gaining access to customers who are already
connected to the network.
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The users connect to the system via a normal data socket, then buy the services they want directly
from the relevant providers, thus gaining access to Internet, email, music, films, etc. The model
has been well received by many service providers, including major firms such as Tele2 and Tis-
cali.
Västerås' community network has 29 service providers offering more than 100 unique services.
These services are suited to different categories of user, such as landlords, companies or house-
holds, and include voice, video, data, alarms, surveillance, support and operation, training, gam-
ing etc. As an open network, all those who so desire can also offer a service on the network, in
which case they sign a contract with Mälarenergi to become a service provider.
Because of the popularity of the network in the community, approximately 70% of all network
communication is local and does not go out via the Internet. It is much faster to transfer a file be-
tween two connections in the community network than to send it over the Internet, and the capac-
ity thus saved can be used for much more bandwidth hungry traffic, such as video-on-demand, IP
telephony, TV or radio, which are transmitted with much poorer quality on the Internet.
Users who wish to use the Internet also benefit from being connected to the community network
since the network is connected to the Internet via the Internet service providers that offer their
services on it. The Västerås community network offers connections at speeds no less than 10
Mbps, and has the capacity to offer 100 Mbps and 1 Gbps.
• Nuenen, the Netherlands
The city of Nuenen in the Netherlands has become the epicentre of some very exciting innovation
in the telecommunications industry, and PacketFront’s technology is making it all possible.
A Dutch cooperative, Ons Net (Our Network) has organized Nuenen’s roughly 8,000 households,
offices, schools, and shops into a purchasing cooperative with enough power to demand state-of-
the-art communications services. A very high level of consumer commitment has guaranteed a
critical mass of customers and project financing.
Volker Stevin Telecom recognized this opportunity and stepped in to build and operate a network
providing access to triple-play services: TV/video, telephony, and Internet. As a method for
quick growth, this network offered free voice service for one year and reached 90% penetration,
and largely kept that penetration rate once the promotion period was over.
Volker Stevin Telecom has chosen to remain strictly an access provider, hosting the conduit in
Nuenen for a variety of service providers to compete for customers. Via the start-up user interface
on the network a variety of service providers are presented to Nuenen residents. Volker Stevin
Telecom and Ons Net believe that more flexibility in the business model leads to more choice,
higher quality services, and lower prices to consumers.
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NNeettwwoorrkk FFiinnaanncceess
This section seeks to provide information regarding capital expenses, operating expenses, and the
take rates necessary to produce a cash positive network over time.
• Capital Expenses
19,00018,988156 174 170 296 180158 166 169 17,519 Total
9090 Mobile home
2,3172,31720+ units
1,4071,407 10 to 19 units
1,9081049269153686977901,1865 to 9 units
6,550
829410010153907783 or 4 units
390221266663502 units
6266261-Unit Attached 12,450
11,4214672991219180747310,7651-Unit Detached
ModeledTotal20072006200520042003200220012000Census
19,00018,988156 174 170 296 180158 166 169 17,519 Total
9090 Mobile home
2,3172,31720+ units
1,4071,407 10 to 19 units
1,9081049269153686977901,1865 to 9 units
6,550
829410010153907783 or 4 units
390221266663502 units
6266261-Unit Attached 12,450
11,4214672991219180747310,7651-Unit Detached
ModeledTotal20072006200520042003200220012000Census
MDU
Single
Family
Avg of 168 new homes/year
Figure 1 — Residential unit counts were estimated using 2000 Census data com-
bined with new housing building permit data.
In order to estimate capital expenses, one needs to determine how many total units are planned to
be connected to the network. For the purposes of this business plan and based on feedback from
Edmonds, we have designed this business plan as a complete city build out.
In order to determine how many units there were to be connected, we started with the 2000 cen-
sus data, which projected 17,500 units broken down by unit size. To that number we added new
home construction permitting data up through mid-summer in 2007. Combining the census data
with the additional new home permitting data since that time, we arrived at roughly 19,000 units.
We further broke that number down into two sub-categories: single family units, of which there
were 12,450 homes; and multi-dwelling units (MDUs), of which there were 6,550.
Typically, ARPU in MDUs is lower by 25-30%. However, we modeled the same amount on capi-
tal costs to get to the MDUs because there is often a need to bore underneath asphalt, so the fiber
drop will be more expensive than a single family residence. However, the same fiber drop would
be able to connect multiple units, so we modeled it relatively consistently with the single family
unit. There could also be some savings regarding the electronics in the MDUs.
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5602,722Total
Ignored2250+
Ignored5100 to 250
3350 to 99
5525 to 49
17410 to 24
560
2985 to 9
Residential1,0832 to 4
Ignored1,0721
Count# of
Employees
5602,722Total
Ignored2250+
Ignored5100 to 250
3350 to 99
5525 to 49
17410 to 24
560
2985 to 9
Residential1,0832 to 4
Ignored1,0721
Count# of
Employees
Side and hobby businesses that would
never contract for services independently
from the home.
Small businesses that possibly are home
based but could have commercial
presence. Take residential products
Businesses with commercial presence
likely to take different class of service
from residential products.
Large businesses with enterprise needs.
Assumed to remain with current
incumbent provider.
Figure 2 — Business unit counts are derived from Dunn & Bradstreet data, but
only the medium-sized businesses have been counted as business units.
This figure represents a summary of the range of businesses in Edmonds. According to Dunn &
Bradstreet, there are approximately 1,000 businesses registered in Edmonds that have only one
employee. We have ignored those businesses for the purposes of this business plan; we assumed
that those single-employee businesses by and large consist of residents who have a business li-
cense for convenience and/or those who run a business out of their home. For the most part, these
types of business have no commercial presence (office space, etc.) separate from their homes.
These types of businesses would mostly be taking residential services, not business services.
As we examined the group of businesses with between 2 and 4 employees, we understood that
some of these businesses may actually have an office or place of business outside of the resi-
dence—but again, most of these are more likely home-based. For the purposes of this business
plan, we included these into the residential numbers under the assumption that they would also
take the residential suite of products. There is also a chance that their place of work will be the
same as their place of residence, and so will not be taking services separately from their resi-
dence.
For the purposes of the Edmonds broadband network, the most vital part of he business commu-
nity are those businesses with between 5 and 99 employees, of which there are approximately
560. These businesses generally have an actual commercial presence. These businesses will also
subscribe to various levels of services, including Internet, and depending on the nature of the
business they may subscribe to a voice and video product as well.
For the businesses between 100 and 250 employees, and 250+; we assumed that they are already
well served by the incumbents, and they would not be likely to initially take service from provid-
ers on the Edmonds network. If any of these businesses do switch to the Edmonds network, it
would most likely be in 2-3 years, when their current contracts with the incumbents come up for
renewal. Some of these businesses could also take service on the Edmonds network as a backup
to their current communications services.
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CAPEX/UnitTotal Capital
19,560Units Passed
$ 906.25$ 17,726,208Plant
19.12373,970Electronics
$ 925.37$ 18,100,178Total Fixed
$ 279.23$ 2,579,825Electronics
$3,080.20
$ 1,121.10
219.51
243.82
378.53
9,239Subscribers (47% penetration)
$ 10,357,215Total Variable
$ 28,457,993Total CAPEX
3,497,250Drops
2,253,670CPE
2,028,070IP Set tops
CAPEX/UnitTotal Capital
19,560Units Passed
$ 906.25$ 17,726,208Plant
19.12373,970Electronics
$ 925.37$ 18,100,178Total Fixed
$ 279.23$ 2,579,825Electronics
$3,080.20
$ 1,121.10
219.51
243.82
378.53
9,239Subscribers (47% penetration)
$ 10,357,215Total Variable
$ 28,457,993Total CAPEX
3,497,250Drops
2,253,670CPE
2,028,070IP Set tops
Capital Expenses
% of Total CAPEX
Plant
62%
Electronics
11%
Drops
12%
CPE
8%
Set tops
7%
Variable capital
37%
Fixed capital
63%
Source: PacketFront
Figure 3 — Total capital required for the project is ~$28M, of which 64% is fixed
plant regardless of the number of subscribers. The plant can be built in phases
according to demand to allow for some variability.
The approximately 19,000 residential units, plus the 1,000 very small businesses counted in the
residential numbers, in addition to the 560 mid-size businesses equals 19,560 potentially servable
units in Edmonds.
With this number in mind, we estimate that the total capital expenditure required for the project is
$28.4 million, or approximately $3080 per unit at 47% penetration This includes $925.37 per
home passed (that is, the cost to get the fiber to the ‘curb’), plus $1,121 to connect each home that
subscribes to service on the network. The 47% estimated penetration rate equals approximately
9,239 subscribers. If you divide $28.4 million by 9,239, this equals approximately $3,080 per
user to build the network. A large percentage of that capital expense is in the outside plant. .
We believe that while this 47% penetration rate will not be gained passively by the network, it
can be reached through a tightly integrated implementation, operations and aggressive marketing,
as described later in this document.
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196 miles access plant
39 miles underground
157 miles aerial
23 miles of distribution
0.7 miles underground
4.3 miles aerial
17.9 miles of potential Blackrock
Fiber
Source: PacketFront
Figure 4 — In order to estimate capital costs, PacketFront modeled the running
line routes past every address in the city using GIS software (see the larger map
on page 6).
When we modeled the Edmonds network using available data, it appeared that more than 80% of
the network could be deployed aerially. This provides a large cost advantage over some networks;
it is much less expensive to deploy the network aerially than underground.
We acknowledge Edmonds’ preference for underground deployment; however, note that doing so
would increase the $18M fiber plant costs seen on Figure 3 to more than $35M. Deploying the
network entirely underground would make the financial success of the network extremely chal-
lenging. However, as the electric utility buries lines throughout the city, the fiber cables could be
buried at the same time to take advantage of shared costs.
PacketFront did investigate possibly using some of the existing fiber routes owned by private par-
ties to deploy part of the Edmonds’ plant; however, the fee for using their fiber plant is more
costly than Edmonds deploying its own fiber. Should those fees drop substantially, this option
may be worth revisiting.
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Density
HHP / Mile
Outside Plant Cable Placement
Aerial vs. Underground
HH
P
/
M
i
l
e
196 miles of running line 19,560 HHP
Underground
Aerial
100
117
135
87
0
20
40
60
80
100
120
140
160
Edmonds City Washington
Community 2
Washington
Community 1
UTOPIA
80%
36%
52%
35%
20%
64%
48%
65%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Edmonds City Washington
Community 2
Washington
Community 1
UTOPIA
Source: PacketFront
Figure 5 — The large portion of aerial plant placement significantly reduces the
cost of the project. Edmonds’ density is also favorable.
Edmonds has some significant cost advantages when compared to other similar projects and ar-
eas. As shown on Figure 4, the Edmonds network can be constructed 80% aerially, which is a
great cost savings. Edmonds also has approximately 100 homes per square mile; this is also fa-
vorable, although is less dense relative to other cities in surrounding area. These, however, are
good metrics that will result in lower overall capital expenses.
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Outside Plant Cable Placement
Aerial vs. Underground
101%
113%
12%15% 15%
-16%
-6%
6%
-5%
-20%
0%
20%
40%
60%
80%
100%
120%
Pneumatic
Drilling
Directional
Drilling
Pull Fiber Place Strand Lash Fiber Splice <12 Splice 13 to
72
Splice 73 to
215
Splice 216+
196 miles of running line
Sources: UTOPIA, Local Edmonds Construction Firm
Figure 6 — The price of underground construction in Edmonds is double that ex-
perienced in Utah, perhaps due to less favorable ground conditions and the effect
of Prevailing Wage laws. Aerial Construction seems to reflect the impact of Pre-
vailing Wage laws alone.
As part of this process, we asked a construction firm local to Edmonds to provide quotes on labor
rates for network installation. We found that the cost relative to UTOPIA construction on some of
the main underground units were 100% more in Edmonds. In other words, the labor costs are
roughly double than what we’ve historically seen in our experience with the UTOPIA network
project in Utah. We attribute a portion of that to prevailing wage laws in Washington State, and
also a portion to unfavorable construction conditions for buried cable; combined, these factors
result in higher construction expenses.
Prevailing Wage laws do also impact the aerial portions of the network, which is consistent with
research that says that prevailing wage laws increase costs by 15%-20%. We believe that at least
a 15% increase in costs over those witnessed on the UTOPIA project would be proven no matter
which construction firm is selected.
It should be noted that the splicing costs were more comparable to average rates found for the
UTOPIA project.
While our research did not include soliciting bids from multiple construction firms, this should be
the next step for Edmonds.
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$28.00
$18.17 $18.10 $17.61
$15.15
$0
$5
$10
$15
$20
$25
$30
Edmonds
City
UTOPIA
Phase I
UTOPIA
Phase II
TCS Beltw ay
$7.25 $6.91
$5.96 $6.06
$3.21
$0
$5
$10
$15
$20
$25
$30
Edmonds UTOPIA
Phase 1
UTOPIA
Phase II
Beltway Cable
Aerial Construction Costs
157 miles
Underground Construction Costs
39 miles
$/
f
o
o
t
$/
f
o
o
t
Sources: UTOPIA, Local Edmonds Construction Firm, Dean & Company
Figure 7 — Although the underground construction costs could be significantly
higher in Edmonds, the large amount of aerial construction can minimize the im-
pact on the total capital cost of the project.
When examining the costs-per-foot for construction in Edmonds, the underground costs are sig-
nificantly more expensive than what has been experienced with other projects. The aerial costs
are less expensive but still higher than what have been experienced on a per-foot basis in other
areas of the country.
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48.62950,915Distribution Rings
72.001,408,251Inspection
$906.25$17,726,208Total
43.46850,000Cabinets
77.621,518,251Engineering
76.691,500,000Management
236.864,632,903Construction
Materials
$351.02$ 6,865,888Construction
Labor
Cost / HHPConstruction
Cost
48.62950,915Distribution Rings
72.001,408,251Inspection
$906.25$17,726,208Total
43.46850,000Cabinets
77.621,518,251Engineering
76.691,500,000Management
236.864,632,903Construction
Materials
$351.02$ 6,865,888Construction
Labor
Cost / HHPConstruction
Cost
Construction Costs
% of Total Plant
Distribution
Rings
5%
Inspection
8%
Cabinets
5%
Engineering
9%
Management
8%
Construction
Materials
26%
Construction
Labor
39%
Source: PacketFront
Figure 8 — The total cost of the outside plant is projected to be $17.7M, which
breaks down into Construction Labor, Construction Materials, Management, Engi-
neering, Cabinets, Distribution Rings, and Inspection costs.
In summary, when the $17.7M outside plant costs are broken down into its components, $6.8 mil-
lion of that is the labor portion. As discussed in previous figures, while there is not a significant
amount of underground construction, what exists is very costly.
Construction materials comprise another major portion of the total. Other categories to account
for include overall project management, engineering of the network, placing of the cabinets, dis-
tribution rings, and inspection costs.
It’s possible that, using the open trenches for the planned water project, approximately $3-4 mil-
lion of the construction costs could be offset. This would include lower labor costs (which would
be lowered but not altogether eliminated), but not lower material costs.
Questions still remain around whether the management, engineering, distribution rings or inspec-
tion costs could be offset if the network is built as part of the water project. How much or how
little Edmonds wishes to share these expenses with other stakeholders becomes a matter for Ed-
monds and the stakeholders to decide. In general, however, the more that is offset by other stake-
holders, the better the financial outcome is for the network. This will be shown in upcoming fig-
ures.
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~1500 HHP
~900 HHP
Set top box
Distribution
• 23 miles of plant
• $373,970 of electronics
• $ 19 / sub
Access
• 191 miles of plant
• $2,579,825 of electronics
• $ 279 / sub
Customer Equipment (CPE)
• $2,252,670 of electronics
• $ 244 / sub
Set tops
• $2,028,070 of electronics
• $219 / sub
95% of electronics capital
$6,860,565
5% of electronics capital
$373,970
Cabinets
Source: PacketFront
Figure 9 — The electronics will cost approximately $7.2M, of which 95% is the link
to the customer’s premise plus set top boxes for video.
This figure shows a breakdown of how the electronics are configured for the network. As seen on
the bottom left of the figure, there are $373,970 in core electronics. On the right side there is $6.8
million in access electronics, with the majority of the cost providing the link from the cabinet to
the home.
Therefore, the access electronics portion is by far the most significant portion of the costs of de-
ploying this network. We also included $2 million for set top boxes, which is about $219 per sub-
scriber, but in later figures we show that the set top boxes end up being a nice revenue maker for
the network. These numbers account for an average of 2.5 set tops per video subscriber.
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$925
$1,021
$873
$0
$300
$600
$900
$1,200
$1,500
Edmonds City Verizon FIOS 2005 Verizon FIOS 2006
$902
$880
$1,163
$220
$0
$300
$600
$900
$1,200
$1,500
Edmonds City Verizon FIOS 2005 Verizon FIOS 2006
Cost to Connect a Subscriber
9,239 subscribers – 47%
Cost per Premise Passed
19,560 HHP
Note:Edmond’s connection costs include set top boxes which are
not included by Verizon
Set top
Boxes
Sources: PacketFront, Verizon
Figure 10 — Cost per premise passed in Edmonds is in line with the Verizon FiOS
project.
To ensure that our projected costs were in line with comparable projects, we compared these pro-
jections with Verizon FiOS capital expenditures. Where the Edmonds network is projected to cost
$925 per home passed for the fiber plant, Verizon reported approximately $1000 per home passed
in 2005, and $873 in 2006. This change shows that Verizon has been able to drive down its own
costs over this period.
The cost to connect a subscriber on the Edmonds network is actually less than what Verizon has
reported, and a little bit more if you include the set top box. Verizon’s number does not include
the set top box.
This review indicates that our estimates are in a reasonable range of what the Edmonds network
will cost to deploy. The City would still need to solicit bids to finalize pricing.
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• Operating Expenses
$6.34
$9.53 $9.55
$10.87
$9.35 $9.79
$5.01
$7.74
$9.63
$9.25
$10.28
$13.97
$0
$5
$10
$15
$20
$25
Edmonds City ILEC Qwest BellSouth Verizon AT&T
$
/
S
u
b
/
M
o
n
t
h
Network Operating Expenses
Per subscriber
Field Operations
Network Operations
$17.27
$19.18
$20.12 $19.66
$23.76
$11.35
Sources: PacketFront, FCC
Figure 11 — Edmonds community fiber network is expected to be less expensive
to maintain in the field than the ILEC’s copper plant.
Operational costs for Edmonds are approximately $11 per subscriber per month, which is far
lower than the operational costs for the ILECs. The operational costs for a typical ILEC reflect
aging copper plants and old legacy systems that require more upkeep and repair. A typical ILEC
also maintains a much larger overhead cost due to their large corporate structures. The Edmonds
network will have a much leaner overhead and slimmer operational costs due to the newer and
more adaptable fiber infrastructure.
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Total Network Operating Expenses
Agency Operations
Network Operations
Marketing
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: PacketFront
Figure 12 — Annual operating expenses are approximately $1.5M annually. Sig-
nificant marketing dollars will be required early in the project to generate aware-
ness and subscribers.
The total network operations expenditure is thought to increase very gradually over time due to
the increased number of subscribers. This operational model allows for agency costs, including
staff. There will likely also be other similar overhead.
Initial marketing costs are estimated relatively high in order to help drive demand for services
initially—to get the word out and kick start the project. Over time marketing costs begins to taper
off into maintenance mode over a period of some years.
Network Operations and Agency costs assumed in this model include:
Network Operations:
• Asset Management – to operate the network
• Field Maintenance – to maintain the infrastructure in the field
• Collocation Fees – to locate core electronics
• Interconnects – to connect the Edmonds network to the rest of the world
Agency:
• Advertising – marketing cost for the network assumed at $200/sub
• Salaries & Benefits – $12,000/month is allocated, but not designated for specific staffing
• Professional Fees – to cover legal and other professional fees
• Rent – no money allocated for rent. Assumed to share city space
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• Insurance
• Other expenses
$63.91
$31.95
$21.30
$7.10$7.99$9.13$10.65
$15.98
$12.78
$0
$10
$20
$30
$40
$50
$60
$70
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Total Operating Expenses
Per subscriber per month
$
/
S
u
b
/
M
o
n
t
h
Take Rate
Source: PacketFront
Figure 13 — The operating overhead of the project will require take rates above
40% to bring the unit economics to a reasonable cost.
There are some variable costs on the operations side; however, most are fixed so as the take rate
goes up, those costs can be spread across a greater portion.
This figure also shows that at the 28-38% penetration range, even so high as 42% penetration, the
network will be in a range similar to what is currently being paid by the ILECs in terms of opera-
tional costs (which run typically $15-20 per user per month). The assumption is that the Edmonds
network would be closer to the 45-50% range for network penetration, and therefore have lower
operational costs than the ILECs.
PacketFront anticipates that the 45%-50% take rate would be eventually reached after approxi-
mately 6-8 years.
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($10,000,000)
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
$15 $20 $25 $30 $35 $40 $45 $50 $55 $60
Present Value of Net Operating Income
By take rate and ARPU
Pr
e
s
e
n
t
V
a
l
u
e
*
ARPU (Average revenue per user)
60% Take Rate
50% Take Rate
40% Take Rate
30% Take Rate
*Assumes discount rate of 5.5% for 25 years
Figure 14 — The present value of the project—or the amount of capital that can be
raised—depends on the average revenue per user (ARPU) at a given take rate.
The ARPU for a user is derived by the service(s) subscribed to by each user. For example, a tri-
ple-play subscriber would have a higher APRU than an Internet-only subscriber. This figure
looks at one way to estimate the net value of the project for purposes of financing and private
capital. The value can be calculated by taking the ARPU combined with the take rate.
In other words, if we assume that the network can achieve a $34 ARPU and a 30% take rate, this
project would be worth about $10 million. If we believe that the network can get a $50 ARPU
and a 50% take rate, the project’s worth $55 million. This is one way to value the network for the
purposes of obtaining private equity.
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All costs required to
light the network and
make it fully capable
of carrying meter
traffic.
Includes all plant cost
as well as the premise
drop to connect the
meter to the
electronics.
Direct labor and
materials but
associated project
overhead such as
engineering,
management, &
inspection.
Only direct labor and
materials to install fiber.
$21,200,000
$21,223,458
3,497,250
$17,726,208
1,408,251
950,915
850,000
1,518,251
1,500,000
4,632,903
$ 6,865,888
Plant + Drop
$26,400,000
$26,429,923
2,262,670
2,579,825
373,970
3,497,250
$17,726,208
1,408,251
950,915
850,000
1,518,251
1,500,000
4,632,903
$ 6,865,888
Lit transport
Drops
Core electronics
Cabinet electronics
Customer electronics
$17,726,208$12,449,706Total
$17,700,000$12,400,000Round to $100k
950,915 950,915Distribution Rings
1,408,251Inspection
$17,726,208$12,449,706Total Plant
850,000Cabinets
1,518,251Engineering
1,500,000Management
4,632,9034,632,903Construction Materials
$ 6,865,888$ 6,865,888Construction Labor
All PlantMinimal
All costs required to
light the network and
make it fully capable
of carrying meter
traffic.
Includes all plant cost
as well as the premise
drop to connect the
meter to the
electronics.
Direct labor and
materials but
associated project
overhead such as
engineering,
management, &
inspection.
Only direct labor and
materials to install fiber.
$21,200,000
$21,223,458
3,497,250
$17,726,208
1,408,251
950,915
850,000
1,518,251
1,500,000
4,632,903
$ 6,865,888
Plant + Drop
$26,400,000
$26,429,923
2,262,670
2,579,825
373,970
3,497,250
$17,726,208
1,408,251
950,915
850,000
1,518,251
1,500,000
4,632,903
$ 6,865,888
Lit transport
Drops
Core electronics
Cabinet electronics
Customer electronics
$17,726,208$12,449,706Total
$17,700,000$12,400,000Round to $100k
950,915 950,915Distribution Rings
1,408,251Inspection
$17,726,208$12,449,706Total Plant
850,000Cabinets
1,518,251Engineering
1,500,000Management
4,632,9034,632,903Construction Materials
$ 6,865,888$ 6,865,888Construction Labor
All PlantMinimal
Figure 15 — A number of cases can be made for the amount of network capital
that could be carried by the other network stakeholders.
The chart above illustrates four scenarios by which the water utility may value the existence of
the fiber network for their own purposes. As is shown above, there is great variation in the value,
from a minimal amount to nearly the cost of the full buildout.
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$ 36,258,929Total
884,3642.5%Cost of Issuance
2,210,9841 yearDebt Service Reserve
3,505,5872 yearsCapitalized Interest
1,200,000Start up Operations
$ 28,457,993Capital
$ 36,258,929Total
884,3642.5%Cost of Issuance
2,210,9841 yearDebt Service Reserve
3,505,5872 yearsCapitalized Interest
1,200,000Start up Operations
$ 28,457,993Capital
Note: Assumed financing structure is 25 year revenue bonds at 5.5%
Figure 16 — An additional $8M of financing and operating overhead will likely be
required to fully fund the project.
This table categorizes the total project costs. $28.4 million in capital expenses will be required to
build the network. In addition, we estimate that the network will need $1.2 to initially support
operations until the network generates enough revenue to cover it. This business plan also as-
sumes the capitalization of two years of interest.
In addition, the plan should account for one year of reserve funds out of bond proceeds. Lastly,
with the inclusions of the cost of bond issuance at a little under $1M, the total project is antici-
pated to require slightly over $36 million.
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$0
$10
$20
$30
$40
$50
$60
$70
20% 30% 40% 50% 60% 70%
Required Take Rate & ARPU
By water utility contribution
AR
P
U
Take Rate
$12.4M
$17.7M$21.2M
$26.4M
$6.0M
$0.0M
Figure 17 — Depending on the amount of capital carried by the other network
stakeholders, the required combination of take rate and ARPU can be determined.
Factoring in the required debt service on a bond issue, the capital costs and the operational ex-
penses of the network, this graph shows what would be required, in terms of take rate and ARPU,
in order to have the network’s total revenue cover all of the debt service and operations—at vari-
ous levels of funding from the other network stakeholders.
If you expect a 30% take rate and a $31 ARPU, the water utility would need to contribute $26.4M
to the project in order to make the network viable. Likewise, if the network stakeholders put for-
ward $6M, then the network would need to sustain a $38 ARPU and a 45% take rate.
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$15
$20
$10
$5
$10
$30
$5
$40
$30
Retail Rate*
(Estimated)
1.5.5.5$ 10.00PVR
1.5222$ 5.00Set Top
30%30%30%30%$ 6.00HD
50%0%50%50%$ 5.00Phone
20%10%10%10%$ 5.00Gaming/Other
$37.34
100%
30%
100%
100%
0%
100%
C
$46.15
100%
50%
100%
100%
0%
100%
D
100%100%5.00CPE Rental
$32.34$37.34ARPU
100%100%$ 6.00Base Transport
30%30%Video
25%75%25.00Speed 2
75%25%$ 15.00Speed 1
100%100%Data
BAWholesale
Rate
Service
$15
$20
$10
$5
$10
$30
$5
$40
$30
Retail Rate*
(Estimated)
1.5.5.5$ 10.00PVR
1.5222$ 5.00Set Top
30%30%30%30%$ 6.00HD
50%0%50%50%$ 5.00Phone
20%10%10%10%$ 5.00Gaming/Other
$37.34
100%
30%
100%
100%
0%
100%
C
$46.15
100%
50%
100%
100%
0%
100%
D
100%100%5.00CPE Rental
$32.34$37.34ARPU
100%100%$ 6.00Base Transport
30%30%Video
25%75%25.00Speed 2
75%25%$ 15.00Speed 1
100%100%Data
BAWholesale
Rate
Service
*Note: Retail Rates will be set by the service provider(s). These are listed for
review purposes only.
Figure 18 — Residential ARPU can be approximated by multiplying the wholesale
rate of a service by the % of subscribers taking that service.
This table describes various wholesale rates, service combinations and ARPU scenarios to be
considered by Edmonds.
Historically, of the subscribers who take UTOPIA services for broadband, 50% also take phone
service, and 30% take video. The table represents scenarios of service mixes that are largely
based on the performance of UTOPIA.
Set top boxes have been included in the above scenarios for two reasons.—there’s a high likeli-
hood that the service provider(s) who are contracted to provide service on the network won’t be
able to fund the set top boxes required. The network will therefore be required to provide the
capital. Secondly, set top boxes are a profitable source of revenue, and so it’s more advantageous
for the network to provide them.
The above scenarios assume that everyone subscribing to the network takes data service. There
are two levels of wholesale rates: $15 and $25 (per subscriber per month) for data, to account for
two different levels of data service. In addition, Scenario D charges the equivalent of a cable
modem fee—both Comcast and Verizon typically charge such fees, so there is some precedent for
it.
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For video, the scenarios assume a base transport fee of $6, as well as an option for a $6 upgrade
to HD. The scenarios charge $5 for a regular set top and $10 for a PVR set top. Based on ex-
perience, the scenarios assume an average of 2 set tops per home and .5 of a PVR. (Scenario D is
a little more optimistic and assumed more people would take the PVR.)
The scenarios also assume that in most cases about half the people would take phone at a whole-
sale rate of $5. Charging for phone service can be tricky; you can charge something, but charging
too much will encourage people to run the voice through their data pipe (i.e. with Skype or
Vonage), and then the network will receive no additional revenue. $5 seems to be about the
maximum you could charge without pushing people to run their voice through their high speed
data line—which is a temptation if the network offers a 20Mbps or 50 Mbps product.
Scenarios A and B examine what happens when consumers are more or less price sensitive to the
data speed price. At speed 1, at $15 wholesale, the data service would retail for around $30, and
speed 2 (at $25 wholesale), data service would retail for around $40. Scenario A assumes a better
penetration of the $40 higher end speed. Scenario B assumes that people are a little more price
sensitive and more subscribe to the $30 speed. The impact of consumer’s price sensitivity is re-
flected in the ARPU for each scenario.
Scenario C offers only the higher data speed and then adds on for video, but assumes that the us-
ers go elsewhere (Skype, Vonage, etc.) for their phone services. This scenario would produce an
ARPU of $37.34.
Scenario D is the most aggressive of the 4 scenarios by offering only the high-end data speed.
This scenario also shows more consumers subscribing to HD, and more people taking a PVR as
opposed to a regular set-top box, better penetration of video overall, and the same phone penetra-
tion as the other scenarios. This scenario could be supported by very aggressive joint marketing
efforts between the network and the service providers. Scenario D would result in a $46 ARPU.
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$0
$10
$20
$30
$40
$50
$60
$70
20% 30% 40% 50% 60% 70%
Required Take Rate & ARPU
By water utility contribution
AR
P
U
Take Rate
$12.4M
$17.7M$21.2M
$26.4M
D
A+C
B
$6.0M
$0.0M
Figure 19 — There are a number of reasonable combinations of stakeholder capi-
tal contributions and required take rate & ARPU to make the network viable.
Based upon the service mixes seen in the previous figure, assuming that the network achieves a
$37 ARPU as seen in Scenario A, and that with a stakeholder contribution of $12.4 million, the
network will require a 38% take rate to cover its operations and debt service requirements.
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Tacoma, WA
% of
Units
Passed
Telecom Projects
Subscriber take-rate by year
Orem, UT
Edmonds
Alameda, CA
Verizon
FIOS
FIOS Projection
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Figure 20 — A take rate forecast growing to 45% is reasonable compared to the
performance of other networks.
This is a look at the performance of some other projects, including FiOS and Orem, Utah (part of
UTOPIA). Orem has many elements similar to an Edmonds, although it’s generally a younger
city demographically. There are also cities that represent a range of experiences. We excluded
those cities providing retail services.
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CCoonncclluussiioonn aanndd RReeccoommmmeennddaattiioonnss
As we examine this data, we can conclude that there is a reasonable business case for building out
fiber to the premise in Edmonds, and to serve residents and businesses with triple-play services.
However, we do recommend that this business plan be combined with the separate work that the
City has undertaken regarding government and city facilities, in order to discern the full financial
and business outcomes of an Edmonds network. Overall, this plan should recognize that the
chances of success for this network will increase greatly when there is an integrated approach that
incorporates the city telecom services, public utilities, education, health care, residential and
business involvement.
In addition, we wish to acknowledge the risk that the Verizon FiOS project poses to the Edmonds
network. Verizon is a solid service provider and they are delivering a good product with FiOS.
We do not yet know what impact the FiOS project will have on the competitive landscape in Ed-
monds. However, we believe that an open access fiber network has much to offer over the FiOS
project, specifically:
• The Edmonds network is envisioned to cover the entire city; it is highly unlikely that
FiOS will be deployed throughout the entire city.
• The Edmonds active Ethernet network will have greater capacity, and be quicker and less
expensive to upgrade in the future, than Verizon’s FiOS, which is built using a GPON to-
pology.
• The Edmonds network will be an open access network offering the freedom of choice to
its users; Verizon’s users will be locked into only Verizon services.
• The Edmonds network will have the capability to offer far more advanced services to its
users due to its superior capacity.
With aggressive marketing and the right message to the community, it is possible to mitigate the
threat that the FiOS project poses to the Edmonds network.
Specific recommendations for Edmonds include the following:
1. Involve other governmental entities and community stakeholders and create an integrated
business plan. Edmonds should also explore the possibilities that other governmental and
nonprofit entities may be willing to join in the business model by putting forth funds to fi-
nance the network; these entities would directly benefit from the existence of the network,
and therefore may be willing to participate in the financial risk and potential outcome of the
network.
For example, if one of the specific uses of the network is to serve the water utility, then the
water utility may be willing to allocate more funds to a network that allows it to attain its
goals. Likewise, other entities that have a direct need for the network, and will benefit from
it, may be willing to place funds into the network to help guarantee its existence and success.
These public or private funds could be used as part of the capital outlay for the network build.
Some or all of these invested funds could also be held in reserve to serve as a guarantee in
case the network does not perform as expected. This reserve fund could be used to finan-
cially secure the network, but would not otherwise be touched unless certain performance
thresholds were reached. The more funding the City is able to secure from public and private
entities, the better the financial outlook for the network.
Edmonds should complete an integrated business plan that includes all targeted network
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stakeholders, including the government and utility aspects. All the work done separately by
Edmonds needs to be integrated to provide a fuller picture of the network strengths, benefits,
costs and risks.
2. Conduct a governance and legal review to ensure an entity is created that can properly and
legally share the contributions of the joint public and private organizations. An organiza-
tional and governance structure needs to be created for the legal broadband entity. This proc-
ess involves drafting all required legal papers and agreements, formation of an appropriate
operating entity incorporated under state law, and preparing the broadband entity to accept
cash and asset contributions
3. Develop a financing plan that:
• meets the project’s goals
• fits within the constraints set by local and/or federal regulations
• fits within the business plan created during the planning phase
Ultimately, the financing plan will present options to pay for the community network. The
end result of the financing plan will be a customized financing solution for the community
that maximizes the ability to finance the network while minimizing risk to the stakeholders.
4. Develop a marketing plan and market the network aggressively. Gather grassroots support
and local champions for the initiative. The financial success of Edmonds’ network is reliant
upon a solid take rate and ARPU performance. History has shown that many municipal net-
works have not been as successful as planned, in part because they have not allocated the
marketing dollars necessary to build community awareness of the benefits of the community
network.
Appropriate marketing will create a much better response in terms of take rates, and must be
used as part of the overall strategy for network success.
5. Construct and implement the network. Hire experienced engineering, construction, and in-
spection firms to be sure that that the network is deployed within scope and budget. Use an
experienced project manager to guide the project to successful completion.
6. Make use of an experienced third-party firm to take on the daily operations of the network;
such a firm should be deeply experienced in open access networks, governance and organiza-
tional issues, network planning, service provider management, network monitoring and trou-
bleshooting, and general operations.
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Appendix A—Sample Service Level Agreements
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EXHIBIT D
Service Level Agreements
1 OVERVIEW
1.1 This Exhibit D provides detailed descriptions of the Performance Metrics for the [PROJECT] net-
work, and is the basis for certain service level agreements between Service Provider and [PROJECT]. All
Performance Metrics will apply to [PROJECT]’s Network. For the purpose of these Performance Metrics,
[PROJECT]’s Network can be viewed as a carrier network to which Service Provider hands off/accepts
traffic (1) for voice services; (2) for data services; and (3) for video services; collectively (“Services”).
1.2 In addition to any other rights under this Agreement, if any given Retail Subscriber (1) experi-
ences an Outage that continues for a period of more than five (5) Business Days after delivery of written
notice thereof by Service Provider to [PROJECT], or (2) experiences three (3) or more Outages of the
same Service, whether or not for the same reason, in any thirty (30) calendar day period, then Service Pro-
vider may terminate the Service(s) for the Retail Subscriber without liability for cancellation or termination
charges.
1.3 Each Metric as defined in Section 3 of this Exhibit, measurement, report, reporting tool, or other
datum is Service Provider’s “Protected” information subject to the requirements set forth in Sections 8.2
and 8.3 in the body of this Agreement and [PROJECT]’s Confidential Information subject to the require-
ments set forth in Section 8.4 in the body of this Agreement.
1.4 [PROJECT] will:
1.4.1 Use commercially reasonable efforts to remedy any delays, interruptions, omissions,
mistakes, accidents or errors (“Defect” or “Defects”) and restore the Services as soon as possible
after any Defect is reported to [PROJECT] using receipted electronic mail, fax or other documen-
tation.
1.4.2 Collect, measure, and report data to Service Provider for service, network and opera-
tional Performance Metrics described in Section 3. [PROJECT] will provide Metrics upon writ-
ten request, using a Microsoft® Excel spreadsheet or other format mutually agreed to by
[PROJECT] and Service Provider. [PROJECT] is responsible (at its expense) for providing any
equipment, systems, and software necessary to collect and report such Metrics.
1.4.3 Analyze and improve processes, as necessary, to achieve Performance Metric Objectives
set forth in Section 3.
1.4.4 Establish, maintain, and use quality improvement teams (“QITs”) that
meet at least quarterly, and which consist of [PROJECT] process representatives,
subject matter experts, and Service Provider, as well as potentially other of
[PROJECT]’s service providers, suppliers and subcontractors, to conduct root cause
analysis on data indicating inferior performance, act on results and implement im-
provement plans for those Metrics that fail to meet or exceed the Objectives set forth
in Section 3.
1.5 Service Provider will:
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1.5.1 Measure Quality Metrics by means of Service Provider’s regularly scheduled Retail Sub-
scriber satisfaction surveys which randomly sample Retail Subscribers for their opinions of Ser-
vice Provider service quality.
1.5.2 Collect Retail Subscriber complaint information on Services through its
customer care center(s). Based on the first twelve (12) months’ of operations, a base-
line number of Retail Subscriber complaints will be established. Following that,
Service Provider will establish a performance metric for measurement during the
term of the Agreement.
1.5.3 Measure performance metrics and work with [PROJECT] to resolve
discrepancies, if any, between the parties’ results.
1.5.4 Use commercially reasonable efforts to meet Service Provider SLAs as speci-
fied in Exhibit E.
2 DEFINITIONS AND GENERAL PROVISIONS
2.1 “Metric” or “Service Metric” means the performance measures for specific [PROJECT] functions
and includes the Description, Measurement Method, Objective and Service Credit, if any, that define the
capitalized term that is used throughout this Exhibit D.
2.2 “Description” means the specific [PROJECT] function to be measured.
2.3 “Measurement Method” means the tools, process and algorithms for determining [PROJECT]’s
performance and the frequency of the measurement.
2.4 “Objective” means the level of performance that Service Provider expects [PROJECT] to achieve.
2.5 “Service Credit” means the amount [PROJECT] owes to Service Provider, where applicable, if
the Objective is not met for that month. The amount of any Service Credit shall be calculated as set forth
in Section 3.
2.5.1 Service Provider will not receive Service Credits for any Service interruption or other
transmission problem (including, without limitation, any inability of [PROJECT] to maintain Per-
formance Metrics commitments contained herein) that is in whole or in part caused by or attrib-
uted to Service Provider or its Retail Subscriber, or other event defined under Article XI – Force
Majeure in the body of this Agreement. [PROJECT] will nevertheless use its reasonable efforts to
seek a prompt resumption of Service and/or resolution of transmission problems in those circum-
stances where such efforts have a reasonable likelihood of promptly achieving the cited results.
2.5.2 In the event that Service Credits are issued for missing Network Availability Objectives,
Service Credits shall not be issued for Packet Loss or Roundtrip Delay/Latency for the same inci-
dents. In the event that Service Credits are issued for missing Network Core Average Availability
Objectives, Service Credits shall not be issued for missing Network Edge Average Availability
Objectives for the same reporting month.
2.5.3 Service Credits expressed as a percent of “Services affected”, “recurring charges”, etc.
refer to amounts charged to Service Provider by [PROJECT] unless otherwise explicitly stated.
2.6 “[PROJECT]’s Network” or “Network” means the “Network” as defined in Article I of the body
of this Agreement.
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2.6.1 “Network Core” means that portion of the Network for which a higher degree of redun-
dancy and reliability is provided (see diagram 4.1), including Regional Core Switch (RCS) and
Distribution Core Switches (DCS) and Provider Access Switches (PAS)
2.6.2 “Network Edge” means that portion of the Network for which a lesser degree or no re-
dundancy is provided (see diagram 4.1), including Access Distribution Switches (ADS) and Ac-
cess Portals (AP)
2.6.3 ”Network Connection Point (NCP)” means the point(s) of Service Provider connectivity
ingress and egress deployed at multiple Points of Presence providing access to the [PROJECT]
Network for service providers.
2.6.4 “Access Portal (AP)” means the switches deployed at the subscriber premises where the
fiber network terminates into service ports.
2.6.5 “On Premises Back-Up Battery” means the sealed lead acid component of the uninterrup-
tible power supply deployed on the Retail Subscriber’s premise.
2.6.6 “Quality of Service (QoS)” means the direct measure of quality for the services delivered
over [PROJECT]’s Network.
2.6.7 “Customer Premise Equipment (CPE)” means the equipment, such as, but not limited to,
Access Portals and video gateways, that will be installed at the Retail Subscriber’s premise.
2.7 “Business hours” means 8:00 am to 5:00 PM Mountain Time on a Business Day. “Business Day”
means Monday through Friday, excluding public holidays recognized in Utah.
2.8 “Outage” means Service(s) is/are interrupted such that there is a loss of continuity (unable to
transmit or receive traffic to the Retail Subscriber Access Portal), or when [PROJECT] and Service Pro-
vider agree that Service is unfit or unavailable for use. Each Service affected is counted separately (e.g. if
the Access Portal of a Retail Subscriber who has video and data Services fails then it is counted as two (2)
Outages.)
2.8.1 The following are excluded from Outages:
• failure of components for which Service Provider and/or its Retail Subscriber(s) are re-
sponsible and are therefore not part of [PROJECT]’s Network (e.g., to the network side
of the interconnecting Service Provider router).
• time that corrections cannot be made because the Service Provider, Retail Subscriber, or
access to the facilities necessary for making the repair, are inaccessible
• problems caused by Retail Subscribers’ negligence or misconduct, or by the negligence
or misconduct of others authorized by the Retail Subscribers
• problems resolved as “No Trouble Found”
• scheduled network upgrades and maintenance periods. The upgrades and maintenance
will be scheduled when customer services are impacted minimally, typically between 12
AM to 6 AM local time. Furthermore, [PROJECT] will notify the Service Provider of
such scheduled upgrades or maintenance periods as per 3.9.7.
• Circumstances defined in Section 2.5 above.
2.9 “Outage Duration” is the time in minutes that an Outage has occurred. An Outage begins when
Service Provider notifies [PROJECT] and [PROJECT] opens a trouble ticket and ends when service has
been restored.
2.10 “Availability” means percentage of time [PROJECT]’s Network is available for service. Network
Average Availability is measured performance of [PROJECT]’s Network. Even though [PROJECT]’s
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Network Core Switches deliver 99.99% Network Average Availability, a Service Provider is not be as-
sured 99.99% availability unless its equipment is appropriately configured and connected over redundant
paths to [PROJECT]’s Network (see Diagram 4.1) Availability for the Network Core and Network Edge
are computed separately.
Network Average Availability is:
100__
__1 ×⎥⎦
⎤⎢⎣
⎡−∑
TimeAvailableTotal
durationsoutageNetwork
Sum of Network_outage_durations = the total of the outage time, in minutes, of all Retail
Subscribers’ Services in service affected by network outages during the reporting calen-
dar month.
Total_Available_Time = (number of Services in service on the last day of the calendar month pre-
ceding the reporting month) * ((days in the reporting calendar month) * (minutes per day)).
2.11 “Delay / Latency” means the time it takes a packet to traverse the distance between two points on
the Network (note: every 50 miles (one-way) increases the allowable roundtrip delay by 1 millisecond).
Specifically, roundtrip delay/latency means the interval of time, in milliseconds, it takes a sixty-four byte
(64-byte) test packet of data to travel from the Regional Core Switch (RCS) which the service provider
uses to aggregate and distribute their services to a QoS specific AP connected to each ADS via
[PROJECT]’s Network and back. Any unsuccessful ping will be counted at 20 milliseconds.
Delay/Latency will be monitored and tested as follows: [PROJECT] will make at least 20 roundtrip delay
measurements each hour.
Measurements will be taken from RCS elements that distribute and aggregate subscriber services through
all ADSs to dedicated, management-specific APs for each QoS. Delay will be measured to the nearest mi-
crosecond. The “Average Monthly Round Trip Delay” is calculated as the average of all measurements
taken during a given calendar month. Objectives for round trip delay are given in Section 3.2.1, 3.3.1,
3.4.1, 5.1, 6.1, and 7.1.
In the event of Delay/Latency problems. [PROJECT] will respond to the specific Delay/Latency problem
when notified and documented by Service Provider on behalf of any individual Retail Subscriber.
[PROJECT] will perform end-to-end performance measurements and other tests and take necessary correc-
tive action to restore Retail Subscribers Service to levels specified for Delay/Latency in Section 3.
2.12 “Packet loss” means a maximum percentage of data packets that [PROJECT]’s Network may drop
(sent and not received) through the [PROJECT] Network.
[PROJECT] will track the number of dropped packets by QoS level on the egress of all [PROJECT] switch
ports that are connected to other [PROJECT] switch ports. On the ingress of [PROJECT] switch ports,
dropped packets are not categorized by QoS. [PROJECT] will count all ingress port dropped packets and
prorate dropped packets across QoS levels based on bandwidth of each QoS level. [PROJECT] will only
monitor dropped packets which will not be part of the SLA calculation on service provider NCP ports.
Packet loss is calculated as a percent as follows:
100ports specified allon QoSgiven afor packets All
ports specified allon QoSgiven afor packetsLost ×⎥⎥
⎦
⎤
⎢⎢
⎣
⎡
∑
∑
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[PROJECT] fails to meet the service level agreement when the percent packet loss
for any Service exceeds the Objective.
2.13 “Installation” means [PROJECT] will provide Committed Due Dates for installation of Service in
less than or equal to the intervals from order date as shown below.
For pre-configured Services (voice, video, ISP data) to Residential Subscribers
• Access Portal has been previously installed, no truck roll required: two (2) business
days
• Access Portal has been previously installed, truck roll required: seven (7) busi-
ness days
• Full install fiber and Access Portal installation is required: twelve (12) busi-
ness days
For pre-configured Services (e.g., voice, video, ISP data) to Business or MDU Subscribers
• Access Portal has been previously installed, no truck roll required: two (2) business
days
• Access Portal has been previously installed, truck roll required: seven (7) busi-
ness days
• Access Portal installation is required, premise construction has been
previously Installed, no inside wiring required:
twelve (12) business days
• Building entry not complete or Access Portal, conduit and/or inside
wiring installation are required:
case-by-case basis
For custom services case-by-
case
2.13.1 A delayed installation credit will not be applied under the following circumstances:
• Installation is delayed at Service Provider’s request
• Due to events described under 2.5
• Installation is delayed with the approval of Retail Subscriber
• [PROJECT] has not been given necessary access to facilities required for installation or
Retail Subscriber is not ready or not available to accept the Service until after the com-
mitted due date
• Retail Subscriber facilities are unsuitable or unfit for installation
• [PROJECT] has:
• made reasonable efforts to consult with the appropriate Service Provider work
center (or such other contact specified by Service Provider) by telephone; and
• taken such further reasonable and prudent actions in an attempt to make instal-
lation as Service Provider may direct in the course of such consultation.
• If [PROJECT]’s reasonable efforts to consult with Service Provider as required
above are unsuccessful, [PROJECT] shall notify Service Provider of the reason
for the delay as soon as reasonably possible.
2.14 For installations, [PROJECT] will:
• Maintain sufficient CPE to fill Retail Subscriber order
• Attempt to contact Retail Subscriber prior to the scheduled appointment
• twenty-four (24) hours prior (up to 2 attempts)
• 30 minutes prior to the schedule appointment
• Arrive on site at Retail Subscriber premises within the appointment window
• Install Service(s) as ordered, including CPE.
• Update Retail Subscriber’s order status within 1 business day after the installation
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2.15 [PROJECT] will collect and meet following inventory Performance Metrics:
• Notify Service Provider to replenish fulfillment materials (if applicable) within thirty (30) cal-
endar days of anticipated depletion of its inventory
• Maintain its Homes Passed / Marketable database with a minimum of ninety-nine percent
(99%) accuracy. (The inaccuracy is measured by the number of installations that are cancelled
by [PROJECT] due to service not being available to a particular address after providing a
Committed Installation Date to Service Provider.)
2.16 “Repair and/or Maintenance at the Retail Subscriber Premises” means that a [PROJECT] techni-
cian or [PROJECT] sub-contractor visits the Retail Subscriber Premises to perform needed, requested and
scheduled work on Services and associated [PROJECT]-provided equipment.
For Repair and Maintenance visits, [PROJECT] will:
• Maintain sufficient CPE to complete necessary repairs
• Attempt to contact Retail Subscriber prior to the scheduled appointment
• twenty-four (24) hours prior (up to 2 attempts)
• 30 minutes prior to the schedule appointment
• Arrive on site at Retail Subscriber premises within the appointment window
• Repair Service(s) as ordered
• Update Retail Subscriber’s order status within 1 business day after the installation
Any Repair and/or Maintenance at the Retail Subscriber Premises that do not take place in accordance with
the foregoing requirements will be performed in a reasonable timeframe and in a reasonable manner, taking
into consideration the relevant circumstances.
2.17 [PROJECT] will provide a sufficient number of qualified staff to answer and respond to all tech-
nical support calls and direct trouble ticket system inputs from Service Provider to meet the Objectives.
The Performance Metrics specify Objectives that include: (1) the target time for answering/responding to
calls, and (2) the percentage of calls that shall meet the target
[PROJECT]’s telephone support and trouble ticket system shall be available twenty-four (24) hours a day,
three hundred and sixty-five (365) days a year. During normal Business Hours, [PROJECT] shall accept
calls from Service Provider on all valid topics. Outside of normal Business Hours, [PROJECT] shall re-
spond to calls relating to Network and Service defects.
The target time or duration is measured from the time Service Provider’s telephone call enters the
[PROJECT]’s help desk routing queue until the time Service Provider speaks to a technician who is capa-
ble of resolving the trouble or answering the question.
2.18 “Mean Time to Repair (MTTR)” means the average time of the actual repair needed to restore Ser-
vices. MTTR is measured in each reporting calendar month.
Number of Outages = Count of Outages (Defined in Section 2.8) less Outage Exclusions (Defined
in Section 2.8.1)
SLA Response Window = time allowed under the specific SLA to begin repair service (e.g. Next
Business Day, Same Day, 4 Hour, etc). The SLA Response Window is subtracted from
each Outage Duration. Unless otherwise specified in a separate service agreement, SLA
response window is by the end of the next business day.
MTTR is calculated as follows:
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⎟⎟
⎠
⎞
⎜⎜
⎝
⎛∑
Outages ofNumber
Durations Outage
A separate MTTR is calculated for each committed SLA Response Window. The
MTTR is measured in the same units as the SLA Response units (i.e. days or hours).
2.19 [PROJECT] will strive to resolve trouble tickets as quickly as possible. The
Direct Measures of Quality (DMOQs) addressing this are the percentage of ser-
vice outage trouble tickets that are resolved within either one or two days – the
concern being those that remain open for longer periods. This metric has two
measures: (1) the total number of occurrences, and (2) the corresponding per-
centage that the total number reflects. SLA Response Window and Repair
Time are defined in Section 2.18.
DMOQ Period = 24 hours or 48 hours, depending on the metric
The percentage is calculated as follows:
()100 monthcalendar in the tickets troubleofnumber Total
hrs 48 (2)or hrs, 24 (1)ithin month calendar ain resolved ticketstrouble ×⎟⎟
⎠
⎞
⎜⎜
⎝
⎛∑w
Packet Page 114 of 142
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n
t
h
i
n
w
h
i
c
h
the Network fails to achieve this Objective, [PROJECT] will issue a 2% credit on the Service Provider monthly recurring charges for all applicable Services.
3.
3
.
2
P
a
c
k
e
t
l
o
s
s
<0
.
1
%
Se
e
S
e
c
t
i
o
n
2
.
1
2
Se
e
S
e
c
t
i
o
n
2
.
1
2
For each reporting month in which the Network fails to achieve this Objective, [PROJECT] will issue a 2% credit on the Service Provider monthly recurring charges for all applicable Services.
3.
4
Da
t
a
–
Q
o
S
3
3.
4
.
1
R
o
u
n
d
-
t
r
i
p
D
e
l
a
y
/
L
a
t
e
n
c
y
<4
m
i
l
l
i
s
e
c
o
n
d
s
R
T
d
e
l
a
y
+
1
ms
f
o
r
e
a
c
h
5
0
m
i
l
e
s
(
o
n
e
w
a
y
)
Se
e
S
e
c
t
i
o
n
2
.
1
1
S
e
e
S
e
c
t
i
o
n
2
.
1
1
F
o
r
e
a
c
h
r
e
p
o
r
t
i
n
g
m
o
n
t
h
i
n
w
h
i
c
h
the Network fails to achieve this Objective, [PROJECT] will issue a 2% credit on the Service Provider monthly recurring charges for all applicable Services.
3.
4
.
2
P
a
c
k
e
t
l
o
s
s
0.
3
%
Se
e
S
e
c
t
i
o
n
2
.
1
2
Se
e
Se
c
t
i
o
n
2
.
1
2
For each reporting month in which the Network fails to achieve this Objective, [PROJECT] will issue a 2% credit on the Service Provider monthly recurring charges for all applicable Services.
Pa
c
k
e
t
Pa
g
e
11
6
of
14
2
Ci
t
y
o
f
E
d
m
o
n
d
s
F
i
b
e
r
O
p
t
i
c
N
e
t
w
o
r
k
Pa
g
e
6
9
Pe
r
f
o
r
m
a
n
c
e
M
e
t
r
i
c
s
Ob
j
e
c
t
i
v
e
De
s
c
r
i
p
t
i
o
n
Me
a
s
u
r
e
m
e
n
t
M
e
t
h
o
d
Service Credit
3.
5
Da
t
a
–
Q
o
S
2
3.
5
.
1
R
o
u
n
d
-
t
r
i
p
D
e
l
a
y
/
L
a
t
e
n
c
y
<
5
m
i
l
l
i
s
e
c
o
n
d
s
R
T
d
e
l
a
y
+
1
ms
f
o
r
e
a
c
h
5
0
m
i
l
e
s
(
o
n
e
w
a
y
)
Se
e
S
e
c
t
i
o
n
2
.
1
1
S
e
e
S
e
c
t
i
o
n
2
.
1
1
F
o
r
e
a
c
h
r
e
p
o
r
t
i
n
g
m
o
n
t
h
i
n
w
h
i
c
h
the Network fails to achieve this Objective, [PROJECT] will issue a 2% credit on the Service Provider monthly recurring charges for all applicable Services.
3.
5
.
2
P
a
c
k
e
t
l
o
s
s
0.
5
%
Se
e
S
e
c
t
i
o
n
2
.
1
2
Se
e
Se
c
t
i
o
n
2
.
1
2
For each reporting month in which the Network fails to achieve this Objective, [PROJECT] will issue a 2% credit on the Service Provider monthly recurring charges for all applicable Services.
3.
6
Da
t
a
–
Q
o
S
1
3.
6
.
1
R
o
u
n
d
-
t
r
i
p
D
e
l
a
y
/
L
a
t
e
n
c
y
<
8
m
i
l
l
i
s
e
c
o
n
d
s
R
T
d
e
l
a
y
+
1
ms
f
o
r
e
a
c
h
5
0
m
i
l
e
s
(
o
n
e
w
a
y
)
Se
e
S
e
c
t
i
o
n
2
.
1
1
S
e
e
S
e
c
t
i
o
n
2
.
1
1
F
o
r
e
a
c
h
r
e
p
o
r
t
i
n
g
m
o
n
t
h
i
n
w
h
i
c
h
the Network fails to achieve this Objective, [PROJECT] will issue a 2% credit on the Service Provider monthly recurring charges for all applicable Services.
3.
6
.
2
P
a
c
k
e
t
l
o
s
s
<1
%
Se
e
S
e
c
t
i
o
n
2
.
1
2
Se
e
S
e
c
t
i
o
n
2
.
1
2
For each reporting month in which the Network fails to achieve this Objective, [PROJECT] will issue a 2% credit on the Service Provider monthly recurring charges for all applicable Services.
3.
7
Da
t
a
–
Q
o
S
0
3.
7
.
1
R
o
u
n
d
-
t
r
i
p
D
e
l
a
y
/
L
a
t
e
n
c
y
<
2
0
m
i
l
l
i
s
e
c
o
n
d
s
S ee
S
e
c
t
i
o
n
2
.
1
1
Se
e
S
e
c
t
i
o
n
2
.
1
1
Not applicable
3.
7
.
2
P
a
c
k
e
t
l
o
s
s
<
2
%
Se
e
S
e
c
t
i
o
n
2.
1
2
Se
e
S
e
c
t
i
o
n
2
.
1
2
Not applicable
Pa
c
k
e
t
Pa
g
e
11
7
of
14
2
Ci
t
y
o
f
E
d
m
o
n
d
s
F
i
b
e
r
O
p
t
i
c
N
e
t
w
o
r
k
Pa
g
e
7
0
Pe
r
f
o
r
m
a
n
c
e
M
e
t
r
i
c
s
Ob
j
e
c
t
i
v
e
De
s
c
r
i
p
t
i
o
n
Me
a
s
u
r
e
m
e
n
t
M
e
t
h
o
d
Service Credit
3.
8
In
s
t
a
l
l
a
t
i
o
n
3.
8
.
1
O
n
-
t
i
m
e
i
n
s
t
a
l
l
a
t
i
o
n
97
%
o
f
a
l
l
i
n
s
t
a
l
l
a
t
i
o
n
s
s
h
a
l
l
me
e
t
C
o
m
m
i
t
t
e
d
I
n
s
t
a
l
l
a
t
i
o
n
Du
e
-
d
a
t
e
s
Se
e
S
e
c
t
i
o
n
2
.
1
3
Se
e
S
e
c
t
i
o
n
2
.
1
3
E
a
c
h
m
o
n
t
h
t
h
a
t
[
P
R
O
J
E
C
T
]
f
a
i
l
s
t
o
meet the Objective by the amount indicated below, [PROJECT] will issue the following Service Credit to the Service Provider: (1) Below 98% but not below 95% then $45 per incident which missed the Commit-ted Due-date; (2) Below 95% then $90 per incident which miss the Committed Due-date.
3.
9
Se
r
v
i
c
e
M
e
t
r
i
c
3.
9
.
1
T
e
c
h
n
i
c
a
l
S
u
p
p
o
r
t
R
e
s
p
o
n
s
e
Ti
m
e
85
%
o
f
S
e
r
v
i
c
e
P
r
o
v
i
d
e
r
’
s
t
e
l
e
-
ph
o
n
e
c
a
l
l
s
(
f
o
r
i
n
s
t
a
l
l
a
t
i
o
n
an
d
/
o
r
m
a
i
n
t
e
n
a
n
c
e
)
c
o
n
n
e
c
t
e
d
to
[
P
R
O
J
E
C
T
]
’
s
N
e
t
w
o
r
k
O
p
-
er
a
t
i
o
n
s
C
e
n
t
e
r
w
i
t
h
i
n
5
m
i
n
-
ut
e
s
.
Se
e
S
e
c
t
i
o
n
2
.
1
7
S
e
e
S
e
c
t
i
o
n
2
.
1
7
Not applicable
3.
9
.
2
T
e
c
h
n
i
c
a
l
S
u
p
p
o
r
t
R
e
s
o
l
u
t
i
o
n
N
o
t
i
-
fi
c
a
t
i
o
n
t
o
S
e
r
v
i
c
e
P
r
o
v
i
d
e
r
10
0
%
o
f
S
e
r
v
i
c
e
P
r
o
v
i
d
e
r
’
s
tr
o
u
b
l
e
t
i
c
k
e
t
r
e
s
o
l
u
t
i
o
n
(
i
.
e
.
,
ti
c
k
e
t
c
l
o
s
e
d
)
w
i
l
l
b
e
n
o
t
i
f
i
e
d
t
o
SP
w
i
t
h
i
n
3
0
m
i
n
u
t
e
s
o
f
a
t
i
c
k
e
t
be
i
n
g
c
l
o
s
e
d
v
i
a
a
n
a
g
r
e
e
d
u
p
o
n
no
t
i
f
i
c
a
t
i
o
n
m
e
t
h
o
d
.
Se
e
S
e
c
t
i
o
n
2
.
1
9
S
e
e
S
e
c
t
i
o
n
2
.
1
9
N
o
t
a
p
p
l
i
c
a
b
l
e
3.
9
.
3
M
e
a
n
T
i
m
e
t
o
R
e
p
a
i
r
S
e
r
v
i
c
e
O
u
t
-
ag
e
Me
a
n
T
i
m
e
t
o
R
e
p
a
i
r
s
h
a
l
l
n
o
t
ex
c
e
e
d
t
h
e
t
i
m
e
s
s
p
e
c
i
f
i
e
d
i
n
th
e
S
L
A
s
.
Se
e
S
e
c
t
i
o
n
2
.
1
8
S
e
e
S
e
c
t
i
o
n
2
.
1
8
N
o
t
a
p
p
l
i
c
a
b
l
e
3.
9
.
4
%
T
r
o
u
b
l
e
T
i
c
k
e
t
s
R
e
s
o
l
v
e
d
>
2
4
Ho
u
r
s
Le
s
s
t
h
a
n
f
i
v
e
p
e
r
c
e
n
t
(
<
5
%
)
Se
e
S
e
c
t
i
o
n
2
.
1
9
Se
e
S
e
c
t
i
o
n
2
.
1
9
DM
O
Q
P
e
r
i
o
d
–
2
4
h
o
u
r
s
Not applicable
3.
9
.
5
%
T
r
o
u
b
l
e
T
i
c
k
e
t
s
R
e
s
o
l
v
e
d
>
4
8
Ho
u
r
s
Le
s
s
t
h
a
n
t
h
r
e
e
p
e
r
c
e
n
t
(
<
3
%
)
Se
e
S
e
c
t
i
o
n
2
.
1
9
S
e
e
S
e
c
t
i
o
n
2
.
1
9
DM
O
Q
P
e
r
i
o
d
–
4
8
h
o
u
r
s
Not applicable
Pa
c
k
e
t
Pa
g
e
11
8
of
14
2
Ci
t
y
o
f
E
d
m
o
n
d
s
F
i
b
e
r
O
p
t
i
c
N
e
t
w
o
r
k
Pa
g
e
7
1
Pe
r
f
o
r
m
a
n
c
e
M
e
t
r
i
c
s
Ob
j
e
c
t
i
v
e
De
s
c
r
i
p
t
i
o
n
Me
a
s
u
r
e
m
e
n
t
M
e
t
h
o
d
Service Credit
3.
9
.
6
M
i
s
s
e
d
Ap
p
o
i
n
t
m
e
n
t
s
Ze
r
o
(
0
)
To
t
a
l
n
u
m
b
e
r
o
f
t
i
m
e
s
a
n
d
r
e
a
s
o
n
s
f
o
r
[P
R
O
J
E
C
T
]
’
s
t
e
c
h
n
i
c
i
a
n
f
a
i
l
i
n
g
t
o
ke
e
p
a
s
c
h
e
d
u
l
e
d
a
p
p
o
i
n
t
m
e
n
t
w
i
t
h
an
y
R
e
t
a
i
l
S
u
b
s
c
r
i
b
e
r
w
i
t
h
i
n
t
h
e
a
p
-
po
i
n
t
m
e
n
t
w
i
n
d
o
w
.
Se
e
S
e
c
t
i
o
n
2
.
1
3
On
a
n
i
n
d
i
v
i
d
u
a
l
S
u
b
s
c
r
i
b
e
r
p
e
r
Se
r
v
i
c
e
b
a
s
i
s
,
t
h
e
t
o
t
a
l
n
u
m
b
e
r
o
f
ti
m
e
s
a
n
d
r
e
a
s
o
n
s
f
o
r
[
P
R
O
J
E
C
T
]
fa
i
l
i
n
g
t
o
k
e
e
p
s
c
h
e
d
u
l
e
d
a
p
-
po
i
n
t
m
e
n
t
s
f
o
r
p
r
o
f
e
s
s
i
o
n
a
l
i
n
-
st
a
l
l
a
t
i
o
n
o
r
t
e
c
h
n
i
c
i
a
n
d
i
s
p
a
t
c
h
ap
p
o
i
n
t
m
e
n
t
s
w
i
t
h
a
n
y
R
e
t
a
i
l
Su
b
s
c
r
i
b
e
r
,
w
i
t
h
i
n
a
c
a
l
e
n
d
a
r
mo
n
t
h
c
o
u
n
t
e
d
e
a
c
h
r
e
p
o
r
t
i
n
g
ca
l
e
n
d
a
r
m
o
n
t
h
.
In the event [PROJECT] fails to appear at a Retail Subscriber’s Prem-ises for a scheduled installation or repair/maintenance appointment within the appointment window , [PROJECT] will, upon Service Pro-vider’s request, either (a) issue Ser-vice Provider $60 Service Credit, or (b) cancel the affected order without any cancellation charges.
3.
9
.
7
N
o
t
i
f
i
c
a
t
i
o
n
o
f
S
c
h
e
d
u
l
e
d
N
e
t
w
o
r
k
Up
g
r
a
d
e
o
r
M
a
i
n
t
e
n
a
n
c
e
10
0
%
N
o
t
i
f
i
c
a
t
i
o
n
t
o
S
e
r
v
i
c
e
Pr
o
v
i
d
e
r
c
o
n
t
a
c
t
s
v
i
a
e
l
e
c
t
r
o
n
i
c
ma
i
l
o
r
o
t
h
e
r
a
g
r
e
e
d
u
p
o
n
me
t
h
o
d
f
i
v
e
(
5
)
d
a
y
s
i
n
a
d
v
a
n
c
e
th
e
s
c
h
e
d
u
l
e
d
e
v
e
n
t
Nu
m
b
e
r
o
f
t
i
m
e
s
[
P
R
O
J
E
C
T
]
p
e
r
-
fo
r
m
s
s
c
h
e
d
u
l
e
d
n
e
t
w
o
r
k
u
p
g
r
a
d
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City of Edmonds Fiber Optic Network
Page 73
EXHIBIT E
Service Provider Service Level Agreements
1 OVERVIEW
1.1 This Exhibit E provides detailed descriptions of the Performance Metrics for Service Provider perform-
ance, and is the basis for certain service level agreements between Service Provider and [PROJECT]. All Perform-
ance Metrics are expectations of Service Provider’s performance and quality of customer services directly related to
and in consideration of the use of [PROJECT]’s Network. For the purpose of these Performance Metrics,
[PROJECT]’s Network can be viewed as a private carrier network to which Service Provider hands off/accepts traf-
fic (1) for voice services; (2) for data services; and (3) for video services; collectively (“Services”).
1.2 In addition to any other rights under this Agreement, if any given Retail Subscriber (1) experiences an Out-
age that continues for a period of more than five (5) Business Days after [PROJECT] delivers written notice to Ser-
vice Provider of such Outage, or (2) experiences multiple Outages of the same Service, whether or not for the same
reason, in any thirty (30) calendar day period, then upon written request from the Retail Subscriber, [PROJECT], in
its sole discretion, may transfer the service connections to an alternate provider without the Retail Subscriber or
[PROJECT] having any liability of any kind whatsoever for cancellation, termination or any other charges.
1.3 Service Provider will:
1.3.1 Use commercially reasonable efforts to remedy any delays, interruptions, omissions,
mistakes, accidents or errors (“Defect” or “Defects”) and restore the Services as soon as possible after any
Defect is reported to Service Provider.
1.3.2 Collect, measure, and report data to [PROJECT] for service, and operational Perform-
ance Metrics described in Section 3. Service Provider will provide Metrics upon written request, using a
Microsoft® Excel spreadsheet or other format mutually agreed to by [PROJECT] and Service Provider.
Service Provider is responsible (at its expense) for providing any equipment, systems, and software neces-
sary to collect and report such Metrics.
1.3.3 Analyze and improve processes, as necessary, to achieve Performance Metrics set forth
in Section 3.
1.3.4 Measure Quality Metrics by means of Service Provider’s regularly scheduled Retail Sub-
scriber satisfaction surveys which randomly sample Retail Subscribers for their opinions of Service Pro-
vider service quality.
1.3.5 Collect Retail Subscriber complaint information on Services through its
customer care center(s). Based on the first twelve (12) months’ of operations, a baseline num-
ber of Retail Subscriber complaints will be established. Following that, [PROJECT] will es-
tablish a performance metric for measurement during the Term of the Agreement.
1.3.6 Provide [PROJECT] with necessary customer information to allow
[PROJECT] the opportunity to perform a similar survey of customer opinion as a comparative
benchmark to evaluate Service Provider’s performance on the Network.
Packet Page 121 of 142
City of Edmonds Fiber Optic Network
Page 74
2 DEFINITIONS AND GENERAL PROVISIONS
2.1 “Metric” or “Service Metric” means the performance measures for specific Service Provider functions and
includes the Description, Measurement Method, and Objective that define the capitalized term that is used through-
out this Exhibit E.
2.2 “Description” means the specific Service Provider function to be measured.
2.3 “Measurement Method” means the tools, process and algorithms for determining Service Provider’s per-
formance and the frequency of the measurement.
2.4 “Objective” means the level of performance that [PROJECT] expects Service Provider to achieve.
2.5 Repetitive non-compliance with any provision of this Exhibit E is a material breach of this Agreement
and, in [PROJECT]’s sole discretion, may result in the termination or non-renewal of thereof.
2.7 “Retail Quality of Service (RQoS)” means the direct measure of quality for the Retail Services delivered
over [PROJECT]’s Network.
2.8 “Retail Customer Premise Equipment (CPE)” means the equipment, such as, but not limited to, premise
wiring performed by Service Provider, Service Provider routers, hubs or switches or other Service Provider
equipment that will be installed by the Service Provider at the Retail Subscriber’s premise.
2.8 “Business hours” means 8:00 am to 5:00 PM Mountain Time on a Business Day. “Business
Day” means Monday through Friday, excluding public holidays recognized in Utah.
2.9 “Outage” means Service(s) is/are interrupted such that there is a loss of performance (unable
to properly utilize the Retail Services), or when [PROJECT] and Service Provider agree that
Service is unfit or unavailable for use.
2.9.1 The following are excluded from Outages:
• failure of components for which [PROJECT] and/or the Retail Subscriber(s) are responsible and
are therefore not part of Service Provider’s Platform.
• time that corrections cannot be made because Retail Subscriber, or access to those facilities are
necessary for making the repair, are inaccessible
• problems caused by Retail Subscribers’ negligence or misconduct, or by the negligence or mis-
conduct of others authorized by the Retail Subscribers
• problems resolved as “No Trouble Found”
• scheduled Service Provider network upgrades and maintenance periods. The upgrades and main-
tenance will be scheduled when Retail Subscriber Services are impacted minimally, typically from
12 AM to 6 AM local time. Furthermore, Retail Service Provider will notify [PROJECT] of such
scheduled upgrades or maintenance periods as per 3.7.4 and 3.7.5
• any Service interruption or other transmission problem that is in whole or in part caused by or at-
tributed to [PROJECT] or Service Provider’s Retail Subscriber unless Service Provider could
have reasonably been able to avoid such Service interruption
• other event defined under Article XI – Force Majeure in the body of this Agreement. Following a
Force Majeure Event, Service Provider will use commercially reasonable efforts to promptly re-
sume Services.
2.10 “Outage Duration” is the time in minutes that an Outage has occurred. An Outage begins when Service
Provider opens a trouble ticket and ends when Service Provider notifies [PROJECT] that the problem has been re-
solved and Retail Services are available to Retail Subscribers.
Packet Page 122 of 142
City of Edmonds Fiber Optic Network
Page 75
2.11 “Availability” means percentage of time RQoS meets defined performance metrics. Retail Services Aver-
age Availability is measured performance of Service Providers Retail Services. Availability for each of the Retail
Services are computed separately.
Retail Services Average Availability is:
100__
___Re1 ×⎥⎦
⎤⎢⎣
⎡−∑
TimeAvailableTotal
durationsoutageServicetail
Sum of Retail_Service_outage_durations = the total of the outage time, in minutes, of
the Retail Subscribers’ Services during the reporting calendar month.
Total_Available_Time = (days in the reporting calendar month) * (minutes per day).
2.12
Service Provider shall have an oversubscription rate at a level to provide Retail Subscribers with off-net throughput
commensurate with Services purchased. Throughput demand on Service Provider connection shall not exceed
available throughput except during infrequent moments of unusually high demand. It is anticipated Service Pro-
vider will offer a 100 to 1 oversubscription, however this ratio will be adjusted to ensure throughput is commensu-
rate with Services purchased.
To monitor Throughput, the Service Provider will make at least 24 throughput measurements each day from
[PROJECT]’s test access portals (“Access Portals”) to Speakeasy, MegaPath or other mutually agreed speed test
site.
2.13 “Installation” means Service Provider will provide Committed Due Dates for scheduling of Service in less
than or equal to the intervals from order date as shown below. {The following could be modified in conjunction with
definitions contained within Service Provider install commitments}
For pre-configured Services (voice, video, ISP data) to Residential Subscribers
• Access Portal has been previously installed, no truck roll required: two (2) business days
• Access Portal has been previously installed, truck roll required: seven (7) business days
• Full install fiber and Access Portal installation is required: twelve (12) business days
For pre-configured Services (e.g., voice, video, ISP data) to Business or MDU Subscribers
• Access Portal has been previously installed, no truck roll required: two (2) business days
• Access Portal has been previously installed, truck roll required: seven (7) business days
• Access portal installation is required, premise construction has been
previously installed, no inside wiring required: twelve
(12) business days
• Building entry not complete or Access Portal, conduit and/or inside
wiring installation required:
case-by-case basis
Packet Page 123 of 142
City of Edmonds Fiber Optic Network
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For custom services: case-by-case
2.13.1 A delayed installation will not counted under the following circumstances:
• Installation is delayed at [PROJECT]’s request; or
• Installation is delayed at the request of Retail Subscriber.
• Retail Subscriber has not given [PROJECT] necessary access to the premises where installation
is to be made or Retail Subscriber is not ready or not available to accept the Service until after the
committed due date.
• Service Provider has:
• made reasonable efforts to consult with Retail Subscriber by telephone from the prem-
ises where installation is scheduled to be made (or from a location near such premises);
and
• taken such further reasonable and prudent actions in an attempt to make installation as
Service Provider may direct in the course of such consultation.
• If Service Provider’s reasonable efforts to consult with Retail Subscriber as required above are
unsuccessful, Service Provider shall notify [PROJECT] of the reason for the delay as soon as rea-
sonably possible.
• During a Force Majeure Event.
2.13.2 Voice installations requiring Local Number Port (“LNP”) should be coordinated closely with [PROJECT]
and the prior voice provider to avoid telephone service disruption to the Retail Subscriber. Service Provider must
have a backup plan in place in case of LNP failure. Backup plan must provide Retail Subscriber with telephone ser-
vice until number can be ported.
2.14 For installations, Service Provider will:
• Maintain sufficient CPE to fill Retail Subscriber order
• If the Service Provider is managing and installing their own inside wiring, contact Retail Subscriber
prior to the scheduled appointment
• twenty-four (24) hours prior (up to 2 attempts)
• 30 minutes prior to the schedule appointment
• Arrive on site at Retail Subscriber premises within the appointment window
• Install Service(s) as ordered
• Update Retail Subscriber’s order status within 1 business day after the installation
2.15 Service Provider will collect and meet the following inventory Performance Metrics:
• Notify [PROJECT] to provide additional [PROJECT] provided CPE materials within thirty (30) calen-
dar days of anticipated depletion of its inventory.
2.16 “Repair and/or Maintenance at the Retail Subscriber Premises” means that a Service Provider technician
visits the Retail Subscriber Premises to perform needed, requested and scheduled work on Services and associated
Service Provider equipment.
For at least ninety-five percent (95%) of all Repair and/or Maintenance appointments at the Retail Subscriber Prem-
ises, Service Provider will:
• Maintain sufficient CPE and supplies, as applicable, to complete necessary repairs
• Contact Retail Subscriber prior to the scheduled appointment twenty-four (24) hours prior (up to 2 at-
tempts)
• Arrive on site at Retail Subscriber Premises within the appointment window
• Repair/maintain Service(s) as ordered
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City of Edmonds Fiber Optic Network
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Any Repair and/or Maintenance at the Retail Subscriber Premises that do not take place in accordance with the fore-
going requirements will be performed in a reasonable timeframe and in a reasonable manner, taking into considera-
tion the relevant circumstances.
2.17 Service Provider should provide quality support and technical assistance as follows:
2.17.1 Service Provider will provide a sufficient number of qualified staff to answer and respond to all technical
support calls and direct trouble ticket system inputs from Retail Subscribers to meet the Objectives. The Perform-
ance Metrics specify Objectives that include: (1) the target time for answering/responding to calls, (2) the percent-
age of calls that shall meet the target and (3) the trouble resolution notification time to Service Provider.
Service Provider’s telephone support and trouble ticket system shall be available twenty-four
(24) hours a day, three hundred and sixty-five (365) days a year.
During normal Business Hours, Service Provider shall accept calls from Retail Subscribers on
all Service-related topics. Outside of normal Business Hours, Service Provider shall respond
to calls relating to Service Provider Network and Service defects.
The target time or duration is measured from the time Retail Subscriber’s telephone call enters the Service Pro-
vider’s help desk routing queue until the time Retail Subscriber speaks to a technician who is capable of resolving
the trouble or answering the question.
2.17.2 All employees of Service Provider are expected to be courteous, knowledgeable and helpful and to provide
effective and satisfactory service in all contacts with Retail Subscribers.
2.17.3 Service Provider shall provide telephone coverage adequate to meet metrics outlined in 3.6.6, 3.6.7 and 3.6.8.
2.17.4 The Service Provider’s customer service representatives (“CSR”) shall have the authority to provide credit
for interrupted service, for any violation of these Standards, to waive fees, to schedule service appointments and to
change billing cycles, where appropriate. Any difficulties that cannot be resolved by the CSR shall be referred to
the appropriate supervisor who shall contact the Retail Subscriber by the end of the next business day and shall at-
tempt to resolve the problem within forty eight (48) hours or within such other time frame as is acceptable to the
Retail Subscriber and Service Provider.
2.17.5 Bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but
not limited to, basic and premium service charges and equipment charges. Bills will also clearly delineate all activ-
ity during the billing period, including optional charges, rebates and credits. In case of a billing dispute, Service
Provider shall respond to a written complaint from a Retail Subscriber within thirty (30) days.
2.17.6 Credits for Services will be issued no later than the Retail Subscriber’s next billing cycle following the de-
termination that a credit is warranted. Refund checks (if applicable) will be issued promptly, but no later than ei-
ther the Retail Subscriber’s next billing cycle following resolution of the request or thirty (30) days, whichever is
earlier, or the return of the equipment supplied by the Service Provider (if applicable) if Service is terminated.
2.17.7 Service Provider shall provide clear instructions in written form (other forms are possible in addition to writ-
ten) regarding use of the Retail Services. Service Provider must provide such written instructions to [PROJECT]
prior to use in the field and work with [PROJECT] to create and accurate and mutually agreed upon Retail Sub-
scriber documents.
2.17.8 Retail Subscribers will be notified of any changes in rates, Services, support hours or contact information,
charges or channel positions (as applicable) as soon as possible in writing. Notice must be given to Retail Sub-
scribers a minimum of thirty (30) days in advance of such changes if the change is within the control of the Service
Provider.
Packet Page 125 of 142
City of Edmonds Fiber Optic Network
Page 78
2.17.9 Service Provider shall establish written procedures for receiving, acting upon, and resolving Retail Sub-
scriber complaints, and crediting Retail Subscriber accounts and shall publicize such procedures through printed
documents at Service Provider’s sole expense. Said written procedures shall prescribe a simple manner in which any
Retail Subscriber may submit a complaint by telephone or in writing to Service Provider that it has violated any
provision of this Exhibit E, any terms or conditions of the Retail Subscriber's contract, or reasonable business prac-
tices.
2.18 “Mean Time to Repair (MTTR)” means the average time of the actual repair needed to restore Services.
MTTR is measured in each reporting calendar month.
Number of Retail Outages = Count of Retail Outages (Defined in Section 2.9) less Retail Outage Exclu-
sions (Defined in Section 2.9.1)
Retail SLA Response Window = time allowed under the specific RSLA to begin repair service (e.g. Next
Business Day, Same Day, 4 Hour, etc). Unless otherwise specified in a written RSLA, the re-
sponse window is Next Business Day. The RSLA Response Window is subtracted from each Out-
age Duration.
MTTR is calculated as follows:
⎟⎟
⎠
⎞
⎜⎜
⎝
⎛∑
Outages Retail ofNumber
Durations Outage Retail
A separate MTTR is calculated for each committed RSLA Response Window. The MTTR is
measured in the same units as the RSLA Response units (i.e. days or hours).
2.19 Retail Service Provider will strive to resolve trouble tickets as quickly as possible.
The Retail Direct Measures of Quality (RDMOQs) addressing this are the percentage of
trouble tickets that are resolved within either one or two days – the concern being those
that remain open for longer periods. This metric has two measures: (1) the total num-
ber of occurrences, and (2) the corresponding percentage that the total number reflects.
RSLA Response Window and Repair Time are defined in Section 2.18.
RDMOQ Period = 24 hours or 48 hours, depending on the metric
Packet Page 126 of 142
City of Edmonds Fiber Optic Network
Page 79
The percentage is calculated as follows:
()100 monthcalendar in the tickets troubleofnumber Total
hrs 48 (2)or hrs, 24 (1)ithin month calendar ain resolved ticketstrouble ×⎟⎟
⎠
⎞
⎜⎜
⎝
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2.20 Retail Service Provider will endeavor to provide quality services achieving Retail
Subscriber retention rates below the industry average at an annual average of no more
than 12%. This will be measured monthly, as described in 3.6.1 as follows:
1% monthcalendar theofday last theon ssubscriber ofnumber Total
______<=⎟⎟⎠
⎞⎜⎜⎝
⎛monthcalendarinonsCancellatiSubscriberofNumber
Packet Page 127 of 142
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e
c
t
i
o
n
2
.
1
1
3.
2
In
t
e
r
-
ne
t
Tr
a
n
-
si
t
Da
t
a
-Qo
S
x
3.
2
.
1
Up
l
o
a
d
a
n
d
D
o
w
n
l
o
a
d
T
h
r
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g
h
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t
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o
m
p
a
-
ra
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o
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d
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e
d
pr
o
d
u
c
t
s
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e
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e
c
t
i
o
n
2
.
1
2
Se
e
S
e
c
t
i
o
n
2
.
1
2
3.
3
Re
-
ta
i
l
Se
r
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vi
c
e
In
s
t
a
l
la
-
ti
o
n
3.
3
.
1
On
-
t
i
m
e
p
r
o
v
i
s
i
o
n
i
n
g
97
%
o
f
a
l
l
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n
s
t
a
l
l
a
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ti
o
n
s
s
h
a
l
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m
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t
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m
m
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t
t
e
d
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n
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t
a
l
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a
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ti
o
n
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u
e
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d
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t
e
s
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e
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e
c
t
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o
n
2
.
1
3
Se
e
S
e
c
t
i
o
n
2
.
1
3
Pa
c
k
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t
Pa
g
e
12
8
of
14
2
Ci
t
y
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f
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d
m
o
n
d
s
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b
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r
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p
t
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t
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r
k
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g
e
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1
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r
f
o
r
m
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n
c
e
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e
t
r
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c
s
Ob
j
e
c
t
i
v
e
De
s
c
r
i
p
t
i
o
n
Measurement Method
3.
4
Re
t
a
i
l
M
a
r
k
e
t
i
n
g
M
e
t
r
i
c
3.
4
.
1
Re
t
a
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l
M
a
r
k
e
t
i
n
g
R
e
s
p
o
n
s
e
Ti
m
e
Wi
t
h
i
n
2
w
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k
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f
ma
r
k
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t
r
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a
d
y
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o
t
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f
i
-
ca
t
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o
n
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e
r
v
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r
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vi
d
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r
w
i
l
l
l
a
u
n
c
h
ma
r
k
e
t
i
n
g
e
f
f
o
r
t
s
.
3.
4
.
2
Re
t
a
i
l
M
a
r
k
e
t
i
n
g
F
r
e
q
u
e
n
c
y
A
t
l
e
a
s
t
e
v
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r
y
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mo
n
t
h
s
S
e
r
v
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c
e
Pr
o
v
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r
s
h
a
l
l
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o
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ta
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t
a
l
l
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a
r
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d
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t
o
of
f
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r
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v
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s
3.
5
Re
t
a
i
l
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u
b
s
c
r
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b
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r
R
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n
t
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o
n
Me
t
r
i
c
3.
5
.
1
Re
t
a
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l
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u
b
s
c
r
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b
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r
R
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t
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n
t
i
o
n
Me
t
r
i
c
Se
r
v
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c
e
P
r
o
v
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d
e
r
s
wi
l
l
r
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t
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n
R
e
t
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l
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b
s
c
r
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b
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r
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t
o
r
be
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o
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n
d
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s
t
r
y
a
v
-
er
a
g
e
c
h
u
r
n
r
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t
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.
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e
c
t
i
o
n
2
.
2
0
Se
e
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t
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o
n
2
.
2
0
3.
6
Re
p
a
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r
M
e
t
r
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c
s
3.
6
.
1
Me
a
n
T
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m
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t
o
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p
a
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r
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t
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g
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a
n
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m
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pa
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r
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l
l
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t
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th
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p
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f
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in
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h
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R
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L
A
s
.
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e
c
t
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o
n
2
.
1
8
Se
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c
t
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o
n
2
.
1
8
3.
6
.
2
%
R
e
t
a
i
l
T
r
o
u
b
l
e
T
i
c
k
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t
s
Re
s
o
l
v
e
d
>
2
4
H
o
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r
s
Le
s
s
t
h
a
n
f
i
v
e
p
e
r
-
ce
n
t
(
<
5
%
)
Se
e
S
e
c
t
i
o
n
2
.
1
9
Se
e
S
e
c
t
i
o
n
2
.
1
9
RD
M
O
Q
P
e
r
i
o
d
–
2
4
h
o
u
r
s
3.
6
.
3
%
R
e
t
a
i
l
T
r
o
u
b
l
e
T
i
c
k
e
t
s
Re
s
o
l
v
e
d
>
4
8
H
o
u
r
s
Le
s
s
t
h
a
n
t
h
r
e
e
p
e
r
-
ce
n
t
(
<
3
%
)
Se
e
S
e
c
t
i
o
n
2
.
1
9
Se
e
S
e
c
t
i
o
n
2
.
1
9
RD
M
O
Q
P
e
r
i
o
d
–
4
8
h
o
u
r
s
Pa
c
k
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t
Pa
g
e
12
9
of
14
2
Ci
t
y
o
f
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d
m
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n
d
s
F
i
b
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r
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p
t
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c
N
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t
w
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k
Pa
g
e
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2
Pe
r
f
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m
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n
c
e
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t
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c
s
Ob
j
e
c
t
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v
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De
s
c
r
i
p
t
i
o
n
Measurement Method
3.
6
.
4
No
t
i
f
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c
a
t
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o
n
o
f
S
c
h
e
d
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l
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d
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r
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p
g
r
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d
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o
r
M
a
i
n
t
e
-
na
n
c
e
10
0
%
N
o
t
i
f
i
c
a
t
i
o
n
to
[
P
R
O
J
E
C
T
]
v
i
a
el
e
c
t
r
o
n
i
c
m
a
i
l
o
r
ot
h
e
r
a
g
r
e
e
d
u
p
o
n
me
t
h
o
d
f
i
v
e
(
5
)
d
a
y
s
in
a
d
v
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n
c
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t
h
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sc
h
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d
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t
Wh
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a
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o
t
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c
e
s
s
h
a
l
l
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n
c
l
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d
e
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f
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n
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t
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o
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f
n
a
t
u
r
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o
f
O
u
t
a
g
e
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pl
a
n
n
e
d
o
u
t
a
g
e
t
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m
e
•
nu
m
b
e
r
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f
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e
r
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e
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r
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v
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r
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e
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ta
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l
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b
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r
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d
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tr
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e
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m
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t
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g
r
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n
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Re
t
a
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u
b
s
c
r
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S
e
r
v
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o
c
c
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r
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r
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g
a
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r
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n
t
h
.
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h
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m
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be
r
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n
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a
n
y
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n
d
a
l
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s
e
r
v
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c
e
s
o
n
[P
R
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J
E
C
T
]
’
s
N
e
t
w
o
r
k
.
3.
6
.
5
No
t
i
f
i
c
a
t
i
o
n
o
f
U
n
s
c
h
e
d
u
l
e
d
Up
g
r
a
d
e
,
M
a
i
n
t
e
n
a
n
c
e
e
v
e
n
t
10
0
%
N
o
t
i
f
i
c
a
t
i
o
n
to
[
P
R
O
J
E
C
T
]
c
o
n
-
ta
c
t
s
v
i
a
e
l
e
c
t
r
o
n
i
c
ma
i
l
o
r
o
t
h
e
r
a
g
r
e
e
d
up
o
n
m
e
t
h
o
d
w
i
t
h
i
n
te
n
(
1
0
)
m
i
n
u
t
e
s
o
f
th
e
s
t
a
r
t
o
f
a
n
u
n
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sc
h
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d
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l
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d
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t
Wh
e
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v
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r
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p
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f
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u
n
s
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d
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l
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e
t
w
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p
g
r
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r
ma
i
n
t
e
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a
n
c
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v
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t
t
h
e
n
o
t
i
c
e
s
h
a
l
l
in
c
l
u
d
e
:
•
de
f
i
n
i
t
i
o
n
o
f
n
a
t
u
r
e
o
f
O
u
t
a
g
e
•
pl
a
n
n
e
d
o
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t
a
g
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t
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m
e
•
nu
m
b
e
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o
f
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e
r
v
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c
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P
r
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v
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d
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r
R
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t
a
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l
Su
b
s
c
r
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b
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r
s
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m
p
a
c
t
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d
•
tr
o
u
b
l
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t
i
c
k
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t
n
u
m
b
e
r
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r
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v
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n
t
re
f
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c
e
Nu
m
b
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r
o
f
m
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n
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t
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s
f
r
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m
S
e
r
v
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c
e
Pr
o
v
i
d
e
r
’
s
n
o
t
i
f
i
c
a
t
i
o
n
t
o
[P
R
O
J
E
C
T
]
’
s
t
o
a
f
t
e
r
t
h
e
b
e
g
i
n
n
i
n
g
of
a
n
u
n
s
c
h
e
d
u
l
e
d
s
e
r
v
i
c
e
u
p
g
r
a
d
e
,
ma
i
n
t
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n
a
n
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e
v
e
n
t
,
o
r
M
a
j
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r
S
e
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v
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e
In
c
i
d
e
n
t
.
T
h
i
s
n
u
m
b
e
r
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n
c
l
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a
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y
an
d
a
l
l
s
e
r
v
i
c
e
s
o
n
[
P
R
O
J
E
C
T
]
’
s
Ne
t
w
o
r
k
.
3.
6
.
6
Te
c
h
n
i
c
a
l
S
u
p
p
o
r
t
R
e
s
p
o
n
s
e
Ti
m
e
85
%
o
f
R
e
t
a
i
l
S
u
b
-
sc
r
i
b
e
r
’
s
t
e
l
e
p
h
o
n
e
ca
l
l
s
(
f
o
r
i
n
s
t
a
l
l
a
t
i
o
n
an
d
/
o
r
m
a
i
n
t
e
n
a
n
c
e
)
co
n
n
e
c
t
e
d
t
o
S
e
r
v
i
c
e
Pr
o
v
i
d
e
r
w
i
t
h
i
n
5
(f
i
v
e
)
m
i
n
u
t
e
s
Se
e
S
e
c
t
i
o
n
2
.
1
7
Se
e
S
e
c
t
i
o
n
2
.
1
7
3.
6
.
7
Sa
l
e
s
R
e
s
p
o
n
s
e
T
i
m
e
8
5
%
o
f
p
o
t
e
n
t
i
a
l
Re
t
a
i
l
S
u
b
s
c
r
i
b
e
r
s
sh
o
u
l
d
w
a
i
t
n
o
m
o
r
e
th
a
n
3
(
t
h
r
e
e
)
m
i
n
-
ut
e
s
o
n
h
o
l
d
b
e
f
o
r
e
sp
e
a
k
i
n
g
t
o
a
s
a
l
e
s
re
p
r
e
s
e
n
t
a
t
i
v
e
.
Se
e
S
e
c
t
i
o
n
2
.
1
7
Se
e
S
e
c
t
i
o
n
2
.
1
7
Pa
c
k
e
t
Pa
g
e
13
0
of
14
2
Ci
t
y
o
f
E
d
m
o
n
d
s
F
i
b
e
r
O
p
t
i
c
N
e
t
w
o
r
k
Pa
g
e
8
3
Pe
r
f
o
r
m
a
n
c
e
M
e
t
r
i
c
s
Ob
j
e
c
t
i
v
e
De
s
c
r
i
p
t
i
o
n
Measurement Method
3.
6
.
8
Bu
s
y
S
i
g
n
a
l
Un
d
e
r
n
o
r
m
a
l
o
p
e
r
-
at
i
n
g
c
o
n
d
i
t
i
o
n
s
,
t
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City of Edmonds Fiber Optic Network
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APPENDIX 5: COST & CARBON OFF-SET COMPUTATION
In-Custody Hearings
Court
1) In reviewing the in-custody calendar, there were two vehicles per week from January 1st through Septem-
ber 30th.
2) There were three Friday hearings from January 1st through September 30th. Each hearing required two ve-
hicles.
3) The City borrows a van from the City of Lynnwood which holds 10 inmates. The size of the vehicle used
for the second set of inmates depends on the size of the transport.
4) 9 week sample (August and September) - estimates calculated based on the number of inmates transported
a. 10 hearing days
b. Average hearing day data
i. Two vehicles
1. One way trip from the City of Edmonds police department to the City of Lynn-
wood police department to the Snohomish County jail is 18 ½ miles. Round trip
is 37 miles.
2. IRS mileage rate is $.485
3. Estimated cost for two round trips = $36
ii. 3.6 Officers
1. Transport officer average hourly wage = $ 50.38
2. An average of 4.5 hours per hearing day
iii. Estimated average cost per hearing day: $852
1. $36 vehicle cost
2. $816 officer cost
5) Estimated annual transport savings per year: $47,710
a. Average number of hearings per year: 56
i. 4.67 hearings per month
ii. 12 months
b. Average transport cost per hearing $852
6) Estimated annual mileage savings – 4,144 miles
a. Average number of hearings per year: 56
b. Round trip mileage for two cars per hearing: 74 miles
7) Estimated annual CO2 (tonnes) savings: 2.67
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Smart Metering
Labor Cost
1) Meter Reader
a. 62% time spent reading meters
b. 21% time spent on maintenance
c. 17% overhead time
d. Hourly wage - $18.68, plus 30% for benefits - $24.28
e. Estimated salary savings $4,210 per month
f. Estimated annual savings $50,521
2) Water Maintenance Worker II
a. According to the current water maintenance technician, he spends approximately 30 to 50 % of
his time on utility dispatches. In the calculation, 30% was used for the current processes.
b. Hourly wage - $25.45, plus 30% for benefits - $33.09
c. Estimated current salary based on 30% equals $20,646
3) Utility Billing Technician
a. According to the utility billing technician, she spends approximately 10% of her time on utility
dispatch items that are associated with the actual reading of the meter. The following items are
considered utility dispatches.
i. Closing Bills
ii. Re-reads
iii. Leak Adjustments
b. Hourly wage - $25.23, plus 30% for benefits - $32.80
c. Estimated current salary based on 10% equals $6,822
Equipment Rental
1) Vehicle cost per year based on July 2006-June 2007 vehicle expenditure data
a. #128 WTR 2002 FORD F-250 PICK-UP (water maintenance worker II (#77) – 30% of actual ve-
hicle usage)
i. 381 average miles per month (10/19/2007)
ii. Annual operation and replacement costs - $2,935
1. Operating costs - $2,161
2. Replacement costs - $774
b. #56 WTR 2000 GO-4 (meter reader scooter)
i. 500 average miles per month (10/19/2007)
ii. Annual operation and replacement costs - $5,981
1. Operating costs - $2,381
2. Replacement costs - $3,600
c. #38 WTR 1995 FORD PICKUP (meter reader)
i. 541 average miles per month (10/19/2007)
ii. Annual operation and replacement costs - $5,660
1. Operating costs - $3,860
2. Replacement costs - $1,800
Installation Costs
1) Cost Factors
a. Radio read meter costs were obtained by Jim Waite, the Water/Sewer Manager. He obtained the
cost from vendors the City currently uses.
b. Labor costs are based on the number of unit installations per hour based on the size of the meter.
Installation would be performed by a Water Maintenance Worker.
i. Actual 2007 salary and benefits - $33.09 per hour
ii. An overhead rate of $42.00 was used to calculate the labor costs. This figure was calcu-
lated based on a methodology used by the water department in figuring out the amount of
actual time worked during the period.
c. The number of meters and the age of the meters were pulled from the Eden Utility Billing System.
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2) Meters
a. 29% of the City’s water meters are between 10 and 20 years old. The table below describes the
estimated cost to replace these meters.
Meter
Size
Number of
Meters
Number of meters
between 10 and 20
years old
Installation
Time (number
per hour)
Per Unit
Cost
Labor Cost (10 to 20
Year Old Meters)
Radio Read
Meter Cost
Material Cost
(10 to 20 Year
Old Meters)
Cost to Replace
(10 to 20 Year Old
Meters)
5/8"9,026 2,598 3.00 14.00 36,372.00 240 623,520 659,892
1"449 127 2.00 21.00 2,667.00 300 38,100 40,767
1 1/2"201 94 1.00 42.00 3,948.00 500 47,000 50,948
2"202 74 1.00 42.00 3,108.00 1600 118,400 121,508
3"22 6 0.25 168.00 1,008.00 2000 12,000 13,008
4"55 16 0.25 168.00 2,688.00 3100 49,600 52,288
6"32 15 0.25 168.00 2,520.00 5500 82,500 85,020
8"51 30 0.10 420.00 12,600.00 9400 282,000 294,600
10,038 2,960 64,911.00$ 1,253,120.00$ 1,318,031.00$
b. 37% of the City’s water meters are greater than 20 years old. The table below describes the esti-
mated cost to replace these meters.
Meter
Size
Number of
Meters
Number of meters
greater than 20
years old
Installation
Time (number
per hour)
Per Unit
Cost
Labor Cost
(Greater than 20
Year Old Meters)
Radio Read
Meter Cost
Material Cost
(Greater than 20
Year Old Meters)
Cost to Replace
(Greater than 20
Year Old Meters)
5/8"9,026 3,403 3.00 14.00 47,642.00 240 816,720 864,362
1"449 181 2.00 21.00 3,801.00 300 54,300 58,101
1 1/2"201 50 1.00 42.00 2,100.00 500 25,000 27,100
2"202 32 1.00 42.00 1,344.00 1600 51,200 52,544
3"22 9 0.25 168.00 1,512.00 2000 18,000 19,512
4"55 3 0.25 168.00 504.00 3100 9,300 9,804
6"32 4 0.25 168.00 672.00 5500 22,000 22,672
8"51 10 0.10 420.00 4,200.00 9400 94,000 98,200
10,038 3,692 61,775.00$ 1,090,520.00$ 1,152,295.00$
c. 34% of the meters are not part of the replacement calculation
Cost Comparison
1) Baseline and descriptions for meter reading at a central location
a. The top portion of the baseline table exhibits meters that need to be replaced due to the fact they
have exceeded their useful life, 20 years.
b. The bottom portion of the baseline table exhibits meters that would benefit from replacement, 10
to 20 year old meters.
Existing Baseline System
Expense Description 2007 2008 2009 2010 2011 2012 2013 2014
Initial Meter Replacement Program 1,152,295.00$
Bi-Monthly Meter Reading Costs 50,520.60 51,783.615 53,078.205 54,405.161 55,765.290 57,159.422 58,588.407 60,053.117
Administrative Meter Reads 27,467.33 28,154.009 28,857.859 29,579.305 30,318.788 31,076.758 31,853.677 32,650.019
Vehicle Replacement Costs 6,174.00 6,328.350 6,486.559 6,648.723 6,814.941 6,985.314 7,159.947 7,338.946
Vehicle Maintenance Costs 8,402.20 8,612.255 8,827.561 9,048.250 9,274.457 9,506.318 9,743.976 9,987.575
1,244,859.13$ 94,878.23$ 97,250.18$ 99,681.44$ 102,173.48$ 104,727.81$ 107,346.01$ 110,029.66$
Expense Description 2007 2008 2009 2010 2011 2012 2013 2014
Total AMR Capital Costs 1,318,031.00$
Total AMR System O&M Costs
Water Cost Savings from Meter Accuracy (10,520.50) (10,520.50) (10,520.50) (10,520.50) (10,520.50) (10,520.50) (10,520.50) (10,520.50)
Sewer Cost Savings from Meter Accurancy
Bi-Monthly Meter Reading Costs 28,532.52 29,245.84 29,976.98 30,726.41 31,494.57 32,281.93 33,088.98 33,916.20
Administrative Meter Reads 13,634.63 13,975.49 14,324.88 14,683.00 15,050.08 15,426.33 15,811.99 16,207.29
Vehicle Replacement Costs 1,315.80 1,348.70 1,382.41 1,416.97 1,452.40 1,488.71 1,525.92 1,564.07
Vehicle Maintenance Costs 3,674.04 3,765.89 3,860.04 3,956.54 4,055.45 4,156.84 4,260.76 4,367.28
1,354,667.49$ 37,815.42$ 39,023.82$ 40,262.42$ 41,532.00$ 42,833.31$ 44,167.15$ 45,534.35$
c. Current labor costs - $77,989
i. Meter Reader salary and benefits for a total of $50,521
ii. 30% of the Water Maintenance Worker II salary and benefits for a total of $20,646
iii. 10% of the Utility Billing Technician salary and benefits for a total of $6,822
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d. Current annual vehicle costs – $14,576
i. Vehicle used by the water maintenance technician - $2,935
ii. Two vehicles used by the meter reader - $11,641
e. Smart metering labor costs - $42,167
i. Largest cost savings is in salaries and benefits
ii. 33% of the meters would not be replaced and need manual reads. Based on the current
time spent reading meters, which is 62%, the time needed to read these meters is 20%
of the maintenance worker’s time ($14,080).
iii. Maintenance would need to be continued at the same rate as the current meters – 21%
of the maintenance worker’s time ($14,452).
iv. Some administrative reads would be needed due to resident requests as well as reads
for closing bills, misreads, and leak adjustments on the remaining 33% of the manual
read meters. Based on the current time spent on administrative reads, which is 30%,
the time needed to read these meters is 10% of the maintenance worker’s time
($6,813).
v. The change in the utility billing technician’s time is zero. Administrative tasks cur-
rently performed will decrease with the offset being new administrative tasks. 10% of
the utility billing technician’s time is spent on utility dispatch issues ($6,822).
f. Smart metering annual vehicle costs - one vehicle used by the water maintenance technician
(51%) - $4,990
2) Baseline and descriptions for meter reading via automobile
a. The top portion of the baseline table exhibits meters that need to be replaced due to the fact they
have exceeded their useful life, 20 years.
b. The bottom portion of the baseline table exhibits meters that would benefit from replacement, 10
to 20 year old meters.
Existing Baseline System
Expense Description 2007 2008 2009 2010 2011 2012 2013 2014
Initial Meter Replacement Program 1,152,295.00$
Bi-Monthly Meter Reading Costs 50,520.60 51,783.615 53,078.205 54,405.161 55,765.290 57,159.422 58,588.407 60,053.117
Administrative Meter Reads 27,467.33 28,154.009 28,857.859 29,579.305 30,318.788 31,076.758 31,853.677 32,650.019
Vehicle Replacement Costs 6,174.00 6,328.350 6,486.559 6,648.723 6,814.941 6,985.314 7,159.947 7,338.946
Vehicle Maintenance Costs 8,402.20 8,612.255 8,827.561 9,048.250 9,274.457 9,506.318 9,743.976 9,987.575
1,244,859.13$ 94,878.23$ 97,250.18$ 99,681.44$ 102,173.48$ 104,727.81$ 107,346.01$ 110,029.66$
Expense Description 2007 2008 2009 2010 2011 2012 2013 2014
Total AMR Capital Costs 1,318,031.00$
Total AMR System O&M Costs
Water Cost Savings from Meter Accuracy (10,520.50) (10,520.50) (10,520.50) (10,520.50) (10,520.50) (10,520.50) (10,520.50) (10,520.50)
Sewer Cost Savings from Meter Accurancy
Bi-Monthly Meter Reading Costs 37,708.44 38,651.15 39,617.43 40,607.87 41,623.07 42,663.64 43,730.23 44,823.49
Administrative Meter Reads 13,634.63 13,975.49 14,324.88 14,683.00 15,050.08 15,426.33 15,811.99 16,207.29
Vehicle Replacement Costs 1,651.20 1,692.48 1,734.79 1,778.16 1,822.62 1,868.18 1,914.89 1,962.76
Vehicle Maintenance Costs 4,610.56 4,725.82 4,843.97 4,965.07 5,089.20 5,216.43 5,346.84 5,480.51
1,365,115.33$ 48,524.45$ 50,000.58$ 51,513.60$ 53,064.46$ 54,654.08$ 56,283.45$ 57,953.54$
c. Current labor costs - $77,989
i. Meter Reader salary and benefits for a total of $50,521
ii. 30% of the Water Maintenance Worker II salary and benefits for a total of $20,646
iii. 10% of the Utility Billing Technician salary and benefits for a total of $6,822
d. Current annual vehicle costs – $14,576
i. Vehicle used by the water maintenance technician - $2,935
ii. Two vehicles used by the meter reader - $11,641
e. Smart metering labor costs - $51,343
i. Largest cost savings is in salaries and benefits
ii. 33% of the meters would not be replaced and need manual reads. Based on the current
time spent reading meters, which is 62%, the time needed to read these meters is 20%
of the maintenance worker’s time ($14,080).
iii. One employee would spend one to two days driving around the city scanning the me-
ters. It would take approximately 13% of the maintenance worker’s time ($9,176)
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iv. Maintenance would need to be continued at the same rate as the current meters – 21%
of the maintenance worker’s time ($14,452).
v. Some administrative reads would be needed due to resident requests as well as reads
for closing bills, misreads, and leak adjustments on the remaining 33% of the manual
read meters. Based on the current time spent on administrative reads, which is 30%,
the time needed to read these meters is 10% of the maintenance worker’s time
($6,813).
vi. The change in the utility billing technician’s time is zero. Administrative tasks cur-
rently performed will decrease with the offset being new administrative tasks. 10% of
the utility billing technician’s time is spent on utility dispatch issues ($6,822).
f. Smart metering annual vehicle costs - one vehicle used by the water maintenance technician
(64%) - $6,262
3) Carbon reduction - the following estimates are based on #56WTR and #38WTR not being used for meter
reading and maintenance.
a. Estimated annual mileage savings 12,492
b. Estimated annual CO2 (tonnes) savings: 5.67
c. Estimated annual vehicle cost savings $11,640
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AM-1607 2.D.
Cable Franchise Fee Ordinance
City Council Committee Meetings
Date:06/10/2008
Submitted By:Kathleen Junglov, Administrative Services Time:10 Minutes
Department:Administrative Services Type:Action
Committee:Finance
Information
Subject Title
Cable Franchise Fee Ordinance.
Recommendation from Mayor and Staff
Forward ordinance to full council for approval.
Previous Council Action
None.
Narrative
Current city code states the cable franchise fee will be charged at 3%. Additionally providers will
be charged a 3% utility tax. This is inconsistent with current practice. The attached ordinance
updates the code to charge a 5% franchise fee and a 1% utility tax.
Fiscal Impact
Attachments
Link: Cable Franchise Fee Ordinance
Form Routing/Status
Route Seq Inbox Approved By Date Status
1 Admin Services Dan Clements 06/05/2008 11:49 AM APRV
2 City Clerk Linda Hynd 06/05/2008 12:27 PM APRV
3 Mayor Gary Haakenson 06/05/2008 12:40 PM APRV
4 Final Approval Linda Hynd 06/05/2008 02:46 PM APRV
Form Started By: Kathleen
Junglov
Started On: 06/05/2008 11:10
AM
Final Approval Date: 06/05/2008
Packet Page 137 of 142
ORDINANCE NO. _______
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, AMENDING THE PROVISIONS OF ECC
3.20.050 TO CHANGE THE FRANCHISE FEE AND UTILITY
BUSINESS LICENSE TAX RATE FOR COMMUNITY
ANTENNA TELEVISION SYSTEMS, PROVIDING FOR
SEVERABILITY, AND FIXING A TIME WHEN THE SAME
SHALL BECOME EFFECTIVE.
WHEREAS, the cap on franchise fee on cable operators has changed from three
percent to five percent; and
WHEREAS, in addition to franchise fee, the City may also charge a utility
business license tax on cable operators; NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO
ORDAIN AS FOLLOWS:
Section 1. Edmonds City Code Section 3.20.050, Occupation Subject to Tax -
Amounts. is hereby amended to read as follows:
3.20.050 Occupation Subject to Tax - Amounts.
. . .
E. Cable Television. Pursuant to Chapter 4.68 ECC, community
antenna television systems, commonly known as cable television
franchisees, are herby levied a franchise fee of five percent (five
percent maximum), as authorized by 47 U.S.C. §542(a) and RCW
35.21.860, on all gross revenues derived from any source of
revenue by cable television franchisees from their cable television
operations in the city of Edmonds. In addition thereto, a business
license tax, as authorized in part by 47 U.S.C. §542(g)(2)(A), is
hereby levied equal to one percent (six percent maximum) on all
gross revenues derived from any source of revenue by cable
television franchisees from their cable television operations in the
city of Edmonds.
- 1 -
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Section 2. Severability. If any section, sentence, clause or phrase of this
ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction,
such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other
section, sentence, clause or phrase of this ordinance.
Section 3. Effective Date. Part of this ordinance being subject to referendum as
set forth in RCW 35.21.706, any duly qualified person may file a referendum petition with the
city clerk within seven (7) days after the passage of this ordinance. In the event that such a
petition is filed, the city clerk shall, within ten (10) days, confer with the petitioner regarding the
form and style of the petition, secure an accurate, concise, and positive ballot title from the city
attorney, and assign an identification number to the petition. Thereafter, the petitioner shall have
thirty (30) days within which to gather signatures from not less than fifteen percent (15%) of the
city's registered voters as of the last municipal general election. In the event that no referendum
petition is filed within seven (7) days after the passage of this ordinance, this ordinance shall take
effect five (5) days after publication of an approved summary thereof consisting of the title or
after seven (7) days after the passage of this ordinance, whichever is later.
APPROVED:
MAYOR GARY HAAKENSON
ATTEST/AUTHENTICATED:
CITY CLERK, SANDRA S. CHASE
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY:
- 2 -
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BY
W. SCOTT SNYDER
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL:
PUBLISHED:
EFFECTIVE DATE:
ORDINANCE NO.
- 3 -
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SUMMARY OF ORDINANCE NO. __________
of the City of Edmonds, Washington
On the ____ day of ___________, 2008, the City Council of the City of Edmonds,
passed Ordinance No. _____________. A summary of the content of said ordinance, consisting
of the title, provides as follows:
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, AMENDING THE PROVISIONS OF ECC
3.20.050 TO CHANGE THE FRANCHISE FEE AND UTILITY
BUSINESS LICENSE TAX RATE FOR COMMUNITY
ANTENNA TELEVISION SYSTEMS, PROVIDING FOR
SEVERABILITY, AND FIXING A TIME WHEN THE SAME
SHALL BECOME EFFECTIVE.
The full text of this Ordinance will be mailed upon request.
DATED this _____ day of ________________,2008.
CITY CLERK, SANDRA S. CHASE
- 4 -
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AM-1609 3.A.
Change Handicap Parking to a 4-Hour Limit
City Council Committee Meetings
Date:06/10/2008
Submitted By:James Lawless, Police Department
Submitted For:Gerry Gannon Time:15 Minutes
Department:Police Department Type:Information
Committee:Public Safety
Information
Subject Title
Change handicap parking to 4 hour limit.
Recommendation from Mayor and Staff
We (Police and Parking Committee) recommend not affixing a time limit to handicap parking
spaces.
Previous Council Action
None.
Narrative
Members of the community are requesting that a 4 hour time limit be affixed to handicap parking
spaces. This is allowed by RCW, however, our recommendation is that we do not affix time
limits. Issues are enforcement, negative publicity, and true need to limit handicap parking.
Fiscal Impact
Attachments
No file(s) attached.
Form Routing/Status
Route Seq Inbox Approved By Date Status
1 City Clerk Linda Hynd 06/06/2008 09:42 AM APRV
2 Mayor Gary Haakenson 06/06/2008 10:34 AM APRV
3 Final Approval Sandy Chase 06/06/2008 12:07 PM APRV
Form Started By: James
Lawless
Started On: 06/06/2008 09:28
AM
Final Approval Date: 06/06/2008
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