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1 © 2013 Calix – Proprietary and Confidential
Broadband is the New Necessity
Better Broadband for Maquoketa
2 © 2013 Calix – Proprietary and Confidential
Calix Strategic Focus: Access Network The rise of the consumer … and the cloud
Access
The Cloud
Content Subscriber
3 © 2013 Calix – Proprietary and Confidential
Calix Deployment Experience
Communities served by
Calix fiber in the U.S.
NFL/NBA cities: 11 metros Orlando, Las Vegas, Seattle, Portland,
Denver, Phoenix, Cincinnati, Sacramento,
Salt Lake City, Minneapolis/St. Paul, San
Antonio
10,000 population: 100+
4 © 2013 Calix – Proprietary and Confidential
Obama Visits Cedar Falls Demonstration of Calix equipment
Some significant recent events
Rural Broadband Experiments - $100M … fiber participants offered
CAF II opportunity
Call for Title II treatment for broadband … it will happen, but when?
Definition of broadband increased to 10/1 …soon may be 25/3
CAF programs embrace utilities, MSOs, Munis … not just for
ILECs anymore
$40M new dollars added into RUS loans … expanded for Munis
E-Rate significantly expanded … $1.5B for fiber infrastructure
A new ROR algorithm solidified … Price Cap next
A shift from wireless to fiber … Obama get a Calix gig demo!
5 © 2013 Calix – Proprietary and Confidential
FTTH Map of the USA
Source: http://www.broadbandmap.gov/
http://www.broadbandmap.gov/
6 © 2013 Calix – Proprietary and Confidential
Broadband and Economic Development
7 © 2013 Calix – Proprietary and Confidential
What is the connection?
Kitty Litter and Economic Development
8 © 2013 Calix – Proprietary and Confidential
Cassopolis, Michigan
Edward Lowe Foundation
9 © 2013 Calix – Proprietary and Confidential
Edward Lowe Foundation
Economic Gardening
10 © 2013 Calix – Proprietary and Confidential
Broadband is the New Necessity
Broadband and Economic Development
Question 1:
Would you rather have 100
five employee companies
or a single 500 person
company in your
community?
Question 2:
Would the people running
those five person
companies be able to grow
without adequate
broadband?
High speed broadband is now
considered a fundamental element
of a community’s ability to compete
in the global economy
11 © 2013 Calix – Proprietary and Confidential
Why Fiber Broadband Networks?
12 © 2013 Calix – Proprietary and Confidential
The Internet of Things is Growing
New generations of “connected” devices will change home
networking and bandwidth consumption
By 2020, the average U.S. home will
have 50 internet connected devices
Source: Gigaom, Parks Associates,
The Wall Street Journal, stltoday.com
95% of U.S. broadband
homes are projected to
have home networks by
2016
13 © 2013 Calix – Proprietary and Confidential
Peak Bandwidth Growth over Time? Following somewhat behind Moore’s Law
Nielson’s Law
Internet peak consumption doubles every 2 years
14 © 2013 Calix – Proprietary and Confidential
Why Fiber? Bandwidth growth is exponential
Fiber is the path to long-term sustainability
Offers virtually unlimited bandwidth
Allows network to be built “once”
We have already experienced this rate of growth
VDSL2 Fiber ADSL/2/2+
1.5-3 Mbps
8-24 Mbps
50 Mbps
100 Mbps
500 Mbps
Mu
lti-P
air
Bo
nd
ing
2-P
air
Bo
nd
ing
Competitive
Battleground (today)
20 Mbps service today will
require 150 Mbps in 5 years,
1 Gbps in 10 years
15 © 2013 Calix – Proprietary and Confidential
Fiber as a Community Asset?
Gives your community a competitive advantage
Businesses need high speed fiber optics to be competitive
Young people won’t settle where they can’t get high speed
broadband
Critical infrastructure for economic development
Why is fiber the technology of choice?
The only technology that has the bandwidth and flexibility to keep
up with projected consumer demand
Fiber has a high initial cost, but a low operating cost eliminating
truck rolls and ongoing maintenance
Provides a communication infrastructure for grid modernization
Fiber future proofs the network; bandwidths can scale with
consumer demand Fiber cable infrastructure has unlimited bandwidth potential
16 © 2013 Calix – Proprietary and Confidential
Fiber Value Proposition
Enterprise
World-class infrastructure to collaborate, innovate and compete
Serving business of any size
Community
Economic development and vitality
World-class healthcare, enriched education and public safety
Improved public services and government efficiencies
Consumers
Freedom: no constraints, no boundaries, no limits
Access to all the things you care about, anytime, anywhere.
Highest quality communications: video, voice and data
Value to community stakeholders
17 © 2013 Calix – Proprietary and Confidential
Appealing to Enterprise
Infrastructure
Fiber to the building available to all businesses
Advanced networking capabilities, with redundant connections
Services
100Mbps,1000Mbps and 10Gbps symmetrical services
Metro Ethernet Forum E-Line and E-LAN based service
Service level agreements available to all businesses
24/7 network monitoring and support
Economic gardening
A place entrepreneurs come to create businesses
A blended mix of established enterprises and new technology firms
leveraging Gigabit services
An appealing place for retailers and hospitality serving technology
savvy consumers and businesses
Marketing a Gigabit
18 © 2013 Calix – Proprietary and Confidential
Appealing to Community
Education
Gigabit fiber serving every school building
Children with access to the most advanced technology-in school,
at home and throughout the community
Healthcare
Gigabit fiber to every hospital and clinic
Rapid transfer of medical records, images and
Access to world class medical facilities through Gigabit portals
In-home medical monitoring and diagnostics
Public safety and community services
Gigabit fiber to all community buildings, Wi-Fi in all public spaces
Street level and home monitoring via communications
infrastructure
Community portal for events, message boards, networking and
building community cohesiveness
19 © 2013 Calix – Proprietary and Confidential
Appealing to Consumers
Infrastructure
Gigabit fiber available to every home
Higher home resale values
Services
100Mbps and 1000Mbps symmetrical Internet services
Advanced high definition video offering with DVR
Home monitoring and security services
Local, national and worldwide voice calling plans
In-home and community networks
Seamless operator supported Wi-Fi network throughout the home
and public spaces throughout the community
In-home IT support for computers, wireless devices and media
centers
New advanced services leveraging Gigabit fiber-wireless network
Marketing a Gigabit
20 © 2013 Calix – Proprietary and Confidential
The Gigabit Phenomenon
21 © 2013 Calix – Proprietary and Confidential
Google Fiber Experience Provider A “clean-sheet” approach to communications
22 © 2013 Calix – Proprietary and Confidential
Creating Gigabit communities
Gigabit Residential Announcements
Cedar Falls, Iowa
Bristol, VA
Ten Cities
Red Wing, Minnesota
Rural Minnesota
Rural Vermont
100 Cities
Multiple Cities
Rural Missouri
Burlington, Vermont
Multiple Cities Chattanooga, Tennessee
Lafayette, Louisiana Longmont, Colorado
23 © 2013 Calix – Proprietary and Confidential
Getting Maquoketa Better Broadband
24 © 2013 Calix – Proprietary and Confidential
Prerequisites for Better Broadband
Maquoketa has many of the key ingredients
Fiber links to Internet connection points
Through multi-city fiber ring
History of community ownership
Locally owned and controlled electric infrastructure
Anchor institutions or businesses with unmet BB needs
Anchors and businesses are key to driving initial deployment
Engage with professional resources
Work with industry experts-consulting engineering firms-who have
“been there and done that”
Engage with your community
The best advocates for better broadband are already in your
community
25 © 2013 Calix – Proprietary and Confidential
Internal community network-Phase 1
Building a Community Network
All IP
over
Ethernet
over
Fiber
The Cloud
One Network
Data
Center
City Building #1
City Building #2
Electric Sub-Station #3
10 Gigabit Redundant Ring
26 © 2013 Calix – Proprietary and Confidential
Leverage community network-Phase 2
Serving Business and Anchor Institutions
All IP
over
Ethernet
over
Fiber
The Cloud
One Network
Data
Center
City Building #1
City Building #2
City Building #3
10 Gigabit Redundant Ring
Schools
Mobile and Smart Grid
Wireless
Business
27 © 2013 Calix – Proprietary and Confidential
Expanding network to serve consumers-Phase 3
Serving Residential Subscribers
All IP
over
Ethernet
over
Fiber
The Cloud
One Network
Data
Center
City Building #1
City Building #2
City Building #3
10 Gigabit Redundant Ring
28 © 2013 Calix – Proprietary and Confidential
Maquoketa 3,600 meters, average density of 851 per square mile
30% Take Rate 50% Take Rate 70% Take Rate
Cost per Home
Passed
$550
$550
$550
Incremental
Cost per Home
Served
$650
$650
$650
Meters served 1,080 1,800 2,520
Total Cost $2.7 million $3.2 million $3.6 million
Actual Cost
per Home
Served
$2,500
$1,800
$1,400
*Assumes all aerial construction. Does not take in to account
make ready costs, IPTV headend or engineering costs
29 © 2013 Calix – Proprietary and Confidential
Most successful towns have used their city owned electric
Municipals and Fiber Access
Broadband as a source of expanded revenue
Entering broadband is a standalone business decision Each subscriber generates $50-150 per month
Broadband as an enabler of grid modernization
Two-way communications network to sub-stations and homes at no incremental cost
Public-private partnerships Indianola, Iowa Found a nearby telecom operator that wanted to expand its services