Priorities Committee Meeting_Jul14_2015

Author: Rob Schneider, Information Technology Services Page 1 of 1 Director(s): Rob Schneider, Information Technology Services Associate Commissioner: Darlene Bouwsema, Corporate Services Lead Department: Information Technology Services

STRATEGIC INITIATIVE AND UPDATE Urban Fibre Feasibility Report 2015 07 14 Report Purpose To provide and inform Priorities Committee of the finding of the Urban Fibre Feasibility Report.

Council History January 14, 2014 – Councillor Botterill submitted a Program Request for a pre-feasibility study on a project to run County owned fibre optic connections to residences and businesses with Strathcona County’s urban services area. July 8, 2014 – Council directed Administration to conduct a Fibre Optic feasibility study. Strategic Plan Priority Areas This project supports the following strategic goals: Goal 1: Strategically manage, invest and plan for sustainable municipal infrastructure Goal 6: Promote Strathcona County locally, nationally and internationally as a place that is open for a wide range of diverse business and investment Goal 8: Provide a climate of safety for individuals in homes, neighbourhoods and public spaces Goal 11: Facilities and activities are available, accessible and used by residents Economy: Providing high speed broadband to the community at economical prices can foster a diverse set of business opportunities and raise the community standard of living. It also supports citizen remote education and training. Governance: Increase public involvement and communicate with community – provides new channels of communicating with citizens and enables them to make use of new tools. Social: High speed Internet is becoming a fundamental component of our social community. Culture: Vibrant, creative community – on‐line interests research and learn about community and heritage. Environment: Improve the efficiency of resource usage – reduce travel. Other Impacts Policy: n/a Legislative/Legal: n/a Interdepartmental: PDS, Utilities, EDT Summary The County contracted Magellan Advisors to complete a feasibility study for fibre optics connectivity to all businesses and residents in the Urban Services Area. Magellan has completed that study and will be reporting on their findings.

Strathcona county

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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Urban fiber to the home feasibility study Presentation to council

overview

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

3  

•  Broadband overview & trends

•  State of Broadband in Sherwood Park •  Local government’s role in broadband

•  Potential opportunities for the County

•  Options, benefits & risks

•  Recommendations & next steps

Broadband trends

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

4  

Consumer  Driven  Demand  for  Bandwidth  

Applica;ons  Devices  

Communi;es  

Converged  Digital  Life  

Broadband trends

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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Smart  Home  =  More  Broadband  

3D medical imaging

Multi-location HD and/or 3D video conferencing

User Generated Content (UGC) uploading and downloading

Smart Appliances

Large screen TVs beyond 100” will lead to higher resolution -  4K UHD 3840 pixels x 2160 pixels -  8K UHD 7680 pixels x4320

Interactive 3D -  3D gaming -  3D conferencing -  3D virtual travel -  3D e-learning

broadband trends

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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Connected  Communi;es  =  More  Broadband  

•  Benefits to the County itself •  Smart Grid •  Intelligent Traffic Control •  Smart Utilities •  Safety & Security •  Sensor Networks

State of broadband in sherwood park

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

7  

Are Broadband Providers Keeping Up with Demand?

Current environment - shaw

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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•  Definitions •  DOCSIS 3.0 •  Data Over Cable Service Interface

Specification 3.0 •  Broadband is delivered over the current

coax cable run to each home that currently provides cable TV service.

120$Mbp$DOCSIS$3.0$

120$Mbp$DOCSIS$3.0$

120$Mbp$DOCSIS$3.0$

120$Mbp$DOCSIS$3.0$

120$Mbp$DOCSIS$3.0$

120$Mbp$DOCSIS$3.0$

120$Mbp$DOCSIS$3.0$

120$Mbp$DOCSIS$3.0$

Current environment - telus

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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•  Definitions •  FTTH – Fiber to the home, fiber-optic

cables brought directly to each home, providing broadband connectivity

•  FTTN •  FTTN – Fiber to the node, fiber-optic

cables brought to each neighborhood to provide additional bandwidth to existing copper connections, connections to each home still utilize coax or telephone lines to deliver broadband services

100#Mbp#FTTH#

100#Mbp#FTTH#

100#Mbp#FTTH#

100#Mbp#FTTH#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

50#Mbp#FTTN#

Local provider investments

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

10  

•  Telus •  $1B planned for Edmonton area over 6 years •  Fiber to the home and business services •  No information found on amount in Strathcona •  Planned offering – 150 Meg, competing with Shaw •  Future offering - ?? •  Will Strathcona benefit? No specific plans.

•  Shaw •  No information found on future upgrades

What’s the opportunity?

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

11  

What’s the opportunity?

What’s the opportunity?

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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•  Use Next Generation Broadband as a Differentiating Amenity •  Support your status as the most Livable Community in Canada •  Put Strathcona ahead of the curve •  Support key community amenities

•  Overall quality of life of the residents •  Future home healthcare & virtual doctor’s visits •  Digital education technologies – at school and at home •  Public safety & security through innovative technology •  Smart city technologies – improve government efficiency •  Green technologies – support lower carbon footprint

Why is fiber-optic the best choice?

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

13  

•  Why Fiber-Optic? •  Nearly unlimited capacity to meet future needs •  Many applications, many devices •  More easily upgraded than traditional broadband •  Low cost incremental upgrades •  Additional benefits to schools, libraries, healthcare & government •  Enables smart city technologies

•  Major providers are planning their fiber deployments •  US, Canada & worldwide •  Only technology that solves future bandwidth needs

Why is fiber-optic the best choice?

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

14  

Cable Modem

Bandwidth Compared – Next Generation vs. Other Technologies

Next-Generation Broadband Fiber To The Home (FTTH)

Dial-Up

Fiber-optic has 10 to100 times more capacity than traditional & older broadband technologies

ISDN DSL

broadband trends

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

15  

0.00  

0.50  

1.00  

1.50  

2.00  

2.50  

Sep  '01  

Sep  '02  

Sep  '03  

Sep  '04  

Sep  '05  

Sep  '06  

Sep  '07  

Sep  '08  

Sep  '09  

Sep  '10  

Sep  '11  

Sep  '12  

Sep'13  

Sep'  14  

Jun'  15  

Homes  Marketed   Homes  Connected  

Service  is  available  to  2.1  million  homes  700K  homes  have  been  connected  

Canadian FTTH Deployments are Increasing

Service  Available  

benefits of fiber

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

16  

•  Economic development •  Attract and retain businesses

•  Quality of life •  State of the art amenities for residents

•  Property values •  Fiber has been shown to support higher values

•  Education •  Ensuring schools have access to all online technologies

•  Government •  Enabling smart city technologies that reduce cost and improve efficiencies

17  

Statistics from the US Ftth impact on home values

(No Canadian data currently)

18  

I

I

FTTHTake Rates by ProviderType Real estate dev install FTTH enj

elopers who oy the highest

Rea l Estate Devclopct

CablelV

ILEC

CLEC Division o f ILEC 55%

Electric Co-op 53%

Competitive Provldet 49%

Municipal Retail 46%

RBOC 40%

Municipal Wholesale 29%

Current FTTH Users: Importance of Area Amenit ies if Shopping for New Home

FTlH

Green Space for Walking. Jogg ng

Commun tyPooVPark

24-Hour elghbOlhood Patrol

Fitness Center/ Clubhouse •••••••• 53%

66%

63%

-

!take rates.

81%

NonFTIH Amenities

Users: Importance of Area if Shopping for New Home

. Green Space forWaJkmg, Joggmg

81%

24-Hour NeighbOlhood Patrol

Fi tness Center/ O ubhou se

89%

Comm unity Pool/ Pa rk

vailability of a fiber connection is among e most important amenities for buyers

hopping for new homes. Among current H users, it is the most important amenity.

Source: RVA LLC

83'!6

78'!6

The role of local government

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

19  

What’s the role of local government?

The role of local government

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

20  

•  Local governments are taking charge •  Broadband is becoming a utility •  Implementing broadband-friendly policy •  Using their existing fiber networks •  Building new fiber networks •  Partnering with private providers •  and even providing services directly

the role of local government

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

21  Public Benefit

The role of local government

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

22  

•  Examples •  Retail Services

•  O-Net, Olds, Alberta •  https://www.youtube.com/watch?v=cCJWJN80ZkQ

•  Open Access Services •  Chelan County, Washington •  https://www.youtube.com/watch?v=6uK73V0hqIo

•  Public-Private Partnership •  Jupiter, Florida

options

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

23  

What are strathcona’s feasible options?

Feasible Options

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

24  

•  Precursor: Establish broadband-friendly public policy

•  Option 1: Develop an exclusive public-private partnership

•  Option 2: Become a provider directly

precursor

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

25  

•  Precursor: Broadband-Friendly Public Policy

•  Description •  County implements broadband-friendly policies

–  Greenfield developments

»  Developer standards for broadband infrastructure

–  Utility relocation

»  Dig once & joint trenching

»  Broadband engineering standards

»  Review existing

»  Determine the appropriate funding model

precursor

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

26  

•  Precursor: Broadband-Friendly Public Policy

•  Benefits •  Incremental new infrastructure with companion projects

•  Providers increase their amount of infrastructure

•  County increases its own infrastructure

• No significant impact to the consumer

Precursor

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

27  

•  Precursor: Broadband-Friendly Public Policy

•  Risks • No significant impact to the consumer

• No direct control over the services provided

•  Providers may not participate

•  Funding (although limited) may not be paid back

Option 1

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

28  

•  Option 1: Develop an Exclusive Public-Private Partnership

•  Description

•  County builds fiber infrastructure to homes & businesses

•  Identify strategic partner to provide retail services

•  County funds the project

•  Provider delivers all broadband services over the network

•  Provider pays County a revenue share to recoup investment

•  Citizens and businesses receive enhanced services

Option 1

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

29  

•  Option 1: Develop an Exclusive Public-Private Partnership

•  Benefits

•  Citizens and businesses receive enhanced services

•  County does not need to operate

•  County maintains more control in the partnership

•  Business case to recoup investment

•  Long-term return on investment beyond payback

30  

Option 1

30  

•  Local  community  based  service  provider  •  Open  to  partner  to  provide  content  and  operate  network  •  Have  a  redundant  10  gig  connec;on  into  Edmonton  

•  Operates  in  Ontario  in  several  small  communi;es  •  Seasoned  small  FTTH  network  provider  •  Could  possibly  provide  content  and  operate  network        

•  Based  out  of  Halifax  Nova  Sco;a  •  Has  expanded  across  Canada  by  acquiring  other  

communica;ons  company’s  •  Could  possibly  provide  content  and  operate  network  

•   Currently  building  and  opera;ng  in  many  states  •  Does  not  offer  voice  services  •  Strategically  could  be  looking  to  expand  into  Canada  •  Could  possibly  provide  content  and  operate  network  

31  

Option 1

31  

GPON  Switch    

864  Spli[er  Cabinets  

Feeder  Fiber  County  Fiber   Sherwood  Park  Network  Design  

Fire  sta;on  #6  

County  Hall  

GPON  switch  boundary  

Area  with  Poles  

Future  Growth  

Size  feeder    to  serve    growth  area  Size  feeder    

to  serve    growth  area  

Size  feeder    to  serve    growth  area  

Option 1

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

32  

Option 1

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

33  

Funding  Required  (Conceptual  100%  Buildout  in  Urban  Service  Area)  

Capital  Asset    100%  Buildout  

Feeder  &  Distribu;on  Fiber  Design  &  Construc;on    $68,972,050    

Premises  Connected  (Fiber  Infrastructure  Only)    $2,592,316    

Total  Capital  Funding   $71,564,366  

34  

Payback  Range   Addi;onal  Returns                            -­‐>  

Option 1

Option 1

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

35  

•  Option 1: Develop an Exclusive Public-Private Partnership

•  Risks

•  Public-Private partnerships are difficult to develop

•  Execution strategy must be managed

•  County has limited over the retail services provided

•  Provider must be successful for County to recoup investment

Option 2

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

36  

•  Option 2: Become a Retail Provider

•  Description •  County builds fiber network and provides all services

•  Responsible for all facets of a telecom business

•  Offer triple-play at competitive prices –  Television, Internet, Telephone

•  100% access to every home and business

•  Homes connected based on signups

Option 2

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

37  

•  Option 2: Become a Retail Provider

•  Benefits •  County maintains total control

•  World-class services to the community

•  Business case to recoup investment

•  Surplus revenues in later years

•  Community-owned, dollars stay local

•  Network and services designed for the stakeholders

Option 2

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

38  

Funding  Required  (Conceptual  100%  Buildout  in  Urban  Service  Area)  

Capital  Asset    100%  Buildout  

Feeder  &  Distribu;on  Fiber  Design  &  Construc;on    $68,972,050    

Premises  Connected  (Fiber  +  Equipment)    $13,285,627    

Headend  Equipment      $5,206,000    

Building  Improvements    $1,500,000    

General  Equipment    $309,000    

Total  Capital  Funding   $89,272,677  

Total  Opera;ng  Funds  Required     $22,337,323  

Total  Capital  &  OperaPonal  Funding  Required   $111,610,000  

Con;ngencies   11,610,000  

Total  Funding  Required   $123,220,000  

39  

Option 3

$0

$32 $30

$32

$8 $6

$0

$3

$7

$10 $7 $7 $6 $6 $6

$5 $5 $5 $5 $5

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Annual&Free&Cash&Flow&(Revenues&Less&Expenses&&&Debt)&(In&Millions)&

Payback  Range   Addi;onal  Returns                            -­‐>  

Option 2

Option 2

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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•  Option 2: Become a Retail Provider

•  Risks •  Execution and operating risks

•  Subject matter expertise and organizational capabilities

•  Must be run as a “business”

•  Competitive forces from incumbents

•  Market is competitive today

•  Market uptake must be achieved

•  Technology change

Option comparison

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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Public Investment

Public Benefits

Public Policy

Infrastructure Only

Wholesale Open Access

Retail Provider

$120M

$100M

$80M

$60M

$40M

$20M

$0

Greatest Community Benefit for Least Incremental Investment

$20M

$18M

$73M

Public-Private Partnership Domain

Public-­‐Private  Partnership  $73M  

Retail  Provider  $123M  

Broadband-­‐Friendly  Public  Policy  

   

$120M          

$80M          

$40M          

$0M  

Public  Investmen

t  

Option comparison

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

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OpPon  1:  Public-­‐Private  Partnership   OpPon  2:  Retail  Provider  

Funding  Required   $73  Million   $123  Million  

Payback  Period   12-­‐14  Years   12  -­‐  17  Years  

Factors  Affec;ng  Payback   Ini;al  Cost  Revenue  Sharing  Agreement  

Ini;al  Cost  Ongoing  Cost  

Uptake  Market  Prices  

recommendations

31

City of Palo Alto FTTP Master Plan RFP Magellan Advisors, LLC. 7/31/14.

Magellan will also deliver its comprehensive financial plan using our Broadband Financial Sustainability Model that provides the financial details around the proposed network. The Financial Plan is the most important aspect of this project for Palo Alto because it defines the overall feaasibility and sustainability of moving forward with a proposed FTTP network. Magellan is the only consulting firm with the expertise in broadband financial planning necessary to ensure Palo Alto achieves its goals for the FTTP network. Our financial plans have been used to secure investment in excess of $500 million in broadband projects nationwide and we will ensure that Palo Alto has a similar financial plan that determines the overall sustainability of its FTTP network. The Financial Plan will provide comprehensive documentation of capital costs to build and expand the network, operating costs, cost of services, debt service costs, reserve requirements, and other relevant cost information. Our Financial Plan will also provide all revenue forecasts for the network based on the City’s selected business model. Our Financial Plan will provide a funding-ready set of financial statements to the City and detailed financial metric analysis to help the City understand the overall financial sustainability of the proposed project.

Task 6. Presentations to City Council Magellan will present its findings, recommendations, and the FTTP Master Plan to City Council. We will provide an “elected official” level overview of the project’s findings and how we arrived at the conclusions. We will help Council understand the key aspects of the proposed FTTP network and how it will meet the needs of the Palo Alto community for the long-term. We will provide a balanced assessment of the opportunities and risks around the project, particularly focusing on achieving the selected business model, recruiting potential project partners, and achieving financial sustainability in the project. We generally find that a Council Workshop setting is most effective in these projects because it allows the time necessary to properly review a significant project like the FTTP Master Plan. In some cases we have found that this workshop, followed by a formal Council Meeting presentation, achieves the best results. If Council authorizes staff to proceed, Magellan will help the City develop an RFP to build the Citywide FTTP network. Magellan has successfully developed over 50 RFPs for municipalities to build FTTP networks across the country. We have a significant base of draft language, unit pricing schedules, terms, conditions, and other information that we will utilize to develop a competitive procurement for the City. We will help the City streamline the procurement process to ensure that it receives true “apples to apples” comparisons from competing vendors and that the City receives the most competitive quotes. As part of the RFP, Magellan will develop an evaluation and scoring matrix with the City for selecting the most qualified vendor for the project.

43  

•  Develop a broadband working group

•  Assign community stakeholders •  Task it with carrying out the next steps •  Determine the needs of the community – education, outreach, surveys, open houses

•  Implement Broadband-friendly public policy •  Dig-once & broadband development standards •  Identify companion capital projects to install conduit and fiber

•  Investigate Option 1: Determine whether a partnership is possible •  Ask providers what it would take for them to build •  Work with local providers to determine options •  Issue a Public RFI •  Determine if results are satisfactory for partnership

•  Re-assess Plan and Consider Option 2