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Home My WebLink AboutItem 10a -Downtown Arcadia Broadband Strategic Plan DATE: November 7, 2023 TO: Honorable Mayor and City Council FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director SUBJECT: DOWNTOWN ARCADIA BROADBAND STRATEGIC PLAN CEQA: Not a Project Recommendation: Receive and File SUMMARY On October 18, 2022, the City Council approved the allocation of American Rescue Plan Act (“ARPA”) funds for several economic development initiatives, including the development of a Broadband Strategic Plan for Downtown Arcadia. The Plan has been completed and has been submitted to the City as a final document. It is recommended that the City Council receive and file the Strategic Plan and direct staff to work on implementation of the Plan’s recommendations over time. BACKGROUND Since the end of the COVID-19 pandemic, ARPA funding has been available for various purposes, including economic development and financial assistance for businesses. To date, the City Council has allocated funds for several important and well-received economic development programs, including the Small Business Grant Program, the Small Business Permit Assistance Program (reimbursing City permit fees), the Chamber of Commerce Membership Program, the Merry and Bright Holiday Shopping Program, and the development of a Broadband Strategic Plan for Downtown Arcadia. The original request for a broadband study came from the Downtown Arcadia Improvement Association (“DAIA”). It was articulated by the DAIA that Internet speeds were poor in the Downtown and options for improvements were costly and challenging. It was anticipated that a study could determine some options for improved service and support for the downtown business community. The City Council agreed that this was an important project that could be funded with ARPA monies. In fact, the original guidelines of the ARPA program identified funding for broadband improvements as one of the primary pillars of the program. A Request for Proposals (“RFP”) for the broadband study was issued in July 2022. The low bidder, Design Nine, Inc., was selected as the preferred consultant with a contract Downtown Arcadia Broadband Strategic Plan November 7, 2023 Page 2 of 5 amount of $48,750. Following selection of Design Nine Inc., the City was approached by a privately-funded broadband infrastructure company regarding a potential public-private partnership with the City to install a citywide fiberoptic network in the public right-of-way. Based on the City Council’s discussion and direction at the October 18, 2022, Study Session on this topic, additional funding in the amount of $16,250 was added to the project to assist the City with the review and evaluation of this proposal, resulting in a total project cost of $65,000. Design Nine started work on the Strategic Plan in the late Fall of 2022. DISCUSSION Design Nine researched the City’s existing broadband infrastructure, the Internet Service Providers that service the City, the state of broadband in both the Downtown area and Citywide, and interviewed staff and stakeholders. Part of their outreach efforts included meetings with the Downtown Arcadia Improvement Association and the City’s Utility Coordination Committee, which includes members from various City Departments as well as regional utility providers. Not surprisingly, the study found that Downtown Arcadia has limited availability of Fiber Internet Service, and that fiber is more readily available in the City’s residential areas. The City currently has four primary Internet Service Providers (“ISPs”): Spectrum, AT&T, Frontier Communications, and Giggle Fiber. None of these ISPs have done extensive projects in the City’s commercial areas as they have focused on residential neighborhoods instead. Gaps in the infrastructure due to high costs of providing service in urban areas, lack of concentrated and consistent demand, and the absence of newly built buildings and infrastructure are some of the reasons for this. Additionally, businesses have a wide range of data needs and demands, which do not support a single technology or approach to receiving Internet service. To date, the City has not completed any major projects to provide fiber for commercial use. The City has installed a significant amount of conduit and fiber to connect traffic signals and other City facilities together, but this has not been extended to private uses. To gain a better perspective of business needs and current challenges, Design Nine conducted interviews and distributed a survey to business owners through the DAIA and the Chamber of Commerce. While participation was limited, there was anecdotal information received that supported the regional and national data provided. Additionally, an analysis of each of the ISPs, including their costs and rate structures was also conducted to provide a clear picture of some of the challenges facing major installations in the Downtown area. To establish an understanding of the current situation not only in the Downtown but throughout the City, the Strategic Plan includes the following sections and analyses: • Broadband as essential infrastructure Downtown Arcadia Broadband Strategic Plan November 7, 2023 Page 3 of 5 • Asset Analysis – how is the City set up to receive infrastructure changes • Fiber Optic Availability • Survey Results • Gap Analysis • ISP Engagement Strategy • Recommendations • Infrastructure Funding and Grant Opportunities Based on the background information provided, the primary focus of the report is the development of a series of recommendations, including detailed recommendations for improving connectivity in the Downtown over time. The recommendations range from simple communication enhancements to practical economic development policies to providing conduit and potentially “dark fiber” throughout the Downtown. Dark fiber is fiber that would be placed by the City and then leased to ISPs for their use. Several of these recommendations are already part of the City’s approach, and each of the recommendations is briefly described below: • The City should not become an Internet provider. The City should focus on developing public/private partnerships by making targeted investments in passive broadband infrastructure like towers and dark fiber. • Develop partnerships with ISPs. Foster public-private partnerships to leverage the expertise and resources of private broadband providers. • Streamline Permitting Processes. Simplify and expedite the permitting processes for broadband infrastructure deployment. • Adopt a "Dig Once" Policy. Implement a policy that requires the installation of conduit or fiber-optic infrastructure during planned excavation or construction projects. • Identify Revenue Generation Opportunities. Explore potential revenue generation opportunities related to broadband deployment such as leasing access to City assets or rights-of-way, offering expedited permitting for a fee, or exploring partnerships with service providers that provide revenue-sharing arrangements. • Develop Community Development and Planning Guidelines. Integrate broadband infrastructure requirements into community development and planning guidelines. • Broadband Connectivity Project. A conduit and dark fiber network in the downtown area of Arcadia to bring improved broadband Internet speeds and a Downtown Arcadia Broadband Strategic Plan November 7, 2023 Page 4 of 5 wider choice of Internet providers. This is the primary recommendation of the Strategic Plan. The Study provides analysis on how the connectivity project could occur, provides estimated costs, and even extensive maps for how conduit could be added in the various portions of the Downtown. Fiber could be installed as part of large infrastructure projects, added through public street or alley improvement projects, or could be required as part of private development projects. Making conduit available for ISPs may also increase the competition for business customers, which could help lower the cost of Business Class Internet for downtown retail, professional, and enterprise businesses. Improved access and lower costs for Internet would also help retain existing businesses in the downtown area and help attract new businesses and jobs. Currently, the City has scheduled a project to make improvements to the downtown alleys. This work was funded through a major grant from Metro and is anticipated to begin construction in November 2023. As part of this work, the City will be installing conduit and pull boxes (boxes that provide access to fiber cable and splice closures) for fiber, and making the ISPs aware of this work. This project’s timing in combination with the Strategic Plan is advantageous, helping provide enhanced access to businesses in various areas of the Downtown. It is anticipated that conduit and potentially dark fiber will be added to projects over time to “build out” the infrastructure recommended as part of the Study. In addition, the City will be cognizant of grant opportunities and regional efforts to provide funding or resources for fiber installation, or to further the goals of the Study. Current efforts include a major effort by the San Gabriel Valley Council of Governments and an initiative spearheaded by the County of Los Angeles to address the “digital divide”. A separate, but related part of the scope of work for Design Nine, was to review a Citywide broadband infrastructure project that had been proposed by a firm named “SiFi”. This proposal offered no upfront costs to the City to allow infrastructure to be placed throughout the City’s right-of-way and then privately leased to ISPs. Through a multi-year construction effort, infrastructure is placed to the property line of each home in the City through a process called “microtrenching”. A number of cities in the region have pursued this approach as a way to provide access to a large number of residents. Design Nine reviewed and analyzed the proposal, which is attached as Exhibit “C” to the Strategic Plan. At this time, it is not recommended to pursue a Citywide project of this nature. Construction time horizons appear much longer than advertised, the current ISPs in Arcadia already provide solid infrastructure, and the need for such services in the City’s residential areas does not appear acute. The progress and state-of-the-art of this Citywide concept will be monitored, and if any changes occur, the project will be returned to the City Council for review. It is recommended that the City Council receive and file the Downtown Arcadia Broadband Strategic Plan, and direct Staff to work on implementation of the plan recommendations over time. Examples of implementation actions include provision of Downtown Arcadia Broadband Strategic Plan November 7, 2023 Page 5 of 5 conduit and fiber access in all City street projects, seeking grants for funding of larger infrastructure projects, communication with ISPs on availability of conduit or fiber, and working with the business community as options become available. Any aspect of implementation that requires funding will be brought back to the City Council for consideration prior to any additional expenditures. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. FISCAL IMPACT The City was originally allocated a total of $8,865,000 in ARPA funding to use for various purposes, including economic assistance. As of the date of this Staff Report, approximately $1.4 million in ARPA funds remain to be specifically allocated. A total of $65,000 was allocated toward the Broadband Strategic Plan and review of the citywide fiberoptic proposal. Use of ARPA monies for this project are an appropriate use funding, consistent with the objective to provide economic assistance to residents and businesses impacted by the COVID-19 pandemic. Any additional expenditures to implement the recommendations of the Broadband Study will be brought back to the City Council for consideration and action. RECOMMENDATION It is recommended that the City Council determine that this action does not constitute a project and is, therefore, exempt under, the California Environmental Quality Act (“CEQA”); and receive and file the Downtown Arcadia Broadband Strategic Plan, and direct Staff to implement Plan recommendations over time. Attachment: Downtown Arcadia Broadband Strategic Plan CITY OF ARCADIA Downtown Broadband Strategic Plan broadband planners DESIGN NINE September 2023 TABLE OF CONTENTS 1 Summary and Recommendations __________________________________1 Recommendations __________________________________________________________2 2 Broadband as Essential Infrastructure _______________________________3 2.1 What is Government’s Role? ______________________________________________5 2.2 The Shared Infrastructure Business Model __________________________________6 2.3 Service Providers and Shared Infrastructure _________________________________8 3 Asset Analysis ____________________________________________________9 3.1 Potential Anchor Customers ______________________________________________10 3.2 Population and Density Distribution _______________________________________12 3.3 LMI and HUD Eligible Areas _______________________________________________13 4 Fiber Optic Availability ___________________________________________15 4.1 Downtown Fiber Availability ______________________________________________16 4.2 Number of Fiber Providers ________________________________________________17 4.3 Technology Type Availability ______________________________________________18 4.4 Broadband Service Levels ________________________________________________19 4.5 Upload and Download Speeds ____________________________________________20 5 Business Broadband Survey Results ________________________________22 Distribution of Business Survey Responses _____________________________________23 Business Survey Summary Data _______________________________________________24 6 Gap Analysis ____________________________________________________34 6.1 Gaps in the Infrastructure _________________________________________________34 6.2 How much Broadband is Enough? _________________________________________35 6.3 Job and Workforce Challenges ____________________________________________36 6.4 Business Bandwidth Needs _______________________________________________37 7 ISP Engagement Strategy _________________________________________39 7.1 Engaging with Broadband Providers _______________________________________39 7.2 Shared Infrastructure _____________________________________________________41 8 Recommendations _______________________________________________42 8.1 The Downtown Connectivity Project _______________________________________43 8.2 Dark Fiber and Lit Fiber __________________________________________________44 8.3 The Meet-Me Shelter Concept ____________________________________________44 8.4 Overview of the Conduit/Fiber System _____________________________________45 8.5 Service Offerings ________________________________________________________46 8.6 Equipment ______________________________________________________________46 8.7 Conduit and Dark Fiber Design ___________________________________________47 8.8 Conduit and Dark Fiber Cost Estimate _____________________________________50 8.9 Cost Estimate Assumptions _______________________________________________55 8.10 Dark Fiber Lease Considerations _________________________________________55 9 Infrastructure Funding and Grant Opportunities _____________________56 9.1 California Funding Opportunities _________________________________________57 9.2 BEAD Funding __________________________________________________________60 9.3 Digital Equity Act of 2021 _________________________________________________61 9.4 Middle Mile Broadband Infrastructure Program _____________________________61 9.5 HUD Community Development Block Grants _______________________________62 9.6 Opportunity Zones ______________________________________________________62 9.7 Bonding ________________________________________________________________62 9.8 Lease Fees ______________________________________________________________63 9.9 Community Reinvestment Act _____________________________________________63 9.10 Connection Fees _______________________________________________________63 9.11 New Markets Tax Credit _________________________________________________64 9.12 Special Assessment/Service District/TIF ___________________________________65 9.13 Grant Application Activities _____________________________________________66 10 Obstacles to Broadband Deployment _____________________________68 Appendix A: Broadband Provider Analysis ____________________________69 Appendix B: Conduit Design Detail __________________________________91 Appendix C: SiFi Analysis __________________________________________116 Appendix D: Glossary ____________________________________________124 Disclaimer The telecommunications business is continually evolving. We have made our best effort to apply our experience and knowledge to the business and technical information contained herein. We believe the data we have presented at this point in time to be accurate and to be representative of the current state of the telecommunications industry. Design Nine, Inc. presents this information solely for planning purposes. This document is not intended to be a replacement for formal engineering studies that are normally required to implement a telecommunications infrastructure. No warranty as to the ﬁtness of this information for any particular building, network, or system is expressed or implied. Design Nine, Inc. will not be responsible for the misuse or misapplication of this information. For more information: www.designnine.com 1 SUMMARY AND RECOMMENDATIONS A broadband study of broadband in downtown Arcadia began in late fall of 2022 and was completed in the summer of 2023. The study was developed in response to requests from the business community to the City leaders to assist with improved availability of business class broadband in the downtown area of Arcadia and to assist with more affordable broadband and Internet services. In the downtown area, businesses have limited choice of providers, Internet packages, and pricing options. Some businesses have reported very expensive one time construction costs to get improved service. While many residential areas of Arcadia already have very affordable ﬁber Internet services, downtown businesses have very limited access to ﬁber Internet. Downtown businesses are typically paying more for less capable Internet service than many residents with superior ﬁber Internet service. Downtown businesses played an important role in the study by participating in group meetings, one on one meetings and calls, and contributing to a broadband survey used to collect information about business broadband speeds, costs, and needs. Downtown Arcadia businesses have restricted options for Internet service. Many of those businesses still must use the older, copper-based asymmetric (unequal upload and download speeds) cable Internet service. The asymmetric service has much slower upload speeds than download speeds, which can affect a business’ ability to efﬁciently upload and share large ﬁles, make best use of increasingly common cloud-based services, and use videoconferencing services like Teams and Zoom with excellent quality audio and video. A primary obstacle to better Internet service in downtown Arcadia is the high cost of installing new underground ﬁber cable. It is not economical for an Internet Service Provider (ISP) to construct hundreds or thousands of feet of new underground conduit and ﬁber cable just to reach one or two customers. By creating a Downtown Connectivity Project, the City can play an important role in reducing ISP capital costs. The development of an open access conduit and dark ﬁber cable system that passes most buildings in downtown Arcadia would help retain existing businesses and help attract new businesses and jobs. The open access system would offer dark ﬁber strands to any interested ISP. The City would not be an Internet provider, and would have very limited operations and maintenance expense for the system. Each ISP would install their own equipment and be responsible for sales and marketing of their services. The advantages of this approach include reduced construction costs of ISPs, and the ability to have multiple ISPs using the comprehensive City-owned conduit ﬁber system would mean increased competition, a wider variety of high performance Internet packages, and reduced prices for those services. Better Internet service and attractive pricing would increase the value of downtown ofﬁce space and help attract new businesses and workers to Arcadia. Arcadia Broadband Strategic Plan Page of 1 125 RECOMMENDATIONS Broadband Connectivity Project A conduit and dark ﬁber network in the downtown area of Arcadia would bring improved broadband Internet speeds and a wider choice of Internet providers. The increased competition for business customers would also help lower the cost of business class Internet for downtown retail, professional, and enterprise businesses. The improved access and lower costs for Internet would also help retain existing businesses in the downtown area and help attract new businesses and jobs. The City government should not become an Internet provider Instead, it could focus on developing public/private partnerships by making targeted investments in passive broadband infrastructure like towers and dark ﬁber. These assets have long life spans of forty years or more and can be leased out to private sector ISPs (passive infrastructure leasing is not a telecommunications service). While the revenue from the lease agreements will be modest, the funds generated can be used to support maintenance of this infrastructure. Develop partnerships with ISPs Foster public-private partnerships to leverage the expertise and resources of private broadband providers. This can include joint investment initiatives, shared infrastructure deployments, or collaboration on community broadband projects. Streamline Permitting Processes Simplify and expedite the permitting processes for broadband infrastructure deployment. This can include creating a dedicated broadband team within the City's permitting department, establishing clear guidelines and timelines for approvals, and implementing online application systems. Cost: Moderate to high, depending on administrative changes and system upgrades required. Adopt a "Dig Once" Policy Implement a "dig once" policy that requires the installation of conduit or ﬁber-optic infrastructure during planned excavation or construction projects. This approach reduces future costs by minimizing the need for disruptive and expensive excavation work. Cost: Low to moderate, depending on coordination efforts with construction projects and potential infrastructure investments. Identify Revenue Generation Opportunities Explore potential revenue generation opportunities related to broadband deployment, such as leasing access to City assets or rights-of-way, offering expedited permitting for a fee, or exploring partnerships with service providers that provide revenue-sharing arrangements. Cost: Low to moderate, depending on the administrative and legal work involved in identifying and implementing revenue opportunities. Develop Community Development and Planning Guidelines Integrate broadband infrastructure requirements into community development and planning guidelines. This ensures that new developments include provisions for broadband infrastructure, supporting future connectivity needs. Cost: Low to moderate, primarily involving updates to planning guidelines and coordination with developers. Arcadia Broadband Strategic Plan Page of 2 125 2 BROADBAND AS ESSENTIAL INFRASTRUCTURE Governments build and manage roads, but don’t own or manage the businesses that use those roads to deliver goods and services. There is true competitive pricing between competing service providers, and little or no government regulation is required. The tremendous versatility of the Internet and the underlying technology bases now allows services that used to require their own, separate (analog) road system (voice telephony and TV services) to be delivered alongside other services like Internet access on a single, integrated digital road system. If we managed overnight package delivery the way we manage telecom, UPS and Fedex would only deliver packages to residences and businesses where each delivery ﬁrm had built a private road for their exclusive use. We recognize immediately the limitations of such a business model–few of us would have overnight package delivery to our homes because the small number of packages delivered would not justify the expense of building a private paved road. Before the rise of the automobile, most roads were built largely by the private sector. After cars became important to commerce and economic development, communities began building and maintaining roads because it became an economic development imperative to have a modern transportation system in communities. Before the rise of the Internet, digital networks were built largely by the private sector. As broadband has become critical to commerce and economic development, communities with digital roads are more competitive globally. The time has come to recognize that it is inefﬁcient and wasteful to build full duplicated digital road systems, which only raise the cost of telecom services to all public and private users. Networks that share capacity among a wide variety of public and private users have a lower cost of construction and a lower cost of operation—beneﬁting all users. Arcadia Broadband Strategic Plan Page of 3 125 A UTILITY COMPARISON SHARED ROADS SHARED AIRPORTS SHARED TELECOM Historically, roads have been built and maintained by the community for the use of all, especially private ﬁrms that want to use them to deliver goods and services. Airports are built and maintained by a community or region as an economic and community development asset. Both public and private users beneﬁt from the shared use of a single, well-designed airport Duct and ﬁber may be installed and maintained by the community and/or a neutral owner/operator for the use of all, including private ﬁrms that want to use them to deliver goods and services. Access to the community road system is provided by parking lots and driveways, built by property owners, developers and builders. Airport assets like departure gates, ticket areas, and runways provide access to the airline services. In the digital road system, access across private property to the community–wide network in the public right of way is provided by duct and ﬁber built by property owners and/or developers and builders. The local government uses roads only to deliver government services. Local government does not offer services like overnight package delivery. While the local government or a consortium of local governments typically own the airport facility, the local governments do not offer ﬂight services. Local government uses the digital transport system only to deliver government services. Government does not offer services like Internet access or Voice over IP. Private sector businesses use roads so that their own cars and trucks can deliver goods and services to customers. Because businesses do not have to build and maintain roads, all businesses beneﬁt directly by being able to reach more customers at less expense. Private sector airlines are able to offer competitively priced airfares because of the shared cost of the airport terminal facilities. Each airline does not build its own airport (which would sharply increase the cost of airfare). Private sector businesses use the digital transport system to deliver goods and services to customers. Because businesses do not have to build and maintain a digital road system, all service providers beneﬁt directly by being able to reach more customers at less expense. There are no road connection fees, and anyone may connect to the road system for free. Governments pay for the cost of maintaining roads largely from those that use the roads . Fees are proportional to use, from taxes on tires and gasoline. Businesses and citizens do not pay a fee to access the airport facility. The cost of maintaining the airport facility is paid by the airlines, which bundle that cost into the price of airfare. Fees are proportional to actual use by ﬂying customers. Airlines beneﬁt because they do not have to build, own, and operate the airport directly. Those costs are shared across all users. Any qualiﬁed service provider may connect to the digital road system for a nominal fee and begin to offer services, without any signiﬁcant capital expense. Network capital and operating costs are recovered by charging service providers a small fee that is based on a percentage of their income from services offered over the system. Arcadia Broadband Strategic Plan Page of 4 125 2.1 WHAT IS GOVERNMENT’S ROLE? Successful improvements in broadband access, affordability, and reliability for Arcadia involves several decision points, as outlined in the illustration below. Government has several “ﬁrst choice” options. Do nothing is to accept that businesses and residents in the City will have to continue to use whatever is available, despite the cost and bandwidth limitations that limit what many are able to do online. Government can remove barriers to private sector investment. This can be an effective and low cost strategy. Possibilities include reducing permit fees for ﬁber construction and tower installation, incentives to developers to install conduit and meet-me boxes in new residential and commercial construction, simpliﬁed permit requirements for utility pole installation on private property, and identifying areas of residential and business demand and sharing that information with providers. The City can choose to make investments in basic infrastructure (e.g. a ﬁber network) and make that infrastructure available to the private sector via revenue-generating lease agreements. The City can pursue public/private partnerships with technically qualiﬁed and ﬁnancially stable ISPs and WISPs. Where appropriate, the City can channel grant funds to providers while using the funds to build and manage new broadband infrastructure. Selected providers should be able to show technical competency and have a demonstrable track record of managing substantial ﬁber and/or wireless builds on time and within budget. When communities have chosen the option to compete directly with the private sector by offering retail Internet, phone, and TV services lawsuits from incumbents often create difﬁculty moving forward as well as expensive legal fees. Arcadia Broadband Strategic Plan Page of 5 125 What is the role of government? Do nothing (accept status quo) Remove barriers Invest in infrastructure Compete directly with private sector Reduce red tape, provide incentives for investment Lease basic infrastructure to the private sector Public/Private Partnerships Evaluate qualiﬁed ISPs and WISPS, support funding proposals 2.2 THE SHARED INFRASTRUCTURE BUSINESS MODEL Traditionally, the telecom services market has been vertically integrated, with telephone and cable companies owning the cable infrastructure (i.e. twisted pair copper cable for telephone, and coaxial copper cable for TV). These companies bundled analog services with their own infrastructure, which made sense when only one service could be delivered over the cable. American residents and businesses needed two networks: one for voice telephone service, and one for television. The rise of the Internet and associated changes in technology led to digital services (voice, video, Internet) that could be delivered simultaneously over a single cable or wireless connection. By the early 2000s, it was becoming apparent that it was inefﬁcient and costly to have two competing “retail” cable systems (e.g. telephone, cable) delivering the same content and services—it was only creating higher costs for residents and businesses. A new business model became possible: wholesale leasing of the cable/wireless infrastructure to private sector service providers, which unbundles the infrastructure from the services. A side effect of this unbundling is that it becomes much easier to determine what a customer is actually paying for a given service. In the vertically integrated 20th century model, with the cost of infrastructure maintenance bundled together with the services, it is much more difﬁcult to determine what a service actually costs. While a few communities have pursued the retail business model (typically building ﬁber to the home and business and selling retail Internet and other services directly to customers), most of these retail efforts have been by local governments that are also providing electric service—owning the utility poles is a signiﬁcant cost advantage not available in most communities. Within the wholesale business model, there are several different ways to generate revenue. Passive Infrastructure Leasing — In this approach, the City makes investments in a few targeted passive infrastructure types, typically broadband towers, and optionally conduit and dark ﬁber. This kind of basic infrastructure has virtually no day to day maintenance and management responsibilities, and can be leased out to private sector Internet providers so that those companies can expand their service area and service quality more rapidly. Lit Circuit Wholesale — In this approach, the network provides lit ﬁber circuits to providers, with one circuit allocated to each customer. Service providers are charged for the cost of each circuit. Service providers are responsible for their own customers and their own customer billing. Revenue is based on the number of customers who actually buy service (the take rate). Revenue is dependent on the marketing success of the service providers. Arcadia Broadband Strategic Plan Page of 6 125 What business model? Public Sector Retail Wholesale Infrastructure Direct competition with the private sector. Increased stafﬁng and operational costs, somewhat higher revenue. Partnership with private sector ISPs, reduced operational costs and responsibilities Utility Fee Wholesale — In this approach, every household and business in the community pays a monthly small utility fee. Service providers pay only a small fee for use of the network that is based on the total number of potential customers. In this model, the effective take rate from a revenue perspective is 100%. With this high take rate, the individual utility fee can be very modest because everyone pays something, rather than just those buying a service. In the wholesale infrastructure business model, local government investments are limited to basic transport infrastructure, including conduit, ﬁber, and network equipment. Services for businesses and residents are offered by private sector providers offering Internet, TV, telephone and other data services. Features Municipal Retail Wholesale Infrastructure Basic Concept Generally more difﬁcult to because of possible legal challenges from incumbent providers. Generally not an option in Arcadia. One or more private sector ISPs would use the infrastructure to sell their own services directly to residents and businesses. Can be a dark ﬁber approach, lit ﬁber approach, and/or wireless towers. Government Involvement Local government competes directly with the private sector for Internet service. City involvement is limited to providing basic infrastructure to ISPs. Management Local government is responsible for management and operations. Most functions could be outsourced to a qualiﬁed third party entity. ISPs responsible for virtually all day to day customer services and support. City only responsible for conduit/dark ﬁber maintenance and repairs. Competition The incumbent telephone and cable providers would compete vigorously against local government service offerings. Private sector ISPs would provide competition to the existing incumbent providers. Service Options Local government would sell only Internet. Businesses and residents could get TV and voice using their Internet connections. ISPs would focus on high speed Internet, with some other service offerings like voice and business services. Risks The primary risk would be lawsuits from incumbent providers. Limited risk if ﬁnancing can be identiﬁed. A limited but consistent awareness/marketing campaign is required to meet ﬁnancial targets for leasing conduit/ﬁber strands to ISPs. Arcadia Broadband Strategic Plan Page of 7 125 2.3 SERVICE PROVIDERS AND SHARED INFRASTRUCTURE The wholesale infrastructure model, where the local government is NOT selling retail telecommunications services, has been resistant to legal challenges, with at least one hundred communities in the U.S. that lease infrastructure to private sector service providers. The service providers that are usually most eager to become providers on a community-owned network are smaller local and regional providers. Once a community-owned network is under construction, it is typical that the incumbents, particularly the cable companies, begin lowering rates and offering special deals to customers to try to lock them in to multi-year contracts. There are two ways to approach this: •If the announcement of construction of community-owned infrastructure lowers prices and improves service from the incumbents, that is an economic beneﬁt to the businesses of the city. The new system, bringing new providers and a wider range of packages and pricing to citizens and businesses, creates the needed competition that motivates the incumbents to provide better prices and service. •If the City does move forward, a modest but well thought out information and education campaign about the beneﬁts and advantages will be important to counter mis-leading information from the incumbents. Part of the effort must be to let businesses know not to sign long term contracts with the existing incumbent providers. Arcadia Broadband Strategic Plan Page of 8 125 3 ASSET ANALYSIS There are a variety of existing assets, resources and infrastructure that could be used to facilitate further deployment of broadband services in the downtown business district. There may be an opportunity for the City to expand its smart city infrastructure by deploying conduit and dark ﬁber and leasing some of those assets (e.g. ﬁber strands) to private sector ISPs. The lease fees would offset the cost of installing the shared infrastructure. Utility Infrastructure The city's utility infrastructure, such as electric or water utility poles, conduits, or ducts, can be utilized for the deployment of broadband infrastructure. By leveraging these existing assets, the cost and time associated with deploying new infrastructure can be reduced for private sector Internet providers. Municipal Buildings and Facilities Municipal buildings and facilities, including city halls, libraries, schools, and community centers, can serve as potential locations for the installation of wireless access points or small cell sites. These assets can help improve connectivity in surrounding areas and provide public Wi-Fi hotspots. Streetlights and Trafﬁc Controls Streetlights and the City trafﬁc control network can serve a dual purpose as infrastructure for deploying wired broadband services, cellular 5G small cells, or WiFi wireless equipment. This can enhance coverage and capacity for wireless broadband services in downtown Arcadia. “Smart” streetlights that can be dimmed or turned off during low trafﬁc periods (e.g. late night, early morning) can be controlled with ﬁber-connected management systems. Energy savings from such initiatives can be used to help fund deployment of conduit and ﬁber in the downtown areas of the City. Public Rights-of-Way Public rights-of-way, such as roads, sidewalks, and medians, can be used to lay ﬁber optic cables or deploy wireless infrastructure. Streamlining access to public rights-of-way and establishing clear guidelines for deployment can facilitate broadband expansion. City permitting staff should ensure that telecom infrastructure as-built data is added to the City GIS system. Digital Infrastructure Plans Existing City plans and initiatives related to smart city development (e.g. “smart” water meters) or digital infrastructure can be aligned with broadband deployment strategies. Coordination between different departments and leveraging these plans can provide a cohesive framework for broadband expansion. The City Planning department should work closely with City engineering and permitting staff to track private sector telecom infrastructure that is placed in public right of way. Partnerships with Private Sector Collaborating with private sector entities, including ISPs, telecommunications companies, or infrastructure providers, can leverage their resources and expertise to facilitate broadband deployment. Public-private partnerships can help access additional funding, technical knowledge, and accelerate the expansion of services. A wide variety of assets in City of Arcadia are identiﬁed in the following pages. The included maps provide detail on the following: Arcadia Broadband Strategic Plan Page of 9 125 Potential Anchor Customers— This information is used to identify key users of Internet services that could beneﬁt from improved broadband infrastructure in the city. K12 schools, public safety facilities, ﬁre and rescue locations, health facilities, and city facilities are included. LMI/HUD Areas — Low and Moderate Income (LMI) and HUD-eligible areas often qualify for certain kinds of grants not available to other areas. 3.1 POTENTIAL ANCHOR CUSTOMERS Identifying potential anchor customers and leveraging existing anchors can play a crucial role in justifying private-sector investment in broadband infrastructure. Here are some potential anchor customers and strategies to leverage them in support of the City's broadband objectives for downtown Arcadia. Educational Institutions Schools, colleges, and universities are ideal anchor customers due to their signiﬁcant demand for high- speed internet access. Partnering with educational institutions in downtown Arcadia can attract private- sector investment. Strategies could include collaborating with educational institutions to share infrastructure, establishing public-private partnerships for connectivity solutions, or providing incentives for broadband providers to serve these institutions. Healthcare Facilities Hospitals, clinics, and healthcare facilities require reliable and high-speed connectivity for telemedicine, electronic health records, and medical imaging. Leveraging healthcare facilities as anchor customers can attract private investment. Encouraging partnerships between healthcare providers and broadband providers can lead to tailored solutions for their connectivity needs. Ofﬁce Buildings and Industrial Zones Ofﬁce buildings and industrial areas of downtown Arcadia will have a high concentration of businesses that rely on fast and reliable internet connectivity. Collaborating with building owners or industrial businesses can help attract private investment. This can involve providing incentives for broadband providers to serve these areas or facilitating the installation of shared infrastructure to lower costs. Government Ofﬁces and Municipal Services City ofﬁces require robust broadband connectivity for their operations. Leveraging the City’s facilities as anchor customers can help incentivize private investment. Strategies may include working with providers to provide connectivity services to City ofﬁces, exploring partnerships for network sharing, or establishing public-private collaborations to improve connectivity in government facilities. Community Centers and Libraries Community centers and libraries serve as important gathering spaces for residents and often provide public access to computers and internet services. Partnering with these institutions can help attract private investment. Strategies could include offering incentives for broadband providers to improve connectivity in these facilities or exploring innovative models such as Wi-Fi hotspots in community centers or mobile library services. Entertainment and Arts Venues Entertainment venues, theaters, and arts centers in the downtown area require internet connectivity for digital performances, streaming, and online ticketing. These venues as anchor customers can help Arcadia Broadband Strategic Plan Page of 10 125 attract private investment. Strategies may include facilitating partnerships between broadband providers and entertainment venues or providing incentives for connectivity enhancements. Sports Facilities and Arenas Sports facilities and arenas in Arcadia also require robust broadband connectivity for ticketing systems, live streaming, and fan engagement. Leveraging these venues as anchor customers can justify private investment. Exploring partnerships with broadband providers or offering incentives to enhance connectivity in these venues can be effective strategies. Arcadia Broadband Strategic Plan Page of 11 125 Points of Interest Community Center Fire Station Police Station Townhall Library Hospital Schools Arcadia, California Created by Design Nine, Inc. 5/23/23023 County of Los Angeles, California State Parks, Esri, HERE, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, USDA, Esri, NASA, NGA, USGS, FEMA±0 10.5 Miles Scale: 1:42,100 3.2 POPULATION AND DENSITY DISTRIBUTION This map shows the population and density distribution in the city, by census block. This information can be helpful when working with service providers and when trying to identify what technologies are most appropriate for various areas of the city. Arcadia Broadband Strategic Plan Page of 12 125 Population Density by Census Block Groups (2021 ACS Estimates) Population / Square Mile 611 - 4,000 4,000 - 10,000 10,000 - 15,000 15,000 - 32,264 Arcadia, California Created by Design Nine, Inc. 5/23/23023 County of Los Angeles, California State Parks, Esri, HERE, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, USDA, Esri, NASA, NGA, USGS, FEMA±0 10.5 Miles Scale: 1:42,100 3.3 LMI AND HUD ELIGIBLE AREAS HUD-eligible areas are determined by Low and Moderate Income (LMI) statistics—but can be different from census blocks in the city that meet LMI thresholds. HUD-eligible census blocks can qualify for CDBG funding for telecom infrastructure projects. Arcadia does have some HUD grant eligible areas. Arcadia Broadband Strategic Plan Page of 13 125 Percent of Population with Low to Moderate Income (LMI) by Census Block Groyps (2019 ACS) Percent 4% - 20% 21% - 36% 37% - 50% 51% - 69% Arcadia, California Created by Design Nine, Inc. 5/23/23023 County of Los Angeles, California State Parks, Esri, HERE, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, USDA, Esri, NASA, NGA, USGS, FEMA±0 10.5 Miles Scale: 1:42,100 Arcadia Broadband Strategic Plan Page of 14 125 HUD Grant Eligible Census Block Groups (2019 ACS Estimates) Eligibility Status Not HUD Grant Eligible Could be HUD Grant Eligible HUD Grant Eligible Arcadia, California Created by Design Nine, Inc. 5/23/23023 County of Los Angeles, California State Parks, Esri, HERE, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, USDA, Esri, NASA, NGA, USGS, FEMA±0 10.5 Miles Scale: 1:42,100 4 FIBER OPTIC AVAILABILITY Fiber availability data is compiled from publicly available sources. The FCC (Federal Communications Commission) provides a wide variety of broadband and telecom data as reported to the FCC by the providers. Some telecom providers do not share their route data. In residential areas of the city, AT&T, Earthlink, Frontier, and Giggle Fiber all offer ﬁber service, but not to every residence. AT&T and Frontier are the predominate ﬁber providers. In the downtown area of the city, ﬁber availability is much more limited. Downtown Arcadia, with respect to telecom infrastructure, is an “urban” environment with much higher construction costs than in residential neighborhoods. The high cost of installing ﬁber under urban streets and sidewalks is a deterrent to widespread ﬁber availability. Arcadia Broadband Strategic Plan Page of 15 125 4.1 DOWNTOWN FIBER AVAILABILITY Data provided by the National Broadband Map shows very limited or no business class ﬁber coverage in downtown Arcadia. Some downtown businesses reported in the broadband survey results that they did have a ﬁber connection, and it appears that Giggle ﬁber may have some limited availability in the downtown area. Arcadia Broadband Strategic Plan Page of 16 125 4.2 NUMBER OF FIBER PROVIDERS This map shows the availability of ISPs offering business class ﬁber services in Arcadia. In the downtown area (the expanded rectangle), there are none or only one provider. The large green block (claiming six providers) would seem to be a data anomaly. Other data indicates that are at most three ﬁber providers in a few residential areas of the city. Arcadia Broadband Strategic Plan Page of 17 125 4.3 TECHNOLOGY TYPE AVAILABILITY There are only a few areas of the city where ﬁber (the blue blocks) show availability. It is more widely available in residential neighborhoods. Arcadia Broadband Strategic Plan Page of 18 125 4.4 BROADBAND SERVICE LEVELS The FCC data indicates that the city is “fully served” with the exception of a several very small areas. This map uses the newer FCC deﬁnition of fully served, which is 100 Mbps download and 20 Mbps upload speeds. There are two problems with the 477 data: •The data is self-reported by the providers, who typically report their most optimistic Internet speeds. In practice, customers may not always get the reported speeds. •A single customer receiving service in a census block means that the provider can indicate that the entire census block is counted. So if one household receives 100/20 Mbps service, all households in that census block are counted as receiving that level of service. Arcadia Broadband Strategic Plan Page of 19 125 4.5 UPLOAD AND DOWNLOAD SPEEDS The next two maps illustrate upload and download speeds, also using recent FCC data given by the Internet Service Providers. Consistent with previous data in this section, the downtown area has some of the slowest broadband speeds in the city. The green shades indicate higher speed service availability. Download speeds exceed the 100 Mbps minimum everywhere in the city. Arcadia Broadband Strategic Plan Page of 20 125 Throughout the city, upload speeds are much lower than download speeds. The asymmetric speeds (upload much lower than download) reﬂects a continued reliance on cable Internet, which is an older, copper-based technology that has difﬁculty providing business class service (i.e. symmetric service, or equal upload and download speeds). Arcadia Broadband Strategic Plan Page of 21 125 5 BUSINESS BROADBAND SURVEY RESULTS During the summer of 2023, a broadband survey was conducted in Arcadia, California as part of a study in broadband needs. The online (Web) version of the survey was publicized on social media. A total of 10 responses were were collected from businesses in the City of Arcadia. Not all responders answered every question. Some key ﬁndings from the results are listed below. Arcadia Broadband Strategic Plan Page of 22 125 70% of respondents said that they believe the local government should help facilitate better broadband 40% of business respondents want better Internet access 100% indicated that the Internet is important to the success of their business over the next ﬁve years 50% of businesses are “satisﬁed” or “very satisﬁed” with the speed of their current Internet service Several businesses reported they have a ﬁber Internet connection 80% of businesses that responded need employees to be able to work from home DISTRIBUTION OF BUSINESS SURVEY RESPONSES The map below shows the geographic distribution of responses to the business survey. Arcadia Broadband Strategic Plan Page of 23 125 Business Survey Results Survey Responses Downtown Arcadia, California Created by Design Nine, Inc. 8/24/23023 Esri Community Maps Contributors, County of Los Angeles, California State Parks, © OpenStreetMap, Microsoft, Esri, HERE, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, US Census Bureau,±0 0.20.1 Miles Scale: 1:7,000 BUSINESS SURVEY SUMMARY DATA 1.What kind of Internet service are you using to complete this survey? 2.Select the items you agree with below Arcadia Broadband Strategic Plan Page of 24 125 Wired Internet (e.g. DSL, cable) Wireless ISP Cellular Internet on a smartphone I don't know 30%60% 10% 10% 20% 60% My business needs better Internet/data service. My business needs better landline telephone service I need better VoIP (Voice over IP) telephone service My business needs better cellular telephone service. We are satisﬁed with all of our services. 30%60% 50% 10% 10% 10% 40% Agree 3. How important do you think Internet technology will be for the success of your business over the next ﬁve years? 4a. Total number of employees 4b. Total number of Internet users 1 to 10 70% 11 to 40 30% 41 to 80 0% 81 to 150 0% Over 150 0% 1 to10 60% 11 to 40 20% 41 to 80 0% 81 to 150 10% Over 150 10% Arcadia Broadband Strategic Plan Page of 25 125 Very Important Somewhat Important Neutral Unimportant 0%25%50%75%100% 0% 0% 20% 80% 5. If you are a business, what type? (select all that apply) Other types of businesses •Escrow services company 6. Is this a home-based business? 7. How much do you pay now for Internet access each month? Professional / Ofﬁce 4 40% Retail / Wholesale 3 30% Medical 1 10% Restaurant / Food Services 1 10% Educational 1 10% Other (Please Specify Below)1 10% Yes No 0 10 0%100% $0 to $100 $101 to $150 $151 to $500 $501 to $1,000 $1,001 to $5,000 $5,000 or more I don’t know 4 3 2 0 1 0 0 40%30%20%0%10%0%0% Arcadia Broadband Strategic Plan Page of 26 125 8. Are you satisﬁed with what you pay for Internet service? 9. What type of Internet do you have? Other types of Internet •SD WAN service, cable modem, cellular wireless failover 10. Who is your Internet service provider? Cable Modem 1 10% Fiber 4 40% Wireless ISP 2 20% DSL Line 1 10% Other (Please Specify Below)1 10% I don’t know 1 10% Spectrum 6 60% Giggle 2 20% AT&T 1 10% Verizon 1 10% Arcadia Broadband Strategic Plan Page of 27 125 40% 60% Yes No 11. Based on the type of Internet you selected above, why do you still have it? Respondents could choose more than one option. 12. What is the download speed of your Internet connection? (A Gigabit is 1000 Megabits (Mbps) 1-10 Mbps 10 - 50 Mbps 50-100 Mbps 100 - 1,000 Mbps 1,000+ Mbps (Gigabit) I don’t Know 0 2 1 2 1 4 0%20%10%20%10%40% Arcadia Broadband Strategic Plan Page of 28 125 Most reliable service available Best price available Too expensive to change No other options Limited other options Not interested in changing 25%50% 10% 10% 20% 20% 30% 40% 13. What is the upload speed of your Internet connection? (A Gigabit is 1000 Megabits (Mbps) 14. How satisﬁed are you with the speed of your Internet service? 15. How satisﬁed are you with the reliability of your Internet service? Less than 1 Mbps 1 - 3 Mbps 3 - 100 Mbps 100+ Mbps I don’t Know 0 0 4 2 4 0%0%40%20%40% 30% 60% Very Satisﬁed Satisﬁed Neutral Dissatisﬁed Very Dissatisﬁed 0%0% 50% 30% 20% 30% 60% Very Satisﬁed Satisﬁed Neutral Dissatisﬁed Very Dissatisﬁed 0% 10% 40% 30% 20% Arcadia Broadband Strategic Plan Page of 29 125 16. How important is a redundant or second Internet connection to your business? 17. Please select all that apply to your current Internet provider 18. Select all the items you use the Internet for now (Select all that apply) Monitor / control security, alarms, health, processes, etc.8 80% Videoconferences (Zoom, Webex, Teams, GoToMeeting)7 70% Online Backup (ﬁles, photos, music, company data) 7 70% Processing credit card / debit card transactions 6 60% Social Media (Facebook, LinkedIn, Twitter, Instagram)6 60% VoIP Internet phone(Vonage/Skype, etc.)6 60% Ordering / managing inventory 5 50% Receiving and processing online orders 5 50% Arcadia Broadband Strategic Plan Page of 30 125 Very Important Somewhat Important Neutral Not Important 30%60% 10% 30% 10% 50% I am satisﬁed with my Internet provider Cannot rely on the service Price is unreasonable for the service I receive Slow or poor technical support The speed I want is not available at my business location Poor customer service 30%60% 10% 20% 20% 20% 30% 50% Other uses for the Internet •Website design and editing videos 19. What kind of telephone service do you have? 20. Do you or your employees use a VPN (Virtual Private Network) to obtain remote access for your work or to a company network? Offer customers free WiFi service while shopping 5 50% Cloud-based business, accounting or other services 4 40% Other 1 10% Yes No I Don’t Know 2 7 1 20%70%10% Arcadia Broadband Strategic Plan Page of 31 125 VoIP Landline and cellphone service Landline only, no cellphone service Cellphone service only 30%60% 10% 10% 30% 50% 21. How important is it for your employees to be able to work from home? 22. Does limited Internet access at employees’ residences impact your business? 23. Does the availability or pricing of existing Internet options impact your business’s decision to relocate or stay in the city? Arcadia Broadband Strategic Plan Page of 32 125 Very important on a consistent basis Very important occasionally Occasionally It would be nice, but it’s not important No 0%35%70% 20% 60% 20% 50%50% Yes No 60% 40% Yes No If yes, brieﬂy state why: •Being a website designer and video producer, internet and the quality and speed of internet service is vital ... imperative ... highly important to the success of my business .... and mental well-being •I moved my business to Downtown Arcadia in December. But internet availability dictated where I could move. The original space I was interested in was in the next block and internet was not good there, so I couldn’t take that space •Spectrum Internet is not reliable. I have to pay for a SD WAN service and cellular service as a backup to maintain reliable internet connectivity. •That’s the least of the problems with Arcadia!! •We could not move to another city that does not have ﬁber internet 24. Are you interested in Gigabit (high speed) ﬁber Internet Service? 25. Should the county government have a role in facilitating better and more affordable broadband services? 26. Any Other Comments •The government should be involved only if helps the business and the city together. Thank you for this survey and thank you for your concern. Yes No 7 3 70%30% Arcadia Broadband Strategic Plan Page of 33 125 50% 20% 30% Yes No Maybe, but I need to know more about ﬁber Internet ﬁrst 6 GAP ANALYSIS A broadband study kick-off meeting was held with Arcadia management personnel on 12/6/22. Present at the meeting were Tim Schwehr (former Arcadia ECD Director), Jason Kruckeberg (Arcadia Asst. City Manager.), Alana Bautista (Arcadia Management Analyst), Andrew Cohill (Design Nine CEO), Dave Sobotta (Design Nine Marketing Director) and Jack Maytum (Design Nine Senior Broadband Analyst). This study was initiated by the Arcadia Downtown Business Improvement District. Arcadia management wanted to evaluate high-level options regarding improvements to broadband services in the city. Should the city build out its own system? An impetus for the broadband study was a proposal to the city by SiFi, a British company, offering to construct an open-access, ﬁber-optic network in downtown Arcadia at no cost to the city. An evaluation of the SiFi proposal is included in this report. Initial stakeholder meetings were held on 12/15/22. A brieﬁng with Tim Schwehr and Jack Maytum was followed by meetings with members of the Downtown Arcadia Improvement Association and later by a meeting with Karen MacNair, CEO of the Arcadia Chamber of Commerce. On 2/9/23 jack Maytum met with the board of directors from the Downtown Arcadia Improvement Association to explain the goals of the broadband study and to discuss the board members’ broadband issues. In all cases, the primary complaints concerning Arcadia’s broadband services for local small businesses centered on the lack of high-speed ﬁber-optic based systems and little competition among providers which leads to high Internet costs for businesses in downtown Arcadia. On 3/16/23 Jack Maytum attended the online meeting for those companies providing utility services to Arcadia. This meeting was one of the regularly scheduled quarterly meetings hosted by the Arcadia Engineering Department. Kevin Merrill, City Engineer, introduced the participants and lead a discussion of the city’s plans for economic development and infrastructure improvement. The intention was to provide a forum for a discussion of broadband expansion with the incumbent broadband providers but none of them were present at the meeting. Nevertheless, the meeting provided a useful overview of the many plans and projects for municipal improvement already underway in Arcadia. 6.1 GAPS IN THE INFRASTRUCTURE Gaps in the existing broadband infrastructure within Downtown Arcadia, particularly for small businesses, can be described as follows. Limited Coverage Certain areas of Downtown Arcadia may have limited or no access to broadband services. This could be due to the absence of internet service providers (ISPs) in those areas or insufﬁcient infrastructure to provide reliable and high-speed connections. Slow Internet Speeds Even if broadband services are available, there might be issues with slow internet speeds. This could be a result of outdated infrastructure or network congestion due to a high number of users in the area. Arcadia Broadband Strategic Plan Page of 34 125 Lack of Fiber-Optic Connectivity Fiber-optic cables offer high-speed and reliable internet connections. However, some areas in Downtown Arcadia do not have a proper ﬁber-optic network, limiting the availability of high-speed broadband services. Limited Competition Although there are a relatively large number of ISPs servicing the broadband market in Downtown Arcadia there is limited competition among ISPs in each speciﬁc neighborhood. This is a common circumstance by design; ISPs seldom overbuild a neighborhood containing an existing service provider. This lack of competition can result in higher prices and fewer incentives for ISPs to invest in infrastructure improvements. Unequal Access There might be disparities in broadband access across different demographics or socioeconomic groups within Downtown Arcadia. This digital divide can result in certain communities or individuals having limited access to broadband services and the opportunities they provide. 6.2 HOW MUCH BROADBAND IS ENOUGH? Bandwidth needs for the past several years have been growing by an estimated 30% per year and show no sign of slowing. This means residential and business bandwidth needs are doubling every three years. As computers and associated hardware (e.g. video cameras, audio equipment, and VoIP phones) become more powerful and less expensive, new applications and services are continually emerging that drive demand for more bandwidth. “Next-generation” is the term used to describe future planning for network connectivity and infrastructure. Next-generation broadband reaps substantial beneﬁts. There are several key beneﬁts of Next-generation broadband: •Dramatically faster ﬁle transfer speeds for both uploads and downloads. •The ability to transmit streaming video, transforming the Internet into a more visual medium. •The means to engage in true-real time collaboration. •The ability to use many applications simultaneously. •The ability to maintain ﬂexible work schedules by being able to work from home on a part- time or full-time basis. •The ability to obtain health-related services for an occasional illness and/or long term medical services for chronic illnesses. Clearly, consumers have a strong interest in a visual medium from when and wherever they are. YouTube is the second most popular search engine after Google, which demonstrates the need to support the infrastructure to transmit streaming video. In addition to video streaming, true real-time collaboration also provides an effective way for people to interact from wherever they are. People can engage in a two-way real-time collaboration so that fruitful, visual conversations can be held between friends, family, business associates from the state, country, or internationally. Arcadia Broadband Strategic Plan Page of 35 125 Because of ﬁber networks, employees have the capability of working from home. Findings suggest that if all Americans had ﬁber to the home, this would lead to a 5% reduction in gasoline use, a 4% reduction in carbon dioxide emissions, $5B in lower road expenditures, and $1.5B commute hours recaptured. In Arcadia today, many residents and businesses are still relying on copper-based services. The bandwidth tables on the following pages show what is likely to be needed over the the next several years in terms of bandwidth. The existing copper infrastructure is going to become a limiting factor in economic development. 6.3 JOB AND WORKFORCE CHALLENGES Arcadia can be attractive to an emerging new group of businesspeople and entrepreneurs that typically are well-educated, own their own businesses or work for large global corporations, and are making choices about where they lived based on family needs and interests rather than business interests. This new breed of entrepreneurs and workers places a high value on the kinds of amenities that contribute to a good quality of life, such as traditional neighborhoods, vibrant downtown areas, a wide range of cultural and recreation opportunities, good schools, and a sense of place. These businesspeople and their families make relocation decisions based on quality of life only where there is abundant and affordable broadband, because broadband enables this new approach to personal and work life. However, what has become painfully clear during the Covid pandemic is that this deﬁnition of “fully served” is not adequate to support many kinds of work and business activities. If the goal is to enhance business access to broadband, there can be no upper limit on the deﬁnition of broadband. Saying that broadband (as an example) is 5 Megabits/second of bandwidth or 10 Megabits/second is to tell the residents and businesses in Arcadia that there will be limits on their work and job opportunities. Broadband is a community and economic development issue, not a technology issue. The essential question is not, “What system should we buy?” or “Is 5G wireless better or cheaper than ﬁber?” Instead, the question is: “What do businesses of Arcadia need to be able to compete globally over the next thirty years?” In short, Arcadia’s downtown area today has “little broadband” in the form of DSL and cable modem service, along with a very limited amount of “big broadband” in the form of ﬁber to some businesses. Two key concepts that should drive City investments in telecom are: “Broadband” is not the Internet Bandwidth is not a ﬁxed number Broadband and “the Internet” are often used interchangeably, but this has led to much confusion. Broadband refers to a delivery system, while “the Internet” is just one of many services that can be carried on a broadband network. The challenge for the City is to ensure that businesses have affordable access to a choice of broadband providers and services with sufﬁcient bandwidth to deliver all the services that will be needed and expected within the next three to four years, including but not limited to “the Internet.” Arcadia Broadband Strategic Plan Page of 36 125 The economic impact can include the following effects: •Difﬁculty retaining some existing businesses. As business bandwidth needs continue to increase over the next several years, some businesses may need to move out of the area to ensure that they have the right bandwidth to support their business operations. •Difﬁculty attracting new businesses. New businesses interested in some of the advantages of the city, like low cost of living, good recreational opportunities, and good workforce ethic, may be deterred by the cost and limited bandwidth available, and therefore choose other areas to locate. •Difﬁculty keeping younger workers and families in the city. Younger workers and families tend to be heavy users of Internet services, and real-estate agents are reporting that younger house buyers are reluctant to live in areas with poor Internet service. •Reductions in real estate value. Commercial ofﬁce buildings and retail business spaces with poor Internet service are more difﬁcult to rent, leading to lower prices and negatively impacting City income from property taxes. 6.4 BUSINESS BANDWIDTH NEEDS The table below shows bandwidth consumption for several types of businesses and a projection of the bandwidth needed 5 and 10 years out. The Covid pandemic has had the effect of dramatically increasing the number of home-based works and has also affected business travel decisions. More and more businesses will invest in high deﬁnition (HD) quality business videoconference systems to reduce the need for travel and to maintain high quality communications with a dispersed workforce. These HD systems require substantial bandwidth; a two-way HD video conference requires 20-25 Mbps during the conference, and a three-way conference requires 30-35 Mbps during the conference. Business Bandwidth Needs LARGE BUSINESS SMALL BUSINESS HOME BASED WORKER DESCRIPTION A larger business with about 50 workstations A small business with 10 to 15 employees, and 7-10 workstations One or two people working from home Concurrent Use Mbps Concurrent Use Mbps Concurrent Use Mbps Telephone 20 5 5 1.5 2 0.5 Credit Card Validation 4 4 1 1 0 Security System 1 5 1 2 2 2 Internet 50 500 7 10.5 2 20 VPN Connection 20 100 5 50 2 5 Data Backup 5 7.5 1 10 2 10 Web Hosting 1 2 0 0 Workforce Training (online classes)5 20 1 10 2 10 Arcadia Broadband Strategic Plan Page of 37 125 As more workers are moved to home-based ofﬁces, the business location must provide network access (Virtual Private Network (VPN)) to employees working from home. These home-based workers will make extensive use of videoconferencing to attend routine ofﬁce meetings remotely and to enhance communications with co-workers, including videoconferences with other home-based workers in the company. A VPN network providing remote access to just two or three home-based employees could require 50 Mbps of bandwidth during normal work hours. HD Video- conferencing 20 125 2 20 2 10 Totals 768.5 105.0 57.5 5 YEARS FROM NOW 3-10 Gbps 250-500 Mbps 100-200 Mbps 10 YEARS FROM NOW 10 + Gbps 2-4 Gbps 500-750 Mbps LARGE BUSINESS SMALL BUSINESS HOME BASED WORKER Arcadia Broadband Strategic Plan Page of 38 125 7 ISP ENGAGEMENT STRATEGY The following ISPs operate in Arcadia: Spectrum Spectrum is a prominent ISP in Arcadia, offering cable-based Internet services to both residential and business customers. They provide a range of plans with varying speeds to cater to different user requirements. AT&T AT&T delivers connectivity in Arcadia through its ﬁber-optic network. Their ﬁber plans offer ultra-fast speeds and reliable connections, primarily targeting businesses and tech-savvy users. Frontier Communications Frontier Communications provides DSL-based Internet services to Arcadia residents and businesses. While DSL speeds may not match those of cable or ﬁber, Frontier offers cost-effective options for users seeking more affordable Internet plans. The current president of Frontier Communications recently stated that a ﬁber-optic network replacement for the current DSL system will take at least ﬁve years to implement. Giggle Fiber Giggle Fiber claims to cover 75% of Arcadia with its “giggle Gig” ﬁber-optic service with up to 5Gb/sec speeds. Satellite Providers Satellite Internet providers, such as HughesNet and Viasat, offer connectivity options to areas where wired connections may be limited. These services are more suitable for rural or remote areas. There are additional ISPs offering certain services in Arcadia, and more detail on their service offerings are provided in Appendix A of this report. 7.1 ENGAGING WITH BROADBAND PROVIDERS A variety of strategies are available to improve interaction and engagement with local service providers. Learn More About Local ISPs Use the data in the report to understand more about the local internet service providers (ISPs) that operate in Arcadia, especially the downtown area. Meet with the providers to ask their opinion on how the City could support expanded ﬁber access in the downtown portions of the City. Publicly Available Broadband Maps Some local governments maintain or provide convenient access to publicly available broadband maps or databases (e.g. the National Broadband Map) that provide information about broadband service providers and their coverage areas. The City of Arcadia economic development information on the City Web site should make it easy to ﬁnd information about broadband availability in various parts of the City. Note that ﬁber to the home availability can be very attractive to relocating workers and families, especially the Millennial generation. Arcadia Broadband Strategic Plan Page of 39 125 Engage with Community Forums and Groups Promote the results of this broadband study in online forums, social media groups, or neighborhood associations focused on Downtown Arcadia. Local residents or businesses might have insights or recommendations regarding broadband service providers and infrastructure. Coverage Maps Obtain or create coverage maps that display the areas where broadband services are available. Ask ISPs offering services in the city to provide this data. Note that they may claim the information is “proprietary,” but data on any ﬁber cable that uses public right of way should be available to the City. The ISPs do not have to indicate what customers are connected to the ﬁber, but they are obligated to provide route maps of their ﬁber cables that are in the right of way. Comparative Analysis Compare gathered information to identify locations in the downtown area that are well-served, underserved, and unserved, noting that based on the FCC data in this report, most downtown areas are not well-served. Understand Provider Objectives During the engagement process, seek to understand the objectives and priorities of the broadband providers. Identify their expansion plans, areas of interest, and any potential challenges they may face in deploying infrastructure in Downtown Arcadia. Highlight City's Broadband Objectives Clearly communicate the City's broadband objectives, including the desired level of coverage, speed, and service quality. Emphasize the beneﬁts of improved broadband infrastructure, such as economic development, enhanced education, healthcare, and public safety. Identify Mutual Beneﬁts Identify areas of mutual beneﬁt between the City and broadband providers. Highlight how improved broadband infrastructure can support the providers' business growth, customer base expansion, or revenue generation. Emphasize the potential for public-private partnerships and collaboration to achieve shared goals. Collaborative Planning Engage in collaborative planning with the broadband providers to identify opportunities for infrastructure deployment, including leveraging existing assets, such as conduit, rights-of-way, or public facilities. Explore possibilities for joint investment, resource sharing, or access to existing networks. Streamlined Permitting and Regulatory Processes Work with the broadband providers to streamline permitting and regulatory processes for infrastructure deployment. Simplify procedures, expedite approvals, and create clear guidelines to facilitate efﬁcient deployment while maintaining necessary oversight. Arcadia Broadband Strategic Plan Page of 40 125 Incentives and Support Assess the feasibility of providing incentives or support to broadband providers to encourage additional deployment. This could include expedited access to city assets, fee reductions, tax incentives, or assistance in navigating local regulations. Tailor incentives based on the speciﬁc needs and priorities of the providers. Regular Communication and Relationship Building Maintain regular communication and foster ongoing relationship-building efforts with broadband providers. Establish a dedicated point of contact within the City to address their concerns, provide updates on the progress of broadband initiatives, and seek input on potential improvements. Collaboration in Community Engagement Encourage broadband providers to actively engage with the community. Encourage their participation in public meetings, workshops, or outreach programs to address concerns, educate residents about available services, and gather feedback on service quality and coverage. 7.2 SHARED INFRASTRUCTURE The high cost of adding broadband conduit, handholes, and dark ﬁber in the downtown areas of Arcadia are very likely the key reason that downtown businesses are either underserved with ﬁber Internet or pay excessively expensive fees for ﬁber Internet services. The most straightforward approach to solving this problem would be for the City to invest in a shared broadband infrastructure system in most of the downtown area. The City, by defraying the cost of the infrastructure for ALL providers, would make it inexpensive and simple for multiple providers to offer a wide variety of affordable, high speed Internet and IP-based services. The City would not be an Internet provider. Rather, it would lease dark ﬁber and/or conduit to providers that want to offer ﬁber services to business customers. By passing most business and commercial buildings with conduit, ﬁber, and handholes, ISPs could install inexpensive ﬁber drops from the nearest handhole to a commercial building, and provide ﬁber services to tenants within that building. Conduit, handholes, and dark ﬁber are passive infrastructure, meaning there are no network electronics. The City would be responsible for the cost of locates (a minor expense and could be done by City employees) and for routine and emergency break-ﬁx, which is relatively rare for underground infrastructure. ISPs would be responsible for selling services, all interior cabling in ofﬁce buildings, and for all network electronics. A single modest pre-fab shelter would provide all of the rack space needed for multiple ISPs. A detailed pre-engineering design and cost estimate for a downtown shared broadband infrastructure is described in Section 8. Arcadia Broadband Strategic Plan Page of 41 125 8 RECOMMENDATIONS Arcadia can pursue several strategies to improve broadband accessibility and affordability in the downtown area of the city. These strategies are described below, and the Broadband Connectivity Project, described in more detail in the rest of this chapter, has the most potential to get businesses in the downtown area better pricing and improved service levels. Broadband Connectivity Project A conduit and dark ﬁber network in the downtown area of Arcadia would bring improved broadband Internet speeds and a wider choice of Internet providers. The increased competition for business customers would also help lower the cost of business class Internet for downtown retail, professional, and enterprise businesses. The improved access and lower costs for Internet would also help retain existing businesses in the downtown area and help attract new businesses and jobs. The conduit and dark ﬁber would be leased to interested Internet Service Providers who want to expand their service area in downtown. The project would remove the most signiﬁcant barrier to better Internet downtown, which is the high capital cost of broadband infrastructure in the urban downtown environment. A single conduit and ﬁber network, open to multiple providers, can bring more providers downtown at less cost to each provider—creating competition, lower prices, and better service. The City government should not become an Internet provider Instead, it could focus on developing public/private partnerships by making targeted investments in passive broadband infrastructure like towers and dark ﬁber. These assets have long life spans of forty years or more and can be leased out to private sector ISPs (passive infrastructure leasing is not a telecommunications service). While the revenue from the lease agreements will be modest, the funds generated can be used to support maintenance of this infrastructure. Develop partnerships with ISPs Foster public-private partnerships to leverage the expertise and resources of private broadband providers. This can include joint investment initiatives, shared infrastructure deployments, or collaboration on community broadband projects. Streamline Permitting Processes Simplify and expedite the permitting processes for broadband infrastructure deployment. This can include creating a dedicated broadband team within the City's permitting department, establishing clear guidelines and timelines for approvals, and implementing online application systems. Cost: Moderate to high, depending on administrative changes and system upgrades required. Adopt a "Dig Once" Policy Implement a "dig once" policy that requires the installation of conduit or ﬁber-optic infrastructure during planned excavation or construction projects. This approach reduces future costs by minimizing the need for disruptive and expensive excavation work. Cost: Low to moderate, depending on coordination efforts with construction projects and potential infrastructure investments. Identify Revenue Generation Opportunities Explore potential revenue generation opportunities related to broadband deployment, such as leasing access to City assets or rights-of-way, offering expedited permitting for a fee, or exploring partnerships Arcadia Broadband Strategic Plan Page of 42 125 with service providers that provide revenue-sharing arrangements. Cost: Low to moderate, depending on the administrative and legal work involved in identifying and implementing revenue opportunities. Develop Community Development and Planning Guidelines Integrate broadband infrastructure requirements into community development and planning guidelines. This ensures that new developments include provisions for broadband infrastructure, supporting future connectivity needs. Cost: Low to moderate, primarily involving updates to planning guidelines and coordination with developers. 8.1 THE DOWNTOWN CONNECTIVITY PROJECT The City of Arcadia dark downtown ﬁber and conduit network would be operated as city-owned project. The network would bring the downtown area several beneﬁts: •It would address the shortcomings of Internet availability in downtown Arcadia (high prices, limited availability of high performance ﬁber-delivered Internet. •A single, shared network infrastructure available for use by multiple providers would eliminate the capital costs that each provider currently faces if they want to expand service downtown. It is inefﬁcient and costly to expect multiple providers to each build duplicated infrastructure to each downtown building. •Because capital costs are sharply reduced for each provider, smaller providers could compete effectively with larger providers. The City-owned infrastructure will introduce true competition in the downtown area, which should lower prices, bring higher speeds, and higher quality customer service. •As a city-owned project, the network would be vested in the community and can be operated on behalf of the business community and economic development needs of the businesses of Arcadia. •It would generate a modest revenue stream for the City, which would be used to maintain the infrastructure. The network will be operated as a dark (unlit) ﬁber optic and telecom conduit network available to any and all service providers, including incumbent providers who want access to the signiﬁcant market opportunity represented by the residents and businesses of the City. The City would have a limited number of essential roles: •Contract Management - The City will hold contracts for outsourced network repairs and maintenance and outsourced construction of network extensions. The City will also manage service provider contracts for the ﬁber and/or conduit leases offered on the network. The limited scope of the network should minimize internal staff requirements. •Financial Management - The City will provide the ﬁnancial oversight of the network. Most routine bookkeeping and accounting would not require full time staff and can be handled easily with existing City accounting resources. •Public Awareness - The City will need to maintain a modest, ongoing public awareness campaign to ensure that local businesses are aware of the opportunity to obtain higher performance, broadband services from local providers using the City infrastructure. While service providers Arcadia Broadband Strategic Plan Page of 43 125 would be responsible for their own sales, billing and customer management, the City would focus on availability awareness in the community. •Project Development/Management - As funding sources are developed for portions of the conduit/dark ﬁber system, the City will provide ﬁnancial and project oversight of these projects during the implementation and construction phase. 8.2 DARK FIBER AND LIT FIBER About Dark Fiber Dark ﬁber is installed in conduit underground and/or hung on utility poles. It is called “dark” because no network electronics are installed to “light” the ﬁber (using small lasers in a ﬁber switch). For small municipal/local government ﬁber installations, dark ﬁber has a signiﬁcant advantage in terms of management—very little ongoing operational responsibility is required. Dark ﬁber is leased out to service providers, who install their own network electronics in cabinets or shelters attached to the ﬁber cables. The providers typically lease ﬁber pairs between the cabinet and their customers, and are responsible for all equipment-related management and maintenance. Dark ﬁber networks can be used by service providers to provision either Active Ethernet or GPON services to their customers. Dark ﬁber networks do not generate large amounts of revenue, but this is offset by very low maintenance costs—primarily an emergency break-ﬁx arrangement with a local or regional ﬁrm qualiﬁed to splice ﬁber. Emergency break-ﬁx contracts are usually based on a time and materials basis, so there is little or no expense if there are no ﬁber breaks. Other costs include “locates,” which are called in to California 811 service (Miss Utility Hotline) and are performed by either the local Public Works department or a private sector contractor. For small ﬁber networks, locate costs are generally modest. About Lit Fiber A “lit” ﬁber network includes the network electronics needed to transmit data over the ﬁber (using the small lasers in a ﬁber switch, hence there is light traveling over the ﬁber cable). In a lit network, “lit circuits” are leased out to service providers rather than ﬁber pairs. The muni/local government/ community network provides the network electronics, which reduces costs for the service provider— meaning they are able to pay higher lease fees for the circuits they use to deliver services (like Internet) to their customers. Lit networks generate more revenue, but also have higher expenses because the network electronics have to be monitored and managed on a 24/7/365 basis (this task can usually be outsourced at reasonable cost). However, very small ﬁber deployments often do not pass enough homes or businesses to generate sufﬁcient revenue to cover the higher costs. Like dark ﬁber, a lit network incurs break-ﬁx and locate costs as well. 8.3 THE MEET-ME SHELTER CONCEPT In downtown Arcadia, a single “meet me” shelter could be installed, and while it could be a freestanding cabinet, a small pre-fab shelter might be a better choice. A meet me shelter is a telecom cabinet or shelter with ﬁber cables installed between the cabinet and nearby ofﬁce buildings, commercial buildings, and retail spaces. Providers only have to reach the meet-me shelter location, Arcadia Broadband Strategic Plan Page of 44 125 lowering their costs. The City would provide a conduit and dark ﬁber system between the meet me shelter and downtown business and ofﬁce spaces. This approach dramatically reduces the upfront costs that providers must spend to reach business customers. It allows smaller providers to affordably enter the downtown Arcadia marketplace and compete with the larger, more expensive incumbents. The dark ﬁ ber approach minimizes operational costs. Service providers would install their own equipment in the shelter and would pay a modest monthly lease fee for the ﬁber strands they use to connect customers to their services. 8.4 OVERVIEW OF THE CONDUIT/FIBER SYSTEM The conceptual design of a telecom and broadband infrastructure is typically completed during the planning process. A conceptual design provides a high level road map used to further develop a speciﬁc implementation project. A conceptual design usually includes: •Network architecture at a high level, including the amount of ﬁber and wireless connectivity and how it can be deployed. •Early areas of deployment (e.g business parks, downtowns, residential, schools, and/or other areas) tied to broader community and economic development plans). •Pre-design estimates of the cost of construction of the initial network investments, usually using cost studies developed in the initial deployment areas. These estimates include identiﬁcation of major network costs and components. The architecture for the Sandpoint Network is based upon a dark ﬁber and passive infrastructure architecture. Network Core In Arcadia the system will be comprised of the initial conduit/ﬁber network and any future expansion. Service Provider equipment will be located at the provider cabinet. The City will provide and manage a centrally located patch panel for allocating and managing the leased ﬁber strands. Distribution and Access Networks Arcadia would invest in passive network elements which will consist of conduit, dark ﬁber, splice closures, and handholes. A single pre-fab shelter will be the termination point for the downtown ﬁber Arcadia Broadband Strategic Plan Page of 45 125 and conduit. The last mile ﬁber infrastructure (ﬁber drops to buildings and network electronics) would be provided by service providers. Service Provider Attachment Service Providers will be able to connect to Arcadia ﬁber at any handhole or splice closure on the network. Access to splice closures is managed by the City. Any IRU/lease holder who needs a splice in an existing handhole or splice closure must place an order with the City and will be charged for the actual cost, plus 20%. Service Delivery & Provisioning Service providers will be responsible for installing their own equipment and conﬁguring and managing their own services over the ﬁber. 8.5 SERVICE OFFERINGS Service offerings are created by the providers who lease the infrastructure. With the right equipment installed the dark ﬁber can deliver Voice, Video, Internet, and almost any other broadband service known today. A variety of services are likely to be offered, including: •Business triple play (voice, TV, Internet). •Internet Protocol services (e.g. Internet access) •VoIP •Layer 3 IP VPNs •Layer 2 VPNs •Data back up services •Video on demand 8.6 EQUIPMENT A downtown dark ﬁber network would beneﬁt both existing ISPs and new ISPs by providing affordable high performance transport in downtown Arcadia. This network would not offer any telecommunications services. It would provide only dark ﬁber leases and Indefeasible Right of Use (IRU) agreements to qualiﬁed telecommunications companies. The City would not be selling any telecommunications services. That would continue to be the domain of the private sector providers. The network could also improve access to City facilities in the downtown area. Arcadia Broadband Strategic Plan Page of 46 125 8.7 CONDUIT AND DARK FIBER DESIGN The Arcadia network would include only passive network items, including conduit, dark ﬁber, a single shelter, and patch panels. The City would not own or have any responsibility for network electronics (e.g. ﬁber switches, routers, power supplies, etc.). In the downtown core, the City will be deploying multi-path conduit for use by providers. Multi-path conduit - For all current and future conduit expansions in the downtown core, the City should standardize on 22/16 7-way Dura-Line FuturePath or equivalent. In most cases there will be 2x 7-way conduits in all distribution locations and a single 7-way conduit in most handholes. Oversized Vaults - In the downtown core the City should standardize on 36” x 48” x 36” double lidded maintenance holes. These oversized vault will allow multiple providers to store slack and place splice enclosures in the vaults. Conduit and handhole installation and construction times can be dependent on w e a t h e r a n d o n procurement. Most grant- funded projects require careful attention to a public procurement process, which can add 90 to 180 days to the timeline. Broadband Construction Timetable Project Type Project Execution Planning Project Procurement Project Engineering and Construction Total Estimated Timeline Fiber to the business projects 4-6 months 4-6 months 6-12 months 14-24 months Arcadia Broadband Strategic Plan Page of 47 125 Arcadia Broadband Strategic Plan Page of 48 125 This map illustrates individual section maps contained in Appendix B. Arcadia Broadband Strategic Plan Page of 49 125 8.8 CONDUIT AND DARK FIBER COST ESTIMATE The tables in this section provide a projected estimate of the cost to build out the entire conduit, handhole, and dark ﬁber system as proposed in the previous section. It is not necessary to build out the entire system at one time, and the distribution scheme as designed in the ﬁrst map in Section 8.6 illustrates one possible deployment scheme in four parts. Other build out schedules are also possible. The full build is approximately six miles of conduit. In the urban conditions in downtown Arcadia, all of the work could easily be completed in less than one year. Fiber construction times can be dependent on weather (more weather related delays are likely in late fall through early spring) and on procurement. The time of year that requests for proposals are issued can affect the cost of a project. If possible, ﬁber construction bids are likely to be most favorable when bid out in the fall. Most grant-funded projects require careful attention to a public procurement process, which can add 90 to 180 days to a typical construction timeline. Costs for the project have been estimated based on current market prices observed on similar projects. Supply chain delays that were common eighteen to twenty-four months ago have eased, but some materials may still have long lead times (several months). The costs provided here should remain reliable for three to six months. Actual construction costs cannot be fully ensured until formal quotes have been received from ﬁber contractors. Arcadia Fiber Route Overview 0 ITEM/PROJECT VALUE 1 Miles of Fiber / Conduit Installed 5.99 2 Number of Handholes Installed 223 3 Splice Closures Installed 150 4 Cabinets Installed 0 5 Number of Buildings Connected 235 6 Take Rate - Percentage of the Buildings Passed who are connected 50% 7 Aerial - Percentage of construction expected to be installed on utility poles.0% 8 Trenching - Percentage of construction installed by trenching 0% 9 Boring - Percentage of construction installed by horizontal drilling.96.25% 10 Slot Cutting - Conduit installed in street by special methods.5% 11 Rock Saw - Required where rock prevents the use of other methods.5% 12 Direct Bury - Conduit installed by direct bury methods (plow, vibratory plow)0% 13 Aerial Info 0% Aerial is estimated to account for water body crossings and other obstacles to construction. 14 Other Notes Estimated labor rates are based upon common rates seen for recent medium sized rural projects. Arcadia Broadband Strategic Plan Page of 50 125 Arcadia Fiber Cost Summary 0 ITEM/PROJECT ESTIMATED 1 Construction Materials $418,643 2 Distribution Labor $1,329,569 3 Structures, Cabinets, and Equipment $195,306 4 Drop Construction $922,375 5 Network Construction Subtotal $2,865,892 6 Project Mgmt, Network Engineering, Integration, and Testing $358,237 7 Misc Fees, Advertising, Technical Services $4,299 8 Bookkeeping and Administration $7,500 9 Engineering, Permitting $214,942 10 Legal Costs $4,299 11 Other Costs Subtotal $589,276 12 Project Total $3,455,169 13 Contingency at 5%$172,758 14 Project Total (with contingency)$3,627,927 Arcadia Broadband Strategic Plan Page of 51 125 1 ITEM/PROJECT UNITS UNIT COST LOW UNIT COST HIGH TOTAL (AVERAGE) 2 Aerial Construction 0 $4 $6 $0 3 Trenching 0 $17 $24 $0 4 Boring 24,107 $26 $35 $735,257 5 Slot Cutting 1,252 $10 $14 $15,028 6 Rock Saw 1,252 $22 $43 $40,700 7 Direct Bury / Vibratory Plow 0 $12 $12 $0 8 Make Ready Heavy 0 $800 $1,200 $0 9 Make Ready Light 0 $350 $500 $0 10 Pole Replacement 0 $3,000 $6,000 $0 11 Handhole Installation - Soft Surfaces 34 $625 $840 $24,905 12 Handhole Installation - Hard Surfaces 189 $1,600 $2,350 $373,275 13 FOSC Assembly and Installation 150 $450 $600 $78,750 14 Splicing (per splice estimate)2,090 $24 $35 $61,655 15 Total:$1,329,568.99 16 17 Construction labor based on past project experience. Bidding environment can have a signiﬁcant affect on labor pricing, especially for small projects. Arcadia Broadband Strategic Plan Page of 52 125 1 ITEM/PROJECT UNITS UNIT COST LOW UNIT COST HIGH TOTAL (AVERAGE) 2 Duraline 1.5” HDPE - 2 way divided reel 7273 $0.86 $0.96 $6,618 3 Duraline 7-Way with Pinpoint Trace Wire 17773 $2.50 $2.80 $47,098 4 Buried Fiber Marker Posts/Medallions 140 $20.00 $25.00 $3,150 5 288 Strand Fiber Optic Cable (avg strand count)17773 $1.75 $2.80 $40,434 6 Slack Fiber (50’ per hand hole)11200 $1.75 $2.80 $25,480 7 Large Handhole - 24x36x36 Concrete Polymer (incl. Lid)235 $850.00 $1,000.00 $217,375 8 Handhole Installation Materials (Gravel, Straw, etc.)223 $15.00 $30.00 $5,018 9 Fiber Splice Closure (Type D) with Trays/ Basket 158 $445.00 $485.00 $73,470 10 RR Crossings - Added Permitting & Engineering Costs 0$10,000.00$25,000.00 $0 11 Total:$418,643 12 13 Construction materials estimated with 5% overage for waste & slack. Contractor responsible for furnishing OSP materials. Recent lead times on ﬁber optic cable have been 90 days or more. Conduit, mule tape, tracer, and other linear foot items are often ordered as a single product on a single reel. Coordinate material ordering with contractors to match contractors’ installation preferences. Arcadia Broadband Strategic Plan Page of 53 125 Equipment / Drops 1 ITEM/PROJECT UNITS UNIT COST LOW UNIT COST HIGH TOTAL (AVERAGE) 2 12x20 Pre-fabricated Telecom Shelter 1 $97,767 $115,000 $106,384 3 Shelter Shipping 1 $9,844 $12,500 $11,172 4 Site Prep and Shelter Installation 1 $19,500 $25,000 $22,250 5 Generator 1 $12,500 $17,500 $15,000 6 Electrical Fit-up, Generator, and service Install 1 $10,000 $12,500 $11,250 7 Building Fit-up (Racks, Cable Management, etc.,)1 $6,500 $10,000 $8,250 8 FieldSmart 288F Patch Panel 4 $5,000 $5,500 $21,000 9 Total: $195,306 10 1 ITEM/PROJECT UNITS UNIT COST LOW UNIT COST HIGH TOTAL (AVERAGE) 2 Drop Construction - Service Location Handholes are being placed close to the buildings in most situations. This work will vary widely and will include some concrete/ pavement cutting, surface mount conduit on buildings, and could include inside work into telecom closets etc., 235 $2500 $5000 $881,250 3 Patch Cables, NID, Mounting Hardware, and Materials 235 $150 $200 $41,125 4 Total:$922,375 5 Arcadia Broadband Strategic Plan Page of 54 125 8.9 COST ESTIMATE ASSUMPTIONS The cost estimate for the conduit and dark ﬁber networks are based on current prices for materials and labor. Material prices have been somewhat volatile for the past eighteen to twenty-four months, but supply chain issues that were creating substantial price increases in 2021 and 2022 have moderated, but the pace of ﬁber deployment continues to increase, which can affect materials pricing. Labor costs have also been increasing over the past two years, again because of the increased pace of ﬁber to the premises deployments. Weather and the time of year that the bid is released can have a signiﬁcant effect on the cost ﬁber construction. Construction bids released in early to mid fall will typically attract better pricing that bids released in the winter and spring. The costs projected in this estimate can be affected by several factors. The costs have been conservatively estimated, but it should be assumed that this estimate only reﬂects market pricing for ninety days from the date of this report (late spring 2023). The true cost of ﬁber construction project has to be determined by bidding the labor and materials and getting binding quotes. Once dark ﬁber cable and/ existing or new towers have space available to lease to WISPs, there are policy and contract decisions that must be evaluated. 8.10 DARK FIBER LEASE CONSIDERATIONS Passive ﬁber infrastructure (i.e. no electronics) can include conduit, ﬁber cable, splice closures, and cabinets. Because all powered network equipment would be provided by the lessee (i.e. the ISP), there is no day to day management responsibilities and only occasional routine maintenance. Emergency break-ﬁx for situations like a cable broken by a construction ﬁrm working in the right of way can be outsourced to a qualiﬁed private sector provider. Local governments routinely manage much more complex water and sewer systems. Some guidelines for leasing dark ﬁber include: •There should be a single public price list for the cost of leasing ﬁber strands. •A standard master agreement should be used for leases. This agreement will typically require an SLA (Service Level Agreement) that speciﬁes repair times for emergency break-ﬁx (i.e. the ﬁber cable has been damaged and a qualiﬁed break-ﬁx repair ﬁrm must be on call to make repairs). •It will also be important to have Indefeasible Right of Use (IRU) pricing. Fiber strand leases are typically for periods of 10 years or less. IRUs are long term leases and are typically 20 to 30 years in length. IRU fees have two parts: a single upfront payment that usually reﬂects some portion of the construction cost for the ﬁber route. As an example, if a lease will include 12 strands of ﬁber on a 10 mile route of 144 strand ﬁber that cost $100,000 to construct, the one time fee might be 12/144 * $100,000 = $8,333. Most IRUs also have a modest annual maintenance fee that reﬂects the cost of maintenance and repairs; this would also be pro-rated to reﬂect the number of ﬁbers assigned to the IRU agreement. •Splice points and who is allowed to open handholes to perform splicing must be identiﬁed in the master agreement. Arcadia Broadband Strategic Plan Page of 55 125 9 INFRASTRUCTURE FUNDING AND GRANT OPPORTUNITIES There are a wide variety of state and Federal grant programs, and one outcome of the COVID crisis is a widespread recognition that access to affordable, high performance broadband for homes and businesses is both an economic and community development issue. Funding opportunities vary from state to state. The American Rescue Plan Act of 2021 (ARPA) allowed states and local governments to use some ARPA funds for broadband infrastructure improvements. Many localities chose to simply pass their ARPA funds directly to local and regional ISPs, with varying results. Some ISPs that received funds had little or no experience building ﬁber to the home networks, and their construction efforts have been slow and/or more costly than projected. Some areas have received excellent ﬁber to the home and ﬁber to the business services. It is important to note that any investment by the City in broadband infrastructure should be focused on passive infrastructure. Passive infrastructure can be leased to private sector service providers, generating long term revenue for maintenance and expansion. Leasing passive infrastructure like towers and dark ﬁber is not a telecommunications service. These assets will have a conservative life span of 30 years or more (e.g. wireless towers, conduit, ﬁber cable). These types of infrastructure investments create hard assets that have tangible value and can then be leveraged for additional borrowing. The demand for services and the associated fees paid for those services will provide the revenue that will pay back loans over time. There is ample time to recoup not only the initial capital investment, but also to receive regular income from the infrastructure. Arcadia Broadband Strategic Plan Page of 56 125 Funding Options Bonding General Fund/CIP Lease Fees Self Funding G.O. bonds Private sector providers pay appropriate fees to use the infrastructure Allocations from the General Fund or the Capital Improvement Fund Businesses and/or residents provide some or all of the capital expenses Grants Seek grants where available, including DHCD, USDA, FCC funds, other sources The ﬁnancing of local government and/or community-owned telecommunications infrastructure faces several challenges with respect to funding. •Not all local governments are willing to commit to making loan guarantees from other funding sources like property taxes, because the idea of community-owned telecom infrastructure has a limited track record and therefore a higher perceived risk. •Similarly, citizens are not always willing to commit to the possibility of broadband fees or higher taxes that may be needed to support a telecom infrastructure initiative, for many of the same reasons that local governments are still reluctant to make such commitments: perceived risk and a lack of history for such projects. •Finally, banks and investors are also more skeptical of community telecom projects because of the relative newness of the phenomenon. By comparison, there are decades of data on the ﬁnancial performance of water and sewer systems, so the perceived risk is lower. Somewhat paradoxically, the cost of such a community digital road system is lower when there is a day one commitment to build to any residence or business that requests service. This maximizes the potential marketplace of buyers and attracts more sellers to offer services because of the larger potential market. This is so because: •Service providers are reluctant to make a commitment to offer services on a network without knowing the total size of the market. A larger market, even if it takes several years to develop, is more attractive. •Funding agencies and investors that may provide loans and grants to a community network project want to know how the funds will be repaid and/or that grants will contribute to a ﬁnancially sustainable project. Knowing that the size of the customer base is the maximum possible for a service area helps reduce the perceived risk for providing loans and grants. 9.1 CALIFORNIA FUNDING OPPORTUNITIES The California Advanced Services Fund has played a crucial role in supporting broadband infrastructure development and promoting equitable access to high-speed internet services in California. By addressing the needs of unserved and underserved communities, the CASF aims to bridge the digital divide and foster economic growth, education, healthcare, and improved quality of life for all Californians. Broadband Infrastructure Grant Program (BIGP) The California Department of Housing and Community Development (HCD) administers the Broadband Infrastructure Grant Program. It offers grants to local governments, tribal entities, and nonproﬁt organizations for broadband infrastructure projects in unserved and underserved areas of California. The funding for the program can vary depending on the budget allocated by the California Department of Housing and Community Development (HCD) and other factors. The program aims to expand broadband access, bridge the digital divide, and promote equitable connectivity across the state. Here are some key details about the Broadband Infrastructure Grant Program (BIGP): Funding: The BIGP provides funding through grants to support broadband infrastructure projects. The speciﬁc amount of funding available can vary depending on the program budget allocated by the California Department of Housing and Community Development. Funding may come from various sources, including federal grants, state funds, and other funding streams. Arcadia Broadband Strategic Plan Page of 57 125 Eligibility: Eligible applicants for the BIGP grants include local governments, tribal entities, and nonproﬁt organizations. These entities can apply for funding to implement broadband infrastructure projects in unserved and underserved areas of California. The program prioritizes projects that demonstrate a clear need for broadband access and propose sustainable and scalable solutions. Project Types: The BIGP supports a wide range of broadband infrastructure projects, including the deployment of broadband networks, upgrading existing infrastructure, and other related initiatives. Projects can involve different technologies such as ﬁber optics, ﬁxed wireless, satellite, or other suitable broadband technologies that meet the program's goals. Unserved and Underserved Areas: The BIGP focuses on addressing the needs of unserved and underserved areas in California. Unserved areas are deﬁned as those lacking access to broadband speeds of at least 6 Mbps (download) and 1 Mbps (upload). Underserved areas are those with access to speeds below 25 Mbps (download) and 3 Mbps (upload). The program targets these areas to expand broadband connectivity and bridge the digital divide. Application Process: Interested entities must submit a grant application to the California Department of Housing and Community Development during designated application periods. The application typically requires detailed information about the proposed project, including project plans, budget, timeline, community impact, and other relevant details. The HCD evaluates the applications based on program criteria and priorities to determine funding recipients. Matching Funds: The BIGP may require applicants to provide matching funds or demonstrate additional sources of funding to supplement the grant. The matching requirements may vary depending on the project and its scope. The purpose of matching funds is to ensure a shared investment in expanding broadband access and encourage collaboration among stakeholders. Reporting and Oversight: Recipients of BIGP grants are typically required to submit periodic reports to the California Department of Housing and Community Development, detailing the progress of the project, expenses, outcomes, and other relevant information. The HCD monitors the projects to ensure compliance, proper use of funds, and the achievement of program objectives. The Broadband Infrastructure Grant Program (BIGP) plays a vital role in supporting broadband infrastructure development in unserved and underserved areas of California. By providing ﬁnancial assistance through grants, the program aims to improve broadband access, foster digital inclusion, and promote economic growth and community development. For the most up-to-date information about the program, it is advisable to visit the ofﬁcial website of the California Department of Housing and Community Development. California Teleconnect Fund (CTF) The California Teleconnect Fund is administered by the California Public Utilities Commission (CPUC) and provides discounted broadband and telephone services to eligible schools, libraries, hospitals, community-based organizations, and nonproﬁts. It aims to enhance digital access for these entities and improve connectivity in their respective communities. The program provides ﬁnancial assistance through discounts rather than direct funding allocations. The CTF discounts are typically 50% off the cost of eligible services, and in some cases, the discount can be as high as 70% for qualifying entities. The speciﬁc funding available through the CTF program is not a ﬁxed amount but rather depends on the total cost of eligible telecommunications services utilized by the participating entities. To obtain the most up-to-date information on the funding availability and discounts offered by the California Arcadia Broadband Strategic Plan Page of 58 125 Teleconnect Fund (CTF), it is recommended to visit the ofﬁcial website of the California Public Utilities Commission (CPUC), which administers the CTF program. Here are some key details about the California Teleconnect Fund (CTF): Eligibility: The CTF is available to eligible entities in California, including K-12 schools, libraries, community colleges, universities, hospitals, healthcare clinics, rural health care providers, community- based organizations, and nonproﬁts. Eligibility criteria may vary for different types of entities, and speciﬁc guidelines are provided by the CPUC. Discounts: The CTF offers discounts on eligible telecommunications services. The standard discount is 50% off the cost of eligible services. However, for qualifying entities serving speciﬁc populations, such as schools with a high percentage of students eligible for the National School Lunch Program or rural health care providers, the discount can be as high as 70%. Eligible Services: The CTF discounts apply to a wide range of eligible telecommunications services, including broadband internet access, voice services, and data transmission. These services can be obtained from participating telecommunications service providers who have entered into an agreement with the CPUC. Application Process: Eligible entities interested in participating in the CTF program need to submit an application to the CPUC. The application process typically involves providing information about the entity, its needs, and the services it intends to utilize. The CPUC reviews the applications and determines eligibility based on the program guidelines. Funding Source: The CTF is funded through a surcharge on intrastate telecommunications services in California. The surcharge is collected from telecommunications service providers and is used to provide the discounts to eligible entities. The exact surcharge rate and funding availability may vary over time based on CPUC decisions and program requirements. Program Oversight: The CPUC oversees the CTF program and is responsible for establishing and implementing program guidelines, eligibility criteria, discount rates, and other program details. The CPUC also reviews and approves telecommunications service provider agreements to ensure compliance and participation in the program. California Advanced Services Fund Broadband Adoption Account (CASF BAA) Within the broader California Advanced Services Fund, the CASF Broadband Adoption Account focuses on promoting broadband adoption and digital literacy. The CASF is administered by the CPUC. It supports projects that address barriers to broadband access and help underserved communities take advantage of available broadband services. The CASF has a broader focus on broadband deployment and adoption. The CASF aims to expand broadband infrastructure and increase broadband adoption in unserved and underserved areas of California. While the CASF primarily focuses on infrastructure deployment, it also supports projects and initiatives that address barriers to broadband adoption and promote digital literacy. These efforts to promote broadband adoption may involve partnerships with community-based organizations, educational institutions, and other entities working to improve digital inclusion. By addressing the challenges related to adoption and digital literacy, the CASF aims to ensure that communities have the necessary resources and skills to fully utilize broadband connectivity. Arcadia Broadband Strategic Plan Page of 59 125 Governor's Broadband Initiative The Governor's Broadband Initiative is an ongoing effort by the state government to bridge the digital divide in California. It encompasses various funding programs, policy initiatives, and partnerships aimed at expanding broadband infrastructure, improving access, and promoting digital equity across the state. This legislation, signed on July 15, 2021 in partnership with legislative leaders, advances the statewide broadband plan with expanded infrastructure prioritizing unserved and underserved areas. The California legislation includes: •$3.25 billion to build, operate and maintain an open access, state-owned middle mile network – high-capacity ﬁber lines that carry large amounts of data at higher speeds over longer distances between local networks. •$2 billion to set up last-mile broadband connections that will connect homes and businesses with local networks. The legislation expedites project deployment and enables Tribes and local governments to access this funding. •$750 million for a loan loss reserve fund to bolster the ability of local governments and nonproﬁts to secure ﬁnancing for broadband infrastructure. Creation of a broadband czar position at the California Department of Technology, and a broadband advisory committee with representatives from across state government and members appointed by the Legislature. 9.2 BEAD FUNDING The BEAD (Broadband Equity, Access, and Deployment) Program has been allocated $42.5 billion to expand Internet access. The funds will be distributed to individual states, based on the number of unserved households in each state. The BEAD program is part of the Infrastructure Investment and Jobs Act (IIJA) passed by Congress in 2021, with a total of $46.2 billion in funds for broadband. Funding will be distributed state by state based on the number of locations that fall below the 25/3 threshold. The program will allow some overbuilding (i.e. ﬁber deployment in areas that exceed the 25/3 threshold) but cannot be more than 20% of the total locations to be served. Areas that already have federal, state, or local funding allocated are not eligible; RDOF areas need to be examined as part of the application process, as they would not qualify. Funds can be spend for: •Broadband mapping, planning, and data collection. •New or upgraded broadband infrastructure (i.e. materials and equipment). •Cost of installation, labor, engineering, and related expenses. •Workforce training and development. An interesting requirement of acceptance of grant funds is that no data caps will be allowed. This is an excellent requirement that protects customers from a common type of “hidden” price increase in the future after the initial build is completed. One billion of the $42.5 billion has been allocated speciﬁcally for middle mile projects that will be operated as open access (non-discriminatory use by any and all providers and users). Partnerships are encouraged. Arcadia Broadband Strategic Plan Page of 60 125 9.3 DIGITAL EQUITY ACT OF 2021 The Digital Equity Act of 2021 provides $2.75 billion to establish three grant programs that promote digital equity and inclusion. These programs will fund projects that help ensure U.S. communities have the information technology capacity needed for full participation in society, democracy, and economy by promoting a diverse array of digital advancement projects. These projects may range from providing digital literacy and digital skills education to low-income populations, improving the online accessibility of social services for individuals with disabilities, or more accurately measuring broadband access and adoption in rural communities. Awards to the states were made in 2022. Local governments should check with the state agency administering these funds to determine if funds are still available. The three programs are: •The State Digital Equity Planning Grant Program is $60M formula grant program for states, territories and tribal governments to develop digital equity plans. This program is administered by allocating funds to each state, and the governor of each state will appoint an administering agency responsible for distributing the funds. No cost sharing or matching funds are required to apply for this program. •The Digital Equity Capacity Building Grant Program is a $1.44 billion formula grant program for states, territories, and tribal governments. As of late spring, 2023, this Federal program has not released a NOFA (Notice of Funds Availability). •The Digital Equity Competitive Grant Program is a $1.25 billion grant program. It will fund annual grant programs for ﬁve years to implement digital equity projects. As of late spring, 2023, this Federal program has not released a NOFA (Notice of Funds Availability). 9.4 MIDDLE MILE BROADBAND INFRASTRUCTURE PROGRAM The Federal Middle Mile (MM) program allocated $1 billion for high speed Internet access. The goal of the program is to expand middle mile infrastructure in unserved and underserved areas. “Middle mile” is deﬁned as the mi-section of Internet infrastructure that transports high volume data at high speed over long distances. Middle mile investments can also assist with the development of redundant ﬁber routes, which are important for economic development, public safety, education, and health care. Both states and local governments were eligible to apply, and collaborations were also eligible (e.g. city government and one or more ISP partners). For the ﬁnal round of funding, grant applications were due in the fall of 2022. Over 235 applications were submitted, and as of early spring, 2023, awards have not yet been announced. Grants can be used for the construction, improvement, or acquisition of middle mile infrastructure, including: •Construction, improvement, or acquisition of facilities and equipment •Engineering design, permitting and work related to project reviews •Personnel costs, incl. salaries and beneﬁts for staff and consultants •Other costs necessary to programmatic activities Arcadia Broadband Strategic Plan Page of 61 125 9.5 HUD COMMUNITY DEVELOPMENT BLOCK GRANTS The U.S. Housing and Urban Development (HUD) Community Development Block Grant (CDBG ) State Program allows the California state government to award grants to smaller units of general local government (e.g. counties, towns) that develop and preserve decent affordable housing, to provide services to the most vulnerable in a community, and to create and retain jobs. In recent years, CDBG funds have been successfully used for broadband infrastructure development where the local government applicant can show the improvements meet the general guidelines of the program—so grant funds have to spent in low and moderate income areas. Over a one, two, or three-year period, as selected by the grantee, not less than 70% of CDBG funds must be used for activities that beneﬁt low- and moderate-income persons. In addition, each activity must meet one of the following national objectives for the program: beneﬁt low- and moderate- income persons, prevention or elimination of slums or blight, or address community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community for which other funding is not available. More information is available here (https://www.hud.gov/program_ofﬁces/comm_planning/communitydevelopment/ programs). 9.6 OPPORTUNITY ZONES An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and has been approved by the Internal Revenue Service (IRS). Opportunity Zones are designed to create tax incentives for private investors to make investments that can encourage economic development and job creation in distressed communities. Opportunity Zones would be of most use for Internet Service Providers (ISPs) who could use the tax beneﬁts to make a business case to improve Internet access in a qualifying area (zone). Opportunity Zones are deﬁned by census tract, and the Census Bureau’s Geocoder online tool can provide census tract ID numbers. A link to the list of currently qualiﬁed census tracts can be found on this page (https://www.cdﬁfund.gov/opportunity-zones). Arcadia does not appear to have any designated Opportunity Zones. 9.7 BONDING Revenue bonds are repaid based on the expectation of receiving revenue from the network, and do not obligate the local government or taxpayers if ﬁnancial targets are not met. In that respect, they are different from general obligation bonds. Many kinds of regional projects (water, sewer, solid waste, etc.) are routinely ﬁnanced with revenue bonds. We believe many community projects will eventually ﬁnance a signiﬁcant portion of the effort with revenue bonds, but at the present time, the limited ﬁnancing history of most community-owned broadband networks has limited using revenue bonds. Selling revenue bonds for a start up municipal network can be more challenging because there is no ﬁnancial or management history for the venture. Bond investors typically prefer to see two or three years of revenue and expenses and a track record of management success. It would be advisable for the city to have an early conversation with qualiﬁed municipal bond counsel to assess the viability of this approach. However, the Covid crisis and the subsequent increase in demand for better Arcadia Broadband Strategic Plan Page of 62 125 broadband seems to encouraged the bond market to regard muni broadband ﬁnancing as less risky than in past years. Obtaining funding using revenue bonds requires an excellent municipal credit rating and an investment quality ﬁnancial plan for the operation and management of the network. Revenue bonds must be used carefully, and a well-designed ﬁnancial model is required to show investors that sufﬁcient cash ﬂow exists to pay back the loans. General obligation bonds are routinely used by local governments to ﬁnance municipal projects of all kinds. G.O. bonds are guaranteed by the good faith and credit of the local government, and are not tied to revenue generated by the project being funded (i.e. revenue bonds). G.O. bonds obligate the issuing government and the taxpayers directly, and in some cases could lead to increased local taxes to cover the interest and principal payments. In discussions with bond underwriters, it has been suggested that it would be easier to obtain bond funds for telecom if the telecom bonding amount was rolled into a larger water or sewer bond, or some other type of bond request that are more familiar to the bond market (e.g. adding $1M in telecom funds to a $10M bond initiative for other improvements). 9.8 LEASE FEES Initiatives like tower access and access to local government-owned conduit and ﬁber can create long term revenue streams from lease fees paid by service providers using that infrastructure. The City of Danville, Virginia has recovered their entire initial capital investment from lease fees paid by providers on the Danville ﬁber network. 9.9 COMMUNITY REINVESTMENT ACT The Community Reinvestment Act (CRA) was developed forty years ago to encourage banks and savings institutions to help meet the credit needs of their local communities, with a focus on low and moderate income areas of those communities. The Federal agencies that oversee private banks assign a CRA rating to each institution. Banks are often looking for well-planned community efforts that need loans. Such loans can improve a bank’s CRA rating. The CRA was revised in 2016 to encourage banks to support community broadband efforts. A community broadband project may be able to get some loan ﬁnancing from a local bank that wants to get credit for their CRA work. 9.10 CONNECTION FEES Tap fees, pass by fees, and connection fees are already commonly used by local governments for utilities like water and sewer. The revenue share model can be strengthened from additional sources of revenue, including one time pass by fees, connection fees and sweat equity contributions. It is important to note that the Co-op Membership Fee can be treated as a connection fee in whole or in part. Pass By Fees – Pass by fees could be assessed once the ﬁber passes by the property, just as some communities assess a pass by fee when municipal water or sewer is placed in the road or street–and the fee is assessed whether or not the premise is connected, on the basis that the value of the property has been increased when municipal water or sewer service passes by. At least one study has indicated Arcadia Broadband Strategic Plan Page of 63 125 that properties with ﬁber connections have a higher value by $5,000 to $7,000 that similar properties without ﬁber access. One Time Connection Fees – A one time connection fee can be assessed to property owners (e.g. residents and businesses) when the ﬁber drop from the street to the premise is installed. This is similar to the kinds of connection fees that are typically charged when a property is connected to a municipal water or sewer system. The fee is used to offset the cost of the ﬁber drop and the Customer Premise Equipment (CPE) needed to provide the operational access to the network. The connection fee can be modest (e.g. $100) or it can be a larger percentage of the actual cost of the connection. Fiber CPE may range from $250 to $350 and a ﬁber drop may cost from $200 for a premise very close to the distribution ﬁber passing along the property to $1,000 or more if the premise is hundreds of feet from the road. One variant would be to charge a minimum connection fee for up to some distance from the road (e.g. $100 for up to 75’ and $2 for each additional foot). There is already some data that indicates that residential property values increase by as much as $5,000 to $7,000 if ﬁber broadband services are available, so pass by fees can be justiﬁed on the basis of increased property values accruing to the property owner. Given the novelty of this approach, pass by fees may need more time to become an accepted ﬁnance approach, but tap fees (for installing the ﬁber cable from the street or pedestal to the side of the home or business) may be easier to use, especially for businesses that may need improved broadband access. Tap fees have the potential of reducing the take rate in the early phases of deployment, but as the value of the network becomes established, it is likely that there will be much less resistance to paying a connection fee. 9.11 NEW MARKETS TAX CREDIT New markets tax credits are a form of private sector ﬁnancing supported by tax credits supplied by the Federal government. The New Markets Tax Credit (NMTC) Program permits taxpayers to receive a credit against Federal income taxes for making qualiﬁed equity investments in designated Community Development Entities (CDEs). The CDEs apply to the Federal government for an allotment of tax credits, which can then be used by private investors who supply funds for qualifying community projects. Substantially all of the qualiﬁed equity investment must in turn be used by the CDE to provide investments in low-income communities. The credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year credit allowance period. In each of the ﬁrst three years, the investor receives a credit equal to 5% of the total amount paid for the stock or capital interest at the time of purchase. For the ﬁnal four years, the value of the credit is six % annually. Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period. Throughout the life of the NMTC Program, the Fund is authorized to allocate to CDEs the authority to issue to their investors up to the aggregate amount of $19.5B in equity as to which NMTCs can be claimed. These tax credits can be quite useful, and there may be some areas that qualify. However, it can take up to a year or more to apply and then ﬁnally receive NMTC-related cash. This can be a useful long term source of funds. Arcadia Broadband Strategic Plan Page of 64 125 9.12 SPECIAL ASSESSMENT/SERVICE DISTRICT/TIF Communities like Bozeman, Montana and Leverett, Massachusetts have been funding broadband infrastructure improvements with special assessments (in Leverett, $600/year for ﬁve years), and in Bozeman, TIF (Tax Increment Funding) is being used in some areas to add telecom conduit, handholes, and dark ﬁber. In some localities, it is possible to levy a special assessment in a service district designated for a particular utility (like broadband) or other kind of public service. Charlemont, Massachusetts is adding an $11/month assessment to every household to build a town- owned Gigabit ﬁber network that will pass every household in the community. A town-wide vote supported this funding approach. Put in perspective, the average cost of a large, single topping pizza in the U.S. is currently $9 to $12. Tax Increment Financing (TIF) Consider establishing a Tax Increment Financing district or utilizing an existing TIF district to capture future increases in property tax revenue resulting from broadband infrastructure improvements. The additional revenue can then be allocated towards funding broadband initiatives. Special Purpose Local Option Sales Tax (SPLOST) If applicable, consider using a portion of the revenue generated from a local sales tax dedicated to speciﬁc infrastructure projects, such as broadband deployment. This can provide a reliable funding source for broadband initiatives within the designated timeframe of the sales tax program. Utility Fees and Special Assessments Some local governments have evaluated the potential of a $10-12 utility tax levied on every household and business to ﬁnance a full ﬁber to the premises build out, including a modest “free” Internet service that would be adequate for email and light Web use. Most households will probably choose to select a higher performance Internet package from a private provider on the network. A $10/month special assessment (the average cost of one large pizza) on every business in the downtown area in Arcadia could raise as much as $960,000 for broadband over 20 years—enough to pass nearly all downtown buildings with conduit and dark ﬁber. The table below shows the kind of funds that could be generated over several time periods. If $10 per month were collected from each household for 30 years, it would easily ﬁnance the immediate build out of Gigabit ﬁber that would pass nearly all homes and businesses in the downtown portions of Arcadia. A lesser amount (e.g. $2/month over 20 years) would easily ﬁnance the immediate build out of a comprehensive telecom conduit and dark ﬁber system in the downtown area.. Arcadia Special Assessment Examples Monthly Assessment Amount Twenty Year Assessment Thirty Year Assessment Number of Premises/Businesses 400 $1 $96,000 $144,000 $2 $192,000 $288,000 $5 $480,000 $720,000 Arcadia Broadband Strategic Plan Page of 65 125 9.13 GRANT APPLICATION ACTIVITIES $10 $960,000 $1,440,000 Arcadia Special Assessment Examples Monthly Assessment Amount Twenty Year Assessment Thirty Year Assessment Number of Premises/Businesses 400 Activity Description Discussion Tasks Develop a grant application The grant application process, from start to award announcement, can be nine to 12 months. Broadband grant application requirements have become more stringent over time, with more grant agency oversight and review. Careful planning is essential to develop a successful application. •Once a grant opportunity has been identiﬁed, review grant requirements to determine if the project can qualify. For example, some grants require two years of ﬁnancial history. •Identify regional agency that will assist. •Begin contacting potential ISP partners. •If the project qualiﬁes, identify at least two people to take the lead to prepare application. •Prepare a task list of all grant materials requirements and identify data needed. •Develop a timeline for developing sections of the grant. •Identify requirements for letters of support and matching funds and develop timeline to solicit and collect commitments. •Complete all sections of grant application with assistance from public and private partners. •Submit grant application. Arcadia Broadband Strategic Plan Page of 66 125 Typical Timeline Months Tasks 1 2 3 4 5 6 7 8 9 10 11 12 Determine grant qualiﬁcations Identify regional council partner Identify ISP partner if needed Appoint grant team Create grant task list Prepare timeline and assign tasks to partners Identify matching fund requirements and letters of support to solicit and collect as needed Complete all sections of the grant application Submit grant Grant agency review Awards announcement Arcadia Broadband Strategic Plan Page of 67 125 10 OBSTACLES TO BROADBAND DEPLOYMENT When considering obstacles to broadband deployment in downtown Arcadia, several factors may come into play. Here are some potential obstacles that can hinder broadband deployment: Physical Infrastructure Challenges The physical infrastructure of downtown Arcadia can pose obstacles to broadband deployment. This includes difﬁculties in accessing utility poles, lack of available conduit or ducts for ﬁber optic cable installation, or the need for signiﬁcant trenching or construction work to lay infrastructure. The cost of installing underground conduit and ﬁber in built up urban areas (i.e. downtown Arcadia) can be signiﬁcantly higher than in residential neighborhoods—part of the reason many residential areas of the city already have ﬁber service when large portions of the downtown area do not. Rights-of-Way and Permitting Securing rights-of-way for deploying broadband infrastructure in public spaces can be a complex and time-consuming process. Obtaining necessary permits, dealing with regulatory requirements, and navigating through local zoning and land-use regulations may create obstacles to timely deployment. The City should ensure that the City engineering and permitting processes and construction requirements are reasonable. A frequent complaint from ﬁber contractors throughout the U.S. is that some municipalities are very slow in processing telecom infrastructure permits. Cost and Financing The ﬁnancial burden of deploying broadband infrastructure can be a signiﬁcant obstacle. The upfront costs of network deployment, including equipment, materials, labor, and ongoing maintenance expenses, can be substantial. Limited funding or difﬁculty in securing ﬁnancing options may impede deployment efforts. The City could help offset private sector capital costs by constructing a shared conduit/ﬁber system in the downtown area. Regulatory Barriers Regulatory frameworks at the local, state, or federal level can pose obstacles to broadband deployment. These may include outdated or restrictive regulations, permitting delays, or requirements that increase the cost and complexity of infrastructure deployment. Limited Competition Lack of competition among broadband service providers can hinder deployment efforts. In areas where a single provider dominates, there may be less incentive for investment and innovation. Encouraging competition can spur infrastructure development and drive improvements in service quality and affordability. A shared conduit/ﬁber system would likely bring new providers who are interested in serving the downtown businesses, and new ISP entrants to an existing market usually brings lower prices, better service, and higher speeds for businesses. Stakeholder Engagement and Community Support Lack of business awareness, engagement, or support for broadband initiatives can be an obstacle. It is important to educate and engage businesses, the Chamber of Commerce, and any local merchant associations to build understanding, support, and participation in broadband deployment efforts Arcadia Broadband Strategic Plan Page of 68 125 APPENDIX A: BROADBAND PROVIDER ANALYSIS This report section includes information which shows what Internet services are available to The City of Arcadia businesses and residents and how much business and residents pay for the services they chose. Appendix A contains more detail on provider services, prices, and packages. Pricing information is often difﬁcult to obtain because many providers intentionally do not want the local government, businesses, or residential customers to be able to do comparison shopping. The true cost of a package of Internet is often hidden behind promotional pricing and hidden taxes and fees, making it difﬁcult for a customer to decipher or it requires a phone call to a sales representative. Business pricing is even more difﬁcult to assess because many ISPs will refuse to provide any pricing without a site survey. Our data is assembled from several public sources that provide data on Internet use, including FCC data, social media data, and commercial Web sites that provide Internet use data. The best information utilizes zip codes but those boundaries are not aligned with local government jurisdictions, and some zip code data as we discuss later includes areas have no information. Adjustments are noted. The information in these charts and tables is current as of late March 2023, and shows the areas where service providers claim to provide service. Percentages of customers being offered different kinds of service do change as equipment is upgraded or new neighborhoods are reached. Because of rapid changes that can take place with pricing and available services, this report should be only viewed as a snapshot of the information when the report was written. It would be very unusual for service provider data to remain the same even one or two months later. Changes are happening quickly in Arcadia. This report also provides estimates of pricing, services and speeds received by households in a particular zip code. Actual pricing, services, and speeds are more discoverable in survey responses which document what services customers actually have. We have included business information that is available without a site survey. Nationally, Consumer Reports found in their Summer 2021 Broadband Survey, “Fifteen percent of American households only have access to the internet through their smartphone data plan and one in 20 use DSL or dial-up to access the internet. Three percent of Americans say their household does not have access to the internet.” These are good metrics to compare coverage in your City. We estimate 1 that about 9% of The City of Arcadia residents use DSL and less than one half a percent use dial-up. An initial estimate is that 9% of The City of Arcadia residents access the Internet only with their smartphone and another 5% only have satellite Internet access. These services are more expensive than ﬁxed wireless (FW) or ﬁber. Consumer Reports recently stated that 84% of their members in March 2022, agreed that Internet service is “as important as water or electricity.” National surveys mirror those numbers with the latest number there being an April 2020 survey showing 80% of all surveyed consumers saying the same thing. 2 Broadband Survey, Consumer Reports, July 20211 Best and Worst Home Internet Providers of 2022, By James K. Willcox, November 7, 2022, page 12 Arcadia Broadband Strategic Plan Page of 69 125 According to a 2019 Consumer Reports study , the national average advertised price for standard 3 triple play services of Internet, television, and telephone across the country is $156.17. Because of fees and taxes, the actual national average cable bill was $217.42. Nationally, consumers got an average of 24% added to their bill. Our information shows those prices have not gone down. Data caps which were turned off early in the pandemic are back in many areas. 4 In their 2022 study of 22,000 bills Consumer Reports found companies imposed ”junk fees”—under names such as “network enhancement fee,” “internet infrastructure fee,” “deregulated administration fee,” and “technology service fee.” These are not government required fees. They only improve the company’s proﬁts and sometimes used to raise costs for customers without breaking contracts. 5 Dealing with data caps can also be expensive for consumers, often adding $30 or more per month. Cord Cutting Continues, Fueled By High Cable Pricing, Consumer Reports' Survey Finds 9/17/20193 Consumer Reports -Get Ready for Cable TV and Internet Price Hikes and Data Caps in the New Year 12/21/204 What Consumer Reports Learned From 22,000 Internet Bills.- Dec. 17, 2022, page 45 Arcadia Broadband Strategic Plan Page of 70 125 This rate card is typical of the complexity of fees that consumers face when they are trying to bundle services. Arcadia Broadband Strategic Plan Page of 71 125 “Nearly half (47 percent) of U.S. TV viewers state they do not subscribe to “traditional cable,” and among those that do, 44 percent are planning to drop cable or cut back services over the next year.“ 6 This chart from Innovative Systems’ study of rural broadband users shows how streaming is becoming 7 an important delivery mechanism even in rural areas. We would expect Arcadia residents to have an even greater dependence on streaming. Streaming is just one of the factors that increases the demand for greater bandwidth across the full spectrum of broadband users. Streaming can be problematic with services that have high latency. OpenVault recently reported “average per-household consumption was 586.7 GB at the end of 2022, an increase of nearly 10% over the prior year. The percentage of subscribers on gigabit tiers reached 26% in 4Q22, more than double the 12.2% during the same period in 4Q21. They also reported average speeds for US household was 415 Mbps down and 25 Mbps up. ” 8 July 20, 2021, The Future of TV Report: Connected TV and Linear TV Move Closer Together6 Rural Video and Broadband Industry Study - 2021, page 4, by Innovative Systems7 OpenVault, Broadband Insights Report (OVBI) 4Q22, page 8,9,17, fall 20228 Arcadia Broadband Strategic Plan Page of 72 125 The Pandemic has also had a major impact on the amount of work done from home even in rural areas. The recent Census Bureau's Household Pulse Survey showed that 43% of Californians 9 10 reported working from home from one to ﬁve days in the past week. Survey results presented in November 2021, by Kyle Rosner, Deputy Broadband Advisor for the Commonwealth of Virginia, indicate that the number of people working from home (among those who can) has jumped from a pre-pandemic level of 20% to 71% who are currently working from home. Those who would like to work from home after the pandemic now stand at 54%. 11 The City of Arcadia’s residents are seeing increasing access to the Internet through more modern ﬁber connections. Our survey will provide more information. Having access to ﬁber means that working from home in a job that requires signiﬁcant Internet access is easier as more ﬁber connections are made. Rural Video and Broadband Industry Study - 2021, page 13, by Innovative Systems9 Week 54 Household Pulse Survey: February 1 - February 13, 2023, Table 7a10 Connect Commonwealth Presentation by Kyle Rosner to NC Broadband Matters, November 15, 2021, slide 1611 Arcadia Broadband Strategic Plan Page of 73 125 It is important to understand how signiﬁcant broadband bills have been become for all households. When faced with limited broadband choices driven by lack of competition there are few ways for a household, especially a small one, to lower broadband costs signiﬁcantly. The increasing dependence of households on broadband services makes this even more critical. Sources: Municipal utility reporting, Consumer Reports 2019 study, energystar.gov Nationwide, Circle of Blue Arcadia Broadband Strategic Plan Page of 74 125 $0.00 $75.00 $150.00 $225.00 $300.00 Cable Electricity/Gas Water Garbage $15.00 $54.90 $135.60 $217.42 Average Monthly Cost Per Utility Those houses purchasing a traditional cable package at or above average national costs now ﬁnd that their cable package costs more than all their other utilities put together. “One important thing we found in our research was how relatively expensive a cable bill is compared to other utilities for smaller households. The average cable bill stays relatively similar across household sizes, whether it’s one person living in a small apartment or a family of ten living in a large house. This is not true of utilities like electricity or water, with much wider scales for their average bill size depending on household size.” 12 Our pricing information includes all the service providers that have been discovered with services offered to 5% or more residents living in zip codes with at least 5% or more of their population in The City of Arcadia. Two zip codes, 91732 and 91780, were eliminated due to their Arcadia population being only two tenths of one percent . We also cannot analyze zip codes which are just post ofﬁce boxes because there is no way to accurately determine where those people using the post ofﬁce boxes receive their Internet services. Two zip codes, 91066 and 91077, were excluded as post ofﬁce box only locations. While our online reports showed substantial availability of ﬁber in the City, we believe that there may be more ﬁber available than online reports indicate. While online reports showed Giggle Fiber as a cable only provider, we were able to take the signup process to the last step on several Arcadia locations for a ﬁber connection from Giggle. From the spread of the locations and conservations with customer representatives, it appears that Giggle is converting customers to ﬁber when they request it. AT&T and Frontier on the other hand appear to building out neighborhoods. While EarthLink is listed as a ﬁber provider, we were unable to verify any locations. However, EarthLink does not build their own ﬁber so their absence has little to do with the amount of ﬁber available in Arcadia. We question the accuracy of the Census reported number of 2,693 households in Arcadia receiving Internet services by satellite. Based on areas similar to Arcadia we would expect it to be under 1,000 households which is similar to DSL usage. Survey data will help pinpoint this. We also do not include services in the pricing comparisons when we estimate the service is available to less than 5% of the City’s population. Satellite prices are also not considered in median cost comparisons since they are available everywhere and would distort local pricing. We also exclude Earthlink 5G and T-Mobile 5G home Internet services for the same reason With those considerations, median price of a 25/3 Internet connection in The City of Arcadia is $60 which is 19% lower than $73.98 median price we have calculated across our last dozen studies. However, bundled triple-play (Internet-TV-Phone) services for The City of Arcadia citizens are hard to compare to other places we have studied since the only triple-play provider Arcadia has is Spectrum. The lowest price of a Spectrum triple-play package with at least 25/3 connectivity is $169.91. The median triple-play service cost across our last nine counties studied (four in Pennsylvania, four in Texas and one in Minnesota) was $139.07. If we assumed all of the estimated 11,471 City of Arcadia households on cable are using Spectrum’s lowest cost triple-play services, they are paying $353,766 month more than those other counties’ residents. Annually that number is $4,245,188. Some counties in those nine have competing cable service providers with the result that we have seen cable triple play bundles similar to the Spectrum one priced as low as $110 monthly. Report: The average cable bill now exceeds all other household utility bills combined, AllConnect 6/22/202012 Arcadia Broadband Strategic Plan Page of 75 125 Competition lowers prices, but some neighborhoods close to each other in Arcadia end up paying more than their neighbors for Internet service that is far less capable. An example is pictured below. The same provider is charging more for poor service less than two miles away. We mostly recently saw something similar in studies that we did in Texas. As you can see from the pricing tables that follow AT&T charges $70 for their hybrid copper service no matter how slow the speed is. Arcadia Broadband Strategic Plan Page of 76 125 Summary of Service Provider Data - City of Arcadia, CA Least Expensive Internet Only Service Least Expensive Internet Only Service Meeting 25/3 Least Expensive Triple Pay Package Meeting 25/3 AT&T IPBB $70 $70 N/A Frontier DSL $54.99 N/A N/A Giggle Cable $44.95 $44.95 N/A Spectrum Cable $99.95 $99.95 $169.91 AT&T Fiber $60 $60 N/A EarthLink Fiber Unable to verify location Frontier Fiber $54.99 $54.99 N/A Giggle Fiber $39.95 $39.95 N/A Towerstream FWA $75 $150 N/A T-Mobile Lite Home Internet $50 $50 N/A EarthLink 5G $64.95 $64.95 N/A T-Mobile 5G Internet $50 $50 N/A HughesNet $64.99 $64.99 N/A Viasat $69.99 $99.99 N/A Starlink $120 $120 N/A Arcadia Broadband Strategic Plan Page of 77 125 The table below illustrates the estimated telecom expenditures, public and private, over the next thirty years. Over that time period, over $486 Million is put in envelopes and much of it leaves both the City and the state. Redirecting a fraction of those expenditures could build a complete conduit/dark ﬁber system throughout the downtown area of the City. Telecom Expenditures - City of Arcadia, CA Households 19,189 Businesses 2,496 Household Internet Access Type Estimates Cell Phone / 5G Fixed Wireless DSL Satellite Cable No Internet Access Fiber Dial-up Household Percentage 9%1%9%5%60%6%9.64%0.47% Households 1,772 190 1,734 1,000 11,471 1,063 1,849 90 Average monthly telecom expenditures Cell Phone for Voice/ Internet $160 Satellite TV: $100 Cell Phone $127 Fixed Wireless $50 Satellite TV: $100 Cell Phone $127 Phone: $15 Satellite TV: $100, DSL Internet : $55 Internet Cell Phone $127 Satellite TV: $100, Satellite Internet: $100 Cell Phone $127 Phone $40 TV: $70 Cable Internet $80 Cell Phone $127, no Internet, Satellite TV $100 Cell Phone $127, Fiber Internet $65, Stream- ing TV $45 Cell phone $127, Dial-up Internet $12.95, Satellite TV:$100 Monthly cost of Services $260 $277 $297 $327 $317 $227 $237 $240 Annual household cost $3,120 $3,324 $3,564 $3,924 $3,804 $2,724 $2,844 $2,879 Annual cost all households $5,528,640 $631,560 $6,179,976 $3,924,000 $43,635,684 $2,895,612 $5,258,556 $259,146 30 year expenditures $165,859,200 $18,946,800 $185,399,280 $117,720,000 $1,309,070,520 $86,868,360 $157,756,680 $7,774,380 Total residential expenditures $165,859,200 Estimated Hidden Fees $140,859,292 Total Business Costs $179,712,000 Total expenditures $486,430,492 Arcadia Broadband Strategic Plan Page of 78 125 Arcadia Broadband Strategic Plan Page of 79 125 0 5,000 10,000 15,000 20,000 City of Arcadia Internet Users Hughes Net Viasat -Satellite 5% Cellular Companies 9% AT&T Fiber Frontier Fiber Giggle Fiber 10% Tower Stream FWA 1% AT&T IPBB Frontier DSL 9% Giggle Fiber- Cable Spectrum Cable 60% Satellite Cellular Fiber Fixed Wireless DSL Cable No Internet Subscription 6% Dial-up Usage 0.47% Satetille Usage 5.22% Cell Phone 9.24% Fixed Wireless Usage 0.99% Fiber Usage 9.65% Cable Usage 59.84% DSL Usage 9.05% Estimated Internet Access by Type- The City of Arcadia, CA 6% No Internet Subscription Information from surveys often does not total 100% because some respondents choose more than one answer even when requested to pick only one. Business Service Provider Data - City of Arcadia, CA Non-promo Pricing Promo pricing Speed Includes Comments Spectrum $93 $73 300/10 Internet only $99 Installation Spectrum $93 $73 600/35 Internet only $99 Installation Spectrum $142.98 $122.98 1000/35 Internet only $99 Installation Spectrum $117.97 $77.97 300/10 Internet, One phone line Spectrum $97.97 $77.97 600/35 Internet, One phone line Spectrum $147.97 $127.97 1000/35 Internet, One phone line Spectrum’s wireless, battery-powered LTE modem can keep your business running during a power outage thanks to its automatic backup connection and unlimited data to support up to four devices for more than eight hours. No pricing available Frontier Fiber Could not conﬁrm a business location with Frontier available Giggle Fiber Cable $59.95 350/10 Internet only Giggle Fiber Cable $99.95 500/10 Internet only Giggle Fiber Cable $159.95 1000/15 Internet only Giggle Fiber Cable Symmetrical Enterprise Internet is quoted individually and requires a site survey. Business Phone available at $25/mo One Ring Network No public information Crown Castle No public information GTT Communications No public information Verizon Business $79 $69 200/200 Internet only 30-day money back guarantee Verizon Business $139 $129 500/500 Internet only 30-day money back guarantee Verizon Business $259 $249 940/880 Internet only 30-day money back guarantee Arcadia Broadband Strategic Plan Page of 80 125 Typical Business Internet Provide Site- Pricing requires a real address and most likely a site survey. Non-promo Pricing Promo pricing Speed Includes Comments Verizon Business All Offers: Offers available to new business customers only, subject to credit review. Not available in all areas/locations. Depending on speed tier purchased, promotional pricing for Internet and voice guaranteed for 12 consecutive months ($10 increase starting month 13 with 2 year contract), or 24 consecutive months ($10 increase starting month 25 with 2 year contract), or 36 consecutive months ($10 increase starting month 37 with 2 year contract) or 60 consecutive months ($10 increase starting month 61 with 2 year contract) (60 month guarantee not available in all areas where Fios is sold) $49 activation fee may apply. Offers may be fulﬁlled via bill credit(s); other taxes, fees & terms apply. Early termination fees for a 2 year contract: 35% of base monthly charges for unexpired term. 2 year term automatically renews at then-current term rates unless canceled within 30 days prior to or 60 days after the term is renewed. Phone equipment purchase required with VoIP, starting at $85. Equipment must be returned within 30 days of cancellation. Equipment restocking fee may apply if order is canceled or service is terminated within 30 days. MBG and/or promotional offers do not apply to service ordered for temporary, short term or special events. Firm Price Quote is valid for 5 business days and is an estimate based on current pricing, promotions and taxes that are subject to change. Spectrotel No public information CyberNet Asymmetric Services Start at $59.95 monthly Fiber Services Start at $199 monthly Fusion Connect Asymmetrical Ethernet up to 10.0 M Cable up to 600M Tower Stream Dedicated Internet Access with speeds from 5Mbps to 10Gbps. Sonic Unable to locate a veriﬁable address Arcadia Broadband Strategic Plan Page of 81 125 If there is no information in the “One-time Fees,” it does not necessarily mean there are no one-time fees. It just means that information on the one-time fees could not be found on the company’s public website.NOTE: Many ISPs do not provide upload speeds. This table indicates that no upload speed was discoverable by the abbreviation ‘NA’ (Not Available) Wireline Internet service provider comparison for City of Arcadia, CA Provider Monthly Cost Promo Rate & Contract Length Other Monthly Fees Download /Upload Speed (Mbps) Data Cap (GB/ Month) One-Time Fees Services & Incentives AT&T IPBB $70 $55 includes $5 month AutoPay and paperless discount, $10 discount for 12 months Extended Wi-Fi $10 0.768/0.4 1,000 $10 charge each additional 50GB (up to $100/ mo.). Unlimited data allowance may also be purchase d separately for an additional $30/mo. Taxes & Fees: Up to $99 installation fee may apply, Monthly cost recovery surcharges, not government- required, apply in TX, OH and NV Internet Only AT&T IPBB $70 $55 includes $5 month AutoPay and paperless discount, $10 discount for 12 months Extended Wi-Fi 3/1 Provider Arcadia Broadband Strategic Plan Page of 82 125 AT&T IPBB $70 $55 includes $5 month AutoPay and paperless discount, $10 discount for 12 months $10 5 / 1 1,000 $10 charge each additional 50GB (up to $200/ mo.). Unlimited data allowance may also be purchase d separately for an additional $30/mo. Taxes & Fees: Up to $99 installation fee may apply, Monthly cost recovery surcharges, not government- required, apply in TX, OH and NV Internet Only AT&T IPBB $70 $55 includes $5 month AutoPay and paperless discount, $10 discount for 12 months Extended Wi-Fi $10 10/1 1,000 $10 charge each additional 50GB (up to $100/ mo.). Unlimited data allowance may also be purchase d separately for an additional $30/mo. Taxes & Fees: Up to $99 installation fee may apply, Monthly cost recovery surcharges, not government- required, apply in TX, OH and NV Internet Only Monthly Cost Promo Rate & Contract Length Other Monthly Fees Download /Upload Speed (Mbps) Data Cap (GB/ Month) One-Time Fees Services & IncentivesProvider Arcadia Broadband Strategic Plan Page of 83 125 AT&T IPBB $70 $55 includes $5 month AutoPay and paperless discount, $10 discount for 12 months Extended Wi-Fi $10 100/10 1,000 $10 charge each additional 50GB (up to $100/ mo.). Unlimited data allowance may also be purchase d separately for an additional $30/mo. Taxes & Fees: Up to $99 installation fee may apply, Monthly cost recovery surcharges, not government- required, apply in TX, OH and NV Internet Only Frontier DSL $54.99 $49.99 with a $5 discount for autopay 10/1 Internet only, router included. Free service activation. Router Included Giggle Fiber (Cable)$44.95 $5 Auto Pay Discount Available No Contract WiFi $9.95 500/25 Unlimited Order online free $60 installation Internet Only Modem included Giggle Fiber (Cable)$54.90 $5 Auto Pay Discount Available No Contract WiFi $9.95 500/25 Unlimited Order online free $60 installation Internet and Phone Modem included Giggle Fiber (Cable)$69.95 $5 Auto Pay Discount Available No Contract WiFi $9.95 940/40 Unlimited Order online free $60 installation Internet Only Modem included Giggle Fiber (Cable)$79.90 $5 Auto Pay Discount Available No Contract WiFi $9.95 940/40 Unlimited Order online free $60 installation Internet and Phone Modem included Monthly Cost Promo Rate & Contract Length Other Monthly Fees Download /Upload Speed (Mbps) Data Cap (GB/ Month) One-Time Fees Services & IncentivesProvider Arcadia Broadband Strategic Plan Page of 84 125 Spectrum $99.99 $39.99 ($60 discount) for two years. 500/20 Unlimited Free installation Free Activation Internet Only $50 one time credit Free modem Spectrum $119.99 $59.99 ($60 discount) for two years. 940/35 Unlimited Free installation Free Activation Internet Only Free modem Spectrum $169.91 $94.92 ($75 discount) for two years. Includes $22.20 Broadcast fee 500/20 Unlimited Free installation Free Activation Internet, Choose 15 TV Channels, Home Phone, $50 one time credit Free modem Spectrum $189.91 $114.92 ($75 discount) for two years. Includes $22.20 Broadcast fee 940/35 Unlimited Free installation Free Activation Internet, Choose 15 TV Channels, Home Phone, $50 one time credit Free modem Spectrum $237.80 $152.80 ($85 discount) for two years. Includes $22.20 Broadcast fee $6.00 Sports fee 500/20 Unlimited Free installation Free Activation Internet, 125+ TV Channels, 23+ Sports Channels, Home Phone, Free modem Spectrum $253.17 $168.17 ($85 discount) for two years. Includes $22.20 Broadcast fee $6.00 Sports fee 940/35 Unlimited Free installation Free Activation Internet, 125+ TV Channels, 23+ Sports Channels, Home Phone, Free modem AT&T Internet 300 Fiber $60 $55 includes $5 month AutoPay & Paperless discount Extended Wi-Fi $10 300/300 Unlimited Taxes & Fees: Credit for $99 standard installation Internet Only-Free $100 Reward Card, also additional $50 Reward Card for Internet sign up. Will pay ETF from previous service-see note Monthly Cost Promo Rate & Contract Length Other Monthly Fees Download /Upload Speed (Mbps) Data Cap (GB/ Month) One-Time Fees Services & IncentivesProvider Arcadia Broadband Strategic Plan Page of 85 125 ```````` AT&T Internet 500 Fiber $70 $65 includes $5 month AutoPay & Paperless discount Extended Wi-Fi $10 500/500 Unlimited Taxes & Fees: Credit for $99 standard installation Internet Only-Free $100 Reward Card, also additional $50 Reward Card for Internet sign up. Will pay ETF from previous service-see note AT&T Internet 1 Gig Fiber $85 $80 includes $5 month AutoPay & Paperless discount Extended Wi-Fi $10 1000/100 0 Unlimited Taxes & Fees: Credit for $99 standard installation Internet Only-Free $100 Reward Card, also additional $50 Reward Card for Internet sign up. Will pay ETF from previous service-see note Frontier Fiber $59.99 $49.99 with Auto Pay 500/500 Unlimited Installation $50 ($35 discount) Internet Only Amazon eero 6+ router included, $10/mo off YouTube TV for one year Frontier Fiber $79.99 $69.99 with Auto Pay 1000/100 0 Unlimited Installation $50 ($35 discount) Internet Only Amazon eero 6+ router included, $10/mo off YouTube TV for one year Frontier Fiber $109.99 $99.99 with Auto Pay 2000/200 0 Unlimited Installation $50 ($35 discount) Internet Only Amazon eero 6+ router included, $10/mo off YouTube TV for one year $200 Visa Rewards Card Frontier Fiber $109.99 $99.99 with Auto Pay 5000/500 0 Unlimited Installation $50 ($35 discount) Internet Only TP-Link Archer AXE300 6E router included, $10/mo off YouTube TV for one year Giggle Fiber $39.95 No promo rate Optional Router $9.95 500/500 Unlimited Internet Only Giggle Fiber $64.95 No promo rate Optional Router $9.95 1000/100 0 Unlimited Internet Only Monthly Cost Promo Rate & Contract Length Other Monthly Fees Download /Upload Speed (Mbps) Data Cap (GB/ Month) One-Time Fees Services & IncentivesProvider Arcadia Broadband Strategic Plan Page of 86 125 Wireless Internet service provider comparison for City of Arcadia, CA Provider Monthly Cost Promo & Contract Length Other Monthly Fees Download/ Upload Speed (Mbps) Data Cap (GB/ Month) One-Time Fees Services & Incentives Towerstream FWA $75 12 Months 10/5 Unlimited $300 Installation Fee Internet Only Towerstream FWA $100 12 Months 15/5 Unlimited $300 Installation Fee Internet Only Towerstream FWA $64.99 12 Months 20/5 Unlimited $300 Installation Fee Internet Only Towerstream FWA $74.99 12 Months 25/10 Unlimited $300 Installation Fee Internet Only EarthLink $64.95 Unknown uses either 4G LTE or 5G depending on closest tower 50 GB Activation fee $79.95 Internet Only EarthLink $79.95 Unknown uses either 4G LTE or 5G depending on closest tower 75 GB Activation fee $79.95 Internet Only EarthLink $99.95 Unknown uses either 4G LTE or 5G depending on closest tower 100 GB Activation fee $79.95 Internet Only EarthLink $149.95 Unknown uses either 4G LTE or 5G depending on closest tower 150 GB Activation fee $79.95 Internet Only T-Mobile Lite Home Internet $50 $14.95 router 35/3 Internet Only - Plan costs will vary by location Provider Arcadia Broadband Strategic Plan Page of 87 125 T-Mobile 5G $50 Auto Pay Required - $50 includes $10 credit for autopay None 182/33 (Varies by location) None Internet Only- $100 back when you switch to T- Mobile Home Internet via virtual Prepaid Mastercard® in 8 weeks- will pay to $500 to terminate another contract T- MobileHome Internet General Terms: During congestion, Home Internet customers may notice speeds lower than other customers due to data prioritization. Not available in all areas. $35 assisted support or device connection charge due at sale. Plus taxes & fees for accounts currently paying for a T- Mobile wireless line with additional taxes & fees: Monthly Regulatory Programs (RPF) & Telco Recovery Fee (TRF) totaling $1.40 per data only line ($0.12 for RPF & $1.28 for TRF) apply; taxes/fees approx. 3-12% of bill. Credit approval required. For use only with T-Mobile Gateway for in-home use at location provided at activation. If canceling service, return gateway or pay up to $370 Verizon LTE Home $60.00 $50 with Auto Pay Two year price lock None 50/4 None None Internet only ,WiFi 6 Router included. 30-Day Satisfaction Guarantee. Will cover the cost of early termination fees with up to $500 when you switch Monthly Cost Promo & Contract Length Other Monthly Fees Download/ Upload Speed (Mbps) Data Cap (GB/ Month) One-Time Fees Services & IncentivesProvider Satellite Internet service provider comparison for City of Arcadia, CA Provider Monthly Cost Promo & Contract Length Other Monthly Fees Download /Upload Speed (Mbps) Data Cap (GB/ Month) One-Time Fees HughesNet $64.99 24 month commitment required. Up to $400 ETF $14.99 equipment lease it you don’t purchase 25/3 After 15 GB (speeds drop to 1-3 Mbps) Internet Only- Purchase pricing is $249.99 to purchase or $99 lease activation- instant lease savings of $99- limited time- Users can add unlimited phone service for $22.95 a month Provider Arcadia Broadband Strategic Plan Page of 88 125 HughesNet $74.99 $49.99 for ﬁrst six months. 24 month commitment required. Up to $400 ETF $15 equipment lease it you don’t purchase 25/3 After 30 GB (speeds drop to 1-3 Mbps) Internet Only - Equipment ricing is $450 to purchase. $100 discount for Internet orders. $15 monthly after $99 lease activation- free installation - Users can add unlimited phone service for $22.95 a month HughesNet $99.99 $74.99 for ﬁrst six months. 24 month commitment required. Up to $400 ETF $15 equipment lease it you don’t purchase 25/3 After 50 GB (speeds drop to 1-3 Mbps) Internet Only - Equipment ricing is $450 to purchase. $100 discount for Internet orders. $15 monthly after $99 lease activation- free installation- Users can add unlimited phone service for $22.95 a month HughesNet $174.99 $149.99 for ﬁrst six months. 24 month commitment required. Up to $400 ETF $15 equipment lease it you don’t purchase 25/3 After 100 GB (speeds drop to 1-3 Mbps) Internet Only - Equipment ricing is $450 to purchase. $100 discount for Internet orders. $15 monthly after $99 lease activation- free installation -Users can add unlimited phone service for $22.95 a month Viasat $69.99 $49.99 for ﬁrst three months 24 month contract $12.99/ month (modem) 12/3 60 GB priority data Internet Only - Setup/ Installation could be up to $75 -equipment purchase instead of lease $299.99- Viasat $99.99 $69.99 for ﬁrst three months 24 month contract $12.99/ month (modem) 25/3 100 GB priority data Internet Only - Setup/ Installation could be up to $75 -equipment purchase instead of lease $299.99- Viasat $149.99 $99.99 for ﬁrst three months 24 month contract $12.99/ month (modem) 30/3 60 GB priority data Internet Only - Setup/ Installation could be up to $75 -equipment purchase instead of lease $299.99- Viasat $199.99 $149.99 for ﬁrst three months 24 month contract $12.99/ month (modem) 30/3 300 GB priority data Internet Only - Setup/ Installation could be up to $75 -equipment purchase instead of lease $299.99- Viasat $299.99 $199.99 for ﬁrst three months 24 month contract $12.99/ month (modem) 30/3 500 GB priority data Internet Only - Setup/ Installation could be up to $75 -equipment purchase instead of lease $299.99- $300 prepaid Visa card Monthly Cost Promo & Contract Length Other Monthly Fees Download /Upload Speed (Mbps) Data Cap (GB/ Month) One-Time FeesProvider Arcadia Broadband Strategic Plan Page of 89 125 StarLink is available in Arcadia. *Early reports from beta testers have been generally positive. Latency is much lower than traditional geostationary satellite services like HughesNet and Viasat, but latency is still much higher than terrestrial ﬁber Internet connections. *If pricing remains similar to what is being charged for early users, Starlink could be a very signiﬁcant improvement for some residents and businesses. It is targeted for the The City of Arcadia area in 2023. Starlink $120 No contracts- 30 Day trial $50 shipping cost and $53.55 estimated tax for equipment 100/40 None $599 for Hardware, shipping $50, Tax $66.53 Total due at order time $715.53 Shipping times 1-2 weeks Starlink $120 No contracts- 30 Day trial $50 shipping cost and $53.55 estimated tax for equipment 100/40 None $2,500 for Hardware, shipping $50, Tax $261.38 Total due at order time $2,811.38 Shipping times 1-2 weeks Starlink Installation You are responsible for installation of the Starlink Kit in a location that has a clear ﬁeld of view, per the Install Guide available in the Starlink Customer Portal. It is your responsibility to ensure compliance with all applicable building codes, zoning, ordinances, business district or association rules, covenants, conditions, restrictions, lease obligations and landlord/owner approvals and requirements for the installation of the Starlink Kit, to pay any associated fees or other charges, and to obtain any permits and other authorizations necessary for the Services and the installation of the Starlink Kit. Should use of the Services require any construction or alteration to your property, Starlink is not obliged to reimburse any expenses or restore your property to the same physical state as prior to delivery of Services. If you require a permanent roof mount installation, you acknowledge the potential risks associated with this type of installation, including, without limitation, with respect to any warranty that applies to your roof or penetration of your roof membrane. Follow the Install Guide. If you cannot safely install the Starlink Kit, do not install it. Monthly Cost Promo & Contract Length Other Monthly Fees Download /Upload Speed (Mbps) Data Cap (GB/ Month) One-Time FeesProvider Arcadia Broadband Strategic Plan Page of 90 125 APPENDIX B: CONDUIT DESIGN DETAIL Arcadia Broadband Strategic Plan Page of 91 125 Arcadia Broadband Strategic Plan Page of 92 125 Arcadia Broadband Strategic Plan Page of 93 125 Arcadia Broadband Strategic Plan Page of 94 125 Arcadia Broadband Strategic Plan Page of 95 125 Arcadia Broadband Strategic Plan Page of 96 125 Arcadia Broadband Strategic Plan Page of 97 125 Arcadia Broadband Strategic Plan Page of 98 125 Arcadia Broadband Strategic Plan Page of 99 125 Arcadia Broadband Strategic Plan Page of 100 125 Arcadia Broadband Strategic Plan Page of 101 125 Arcadia Broadband Strategic Plan Page of 102 125 Arcadia Broadband Strategic Plan Page of 103 125 Arcadia Broadband Strategic Plan Page of 104 125 Arcadia Broadband Strategic Plan Page of 105 125 Arcadia Broadband Strategic Plan Page of 106 125 Arcadia Broadband Strategic Plan Page of 107 125 Arcadia Broadband Strategic Plan Page of 108 125 Arcadia Broadband Strategic Plan Page of 109 125 Arcadia Broadband Strategic Plan Page of 110 125 Arcadia Broadband Strategic Plan Page of 111 125 Arcadia Broadband Strategic Plan Page of 112 125 Arcadia Broadband Strategic Plan Page of 113 125 Arcadia Broadband Strategic Plan Page of 114 125 Arcadia Broadband Strategic Plan Page of 115 125 APPENDIX C: SIFI ANALYSIS Design Nine has reviewed nine documents and articles comprising more than 140 pages of material related to SiFi ﬁber to the home activities. We have also researched additional materials available on the Web. The primary documents we have evaluated are: 1.Master License and Encroachment Agreement, City of San Buenaventura 2.Public Works Report on SiFi, City of Placentia 3.Smart City Managed Services Agreement, City of Placentia 4.Development Agreement, City of Placentia 5.Amendment #1, Construction Practices, City of Placentia 6.SiFi Shelter and Cabinet Speciﬁcations, SiFi 7.City of Arcadia SiFi Proposal 8.Staff Report on SiFi, City of Ventura 9.City of Salem, Massachusetts SiFi Project Summary of Findings The two agreements that we were able to review (Placentia, San Buenaventura) are substantially different. In our experience, we would expect a ﬁrm like SiFi to have a standard municipal agreement that it would use, and that only minor variations, additions, and changes would occur from one municipality to another. It is not clear why they are so dissimilar. No ﬁnancial commitments are required from the City. SiFi will ﬁnance the entire build out. The Placentia agreement includes the provision that the City would assume ownership of the network if SiFi abandons the asset. We would note that this seems highly unlikely, and while it may seem advantageous to the City, if SiFi were to have ﬁnancial problems that forced them out of business, the most likely outcome would be the sale of the network to another network operator. While SiFi promotes their open access business model (network owner/operator rather than ISP), they do not appear to have a track record of attracting multiple ISPs. In Placentia, where construction appears to be nearly complete, only a single ISP is offering service, so there is no price competition, which is a key beneﬁt of open access networks. Placentia is certainly large enough as a market for Internet to attract multiple providers. That suggests that SiFi does not offer sufﬁciently attractive partnerships to ISPs to bring additional providers onto the network, and/or so little of Placentia has been built out that the market is not large enough to attract a second provider. In our experience of more than ﬁfteen years of developing municipal open access networks, we have never found it difﬁcult to attract multiple providers. Our research indicates that both AT&T and Frontier already offer Gigabit ﬁber services in some areas of Arcadia. This level of competition for ﬁber customers brings into question whether SiFi has really done adequate market research in Arcadia. As a general rule, it is prohibitively expensive for a second ﬁber to the home company to develop a sustainable business case in a market where there is already ﬁber services being offered. One possibility is that SiFi only plans to build ﬁber in neighborhoods where neither AT&T nor Frontier currently offer service. In any case, we would suggest that the probability of SiFi passing most homes and businesses in Arcadia is low. If SiFi does enter the Arcadia market, it is Arcadia Broadband Strategic Plan Page of 116 125 very likely that Frontier and/or AT&T will both increase their efforts to pass more homes with ﬁber and will also lower prices in the short term—both strategies would affect SiFi’s ability to meet ﬁnancial targets. SiFi indicates that the company “….builds long term ﬁnancially sustainable FTTP projects…”. However, most of the SiFi projects are still in the initial construction phase or have only been in operation for a year or two. It is not clear that the company’s claim of “ﬁnancially sustainable” networks has been proven. SiFi calls out the use of microtrenching as a primary construction method. As noted in the previous section of this report, the City should study the advantages and disadvantages of microtrenching prior to entering into an agreement with SiFi. As discussed in Section Nine of this memo, the issues that SiFi has had with the City of Salem, Massachusetts and the SiFi ﬁber contractor represent a red ﬂag that should be considered carefully. While it is not clear where to assign blame among the three parties (i.e. SiFi, the city, the ﬁber contractor), the cost overruns and confusion about Salem’s permitting, construction, and remediation requirements suggest, at a minimum, a lack of attention and/or experience in ﬁber to the home build outs. We note that we can count at least ten California cities that SiFi claims it is building ﬁber to the home. We wonder if SiFi has the organizational capacity to manage that number of projects simultaneously, plus what other projects they may have made commitments for in other areas (like Salem, Massachusetts). 1. Master License and Encroachment Agreement, City of San Buenaventura This document is an agreement between SiFi and the City of San Buenaventura. It is thirty-seven single-spaced pages that deﬁnes what SiFi is allowed to do in City right of way (ROW). It also includes numerous other provisions, including the term of the agreement for SiFi to operate in the City (thirty years with a thirty year extension). The terms and requirements are extensive, and include: •The right to build in City ROW. •Deﬁnition of “substantial completion” of the network by SiFi, and City rights if 95% completion is not met in the ﬁrst ﬁve years. •City requirements imposed on SiFi to identify work areas and work zones. •Annual maintenance permits. •Exemptions from City encroachment permitting as it relates to concrete repairs, trenching, and paving. •Exemptions from City requirements for sidewalk, curb and gutter, and trench backﬁll. •Requirements to notify the City of construction activities in a timely manner. •Allowable changes to the SiFi network, including removal of grafﬁti from SiFi facilities. •Relocation of SiFi network facilities if City infrastructure improvements are impacted. •Restoration of right of way after construction. •Construction techniques approved by the City. •City obligations to facilitate timely cooperation of City departments with the SiFi activities. Arcadia Broadband Strategic Plan Page of 117 125 •A commitment by SiFi to provide a lower wholesale rate to ISPs to provide affordable access to qualifying low income households. •A requirement that SiFi maintain a balance of $30,000 with the City, deﬁned as a Regular Monthly Replenishment fund. These funds would be used by the City to pay for City staff costs and other expenses related to supporting the SiFi effort (e.g. a citywide ﬁber project can generate a large number of construction permits, which may require additional City staff to review and approve them, or for increased City inspection of completed construction work). •A City obligation to provide timely and responsive permit review and approval. •Typical indemniﬁcation and liability requirements. We would note that many localities in the U.S. have relatively simple franchise agreements that are used to authorize ﬁber construction. These franchise agreements often simply reference relevant existing locality ordinances and speciﬁcations, rather than calling them out speciﬁcally in a particular agreement. 2. Public Works Report on SiFi, City of Placentia This brief four page report by the City of Placentia Public Works Department provides a useful evaluation of the SiFi proposal to the City in 2019. The report highlights two City beneﬁts: •As part of the network agreement, SiFi agreed to provide a dedicated municipal ﬁber system to connect City-owned facilities. It is noted in the report that employees at various City locations would have much improved access to shared City systems and data. •It was also noted that the Police Department’s CCTV security camera system would beneﬁt with improved ﬁber connectivity, and that the Fire Department could more efﬁciently dispatch equipment. The dedicated City network is referenced in the Managed Services Agreement as “future demand points.” Similar to the San Buenaventura agreement, SiFi promised to pay the City $75,000 per year to support the single point of contact (SPOC), up to a total of 42 months (i.e. the planned duration of the ﬁber construction). The report also notes that initial term of the agreement is for twenty-ﬁve years, with two twenty-ﬁve year extensions. Part of the agreement, as noted by City staff, is that the City has negotiated a ﬁxed annual fee for access and use of the City ﬁber system. While the fee ($20,000/year) seems reasonable now, the twenty year term seems excessive, as the cost of network access has dropped substantially over the past twenty years, and is likely to continue to drop for at least the next ﬁve to ten years. 3. Smart City Managed Services Agreement, City of Placentia This document is an agreement between SiFi and the City of Placentia, executed in September, 2019. Some construction may still be underway, but some areas of the City do appear to have access to the network. GigabitNow seems to be the only provider, although the network is advertised as open access (more than one ISP can use the network to deliver Internet service). An open question would be why SiFi has not been able to attract more than one provider to the network? Microtrenching and micro duct has been used in Placentia. Arcadia Broadband Strategic Plan Page of 118 125 The agreement is thirty-ﬁve pages, and differs substantially from the San Buenaventura agreement discussed in the previous section of this memo. Key sections of the report include the following: •Placentia required SiFi to provide up to 300 “Future Demand Points” as part of the agreement. Future demand points are designated by the City as locations to receive ﬁber broadband service. The City is required to pay for the cost of the drops (the ﬁber cable from the street to the side of the building). The City also gets a 25% discount off the commercial rates offered in the city. The City also cannot use the demand points for any purpose that might compete with the SiFi network (e.g. offering demand point access to a competing network provider). •The agreement also has a full page of KPI (Key Performance Indicators) that specify compliance with speciﬁed target service levels—that is, network performance and requirements in the Service Level Agreement (SLA). •Unlike the San Buenaventura agreement, the Placentia agreement addresses right of way access and regulations with a one sentence requirement to abide by all Federal, state, and local laws and regulations. •The agreement has typical indemniﬁcation and liability language. •There is a section that addresses how SiFi conﬁdential information is handled by the City. •There are two sub-sections that address how SiFi and the City each transfer the agreement to a third party. •There is a section that calls out what the City will pay SiFi for monthly ﬁber service to nine City locations and facilities. •The City is obligated to provide a single point of contact (SPOC) to SiFi for all matters related to the construction and management of the network. •There is an extensive discussion of breach and/or default by either the City or SiFi. •There is a section on dispute resolution and mediation if there are disagreements between the City and SiFi. •There is additional routine contract language addressing severability, governing law, contract modiﬁcation, waivers, and related legal considerations. The KPIs noted above and the SLAs noted above are addressed in more detail in appendices. The SLAs are entirely typical, but SLAs usually address the relationship between the service provider and the customer. The appendices provide a useful insight into the general customer service approach of SiFi, but are not necessarily binding. 4. Development Agreement, City of Placentia This twenty-three page document includes more technical details about the network that SiFi planned to build. Some of the language and sub-sections are very similar to what is contained in the Managed Services Agreement in the previous section of this report, but other sections are entirely different. Some portions of the document seem to substantially duplicate portions of the Managed Services Agreement. It is not clear to us why two different documents were needed. This agreement details SiFi and City permitting obligations (e.g. how quickly the City must review and approve permits, fees paid to the City by SiFi for a single point of contact (SPOC, $75,000/year), discussion of various construction methods (e.g. microtrenching, open trenching, directional boring, Arcadia Broadband Strategic Plan Page of 119 125 ﬁber placement in the sewer system), Siﬁ cabinet and Point Of Presence (POP) locations, and ﬁber drop cable terminations. There are additional sections with typical contract language. We would note again that there is some duplication of sections and language with the Managed Services Agreement. 5. Amendment #1, Construction Practices, City of Placentia This document is an amendment to the Development Agreement between SiFi and the City of Placentia (dated May, 2021). The document appears to make several changes to the Development Agreement, which brings into question why some of the changes were not addressed prior to signing the initial Development Agreement. The document consists of ten single-spaced pages of primarily construction and technical speciﬁcations that were written by the City, and were probably developed by the City Engineer, the Planning Department, and/or the Public Works department. In particular, several of the changes address various aspects of micro trenching and the use of micro duct. Note that a subsequent section of this memo (SiFi Shelter and Cabinet Speciﬁcations) discusses the use of micro duct and micro conduit in more detail. Other portions of the agreement address topics including pavement and surface remediation, permitting, scheduling and phasing of construction, City obligations to SiFi (during construction), SiFi obligations to the City (during construction), work hours, approved activities during approved work hours, punch list management, handling of Stop Orders from the City, handling of non-compliance and safety issues, emergency repair work, coordination of SiFi construction activities with routine and emergency Public Works department activities, relocation of utilities, protection of SiFi installed infrastructure, curb and gutter repairs and/or replacement necessitated by SiFi construction, conﬂicts with City Capital projects, certain indemniﬁcation and liability requirements, and conﬂict resolution. The individual sub-sections of the document that address construction practices can appear to be reasonable, but take as a whole, some of the City of Placentia requirements (e.g. what types of construction activities are allowed during a normal work day) are likely to increase the cost of construction for SiFi. The City of Arcadia, if it moves forward with SiFi, should review the requirements in this document carefully. It is also preferable that the items included in this amendment be both discussed prior to signing the master Development Agreement but also be included in the Master Agreement rather than the more time-consuming and potentially more difﬁcult process of negotiating these changes after the primary agreement has been signed. 6. SiFi Shelter and Cabinet Speciﬁcations, SiFi This SiFi document, (Exhibit B) provides engineered drawings of various components of ﬁber networks that could be included as part of a SiFi “Fiber City” build out. The drawings include detail on handholds, cabinets, shelter, street crossings, ﬁber access boxes (recessed pedestals for drop connections). Based on the material included in this document, SiFi appears to try to use micro conduit as part of their build out design. Five different drawings illustrate how they install micro conduit. Micro conduit can be installed in a wide variety of ways, and any agreement with SiFi should include a careful review of their micro conduit speciﬁcations. Arcadia Broadband Strategic Plan Page of 120 125 •Micro conduit has often been a controversial ﬁber installation strategy. Some of the debate related to micro-conduit include: •Micro conduit installation usually involves cutting a very narrow slot in the street or pavement. The width of the slot can vary between 1/2” and about three inches. The depth of the slot can also vary widely, from about two inches to twelve inches. •The primary advantages of slot-cut micro conduit is avoidance of traditional trenching and/or horizontal directional drilling (HDD). In urban streets, slot cut micro conduit, even at 12” deep, typically avoids any interaction with other utilities (e.g. water, sewer, electric, telecom). Water line breaks are much less likely, as one example. •Shallow slots (e.g. two inches) can create problems if the street is later designated for grinding and repaving. Deeper slots avoid this problem. SiFi’s drawings specify a 12” slot, which should be entirely adequate for normal street grinding (typically the top 2-3”). •The slots do cut the existing pavement. Proper remediation can mitigate the negative effects of cutting the roadway, but careful patching of the slot is needed. Some Public Works departments have been categorically opposed to slot cutting because of the potential negative effects on the roadway. If Arcadia moves forward with SiFi, the Public Works department should review SiFi’s construction procedures, and if slot cutting is employed in Arcadia by SiFi, regular inspection of slot remediation to ensure conformance to speciﬁcations is strongly recommended. Other components included in this document (e.g. pull boxes, shelters, cabinets) are ordinary and widely used in ﬁber to the home projects. 7. City of Arcadia SiFi Proposal The sales document presented to the City of Arcadia by SiFi (Arcadia FiberCity) promises to construct more than three hundred miles of new ﬁber in the city, passing most homes and businesses with symmetrical Gigabit ﬁber. The proposed expenditure of $70M is reasonable given the estimated construction mileage. SiFi is not requesting any City ﬁnancial commitment. The SiFi business model is to be the network owner and operator, and not the ISP. SiFi will partner with one or more ISPs; the ISPs will actually provide the Internet service on the network. The promised competition would occur only if SiFi is able to attract more than one provider to the network. It is worth noting that in Placentia, only one ISP is offering Internet services. SiFi and the City would enter into a Development Agreement that would outline the roles and responsibilities for each of the two parties. SiFi discusses their FOCUS (tm) construction approach that determines the best construction method on a “case by case” basis, “…rather than being restricted to one construction technique and type of technology.” This sounds forward thinking, but we know of no ﬁber to the home project that uses only one construction technique. Local conditions vary everywhere, and both the contractors and the network owner/manager for any given ﬁber to the home project will vary construction methods as needed to suit those local conditions and to keep costs as low as possible. SiFi calls out the use of microtrenching as a primary construction method. As noted in the previous section of this report, the City should study the advantages and disadvantages of microtrenching prior to entering into an agreement with SiFi. Arcadia Broadband Strategic Plan Page of 121 125 SiFi indicates that the company “….builds long term ﬁnancially sustainable FTTP projects…”. However, most of the SiFi projects are still in the initial construction phase or have only been in operation for a year or two. It is not clear that the company’s claim of “ﬁnancially sustainable” networks has been proven. 8. Staff Report on SiFi, City of Ventura The City of Ventura evaluated a SiFi proposal, and the City Manager and the Public Works Director provided the City Council with a brief report. In 2019 the City issued an RFP to attract a ﬁber network provider, and received three proposals. The SiFi proposal was the only one that offered a “complete, underground, low cost citywide network.” The began negotiations with SiFi in April, 2019. An agreement was reached with SiFi in February of 2020. Little information is available on the project. The SiFi “Ventura FiberCity” Web site simply states, “…SiFi Networks has been granted access to Ventura’s right of ways to build a state-of-the-art community wide, ﬁber optic network, known as the Ventura FiberCity®.” The report provides a concise summary of the proposal made to the City, which includes: •SiFi provides the funding for the network, and no City ﬁnancial subsidy is required. •The City gets a discount on network access. •SiFi planned to offer a low cost service to low income homes in the city. •Micro-trenching was planned to be a primary construction method. •The City Engineer would have ﬁnal permit approval on the best construction process to use for each permitted area. •SiFi would reimburse the City for costs related to permitting, including review, approvals, and construction inspection. •SiFi was promising to complete 95% of the construction within ﬁve years. •SiFi wanted an initial thirty year term with an option to extend for thirty additional years. 9. City of Salem, Massachusetts SiFi Project Beginning with discussions starting in 2017, SiFi began negotiating with the City of Salem, Massachusetts to make Salem a “FiberCity.” The SiFi Web site for the project (https://siﬁnetworks.com/ residential/cities/salem-ma/) indicates that while a contract with the City has been signed and that a service provider has been selected, the network design is not complete, nor have construction permit approvals been completed—six years later. A review of City documents and City Council minutes show very little mention of the project after 2021. In 2022, a contract dispute between SiFi and its ﬁber contract began to be reported in the local newspaper. A March, 2022 article in The Salem News provided details of the issue, with the contractor claiming that SiFi had not adequately advised the contractor on certain paving and permitting requirements of the City, which created projected cost overruns. A June, 2022 article in The Salem News reported that SiFi had ﬁred the contractor, and the contractor had ﬁled a wrongful termination lawsuit against SiFi. The Salem FiberCity Twitter account has not been updated since October, 2022, and the last tweet simply apologized for the delays without offering any additional information. Similarly, the Salem Arcadia Broadband Strategic Plan Page of 122 125 FiberCity Facebook page has also not been updated since October, 2022, with she same apology that was posted on Twitter, with no other explanation. As noted above, the City of Salem seems to have gone quiet on the project for at least a year or more. An examination of the Salem project makes it difﬁcult not to conclude that SiFi has problems meeting its commitments. We would also note that nearly six years has past since the City of Salem began talking to SiFi, and as far as we can tell, no residents or businesses in Salem have received ﬁber to the home service. Arcadia Broadband Strategic Plan Page of 123 125 APPENDIX D: GLOSSARY Active network: Typically a ﬁber network that has electronics (ﬁber switches and CPE) installed at each end of a ﬁber cable to provide “lit” service to a customer. Asymmetric connection: The upload and download bandwidth (speed) are not equal. Cable Internet and satellite Internet services are highly asymmetric, with upload speeds typically 1/10 of download speeds. Asymmetric services are problematic for home-based businesses and workers, as it is very difﬁcult to use common business services like two way videoconferencing or to transfer large ﬁles to other locations. Backhaul: Typically refers to a high capacity Internet path out of a service area or locality that provides connectivity to the worldwide Internet. Colo facility: Colo is short for Colocation. Usually refers to a prefab concrete shelter or data center where network infrastructure converges. A colo or data center can also refer to a location where several service provider networks meet to exchange data and Internet trafﬁc. CPE: Customer Premises Equipment, or the box usually found in a home or business that provides the Internet connection. DSL modems and cable modems are examples of CPE, and in a ﬁber network, there is a similarly-sized ﬁber modem device. Dark ﬁber: Dark ﬁber is ﬁber cable that does not have any electronics at the ends of the ﬁber cable, so no laser light is being transmitted down the cable. Fiber switch: Network electronic equipment usually found in a cabinet or shelter Fiber Optic Splice Closure: See FOSC. FOSC: Fiber Optic Splice Closure. Typically a water and air tight cylindrical container where ﬁber cable is split open to allow splicing (connecting together) of ﬁber strands for a drop to a premises. FTTH/FTTP/FTTx: Fiber to the Home (FTTH), Fiber to the Premises (FTTP), and Fiber to the X (FTTx) all refer to Internet and other broadband services delivered over ﬁber cable to the home or business rather than the copper cables traditionally used by the telephone and cable companies. Handhole: Handholes are open bottom boxes with removable lids that are installed in the ground with the lids at ground level. The handholes provide access to ﬁber cable and splice closures that are placed in the handhole. Handholes are also called pull boxes. IP video: Video in various forms, including traditional packages of TV programming, delivered over the Internet rather than by cable TV or satellite systems. Latency: The time required for information to travel across the network from one point to another. Satellite Internet suffers from very high latency because the signals must travel a round trip to the satellite in stationary orbit (22,500 miles each way). High latency makes it very difﬁcult to use services like videoconferencing. Lit network: A “lit”network (or lit ﬁber) is the same as an active network. “Lit” refers to the fact that the ﬁber equipment at each end use small lasers transmitting very high frequency light to send the two way data trafﬁc over the ﬁber. Arcadia Broadband Strategic Plan Page of 124 125 MST: Multiport Service Terminals are widely used in ﬁber to the home deployments to connect individual home drop cables to larger distribution cables on poles or in handholes. Pre-connectorized drop cables snap into the MST ports and do not require any splicing. Passive network: Refers to infrastructure that does not have any powered equipment associated with it. Examples include wireless towers, conduit (plastic duct), handholes, and dark ﬁber. Pull boxes: Pull boxes (also called handholes) are used to provide access to ﬁber cable and splice closures. They are called pull boxes because they are also used during the ﬁber cable construction process to pull the ﬁber cable through conduit between two pull boxes. Splice closures: Splice closures come in a variety of sizes and shapes and are used to provide access to ﬁber cable that has been cut open to give installers access to individual ﬁber strands. Splice closures are designed to be waterproof (to keep moisture out of the ﬁber cable) and can be mounted on aerial ﬁber cable or placed underground in handholes. Also called FOSCs. Splicing: The process of providing a transparent joint (connection) between two individual ﬁber strands so that laser light passes through. A common use of splicing is to connect a small “drop” cable of one or two ﬁber strands to a much larger (e.g. 144 ﬁber strand) cable to provide ﬁber services to a single home or business. SCADA: Supervisory Control and Data Acquisition. Used by the electric utility industry and some other utilities (e.g. water/sewer) to manage their systems. Symmetric connection: The upload and download bandwidth (speed) is equal. This is important for businesses and for work from home/job from home opportunities. Virtual Private Network: A VPN creates a private, controlled access link between a user’s computer and a corporate or education network in a different location. VPNs are often encrypted to protect company and personal data. VPNs usually require a symmetric connection (equal upload and download speeds) to work properly. Arcadia Broadband Strategic Plan Page of 125 125