3.17.09-Page County Implementation Plan-Final

8/9/2019 3.17.09-Page County Implementation Plan-Final

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PAGE COUNTY COMMUNITY BROADBAND IMPLEMENTATION PLAN DECEMBER 31, 2008

TRANSMITTAL L ETTER

December 31, 2008

Dr. Tom Cardman, DirectorPage County Economic Development117 S. Court St.Luray, VA 22835

RE: Page County, Virginia Community Broadband Implementation Plan

Dr. Cardman:

Icon Broadband Technologies (IBT) and Consulting Gateway Corporation (CGC) are pleased to providethis final implementation plan for the proposed Page County, VA Broadband Implementation Project.The plan is presented in a logical order, providing guidance to meet the established project milestones andexpectations of the County. The plan is organized as follows:

First, a Plan Summary: A summary of the plan is provided to easily allow the user to understand why aphased approach is being proposed.

Second , the overall Project Timeline is provided and described so that the critical path is identified forproject events to unfold in a timely manner. By having the project timeline at the front of the document,it is easy to reference it as more detail is provided in subsequent parts of the document. The project

timeline will need to be tracked and updated as the implementation plan progresses.

Third , the project Organization Structure and Governance Plan is addressed so that there is a cleardelineation of responsibilities, including funding, ownership and operations.

Fourth , the project Preliminary Engineering, Design and Cost Estimates are provided to substantiate thebudgets for the funding plan.

Fifth , the project Funding Plan is presented, although options for funding continue to be investigated.

Sixth , Last Mile Solutions outline the anticipated method of service delivery to end-users. Theimplementation plan presented assumes a direct fiber connection to key stakeholders and anchor

customers that require high bandwidth services. Additional methods of last mile delivery will be dictatedby private providers that wish to use the fiber network to expand their current or new services by wirelineand/or wireless methods.

Page County is different from many other more rural Virginia counties because they have some resourcesavailable which can be used to support broadband infrastructure. The soon to be constructed data centerrequires high capacity data backhaul to areas outside of the county. Those backhaul connections can beaccessed by other residents of the new 220 acre office park as well as by a new County network providing


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PAGE COUNTY COMMUNITY BROADBAND IMPLEMENTATION PLAN DECEMBER 31, 2008

more affordable broadband services to areas which will otherwise not be served economically for manyyears.

Phase I capital costs (Luray to Page County High School) have been estimated at $750,000 to $1,129,000depending on the initial method of serving the new Page County High School campus. The preliminarybusiness plan also includes borrowing to meet the first years operation cost and the first years principaland interest. Potential grants and other contributions to finance the project have been identified. Othergrant resources are currently being explored. The pro-formas presented within this document weredeveloped using a total borrowing commitment of approximately $421,000. The final commitment willlikely change based on the outcome of ongoing funding explorations.

Because of the extent of the capital required for new infrastructure, the project was divided into a Phase Iand Phase II with the second phase serving the area from the Page County High School south intoShenandoah. The total capital cost for the second phase of the project is estimated at between $168,000and $547,000 depending on how the first phase is deployed. The total estimated capital costs for bothphases are estimated at $1,297,000 regardless of how the deployment is divided.

IBT and CGC appreciate being allowed to be part of this ground-breaking initiative and look forward tocontinuing to assist Page County in bringing this important infrastructure to the area. If you should haveany questions, please contact us.

Sincerely,

Icon Broadband Technologies Consulting Gateway Corporation

Judy Bentley Keith A. Hill, P.E.Vice President President

[email protected] [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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PAGE COUNTY COMMUNITY BROADBAND IMPLEMENTATION PLAN DECEMBER 31, 2008 PAGE 1 OF 52

TABLE OF CONTENTS

PLAN SUMMARY ......................................................................................................... 3

FIBER

NETWORK

PHASE

I - L

URAYT

HROUGHS

TANLEY............................................................. 3

REASONING FOR PHASE I PROPOSED SOLUTION ....................................................................... 3

NETWORK DESIGN COMPONENTS ............................................................................................. 4

OWNERSHIP AND ORGANIZATION STRUCTURE ......................................................................... 4

PHASE I COSTS AND FUNDING PLAN ......................................................................................... 5

LAST MILE SOLUTIONS ............................................................................................................. 7

PHASE I NETWORK DESIGN ENTIRE COUNTY ............................................................................... 10

PHASE I NETWORK DESIGN LURAY ............................................................................................. 11 PHASE I NETWORK DESIGN LURAY THROUGH STANLEY ............................................................ 12

PHASE I NETWORK DESIGN STANLEY TO PAGE COUNTY HIGH SCHOOL .................................... 13

FIBER NETWORK PHASE II - SHENANDOAH ................................................................................ 14

REASONING FOR PHASE II PROPOSED SOLUTION .................................................................... 14

NETWORK DESIGN COMPONENTS ........................................................................................... 14

OWNERSHIP AND ORGANIZATION STRUCTURE ....................................................................... 14

FUNDING PLAN ....................................................................................................................... 14

PHASE II NETWORK DESIGN SHENANDOAH ................................................................................. 15

FINAL COMMENTS ...................................................................................................................... 16

IMPLEMENTATION PROCESS & T IMELINE ..............................................................17

IMPLEMENTATION STEPS AND TIMELINE .................................................................................... 17

ORGANIZATION STRUCTURE & GOVERNANCE ......................................................21 OWNERSHIP ................................................................................................................................ 21

OPERATION ................................................................................................................................ 21

DEVELOPMENT OF AGREEMENTS ............................................................................................... 22


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NETWORK OPERATIONS MANAGEMENT AGREEMENT ............................................................ 22

NETWORK MAINTENANCE AND EMERGENCY REPAIR AGREEMENT ........................................ 22

NETWORK ACCESS AGREEMENT WITH SERVICE PROVIDERS .................................................. 23

POLE ATTACHMENT /TRENCH USE AGREEMENT ..................................................................... 23CONTENT AGREEMENTS ......................................................................................................... 23

BROADBAND AUTHORITY ORDINANCE ................................................................................... 24

GOVERNANCE PLAN ................................................................................................................... 24

TYPICAL STEPS FOR PLANNING NETWORK GOVERNANCE ...................................................... 25

RATE ORDINANCE AND RESOLUTIONS .................................................................................... 25

MARKETING /PUBLIC RELATIONS PROGRAM ........................................................................... 25

PRELIMINARY DESIGN & PROJECT COSTS .............................................................27

BUSINESS PLAN & ASSUMPTIONS ............................................................................35

FUNDING PLAN .........................................................................................................41

FUNDING PLAN FORMULA .......................................................................................................... 41

GRANTS ...................................................................................................................................... 43

USDA RUS ......................................................................................................................... 43

VIRGINIA DEPT OF HOUSING AND COMMUNITY DEVELOPMENT (DHCD) .............................. 46

U.S. ECONOMIC DEVELOPMENT ADMINISTRATION ................................................................ 46

LOANS ........................................................................................................................................ 47

VIRGINIA RESOURCES AUTHORITY (VRA) ............................................................................. 48

ADDITIONAL FUNDING MECHANISMS ..................................................................................... 48

GOVERNOR 'S DEVELOPMENT OPPORTUNITY FUND ........................................................................ 48

ADVANCED COMMUNICATIONS ASSISTANCE FUND ....................................................................... 49

VIRGINIA COMMUNITY CAPITAL .................................................................................................... 49

RESOURCES ..............................................................................................................50


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PLAN SUMMARY

Per the 2000 census, Page County, VA, has a total population of approximately 23,177 with 10,557housing units. Just over thirty-four percent of the population is located within the incorporated towns of Luray, Stanley and Shenandoah. Approximately 500 businesses are located within the County with themajority located within or just outside of the incorporated towns. The recommended fiber optic network to provide data backhaul and high speed communication services in Page County is structured as a two(2) phase solution which can be addressed simultaneously if funding and commitments can be secured.The following summarizes these two (2) phases.

F IBER NETWORK PHASE I - LURAY THROUGH STANLEY

REASONING FOR PHASE I PROPOSED SOLUTION

While fiber connectivity linking all of the incorporated towns in the County is the ultimate goal, it isrecommended that Phase I consist of Luray and Stanley south to the Page County High School,incorporating the town of Shenandoah in Phase II. This recommendation is based on a review of theinitial overall project costs developed in the Community Broadband Planning Study. Infrastructure wouldconsist of fiber optic cable in Luray and Stanley with an option of either a fiber or point to point wirelessconnection to the Page County High School and Page County Middle School just north of Shenandoah.The final link is presented two ways because of the significant additional cost of the fiber to reach threeschools and a very limited number of additional users. The final link to those schools could continue as itcurrently exists as a point to point wireless link from Luray with the benefit of increased bandwidthgenerated by other aspects of the program (lower Internet costs).

A significant catalyst for fiber optic network connectivity and future economic development growth is thefuture Premier Technical Services (PTS) data center to be constructed between Luray and Stanley. PTSserves a diversified client base that includes federal, state and local governments, commercial enterprises,prime contractors, trade associations, nonprofits and the U.S. military. As a very high bandwidth user,the new data center has facilitated interest by long haul Internet providers to make connections to their(PTSs) facility. A future 220 acre County Tech Park located adjacent to the PTS site will require fiberoptic connectivity to attract additional businesses such as PTS. The presence of long haul connections atthe PTS facility will enable a county network to purchase lower cost bandwidth to distribute to other usersin the Tech Park and over a new County owned network to other parts of the County.

Phase I of the network was selected to reach the greatest numbers of key stakeholders and high bandwidthusers with the least amount of new fiber optic infrastructure.


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NETWORK DESIGN COMPONENTS

While modifications and adjustments will occur as final network design proceeds, generally the designconsists of:

1. Nine (9) miles of backbone fiber deployed from the County Complex on Court Street inLuray and extending into the Town of Stanley. From Court Street the network followsHighway 638 south to Highway 629 east, turning south on Highway 340, turning back northwest on Highway 631 to west on Highway 632 (Goodrich Road) passing the PageCounty Technical School, future County Tech Park and PTS data center, continuing into theTown of Stanley where it becomes Highway T-638, turning south on Aylor Grubbs then easton Main Street ending at the Stanley Fire Department.

2. Five (5) miles of distribution fiber deployed throughout the Town of Luray andinterconnecting with the backbone fiber at the Emergency Communications Center on CourtStreet.

3. Twelve miles (12) of backbone fiber continuing from Stanley to the Page County HighSchool north of Shenandoah. As an alternative this section may be done using the existingschool point to point network until sufficient funds become available to construct additionalfiber.

4. Ninety-seven percent (97%) of the fiber would be deployed aerially on Allegheny Powerutility poles with the remainder deployed underground. Construction will be confinedgenerally within the Virginia Department of Transportation (VDOT) right-of-way. Anadditional approximately 0.5 miles of fiber could be installed underground rather than aerialalong a soon to be constructed water main extension north of Stanley.

5. The main network equipment would be located in the County Court Street Complex whichhas backup power or at another appropriate location. Collocation space where privateproviders could tie into the County network would be available at an alternate facility to bedetermined, possibly at a facility in the future County Tech Park.

6. A passive optical network architecture capable of handling Gigabit bandwidth delivery of voice and data services by multiple providers. The network would also support cabletelevision but using current technology, that capability would be limited to a single provider.

OWNERSHIP AND ORGANIZATION STRUCTURE

The Virginia Water and Waste Authorities Act (VA. CODE 15.2-5100 - 5158) allows counties, cities,and towns to form authorities for a variety of purposes. The Act provides that an Authority may: "Install,own and lease pipe or conduit for the purpose of carrying fiber optic cable, provided that such pipe orconduit and the rights-of-way in which they are contained are made available on a nondiscriminatory,first-come, first-served basis to retail providers of broadband and other telecommunications servicesunless the facilities have insufficient capacity for such access and additional capacity cannot reasonablybe added to the facilities." (Va. Code 15.2-5114(15)). An Authority may borrow funds, issue revenuebonds, and collect fees for its services, and may contract with parties to accomplish its purposes.


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It is recommended Page County establish a county-wide broadband authority as authorized by Code of Virginia, 15.2-5431.1 et seq. (Wireless Service Authorities Act). The Authority can acquire, construct,improve, enlarge, operate or extend any project providing qualifying communications services under theprovisions of the Act. The Authority can also borrow money and issue revenue bonds to finance theproject that do not constitute debt of the local governing body. This business plan assumes the County

would retain ownership and lease the network to a Broadband Authority for operation.

The exact role and responsibilities of the Broadband Authority will depend on whether the Page CountyBroadband Authority is serving the constituents as a service provider or simply overseeing themanagement and governance of the network over which private companies are the service providers.Some of the benefits to the County of separating ownership of facilities from the operator, the Authority,include the following:

By the County owning the infrastructure and leasing it to the Authority, the county maintains somecontrol and input into Authority matters to ensure county objectives are met

By the County owning the fiber optic network, they will have a valuable asset to borrow against in thefuture

By the County owning the fiber optic network, they will be able to further advance economicdevelopment initiatives which are a primary county objective By the County owning the fiber optic network and the Authority leasing the infrastructure, the

structure creates a capability to transfer monetary payments between the two entities By the County and Authority owning separate facilities, the obligations of the county regarding debt

service are lessened and the county is somewhat shielded from Authority operations in terms of risk management.

If the Authority is not a service provider, then the primary role of the Authority will be overseeing theoperations and governance of the network for the County. The County and/or Authority are authorized toform a public/private partnership under the Virginia Public-Private Education and Facilities Act of 2002,amended in 2008 to include communications infrastructure projects. The project may be initiated one of

two ways: the County may solicit proposals from private entities ( 56-575.4(B)), or private entities mayrequest approval for an unsolicited proposal ( 56-575.4(A)). Various entities have expressed interest inoperating the network and providing Internet access to subscribers.

If the Authority is serving customers directly, then the Authority must be treated under a non-discriminatory policy just as any other service provider using the open access network.

PHASE I COSTS AND FUNDING PLAN

The largest part of the project cost is associated with the construction of the outside plant fiber optic cableutilized to carry the data traffic between the end user and the network operations center. While the fiber

could be buried in conduit along VDOT right of way, it is usually more cost effective to attach the fiber toexisting poles owned by either the incumbent electric utility (Allegheny Power) or telephone provider(Embarq). Before either of these entities will allow a Page County Broadband Authority to attach to theirpoles, they will conduct a survey which identifies the costs associated with modifying the existing polesto allow for additional attachments (fiber optic cable) in a manner which does not jeopardize safety, is incompliance with the National Electric Safety Code requirements, and does not impede their primarypurpose, the delivery of power (or for Embarq, telephone services). Those upgrades will be borne by thisproject, but the modifications will actually be assessed and implemented by the pole owners. Estimates of


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these costs are included in the table following based on field surveys, but the final decisions, often thesubject of differing interpretations, are ultimately mandated by the incumbents.

The new fiber infrastructure costs are more straightforward:

Outside Plant Labor the costs to install the new fiber and associated hardware and splice fiberstogether where necessaryPermitting the costs to prepare documents and obtain permission to cross railroads and use road

rights of wayOutside Plant Hardware costs of fiber optic cable, splice closures, pole attaching hardware,

conduit, and vaultsFinal Design and Construction Management Layout of the fiber, locations for closures, fiber

splicing details, bid management, construction management, development of specifications, bid evaluation and review

Install Fiber Drops and ONTs A connection has to be made to each new customer, adding anOptical Network Terminal (ONT), the network gear located at each premise takingservices. These costs will vary with the number of customers taking service and will

extend from year to year as new customers are added.

While the projected costs are primarily for an aerial deployment, there are locations, such as at somerailroad crossings, where there are no utility poles. Fiber in those areas would have to be buried. Anadditional section of fiber just north of Stanley could be buried in conjunction with a water mainextension planned to serve the new Tech Park. The initial construction costs are only slightly less thanaerial construction when the fiber is buried as part of another project, but the fiber is less prone to damageby weather and other external events and there are no annual pole attachment fees for the buried fiber.

Phase I Project Costs (Luray-North of Shenandoah)Outside Plant Labor $184,000

Make Ready and Permitting $135,000Outside Plant Materials $110,000Network Gear $ 68,000Design, Bid Preparation and Evaluation, Construction Management $ 99,000Install Fiber Drops and ONTs $ 85,000Contingency $ 69,000Additional Cost for Fiber from Stanley to Page County High School $379,000Total Phase I (Lower Figure Wireless Point to Point to Page County HighSchool, Higher Figure all fiber)

$750,000-$1,129,000

*dollars rounded to nearest thousand from financial model

While the Countys Solicitor should be consulted for assurance of compliance with Virginia publicprocurement requirements, typically there are two (2) approaches used by Authorities to solicit serviceprovider use of the network. In the first approach, the Authority adopts set fees and rate tariffs that willsubsequently apply to any and all service providers that want to use the network. Essentially allanticipated scenarios (voice, video, data applications) could be addressed. The network could be availablefor dark fiber lease (for transport) or lit fiber (for customer access). The service providers may usewireless or wireline technologies. This approach makes sense when multiple service providers haveexpressed interest in utilizing the network.


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If no providers initially offer to provide services, a Request for Proposal (RFP) could be issued to find aprovider. If no responsive proposals are presented, the Authority could become a service provider actingas a provider-of-last-resort without the perception that there was no open and transparent solicitation forcompetition. While the Authority should also be able to serve under the first scenario of set rate tariffs,operating the network as well as offering services in competition with other providers provides at least the

appearance of a conflict of interest. One objective of the RFP approach to selecting service providers isto allow more input on what terms and conditions they would consider in utilizing the network, allowingfor true collaboration for public/private benefit.

To ensure revenue sufficient to cover operating expenses and debt service, it is critical that at least threelarge bandwidth users in addition to the County agree to connect to the fiber network for services.Candidate customers would include Page Memorial Hospital recently acquired by Valley Health and PageCounty Public Schools.

One service provider has indicated an interest in purchasing dark fiber between tower locations nearStanley, and in and just outside of Luray. Their need would require increasing the fiber counts in someareas during the design phase as well as adding approximately 3500 feet of additional fiber west of Luray.

The extended fiber would provide potential service to a number of additional customers as well asproviding a net offset against the current estimated costs of $50,000 or more. Details of any agreementshould be worked out prior to finalizing details of the network. The same provider is also interested inpurchasing dark fiber between Stanley and Shenandoah although no discussions have been heldconcerning their detailed needs within Shenandoah.

LAST M ILE SOLUTIONS

The fiber distribution network as proposed can feasibly serve subscribers located within 500 feet of thefiber by a drop connection from the fiber network. Large bandwidth customers located farther from thefiber network may make sense on a case-by-case assessment, depending on their bandwidth requirements.The proposed network route was developed to pass key facilities requiring high bandwidth connectivitythat would serve as anchor customers on the network and attract service providers to the County.

Included in the network capital costs for Phase I are the premise installation and equipment requirementsto serve the anchor customers. Additional numbers of business customers are projected at varioussubscriber levels (bandwidth amounts) to be served via direct fiber connections.

The following table details the key facilities located within reach of the Phase I fiber deployment, alsoindicating those facilities targeted for future phases of construction. Facilities located significantdistances from main thoroughfares and from other potential business subscribers are not feasible to servefrom fiber (except for very high bandwidth customers) and should be included in wireless last milenetwork planning.


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KEY CUSTOMER PHASE I P HASE II AND FUTURE SPURS NOT FEASIBLE TOSERVE BY F IBER

County of Page All Court St. Facilities Battlecreek LandfillHealth Dept. Luray Compactor SiteCounty Tech Park (new) Shenandoah Compactor Site **

Senior/Community CenterAnimal ShelterStanley Compactor SiteSocial Services - StanleyShenandoah CompactorSite **

Town of Luray Town Business Office Sewage Treatment Plant Lake Arrowhead OfficePolice Department Water Treatment PlantFire Station Ralph H Dean Recreation Park Public Works

Rescue SquadTown of Stanley Town Business Office Wastewater Treatment

Fire Department 1 Public WorksFire Department 2 Recreation DepartmentPolice DepartmentRescue Squad

Town of Shenandoah

Town Business Office

Police DepartmentFire DepartmentRescue SquadCommunity Computer CtrPublic WorksWastewater Treatment Plant


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KEY CUSTOMER PHASE I P HASE II AND FUTURE SPURS NOT FEASIBLE TOSERVE BY F IBER Public Schools Administration Springfield Elementary

Luray High (new) Shenandoah ElementaryStanley ElementaryPage County TechnicalLuray ElementaryLuray MiddleGrove Hill Elementary *

Page County Middle *

Page County High (new) *

Healthcare Page Memorial HospitalPMH Home Care & HomeMed Ser

PMH Clinic Stanley Rural Health Center

PMH Therapy & Fitness Shenandoah Rural HealthCenterHawksbill Assisted Living Page County Senior Center

Montvue Nursing HomeExcel Therapy

CommunityServices

Luray Public Library Shenandoah Public Library

Stanley Public LibraryLFCC Satellite CampusBB&T Performing Arts CtrChamber of CommercePage County Job CenterAccess to Care InitiativePage County ExtensionOffice - Stanley

State Facilities Virginia State PoliceFederal Facilities Luray Post Office Shenandoah Post Office US Parks Service

Stanley Post Office

Major EmployersFarmers & MerchantsBank Brookside Restaurant

VF Jeanswear Luray Caverns Lotus GardensAllegheny Power Car & Carriage IBR CorporationPioneer Bank - Luray Wal-MartPTS (Main St) McDonaldsPioneer Bank - Stanley Food Lion LurayPTS Data Center (new) BB&T 211 WestPage Valley Bank Page Cooperative Farm BureauFarmers Merchants Bank Emco Enterprises

Mimslyn Inn Shen Paco IndustriesFood Lion - Stanley KVK Precision SpecialtiesShenandoah WasteServices Masonite International

Genie CompanySullivan Mechanical

* Would be served either optionally by fiber or the existing point to point wireless link;** ShenandoahCompactor Site will be in Phase I if the fiber option to the schools is selected or Phase II otherwise


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PHASE I NETWORK DESIGN LURAY


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PHASE I NETWORK DESIGN LURAY THROUGH STANLEY


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PHASE I NETWORK DESIGN STANLEY TO PAGE COUNTY HIGH SCHOOL


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F IBER NETWORK PHASE II - SHENANDOAH

REASONING FOR PHASE II PROPOSED SOLUTION

Strong reasons to eventually extend the fiber network into Shenandoah include:

Completing fiber connectivity between the County operations in Luray and Shenandoah. Key employers in Shenandoah have expressed need for high bandwidth services. The fiber network could be used for county-wide applications such as E911 calls and

emergency response interoperable communications, community disaster recovery planning,public works, facility monitoring and control (SCADA system) and VDOT operations..

The Town of Elkton has expressed an interest in receiving services off a County fibernetwork. Additional customers and benefit would be derived from an extension through thePhase II Shenandoah project.

NETWORK DESIGN COMPONENTS

While modifications and adjustments would probably occur as actual network design proceeds, generallythe design consists of:

1. One and one-third miles of 96 count generally backbone fiber starting at the intersection of Ridgeview Lane and Highway 683 running generally southward to Highway 340 continuinginto Shenandoah.

2. A generally distribution network along First, Fourth, Virginia and Pennsylvania Streets inShenandoah extending out Fourth Street to Quincy Street.

OWNERSHIP AND ORGANIZATION STRUCTURE

The ownership and organization model for Phase II would not change from that recommended anddiscussed in the Phase I solution.

FUNDING PLAN

Phase II Project Costs (Shenandoah)Outside Plant Labor $ 20,000Make Ready and Permitting $ 24,000

Outside Plant Materials $ 15,000Network Gear $ 42,000Design, Bid Preparation and Evaluation, Construction Management $ 10,000Install Fiber Drops and ONTs $ 19,000Contingency $ 13,000Total Phase II $168,000 ($547,000)*

* Figure in parentheses applies if wireless option from Luray to Shenandoah High Schools is utilized inPhase 1


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PHASE II NETWORK DESIGN SHENANDOAH


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FINAL COMMENTS

At the time this document was being finalized, discussions were being held between the US Department of Commerce and the State of Virginiaconcerning the release of funds for construction projects under the recently passed economic stimulus bill (American Recovery and ReinvestmentAct of 2009). Should additional funds become available to Page County under this plan, an additional six miles of fiber are recommended (twentypercent local match required) providing fiber optic cable infrastructure to Rileyville, to Luray Caverns and to several municipal sites outside of Stanley and Luray. These additional sites are identified under the column Phase II and Future Spurs (Page 6 and 7) but are not adjacent to the

recommended fiber path presented (Pages 8 to 11). The additional fiber would cost approximately $425,000 and would essentially completeconnectivity to all County and municipal buildings.


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IMPLEMENTATION PROCESS & T IMELINE

IMPLEMENTATION STEPS AND T IMELINE

Four Weeks: Board Decision to Proceed and Fund Implementation

It is recommended the County retain ownership of the fiber optic network backbone and lease its use to anewly formed county-wide Broadband Authority. The new Authority will assume the responsibilities of financing and overseeing the construction of last mile access networks to be used to serve the end-usecustomers, as well as be the provider of last resort if necessary.

Because of current County economic development initiatives including construction of a data center and

industrial/commercial park (Tech Park), time is of the essence and concurrent steps are recommended tobe taken in order to meet the project timeline.

The Page County Board of Supervisors would pass a resolution authorizing the County Solicitor toprepare an ordinance authorizing the following actions for which there will be the incurrence of expenditures for:

1. The formation of a County-wide Broadband Authority;2. The County hereby establishes its official intent that Obligations be issued to finance

certain costs of the Project, any property functionally related and subordinate thereto andother related expenditures, including without limitation issuance costs, debt servicereserve funds and working capital reserve funds, in an amount not to exceed $________.The County hereby adopts this declaration of official intent under Treasury RegulationsSection 1.150-2 and declares that the County intends toreimburse itself or its designees with the proceeds of the Obligations for Expendituresmade on, after or within 60 days prior to the date of the adoption of this Resolution,except that Expenditures made more than 60 days prior to the date of the adoption of thisResolution may be reimbursed as to certain de minimis or preliminary expendituresdescribed in Treasury Regulations Section 1.150-2(f) and as to other expenditurespermitted under applicable Treasury Regulations.

3. The County Administration to contract with a network design firm to complete theplanning, design and specifications for the construction, equipping and deployment of

the Page County, VA Community Telecommunications Network Project;4. That the County has certain funds available which may be used temporarily for thepurpose of paying such Expenditures for the Project, pending the issuance of theObligations; and (c) that it is anticipated that the Obligations will be issued for thepurpose of financing the Project.


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make-ready required may impact other design decisions potentially causing moving to alternateroutes or in some cases choosing underground alternatives.

Twelve Weeks: Solicit Bids, Interview Firms, Award Contract

Standard public procurement policies should be followed for the solicitation of bids and award of contract. A list of bidding documents and process are outlined as follows:

Bidding/Contract Award

Bidding Documents- A complete set of bidding documents will need to be developed that typically would include:

o Advertisemento Plans and Construction Specificationso Terms and Conditionso Pricing Sheetso Performance, Maintenance Bonds and Insurance Requirementso Liquidated Damages (if used)o Addressing Materials/Equipment Quality Standards and Warranties ( It is understood that

electronics are not part of the scope of this RFP or construction phase)o Change Order Processo Testing Requirementso As-Built Requirementso Payment Request Drawdown Scheduleso Construction/Implementation Contracts

Plans and Specifications- The duplication and distribution of plans and specifications for distribution to bidders.

Pre-bid Meeting- A pre-bid meeting is strongly suggested to address questions, concerns and identify if any

addendums have been issued and need to be responded to.

Bid Receipt, Tabulation, Bond Compliance and Award Recommendation- Once all the bids are received, bids are tabulated, bid compliance is confirmed, references are

checked, and a recommendation for award is provided to the network owners.

Twelve weeks: Material Procurement and Project/Construction Management Services

It is not uncommon for the procurement of materials to take 60-90 days or longer. While waiting formaterials to be delivered on-site, there are a number of project issues that can be addressed such as set-upof a project staging area, and establishing project administration procedures such as the handling of payroll and expense reimbursements, inspection and other quality control measures, required deliverablessuch as as-built plans, warranties, and material shipping documentation for quantity verification. Thefollowing addresses these issues in greater detail.


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Construction Management

Project Mobilization / Staging Area- One of the first steps upon signing the contract and authorizing the Notice to Proceed is to have a

secured staging area for the contractor so as to mobilize equipment, park vehicles, trailers, etc (asan alternative it can be stated in the RFP that locating the staging area can be part of thecontractors scope of work).

Material and Equipment Ordering / Purchase Order Compliance- The earliest date feasible to order material and equipment needs to be identified early in the

process because procurement of some equipment and materials require a considerable lead time.From a quality and cost control measure, as materials and equipment are received, specificationcompliance and quantity verification should be performed.

Payroll and Expense Reimbursement Processing- Virginia is a Right-to-Work state. Through-out the project payroll and expense reimbursement

requests will need to be reviewed for compliance with the bid, confirmation of work complete ormaterials received, and recommendation made for payment.

Eight weeks: Network Construction

Throughout the project, it is recommended to have an owners representative present for on-siteconstruction/installation observation to ensure quality controls are met.

It is not unusual that some adjustments required during construction/installation and therefore the projectrepresentatives would want to ensure accurate as-built plans are prepared and that final quantities areconfirmed for verification for final payment.

Four weeks: Testing, Punch List, Corrections and Project Close-out

After the infrastructure is built, testing will need to be performed and a punch list created for correction of items prior to issuing the final completion notice. Upon completion of the project and satisfaction of thepunch list, retainage will need to be released, warranties collected, operations and maintenance manualsdistributed and contractor demobilization reviewed for acceptable site condition.

Integrated with the outside plant construction contracts will be a second RFP for electronics andsubsequent procurement of this equipment and other ancillary hardware. The objective will be to havethe electronics installed and staff trained as soon as possible so that customers near the central office canreceive service as soon as possible.


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PAGE COUNTY COMMUNITY BROADBAND IMPLEMENTATION PLAN PAGE 21 OF 52DECEMBER 31, 2008

ORGANIZATION STRUCTURE & GOVERNANCE

OWNERSHIP

The County is explicitly authorized to construct and own communications infrastructure, and to borrowfunds and lease access to other municipalities and private companies. The Governors office and theVirginia Legislature has clearly communicated their position that communication infrastructure isconsidered a utility as critical for a communitys growth as water and wastewater systems. The Countyhas access to low-cost loans and potential grant funding to implement the fiber distribution network (Phases I and II) that private providers have been unable or unwilling to build. By retaining ownership of the network after construction, the County will own a valuable asset that can be leveraged for futureeconomic development initiatives and incentives. Additionally, the County will retain control of thisasset to ensure proper maintenance and direct future phases of expansion in accordance with residentialand business growth in the County.

While Virginia law clearly authorizes municipalities to own and operate communication networks, it isimportant to establish a clear separation of responsibilities between operation and service delivery, andmaintenance of the physical infrastructure (County asset). An additional separation is recommended toplace all aspects of the communication business venture under a Broadband Authority for accountability.The Broadband Authority would be tasked with managing the County-owned infrastructure.

The County should clearly retain ownership of the distribution fiber and fiber connections to subscriberpremises. Connections to service providers should be made through collocation facilities where thephysical connections are made via equipment (cross-connect).

OPERATION

Operation of the network consists of these primary functions:

Function Tasks RecommendedResponsible PartyInfrastructure Administration andManagement

Administrative tasks relative tomaintaining all agreements andinventorying of physical assets;overseeing processes and procedures fornetwork operation and third partycontracts; accounting for all Authorityactivities

Broadband Authority

Physical Infrastructure

Maintenance

Perform repairs to fiber optic cable as

needed, run drop fiber to customerpremises for new service, overseeconstruction of extensions of distributionnetwork during future phases

Broadband Authority

Provide service orcontract to outside firm

Equipment Maintenance Repair or replace networking equipmentat all municipal facilities (includingschools) and the network operationcenters (Court Street, Tech Park, oralternate facility).

Broadband Authority Provide service orcontract to outside firm


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Distribution Network Operation Oversee bandwidth management,maintain Internet access, service providerand customer connectivity

Third Party Operator orBroadband Authority asProvider of Last Resort

Distribution Network Administration

Negotiate/develop use agreements,service provider collocation, billing foraccess, right of way agreements, vendorcontracts

Third Party Operator orBroadband Authority asProvider of Last Resort

DEVELOPMENT OF AGREEMENTS

Constructing and operating the community network will require a number of agreements. The followinghighlights these agreements and touches on some of the items to be addressed within each agreement.

NETWORK OPERATIONS MANAGEMENT AGREEMENT

Page County currently lacks the staff and expertise to manage the network once built. A typical solutionis to contract with a third party with previous experience to manage the network. Vendors responding tothe RFI indicated an interest in managing the network on behalf of the County. The following are someof the issues to be addressed within the Network Operations Management Agreement:

Bandwidth responsibilities which includes managing and allocating subscribed bandwidth tocustomers and across the network

Compliance with Customer Privacy and Personal Property Rights Customer billing and collection Operations budget preparation and monitoring Customer and provider technical support/Back-office support Enforcing Quality of Service (QOS) responsibilities Oversee maintenance and emergency repair of the network

NETWORK MAINTENANCE AND EMERGENCY REPAIR AGREEMENT The network manager may not be the party to do the actual maintenance and emergency repair in theevent the network goes down. Typically such responsibilities are contracted with a local contractor orservice provider that has technical field crews and equipment and will respond within a contracted period.Examples of issues typically included within this agreement are as follows:

Stocking of critical spare parts necessary to repair the network and minimize down time Periodic inspection of the outside plant for areas of concern such as loose attachment hardware,

excessive sag of the cable, condition of splice enclosures and handhole vaults, signs of tamperingwith the network by other utilities or vandals

The response time and procedures for making repairs are normally developed in Quality of Service(QoS) agreements. The details will be mandated by the QoS requirements of high bandwidthcustomers of the network itself.

Quite often the contracted party for maintenance and emergency repair will be the same party contractedto perform customer hookup and disconnect services. This introduces a variety of items to address such


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as established levels of responsibilities between the network and the homeowner, right-of-way andeasement matters, underground utility locations, care, handling and conduit while on private property.

NETWORK ACCESS AGREEMENT WITH SERVICE PROVIDERSAgreements with service providers using the community network will need to be developed. A variety of issues to be addressed include:

Clear delineation and understanding of responsibilities Compliance with Customer Privacy and Personal Property Rights Maintenance and emergency repair coordination and responsibilities QoS Standards Fees for use/lease Compliance with federal, state and local laws Network co-use conduct and notification

POLE

ATTACHMENT

/TRENCH

USE

AGREEMENT

Use of other owned facilities such as exiting poles, conduit, trenches, etc. is usually handled one of twoways; either through a joint use agreement if the County owns similar facilities that are needed by theother owners of such facilities or through annual payments. There are federal guidelines andrequirements on establishing fair and reasonable fees through the calculation of developed formulas, aswell as when such attachments cannot be denied. Examples of issues addressed in a Pole Attachment ortrench use agreement include:

Location of cable placement Responsibilities for Make-Ready work and repair Parameters set as to accessing infrastructure Ownership tagging/identification of infrastructure

Sag allowances and depth placement in trenches with appropriate cover and overall compliance withthe National Electric Safety Code requirements

CONTENT AGREEMENTS Content agreements will be specific to the particular content being acquired. For example typicallybandwidth might require a redundant path be available in the event the main feed goes down; TVprogramming would address franchise agreements and fees as well as Public, Educational andGovernment (PEG) channel provisions; voice would require 5-9s (99.999%) reliability and handling of 911 calls.


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BROADBAND AUTHORITY ORDINANCE An ordinance will need to prepared and approved by the county governing board to establish a WirelessService Authority (Broadband Authority). Steps and issues that will need to be addressed include:

Advertisement for public hearing and of theordinance

Appointment of Authority members

Conduct a public hearing Budget of the Authority Incorporation filing of the authority Employees of the Authority Establishing Authority by-laws

A suggested organization for the Broadband Authority is shown below:

GOVERNANCE PLAN A Governance Doctrine is necessary to guide the Network Management from its inception through initialoperations into the growth phase as additional providers, applications and services are added. Whilemany of the steps which follow were developed for public safety networks, the same steps are applicableto the Governance of general purpose government-operated networks.


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TYPICAL STEPS FOR PLANNING NETWORK GOVERNANCE

Establish Key Relationships and Funding Gather Information Create Network Plan and Roadmap Identify Roles and Responsibilities Recruit Service Provider Participants Conduct Service Provider Interviews Analyze Data, Set Goals and Begin Preparations for Strategic Planning Finish Preparations for and Conduct Strategic Planning Session Develop Network Communications Interoperability Strategic Plan and Develop a Network

Operational Hierarchy Management Organization Use Guidelines for the First 90 days of Implementation and Practice the Plan

In addition to policy issues, there are several real and tangible issues that need to be addressed almostdaily. Examples include operations, maintenance and ongoing funding, troubleshooting, outside plantrepairs, stock and inventory of spare parts, ongoing vendor support, operating manuals and updates, andtraining.

RATE ORDINANCE AND RESOLUTIONS An ordinance establishing the legal authority to charge rates will need to be developed and passed by thegoverning board. Typically rates are established through resolutions because of periodically beingupdated. Steps to establish the ordinance and resolutions typically include:

Advertisement for public hearing and of the

ordinance

Nondiscriminatory rate application and structure

Conduct a public hearing Collection practices and policies Some justification basis for the rates such as

cost of service or market driven rates Connect and disconnect practices and policies

MARKETING /PUBLIC RELATIONS PROGRAM Virginia law prohibits local government network owners from endorsing and promoting the services of private service providers using the network. To a publicly owned network owner, however, the publicrelations is still important. Just like use of other public facilities and infrastructure, the governing boardshould discuss and establish how the network will be perceived by the general public, as well as serviceproviders using the network. Desired perceptions typically include:

Professionalism Benefiting public-owners of the network Legal decency of content Community asset Fair and equitable/Non-discriminate

For those services (if any) being offered directly to the end-user by the county network, in addition topublic relations issues, a marketing program will need to be developed that typically would include:


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Customer incentives and promotions such asbundled pricing or limited free service

Response time

Customer sign-up and hook-up Customer Privacy and Personal Property Rights Quality of Service being guaranteed Easy to find customer technical support and

emergency call numbers Competitive rates and service Development of a user friendly website Customer responsibilities Value-added features such as on-line account

access and payments, speed testing, etc


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PRELIMINARY DESIGN & PROJECT COSTS

The fiber distribution network proposed is intended primarily to lay the foundation for private providerexpansion of broadband services throughout the County. As a first step towards achieving that goal, the

Countys investment in fiber is targeted to connect anchor subscribers such as municipal (County, Town,State and Federal) facilities, public schools, key healthcare providers, and large employers that willprovide revenue for the networks economic viability.

The network as proposed is divided into two phases with Phase I meeting the immediate needs of Countyfacilities located primarily in the Luray area. An additional catalyst for investing in fiber in the Lurayarea is the PTS data center under construction in the future County Tech Park. The high bandwidth needof the data center is attractive to Tier 1 data providers (e.g. Level 3) who have committed to extending abackhaul network to reach this new facility. By bringing the low-cost bandwidth directly to the facility,the County has an opportunity to expand availability to other key end-users thereby facilitating access byadditional private providers.

Phase I consists of a distribution fiber network that would connect facilities in Luray, passing south andconnecting to facilities at the County Tech Park, extending to many of the Main Street municipal facilitiesin Stanley, and finally ending at the Page County High School (alternate) north of Shenandoah.Approximately fifty-nine municipal and key community end-user facilities are anticipated to be servedalong this proposed fiber path. Redundancy is achieved by connecting ultimately to a long haul providerat both the Court Street campus and the Data Center/Tech Park facility.

The following table details the key facilities located within reach of the Phase I fiber deployment, alsoindicating those facilities targeted for future phases of construction. Facilities located significantdistances from main thoroughfares and from other potential business subscribers are not feasible to servefrom fiber (except for very high bandwidth customers) and should be included in wireless last milenetwork planning.

KEY CUSTOMER PHASE I P HASE II AND FUTURE SPURS NOT FEASIBLE TOSERVE BY F IBER County of Page All Court St. Facilities (7) Battlecreek Landfill

Health Dept. Luray Compactor SiteCounty Tech Park (new) Shenandoah Compactor Site**Senior/Community CenterAnimal ShelterStanley Compactor SiteSocial Services - StanleyShenandoah CompactorSite**

Town of Luray Town Business Office Sewage Treatment Plant Lake Arrowhead OfficePolice Department Water Treatment Plant

Fire Station Recreation Park Public WorksRescue Squad

Town of Stanley Town Business Office Wastewater TreatmentFire Department 1 Public WorksFire Department 2 Recreation DepartmentPolice DepartmentRescue Squad


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KEY CUSTOMER PHASE I P HASE II AND FUTURE SPURS NOT FEASIBLE TOSERVE BY F IBER Town of Shenandoah Town Business Office

Police DepartmentFire DepartmentRescue SquadCommunity Computer CtrPublic WorksWastewater Treatment Plant

Public Schools Administration Springfield ElementaryLuray High (new) Shenandoah ElementaryStanley ElementaryPage County TechnicalLuray ElementaryLuray MiddleGrove Hill Elementary*Page County Middle*Page County High (new)*

Healthcare Page Memorial Hospital PMH Home Care & Home MedSerPMH Clinic Stanley Rural Health CenterPMH Therapy & Fitness Shenandoah Rural Health CenterHawksbill Assisted Living Page County Senior CenterMontvue Nursing HomeExcel Therapy

Community Services Luray Public Library Shenandoah Public LibraryStanley Public LibraryLFCC Satellite CampusBB&T Performing Arts CtrChamber of CommercePage County Job CenterAccess to Care InitiativePage County Extension Office- Stanley

State Facilities Virginia State PoliceFederal Facilities Luray Post Office Shenandoah Post Office US Park Service

Stanley Post OfficeMajor Employers Farmers & Merchants Bank BB&T 211 West Brookside Restaurant

VF Jeanswear Luray Caverns Lotus GardensAllegheny Power Car & Carriage IBR CorporationPioneer Bank - Luray Wal-MartPTS (Main St) McDonaldsPioneer Bank - Stanley Food Lion LurayPTS Data Center (new) Emco EnterprisesPage Valley Bank Shen Paco IndustriesFarmers Merchants Bank Page Cooperative Farm BureauMimslyn Inn KVK Precision Specialties

Food Lion - Stanley Masonite InternationalShenandoah Waste Services Genie CompanySullivan Mechanical

Would be served either optionally by fiber or the existing point to point wireless link;** Shenandoah Compactor Site will be in Phase I if the fiber option to the schools is selected or Phase II otherwise


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In addition to the key customers targeted for connections to the network, there are approximately 197 small to medium businesses located within500 feet of the network that can also be served directly via fiber. Known businesses include:

Business Address Town Phase INetworkPhase IINetwork

58 WEST7-ELEVEN STOREA MOMENT TO REMEMBERACTION AUTO SALESALICIA'S THERAPEUTIC MASSAGEALYSON'S CUT-N-HAIRAMERICAN LAWN MOWER SERVICEAMERICAN PROMOTIONAL EVENTSAMY ENTERPRISES LLCAPPALACHIAN OUTDOORS ADVENTUREAPRIL'S FLOWER BASKETARTISANS GRILLASCENSION IN WOODCRAFTAUTOZONE #2039AVIO GALLERIES, INC.BEAN EAST CORPBELLA DONNA FACIALSBILL DUDLEY & ASSOC R.E.BLUE RIDGE CLEANERSBOKA CLEANING SERVICESBREN'S ANTIQUESBRENT E LENZ DDS, PCBUDGET INNBURGER KINGBURNER ELECTRIC SERVICEBUTLER'S MOWING SERVICESC & D TOURSCALIFORNIA NAILSCARDINAL INNCENTER STAGE DANCE ACADEMYCOURT HOUSE ANTIQUES

58 WEST MAIN STREET610 EAST MAIN STREET55 EAST MAIN STREET320 WEST MAIN STREET7 BERREY BLVD736 WEST MAIN STREET1016 A EAST MAIN STREET1036 US HWY 211 W822 EAST MAIN STREET55B EAST MAIN STREET131 EAST MAIN STREET2 EAST MAIN STREET154 PLANNING MILL RD1062 US HWY 211 WEST1134 EAST MAIN ST320 N HAWKSBILL126 EAST MAIN ST102 EAST PAGE STREETE MAIN & RESERVOIR5 NICHOLS RD45 CAVE STREET33 NORTH BANK ST320 WEST MAIN STREET1034 US HWY 211 WEST30 N BANK ST103 N HAWKSBILL1218 EAST MAIN ST5 EAST LURAY SHOPPING CTR1005 EAST MAIN ST123 HIGHLAND COURT12 EAST MAIN STREET

LURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAYLURAY

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CRAVINGSCULTURAL CONNECTIONS LLCD & S JEWELERS & PAWNBROKERSDEL LLCDOMINO'S PIZZADRY RUN OUTFITTERSDUNCAN'S CONSTRUCTION COEAST COAST / MAPCO EXPRESSEAST END AUTOMOTIVE INCEAST WOKENVIRO-SOLUTIONSFAMILY DOLLAR STOREFANG S HORNG, MD PCFARMER'S FOOD OF LURAY INCFISHER AUTO PARTS INCFLORAL FANTASY & GIFTSFLOTZIE'S SOFT SERVEFOLTZ'S AUTO SERVICEFOXFIRE PROPERTIES INC.FREEZE'S TOWING & AUTO REPAIRGALLUP HOME REMODELING & REPAIRGILLIAM LUMBER COMPANYGIRIJA YOGAH & R BLOCKHARDEE'S OF LURAYHILLSIDE MOTORS INCHOLTZMAN OIL CO.HOMESTEAD RENTALSPAGE COUNTY EAGLESREED'S TIRE CENTERVALLEY GAS CORPPARNERS FIRSTPIONEER BANKRIVERSIDE MINI-MARTSD TAX & BOOKKEEPINGSTANLEY FLOWER SHOPSTANLEY FOOD LION

123 HIGHLAND COURT1 N BROAD ST #1B2 WEST MAIN ST202 WEST MAIN STREET #29 CAMPBELL STREET151 SOUTH COURT ST5 SMITH STREET725 EAST MAIN STREET139 VIRGINIA AVE #A17 EAST LURAY SHOPPING CTR106 CAVE STREET12 EAST LURAY SHOPPING CTR218 WEST PAGE ST8 EAST LURAY SHOPPING CTR15 EAST LURAY SHOPPING CTR541 WEST MAIN STREET1034B US HWY 211 WEST633 EAST MAIN ST113 EAST MAIN ST418 MILL CREEK ROAD230 WEST MAIN ST STE B15 CAVE STREET126 EAST MAIN ST3 E LURAY SHOPPING CTR607 EAST MAIN STREET7 GARFIELD AVE191 S COURT ST405 EAST MAIN STREET154 PLANNING MILL ROAD3148 US HWY BSN 340134 VIRGINIA AVE300 EAST MAIN STREET311 EAST MAIN STREET1204 EAST MAIN ST7 EAST LURAY SHOPPING CTR19 EAST LURARY SHOPPING CTR35 EAST MAIN ST

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STANLEY PHARMACYL WILLIS FISHERLAW OFFICE OF CHARLES A BUTLERLEMON'S JEWELRY INCLURAY ANTIQUE & DESIGN CTRLURAY ANTIQUE MALLLURAY APOTHECARY INC.LURAY AUTO BODYLURAY BARBER & BEAUTYLURAY BOWLING LANESLURAY CLINIC OF VETERINARY MEDICINELURAY COPY SERVICELURAY FAMILY BILLIARDSLURAY GAS AND OILLURAY IMPORT SERVICE INCLURAY PAGE COUNTY BASEBALL LLCLW VENTURE, INC.MAIN STREET BAKERYMAINSTREAM COMPUTER SYSTEMSMARGARET DALEYMARKOWITZ APPLIANCE CENTERMILLERS COTTAGEMOUNTAIN HOME INSPECTIONS INCMOUNTAIN MEMORIESMOUNTAIN SPRING INNMOVIE STARZ VIDEOMRS B'S PIZZANORTH STAROAK TREE ANTIQUESPAGE COUNTY EAGLESPAGE COUNTY TIRE & AUTOPAGE MOTOR COMPANY INCPAGE PRIMARY CAREPAGE REALTYPAGE THEATRESPATRICK E SPRAGUE DDSPEEBLES

1204 EAST MAIN ST232 WEST MAIN ST115 N MAIN ST26 NORTH BROAD ST56 EAST MAIN STREET7 BLUE RIDGE AVE121 NORTH HAWKSBILL STREET803 EAST MAIN ST50 WEST MAIN ST1208 E MAIN STREET27 EAST MAIN ST30 EAST MAIN ST926 EAST MAIN STREET3 PAINTER STREET1203 EAST MAIN ST1034 US HWY 211 WEST127 E MAIN STREET1122 E MAIN STREET8 BLUE RIDGE AVE35 NORTH BANK STREET7 INN CIRCLE101 NORTH COURT ST10 EAST MAIN ST147 SOUTH COURT ST11 EAST LURAY SHOPPING CTR606 EAST MAIN ST1 VOGT PLACE56 EAST MAIN STREET1138 EAST MAIN ST745 WEST MAIN ST250 MEMORIAL DRIVE STE B1222 EAST MAIN ST33 EAST MAIN ST4 CANAAN STREET14 EAST LURAY SHOPPING CTR111 NORTH COURT ST234 EAST MAIN STREET #3


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PENNY M PETTITPIONEER PARTNERS CLEANING SERVICEPIZZA HUTPLAN QUESTRACERS FIRE EXTINGUISHER SERVICERANCHO VIEJOREBECCA'S ATTICRED'S TIRE & AUTO SERVICEREED'S TIRE CENTERROBERT A DOWNS PLLCRODGER L SMITH, COUNSELOR AT LAWSEAL'S PAINTS AND HARDWARESHARDAN INCSHENANDOAH VALLEY SIDING CORPSHOWALTER SIGNS & SILKSCREENINGSIGN DOCTOR SALES & SERVICESOLON INCSOUTH COURT INNSPEEDY FAMILY STORESTARR JOHNSON INVESTMENTSSTEPHEN M MACDONALD JRSTONEWALL REALTY LLCSTONEY'S TAXIDERMYSTRIPE ITSTUEHMEYER AUTOMOTIVESWENSON VENDING COSYLVAN A WELLSTASTEE FREEZ OF LURAYTAX MATTERS ASSOCIATESTHE GOSHEN HOUSE BED & BREAKFASTTHE HEALING OASIS OF LURAYTHE LOOKING GLASSTHE LUNCHBOXTHE MAIN FRAMETHE PORCHTHE VINTAGE HOPE CHESTTHE WOODSHED

721 EAST MAIN ST117 LURAY AVE27 EAST MAIN ST709 EAST MAIN STREET903 EAST MAIN STREET529 WEST MAIN STREET127 WEST MAIN STREET129 EAST MAIN STREET15 CAMPBELL STREET410 WEST MAIN ST14 COURT LANE104 NORTH HAWKSBILL STREET24 ZERKEL STREET15 SMITH STREET160 SOUTH COURT ST515 WEST MAIN STREET15 SOUTH COURT STREET117 NORTH COURT STREET1225 EAST MAIN STREET104 NORTH HAWKSBILL STREET8 GARFIELD AVENUE4 PAINTER STREET304 NORTH BANK STREET303 EAST MAIN STREET402 WEST MAIN STREET30 EAST MAIN ST120 N HAWKSBILL STREET126 EAST MAIN ST126 EAST MAIN ST40 EAST MAIN ST205 WEST MAIN ST116 EAST MAIN ST21 NORTH BROAD STREET220 MECHANIC STREET118 W COLE STREET42 EAST MAIN STREET903 EAST MAIN STREET


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TUTT'S SPEED SHOPUNCLE BUCK'S FAMILY RESTAURANTVA COUNTRY HOMES & CABINS REALTYVALERIE LUCASVALLEY APPLIANCE COVALLEY AUTO SALESVALLEY GAS CORPVALLEY INTERNAL MEDICINEVALLEY TOTAL FITNESSVICTORIAN INN AT LURAYVIRGINIA GIFT SHOPVIVIAN'S FLOWER SHOPVONDA G. WILTWAL-MART SUPERCENTERWAREHOUSE ART GALLERYWATER PLUS INCWAYNE'S AUTO MARTWEEZIE'S WONDERFUL WORLD LLCWELL SPIRITWENDY'S NAILS ON WHEELSWERNER WIEDEMANN DDSWEST MAIN CARWASHWILLIAM N MAYBERRY, DDSZIPPS LLCA STITCH IN TIMEAA & TBRENDA LAMCINDY'S HAIR STYLINGCLAPPER'S SERVICE CENTERD.T.H. CLEANING SERVICEDR. R.M. BROTHERSDR. SCOTT RUFFNERGFK CONSULTINGGUND PHARMACY LLCHAIR DESIGNERIVY HILL GUEST HOUSEJJ's FAMILY RESTAURANT

15 CAMPBELL STREET14 EAST MAIN STREET904 EAST MAIN STREET250 MEMORIAL DRIVE STE D12 EAST LURAY SHOPPING CTR138 EAST MAIN STREET24 EAST MAIN STREET47 WEST MAIN STREET1204 EAST MAIN ST1036 US HWY 211 W15 CAMPBELL STREET301B WEST MAIN STREET629 WEST MAIN STREET317 NORTH HAWKSBILL STREET27A EAST MAIN STREET11 BARTLETT AVE33 NORTH BANK ST1 HERITAGE DRIVE156 EAST MAIN STREET1207 EAST MAIN STREET140 FOX DRIVE320 HONEYVILLE AVENUE201 EAST MAIN STREET263 KARL JENKINS AVE416 FIRST STREET113 NORTH FOURTH STREET316 THIRD STREET APT408 THIRD STREET412 MARYLAND AVENUE501 DENVER AVENUE424 SOUTH THIRD STREET426 SOUTH THIRD STREET516 A FIRST STREET420 SOUTH THIRD STREET400 FIFTH STREET419 FIFTH STREET418 NORTH FIFTH STREET

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L & R ELECTRICALM.J. STOVER IIIMICHAEL & REBECCA WONGMUSENERGY OF SHENANDOAHOLD DOMINION HEATING & COOLINGPARNERS FIRSTPIONEER BANKRIVERSIDE MINI-MARTROBBINS DESIGNSD TAX & BOOKKEEPINGSEVEN 7SSHEN BOOKKEEPING & TAXSHENANDOAH SERVICE COSHENANDOAH VALLEY FRAME SHOPSHUN XINGSTANLEY FLOWER SHOPSTANLEY FOOD LIONSTANLEY PHARMACY

417 THIRD STREET509 PENNSYLVANIA STREET528 NORTH FIFTH STREET302 THIRD STREET522 FIRST STREET507 FIRST STREET424 FIRST STREET204 FOURTH STREET409 THIRD STREET208 VIRGINIA AVENUE604 FOURTH STREET558 WEST MAIN STREET252 EAST MAIN STREET3513 US HWY BSN 340 WEST714 EAST MAIN STREET190 WEST MAIN STREET558 WEST MAIN STREET308 EAST MAIN STREET

SHENANDOAHSHENANDOAHSHENANDOAHSHENANDOAHSHENANDOAHSHENANDOAHSHENANDOAHSHENANDOAHSHENANDOAHSHENANDOAHSHENANDOAHSTANLEYSTANLEYSTANLEYSTANLEYSTANLEYSTANLEYSTANLEY

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BUSINESS PLAN & ASSUMPTIONS

Many different business models were considered during the preliminary phases of this project ultimatelysettling on one which best met the following objectives:

Provide an infrastructure over which multiple providers could offer voice, data and videoservices

Minimize the involvement of the County government in competition with privateproviders while increasing competition for cost effective telecommunications services

Increase the pace of economic development within the county Minimize the demands on the County for staffing of a newly developed fiber optic

network Create a self-sustaining network not requiring continuous support from the County tax

base to continue operations Provide cost effective, high bandwidth Internet services to schools and County facilities

The final choice selected is one in which the County (through a Broadband Authority) builds a fiber opticbackbone with some distribution fiber capable of serving many of the businesses and residents directlywhile encouraging new wireless development. The outside plant network is sufficiently robust to supportthe delivery of fiber optic services across the county. Details and a discussion of the phase I network follows:

The numbers of potential customers were determined from a GIS analysis which counted all of the businesses and homes within 500 feet of the projected fiber path

Several large bandwidth customers were identified which would benefit from the lower costbandwidth. A minimum of three of these anchor customers are needed for viability of thenetwork.

The revenue projections are for transport of data across the network. They are based on differinglevels of need and economic pricing realities. Three different levels of service have been usedwithin the model.

o A small business or residential best effort Internet product offering up to about 5 Mbpsservice for a monthly transport fee of $30.

o A municipal customer rate providing higher bandwidth and higher levels of network support. A revenue projection of $100 per customer per month has been utilized for thistype of customer.

o An anchor customer level of service providing access at whatever bandwidth is requiredby the customer with 24 hour network support for customers requiring highly reliablebandwidth. Bandwidth would be provided on a somewhat sliding scale estimated at$1,200 per month for 45 Mbps Internet access. The final costs would likely vary basedon negotiated quality of service requirements and support.

Most private customers on the network would utilize an Internet Service Provider who would billcustomers based on the level of Internet access provided, incorporating company overhead into theirmonthly fees. Their overhead would include the network access charges paid to the County. Each ISPwould pay monthly fees to the County for access based on the number of customers and bandwidthpurchased.


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Network Operating CostsYear Year Year Year Year Year

1 2 3 4 5 6

Network Charges

Pole Charges $10,362 $10,362 $10,362 $10,362 $10,362 $10,362Leased Space $1,872 $1,919 $1,967 $2,016 $2,066 $2,118Network Licensing $6,728 $6,893 $7,042 $7,042 $7,042 $7,042Staff Support $27,624 $28,535 $29,474 $30,211 $30,967 $31,741

Total Network $50,920 $52,276 $53,651 $54,522 $55,415 $56,330

The primary cost of operating a network is not the operating costs, but rather the annual principal andinterest charges associated with the cost to build the outside plant and purchase network electronics. Theprincipal costs are:

Make Ready The costs paid to the electric utility (or other owner of utility poles) to make thechanges to their poles necessary to allow fiber optic cable to be installed safely with minimalimpact on the primary purpose of the poles, the delivery of power. These charges can besubstantial and are determined essentially by fiat by the pole owner.

Outside Plant materialsFiber optic cable, mounting hardware, vaults and splice closures Outside Plant LaborThe cost of mounting the fiber on poles or burying it, usually in conduit Design and Construction ManagementThe design, supervisory and quality control costs

associated with the installation of fiber Network Gear with OSSNetwork electronics and software Fiber splicing, Installation of Drop and Optical Network Terminal (ONT), Drop fiberthe costs

associated at the individual premise with provisioning each new customer

These costs can be borne in the entirety by the County or paid for partly by grants and other contributionsand partly by borrowing. The assumption used for this analysis is that sixty percent of the first yearscapital costs can be obtained through grant processes.


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Year Year Year Year Year Year1 2 3 4 5 6

Capital Expenditures

Outside Plant Labor exc. Make-ready $183,892 $0 $0 $0 $0 $0Make Ready and Permitting $134,664 $0 $0 $0 $0 $0Outside Plant Materials $110,108 $0 $0 $0 $0 $0Design and Construction Management $98,960 $0 $0 $0 $0 $0Network Gear with OSS $68,000 $0 $0 $0 $0 $0Contingency $68,778 $0 $0 $0 $0 $0Fiber Splicing per new customer $3,100 $350 $350 $0 $0 $0Install Fiber Drop and ONT $62,000 $7,000 $7,000 $0 $0 $02 Fiber All Dielectric Drop Fiber $2,480 $280 $280 $0 $0 $0FTTH ONT (Outdoor) $21,700 $2,205 $1,985 $0 $0 $0

Total Capital Expenditures $753,682 $9,835 $9,615 $0 $0 $0

Capital Cost Paid by Grant $452,209 $0 $0 $0 $0 $0

Net Capital Expenditures $301,473 $9,835 $9,615 $0 $0 $0

Monies not covered through any grant process must be obtained by borrowing or other means. Generallyenough additional funds should be available at the start of construction to cover the first years principaland interest payments as well as operating costs for the first year. That approach has been utilized fordetermining borrowing requirements. An interest rate of five percent was used for this plan. Monies areavailable to the County from the Virginia Resources Authority which lent money in December 2008 for anon-telecom project at a rate of 3 percent. While they have yet to lend money for a telecom project, it is

likely that monies will be available at a rate lower than was used for this evaluation.


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Bond Proceeds $412,538Underwriter's Spread $5,157Bond Cost of Issuance $1,650Bond Insurance $2,063Principal $421,407 $401,878 $381,373 $359,842 $337,235 $313,497Percent Interest 5.00 5.00 5.00 5.00 5.00 5.00

Cash Available for Year $82,545 $11,265 $15,182 $26,676 $28,999 $31,447

Current Year Capital Expend $301,473 $9,835 $9,615 $0 $0 $0

Cuurent Year Capital Paid $0 ($9,835) ($9,615) $0 $0 $0

End Year Debt Before Payment $421,407 $401,878 $381,373 $359,842 $337,235 $313,497Principal Payment ($19,529) ($20,505) ($21,531) ($22,607) ($23,738) ($24,924)Principal Remaining $401,878 $381,373 $359,842 $337,235 $313,497 $288,573

Cumulative Able to Pay $63,016 $53,775 $47,426 $51,495 $56,756 $63,278

Principal End of Year $401,878 $381,373 $359,842 $337,235 $313,497 $288,573

Bond Details15 year financing

Loan is fully amortized over 15 yearsInterest Rate 5 % per annum

The combination of projected revenues from a limited number of customers and borrowing of fortypercent of construction costs plus first years operating and bond expenses produces the following IncomeStatement.


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Year Year Year Year Year Year1 2 3 4 5 6

Income Statement

Total Revenue on Operations $43,470 $91,265 $95,634 $97,530 $99,473 $101,465Interest on Funds $0 $2,206 $1,882 $1,660 $1,802 $1,986

Network Costs ($50,920) ($52,276) ($53,651) ($54,522) ($55,415) ($56,330)Bond Financing Expenses ($591) ($591) ($591) ($591) ($591) ($591)Total Direct Expenses ($51,511) ($52,868) ($54,243) ($55,113) ($56,006) ($56,921)

Operating Income ($8,041) $40,602 $43,274 $44,076 $45,269 $46,530Operating Income Margin ($18) $44 $45 $45 $46 $46

Depreciation ($11,306) ($21,773) ($22,356) ($22,645) ($22,645) ($22,645)Earnings Before Interest (EBIT) ($19,347) $18,830 $20,917 $21,432 $22,625 $23,885

Interest on Bond $21,070 $20,094 $19,069 $17,992 $16,862 $15,675Short Term Interest $0 $0 $0 $0 $0 $0Adjustments to Bond Interest $0 $0 $0 $0 $0 $0

Adjustments to Short Term Interest $0 $0 $0 $0 $0 $0

Interest Paid $21,070 $20,094 $19,069 $17,992 $16,862 $15,675Gross Earnings Before Taxes ($40,417) ($1,264) $1,849 $3,439 $5,763 $8,211Loss Carryover $0 ($40,417) ($41,681) ($39,833) ($36,393) ($30,631)Net Income Before Taxes ($40,417) ($41,681) ($39,833) ($36,393) ($30,631) ($22,420)

Net Income ($40,417) ($1,264) $1,849 $3,439 $5,763 $8,211


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FUNDING PLAN

Total capital project costs for two phases of fiber deployment are approximately $1,400,000.Conversely, by first deploying Phase I recommendations the County can begin receiving revenue to

solidify the business plan prior to requesting additional funds to extend the fiber network to Shenandoah.In December 2008, the County submitted a funding request in the amount of $1,050,000 to theGovernors office in anticipation of potential infrastructure funding as part of a proposed federalgovernment stimulus plan. The American Recovery and Reinvestment Act was signed into law onFebruary 17, 2009. Details of how grant monies will be distributed were not available at the time thisdocument was written.

FUNDING PLAN FORMULA

The Community Broadband Planning Project business model used assumes a forty percent local fundingcapital commitment. Approximately $300,000 of potential grants or contributions has been identified.Work is continuing to examine other possible sources of funding.

New Construction

Total Project Funding = Forty percent local funding, + Sixty percent grants/contributions. Additionallocal funds would need to be available to support the first years operations, interest and principalpayments covering shortfalls during initial operations.

Existing Infrastructure

1. Establish current valuation of existing infrastructure/facilitiesa. Account for depreciation and remaining years of service lifeb. Account for parties using infrastructure/facilities and percent cost share

2. Determine cost-benefit of percent share to determine intangible value

3. Negotiate use fee and terma. Address what happens when service life expiresb. Address if and when future parties use or benefit from existing infrastructure/facilities

expires

Commonly used utility funding assignments include:

Capital Cost Funding

Capital Costs as used within this funding plan is defined as those upfront tangible costs that have acapital asset value that will depreciate over the life of service plus the associated costs of designing andimplementing the project. Capital Cost items include:

Network construction materials and equipment such as fiber, towers, cabinets, enclosures,Network Interface Devises (NID), etc.

Network design consulting, bidding, constructing and funding expense


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Operational Costs Funding

Operational Costs as used within this funding plan is defined as costs necessary to operate, maintain,repair and collect revenues of the network. Operational Cost items include:

Network staffing personnel Office equipment and materials Software and billing documents Network maintenance personnel Contracted services such as network repair

Valuation Method

Telecommunications is often referred to as the communications utility. Like water, wastewater, electric,and gas industries, there are some common schools of thought of what source should be used to fund theexpenses associated with the utility.

One of the first accounting principles to understand is that utility companies will want to depreciate thesystem assets. Depreciation schedules not only plan for replacement of the item, but justify the chargesassociated with the item. The determination of the value of a utility is used to provide information neededin the structuring of proposed rates, development of depreciation reserve funds, and capital outlay funds.

There are two types approaches typically employed in the performance of a valuation study. These arethe asset-based method , which relies on the capital cost of the facilities, and the income-based method ,which involves the operating income generated by the rates.

The asset based method considers the original and current day (replacement) costs of the utility in-place.The value is based on the capital costs less depreciation, commonly referred to as the undepreciated costs.The depreciation is intended to quantify in dollars, to the extent possible, the actual deterioration of thefacilities or the loss in service that occurs over time due to wear and tear. For purposes of establishing afair market value for the utility in the event of potential acquisition, the original and replacement costsprovide a range for negotiations. However, only the original costs and related depreciation are needed forthe rate determination.

If the network being constructed is new, than the actual costs are the original costs. If the network includes a component already existing, then the replacement or current costs can be determined bytrending the original costs forward to the present using generally accepted construction costs indices. Onthe other hand, if the original costs can not be ascertained from historical records, then the cost to replacethe system can be estimated based on recent costs for the installation of similar facilities in the generalarea. In turn, replacement costs can be trended backwards with the assistance of the same cost indices toarrive at the original costs.

The income-based method is predicated on the revenues earned and the expenses incurred by the utilityoperations. This method equates the value of the system to the sum of the estimated cash flows of the netoperating income (revenues less expenses) over a period of time (say next 20 years), discounted orrestated in terms of todays dollars. It is widely used by companies in the valuation of capitalacquisitions.


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For the Community Broadband Planning Project, a greater emphasis is placed on the asset-based methodbecause original costs are known as opposed to having known operating income and it provides data thatis necessary for the development of rate structures and the depreciation reserve. The income-basedmethod can be used primarily to check the reasonableness of the value generated by the asset-basedapproach.

GRANTS

Opportunities for grant funding include the USDA Rural Utilities Service (RUS), the VirginiaDepartment of Housing and Community Development (VDHCD), and the U.S. Economic DevelopmentAdministration (EDA). There are no private foundations making grants for rural communicationsinfrastructure development at the present time. Matching funds requirements at the federal level are suchthat funds received from other sources (not federal) as well as in-kind contributions can generally be usedto meet matching thresholds.

The most likely source for grant funding for Phase I and II of the fiber network is the VDHCD.Specifically, the County would be implementing infrastructure to benefit at least one