Henry County Fiber Optic Initiative

March 5, 20129:00 AM

The problemThe solutionWhy fiber is “future proof”What is needed, next steps

Overview

Current Expenses

Level of Service

Economic Development

The Problem

Vendor 2009 2010 20112012 Estimates         

Henry County BOC AT&T 172642.94 78179.09 12504.18    Charter 280793.34 221154.15 324394.42    GTA 73074.15 53027.2 47870.53  

HCBOC total:   $526,510.43 $352,360.44 $384,769.13 $407,000.00                       Henry County BOE AT&T 995632.91 1037031.25 864816.66    Charter 98988 47994 N/A    Cogent N/A 43528.41 91980  

HCBOE toal:   $1,094,620.91 $1,128,553.66 $956,796.66 $1,000,000.00                       Henry County WSA AT&T          Charter          Other?        

HCWSA total:   256,134.09 $196,993.35 198,628.09 $183,028.09                      

TOTAL:   $1,877,265 $1,677,907 $1,540,193 $1,590,028

Expenses – Leasing Service Today

Schools currently have .0015 Mbps per student of Internet bandwidth or about 1/1000th what home broadband delivers.◦ Equates to about 11.3 Mbps per school

Henry County currently have .02 Mbps per employee of Internet bandwidth or about 1/100th what home broadband delivers. ◦ Equates to about 1.1 Mbps per building.◦ Henry County government utilizes more bandwidth per

employee because we also service many E-Services directly to Citizens, such as Video of Board Meetings, Electronic access to Tax information and payments,

Many areas of the county are not serviceable at all, including most parks.

Current Level of Service

Henry County has been eliminated for consideration because of lack of redundant suppliers of Fiber Optics. Cite Douglas County, Microsoft Datacenter most recently.

http://www.11alive.com/video/default.aspx?bctid=993700419001

Targeted Industry Study – Cite Study◦ Firms are beginning to near-shore customer-care and processing

centers for complex support and solutions management function◦ Proposed new investment in fiber telecommunications

infrastructure would provide a transformative new asset◦ Digitization of every form of information continually opening new

opportunities for entrepreneurs and innovators

Economic Development

Flexibility and ability to serve UN-Served locations such as Mount Carmel Park Soccer Complex, traffic signals, etc.

10 times the bandwidth for less cost than is currently being paid for service.

Provides Private Sector opportunity for Economic Development (Wholesale of Dark Fiber Only – NO services).

END RESULTS

Dark Fiber – Fiber that has not been attached to any equipment, and provides no utility or benefit without equipment. No services are provided over dark fiber.

Interconnect – Connections made from one building to another. This is often called a LAN or Local Area Network, sometimes called a MAN, or Metropolitan Area Network. Allows transmission of data from one building to and from another. Alone, this is NOT the Internet.

Internet – A global network of interconnected networks. ◦ It is a network of networks that consists of millions of private, public,

academic, business, and government networks, of local to global scope, that are linked by a broad array of electronic, wireless and optical networking technologies.

◦ It is over the Internet that computer users are able to access email, web sites, and many other services.

◦ The HUB of the Internet for our area is located in Downtown Atlanta, and on a map looks much like transportation network.

Definition of Terms used

THE “HOW”

Build a Fiber Network, as specified in plan. Government Only Service for HCBOC, HCBOE, HCWSA, Cities and

other government entities optional (their choice). Operations of the network would be outsourced to a company

experienced in running such a network. Any surplus capacity (i.e. Fiber strands) would be offered for lease in

a Non-Discriminatory fashion at market rates for wholesale dark fiber access. (limit of 20% available to any single company or subdivisions including parent/child of company)◦ Any revenue to be used to pay down debt service and/or to expand network

for economic development and/or education.◦ Note: Due to construction methods, petroleum costs, labor costs, etc. It can

actually be less expensive to buy MORE fiber than less. Example: A 4 strand Fiber Cable costs about $110 per strand for 1000 Feet. A 144

strand Fiber Cable costs about $16 per strand for 1000 feet. When bought in bulk these numbers go down even more. http://store.cablesplususa.com/aq1444h1f-dwb.html

Most of the cost associated with a Fiber Optic network is the LABOR and permitting costs, not the raw material.

The “HOW”, (continued)

Total Cost = $14,000,000 financed at 2.5% for 15 years.

Variable or Recurring costs – ◦ Principle and Interest = $1,143,590.50◦ Annual Operating Expenses = $331,000 (46)

Total Annual Expenses = $1,474,590 15 Years, and we own the whole thing. Then the

Government, Schools, expenses go to the operating costs only of $331,000 per year.

Savings Per Year after payout = $1,169,000 Level of Service increased 10 X current levels for Internet

Access and 50 X for backbone infrastructure. ◦ Each government facility and school would receive 100 Mbps of

Internet on a 1 Gigabit Dedicated Fiber Network

The “HOW”: continued

The laws of physics limits the capacity that wireless can accommodate in a terrestrial setting.

There is a 2.2 second time delay for satellite transmissions (due to the distance and the time it takes signals to be routing to and from earth) – this is called “latency”.

Speed of light – anything faster?

Wave-division multiplexing – means one strand of fiber can simultaneously transmit signals at different wave lengths.

Why Fiber is “future proof”

Staff seeks approval to pursue Letters of Commitment from HCBOE, HCWSA◦ Other letters of commitment from other government

entities (Cities, GDOT, etc.)

Staff seeks approval to move forward with financing options to bring back to the Board for further discussion.

Staff seeks approval to engage Rural Broadband to update the business plan – removing the commercial component.

Next Steps

Thank You.

Questions / Comments