HomeMy WebLinkAboutAgenda Report - February 17, 2021 C-07AGENDAITEM
CITY OF [ lODI
A
COUNCIL COMMUNICATION
AGENDA TITLE: Adopt Resolution Accepting City of Lodi Broadband Feasibility Study Completed by
Magellan Advisors, LLC, of Denver, CO
MEETING DATE:
PREPARED BY:
February 21, 2021
Electric Utility Director
RECOMMENDED ACTION: Adopt a resolution accepting the City of Lodi Broadband Feasibility
Study completed by Magellan Advisors, LLC, of Denver, CO.
BACKGROUND INFORMATION: In March 2020, the Lodi City Council approved a Professional
Services Agreement with Magellan Advisors, LLC, of Denver, CO to
perform a comprehensive Broadband Feasibility Study.
The purpose of the Study was to evaluate the opportunities to expand Lodi's existing fiber-optic network
to meet the City's growing needs for fiber connectivity as well as consider what additional future
opportunities the fiber expansion could yield for the City in terms of enhancing local broadband services
for residents and businesses.
Magellan has provided a comprehensive study that will allow Lodi to make informed decisions regarding
the existing fiber-optic network as well as available business models and deployment options going
forward. The results of the Study, including recommendations regarding a phased implementation
approach, were presented to the City Council during its January 19, 2021 shirtsleeve meeting.
As recommended by Magellan, the initial phase will include upgrading the existing fiber backbone to
support the City's growing needs across many departments and applications. This will include
completing a full engineering design of the fiber backbone rebuild to identify all requirements and
constraints; allocating funding for the upgrade; and developing a Request for Proposals to select a
construction contractor for the rebuild. The new fiber backbone would be dimensioned with extra
capacity that could be used to support potential future broadband services in Lodi.
FISCAL IMPACT: The estimated cost associated with the initial phase of rebuilding and
expanding the City's existing fiber-optic network is approximately $950,000.
FUNDING AVAILABLE: Actual project and funding approval requests will be brought back to
Council for consideration as part of a future annual budget process.
Andrew Keys
Andrew Keys W `�
Deputy City Manager/Internal Services Director
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Jeff Berkheimer
Electric Utility Director
APPROVED:
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CITY OF LODI
Broadband Feasibility
Study
Prepared by: Magellan Advisors
Version: 1.0
Mage//an
ADV/
TABLE OF CONTENTS
EXECUTIVESUMMARY........................................................................................................................................... 2
FIBER IS ESSENTIAL INFRASTRUCTURE................................................................................................................ 4
A. Pandemic Preparedness........................................................................................................................... 4
B. Healthcare.................................................................................................................................................. 5
C. Economic Development............................................................................................................................ 6
D.Education.................................................................................................................................................... 7
E. Grid Modernization................................................................................................................................... 7
F. Smart City Applications............................................................................................................................. 9
G.Broadband Services................................................................................................................................
10
FIBER EXPANSION STRATEGY FOR LODI............................................................................................................
12
A. PHASE 1: Upgrade the City's Fiber Backbone.......................................................................................
13
B. PHASE 2: Broadband Strategy Development.......................................................................................
18
C. PHASE 3: Broadband Expansion to Businesses...................................................................................
19
D.PHASE 4: Broadband Expansion to Homes & Businesses..................................................................
22
SUPPLEMENTAL INFORMATION: THE STATE OF BROADBAND IN LODI........................................................
28
A. Internet Service Providers......................................................................................................................
28
B. Services Available....................................................................................................................................
36
SUPPLEMENTAL INFORMATION: REGULATORY ISSUES..................................................................................
39
A. Federal Regulation of Broadband.........................................................................................................
39
B. Federal Regulation of Wireless Services...............................................................................................
42
C. What is 5G?...............................................................................................................................................
44
D.The FCC's Small Cell Order.....................................................................................................................
47
E. The FCC Rules under the Spectrum Act................................................................................................
48
F. The FCC's "Clarification" Ruling..............................................................................................................
48
G.State and Local Policy..............................................................................................................................
49
H.Dig Once Policy or Ordinance................................................................................................................
49
I. Governance..............................................................................................................................................50
J. Political Will..............................................................................................................................................
50
SUPPLEMENTAL INFORMATION: BROADBAND BUSINESS MODELS.............................................................
52
A. Lodi Leases Fiber.....................................................................................................................................
53
B. Lodi Provides Services.............................................................................................................................
54
C. Lodi Partners with Providers..................................................................................................................
55
D.Benefits of Partnerships.........................................................................................................................
56
E. Risk, Reward & Control in Partnerships................................................................................................
57
SUPPLEMENTAL INFORMATION: FIBER BROADBAND ARCHITECTURE.........................................................59
The Lodi Utilities Fiber -Optic Backbone....................................................................................................
60
Feeder and Distribution Network..............................................................................................................
61
Outside Plant Specifications.......................................................................................................................
63
FiberService Drops.....................................................................................................................................
63
SUPPLEMENTAL INFORMATION: CONSTRUCTION ESTIMATES......................................................................65
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Mage//an
ADV/
TABLE OF FIGURES
Figure 1. Possible Phases of Broadband Deployment....................................................................................13
Figure 2. Sample Fiber Allocation Cable for Municipal, Smart City & Broadband.......................................14
Figure 3. Fiber Backbone Network Rebuild & Enhancement.........................................................................15
Figure 4. Fiber Backbone Rebuild Construction Estimates.............................................................................16
Figure 5. Fiber Backbone Underground Construction....................................................................................17
Figure 6. Areas Around Fiber Backbone with Service Available.....................................................................
20
Figure 7. Incremental Fiber Deployment Strategy...........................................................................................
22
Figure 8. Similar Cities with Municipal Broadband Systems...........................................................................
23
Figure 9. Market Penetration for Similar Cities................................................................................................
24
Figure 10. Fiber -to -the -Home High -Level Design.............................................................................................25
Figure 11. Citywide Fiber -to -the -Home Deployment.......................................................................................27
Figure 12. Internet Service Providers for Lodi Residents................................................................................28
Figure 13. Residential Service Provider Offerings by Address in Lodi...........................................................29
Figure 14. AT&T Published Residential Internet Service Offerings in Lodi ...................................................
30
Figure 15. Comcast Published Residential Internet Service Offerings in Lodi..............................................30
Figure 16. SoftCom Published Residential Internet Service Offerings in Lodi ..............................................
31
Figure 17. AT&T Published Business Internet Service Offerings in Lodi .......................................................
32
Figure 18. Comcast Published Business Internet Offerings in Lodi...............................................................32
Figure 19. SoftCom Published Internet Service Offerings in Lodi..................................................................33
Figure 20. Long-haul Network Providers Servicing Lodi.................................................................................
34
Figure 21. Metro Network Providers Serving Lodi...........................................................................................35
Figure 22. CPUC Residential Coverage Maps in Lodi.......................................................................................36
Figure 23: CPUC Business Coverage Maps in Lodi...........................................................................................37
Figure 24. Business Models for Lodi to Consider.............................................................................................
52
Figure 25. Cities with Dark Fiber Leasing & Rates............................................................................................
53
Figure 26. Lodi's Responsibilities in Each Business Model..............................................................................56
Figure 27. The Lodi Fiber-optic Network Architecture.....................................................................................
59
Figure28. Network Equipment..........................................................................................................................
61
Figure 29. Fiber -to -the -Premises Conceptual Network Design......................................................................62
Figure 30. Outside Plant Design Specifications and Assumptions.................................................................
63
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EXECUTIVE SUMMARY
Over 3,000 cities in the US have invested in fiber networks to support internal and community
needs. Municipal electric utilities are particularly well known for deploying fiber to support
SCADA communications and the modernization of the electric grid. In doing so, they have been
able to expand this fiber to support other internal and community needs, from connecting city
facilities, to providing fiber access to schools, to connecting traffic signals, streetlights and public
safety cameras. The City of Lodi commissioned this Broadband Feasibility Study to evaluate the
opportunities to expand its existing fiber-optic network to:
(1) Meet the City's growing needs for fiber connectivity among internal departments,
electric utility modernization and smart city applications.
(2) Consider what additional future opportunities the fiber expansion could yield for the
City, in terms of enhancing local broadband services for residents and business.
Magellan Advisors, a broadband development firm that provides broadband planning,
engineering and implementation and who has worked with over 100 municipal utilities in the
US, was retained by the City in 2019 to perform the Study.
The City owns an existing fiber backbone of approximately 20 miles and which runs through
the major corridors of the City. The existing fiber is used for:
• City IT: Connecting City facilities to one another so all departments can share data such
as email, video conferencing, GIS and other applications;
• Utilities: Collection of customer electric and water usage data for billing and monitoring
• Public Safety: Fire alerting for fire stations and radio communications for police and fire
The existing fiber backbone is running out of capacity to support the City's growing connectivity
needs. The City will require more fiber in the future to support:
• Automated Meter Reading - Fiber will support 2 -way communications between
household electric meters and our electric infrastructure to more accurately measure
usage and peaks;
• Increased cybersecurity requirements for electric utility communications
• Improved and more reliable communications between City facilities
• Enhanced redundancy to support more critical applications
• Future smart city applications that require the City to connect more devices in the field
Magellan's engineering team evaluated the current network and the requirements to upgrade
the existing fiber backbone to support the City's growing connectivity needs. By investing
$950,000 in fiber enhancements, the City could upgrade its current fiber backbone with a new,
larger fiber cable running through the City's major corridors. This backbone would support the
City's growing needs across many departments and applications. Due to the low capital
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investment needed and the positive, long-term impact that the new fiber backbone will make
on the City's operations, Magellan recommends that the City move forward with upgrade to its
fiber backbone.
In addition to internal uses, the fiber backbone could be leveraged to enhance broadband
services in the Lodi community. The new fiber backbone would be dimensioned with extra
capacity that could be used to lease fiber to broadband providers or develop public-private
partnerships with them, at no additional cost to the project. Several scenarios were evaluated
to inform the City of such opportunities. The City should consider these and other broadband
scenarios as future endeavors once the fiber backbone has been upgraded. Hwoever, Magellan
believes the City should focus on the near-term task of upgrading the fiber backbone first.
• The City could market new fiber -based internet services to about 1,000 businesses in
close proximity to the new fiber backbone (in cooperation with current providers). If 10%
of these businesses subscribed, it would cost the City approximately $350,000 in
additional fiber construction and a payback would be achieved in 7 to 13 years,
depending on the final fees charged to the provider(s). Retail pricing to these businesses
could be approximately 33% lower than they pay today, saving these 1,000 businesses
an average of $270,000 a year on their internet costs. This creates a positive and direct
impact to their bottom line and helps the City retain local businesses. It also enables the
City to directly "lower the cost of doing business in Lodi."
• The City could embark on a citywide buildout to all homes and businesses in partnership
with an existing provider. This initiative would require a $45 million investment by the
City and fees paid by the provider equal or greater than 30% of gross revenues. This
would cover the City's debt service for the $45 million investment, management costs
and overhead to ensure repayment over 20 years. Negotiating a higher revenue share
of 50% would generate a surplus for the City of $16 million over the first 10 years and
$34 million over the 20 year period.
These examples illustrate possible broadband opportunities for the City, but many other
iterations are possible. The City should consider each option as it grows its broadband presence
in the community using a "crawl, walk, run" approach laid out in this study. The most immediate
next steps for the City to take if its desire is to begin the process of expanding broadband
services in Lodi follow:
Adopt the Broadband Feasibility Study formally;
Complete a full engineering design of the fiber backbone rebuild to identify all
requirements and constraints;
3. Allocate funding for the fiber backbone upgrade of $950,000;
4. Develop an RFP to select a construction contractor for the fiber build.
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FIBER IS ESSENTIAL INFRASTRUCTURE
Fiber is the gold standard for municipal communications, broadband services, and internet
access. Fiber is used to transmit large amounts of data securely over long distances with high
reliability. It supports a wide range of applications and is scalable to support nearly unlimited
data capacity. Cities that own fiber consider it a capital infrastructure asset similar to water,
road, and electric infrastructure and it has a lifespan of up to 50 years.
Over 3,000 cities in the US own some form of municipal fiber and have used it for decades to
support their communities. These networks are becoming increasingly important to cope with
the rapid growth in connected devices, from utility assets, to streetlights, to traffic signals, to
surveillance cameras. Cities that maintain these networks are able to accommodate these
"Smart City" technologies that make them more efficient, reduce costs and increase the value
they deliver to their constituents.
Within the past 15 years, some cities have expanded the use of these networks to enhance local
broadband internet services in their communities in order to support the needs of residents,
businesses, and community organizations. As high-speed internet access has become essential
to support economic development, education, healthcare, and other community functions,
cities have leveraged their networks to provide fiber -based internet services, either directly or
through partnerships with private broadband providers.
A. Pandemic Preparedness
In addition to private and public organizations, broadband supports community needs
including telemedicine, aging in place, distance learning, and telecommuting. The COVID-19
pandemic has accelerated the long-term trend of digitalization of business processes, the
economy overall, and everyday life.
The coronavirus pandemic is accelerating shifts and trends toward internet technologies and
business trials. Perhaps the obvious example is the boom in Zoom meetings but there are many
other trends developing or accelerating as well, including an increase in remote telework and
distance learning. The proportion of companies ramping up globally on automation
technologies will at least double over the next two years, according to a Bain survey of nearly
800 executives.'
1 "Pandemic Speeds Up Corporate Investment in Automation", The Wall Street Journal, April 9, 2020.
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The Wall Street Journal recently pointed out that:
"The coronavirus pandemic is deepening a national digital divide, amplifying gains for
businesses that cater to customers online, while businesses reliant on more traditional
models fight for survival. The process is accelerating shifts already under way in parts
of the US economy in ways that could last long after the health crisis has passed...'z
From a community perspective, interconnection of billions of devices allows evolution of smart
cities, smart homes, smart schools, safer and autonomous vehicles, and a safer, healthier,
smarter place to live. From a business perspective, interconnection of devices provides data
previously unavailable to inform operations, enhance decision-making and automate/innovate
in the production process.
B. Healthcare
Healthcare is increasingly bandwidth intensive. As more treatments, devices, and doctors go
online, healthcare organizations will continue to be some of the community's highest
bandwidth users with increasing needs for reliability, security and speeds delivered only byfiber
networks. Remote aspects of healthcare, both monitoring and acute care, increase demand on
bandwidth through the use of robotics and haptic devices. All telehealth fields are growing,
including teletherapy and telepsychiatry, with universities and colleges needing real-time
access to licensed counselors for interventions. Policies in remote imaging, cardiology, and
transmission of Electronic Health Records are expected to increase demands further with needs
for low latency becoming increasingly critical.
In Danville, VA, municipal broadband has long served the Danville Regional Medical Center, one
of the city's largest employers. Medical companies Ohio Health and Cardinal Health, Battelle
Memorial Institute, a non-profit that relies on quantum computing to encrypt information, and
numerous educational facilities use the Dublin, OH municipally -owned fiber network for their
healthcare, education, and research needs.
"Aging in place" is a term used to describe seniors living in the place of their choice for as long
as possible, while getting the services they require, and all of their needs met without moving
in with children or being placed in a nursing or assisted living facility. New gadgets and
technological advancements have been made to make "aging in place" easier and more
attainable for the growing population of seniors. Home-based telehealth, or home health
monitoring solutions, keep physicians in touch with patients and monitor their health without
visiting an office. There have been other advances including but not limited to fall detection
systems, wearable sensors that
2 "Crisis Speeds Up Economy's Shift'; The wall Street Journal, Apri12, 2020.
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collect real time health data, and stove guards .3 Reliable, high-speed internet access is required
for these new technological advances, and the retirees of Lodi would see value in being able to
utilize these products and services.
C. Economic Development
Economic development can be thought of as improving livability through, among other things,
jobs, education, preservation, public safety, and building a strong sense of community.
Broadband infrastructure is a driver of such economic development, and advocates insist that
broadband will improve the local economy. Broadband from outside providers may provide
better connectivity, but higher prices paid to those outside service providers may not
necessarily lead to broad economic development in the community.
Across the board, industries increasingly rely upon transmitting and receiving large amounts of
data and the internet to operate and thrive. Consequently, the availability and affordability of
broadband has become a driver for decisions about where companies locate their
headquarters, manufacturing facilities, distribution centers and satellite locations.
To attract and retain these industries, infrastructure that supports a competitive environment
for affordable, reliable, redundant broadband services must be readily available in areas where
office, technology and industrial parks and other major commercial developments exist today
or are being planned and built. In some cases, local governments have taken it upon themselves
to ensure that this infrastructure exists so they can continue to drive economic investment in
their regions. This includes working with residential developers for the delivery of fiber -to -the -
home for support of home-based businesses, telemedicine, aging in place, public safety, and
emergency response. Other benefits include managing the energy grid and increasing housing
and property values for the high-tech jobs needed to support economic growth supported by
the internet.
Although it would be misleading to imply that the availability (or lack thereof) of broadband is
the only factor by which businesses decide their locations, many companies do consider a lack
of affordable, reliable broadband a major barrier to entry. In locations such as Santa Monica,
California, major employers have been dissuaded from relocating because the local
government was able to offer an alternative cost-efficient broadband service. Following in this
effort, cities and counties across the country are implementing fiber and wireless networks for
economic development and quality of life. These include Fort Collins, CO, Centennial, CO,
Inglewood, CA, Culver City, CA, Santa Clarita, CA, Oxnard, CA, Ventura, CA, Paso Robles, CA, San
Luis Obispo, CA, San Leandro, CA, Carlsbad, CA, Chattanooga, TN and hundreds more
throughout the country.
3 http://aginginplace.com
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D. Education
Educational institutions around the country have become one of the greatest beneficiaries of
locally owned fiber networks. Education has become a broader community responsibility, with
organizations such as libraries and non -profits providing support, internships and alternatives
as education extends beyond the traditional classroom environment - as students perform
assignments outside of school and as adults look to continue lifelong learning.
Connecting to innovative educational programs and tools requires high-speed, reliable and
affordable connectivity. As virtual support moves online, and access to free, world-class
educational resources expand, so does a community's responsibility to provide for all its
learners beyond the school day. Rural residents served by Lodi Utilities do not have the same
opportunity as those in more urban areas, as connectivity continues to be an issue for
communities around Lodi.
Access to broadband is an important component of education, inside the classroom and in the
home. Online applications used to support education and training efforts require high-speed
broadband, with services that meet performance requirements to support real-time video and
voice applications for distance learning and teleconferencing. Today's teaching resources
incorporate multimedia—sound, graphics, video, and data, while the use of online digital
textbooks continue to expand.
This integration of technology into learning is only going to increase over time, those students
without access in the home may fall behind in their academic success further widening the
social issue termed the "digital divide" or "homework gap." The FCC states that although seven
in ten teachers assign homework that require broadband access to complete, one in three
students live in households without access to high-speed broadband internet. There are such
rural communities around Lodi that do not have the connectivity for students living there.
E. Grid Modernization
Technology is transforming public utilities at a rapid pace and is reshaping how customers both
consume energy and interact with their utilities. Most notably, technology made possible
through fiber -optics breathes new life into aging distribution systems at a time when distributed
energy resources and renewable energy are challenging utility business models and centralized
generation.
The US Department of Energy acknowledges that "Our electric infrastructure is aging, and it is
being pushed to do more than it was originally designed to do." 4 Grid modernization generally
refers to the improvements needed in the power grid to accommodate all the rapid
4 https://www.energy.gov/oe/activities/technology-development/grid-modernization-and-smart-grid
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technological changes happening in the generation, transmission and distribution of electricity.
Local utilities can modernize their local grid to make it "smarter" and more resilient through
local sensors and controls that communicate and work together to deliver electricity more
reliably and efficiently.
Short term benefits allow utilities to reduce the frequency and duration of power outages,
reduce storm impacts and restore service faster when outages occur. Across the longer term,
utilities benefit from a modernized grid by improved security, reduced peak loads, data -driven
decision-making, and lower operational costs. Additionally, a smart grid allows for the increased
integration of renewables and distributed energy generation sources.
Energy customers can manage their own energy decisions and costs through easier access to
their own consumption data. Advances in the economical production of lower -carbon energy
production, energy storage and control systems are giving rise to consumers being able to drive
their own choices. These choices ultimately have impacts on demand and some have the
potential to produce a new energy marketplace at the local distribution level.
Progressive utilities today are working to increase monitoring, improve reliability and integrate
distributed energy sources to bring a new array of assets online. As energy storage, distributed
energy sources and energy-efficient consumer options continue to make advances, grid
modernization and secure and real-time data via fiber will be key for the growth and relevance
to the smart grid utility.
The drivers of investments that utilities are making to modernize the grid stem, ironically, from
assets that utilities often do not own, namely distributed energy sources such as rooftop solar
arrays, electric vehicles and battery energy storage systems. To make these investments
valuable, utilities can use monitoring, control and automation technologies to unlock the full
potential of grid assets for greater reliability, efficiency and security.
Electricity distribution is regulated by the states, and interstate transmission is regulated by the
federal government. From a political standpoint, grid modernization is so integrated into the
fabric of society that government policies on the environment, the economy and homeland
security have influences on the modernizing the grid. Government policy is motivating the
growth in renewables; therefore, modernizing the grid is needed to enable the non -carbon shift
in the generation mix, and government policies will continue to encourage this.
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F. Smart City Applications
In considering opportunities for Lodi, the fiber network can be the foundation for programs
that increase efficiencies, lower costs, reduce environmental impacts and enhance quality of
life by relying more on technology. While this optimized internal connectivity is known as "Smart
Grid" for utilities, as better connectivity evolves throughout Lodi Utilities service area
communities, the network gives rise to the notion of "Smart Homes" and "Smart Cities."
With a fiber network in place, as Lodi Utilities expands its online services, all applications
migrated to a community network enjoy greater availability and increased bandwidths.
Limitless bandwidth and capacity create more effective and efficient civic organizations, with
reliable broadband enabling organizations to:
• Improve operational efficiencies
• Reduce direct and indirect costs
• Provide enhancements to public safety
• Provide more information to citizens
• Enable interactions with organizations
• Respond quickly to the local needs
• Better serve the local community
• Ensure emergency preparedness
Organizational applications drive the promise of the Smart City through consumer technologies
and connectible devices. Such devices scattered by the hundreds, if not thousands, throughout
a community are networked seamlessly and generate an enormous amount of data.
Individually, Smart City savings might only be measured in the hundreds of dollars, such as to
help wineries monitor their water usage in order to reduce the number of gallons used to create
wine. Collectively, however, these savings can add up.
Scaling local level economic impacts to the service area level or even the state level and to a
national level could be staggering. Gartner Research reports that IoT supported spending
should reach $7725 billion globally, with IoT spending in the US to total $194 billion this year,
with consumer IoT spending to be $62 billion of that. Looking globally, a McKinsey report says
that efficiencies and opportunities created by IoT may have a collective financial and
nonfinancial benefits of as much as $11 trillion per year by 2025 across all sectors.'
The Smart Cities Council publishes a "Smart Cities Readiness Guide" with detailed information
on Smart City drivers and barriers, benefits, and responsibilities.' From that guide, select
opportunities are outlined as follows:
• Smart Buildings: Using sensors, meters, and software to monitor and control a range of
building functions including lighting, energy, water, HVAC, communications, video
monitoring, intrusion detection, elevator monitoring and fire safety.
5 https:Hinformationmatters.net/internet-of-things-statistics/
6 www.mckinsey.com/insights/preparing_it systems and organizationsJor the internet of things
7 http://rg.smartcitiescouncil.com/readiness-guide/article/drivers-whats-driving-smart-cities
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• Health and Human Services: Transform the delivery of essential health and education
services, since "an educated and healthy city is a successful and wealthy city."
• Energy: A priority for Smart Cities, which typically start with smart energy systems.
• Digital City Services: Services to increase citizen engagement, employee productivity,
competitiveness, citizen satisfaction and cost reduction, delivered via smartphones.
• Mobility and Logistics: Provides safer, more efficient transportation and parking. While
this can ease commuting times for individuals, the macro cost savings are tremendous
for a municipal government.
• Public Safety: Infrastructure and staff to keep the public safe, fostering quicker and
smarter responses without duplicated effort to save lives, property and resources.
• Smart Payments and Finance: Digital disbursements and collections generate significant
savings and increases operational efficiency.
• Smart People: A new City Hall mindset that is more open, transparent, and inclusive to
build two-way communications and create stronger initiatives.
• Telecommunications: An adequate infrastructure is vital for business and community
development and underlies the Smart City.
• Waste Management: Collect and process efficiently, recovering materials that have
value, while benefitting public health and the environment through zero waste efforts.
• Water and Wastewater: Where it takes water to produce electricity, and electricity to
pump water, the Smart City provides for production of both energy and water.
G. Broadband Services
Public utilities that invest in broadband improve the access, affordability and quality of
broadband services over what has traditionally been provided by broadband providers. Rather
than taking profits from the network, public utilities often seek to reinvest in the network, or
to stabilize or lower prices for their customers. They also strive to maintain consistent pricing
at the same levels for their customers rather than pricing services at different rates depending
on location or promotional offers.
Many utilities offer low-cost "lifeline" packages for disadvantaged or low-income residents to
enable them to get services they couldn't otherwise afford. A recent report from Harvard
University's Berkmen Klein Center for Internet and Society found that municipal/utility
broadband networks achieve lower prices for their subscribers than comparable services from
traditional broadband providers. A few key points from the study include:
• When considering entry-level broadband service—the least -expensive plan that
provides at least 25/3 Mbps service -23 out of 27 community -owned FTTH
providers charged the lowest prices in their community when considering the average
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cost of service over a four-year period, considering installation and equipment costs and
averaging any initial promotional rates with later, higher rates.
• In these 23 communities, prices for the lowest -cost program that met the current
definition of broadband were between 2.9% and 50% less than the lowest -cost such
service offered by private providers in that market. In the other four cases, a private
provider's service cost between 6.9% and 30.5% less.
• While community -owned FTTH provider pricing is generally clear and unchanging,
private providers offer initial promotional prices and then raise the monthly price
sharply. The price hike often ranges between $10 and $40 after 12 months.
Keeping Dollars in the Local Economy
When local utilities provide FTTP services, revenues from internet, video and other services stay
local in the community rather than being exported. Subscriber fees are reinvested into the
utility's plant and operations to sustain and grow the system rather than being taken out of the
local economy. These reinvested dollars bring new benefits to subscribers in faster speeds and
new services that utilities continually deploy in their FTTP networks.
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FIBER EXPANSION STRATEGY FOR LODI
This Study recommends a crawl, walk, run approach for expansion of the City's fiber network.
First, the existing fiber network cannot support future City needs and needs to be upgraded.
Phase 1 of the expansion focuses on enhancing the City's existing fiber backbone to support its
internal needs and deploying an upgraded fiber backbone that can support future broadband
services at no additional cost. This is a no -risk and a sunk -cost project, whereby the City would
embark on a new capital project strictly to meet its own needs. The City could choose to pursue
broadband programs using its new network or not, depending on leadership's direction.
Once the fiber backbone is upgraded, the City has many options to consider to enhance the
local broadband environment. Each of these opportunities needs to be thoroughly considered,
in terms of the City's local broadband market, providers, needs, rates and availability. The
second half of this Study is geared to providing detailed information to the City as a starting
point for future broadband initiatives. It also provides some suggested approaches if the City
were to consider a broadband program. These approaches are described below, as Phases 2, 3
and 4.
Once the fiber backbone is complete, Phase 2's focus is to engage broadband providers that
work with the City to provide broadband services to the community. Phase 3 consists of new
targeted fiber construction to high-priority areas of the City such as the industrial park where
these providers may deliver services. Phase 4 builds on the successes of the prior phases by
expanding fiber to greater areas of the Lodi community, serving entire business corridors and
neighborhoods.
The City has some discretion over the pace of implementation; however, as the City moves into
Phases 2 through 4 of the broadband expansion, it must be prepared to implement projects at
the pace that broadband providers are accustomed to in the private sector to ensure that the
City meets their deployment timeframes and customer receive service when expected.
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Figure 1. Possible Phases of Broadband Deployment
PHASES 2-4 ARE OPTIONAL
A. PHASE 1: Upgrade the City's Fiber Backbone
Phase 1 is focused on upgrading the City's existing fiber-optic backbone. The new backbone
would follow similar routes as the existing backbone or use alternative routes in cases where
fiber running lines created new opportunities for City applications or broadband connections.
Exact running lines would be determined at the time of detailed engineering, fielding and
permitting.
This Study focused on utilizing the same running lines as the existing backbone and installing
new 432 -count backbone fiber cables on existing pole lines. The larger cable size would enable
the City to utilize the fiber for City departmental needs, Smart City and IoT applications and
future broadband needs. The 432 -count fiber would give the City sufficient capacity to allocate
fibers within the 432 -count cable for these purposes and support reserve capacity for future
purposes. Within the 432 -count cable, 36 12 -count buffer tubes would be assigned for each
department, application or broadband requirement. A sample allocation table is shown below,
which would be customized to the City's particular internal and external stakeholders.
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Figure 2. Sample Fiber Allocation Cable for Municipal, Smart City & Broadband
Buffer Tube #
Fiber Start
Fiber End
Allocation
Buffer Tube #
Fiber Start
Fiber End
Allocation
1
1
12
Utilities
19
217
228
Broadband
2
13
24
Utilities
20
229
240
Broadband
3
25
36
Utilities
21
241
252
Broadband
4
37
48
Utilities
22
253
264
Broadband
5
49
60
Information Technology
23
265
276
Broadband
6
61
72
Information Technology
24
277
288
Broadband
7
73
84
Information Technology
25
289
300
Broadband
8
85
96
Information Technology
26
301
312
Broadband
9
97
108
Police &Fire
27
313
324
Broadband
10
109
120
Police &Fire
28
325
336
Broadband
11
121
132
Police &Fire
29
337
348
Broadband
12
133
144
Police &Fire
30
349
360
Broadband
13
145
156
Smart City & IoT Reserve
31
361
372
Broadband
14
157
168
Smart City & IoT Reserve
32
373
384
Broadband
15
169
180
Smart City & IoT Reserve
33
385
396
Broadband
16
181
192
Smart City & IoT Reserve
34
397
408
Broadband
17
193
204
General Spare
35
409
420
Broadband
18
205
216
General Spare
36
421
432
Broadband
Construction of the fiber backbone would include installation of the 432 -count cable, splice
enclosures, splicing and termination into key facilities. Figure 18 illustrates the backbone
network rebuild, with the red running lines representing backbone routes through the City.
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Figure 3. Fiber Backbone Network Rebuild & Enhancement
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Figure 19 provides cost estimates for aerial construction, using existing rates from recent aerial
fiber construction projects in the Northern California region. Total costs for the rebuild are
estimated at $752,000 before contingencies. A 25% contingency rate on labor and materials has
been added to the base estimate to account for actual construction costs, yielding a total
estimate of $943,000 for the aerial portion of the rebuild.
Figure 4. Fiber Backbone Rebuild Construction Estimates
Item
Labor
Price
Unit
Quantity
Subtotal Notes
1
Aerial Engineering
$ 1.50
Ft
53,988
$ 80,982.00
2
Install New Splice Case & Prep Cable
$ 250.00
Ea
12
$ 2,969.34 assumes straight splice every 5000'
3
Ground Splice Case
$ 150.00
Ea
12
$ 1,781.60
4
Prep Cable in Panel
$ 250.00
Ea
10
$ 2,500.00 assume (10) 432 fibers in 10 panels
5
Splice Fibers
$ 20.00
Ea
1,710
$ 34,206.80 assumes backbone 432 fibers
6
Install Loaded 144 Port Panel
$ 250.00
Ea
10
$ 2,500.00
7
Terminate Fibers
$ 25.00
Ea
1,440
$ 36,000.00
8
jTest Network
$ 2,500.00
All
1
$ 2,500.00
9
Install pole attachments
$ 80.00
Ea
300
$ 23,994.67 assumes 180' average span lengths
10
Install Strand
$ 1.10
Ft
53,988
$ 59,386.80
11
Install snowshoes
$ 100.00
Ea
108
$ 10,797.60
12
install aerial slack
$ 1.80
Ft
5,399
$ 9,717.84
13
install / lash aerial cable
$ 1.80
Ft
53,988
$ 97,178.40 aerial footage
14
tree trimming
$ 5.00
Ft
2,699
$ 13,497.00 assumes 5% of route
15
install pole risers
$ 310.00
Ea
15
$ 4,648.97 assumes 5% of poles
16
install down guy & anchors
$ 210.00
Ea
45
$ 9,447.90 assumes 15% of poles
17
Make Ready budget
$ 1,000.00
Ea
60
$ 60,000.00 assumes 10% of poles
Labor Subtotal
$ 452,108.91
Item
Material
Labor Contingency Rate
Labor Contingency
Labor Total
Price Unit
Quantity
25%
$ 113,027.23
$ 565,136.14
Subtotal Notes
18
432ct Fiber
$ 3.50
Ft
59,387
$ 207,853.80 includes 5% waste
19
Splice Trays
$ 45.00
Ea
71
$ 3,206.89
20
Splice Cases
$ 706.00
Ea
12
$ 8,385.42 large style closre
21
4u Fiber Panels - Loaded
$ 4,668.00
Ea
10
$ 46,680.00
22
pole attachment hardware
$ 45.00
Ea
300
$ 13,497.00
23
6m Strand
$ 0.10
Ft
53,988
$ 5,398.80
24
snow shoes
$ 90.00
Ea
108
$ 91717.84
25
lashing wire
$ 0.01
Ft
53,988
$ 539.88
26
u guard
$ 125.00
Ea
15
$ 1,874.58
27
anchors
$ 125.00
Ea
45
$ 5,623.75
Material Subtotal
$ 302,777.96
Material Contingency Rate
Material Contingency
Material Total
25%
$ 75,694.49
$ 378,472.45
Total Aerial Backbone
$ 943,608.59
Figure 20 provides cost estimates for underground construction, which is minimal in the fiber
backbone rebuild. Total costs for the underground portion of the rebuild are $35,000 for labor
and $9,000 for materials. A 25% construction contingency has also been applied to the
underground portion of the build, resulting in a total underground cost of $46,000.
The total phase 1 construction costs with contingencies are estimated at $943,000.
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Figure 5. Fiber Backbone Underground Construction
Item
Labor
Price Unit
Quantity
Subtotal Notes
1
Underground Engineering
$ 2.10 Ft
1,254.00
$2,633.40
2
Directional Bore (2) 2"
$ 20.00 Ft
1,254.00
$25,080.00 underground footage
3
Rock Adder
$ 40.00 Ft
-
$0.00
4
Furnish & Install Muletape in New duct
$ 0.25 Ft
2,508.00
$627.00
5
Install#12 Tracer wire
$ 0.25 Ft
1,254.00
$313.50
6
Install Fiber Cable in Duct- Including All Slack
$ 1.00 Ft
1,358.50
$1,358.50
7
Remove & Restore Concrete
$ 18.00 Sq Ft
12.54
$225.72 assume 1 sq. feet per 100 feet of ug insta
8
Install Handhole
$ 300.00 Ea
2.09
$627.00 every 600'
9
Install New Splice Case & Prep Cable
$ 250.00 Ea
0.25
$62.70 assumes straight splice every 5000'
10
Ground splice case
$ 150.00 Ea
0.25
$37.62
11
Prep Cable in Panel
$ 250.00 Ea
2.00
$500.00 assume (2) 432 fibers in 2 panels
12
Splice Fibers
$ 30.00 Ea
36.12
$1,083.46 assumes backbone 432 fibers
13
Test Network
$ 2,500.00 All
1.00
$2,500.00
14
1 Install Marker Post
$ 35.00 Ea
1.57
$54.86 75% of handholes
15
lInstall Marker Postwith Test Station
$ 50.00 Ea
0.52
$26.13 25% of handholes
Item
Material
Labor Subtotal
Labor Contingency Rate
Labor Contingency
Labor Total
Price Unit
Quantity
$35,129.88
25%
$8,782.47
$43,912.35
Subtotal Notes
16
Mule tape
$ 0.05
Ft
2,508.00
$125.40
17
432 ct Fiber
$ 2.98
Ft
1,426.43
$4,250.75 includes 5% waste
18
Splice Trays
$ 45.00
Ea
1.50
$67.72
19
Splice Cases
$ 706.00
Ea
0.25
$177.06 large style closre
20
Handholes
$ 650.00
Ea
2.09
$1,358.50
21
#12 Tracer Wire
$ 0.35
Ft
1,254.00
$438.90
22
Ground Rods
$ 25.00
Ea
0.25
$6.27
23
Marker Post
$ 45.00
Ea
1.57
$70.54
24
Marker Post with Test Station
$ 65.00
Ea
0.52
$33.96
25
2" Pipe
$ 1.00
Ft
2,508.00
$2,508.00
Material Subtotal
Material Contingency Rate
Material Contingency
Material Total
$9,037.10
25%
$2,259.27
1 $11,296.37
Total Underground Backbone
1 $46,426.26
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B. PHASE 2: Broadband Strategy Development (Optional)
Phase 2 is focused on developing an initial broadband program by developing a strategy with
broadband providers to utilize the City's network. Completion of the new fiber backbone will
allow the City to bring fiber to business corridors and/or community anchor organizations that
are in close proximity to the network. This approach leverages the City's rebuilt fiber backbone
to support new broadband applications that are driven by customer demand and new
revenues, minimizing any upfront capital investment that the City may need to make begin
using its network for broadband.
The fiber backbone is built with the capability to support either direct fiber laterals or fiber
distribution plant to connect community anchors, such as schools, healthcare facilities,
businesses and even homes, depending on how the City approaches expansion of broadband
in Lodi. Broadband providers are an important factor to determine Lodi can positively influence
broadband expansion to businesses and residents.
The City can use its fiber backbone in multiple ways to expand broadband services in fiscally
responsible and measured ways, including:
Leasing fiber to community organizations directly. For example, the City could provide a
dark fiber ring to the Lodi Unified School District, which would enable high capacity and
fully redundant fiber connectivity to support growing needs of teachers and students.
The City would need to build fiber laterals to each school to connect them across the
City, which would require capital investment by the City or the school district, or both.
Leasing fiber to broadband providers. For example, the City could provide dark fiber
leasing rates to broadband providers for use of its backbone network and work with
providers to extend fiber laterals to individual businesses. The City would charge
broadband providers a monthly recurring fee for lease of fiber strands on the backbone
and connections to individual businesses. Minimizing the costs of this access fee will
incentivize broadband providers to utilize the network and bring lower-cost fiber -based
broadband services to Lodi's business community, supporting its economic
development strategy.
Marketing business parks as "fiber -ready." The Lodi Industrial Park could be marketed
as a fiber -connected business corridor with completion of the fiber backbone rebuild, as
the backbone will pass in proximity to the park along Thurman and Beckman Rd. If
existing or prospective businesses within the Park needed fiber connectivity, the City
could extend either fiber laterals or fiber distribution into the Park to these specific
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businesses. This strategy should be coordinated with a broadband provider to ensure
that business(es) had a retail ISP that would provide them service using Lodi's fiber.
Partnering with a broadband provider. The City could develop a formal partnership with
a broadband provider to expand the City's new fiber backbone to support broadband
services. This partnership could extend fiber to businesses, neighborhoods or both. In
these cases, the City and partner would agree to specific terms on how the fiber would
be expanded and the customers that would be served through the partnership. The
parties would negotiate a public-private partnership agreement that would determine
what additional funding each would provide, what services would be provided and how
revenues would be shared (or fees assessed by the City). For such partnerships, a key
objective would be to leverage the City's investments in the fiber backbone to catalyze
the deployment of fiber -based broadband services in Lodi.
The City can use multiple approaches to expand broadband or focus on a singular approach.
For example, the City could develop a fiber leasing program with other public organizations that
need fiber connectivity and maintain a commercial fiber leasing program with broadband
providers. Or, the City could develop a public-private partnership with a single provider that
serves all types of customers in the City, including community anchors, businesses and
residents.
C. PHASE 3: Broadband Expansion to Businesses (Optional)
Phase 3 focuses on deployment of broadband services in conjunction with one or more
broadband providers. This phase assesses opportunities around the newly built fiber backbone
to cost-effectively extend fiber laterals and fiber distribution in the immediate vicinity. Using a
buffer of 1,500 on either side of the fiber backbone, the City can reach nearly 10,000 homes
and businesses. Working with the City's broadband provider partner(s), the City could develop
a model to expand its backbone to serve these customers based on needs of the customers
and input from the provider(s). It would allow for a more economical approach that leverages
the fiber backbone assets already built by the City.
For example, the City could focus on just serving businesses in close proximity to the fiber
backbone. Approximately 1,000 businesses are within 1,500 feet of the fiber backbone. This
provides an immediate opportunity to offer fiber -based broadband services to about 30% of
Lodi's business community in conjunction with one or more broadband providers. In this case,
the City could finance and build new fiber connections to each business that the provider(s)
sign up and charge a monthly lease fee to the provider to recover its capital over a 3 -5 -year
period. In these cases, City investment would be directly tied to new revenues on an
incremental, connection by connection basis. Figure 21 illustrates the City's enhanced fiber
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backbone (rebuilt in Phase 1) and a 1,500 -foot buffer on either side of the backbone. This
shaded area would be where the City would market fiber services with providers using the City's
network.
Figure 6. Areas Around Fiber Backbone with Service Available
Fiber construction costs to these businesses will vary widely depending on the distance of the
build, aerial versus underground placement and other local conditions. Therefore, the City
should consider the variance in cost and develop fee structures that support reasonable
repayment of the capital used to build each connection. A typical approach used by many cities
sets rates at a level to achieve a repayment of the City's capital investment within 3-5 years.
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However, if the City can accommodate longer repayment periods, it lowers the fees charged to
providers and these savings are passed on to the end customer, resulting in lower costs for
businesses using the service. Cities have used this technique to keep the costs for fiber -based
broadband as low as possible in their communities with the objective of attracting new
businesses
and retaining existing businesses. In some cases, repayment of this capital has been stretched
to as much as 20 years to coincide with typical bond financing rates and repayment schedules.
A business -only broadband deployment is represented by the scenario below. In this scenario,
the City provides fiber connections to broadband providers who in turn serve business
customers within 1,500 feet of the fiber backbone. This scenario represents a very limited
buildout for the City with the intent of showing the impact to the business community over
time. It also assumes a very conservative take rate of 10%, which may be increased if the City
and provider(s) extensively market the services in the area.
Using these conservative assumptions, the model assumes the City would to allocate $350,000
in capital to building fiber connections and leasing them to service providers in the area, with a
payback of this investment being realized between 6.5 - 13.5 years. In this model, the City only
commits capital to the program when a broadband provider secures a customer and issues a
work order to the City. Actual fiber leasing fees will be determined by negotiations with one or
more broadband providers that serve the market. The City will need to make a final
determination on the most appropriate leasing fees to ensure the market for its fiber leases
are competitive and reflected in the retail pricing to businesses.
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Figure 7. Incremental Fiber Deployment Strategy
DeploymentIncremental Fiber
Locations with Service Available
1,000
Expected Take Rate
10%
Customers Connected
100
Average Cost of Buildout
$2,700
City Capital Allocated to Fiber Buildouts (Incrementally utilized)
$350,000
Monthly Fee to Broadband Provider (Depending on Tolerance for Payback)
$200-$400
Payback of City Investment in Years
6.5-13.5
Expected Retail Cost to the Business
$350-$500
Costs Paid by Businesses Today (If Fiber Is Available)
$550-$800
Savings to Businesses
31%-36%
Annual Savings to 100 Businesses Served
$240K - $300K
Annual Savings to 100 Businesses Over 10 Years
$2.4M - $3M
D. PHASE 4: Broadband Expansion to Homes & Businesses (Optional)
Phase 4 considers a broad deployment of fiber -based broadband services to homes and
businesses across the City, building on the successes of Phases 1-3. Working with its broadband
provider partner, the City would determine the opportunity to expand services in prudent ways
that mutually benefit the City, community and provider.
In this process, the City and provider should conduct significant due diligence to determine
fiscally responsible ways of investing capital for these buildouts. Buildouts could happen over
a longer timeframe of 5-7 years and based on feasibility of each specific project area, such as a
neighborhood or district, or in a more aggressive timeframe within 3-4 years covering all homes
and businesses within the City.
Cities use different approaches to fiber to the home deployments, depending on the availability
of funding, appetite to take on new debt and level of community need and capabilities of the
City and partner. A number of due diligence items should be considered with these
deployments, including:
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Clear policy goals for broadband services. What are the City's policy objectives to ensure
citizens and businesses have access to broadband? This will shape the deployment
schedule, service areas and details of the agreement with its broadband partner(s).
An assessment of community demand. The City should consider quantitative surveys to
assess demand and potential take rates for services.
{ An understanding of competition. What providers, services, packages and rates are
available in the market today and what upgrades will providers make in response to City
investments in fiber -to -the -home broadband. What other steps will competitive
providers take to hold on to their market share and what risk does this pose to the City?
4_ A clear requirement for investment. Fiber -to -the -home services require significant
capital investment, upwards of $38 million for a Citywide buildout in partnership with a
provider. These costs need to be fully vetted through detailed engineering, fielding, final
construction drawings and a bill of materials.
Consideration and negotiation of capital contributions from the City and partner to
assess the best mix of private capital and public funds.
6. A detailed public-private partnership agreement. Commensurate with the City's
investment, the broadband partner must have clear requirements that achieve the City's
goals and protect against downside risk for the City. A carefully crafted partnership
agreement with performance metrics, service level agreements and deployment
milestones is critical to ensure success. Mutual covenants are also important to hold the
City to the standards required by the provider to ensure its success in serving the
market.
7. A framework to manage the partnership with established resources and points of
contact within the City and partner to manage the relationship.
8. An understanding of the payback of the City's investment and debt service
requirements.
Municipal broadband providers have been known to achieve substantial residential penetration
in the communities they serve, in many cases over 50%. Figure 23 illustrates community profiles
for four cities that have established municipal broadband systems that are relatively similar to
the City of Lodi in terms of population and median household income. Cedar Falls, IA and
Longmont, CO are the most similar with populations and incomes within a 20% range of Lodi.
Figure 8. Similar Cities with Municipal Broadband Systems
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Morristown, TN
� Chattanooga, TN
Cedar Falls, IA
Longmont,CO
Population 29,324
Square Mileage 20.9
Households 11,412
Median Household Income $33,216
173,778
137.15
79,607
$41,064
40,566
28.9
14,608
90,237
26.19
33,551
$50,546
$58,698
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Figure 24 illustrates the market penetration for these providers, in terms of residential take
rates, commercial take rates and the years to reach these take rates. Averaged together, these
four systems achieved a 52% take rate with total service to 105,711 out of 203,051 households.
Magellan believes that actual take rates should be discounted for risk premiums by
municipalities that are considering providing broadband services.
Achieving high take rates requires successful execution of the municipalities business strategy,
sales and marketing plan, community engagement plan and go -to -market strategy. We believe
that applying a risk factor of 25% to take rates to arrive at a 40% take rate accounts for the many
risks that are inherent in operating a broadband business. This figure has been used to assess
the broadband partnership retail options in the study.
Figure 9. Market Penetration for Similar Cities
The scenario below models a citywide buildout of fiber -based broadband services to 100% of
homes and businesses in partnership with a broadband provider. It illustrates what it would
take for the City to achieve ubiquitous deployment with a partner to inform leadership of the
costs, revenues and requirements for a full fiber -to -the -home deployment. Figure 25 illustrates
the high-level design for the network.
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rMorristown,
Chattanooga,
Cedar Falls,
Longmont,
TN
TN
IA
CO
Residential
14,500
15,000
33,551
Homes Passed
140,000
5,600
13,000
500
Residential Subscribers
70,000
Residential Penetration
39%
50%
87%
51%
Years to Achieve
Penetration
6 years
7 years
7 years
2 years
Commercial
Commercial
Premises Passed
3,200
14,000
4,500
2,500
1,100
17,111
N/A
Commercial Subscribers
750
Commercial Penetration
23%
32%
44%
N/A
Years to Achieve
Penetration
8 years
10 years
6 years
N/A
The scenario below models a citywide buildout of fiber -based broadband services to 100% of
homes and businesses in partnership with a broadband provider. It illustrates what it would
take for the City to achieve ubiquitous deployment with a partner to inform leadership of the
costs, revenues and requirements for a full fiber -to -the -home deployment. Figure 25 illustrates
the high-level design for the network.
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Figure 90. Fiber -to -the -Home High -Level Design
The broadband partnership assumes that the City would fund the capital investment for all
long-term assets, including engineering and construction of the fiber feeder distribution
network and fiber service drops. Cities have traditionally funded these components of the
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network due to their access to long-term capital at low interest rates, designed to fund these
types of investments. Total
investment in the fiber plant would be $42,897,597. Forth is analysis, a 20 -year bond with a 3.5%
rate was utilized to finance the plant.
It also assumes that the partner would be responsible for all equipment, services and
operations to deliver retail internet services to residents and businesses over the network. This
would alleviate the City's responsibilities to provide retail services and shift responsibilities for
network operations, management, sales, marketing, billing and customer service to the
provider. The design of this type of partnership intends to marry the financial capabilities of the
City with the operating capabilities of a partner to bring fiber -based broadband services to the
community.
The network would be constructed over a three-year period. The first broadband services would
be available at the beginning of the second year of construction. Customer sign-ups would be
relatively minimal during the second year, at 10% of the total market, followed by 15% in the
third year and 20% in the fourth year, yielding a 40% total uptake starting in year 5.
Although the City would shift most operational responsibilities to the provider, it should expect
to incur some ongoing costs in the partnership. These would include direct staff costs needed
to manage the broadband partnership, estimated at about $400K per year on average. In the
first years of the partnership, these costs are expected to be minimal, starting at $150,000 in
year 1 and growing to $300,000 after three years. Staff would be responsible for managing the
performance of the partnership, co -marketing services with the broadband partner and
internal overheads for the accounting, legal, regulatory and reporting requirements associated
with the partnership.
To repay its operational and debt service expenses, the City would need to establish a revenue
sharing or lease fee arrangement with the broadband partner. For this analysis, a revenue share
was established to inform the City of the percent of annual revenues that would be needed to
repay its debt service, fund operational expenses and fund any payments in lieu of taxes
(PILOT). Based on the analysis, the City would require a minimum 30% annual share of gross
revenues with the partner to break-even over 20 years. In this scenario, the City would carry its
debt to term over the entire 20 years. If the City could achieve a 35% revenue share with the
provider, it would generate a surplus of $4.5M over the first 10 years and $9.3M over the 20 -
year period.
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Figure 11. Citywide Fiber -to -the -Home Deployment
DeploymentCitywide Fiber to The Home
Households with Access Available
Businesses with Access Available
Expected Residential Take Rate (Based on comparable muni broadband systems)
Expected Business Take Rate (Based on comparable muni broadband systems)
23,115
3,693
40%
40%
9,246
Total Residential Customers Using the Service
Total Business Customers Using the Service
1,477
Average Monthly Residential Pricing
$65
Average Monthly Business Pricing
Capital Costs
Fiber Feeder Distribution Network Construction
Fiber Service Drops (Based on 40% Take Rate) Construction
$140
Total Cost
$26,697,597
$16,200,000
Fiber Engineering & Permitting
Total Capital Costs
OperatingAnnual
$2,100,000
$44,997,597
Program Management
Maintenance
City Departmental Overhead (Accounting, Management, Legal, Regulatory)
$100,000
$100,000
$80,000
Total Annual Operating Costs
Debt Service Costs (20 Year Electric or General Obligation :.
Fiber Feeder Distribution Network Construction
$280,000
$1,384,479
Fiber Service Drops (Based on 40% Take Rate) Construction
Total Annual Debt Service
Payment in Lieu of Taxes
PILOT Annual Fees (Estimated at 2% of Gross Revenues)
NeededRevenue Share . Break -Even
$840,097
$2,224,576
Annual Cost
$193,872
Value
Minimum Revenue Share Needed to Break Even Over 20 Years
30%
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SUPPLEMENTAL INFORMATION: THE STATE OF BROADBAND IN LODI
A. Internet Service Providers
There are multiple ISPs that provide broadband services in the City of Lodi. Through a market
analysis that includes online research tools, California Public Utilities Commission (CPUC)
mapping and direct outreach to service providers, it appears that four companies serve the
majority of residents and businesses in the City.
Residential internet service in Lodi is comparable to many smaller communities across America.
Incumbent service providers, including both cable and DSL providers, claim to provide services
throughout the entire service area; however, there are gaps in service and some residents may
have a choice of only one choice of provider delivering wired services.
Small to medium businesses in Lodi have three providers delivering service offerings which
come with a higher level of service and, traditionally, a higher price. The average monthly cost
for businesses was $198.60 and the median was $168.95.
Figure 12. Internet Service Providers for Lodi Residents
Comcast is the largest provider of telecommunications services
ccomcast across the US, utilizing its Xfinity branding, they cover almost 40% of
finitthe US market. Comcast provides internet, cable and phone services
y to a considerable portion of Lodi residents and businesses with
introductory speeds at 25Mbps and highest speeds up to 1000Mbps.
As the service area's incumbent telephone provider, AT&T offers
internet service across DSL. ATT service is available in the Lodi
AT&T market, but with noticeable gaps. Service speeds also vary with the
lowest at 5Mbps which does not meet FCC standards of broadband,
up to 75Mbps.
Softcom Communications offers fixed wireless service in Lodi.
Softcom's services are available to residents and businesses at
speeds up to 50Mbps. Coverage appears to be outside of City limits.
Unwired advertises wireless internet services to residential
WIRED customers in the more rural areas of Lodi. However, when contacted,
Unwired did not service any of the random addresses that Magellan
chose.
While a residential survey was not conducted in Lodi, a market analysis utilizing random
addresses across the service area shows that Lodi, like many small to medium sized cities, has
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28
limited internet choice. The market consists of a duopoly with one DSL provider and one cable
provider, in this case
AT&T and Comcast. While wireless providers like Softcom and Unwired may provide some
competition, the service availability is limited and does not bring additional options for
residents in most locations.
The chart below illustrates services available at a sample of random addresses in Lodi.
Magellan's team reached out to service providers directly or online in order to determine
services available. The speeds listed are the highest available at each address under a best
effort service agreement. While Comcast has upgraded their network in Lodi to service gigabit
speeds utilizing DOCSIS 3.1, it does not offer symmetrical download and upload speeds, and is
still subject to outages and slowdowns that come with coaxial cable networks and
oversubscription of services over these networks. Without Comcast investing significantly in its
aging infrastructure, it is fair to wonder how many more Lodi users can be added before
oversubscription creates community -wide slowdowns and disruptions. More information on
user experience could be realized through a community survey and speed tests.
Figure 13. Residential Service Provider Offerings by Address in Lodi
703 S Pleasant Ave., Up to 75Mbps Up to 1000 Mbps
95240
Up to 50Mbps
2132 Newbury Cir., Up to 50Mbps
Up to 1000 Mbps No Service
95240
161 EI Centro Dr., 95240 Up to SMbps
Up to 1000 Mbps Up to 50Mbps
11662 N Ham Lane, No Service
Up to 1000 Mbps No Service
95242
2419 Inglewood Dr., Up to 25Mbps
Up to 1000 Mbps No Service
95240
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No Service
No Service
No Service
No Service
No Service
29
AT&T offers four internet only packages in Lodi, all for the price of $49.99 per month. The level
of service and speeds vary by location in the community with the lowest package of 5Mbps
download and 1 Mbps upload and the highest package at 75Mbps and 5Mbps.
Figure 14. AT&T Published Residential Internet Service Offerings in Lodi
Internet Basic 5/1 $49.99
$8.33 1 -year promo rate
Internet -25
25/3
$49.99
$1.78
1 -year promo rate
internet-50
50/3
$49.99
$0.90
1 -year promo rate
Internet -75
75/5
$49.99
$0.62
1 -year promo rate
Comcast offers five internet only packages in Lodi with prices that range from $24.99 to $84.99
per month. Comcast claims that any address that they service in Lodi is eligible for all services
listed below.
Figure 15. Comcast Published Residential Internet Service Offerings in Lodi
Performance
25/3
$24.99
$0.89
1 -year promo rate
Starter
Performance Pro
200/5
$49.99
$0.24
1 -year promo rate
Blast!
300/10
$64.99
$0.20
1 -year promo rate
Extreme Pro
600/15
$74.99
$0.12
1 -year promo rate
Gigabit
1000/35
$84.99
$0.08
1 -year promo rate
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SoftCom offers five internet only packages in Lodi with prices that range from $24.99 to $84.99
per month. Comcast claims that any address that they service in Lodi is eligible for all services
listed below.
Figure 16. SoftCom Published Residential Internet Service Offerings in Lodi
Enhanced
4/1
$79.95
$15.99
4GLTE
4GLTE
Supreme
6/1.5
$89.95
$11.99
4GLTE
Ultimate
8/2
$109.95
$10.99
4GLTE
Platinum
10/2.5
$159.95
$12.79
4GLTE
Extreme
50/3.5
$349.95
$6.54
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Business Internet Service Providers
AT&T offers three business internet only packages in Lodi ranging in price from $60 to $115 per
month. The level of service and speeds vary by location in the community with the lowest
package of 25Mbps down and the highest package at 75Mbps down.
Figure 17. AT&T Published Business Internet Service Offerings in Lodi
MilL MRC per Mbps
Internet -25 25/3 $60 $2.14 1 -year promo rate
Internet -50 50/3 $85 $1.60 1 -year promo rate
internet-75 75/5 $115 $1.44 1 -year promo rate
Comcast offers five business internet only packages in Lodi with prices that range from $88.95
to $228.95 per month. Comcast claims that any address that they service in Lodi is eligible for
all services listed below.
Figure M Comcast Published Business Internet Offerings in Lodi
•• ••'
End
MRC per Mbps•
Business Starter 35/5 $88.95 $2.23 2 -year promo rate
Business Advanced 200/20 $118.95 $0.54 2 -year promo rate
200
Business Advanced 300/30 $168.95 $0.51 2 -year promo rate
300
Business Advanced 600/35 $218.95 $0.34 2 -year promo rate
600
Business Advanced 1000/35 $228.95 $0.22 3 -year promo rate
1000
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SoftCom offers three business internet packages in Lodi delivered via point to point wireless
with prices that range from $249.95 to $499.95 per month.
Figure 19. SoftCom Published Internet Service Offerings in Lodi
0
Enhanced -10 10/10 $249.95 $12.49 Point to Point
Point to Point
Supreme -25 25/10 $349.95 $9.99
Ultimate -50 50/20 $499.95 $7.14 Point to Point
Wholesale & Middle -Mile Providers
Long-haul and middle -mile network providers are types of telecommunications carriers that
connect networks in cities to networks in other cities, serving as regional and interstate carriers
that essentially create the backbone of internet. These providers typically do not serve retail
customers, but rather provide data transport services to retail internet service providers. These
providers do sometimes serve enterprise scale customers, mostly connecting businesses with
multiple facilities around a region or throughout the country where the provider has network
infrastructure.
Should an internet service provider be interested in starting new services in Lodi, the new entity
might contract with one of these long-haul or middle -mile network service providers to provide
internet connectivity into and out of Lodi. Lodi has several network providers with long-haul
routes through the City, shown in the figure below, including AT&T, CenturyLink, Level 3, Sprint
and Zayo. Lodi should consider engaging these providers as it moves forward with a plan to
develop a network.
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Figure 20. Long-haul Network Providers Servicing Lodi
Lodi metro fiber routes, shown in the figure below, indicate the lack of substantial fiber
availability to the majority of its small and medium businesses and residents. With only one
carrier with metro network, TPx Communications, the area lacks what appears to be a fiber -rich
provider that is actually serving its business parks, major commercial areas or residents.
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Figure 21. Metro Network Providers Serving Lodi
TPx Communications
(5
.._ �1. L-,rw I IC
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B. Services Available
The state of California's Public Utilities Commission (CPUC) has worked to publish data that
gives us an additional detailed picture of the services available in Lodi. Data was pulled from
the CPUC that shows areas reported to be served by providers that have self-reported to the
state through their broadband mapping program, as well as confirmed through mobile field
testing by the Commission'. The maps have become more accurate over the years, but we
should still assume a level of inaccuracy due to self -reporting and difficulties with broadband
mapping at state and federal levels. However, these maps are an additional visual
representation of the gaps in coverage that Lodi's residents still face.
Figure 22. CPUC Residential Coverage Maps in Lodi
NT RD
4
C
cn
PIAN LN O E KE
• DSL
E • Cable
C
% _ %
• Fttx
• Fixed Wireless .I
E H06AN Lr, E HOGAN LN
m
E REP
W
M
E ICE
5
z
m
A
EI
The residential maps show there are clear gaps with unserved residents and census blocks in
various locations throughout Lodi including in the center of the City, to the east and a small
pocket in the northwest, as well as various small unserved blocks scattered throughout the City.
The services with the most coverage in Lodi are delivered via cable, which serves more than half
of the City. Fiber to the premises, or FTTx, is in two small clusters in the center of the City, most
s https://www.cpuc.ca.gov/Broadband_Availability/
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36
likely claimed to be provided by AT&T, however we were unable to confirm this actual service
in the market analysis.
The maps depict a community where many residents have only one choice of a broadband
provider, and in the case, they have two choices, the DSL provider may not meet the FCC's
definition of broadband at speeds at or above 25Mbps. This leaves the majority of Lodi's
residents without competition, and many lacking access to the basic levels of broadband to
maintain necessary digital access.
Figure 23: CPUC Business Coverage Maps in Lodi
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37
For businesses in Lodi, the map above depicts a similar picture as the residential market. The
majority of Lodi's businesses have one option for broadband, which is supported by coaxial
cable. There are several gaps in service where areas are unserved, meaning no providers offer
service to those census blocks. A small number of businesses have access to fiber (in green),
but the services are not sufficient to support a thriving tech -based economy or grow economic
development throughout the City.
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SUPPLEMENTAL INFORMATION: REGULATORY ISSUES
State policy and regulatory frameworks vary across the country regarding provision of
fiber optic -based services by a city. Implementing policies related to broadband is a
vital role that local governments play in expanding access and creating a competitive
market. Magellan Advisors evaluated specific federal policies to ensure any plans and
recommendations regarding Lodi's potential provision of fiber optic -based broadband
services is consistent with policy and regulatory requirements. 9 We also considered
implications of regulations related to emerging next generation 5G wireless services.
Much of the current legislation at the federal, state, and local levels relates to the
coming of 5G, which will be accompanied by additional encroachment activities as more
fiber is deployed to support additional wireless telecommunications facilities.
A. Federal Regulation of Broadband
Due to federal preemption, 10 the FCC's approach to regulating broadband often
determines the extent that state and local governments may also regulate broadband.
However, the FCC has less ability to use its preemption powers to invalidate state laws
which govern municipalities. Because municipalities are considered a creation of state
law and agencies of the state, stricter rules apply which limit when federal law can
preempt a state's abilityto regulate its municipalities.11 Accordingly, while it is important
for a municipal provider to understand the interplay between federal and state law in
governing broadband, state laws which apply specifically to municipal broadband are
likely valid and not preempted by contradictory federal policy.12
Besides contradictory state laws which apply specifically to municipal broadband, FCC
orders and regulation do have considerable ability to limit and determine state law in
the area of communications, and a federal policy of deregulation generally limits and
state and local laws which would limit deployment of broadband infrastructure or have
an anticompetitive effect. As discussed above in the introductory paragraph, in 2018,
the FCC reclassified "broadband internet access service"—including both fixed and
s The following discussion does not constitute a legal opinion and should not be construed as such. Questions about
interpretation or applicability of these or other provisions of federal or California law should be referred to legal
counsel.
10 When commercial activities primarily occur interstate, as opposed to intrastate, Congress has the ability to regulate
these commercial activities and invalidate state or municipal regulations which contradict or oppose the federal
regulations. See In the Matter of Restoring Internet Freedom (In Re: Internet Freedom), 33 F.C.C. Rcd. 311, $$ 194-204
(2018).
11 Tennessee v. Fed. Commc'ns Comm'n, 832 F.3d 597, 610 (6th Cir. 2016) (citing Nixon v. Missouri Mun. League, 541
U.S. 125, 140 (2004)).
"See id. at 613.
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39
mobile service—as an "information service" instead of "telecommunications service," as
each are defined in the Telecommunications Act of 1996 ("TA96").13 This was a reversal
of its 2015 Open Internet Order14 in which the FCC initially classified broadband internet
access service (both fixed and mobile) as a telecommunications service. The FCC
described the effect of this reclassification as ending "utility -style regulation of the
internet ...."15 As classified as a "telecommunications service," broadband internet
service was subject to many of the regulatory obligations of Title II of the
Communications Act, and broadband internet service providers were generally subject
to common carrier requirements. 16 In ending this utility -style regulation in favor of
deregulation, the FCC announced its preemption of any state or local laws which would
contradict this approach.17
In addition to defining what communication technologies are designated
"telecommunications services" and "information services," the FCC otherwise interprets
other provisions and definitions of the TA96, including defining different types of
broadband services and infrastructure. Providers of broadband should familiarize
themselves with the FCC's interpretations and guidance, as its classifications can
determine which federal rules apply to specified broadband services, and the
applicability of certain federal requirements can influence which state and local rules
apply, to the extent such federal rules preempt the state or local law.
As the FCC considers "broadband internet access service" an "information service," and
thus deregulated (as opposed to "telecommunications service" - i.e., basic telephone
service - which are regulated as common carriers), it is important to note the FCC's
current definition of "broadband internet access service," which it defines as:
. . . mass-market retail service by wire or radio that provides the
capability to transmit data to and receive data from all or substantially
13 see In Re: Internet Freedom (interpreting 47 U.S.C. § 153(24), (53)).
14 Protecting and Promoting the Open Internet, WC Docket No. 14-28, Report and Order on Remand, Declaratory
Ruling, and Order, 30 FCC Rcd 5601 (2015) (Title II Order).
" Id. at ¶ 2.
16 1d. at 37 — 57.
17 We therefore preempt any state or local measures that would effectively impose rules or requirements that we
have repealed or decided to refrain from imposing in this order or that would impose more stringent requirements for
any aspect of broadband service that we address in this order. Among other things, we thereby preempt any so-called
I'lleconomic" or "public utility -type" regulations, including common -carriage requirements akin to those found in Title
II of the Act and its implementing rules, as well as other rules or requirements that we repeal or refrain from imposing
today because they could pose an obstacle to or place an undue burden on the provision of broadband Internet access
service and conflict with the deregulatory approach we adopt today. Id. at ¶196.
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all Internet endpoints, including any capabilities that are incidental to
and enable the operation of the communications service, but excluding
dial-up Internet access service.
The term "broadband Internet access service" includes services
provided over any technology platform, including but not limited to
wire, terrestrial wireless (including fixed and mobile wireless services
using licensed or unlicensed spectrum), and satellite. For purposes of
our discussion, we divide the various forms of broadband Internet
access service into the two categories of "fixed" and "mobile." With these
two categories of services—fixed and mobile—we intend to cover the
entire universe of Internet access services at issue in the Commission's
prior broadband classification decisions, as well as all other broadband
Internet access services offered over other technology platforms that
were not addressed by prior classification orders. We also make clear
that our classification finding applies to all providers of broadband
Internet access service, as we delineate them here, regardless of
whether they lease or own the facilities used to provide the
service. "Fixed" broadband Internet access service refers to a
broadband Internet access service that serves end users primarily at
fixed endpoints using stationary equipment, such as the modem that
connects an end user's home router, computer, or other Internet access
device to the Internet. The term encompasses the delivery of fixed
broadband over any medium, including various forms of wired
broadband services (e.g., cable, DSL, fiber), fixed wireless broadband
services (including fixed services using unlicensed spectrum), and fixed
satellite broadband services. "Mobile" broadband Internet access
service refers to a broadband Internet access service that serves end
users primarily using mobile stations. Mobile broadband Internet
access includes, among other things, services that use smartphones or
mobile -network -enabled tablets as the primary endpoints for
connection to the Internet. The term also encompasses mobile satellite
broadband services.18
The FCC has also listed certain services it does not consider "broadband internet access
service," including: (i) data services which provide connectivity to a limited number of
Zs Id. at ¶¶ 21-22.
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41
internet endpoints in conjunction with the offering of certain products or services such
as "e -readers, heart monitors, or energy consumption sensors;" (ii) video or voice
services provided by internet service providers, as these services are otherwise
regulated; (iii) virtual private network (VPN) services; (iv) content delivery networks
(CDNs); (v) hosting or data storage services; (vi) Internet backbone services (if those
services are separate from broadband Internet access service, as these services have
historically not been considered "mass market," because they usually do not provide
the capability to transmit data to and receive data from substantially all Internet
endpoints); (vii) premise owners such as coffee shops, bookstores, and airlines and
providers of private end-user networks such as libraries and universities, and other
businesses which acquire broadband Internet access service from an internet service
provider in order to provide their guests and invitees Internet access on location; and
(viii) personal Wi-Fi networks created by users of broadband internet access service who
do not intentionally offer the benefit to others. Each of these are not considered service
providers because they do not market and sell the broadband internet access to
residential customers, small businesses, or other end-users such as schools and
libraries.19 A municipality which markets internet access to its residents, businesses,
and schools and libraries is likely to be considered a broadband internet access service
provider by the FCC and subject to FCC regulations; therefore, any municipal provider
of telecommunications services should familiarize themselves with the various FCC
reporting, filing and other requirements regarding fees, reports and data. While the
FCC's current regime supports deregulation and free-market principals in relation to
these services, the agency is limited in its authority to preempt state laws related to
municipalities, even if those state laws create greater restrictions than the federal
regulations.
B. Federal Regulation of Wireless Services
Wireless services and technology has been largely unregulated since its inception in the late
1980's - from a rate and tariff standpoint. However local authorities and the Federal
Communications Commission have been in an ongoingjurisdictional battle over siting practices
and zoning requirements for wireless facilities for some time, which will be discussed further
below. At the center of the jurisdictional battle today is 5G wireless service.
The placement of wireless facilities is governed by an interrelated legal framework
characterized by shared jurisdiction between state/local authorities and federal authority (the
Federal Communications Commission or FCC). The past two decades have seen increasing
federal preemption of state and local authority by the Federal Communications Commission
191d. at ¶¶23-25.
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(and Congress), most recently in its "Small Cell Order".20 The U.S. Code provides the basis for
federal preemption where it allows local authorities to regulate the "placement, construction,
and modification" of wireless communications facilities but subject to certain limitations.21
Those limitations include:
• City regulations may not "prohibit or have the effect of prohibiting the provision of
personal wireless services"22;
• City regulations may not "unreasonably discriminate among providers of functionally
equivalent services '23;
• Any denial of an application to place, construct, or modify a personal wireless facility
must be based on "substantial evidence contained in a written record"24; and,
• City regulations may not "regulate the placement, construction, and modification of
personal wireless service facilities on the basis of the environmental effects of radio
frequency emissions to the extent that such facilities comply with the Commission's
regulations concerning such emission S.,,21
In one specific area - radio frequency (RF) emissions - the Federal Communications
Commission (FCC) has been assigned complete regulatory jurisdiction, under the 1996
Telecommunications Act which preempted local regulation of RF safety standards in favor of a
uniform national RF safety standard under FCC jurisdiction .26 "The FCC's limits for maximum
permissible exposure (MPE) to RF emissions depend on the frequency or frequencies that a
person is exposed to. Different frequencies may have different MPE level S.,,27 Local authorities
can require compliance with FCC RF standards be demonstrated in evaluating 5G siting
applications. Applicants often make this demonstration part of the application package. Local
authorities may not however deny wireless communications facilities siting applications based
on RF emissions - Congress has preempted local authority on this subject and placed
jurisdiction in the hands of the FCC.
20 Declaratory Ruling and Third Report and Order; In the Matter of Accelerating Wireless Broadband Deployment by
Removing Barriers to Infrastructure Investment; WT Docket No. 17-79; In the Matter of Accelerating Wireline
Broadband Deployment by Removing Barriers to infrastructure Investment; WC Docket No. 17-84; Released by the
Federal Communications Commission, September 27, 2018. ("Small Cell Order" or "Order".)
2147 U.S.C. § 332(c)(7)(A).
22 47 U.S.C. § 332(c)(7)(13)(i)(1).
23 47 U.S.C. § 332(c)(7)(13)(i)(11).
24 47 U.S.C. § 332(c)(7)(13)(iii).
2s 47 U.S.C. § 332(c)(7)(B)(iv).
2e 47 U.S.C. § 332(c)(7).
27 A Local Government Official's Guide to Transmitting Antenna RF Emission Safety: Rules, Procedures, and Practical
Guidance; Local and State Government Advisory Committee, Federal Communications Commission, June 2, 2000, at
page 3.
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C. What is 5G?
"5G" is the fifth generation of wireless technology driving evolution of the wireless
communications technology platform. First generation, "2G" and "3G" wireless service was
provided beginning in the 1980's and 90's using large towers, "4G" was characterized by
development of "apps" that needed sustained reliable connectivity which in turn drove antenna
densification, while "5G" relies upon even more closely spaced, small antennas. Consequently
wireless carriers such as AT&T, Verizon, the newly merged T-Mobile/Sprint and their contracted
outsourced infrastructure providers (e.g., Crown Castle, Mobilitie, etc.) are increasing demand
for access to city -owned and utility -owned structures and public rights-of-way to accommodate
"4G/4G+" and "5G" "small cell" deployments. Current "4G/4G+" deployments are aimed at
densification and increasing capacity in high -use areas while 5G small cell facilities are also
being deployed in larger numbers to greatly increase speed and data capacity on a "fill-in" basis.
Deployment of high -band "5G" is distinguished from the present "4G" based wireless service by
use of low power transmitters with coverage radius of approximately 400 feet, 5G thus requires
closer spacing of antennas and more of them. Small cells bring the network "closer" to wireless
service users to deliver greatly increased data capacity, faster connectivity speeds and an
overall better wireless service. As stated by the FCC,
The wireless industry is currently deploying and planning for additional
construction of large numbers of small cells - the number of these facilities is
expected to grow rapidly over the next decade. S&P Global Market Intelligence
estimates that between 100,000 and 150,000 small cells will be constructed by
the end of 2018, and that small cell deployments are expected to reach
455,000 by 2020 and nearly 800,000 by 2026. AT&T has reported that a
substantial majority of its infrastructure deployments over the next five years
will be small cell sites. In addition, Verizon is deploying small cells in several
urban areas, including New York, Chicago, Atlanta, and San Francisco. Sprint
announced last year a goal of deploying 70,000 small cells within two years.Z$
In the years following this FCC pronouncement all wireless providers did indeed begin
deployment of 5G (during 2019), and the deployment continues in the US with three wireless
carriers (given the recent merger of T -Mobile and Sprint) but perhaps at a reduced pace given
financial and business impacts of the COVID-19 pandemic. However, both AT&T and T -Mobile
are on target to offer "nationwide" 5G using low -band spectrum by mid-year.29
"Streamlining Deployment of Small Cell Infrastructure by Improving Wireless Facilities Siting Policies; Mobilitie, LLC
Petition for Declaratory Ruling, WT Docket No. 16-421, Public Notice, 31 FCC Record 13360, December 22, 2016, at
page 3-4 (citations omitted). ("Improving Wireless Facilities Siting Policies Public Notice").
29 AT&T "plans to reach nationwide coverage this summer" (2020).
https:Habout.att.com/newsroom/2020/5g_announcements.html (viewed on May 27, 2020). "T -Mobile has launched
nationwide 5G: Here is what that means." https://www.cnn.com/2019/12/03/tech/tmobile-5g/index.html (viewed
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44
5G networks operate multiple frequencies in three bands using millimeter wavelengths - the
highest of which is anticipated to offer download/upload speeds of 1 Gbps. The actual speed
and range the consumer gets depends on a variety of factors, including what frequency is being
used by the service provider - low -band, mid -band, or high -band. There are tradeoffs among
the different bands, between speed and distance/coverage. General observations:
• Low -band frequencies work well across long distances and in rural areas; speeds are
greater than 4G but slower than other 5G frequencies.
• Mid -band frequencies are currently sought after since they permit greater speeds while
covering relatively large areas.
• High -band frequencies provide the fastest speeds but in more limited circumstances
such as close to the antenna and in areas without physical obstructions (i.e., windows,
buildings, walls). Thus, high band will work well in dense areas where antennas can be
placed every few hundred feet. This spectrum delivers the high speeds that are
commonly associated with 5G when the subject comes up.
• It is therefore likely that 5G networking will be a combination of low, mid, and high -band
frequencies.
• Also, obtaining 5G service requires using a 5G -ready device, of which at present there
are only a handful (though the number is growing).
5G networks are designed to provide increased efficiencies while decreasing latency and are
designed for improving the performance of connected devices that define the "Internet of
Things" or IoT.30 Examples include autonomous vehicles, healthcare monitoring technologies,
ultra -high-definition video, virtual reality, and many more applications that are ripe for
development. Indeed, any "tech buzzword" will benefit from 5G's faster speeds and reduced
latency. The transition to 5G will not occur overnight, and 4G and 5G will coexist such that when
a device drops 5G signal a handoff to 4G LTE should be imperceptible.
Does Wireless Service Require Fiber Optic Networks?
There is a common public misconception that "wireless service" is indeed fully wireless, end-to-
end. In fact, typically the only "wireless" component to wireless service is the wireless
transmission over radio spectrum between the user's cell phone and the cell tower at either or
both ends of the ca 11.31 Wireless service places significant demands on the wireline network for
connection of each cell tower or small cell antenna to wireless providers' network facilities.
on May 27, 2020). See also, "What is 5G? The definitive guide to the 5G network rollout";
https://www.tomsguide.com/us/5g-release-date,review-5063.html (viewed on May 27, 2020).
3' There is not a universal definition of "Internet of Things" but it generally refers to scenarios where network
connectivity and computing capability extends to objects, sensors and everyday items not normally considered
computers, and allows these devices to generate, exchange and consume data with minimal human intervention.
31 In some cases, operators have used radio spectrum to transmit consumer data and voice traffic from the transmitter
on the tower to the base, where it is then connected to the landline network. But this engineering practice is going by
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In recent years, wireless providers connected their towers to their network with fiber
connections under "Fiber -to -the -Tower" programs, procuring fiber connectivity from incumbent
local exchange companies and other sources. The 4G LTE evolution of wireless technology and
services supported and encouraged much greater consumer demand for bandwidth and data,
which in turn required fiber capacity for each cell tower to carry all the traffic to the wireless
provider's network. Evolution to 5G network technology greatly increases wireless provider
demand for fiber -based network capacity. 5G relies on an even denser network of cells with
shorter range at higher frequencies. This denser cell network will require an even denser fiber
network to support those cells. Verizon's CEO Lowell McAdam characterized just how dense in
a presentation to investment analysts:
Verizon small cells and densification efforts are driving the deployment of
1700 -strand fiber in Boston, where the company is undertaking a major
network upgrade, McAdam told attendees at a Verizon analyst meeting ... In
comparison, he said, the company deployed six -strand fiber when it began
deploying its ROS landline broadband and internet service in the early 2000s.
Verizon worked closely with its supplier Corning to get 1700 fiber strands in a
single sheath, McAdam said, also noting that the company recently placed a
$300 million order with another fiber supplier Prysmian.
"The largest fiber network in the country will be wireless" and will be operated
by Verizon to provide backhaul and other types of connectivity, said McAdam.
In Boston, Verizon is leveraging fiber that will support small cells to also
support an expansion of the company's ROS offering and a smart city trial.
Potentially the company could repeat that strategy in other markets as its
wireless network densification continues.
"Placing fiber across the country" is a big opportunity, McAdam said. 32
A recent study and report by Deloitte noted that "Deep deployment of fiber optics into our
nation's network infrastructure might not be as glamorous as the eagerly anticipated launch of
fifth -generation mobile networks (5G); however, it is just as important—if not more so. In
fact, 5G relies heavily on fiber and will likelyfall far short of its potential unless the United States
significantly increases its deep fiber investments."33 The study estimates that the US will need
the wayside as it consumes valuable radio spectrum and is otherwise less desirable from an engineering perspective,
in favor of fiber connection of the transmitters on the tower to the base for connection to the landline network.
" http://www.telecompetitor.com/ceo-verizon-wireless-network-densification-will-drive-deployment-of-largest-fiber-
network-nationwide/
33 https://www2.deloitte.com/us/en/pages/consulting/articles/communications-infrastructure-upgrade-deep-fiber-
imperative.html
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to invest $130 - $150 billion in the next 5-7 years in fiber infrastructure in order to support the
roll out of next generation wireless.
just as in other cities, in Lodi requests to encroach on public rights-of-way and attach small cell
antennas to City -owned lightpoles, for example, will be accompanied by requests to place fiber
optic cable for backhaul and network connection, whether via boring, trenching, or other
placement technique. The City needs to have appropriate administrative practices and policies
in place to address these requests for encroachment permits and placement of antennas on
City -owned structures when they come. In addition, the City may consider policy steps such that
the City benefits from future fiber deployments in the public rights-of-way.
D. The FCC's Small Cell Order
The FCC's Small Cell Order limits local authority in many areas include fees (most notably the
annual fee limit of $270 per pole), requirements and criteria that may be used, time frames,
and provisions of some state laws. The Order permits fees only to the extent they are non-
discriminatory ("no higher than the fees charged to similarly -situated competitors in similar
situations"), and are a "reasonable approximation" the government entity's "objectively
reasonable costs" specifically related to the deployment.34
The Order sets out fee levels which are "presumptively reasonable" are $270 per small wireless
facility per year, $500 application fee for up to five facilities, plus $100 for each facility beyond
five.35 Higher fees can be charged if the state or local government entity can show the higher
fees are a reasonable approximation of cost and the costs themselves are reasonable and being
assessed in an non-discriminatory manner.36 Beyond fees, the Small Cell Order also addressed
state and local requirements in the areas of aesthetic requirements, undergrounding
requirements, and minimum spacing requirements using the "materially inhibits" standard
created by the FCC in its Small Cell Order.
The Small Cell Order was appealed to the Ninth Circuit Court of Appeals, which recently issued
its Opinion37 largely upholding the Small Cell Order but with one exception:
The exception is the Small Cell Order provision dealing with the authority of
local governments in the area of aesthetic regulations. We hold that to the
extent that provision requires small cell facilities to be treated in the same
manner as other types of communications services, the regulation is contrary
to the congressional directive that allows different regulatory treatment
among types of providers, so long as such treatment does not "unreasonably
"Small Cell Order, at paragraph 50.
35 Id., at paragraphs 78-79.
36 1d., at paragraph 80.
37 Opinion Denying Petitions in Part, City of Portland v. FCC, No. 18-72689 (9t' Circuit), at page 31.
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discriminate among providers of functionally equivalent services." 47 U.S.0 §
332(c)(7)(13)(i)(1). We also hold that the FCC's requirement that all aesthetic
criteria must be "objective" lacks a reasoned explanation.38
And:
In sum, the requirement that aesthetic regulations be "no more burdensome"
than those imposed on other technologies is not consistent with the more lenient
statutory standard that regulations not "unreasonably discriminate." The
requirement that local aesthetic regulations be "objective" is neither adequately
defined nor its purpose adequately explained. On its face, it preempts too
broadly. We therefore hold those provisions of Paragraph 86 of the Small Cell
Order must be vacated.39
E. The FCC Rules under the Spectrum Act
Prior to the Small Cell Order, the "Spectrum Act" 4° enacted by Congress in 2012 added new
requirements and directives to the Federal Communications Commission (FCC) for processing
and approval of wireless deployments. To implement the Spectrum Act, the FCC issued new
regulations to interpreting the Section 6409(x) requirements and directives of the Act related to
local authorities processing of applications for wireless communications facilities. In brief, the
Act tightens the application of "shot clock" timelines, and requires local jurisdictions to approve
certain collocations and modifications to existing wireless communications facilities under
shortened explicit deadlines, if it is an "eligible facilities request" - which is defined as any
request for modification of an existing tower or base station that does not substantially change
the physical dimensions of such tower or base station, involving (1) collocation of new
transmission equipment; (2) removal of transmission equipment; or (3) replacement of
transmission equipment. The new FCC regulations established defined standards for what for
"substantial change" and implemented the statutory changes to "shot clock" regulations.
F. The FCC's "Clarification" Ruling
The FCC recently made another ruling which attempts to preempt local authority regarding
placement of wireless facilities by "clarifying" "the meaning of our rules implementing Congress'
decisions in section 6409(x) of the Spectrum Act of 2012"41. The Declaratory Ruling on June 10,
2020 has been appealed by numerous parties including state and local government
38 Id., page 31.
39 Id., page 52.
41 See Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. No. 112-96, 126 Stat. 156, § 6409(a) (2012)
("Spectrum Act"), codified at 47 U.S.C. § 1455(a).
41 In the Matter of Implementation of State and Local Governments' Obligation to Approve Certain Wireless Facility
Modification Requests Under Section 6409(a) of the Spectrum Act of 2012, WT Docket No. 19-250 and RM -11849, FCC
20-75 (released Jun. 10, 2020) ("Declaratory Ruling")
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organizations and entities.42 Among other things the Declaratory Ruling purports to "clarify"
existing FCC rules originally adopted in 2014 to implement the Spectrum Act. The cities
challenge the FCC's ruling on the basis that it violates federal requirements for rulemakings,
and is arbitrary, capricious and an abuse of discretion in seeking to change existing FCC rules
regarding applicability of "eligible facilities requests".
G. State and Local Policy
The urgency of state and local policy considerations for small wireless facilities stems from the
fact that many carriers consider street lights and utility poles to be "ideal" supporting structures
for placement of small cell antennas and equipment, which drives the cities' need for standards
and guidelines on placement of antennas and other facilities on or near these structures. Cities
and counties often prefer installation of small cell wireless facilities on streetlights owned by
the local authority based on the positive visual qualities of these facilities when built in
conformance with design standards, efficient use of assets and the public rights-of-way, as well
as in support of Smart City initiatives as described throughout this Plan.
Wireless providers are advocating for their preferred form of legislation in state legislatures as
well as at the federal level (especially the FCC), designed to preempt and limit local authority
over matters pertaining to small cell deployment. Specifically, in California, SB 649 was
presented to the State Legislature and passed the State Senate and Assembly in September
2017. However, it was ultimately vetoed by Governor Brown. The bill would have significantly
reduced local authority over small cell pole attachments in the public right-of-way, including
aesthetics, safety and revenue.
To achieve a City -specific balance between local authority and federal preemption, Magellan
Advisors is able to assist the City in assessing existing wireless and wireline policies, and
updating them where required to maximize local control over facilities deployment, including
an updated Telecommunications Ordinance, Small Cell Deployment Standards, a Master
License Agreement, and a Dig Once policy or ordinance.
H. Dig Once Policy or Ordinance
"Dig Once" can be defined as policies and/or practices that foster cooperation among entities
(especially utilities) that occupy public rights-of-way, to minimize the number and scale of
excavations when installing infrastructure (especially telecommunication S43) in public rights-of-
way. Dig Once has numerous substantial benefits, including promoting and supporting the
placement of broadband infrastructure (e.g., fiber-optic cable and conduit), reducing the
4' Appeals include The League of California Cities, the League of Oregon Cities, and the cities of Glendora, Rancho
Palos Verdes and Torrance in California, Texas Municipal League, Texas Coalition of Cities for Utility Issues, Michigan
Municipal League, the US Conference of Mayors and many other cities.
43 Many utilities are "monopolistic' providers (such as gas, water/sewer and electric) but there are a number of
telecommunications providers that seek permission to encroach on public rights-of-way, including cable TV
companies, competitive telecommunications companies, and wireless communications companies.
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consequences and disruptions of repeated excavations (traffic disruption, road deterioration,
service outages, and wasted resources), and enhancing service reliability and aesthetics.
Dig Once accomplishes the goal of minimizing costs of constructing separate trenches and
facilities - via shared costs of construction. The cost savings are significant. The Federal
Highway Administration estimates it is ten times more expensive to dig up and then repair an
existing road to lay fiber, than to dig support structure for fiber (e.g., conduit) when the road is
being fixed or built. According to a study by the Government Accountability Office, "dig
once" policies can save from 25-33% in construction costs in urban areas and approximately
16% in rural area S.44 In addition, development of Dig Once standards and guidelines for
deployment of conduit and fiber will facilitate economic development and growth, as it enables
cost-effective staged or gradual deployment of broadband infrastructure by local authorities.
Dig Once implementation requires revision to the planning and coordination process for
construction projects in the public rights-of-way. When subsurface utility work occurs, it
presents opportunities for the City to install new fiber in the right-of-way at reduced costs via
coordination of work. Dig once and jointtrench policies allowthe Cityto take advantage of other
subsurface utility projects for the installation of fiber. This enables the City to expand its
ownership of fiber anytime subsurface utility work occurs, at preferential costs to new
construction. The concept can
also extend to required placement of conduit for fiber-optic conduits whenever the ground is
opened, as expressed in recent Congressional legislation.
I. Governance
Governance ensures that maximum public benefit is realized from any public investment in
network infrastructure, whether by fostering competition, meeting public sector requirements,
or minimizing negative impacts of development. Governance aligns investment with public
goals and priorities. Policy guides development, laying out what can be built and how. Political
will is the starting point for the governance and policies simply because without it there is
nothing to govern and no possibility for policy. The City of Lodi has demonstrated political will
by undertaking this planning effort.
J. Political Will
It is important for the City to assess and build political will, which means providing a strong
rationale for this Plan to influential people, including appointed and elected officials, executives
with major employers and prospective investors, and those citizens who are well-connected to
others. Rationale for broadband can be based on risk of loss—such as poor economic
competitiveness—but the strongest rationale is built on this Plan. Broadband can be used to
improve operations, increase impacts, reduce costs, and transform economies.
" https.Ileshoo.house.gov/issues/economy/eshoo-walden-introduce-dig-once-broadband-deployment-bill
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The process of building political will is as important as the individuals involved and the rationale
for action. Indeed, all three work together: the process must be tailored to the individuals and
rationale. For broadband, the rationale revolves around uses and impacts as well as availability,
costs, and performance. Support from business executives and technologists reinforces this
rationale. These stakeholders are most likely to respond to peers, particularly personal
outreach from top public officials. Generally, the process involves:
1. Clearly articulate project goals and objectives in public documents
2. Identify, educate, and mobilize internal champions to garner support from stakeholders
3. Reach out to and inform councils, commissions, and community stakeholders
4 Organize a task force of diverse advocates
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SUPPLEMENTAL INFORMATION: BROADBAND BUSINESS MODELS
This analysis provides alternative business and financial models that the City could utilize to
enhance broadband services in the community. Depending on Lodi's preferences for risk,
reward and control, these models provide information on the funding required, revenues, costs
and financial performance. Magellan recommends that the City consider these three generally
utilized business models, shown in Figure 13.
Figure 24. Business Models for Lodi to Consider
Lodi provider dark fiber to
competitive providers, charging
fees for use of the infrastructure.
There is no master plan for
deployment of the network to
homes or businesses. Providers
simply utilize MU where they
identify opportunities, and Lodi
would negotiate with separate
customers.
Cities using this model
Palo Alto, CA
Columbia, MO
Bartow, FL
Lodi provides retail internet,
voice, and video services to
homes and businesses directly.
Lodi assumes all funding and
operational responsibilities,
including billing, and customer
service and support functions,
and would compete directly with
private service providers.
Cities using this model
Chattanooga, TN
Longmont, CO
BrightRidge, TN
I ICIVVVI n II III U. Ll Ul LUl C,
continuing its expertise in "poles
and wires," while the private
partner services homes and
businesses. The partner
maintains the customer
relationship, including marketing,
billing, and all customer support.
Cities using this model
Huntsville, AL
Westminster, MD
Lincoln, NE
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A. Lodi Leases Fiber
Under this business model, the Lodi network would be built and operated primarily for utility
operational purposes, while offering excess fiber capacity as dark fiber leases to customers and
retail service providers. Under an operating agreement, the fiber infrastructure could be made
available to any retail providers to drive broadband competition and make broadband services
more widely available to homes and businesses throughout the community. Because of the
limited market for dark fiber services, this is a difficult model to make feasible on its own but
becomes viable when it is employed as a value -add when utilities deploy fiber for grid
modernization and municipal needs.
For example, Palo Alto Utilities in California built a 200+ mile fiber network to interconnect its
substations together, enabling AMI and SCADA communications over a utility -owned
infrastructure. Once the network was built, it began leasing excess capacity to service providers
and connected its dark fiber network to the Palo Alto Internet Exchange (PAIX), which allowed
the network to interconnect with more than 100 competitive carriers. In Palo Alto, carriers use
the fiber backbone for last -mile connectivity to individual businesses. Today, Palo Alto
generates about $2 million annually from its dark fiber leasing program.
Figure 14 illustrates other municipalities that lease dark fiber with rates for these services.
Figure 25. Cities with Dark Fiber Leasing & Rates
City of Lakeland
FL
City of Bartow
FL
Eugene Water & Electric Board
OR
Palo Alto Utilities
CA
Springfield Utility Board
OR
City of Holly Springs
NC
City of Rock Falls
IL
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$100
$125
$21
$336
$16
$50
$100
53
B. Lodi Provides Services
Under a retail business model, Lodi Utilities would own, operate and deliver all services directly
to residential and organizational users in the Lodi service area. It would compete with the
private sector for customers and it would be responsible for all operations, customer service,
billing, provisioning and management of the broadband network. Customers would pay the
utilityfor services, and the utility incurs all costs and assumes all risks. This section takes a closer
look at the services that Lodi Utilities could provide to both the residential services market and
the business services market.
The industry is experiencing a time when people are "cord cutting," cancelling their traditional
cable TV service, and opting for "over -the -top" video services such as Netflix, Amazon, and Hulu.
In response, an ever-increasing number of content providers are adapting to these changes by
offering much of their video content over the internet. The abundance of alternative sources of
entertainment is making U.S. households rethink the need to pay for satellite or cable television
service, which includes many channels that never get watched.
Home phone has also experienced cord cutting and today only about 35% of households
maintain home phone service, and subscribership continues to decline each year. However,
many residents still subscribe to home phone service as a backup for their cell phone, for
connection to security systems and for general peace of mind.
When considering services to offer, Lodi Utilities should have a clear understanding of customer
demand. Communities with large percentages of millennials would rather subscribe to over -
the -top services than traditional cable TV, while generally having low home phone penetration.
Conversely, communities with older populations still prefer traditional cable TV rather than
over -the -top services and have higher penetration of home phone services.
Existing providers in Lodi offer competitive packages including internet, TV and home phone.
To be competitive and to attract customers, Lodi Utilities should launch a retail broadband
offering with services that are competitive in the market today, which means offering cable TV
and phone services. Further, Lodi should anticipate subscribership declines in these services
over time but should provide them to have competitive offers in the market.
Traditionally, TV and phone were very capital intensive to include in broadband bundles.
Utilities would invest millions of dollars in IPTV headends and voice switches to offer
competitive services. Today, the landscape of television and telephone service has changed. In
both cases, virtualized environments require little investment to provide TV and phone service,
alleviating the need for substantial investment in technologies that will soon be obsolete. These
services can be provided using white label providers such as MobiTV for television services, and
phone services provided by Momentum, Allianza, or Skyswitch.
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These proven technologies allow smaller utilities to pay per -subscriber for services with almost
no sunk cost in equipment. They also reduce the need for network technicians that traditionally
managed equipment needed to provide TV and home phone.
C. Lodi Partners with Providers
Under a partnership model, Lodi Utilities would create a partnership with an existing
broadband provider to jointly develop a FTTP network. In most cases, Lodi would be likely
responsible for operations of the fiber plant while the partner would be responsible for funding
equipment and ongoing customer -facing operations, such as marketing, billing, and customer
service. The partner provides all retail services to customers and customers interface directly
with the provider, while Lodi maintains a position of infrastructure owner. The private partner
collects all revenues and pays a portion of the revenue to Lodi Utilities, enough to cover Lodi's
debt service for financing the FTTP plant, fund reserves and future expansion and cover any
ongoing operating costs it may incur in the partnership.
Figure 15 illustrates the responsibilities of Lodi or its partner under each of the potential
business models. As a dark fiber provider, Lodi would operate directly with a customer, and
would be required to invest in the network infrastructure to support the needs of its dark fiber
customers. Under the retail model, Lodi Utilities is responsible for the entire network all the
way to the customer premises, including provisioning and all customer support services. Under
a partnership model, specific roles depend on the strengths that each partner brings. In a
partnership, the utility is generally responsible for the physical infrastructure while the partner
supplies content services and customer support functions.
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Figure 26. Lodi's Responsibilities in Each Business Model
Engineering Design
Feeder and Distribution
Premises Fiber Drop
Lodi
Customer Equipment
Provider
Headend and Equipment
Lodi
Facilities and Data Center
Lodi
Vehicles and Maintenance
Equipment
Lodi
Staffing
Lodi
Content
Provider
Customer Service
Lodi
Billing and Provisioning
Lodi
Network Operations
Lodi
Lodi
Utilities
Provides
All Functions
Q:l
Private
Provider
Lodi
Private
Provider
Among these business models, public-private partnerships stand out as an option for utilities
that seek to manage risk while maintaining vital infrastructure as a public asset. Many find
partnership models desirable and have thus explored opportunities for creating such
partnership. As a utility considering a possible partnership, the concepts of risk, reward and
control are important to understand and will be discussed in the next section.
D. Benefits of Partnerships
As Lodi evaluates the possibility of a public-private partnership, it should understand the
process of seeking a partnership. An ideal partnership should include an evaluation of benefits
to the utility and the broader community. The following considerations will allow for a better
understanding of the benefits when evaluating partnership opportunities:
• Publicly owned assets in the right-of-way, such as streetlights, traffic poles, and conduit,
which may be leveraged for in-kind services
• Planned projects for joint trenching
• Economic Improvement Zones that might be targeted
• Competitive rates, marketing strategies, and revenue sharing
• Expanding the network to include underserved and unserved areas
Public-private partnerships offer an array of benefits to communities, both on and off the
balance sheet. From decreasing telecommunications costs to increasing access for all, each of
these benefits should be measured when considering a partner.
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E. Risk, Reward & Control in Partnerships
To most utilities, the business of broadband is a new venture, and many lack the technical or
organizational capacity or even the desire to build and operate a broadband utility, so those
utilities may partner with a public or private entity that can fill a critical long-term and strategic
need. A partner or partners can be considered for any needed role in the new broadband utility,
so this section offers some points around the pros and cons of entering a broadband
partnership.
As Lodi considers broadband, it should consider both the opportunities and the potential
pitfalls by paying attention to the interwoven concepts of Risk, Reward and Control. A successful
partnership must complement these three concepts of each partner, and there will unavoidably
be tradeoffs within this framework for each model. For example, every partner would welcome
lots of rewards, but the partner must also be willing to take on a certain amount of risk. Another
partner may value the control aspect of the partnership, but to do so means that partner must
be willing to share in the other aspects.
RISK
It is not possible to entirely avoid risk at any level in broadband deployment. But calculated and
measured risk often yields benefits that would otherwise have been unattainable. One of the
most enticing components of a partnership is that it can reduce the utility's risk while helping
achieve its broadband goals.
Public financing to support the partnership could be one of Lodi's great risks, though this could
be a worthwhile investment to enable Lodi to retain some ownership and control of the assets
in a partnership model. Although it will entail some financial and political risk due to required
financing, the long-term dividends will be advantageous. This is especially true if Lodi can
execute a meaningful partnership with a private entity that will share in the risk.
Trade-offs may continue even if Lodi enters an agreement that doesn't require it to directly seek
capital investment. For example, Lodi may find a partner that is willing to use its own capital.
Even if Lodi does not directly seek financing, it must commit to a guaranteed payment schedule
and its credit rating could be impacted if a private partner arranges the financing.
Managing retail broadband networks is costly and ever-changing and introduces new risks for
utilities. Utilities that enter the retail market directly are understandably targeted by hostile
incumbent providers that make it challenging for the broadband utility to compete. Part of the
attraction to the public-private partnership model is that private entities operating in this
competitive space today are accustomed to managing these risks, and the partnership strives
to leverage these capabilities to reduce risk for the utility.
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1EA IM
As Lodi considers expanding its fiber infrastructure, it should continually weigh the benefits it
expects to receive as part of a partnership against its potential risk. One component is the
potential for a great degree of flexibility between partners, as financial returns aren't the only
reward valued by some partners. That is, Lodi can consider its community and economic
development priorities and pursue those benefits and rewards on the front-end of a
partnership arrangement.
Although public-private broadband partnership models are relatively new and evolving all the
time, there are several examples that the City can look to as guidance on how it might want to
proceed. It can begin by asking what are the rewards and benefits that it would like to see from
the fiber initiative.
Although benefits cannot be reliably calculated at this stage, Lodi can potentially look to other
electric utilities to get a sense of the goals other partnerships prioritized for the public entity's
benefit. This may help Lodi determine how to balance its risks, and which areas to focus on in
its pursuit of a partner.
CONTROL
Because this is the start of Lodi's broadband journey, it can choose during the negotiation
process its desired level of involvement in infrastructure deployment, network maintenance,
and operations. That is, the City can determine from the outset what level of involvement it
would like to have at every stage and in every arena of the public-private partnership process.
There are ways that Lodi can retain more control within the public-private partnership, and the
most important way is through retaining ownership of physical assets. This must be balanced
with risk, as it is likelythat Lodi will be required to fund part of the fiber deployment investment,
yet the more ownership it has in the fiber asset, the greater degree of control it can maintain.
This enables Lodi to make decisions about placement of assets, the pace and phasing of
deployment, and the overall network footprint. Further, it ensures that if the partnership fails
for any reason, Lodi still has a physical asset that it can use to negotiate a new partnership or
begin its own direct retail operations.
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SUPPLEMENTAL INFORMATION: FIBER BROADBAND ARCHITECTURE
As aspects of physical network design and deployment are discussed, it is important to
understand the various physical network components and their functions that together create
a fiber-optic network and the broadband utility in Lodi.
The fiber network to be deployed in the Lodi Utilities service area consists of three separate
groupings of technology that must be negotiated with various vendors and service providers
and then deployed into the service area communities. As shown in Figure 27, these groups
consist of the central office, the feeder/distribution network, and the fiber drops that connect
the network to member homes and businesses.
Figure 27. The Lodi Fiber-optic Network Architecture
Broadband
Shelter
Fiber
Backbone Fiber
Feeder
Cable
4% k%
Splice Case
� T
Fiber Aerial
Distribution Access
Cable Terminal
Fiber Service Drop
Fiber
Distribution
Hub (FDH)
_-
Splice Case
__
Fiber
Distribution Ground
Cable Access
_ ` Fiber
service
drop
Terminal
The recommended architecture for a network to support the scope and geographic scale of the
Lodi Utilities service area requires a network hierarchy that provides scalability and flexibility,
both in terms of initial network deployment and accommodating the increased demands of
future applications and technologies. Magellan utilizes these guiding principles for network
design to accommodate current and future needs, while minimizing unnecessary cost:
• Capacity - ability to provide efficient transport for data, even at peak levels
• Availability - elevated levels of redundancy, reliability, and resiliency
• Diversity - additional fiber routes to minimize impact from fiber failure
• Redundancy - ability to detect faults and re-route traffic
• Scalability - ability to physically grow network, increase data capacity and evolve with
newer technologies
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• Manageability - dashboard provisioning to manage subscribers and services
• Flexibility - ability to provide different classes of service to different customers
• Adaptability - can allow service providers on the physical layer with separate fiber
strands, or on the logical layer with a separate VLAN or VPN
• Security - controlled physical access to all equipment and facilities, plus embedded
network firewalling, segmentation, and filtering
The Lodi Utilities Fiber -Optic Backbone
The Lodi Utilities fiber-optic network would be connected to the internet through what is known
as a central office. The central office securely houses a set of networking equipment and
maintained in a physical data center environment. The physical location of the central office will
require at least two or more routes of the internet backbone into and out of the service area to
act as redundant convergence points of network traffic.
To reach customers, data moves out from the central office and into Lodi communities inside
fiber-optic cables that are either suspended from utility poles or buried underground.
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Figure 28. Network Equipment
Equipment Shelter (Exterior) Equipment Shelter (Interior)
w� ai, uuu,u, w�uuwuu
ILj
n,
Fiber Distribution Hub (Splitter Cabinet) Optical Network Terminal (At Each Home)
1'
Core Switching & Routing Equipment
Headend/Data Center Environment
Feeder and Distribution Network
The network of fiber-optic cables that spreads throughout the community is known collectively
as the Feeder and Distribution network. As the name suggests, this portion of the network
"feeds" the waves of light from the data center into neighborhoods throughout the service area.
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With the Lodi conceptual design, the electric substations act as network nodes throughout the
service area.
Figure 29. Fiber -to -the -Premises Conceptual Network Design
As the fiber-optic cable passes through a neighborhood, the fiber-optic cable connects to a
Local Convergence Point (LCP), which can be located either inside a facility or inside a pole- or
pad -mounted cabinet in the field. From this LCP, the optical signal is split and distributed into
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up to 32 different connections from the Network Access Point (NAP). It is from the NAP that the
final connection is made into customer premises via the fiber service drop.
Outside Plant Specifications
Aerial specifications are highly dependent on the pole segments and pole ownership. Any future
design engineering study will identify the final overhead requirements and specifications.
Overhead placement standards and specifications should be coordinated through public policy
process with input from relevant community stakeholders, where applicable. Likewise,
underground specifications should follow prevailing building codes and engineering standards
for Lodi. As needed and as possible, local codes should be updated with fiber-optic and
broadband -friendly perspectives. With fiber cable and conduit placement, the specifications are
more defined and standardized, as summarized in Figure 30 below.
Figure 30. Outside Plant Design Specifications and Assumptions
• Backbone cable, 288 -count fiber
• Lateral cable, average 96 -count fiber
• Single mode, loose -tube cable
• jacketed central member with outer
polyethylene jacket
• Sequential markings in meters
Aerial will be ADSS in power space
• 12 fibers per dry buffer tube
• Color coded buffer tubes based on
ANSI/TIA/EIA 598-B Standard Color
Fiber Service Drops
• 36" minimum acceptable depth
• 2" HDPE smooth wall reel -mounted pipe
• Warning tape installed at 12" or 18"
• Maximum fill ratio of 50%
• Maxcell or smaller innerduct
• Average pole span length is 200 feet
• All underground directional bore with no
rock
Vault placement at intersections, every
300ft in corridors to house lid -mounted
pedestals and splice enclosures
To reach the individual customer, connections are made via "fiber service drops," or "the drop,"
which refers to the collection of equipment and processes to physically connect customer
premises to the feeder and distribution network via fiber-optic service lines. At the home or
business, the fiber enters the premises at the Optical Network Terminal (ONT), typically
mounted near or alongside the utility meter on the side of a building. From there, the customer
may connect their own wired or wireless networking equipment for sharing the connection with
computers, phones, and appliances inside and around the premises.
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Whether Lodi owns the portion of the network beyond the node depends on the business
model and partnership arrangement. Those "drop costs" can be borne by the service provider,
as some utilities and cities prefer the LCP or node to serve as the demarcation point of their
network ownership, while others prefer to own the drops that connect to the customer
premises.
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SUPPLEMENTAL INFORMATION: CONSTRUCTION ESTIMATES
Magella
Fiber to the Premise Construction Estimate ADVISORS
IL Assumpdons
does not include equipment or drop costs
splitter cabinets sized at 288 count
avg size fiber priced at 96 count
24" min depth
(1) 2" conduits
hand holes every 400'
no rock adder included
pricing include soft surface restoration & Maintenance of traffic
FTTP Aerial Footage 527,8_56
FTTP Underground Footage 474,877
Premise Count 29,739
Item Labor Price Unit
Quantity
Subtotal Notes
Directional Bore (2) 2"
$ 12.00 FT
$
474,877
$ 5,698,524
Furnish & Install Muletape in New duct
$ 0.25 FT
$
949,754
$ 237,439
Install #12 Tracer wire
$ 0.25 FT
$
474,877
$ 118,719 assumes no rock
Install Fiber Cable in Duct - Including All Slack
$ 0.80 FT
$
569,852
$ 455,882
Remove & Restore Concrete
$ 18.00 SQ FT
$
4,749
$ 85,478 assume 1 sq. feet per 100 feet of install
Install Handhole
$ 300.00 EA
$
1,900
$ 569,852 every 250'
Install New Splice Case & Prep Cable
$ 250,00 EA
$
4,011
$ 1,002,733 every 250'
Ground Splice Case
$ 150,00 EA
$
4,011
$ 601,640
Prep Cable in cabinet
$ 250,00 EA
$
71
$ 17,750
Splice Fibers
$ 20.00 EA
$
64,175
$ 1,283,498 assumes 8 per nap multiplied by 3
Install splitter cabinet
$ 2,500.00 EA
$
71
$ 177,500 assumes 250 connections per 288 cabinet
install concrete base
$ 600.00 EA
$
71
$ 42,600
Terminate Fibers
$ 25.00 EA
$
38,880
$ 972,000
Test Network
$ 2,500.00 ALL
$
1
$ 2,500
Install Marker Post
$ 35.00 EA
$
1,425
$ 49,862 75% of handholes
Install Marker Post with Test Station
$ 50.00 EA
$
475
$ 23,744 25% of handholes
Install pole attachments
$ 80.00 EA
$
2,933
$ 234,603 assumes 180' avg span lengths
Install Strand
$ 1.10 FT
$
527,856
$ 580,642
Install snow shoes
$ 100.00 EA
$
1,056
$ 105,571
install aerial slack
$ 1.80 FT
$
52,786
$ 95,014
install / lash aerial cable
$ 1.80 FT
$
527,856
$ 950,141
tree trimming
$ 5.00 FT
$
26,393
$ 131,964 assumes 5% of aerial route needs tree trimming on this project
install pole risers
$ 310.00 EA
$
147
$ 45,454 assumes 5% of poles
install down guy & anchors
$ 210.00 EA
$
440
$ 92,375 assumes 15% of poles
Make Ready budget
$ 1,000.00 pole
$
293
$ 293,253 assumes 10% of poles
Item Material
Labor Total
Price Unit Quantity
$ 13,868,738
Subtotal Notes
Mule tape
$ 0.05 FT
$
949,754
$ 47,488
96 count fiber
$ 1.05 FT
$ 1,150,494
$ 1,208,019 includes 5% waste - average size cable
Splice Trays
$ 45.00 EA
$
4,011
$ 180A92
Splice Cases
$ 706,00 EA
$
4,011
$ 2,831,718
Handholes
$ 650.00 EA
$
1,900
$ 1,234,680
#12 Tracer Wire
$ 0.35 FT
$
474,877
$ 166,207
Ground Rods
$ 25.00 EA
$
4,011
$ 100,273
Marker Post
$ 45.00 EA
$
1,425
$ 64,108
Marker Post with Test Station
$ 65.00 EA
$
475
$ 30,867
2" Pipe
$ 1.00 FT
$
474,877
$ 474,877
pole attachment hardware
$ 45.00 POLE
$
2,933
$ 131,964
6m Strand
$ 0,10 FT
$
527,856
$ 52,786
snow shoes
$ 80,00 EA
$
1,056
$ 84,457
lashingwire
$ 0.01 FF
$
527,856
$ 5,279
u guard
$ 125.00 POLE
$
147
$ 18,328
anchors
$ 125.00 EA
$
440
$ 54,985
288 count splitter cabinet w tails - fully loaded
$ 8,200.00 EA
$
12
$ 98,400
576 count splitter cabinet w tails - fully loaded
$ 14,000.00 EA
$
59
$ 826,000
cabinet pad
$ 600.00 EA
$
71
$ 42,600
1 x32 splitters
$ 800.00 EA
$
639
$ 511,200
Material Total
Contingency
Total FfTP
$ 8,164,728
217E
$ 26,697,597
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65
RESOLUTION NO. 2021-35
A RESOLUTION OF THE LODI CITY COUNCIL ACCEPTING CITY OF
LODI BROADBAND FEASIBILITY STUDY COMPLETED BY MAGELLAN
ADVISORS, LLC, OF DENVER, COLORADO
WHEREAS, in March 2020, the Lodi City Council approved a Professional Services
Agreement with Magellan Advisors, LLC, of Denver, Colorado, to perform a comprehensive
Broadband Feasibility Study; and
WHEREAS, the purpose of the study was to evaluate the opportunities to expand Lodi's
existing fiber-optic network to meet the City's growing needs for fiber connectivity as well as
consider what additional future opportunities the fiber expansion could yield for the City in terms
of enhancing local broadband services for residents and businesses; and
WHEREAS, Magellan has provided a comprehensive study that will allow Lodi to make
informed decisions regarding the existing fiber-optic network as well as available business models
and deployment options going forward; and
WHEREAS, the results of the study, including recommendations regarding a phased
implementation approach, were presented to the City Council during its January 19, 2021
Shirtsleeve Session; and
WHEREAS, as recommended by Magellan, the initial phase will include upgrading the
existing fiber backbone to support the City's growing needs across many departments and
applications; and
WHEREAS, the estimated cost associated with the initial phase of rebuilding and
expanding the City's existing fiber-optic network is approximately $950,000; and
WHEREAS, the new fiber backbone would be dimensioned with extra capacity that could
be used to support potential future broadband services in Lodi; and
WHEREAS, actual project and funding approval requests will be brought back to Council
for consideration as part of a future annual budget process.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby accept
the City of Lodi Broadband Feasibility Study completed by Magellan Advisors, LLC, of Denver,
Colorado, attached hereto.
Dated: February 17, 2021
I hereby certify that Resolution No. 2021-35 was passed and adopted by the City Council
of the City of Lodi in a regular meeting held February 17, 2021 by the following votes:
AYES: COUNCIL MEMBERS — Chandler, Hothi, Khan, Kuehne, and
Mayor Nakanishi
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
JENNIFER USMIR
s City Clerk
2021-35
CITY OF LODI
Broadband Feasibility
Study
Prepared by: Magellan Advisors
Version: 1.0
Mage//an
ADV/
TABLE OF CONTENTS
EXECUTIVESUMMARY........................................................................................................................................... 2
FIBER IS ESSENTIAL INFRASTRUCTURE................................................................................................................ 4
A. Pandemic Preparedness........................................................................................................................... 4
B. Healthcare.................................................................................................................................................. 5
C. Economic Development............................................................................................................................ 6
D.Education.................................................................................................................................................... 7
E. Grid Modernization................................................................................................................................... 7
F. Smart City Applications............................................................................................................................. 9
G.Broadband Services................................................................................................................................
10
FIBER EXPANSION STRATEGY FOR LODI............................................................................................................
12
A. PHASE 1: Upgrade the City's Fiber Backbone.......................................................................................
13
B. PHASE 2: Broadband Strategy Development.......................................................................................
18
C. PHASE 3: Broadband Expansion to Businesses...................................................................................
19
D.PHASE 4: Broadband Expansion to Homes & Businesses..................................................................
22
SUPPLEMENTAL INFORMATION: THE STATE OF BROADBAND IN LODI........................................................
28
A. Internet Service Providers......................................................................................................................
28
B. Services Available....................................................................................................................................
36
SUPPLEMENTAL INFORMATION: REGULATORY ISSUES..................................................................................
39
A. Federal Regulation of Broadband.........................................................................................................
39
B. Federal Regulation of Wireless Services...............................................................................................
42
C. What is 5G?...............................................................................................................................................
44
D.The FCC's Small Cell Order.....................................................................................................................
47
E. The FCC Rules under the Spectrum Act................................................................................................
48
F. The FCC's "Clarification" Ruling..............................................................................................................
48
G.State and Local Policy..............................................................................................................................
49
H.Dig Once Policy or Ordinance................................................................................................................
49
I. Governance..............................................................................................................................................50
J. Political Will..............................................................................................................................................
50
SUPPLEMENTAL INFORMATION: BROADBAND BUSINESS MODELS.............................................................
52
A. Lodi Leases Fiber.....................................................................................................................................
53
B. Lodi Provides Services.............................................................................................................................
54
C. Lodi Partners with Providers..................................................................................................................
55
D.Benefits of Partnerships.........................................................................................................................
56
E. Risk, Reward & Control in Partnerships................................................................................................
57
SUPPLEMENTAL INFORMATION: FIBER BROADBAND ARCHITECTURE.........................................................59
The Lodi Utilities Fiber -Optic Backbone....................................................................................................
60
Feeder and Distribution Network..............................................................................................................
61
Outside Plant Specifications.......................................................................................................................
63
FiberService Drops.....................................................................................................................................
63
SUPPLEMENTAL INFORMATION: CONSTRUCTION ESTIMATES......................................................................65
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Mage//an
ADV/
TABLE OF FIGURES
Figure 1. Possible Phases of Broadband Deployment....................................................................................13
Figure 2. Sample Fiber Allocation Cable for Municipal, Smart City & Broadband.......................................14
Figure 3. Fiber Backbone Network Rebuild & Enhancement.........................................................................15
Figure 4. Fiber Backbone Rebuild Construction Estimates.............................................................................16
Figure 5. Fiber Backbone Underground Construction....................................................................................17
Figure 6. Areas Around Fiber Backbone with Service Available.....................................................................
20
Figure 7. Incremental Fiber Deployment Strategy...........................................................................................
22
Figure 8. Similar Cities with Municipal Broadband Systems...........................................................................
23
Figure 9. Market Penetration for Similar Cities................................................................................................
24
Figure 10. Fiber -to -the -Home High -Level Design.............................................................................................25
Figure 11. Citywide Fiber -to -the -Home Deployment.......................................................................................27
Figure 12. Internet Service Providers for Lodi Residents................................................................................28
Figure 13. Residential Service Provider Offerings by Address in Lodi...........................................................29
Figure 14. AT&T Published Residential Internet Service Offerings in Lodi ...................................................
30
Figure 15. Comcast Published Residential Internet Service Offerings in Lodi..............................................30
Figure 16. SoftCom Published Residential Internet Service Offerings in Lodi ..............................................
31
Figure 17. AT&T Published Business Internet Service Offerings in Lodi .......................................................
32
Figure 18. Comcast Published Business Internet Offerings in Lodi...............................................................32
Figure 19. SoftCom Published Internet Service Offerings in Lodi..................................................................33
Figure 20. Long-haul Network Providers Servicing Lodi.................................................................................
34
Figure 21. Metro Network Providers Serving Lodi...........................................................................................35
Figure 22. CPUC Residential Coverage Maps in Lodi.......................................................................................36
Figure 23: CPUC Business Coverage Maps in Lodi...........................................................................................37
Figure 24. Business Models for Lodi to Consider.............................................................................................
52
Figure 25. Cities with Dark Fiber Leasing & Rates............................................................................................
53
Figure 26. Lodi's Responsibilities in Each Business Model..............................................................................56
Figure 27. The Lodi Fiber-optic Network Architecture.....................................................................................
59
Figure28. Network Equipment..........................................................................................................................
61
Figure 29. Fiber -to -the -Premises Conceptual Network Design......................................................................62
Figure 30. Outside Plant Design Specifications and Assumptions.................................................................
63
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EXECUTIVE SUMMARY
Over 3,000 cities in the US have invested in fiber networks to support internal and community
needs. Municipal electric utilities are particularly well known for deploying fiber to support
SCADA communications and the modernization of the electric grid. In doing so, they have been
able to expand this fiber to support other internal and community needs, from connecting city
facilities, to providing fiber access to schools, to connecting traffic signals, streetlights and public
safety cameras. The City of Lodi commissioned this Broadband Feasibility Study to evaluate the
opportunities to expand its existing fiber-optic network to:
(1) Meet the City's growing needs for fiber connectivity among internal departments,
electric utility modernization and smart city applications.
(2) Consider what additional future opportunities the fiber expansion could yield for the
City, in terms of enhancing local broadband services for residents and business.
Magellan Advisors, a broadband development firm that provides broadband planning,
engineering and implementation and who has worked with over 100 municipal utilities in the
US, was retained by the City in 2019 to perform the Study.
The City owns an existing fiber backbone of approximately 20 miles and which runs through
the major corridors of the City. The existing fiber is used for:
• City IT: Connecting City facilities to one another so all departments can share data such
as email, video conferencing, GIS and other applications;
• Utilities: Collection of customer electric and water usage data for billing and monitoring
• Public Safety: Fire alerting for fire stations and radio communications for police and fire
The existing fiber backbone is running out of capacity to support the City's growing connectivity
needs. The City will require more fiber in the future to support:
• Automated Meter Reading - Fiber will support 2 -way communications between
household electric meters and our electric infrastructure to more accurately measure
usage and peaks;
• Increased cybersecurity requirements for electric utility communications
• Improved and more reliable communications between City facilities
• Enhanced redundancy to support more critical applications
• Future smart city applications that require the City to connect more devices in the field
Magellan's engineering team evaluated the current network and the requirements to upgrade
the existing fiber backbone to support the City's growing connectivity needs. By investing
$950,000 in fiber enhancements, the City could upgrade its current fiber backbone with a new,
larger fiber cable running through the City's major corridors. This backbone would support the
City's growing needs across many departments and applications. Due to the low capital
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investment needed and the positive, long-term impact that the new fiber backbone will make
on the City's operations, Magellan recommends that the City move forward with upgrade to its
fiber backbone.
In addition to internal uses, the fiber backbone could be leveraged to enhance broadband
services in the Lodi community. The new fiber backbone would be dimensioned with extra
capacity that could be used to lease fiber to broadband providers or develop public-private
partnerships with them, at no additional cost to the project. Several scenarios were evaluated
to inform the City of such opportunities. The City should consider these and other broadband
scenarios as future endeavors once the fiber backbone has been upgraded. Hwoever, Magellan
believes the City should focus on the near-term task of upgrading the fiber backbone first.
• The City could market new fiber -based internet services to about 1,000 businesses in
close proximity to the new fiber backbone (in cooperation with current providers). If 10%
of these businesses subscribed, it would cost the City approximately $350,000 in
additional fiber construction and a payback would be achieved in 7 to 13 years,
depending on the final fees charged to the provider(s). Retail pricing to these businesses
could be approximately 33% lower than they pay today, saving these 1,000 businesses
an average of $270,000 a year on their internet costs. This creates a positive and direct
impact to their bottom line and helps the City retain local businesses. It also enables the
City to directly "lower the cost of doing business in Lodi."
• The City could embark on a citywide buildout to all homes and businesses in partnership
with an existing provider. This initiative would require a $45 million investment by the
City and fees paid by the provider equal or greater than 30% of gross revenues. This
would cover the City's debt service for the $45 million investment, management costs
and overhead to ensure repayment over 20 years. Negotiating a higher revenue share
of 50% would generate a surplus for the City of $16 million over the first 10 years and
$34 million over the 20 year period.
These examples illustrate possible broadband opportunities for the City, but many other
iterations are possible. The City should consider each option as it grows its broadband presence
in the community using a "crawl, walk, run" approach laid out in this study. The most immediate
next steps for the City to take if its desire is to begin the process of expanding broadband
services in Lodi follow:
Adopt the Broadband Feasibility Study formally;
Complete a full engineering design of the fiber backbone rebuild to identify all
requirements and constraints;
3. Allocate funding for the fiber backbone upgrade of $950,000;
4. Develop an RFP to select a construction contractor for the fiber build.
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FIBER IS ESSENTIAL INFRASTRUCTURE
Fiber is the gold standard for municipal communications, broadband services, and internet
access. Fiber is used to transmit large amounts of data securely over long distances with high
reliability. It supports a wide range of applications and is scalable to support nearly unlimited
data capacity. Cities that own fiber consider it a capital infrastructure asset similar to water,
road, and electric infrastructure and it has a lifespan of up to 50 years.
Over 3,000 cities in the US own some form of municipal fiber and have used it for decades to
support their communities. These networks are becoming increasingly important to cope with
the rapid growth in connected devices, from utility assets, to streetlights, to traffic signals, to
surveillance cameras. Cities that maintain these networks are able to accommodate these
"Smart City" technologies that make them more efficient, reduce costs and increase the value
they deliver to their constituents.
Within the past 15 years, some cities have expanded the use of these networks to enhance local
broadband internet services in their communities in order to support the needs of residents,
businesses, and community organizations. As high-speed internet access has become essential
to support economic development, education, healthcare, and other community functions,
cities have leveraged their networks to provide fiber -based internet services, either directly or
through partnerships with private broadband providers.
A. Pandemic Preparedness
In addition to private and public organizations, broadband supports community needs
including telemedicine, aging in place, distance learning, and telecommuting. The COVID-19
pandemic has accelerated the long-term trend of digitalization of business processes, the
economy overall, and everyday life.
The coronavirus pandemic is accelerating shifts and trends toward internet technologies and
business trials. Perhaps the obvious example is the boom in Zoom meetings but there are many
other trends developing or accelerating as well, including an increase in remote telework and
distance learning. The proportion of companies ramping up globally on automation
technologies will at least double over the next two years, according to a Bain survey of nearly
800 executives.'
1 "Pandemic Speeds Up Corporate Investment in Automation", The Wall Street Journal, April 9, 2020.
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The Wall Street Journal recently pointed out that:
"The coronavirus pandemic is deepening a national digital divide, amplifying gains for
businesses that cater to customers online, while businesses reliant on more traditional
models fight for survival. The process is accelerating shifts already under way in parts
of the US economy in ways that could last long after the health crisis has passed...'z
From a community perspective, interconnection of billions of devices allows evolution of smart
cities, smart homes, smart schools, safer and autonomous vehicles, and a safer, healthier,
smarter place to live. From a business perspective, interconnection of devices provides data
previously unavailable to inform operations, enhance decision-making and automate/innovate
in the production process.
B. Healthcare
Healthcare is increasingly bandwidth intensive. As more treatments, devices, and doctors go
online, healthcare organizations will continue to be some of the community's highest
bandwidth users with increasing needs for reliability, security and speeds delivered only byfiber
networks. Remote aspects of healthcare, both monitoring and acute care, increase demand on
bandwidth through the use of robotics and haptic devices. All telehealth fields are growing,
including teletherapy and telepsychiatry, with universities and colleges needing real-time
access to licensed counselors for interventions. Policies in remote imaging, cardiology, and
transmission of Electronic Health Records are expected to increase demands further with needs
for low latency becoming increasingly critical.
In Danville, VA, municipal broadband has long served the Danville Regional Medical Center, one
of the city's largest employers. Medical companies Ohio Health and Cardinal Health, Battelle
Memorial Institute, a non-profit that relies on quantum computing to encrypt information, and
numerous educational facilities use the Dublin, OH municipally -owned fiber network for their
healthcare, education, and research needs.
"Aging in place" is a term used to describe seniors living in the place of their choice for as long
as possible, while getting the services they require, and all of their needs met without moving
in with children or being placed in a nursing or assisted living facility. New gadgets and
technological advancements have been made to make "aging in place" easier and more
attainable for the growing population of seniors. Home-based telehealth, or home health
monitoring solutions, keep physicians in touch with patients and monitor their health without
visiting an office. There have been other advances including but not limited to fall detection
systems, wearable sensors that
2 "Crisis Speeds Up Economy's Shift'; The wall Street Journal, Apri12, 2020.
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collect real time health data, and stove guards .3 Reliable, high-speed internet access is required
for these new technological advances, and the retirees of Lodi would see value in being able to
utilize these products and services.
C. Economic Development
Economic development can be thought of as improving livability through, among other things,
jobs, education, preservation, public safety, and building a strong sense of community.
Broadband infrastructure is a driver of such economic development, and advocates insist that
broadband will improve the local economy. Broadband from outside providers may provide
better connectivity, but higher prices paid to those outside service providers may not
necessarily lead to broad economic development in the community.
Across the board, industries increasingly rely upon transmitting and receiving large amounts of
data and the internet to operate and thrive. Consequently, the availability and affordability of
broadband has become a driver for decisions about where companies locate their
headquarters, manufacturing facilities, distribution centers and satellite locations.
To attract and retain these industries, infrastructure that supports a competitive environment
for affordable, reliable, redundant broadband services must be readily available in areas where
office, technology and industrial parks and other major commercial developments exist today
or are being planned and built. In some cases, local governments have taken it upon themselves
to ensure that this infrastructure exists so they can continue to drive economic investment in
their regions. This includes working with residential developers for the delivery of fiber -to -the -
home for support of home-based businesses, telemedicine, aging in place, public safety, and
emergency response. Other benefits include managing the energy grid and increasing housing
and property values for the high-tech jobs needed to support economic growth supported by
the internet.
Although it would be misleading to imply that the availability (or lack thereof) of broadband is
the only factor by which businesses decide their locations, many companies do consider a lack
of affordable, reliable broadband a major barrier to entry. In locations such as Santa Monica,
California, major employers have been dissuaded from relocating because the local
government was able to offer an alternative cost-efficient broadband service. Following in this
effort, cities and counties across the country are implementing fiber and wireless networks for
economic development and quality of life. These include Fort Collins, CO, Centennial, CO,
Inglewood, CA, Culver City, CA, Santa Clarita, CA, Oxnard, CA, Ventura, CA, Paso Robles, CA, San
Luis Obispo, CA, San Leandro, CA, Carlsbad, CA, Chattanooga, TN and hundreds more
throughout the country.
3 http://aginginplace.com
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D. Education
Educational institutions around the country have become one of the greatest beneficiaries of
locally owned fiber networks. Education has become a broader community responsibility, with
organizations such as libraries and non -profits providing support, internships and alternatives
as education extends beyond the traditional classroom environment - as students perform
assignments outside of school and as adults look to continue lifelong learning.
Connecting to innovative educational programs and tools requires high-speed, reliable and
affordable connectivity. As virtual support moves online, and access to free, world-class
educational resources expand, so does a community's responsibility to provide for all its
learners beyond the school day. Rural residents served by Lodi Utilities do not have the same
opportunity as those in more urban areas, as connectivity continues to be an issue for
communities around Lodi.
Access to broadband is an important component of education, inside the classroom and in the
home. Online applications used to support education and training efforts require high-speed
broadband, with services that meet performance requirements to support real-time video and
voice applications for distance learning and teleconferencing. Today's teaching resources
incorporate multimedia—sound, graphics, video, and data, while the use of online digital
textbooks continue to expand.
This integration of technology into learning is only going to increase over time, those students
without access in the home may fall behind in their academic success further widening the
social issue termed the "digital divide" or "homework gap." The FCC states that although seven
in ten teachers assign homework that require broadband access to complete, one in three
students live in households without access to high-speed broadband internet. There are such
rural communities around Lodi that do not have the connectivity for students living there.
E. Grid Modernization
Technology is transforming public utilities at a rapid pace and is reshaping how customers both
consume energy and interact with their utilities. Most notably, technology made possible
through fiber -optics breathes new life into aging distribution systems at a time when distributed
energy resources and renewable energy are challenging utility business models and centralized
generation.
The US Department of Energy acknowledges that "Our electric infrastructure is aging, and it is
being pushed to do more than it was originally designed to do." 4 Grid modernization generally
refers to the improvements needed in the power grid to accommodate all the rapid
4 https://www.energy.gov/oe/activities/technology-development/grid-modernization-and-smart-grid
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technological changes happening in the generation, transmission and distribution of electricity.
Local utilities can modernize their local grid to make it "smarter" and more resilient through
local sensors and controls that communicate and work together to deliver electricity more
reliably and efficiently.
Short term benefits allow utilities to reduce the frequency and duration of power outages,
reduce storm impacts and restore service faster when outages occur. Across the longer term,
utilities benefit from a modernized grid by improved security, reduced peak loads, data -driven
decision-making, and lower operational costs. Additionally, a smart grid allows for the increased
integration of renewables and distributed energy generation sources.
Energy customers can manage their own energy decisions and costs through easier access to
their own consumption data. Advances in the economical production of lower -carbon energy
production, energy storage and control systems are giving rise to consumers being able to drive
their own choices. These choices ultimately have impacts on demand and some have the
potential to produce a new energy marketplace at the local distribution level.
Progressive utilities today are working to increase monitoring, improve reliability and integrate
distributed energy sources to bring a new array of assets online. As energy storage, distributed
energy sources and energy-efficient consumer options continue to make advances, grid
modernization and secure and real-time data via fiber will be key for the growth and relevance
to the smart grid utility.
The drivers of investments that utilities are making to modernize the grid stem, ironically, from
assets that utilities often do not own, namely distributed energy sources such as rooftop solar
arrays, electric vehicles and battery energy storage systems. To make these investments
valuable, utilities can use monitoring, control and automation technologies to unlock the full
potential of grid assets for greater reliability, efficiency and security.
Electricity distribution is regulated by the states, and interstate transmission is regulated by the
federal government. From a political standpoint, grid modernization is so integrated into the
fabric of society that government policies on the environment, the economy and homeland
security have influences on the modernizing the grid. Government policy is motivating the
growth in renewables; therefore, modernizing the grid is needed to enable the non -carbon shift
in the generation mix, and government policies will continue to encourage this.
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F. Smart City Applications
In considering opportunities for Lodi, the fiber network can be the foundation for programs
that increase efficiencies, lower costs, reduce environmental impacts and enhance quality of
life by relying more on technology. While this optimized internal connectivity is known as "Smart
Grid" for utilities, as better connectivity evolves throughout Lodi Utilities service area
communities, the network gives rise to the notion of "Smart Homes" and "Smart Cities."
With a fiber network in place, as Lodi Utilities expands its online services, all applications
migrated to a community network enjoy greater availability and increased bandwidths.
Limitless bandwidth and capacity create more effective and efficient civic organizations, with
reliable broadband enabling organizations to:
• Improve operational efficiencies
• Reduce direct and indirect costs
• Provide enhancements to public safety
• Provide more information to citizens
• Enable interactions with organizations
• Respond quickly to the local needs
• Better serve the local community
• Ensure emergency preparedness
Organizational applications drive the promise of the Smart City through consumer technologies
and connectible devices. Such devices scattered by the hundreds, if not thousands, throughout
a community are networked seamlessly and generate an enormous amount of data.
Individually, Smart City savings might only be measured in the hundreds of dollars, such as to
help wineries monitor their water usage in order to reduce the number of gallons used to create
wine. Collectively, however, these savings can add up.
Scaling local level economic impacts to the service area level or even the state level and to a
national level could be staggering. Gartner Research reports that IoT supported spending
should reach $7725 billion globally, with IoT spending in the US to total $194 billion this year,
with consumer IoT spending to be $62 billion of that. Looking globally, a McKinsey report says
that efficiencies and opportunities created by IoT may have a collective financial and
nonfinancial benefits of as much as $11 trillion per year by 2025 across all sectors.'
The Smart Cities Council publishes a "Smart Cities Readiness Guide" with detailed information
on Smart City drivers and barriers, benefits, and responsibilities.' From that guide, select
opportunities are outlined as follows:
• Smart Buildings: Using sensors, meters, and software to monitor and control a range of
building functions including lighting, energy, water, HVAC, communications, video
monitoring, intrusion detection, elevator monitoring and fire safety.
5 https:Hinformationmatters.net/internet-of-things-statistics/
6 www.mckinsey.com/insights/preparing_it systems and organizationsJor the internet of things
7 http://rg.smartcitiescouncil.com/readiness-guide/article/drivers-whats-driving-smart-cities
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• Health and Human Services: Transform the delivery of essential health and education
services, since "an educated and healthy city is a successful and wealthy city."
• Energy: A priority for Smart Cities, which typically start with smart energy systems.
• Digital City Services: Services to increase citizen engagement, employee productivity,
competitiveness, citizen satisfaction and cost reduction, delivered via smartphones.
• Mobility and Logistics: Provides safer, more efficient transportation and parking. While
this can ease commuting times for individuals, the macro cost savings are tremendous
for a municipal government.
• Public Safety: Infrastructure and staff to keep the public safe, fostering quicker and
smarter responses without duplicated effort to save lives, property and resources.
• Smart Payments and Finance: Digital disbursements and collections generate significant
savings and increases operational efficiency.
• Smart People: A new City Hall mindset that is more open, transparent, and inclusive to
build two-way communications and create stronger initiatives.
• Telecommunications: An adequate infrastructure is vital for business and community
development and underlies the Smart City.
• Waste Management: Collect and process efficiently, recovering materials that have
value, while benefitting public health and the environment through zero waste efforts.
• Water and Wastewater: Where it takes water to produce electricity, and electricity to
pump water, the Smart City provides for production of both energy and water.
G. Broadband Services
Public utilities that invest in broadband improve the access, affordability and quality of
broadband services over what has traditionally been provided by broadband providers. Rather
than taking profits from the network, public utilities often seek to reinvest in the network, or
to stabilize or lower prices for their customers. They also strive to maintain consistent pricing
at the same levels for their customers rather than pricing services at different rates depending
on location or promotional offers.
Many utilities offer low-cost "lifeline" packages for disadvantaged or low-income residents to
enable them to get services they couldn't otherwise afford. A recent report from Harvard
University's Berkmen Klein Center for Internet and Society found that municipal/utility
broadband networks achieve lower prices for their subscribers than comparable services from
traditional broadband providers. A few key points from the study include:
• When considering entry-level broadband service—the least -expensive plan that
provides at least 25/3 Mbps service -23 out of 27 community -owned FTTH
providers charged the lowest prices in their community when considering the average
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cost of service over a four-year period, considering installation and equipment costs and
averaging any initial promotional rates with later, higher rates.
• In these 23 communities, prices for the lowest -cost program that met the current
definition of broadband were between 2.9% and 50% less than the lowest -cost such
service offered by private providers in that market. In the other four cases, a private
provider's service cost between 6.9% and 30.5% less.
• While community -owned FTTH provider pricing is generally clear and unchanging,
private providers offer initial promotional prices and then raise the monthly price
sharply. The price hike often ranges between $10 and $40 after 12 months.
Keeping Dollars in the Local Economy
When local utilities provide FTTP services, revenues from internet, video and other services stay
local in the community rather than being exported. Subscriber fees are reinvested into the
utility's plant and operations to sustain and grow the system rather than being taken out of the
local economy. These reinvested dollars bring new benefits to subscribers in faster speeds and
new services that utilities continually deploy in their FTTP networks.
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FIBER EXPANSION STRATEGY FOR LODI
This Study recommends a crawl, walk, run approach for expansion of the City's fiber network.
First, the existing fiber network cannot support future City needs and needs to be upgraded.
Phase 1 of the expansion focuses on enhancing the City's existing fiber backbone to support its
internal needs and deploying an upgraded fiber backbone that can support future broadband
services at no additional cost. This is a no -risk and a sunk -cost project, whereby the City would
embark on a new capital project strictly to meet its own needs. The City could choose to pursue
broadband programs using its new network or not, depending on leadership's direction.
Once the fiber backbone is upgraded, the City has many options to consider to enhance the
local broadband environment. Each of these opportunities needs to be thoroughly considered,
in terms of the City's local broadband market, providers, needs, rates and availability. The
second half of this Study is geared to providing detailed information to the City as a starting
point for future broadband initiatives. It also provides some suggested approaches if the City
were to consider a broadband program. These approaches are described below, as Phases 2, 3
and 4.
Once the fiber backbone is complete, Phase 2's focus is to engage broadband providers that
work with the City to provide broadband services to the community. Phase 3 consists of new
targeted fiber construction to high-priority areas of the City such as the industrial park where
these providers may deliver services. Phase 4 builds on the successes of the prior phases by
expanding fiber to greater areas of the Lodi community, serving entire business corridors and
neighborhoods.
The City has some discretion over the pace of implementation; however, as the City moves into
Phases 2 through 4 of the broadband expansion, it must be prepared to implement projects at
the pace that broadband providers are accustomed to in the private sector to ensure that the
City meets their deployment timeframes and customer receive service when expected.
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Figure 1. Possible Phases of Broadband Deployment
PHASES 2-4 ARE OPTIONAL
A. PHASE 1: Upgrade the City's Fiber Backbone
Phase 1 is focused on upgrading the City's existing fiber-optic backbone. The new backbone
would follow similar routes as the existing backbone or use alternative routes in cases where
fiber running lines created new opportunities for City applications or broadband connections.
Exact running lines would be determined at the time of detailed engineering, fielding and
permitting.
This Study focused on utilizing the same running lines as the existing backbone and installing
new 432 -count backbone fiber cables on existing pole lines. The larger cable size would enable
the City to utilize the fiber for City departmental needs, Smart City and IoT applications and
future broadband needs. The 432 -count fiber would give the City sufficient capacity to allocate
fibers within the 432 -count cable for these purposes and support reserve capacity for future
purposes. Within the 432 -count cable, 36 12 -count buffer tubes would be assigned for each
department, application or broadband requirement. A sample allocation table is shown below,
which would be customized to the City's particular internal and external stakeholders.
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Figure 2. Sample Fiber Allocation Cable for Municipal, Smart City & Broadband
Buffer Tube #
Fiber Start
Fiber End
Allocation
Buffer Tube #
Fiber Start
Fiber End
Allocation
1
1
12
Utilities
19
217
228
Broadband
2
13
24
Utilities
20
229
240
Broadband
3
25
36
Utilities
21
241
252
Broadband
4
37
48
Utilities
22
253
264
Broadband
5
49
60
Information Technology
23
265
276
Broadband
6
61
72
Information Technology
24
277
288
Broadband
7
73
84
Information Technology
25
289
300
Broadband
8
85
96
Information Technology
26
301
312
Broadband
9
97
108
Police &Fire
27
313
324
Broadband
10
109
120
Police &Fire
28
325
336
Broadband
11
121
132
Police &Fire
29
337
348
Broadband
12
133
144
Police &Fire
30
349
360
Broadband
13
145
156
Smart City & IoT Reserve
31
361
372
Broadband
14
157
168
Smart City & IoT Reserve
32
373
384
Broadband
15
169
180
Smart City & IoT Reserve
33
385
396
Broadband
16
181
192
Smart City & IoT Reserve
34
397
408
Broadband
17
193
204
General Spare
35
409
420
Broadband
18
205
216
General Spare
36
421
432
Broadband
Construction of the fiber backbone would include installation of the 432 -count cable, splice
enclosures, splicing and termination into key facilities. Figure 18 illustrates the backbone
network rebuild, with the red running lines representing backbone routes through the City.
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Figure 3. Fiber Backbone Network Rebuild & Enhancement
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Figure 19 provides cost estimates for aerial construction, using existing rates from recent aerial
fiber construction projects in the Northern California region. Total costs for the rebuild are
estimated at $752,000 before contingencies. A 25% contingency rate on labor and materials has
been added to the base estimate to account for actual construction costs, yielding a total
estimate of $943,000 for the aerial portion of the rebuild.
Figure 4. Fiber Backbone Rebuild Construction Estimates
Item
Labor
Price
Unit
Quantity
Subtotal Notes
1
Aerial Engineering
$ 1.50
Ft
53,988
$ 80,982.00
2
Install New Splice Case & Prep Cable
$ 250.00
Ea
12
$ 2,969.34 assumes straight splice every 5000'
3
Ground Splice Case
$ 150.00
Ea
12
$ 1,781.60
4
Prep Cable in Panel
$ 250.00
Ea
10
$ 2,500.00 assume (10) 432 fibers in 10 panels
5
Splice Fibers
$ 20.00
Ea
1,710
$ 34,206.80 assumes backbone 432 fibers
6
Install Loaded 144 Port Panel
$ 250.00
Ea
10
$ 2,500.00
7
Terminate Fibers
$ 25.00
Ea
1,440
$ 36,000.00
8
jTest Network
$ 2,500.00
All
1
$ 2,500.00
9
Install pole attachments
$ 80.00
Ea
300
$ 23,994.67 assumes 180' average span lengths
10
Install Strand
$ 1.10
Ft
53,988
$ 59,386.80
11
Install snowshoes
$ 100.00
Ea
108
$ 10,797.60
12
install aerial slack
$ 1.80
Ft
5,399
$ 9,717.84
13
install / lash aerial cable
$ 1.80
Ft
53,988
$ 97,178.40 aerial footage
14
tree trimming
$ 5.00
Ft
2,699
$ 13,497.00 assumes 5% of route
15
install pole risers
$ 310.00
Ea
15
$ 4,648.97 assumes 5% of poles
16
install down guy & anchors
$ 210.00
Ea
45
$ 9,447.90 assumes 15% of poles
17
Make Ready budget
$ 1,000.00
Ea
60
$ 60,000.00 assumes 10% of poles
Labor Subtotal
$ 452,108.91
Item
Material
Labor Contingency Rate
Labor Contingency
Labor Total
Price Unit
Quantity
25%
$ 113,027.23
$ 565,136.14
Subtotal Notes
18
432ct Fiber
$ 3.50
Ft
59,387
$ 207,853.80 includes 5% waste
19
Splice Trays
$ 45.00
Ea
71
$ 3,206.89
20
Splice Cases
$ 706.00
Ea
12
$ 8,385.42 large style closre
21
4u Fiber Panels - Loaded
$ 4,668.00
Ea
10
$ 46,680.00
22
pole attachment hardware
$ 45.00
Ea
300
$ 13,497.00
23
6m Strand
$ 0.10
Ft
53,988
$ 5,398.80
24
snow shoes
$ 90.00
Ea
108
$ 91717.84
25
lashing wire
$ 0.01
Ft
53,988
$ 539.88
26
u guard
$ 125.00
Ea
15
$ 1,874.58
27
anchors
$ 125.00
Ea
45
$ 5,623.75
Material Subtotal
$ 302,777.96
Material Contingency Rate
Material Contingency
Material Total
25%
$ 75,694.49
$ 378,472.45
Total Aerial Backbone
$ 943,608.59
Figure 20 provides cost estimates for underground construction, which is minimal in the fiber
backbone rebuild. Total costs for the underground portion of the rebuild are $35,000 for labor
and $9,000 for materials. A 25% construction contingency has also been applied to the
underground portion of the build, resulting in a total underground cost of $46,000.
The total phase 1 construction costs with contingencies are estimated at $943,000.
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Figure 5. Fiber Backbone Underground Construction
Item
Labor
Price Unit
Quantity
Subtotal Notes
1
Underground Engineering
$ 2.10 Ft
1,254.00
$2,633.40
2
Directional Bore (2) 2"
$ 20.00 Ft
1,254.00
$25,080.00 underground footage
3
Rock Adder
$ 40.00 Ft
-
$0.00
4
Furnish & Install Muletape in New duct
$ 0.25 Ft
2,508.00
$627.00
5
Install#12 Tracer wire
$ 0.25 Ft
1,254.00
$313.50
6
Install Fiber Cable in Duct- Including All Slack
$ 1.00 Ft
1,358.50
$1,358.50
7
Remove & Restore Concrete
$ 18.00 Sq Ft
12.54
$225.72 assume 1 sq. feet per 100 feet of ug insta
8
Install Handhole
$ 300.00 Ea
2.09
$627.00 every 600'
9
Install New Splice Case & Prep Cable
$ 250.00 Ea
0.25
$62.70 assumes straight splice every 5000'
10
Ground splice case
$ 150.00 Ea
0.25
$37.62
11
Prep Cable in Panel
$ 250.00 Ea
2.00
$500.00 assume (2) 432 fibers in 2 panels
12
Splice Fibers
$ 30.00 Ea
36.12
$1,083.46 assumes backbone 432 fibers
13
Test Network
$ 2,500.00 All
1.00
$2,500.00
14
1 Install Marker Post
$ 35.00 Ea
1.57
$54.86 75% of handholes
15
lInstall Marker Postwith Test Station
$ 50.00 Ea
0.52
$26.13 25% of handholes
Item
Material
Labor Subtotal
Labor Contingency Rate
Labor Contingency
Labor Total
Price Unit
Quantity
$35,129.88
25%
$8,782.47
$43,912.35
Subtotal Notes
16
Mule tape
$ 0.05
Ft
2,508.00
$125.40
17
432 ct Fiber
$ 2.98
Ft
1,426.43
$4,250.75 includes 5% waste
18
Splice Trays
$ 45.00
Ea
1.50
$67.72
19
Splice Cases
$ 706.00
Ea
0.25
$177.06 large style closre
20
Handholes
$ 650.00
Ea
2.09
$1,358.50
21
#12 Tracer Wire
$ 0.35
Ft
1,254.00
$438.90
22
Ground Rods
$ 25.00
Ea
0.25
$6.27
23
Marker Post
$ 45.00
Ea
1.57
$70.54
24
Marker Post with Test Station
$ 65.00
Ea
0.52
$33.96
25
2" Pipe
$ 1.00
Ft
2,508.00
$2,508.00
Material Subtotal
Material Contingency Rate
Material Contingency
Material Total
$9,037.10
25%
$2,259.27
1 $11,296.37
Total Underground Backbone
1 $46,426.26
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B. PHASE 2: Broadband Strategy Development (Optional)
Phase 2 is focused on developing an initial broadband program by developing a strategy with
broadband providers to utilize the City's network. Completion of the new fiber backbone will
allow the City to bring fiber to business corridors and/or community anchor organizations that
are in close proximity to the network. This approach leverages the City's rebuilt fiber backbone
to support new broadband applications that are driven by customer demand and new
revenues, minimizing any upfront capital investment that the City may need to make begin
using its network for broadband.
The fiber backbone is built with the capability to support either direct fiber laterals or fiber
distribution plant to connect community anchors, such as schools, healthcare facilities,
businesses and even homes, depending on how the City approaches expansion of broadband
in Lodi. Broadband providers are an important factor to determine Lodi can positively influence
broadband expansion to businesses and residents.
The City can use its fiber backbone in multiple ways to expand broadband services in fiscally
responsible and measured ways, including:
Leasing fiber to community organizations directly. For example, the City could provide a
dark fiber ring to the Lodi Unified School District, which would enable high capacity and
fully redundant fiber connectivity to support growing needs of teachers and students.
The City would need to build fiber laterals to each school to connect them across the
City, which would require capital investment by the City or the school district, or both.
Leasing fiber to broadband providers. For example, the City could provide dark fiber
leasing rates to broadband providers for use of its backbone network and work with
providers to extend fiber laterals to individual businesses. The City would charge
broadband providers a monthly recurring fee for lease of fiber strands on the backbone
and connections to individual businesses. Minimizing the costs of this access fee will
incentivize broadband providers to utilize the network and bring lower-cost fiber -based
broadband services to Lodi's business community, supporting its economic
development strategy.
Marketing business parks as "fiber -ready." The Lodi Industrial Park could be marketed
as a fiber -connected business corridor with completion of the fiber backbone rebuild, as
the backbone will pass in proximity to the park along Thurman and Beckman Rd. If
existing or prospective businesses within the Park needed fiber connectivity, the City
could extend either fiber laterals or fiber distribution into the Park to these specific
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businesses. This strategy should be coordinated with a broadband provider to ensure
that business(es) had a retail ISP that would provide them service using Lodi's fiber.
Partnering with a broadband provider. The City could develop a formal partnership with
a broadband provider to expand the City's new fiber backbone to support broadband
services. This partnership could extend fiber to businesses, neighborhoods or both. In
these cases, the City and partner would agree to specific terms on how the fiber would
be expanded and the customers that would be served through the partnership. The
parties would negotiate a public-private partnership agreement that would determine
what additional funding each would provide, what services would be provided and how
revenues would be shared (or fees assessed by the City). For such partnerships, a key
objective would be to leverage the City's investments in the fiber backbone to catalyze
the deployment of fiber -based broadband services in Lodi.
The City can use multiple approaches to expand broadband or focus on a singular approach.
For example, the City could develop a fiber leasing program with other public organizations that
need fiber connectivity and maintain a commercial fiber leasing program with broadband
providers. Or, the City could develop a public-private partnership with a single provider that
serves all types of customers in the City, including community anchors, businesses and
residents.
C. PHASE 3: Broadband Expansion to Businesses (Optional)
Phase 3 focuses on deployment of broadband services in conjunction with one or more
broadband providers. This phase assesses opportunities around the newly built fiber backbone
to cost-effectively extend fiber laterals and fiber distribution in the immediate vicinity. Using a
buffer of 1,500 on either side of the fiber backbone, the City can reach nearly 10,000 homes
and businesses. Working with the City's broadband provider partner(s), the City could develop
a model to expand its backbone to serve these customers based on needs of the customers
and input from the provider(s). It would allow for a more economical approach that leverages
the fiber backbone assets already built by the City.
For example, the City could focus on just serving businesses in close proximity to the fiber
backbone. Approximately 1,000 businesses are within 1,500 feet of the fiber backbone. This
provides an immediate opportunity to offer fiber -based broadband services to about 30% of
Lodi's business community in conjunction with one or more broadband providers. In this case,
the City could finance and build new fiber connections to each business that the provider(s)
sign up and charge a monthly lease fee to the provider to recover its capital over a 3 -5 -year
period. In these cases, City investment would be directly tied to new revenues on an
incremental, connection by connection basis. Figure 21 illustrates the City's enhanced fiber
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backbone (rebuilt in Phase 1) and a 1,500 -foot buffer on either side of the backbone. This
shaded area would be where the City would market fiber services with providers using the City's
network.
Figure 6. Areas Around Fiber Backbone with Service Available
Fiber construction costs to these businesses will vary widely depending on the distance of the
build, aerial versus underground placement and other local conditions. Therefore, the City
should consider the variance in cost and develop fee structures that support reasonable
repayment of the capital used to build each connection. A typical approach used by many cities
sets rates at a level to achieve a repayment of the City's capital investment within 3-5 years.
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However, if the City can accommodate longer repayment periods, it lowers the fees charged to
providers and these savings are passed on to the end customer, resulting in lower costs for
businesses using the service. Cities have used this technique to keep the costs for fiber -based
broadband as low as possible in their communities with the objective of attracting new
businesses
and retaining existing businesses. In some cases, repayment of this capital has been stretched
to as much as 20 years to coincide with typical bond financing rates and repayment schedules.
A business -only broadband deployment is represented by the scenario below. In this scenario,
the City provides fiber connections to broadband providers who in turn serve business
customers within 1,500 feet of the fiber backbone. This scenario represents a very limited
buildout for the City with the intent of showing the impact to the business community over
time. It also assumes a very conservative take rate of 10%, which may be increased if the City
and provider(s) extensively market the services in the area.
Using these conservative assumptions, the model assumes the City would to allocate $350,000
in capital to building fiber connections and leasing them to service providers in the area, with a
payback of this investment being realized between 6.5 - 13.5 years. In this model, the City only
commits capital to the program when a broadband provider secures a customer and issues a
work order to the City. Actual fiber leasing fees will be determined by negotiations with one or
more broadband providers that serve the market. The City will need to make a final
determination on the most appropriate leasing fees to ensure the market for its fiber leases
are competitive and reflected in the retail pricing to businesses.
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Figure 7. Incremental Fiber Deployment Strategy
DeploymentIncremental Fiber
Locations with Service Available
1,000
Expected Take Rate
10%
Customers Connected
100
Average Cost of Buildout
$2,700
City Capital Allocated to Fiber Buildouts (Incrementally utilized)
$350,000
Monthly Fee to Broadband Provider (Depending on Tolerance for Payback)
$200-$400
Payback of City Investment in Years
6.5-13.5
Expected Retail Cost to the Business
$350-$500
Costs Paid by Businesses Today (If Fiber Is Available)
$550-$800
Savings to Businesses
31%-36%
Annual Savings to 100 Businesses Served
$240K - $300K
Annual Savings to 100 Businesses Over 10 Years
$2.4M - $3M
D. PHASE 4: Broadband Expansion to Homes & Businesses (Optional)
Phase 4 considers a broad deployment of fiber -based broadband services to homes and
businesses across the City, building on the successes of Phases 1-3. Working with its broadband
provider partner, the City would determine the opportunity to expand services in prudent ways
that mutually benefit the City, community and provider.
In this process, the City and provider should conduct significant due diligence to determine
fiscally responsible ways of investing capital for these buildouts. Buildouts could happen over
a longer timeframe of 5-7 years and based on feasibility of each specific project area, such as a
neighborhood or district, or in a more aggressive timeframe within 3-4 years covering all homes
and businesses within the City.
Cities use different approaches to fiber to the home deployments, depending on the availability
of funding, appetite to take on new debt and level of community need and capabilities of the
City and partner. A number of due diligence items should be considered with these
deployments, including:
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Clear policy goals for broadband services. What are the City's policy objectives to ensure
citizens and businesses have access to broadband? This will shape the deployment
schedule, service areas and details of the agreement with its broadband partner(s).
An assessment of community demand. The City should consider quantitative surveys to
assess demand and potential take rates for services.
{ An understanding of competition. What providers, services, packages and rates are
available in the market today and what upgrades will providers make in response to City
investments in fiber -to -the -home broadband. What other steps will competitive
providers take to hold on to their market share and what risk does this pose to the City?
4_ A clear requirement for investment. Fiber -to -the -home services require significant
capital investment, upwards of $38 million for a Citywide buildout in partnership with a
provider. These costs need to be fully vetted through detailed engineering, fielding, final
construction drawings and a bill of materials.
Consideration and negotiation of capital contributions from the City and partner to
assess the best mix of private capital and public funds.
6. A detailed public-private partnership agreement. Commensurate with the City's
investment, the broadband partner must have clear requirements that achieve the City's
goals and protect against downside risk for the City. A carefully crafted partnership
agreement with performance metrics, service level agreements and deployment
milestones is critical to ensure success. Mutual covenants are also important to hold the
City to the standards required by the provider to ensure its success in serving the
market.
7. A framework to manage the partnership with established resources and points of
contact within the City and partner to manage the relationship.
8. An understanding of the payback of the City's investment and debt service
requirements.
Municipal broadband providers have been known to achieve substantial residential penetration
in the communities they serve, in many cases over 50%. Figure 23 illustrates community profiles
for four cities that have established municipal broadband systems that are relatively similar to
the City of Lodi in terms of population and median household income. Cedar Falls, IA and
Longmont, CO are the most similar with populations and incomes within a 20% range of Lodi.
Figure 8. Similar Cities with Municipal Broadband Systems
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Morristown, TN
� Chattanooga, TN
Cedar Falls, IA
Longmont,CO
Population 29,324
Square Mileage 20.9
Households 11,412
Median Household Income $33,216
173,778
137.15
79,607
$41,064
40,566
28.9
14,608
90,237
26.19
33,551
$50,546
$58,698
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Figure 24 illustrates the market penetration for these providers, in terms of residential take
rates, commercial take rates and the years to reach these take rates. Averaged together, these
four systems achieved a 52% take rate with total service to 105,711 out of 203,051 households.
Magellan believes that actual take rates should be discounted for risk premiums by
municipalities that are considering providing broadband services.
Achieving high take rates requires successful execution of the municipalities business strategy,
sales and marketing plan, community engagement plan and go -to -market strategy. We believe
that applying a risk factor of 25% to take rates to arrive at a 40% take rate accounts for the many
risks that are inherent in operating a broadband business. This figure has been used to assess
the broadband partnership retail options in the study.
Figure 9. Market Penetration for Similar Cities
The scenario below models a citywide buildout of fiber -based broadband services to 100% of
homes and businesses in partnership with a broadband provider. It illustrates what it would
take for the City to achieve ubiquitous deployment with a partner to inform leadership of the
costs, revenues and requirements for a full fiber -to -the -home deployment. Figure 25 illustrates
the high-level design for the network.
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rMorristown,
Chattanooga,
Cedar Falls,
Longmont,
TN
TN
IA
CO
Residential
14,500
15,000
33,551
Homes Passed
140,000
5,600
13,000
500
Residential Subscribers
70,000
Residential Penetration
39%
50%
87%
51%
Years to Achieve
Penetration
6 years
7 years
7 years
2 years
Commercial
Commercial
Premises Passed
3,200
14,000
4,500
2,500
1,100
17,111
N/A
Commercial Subscribers
750
Commercial Penetration
23%
32%
44%
N/A
Years to Achieve
Penetration
8 years
10 years
6 years
N/A
The scenario below models a citywide buildout of fiber -based broadband services to 100% of
homes and businesses in partnership with a broadband provider. It illustrates what it would
take for the City to achieve ubiquitous deployment with a partner to inform leadership of the
costs, revenues and requirements for a full fiber -to -the -home deployment. Figure 25 illustrates
the high-level design for the network.
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Figure 90. Fiber -to -the -Home High -Level Design
The broadband partnership assumes that the City would fund the capital investment for all
long-term assets, including engineering and construction of the fiber feeder distribution
network and fiber service drops. Cities have traditionally funded these components of the
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25
network due to their access to long-term capital at low interest rates, designed to fund these
types of investments. Total
investment in the fiber plant would be $42,897,597. Forth is analysis, a 20 -year bond with a 3.5%
rate was utilized to finance the plant.
It also assumes that the partner would be responsible for all equipment, services and
operations to deliver retail internet services to residents and businesses over the network. This
would alleviate the City's responsibilities to provide retail services and shift responsibilities for
network operations, management, sales, marketing, billing and customer service to the
provider. The design of this type of partnership intends to marry the financial capabilities of the
City with the operating capabilities of a partner to bring fiber -based broadband services to the
community.
The network would be constructed over a three-year period. The first broadband services would
be available at the beginning of the second year of construction. Customer sign-ups would be
relatively minimal during the second year, at 10% of the total market, followed by 15% in the
third year and 20% in the fourth year, yielding a 40% total uptake starting in year 5.
Although the City would shift most operational responsibilities to the provider, it should expect
to incur some ongoing costs in the partnership. These would include direct staff costs needed
to manage the broadband partnership, estimated at about $400K per year on average. In the
first years of the partnership, these costs are expected to be minimal, starting at $150,000 in
year 1 and growing to $300,000 after three years. Staff would be responsible for managing the
performance of the partnership, co -marketing services with the broadband partner and
internal overheads for the accounting, legal, regulatory and reporting requirements associated
with the partnership.
To repay its operational and debt service expenses, the City would need to establish a revenue
sharing or lease fee arrangement with the broadband partner. For this analysis, a revenue share
was established to inform the City of the percent of annual revenues that would be needed to
repay its debt service, fund operational expenses and fund any payments in lieu of taxes
(PILOT). Based on the analysis, the City would require a minimum 30% annual share of gross
revenues with the partner to break-even over 20 years. In this scenario, the City would carry its
debt to term over the entire 20 years. If the City could achieve a 35% revenue share with the
provider, it would generate a surplus of $4.5M over the first 10 years and $9.3M over the 20 -
year period.
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Figure 11. Citywide Fiber -to -the -Home Deployment
DeploymentCitywide Fiber to The Home
Households with Access Available
Businesses with Access Available
Expected Residential Take Rate (Based on comparable muni broadband systems)
Expected Business Take Rate (Based on comparable muni broadband systems)
23,115
3,693
40%
40%
9,246
Total Residential Customers Using the Service
Total Business Customers Using the Service
1,477
Average Monthly Residential Pricing
$65
Average Monthly Business Pricing
Capital Costs
Fiber Feeder Distribution Network Construction
Fiber Service Drops (Based on 40% Take Rate) Construction
$140
Total Cost
$26,697,597
$16,200,000
Fiber Engineering & Permitting
Total Capital Costs
OperatingAnnual
$2,100,000
$44,997,597
Program Management
Maintenance
City Departmental Overhead (Accounting, Management, Legal, Regulatory)
$100,000
$100,000
$80,000
Total Annual Operating Costs
Debt Service Costs (20 Year Electric or General Obligation :.
Fiber Feeder Distribution Network Construction
$280,000
$1,384,479
Fiber Service Drops (Based on 40% Take Rate) Construction
Total Annual Debt Service
Payment in Lieu of Taxes
PILOT Annual Fees (Estimated at 2% of Gross Revenues)
NeededRevenue Share . Break -Even
$840,097
$2,224,576
Annual Cost
$193,872
Value
Minimum Revenue Share Needed to Break Even Over 20 Years
30%
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SUPPLEMENTAL INFORMATION: THE STATE OF BROADBAND IN LODI
A. Internet Service Providers
There are multiple ISPs that provide broadband services in the City of Lodi. Through a market
analysis that includes online research tools, California Public Utilities Commission (CPUC)
mapping and direct outreach to service providers, it appears that four companies serve the
majority of residents and businesses in the City.
Residential internet service in Lodi is comparable to many smaller communities across America.
Incumbent service providers, including both cable and DSL providers, claim to provide services
throughout the entire service area; however, there are gaps in service and some residents may
have a choice of only one choice of provider delivering wired services.
Small to medium businesses in Lodi have three providers delivering service offerings which
come with a higher level of service and, traditionally, a higher price. The average monthly cost
for businesses was $198.60 and the median was $168.95.
Figure 12. Internet Service Providers for Lodi Residents
Comcast is the largest provider of telecommunications services
ccomcast across the US, utilizing its Xfinity branding, they cover almost 40% of
finitthe US market. Comcast provides internet, cable and phone services
y to a considerable portion of Lodi residents and businesses with
introductory speeds at 25Mbps and highest speeds up to 1000Mbps.
As the service area's incumbent telephone provider, AT&T offers
internet service across DSL. ATT service is available in the Lodi
AT&T market, but with noticeable gaps. Service speeds also vary with the
lowest at 5Mbps which does not meet FCC standards of broadband,
up to 75Mbps.
Softcom Communications offers fixed wireless service in Lodi.
Softcom's services are available to residents and businesses at
speeds up to 50Mbps. Coverage appears to be outside of City limits.
Unwired advertises wireless internet services to residential
WIRED customers in the more rural areas of Lodi. However, when contacted,
Unwired did not service any of the random addresses that Magellan
chose.
While a residential survey was not conducted in Lodi, a market analysis utilizing random
addresses across the service area shows that Lodi, like many small to medium sized cities, has
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limited internet choice. The market consists of a duopoly with one DSL provider and one cable
provider, in this case
AT&T and Comcast. While wireless providers like Softcom and Unwired may provide some
competition, the service availability is limited and does not bring additional options for
residents in most locations.
The chart below illustrates services available at a sample of random addresses in Lodi.
Magellan's team reached out to service providers directly or online in order to determine
services available. The speeds listed are the highest available at each address under a best
effort service agreement. While Comcast has upgraded their network in Lodi to service gigabit
speeds utilizing DOCSIS 3.1, it does not offer symmetrical download and upload speeds, and is
still subject to outages and slowdowns that come with coaxial cable networks and
oversubscription of services over these networks. Without Comcast investing significantly in its
aging infrastructure, it is fair to wonder how many more Lodi users can be added before
oversubscription creates community -wide slowdowns and disruptions. More information on
user experience could be realized through a community survey and speed tests.
Figure 13. Residential Service Provider Offerings by Address in Lodi
703 S Pleasant Ave., Up to 75Mbps Up to 1000 Mbps
95240
Up to 50Mbps
2132 Newbury Cir., Up to 50Mbps
Up to 1000 Mbps No Service
95240
161 EI Centro Dr., 95240 Up to SMbps
Up to 1000 Mbps Up to 50Mbps
11662 N Ham Lane, No Service
Up to 1000 Mbps No Service
95242
2419 Inglewood Dr., Up to 25Mbps
Up to 1000 Mbps No Service
95240
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No Service
No Service
No Service
No Service
No Service
29
AT&T offers four internet only packages in Lodi, all for the price of $49.99 per month. The level
of service and speeds vary by location in the community with the lowest package of 5Mbps
download and 1 Mbps upload and the highest package at 75Mbps and 5Mbps.
Figure 14. AT&T Published Residential Internet Service Offerings in Lodi
Internet Basic 5/1 $49.99
$8.33 1 -year promo rate
Internet -25
25/3
$49.99
$1.78
1 -year promo rate
internet-50
50/3
$49.99
$0.90
1 -year promo rate
Internet -75
75/5
$49.99
$0.62
1 -year promo rate
Comcast offers five internet only packages in Lodi with prices that range from $24.99 to $84.99
per month. Comcast claims that any address that they service in Lodi is eligible for all services
listed below.
Figure 15. Comcast Published Residential Internet Service Offerings in Lodi
Performance
25/3
$24.99
$0.89
1 -year promo rate
Starter
Performance Pro
200/5
$49.99
$0.24
1 -year promo rate
Blast!
300/10
$64.99
$0.20
1 -year promo rate
Extreme Pro
600/15
$74.99
$0.12
1 -year promo rate
Gigabit
1000/35
$84.99
$0.08
1 -year promo rate
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SoftCom offers five internet only packages in Lodi with prices that range from $24.99 to $84.99
per month. Comcast claims that any address that they service in Lodi is eligible for all services
listed below.
Figure 16. SoftCom Published Residential Internet Service Offerings in Lodi
Enhanced
4/1
$79.95
$15.99
4GLTE
4GLTE
Supreme
6/1.5
$89.95
$11.99
4GLTE
Ultimate
8/2
$109.95
$10.99
4GLTE
Platinum
10/2.5
$159.95
$12.79
4GLTE
Extreme
50/3.5
$349.95
$6.54
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Business Internet Service Providers
AT&T offers three business internet only packages in Lodi ranging in price from $60 to $115 per
month. The level of service and speeds vary by location in the community with the lowest
package of 25Mbps down and the highest package at 75Mbps down.
Figure 17. AT&T Published Business Internet Service Offerings in Lodi
MilL MRC per Mbps
Internet -25 25/3 $60 $2.14 1 -year promo rate
Internet -50 50/3 $85 $1.60 1 -year promo rate
internet-75 75/5 $115 $1.44 1 -year promo rate
Comcast offers five business internet only packages in Lodi with prices that range from $88.95
to $228.95 per month. Comcast claims that any address that they service in Lodi is eligible for
all services listed below.
Figure M Comcast Published Business Internet Offerings in Lodi
•• ••'
End
MRC per Mbps•
Business Starter 35/5 $88.95 $2.23 2 -year promo rate
Business Advanced 200/20 $118.95 $0.54 2 -year promo rate
200
Business Advanced 300/30 $168.95 $0.51 2 -year promo rate
300
Business Advanced 600/35 $218.95 $0.34 2 -year promo rate
600
Business Advanced 1000/35 $228.95 $0.22 3 -year promo rate
1000
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SoftCom offers three business internet packages in Lodi delivered via point to point wireless
with prices that range from $249.95 to $499.95 per month.
Figure 19. SoftCom Published Internet Service Offerings in Lodi
0
Enhanced -10 10/10 $249.95 $12.49 Point to Point
Point to Point
Supreme -25 25/10 $349.95 $9.99
Ultimate -50 50/20 $499.95 $7.14 Point to Point
Wholesale & Middle -Mile Providers
Long-haul and middle -mile network providers are types of telecommunications carriers that
connect networks in cities to networks in other cities, serving as regional and interstate carriers
that essentially create the backbone of internet. These providers typically do not serve retail
customers, but rather provide data transport services to retail internet service providers. These
providers do sometimes serve enterprise scale customers, mostly connecting businesses with
multiple facilities around a region or throughout the country where the provider has network
infrastructure.
Should an internet service provider be interested in starting new services in Lodi, the new entity
might contract with one of these long-haul or middle -mile network service providers to provide
internet connectivity into and out of Lodi. Lodi has several network providers with long-haul
routes through the City, shown in the figure below, including AT&T, CenturyLink, Level 3, Sprint
and Zayo. Lodi should consider engaging these providers as it moves forward with a plan to
develop a network.
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Figure 20. Long-haul Network Providers Servicing Lodi
Lodi metro fiber routes, shown in the figure below, indicate the lack of substantial fiber
availability to the majority of its small and medium businesses and residents. With only one
carrier with metro network, TPx Communications, the area lacks what appears to be a fiber -rich
provider that is actually serving its business parks, major commercial areas or residents.
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Figure 21. Metro Network Providers Serving Lodi
TPx Communications
(5
.._ �1. L-,rw I IC
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B. Services Available
The state of California's Public Utilities Commission (CPUC) has worked to publish data that
gives us an additional detailed picture of the services available in Lodi. Data was pulled from
the CPUC that shows areas reported to be served by providers that have self-reported to the
state through their broadband mapping program, as well as confirmed through mobile field
testing by the Commission'. The maps have become more accurate over the years, but we
should still assume a level of inaccuracy due to self -reporting and difficulties with broadband
mapping at state and federal levels. However, these maps are an additional visual
representation of the gaps in coverage that Lodi's residents still face.
Figure 22. CPUC Residential Coverage Maps in Lodi
NT RD
4
C
cn
PIAN LN O E KE
• DSL
E • Cable
C
% _ %
• Fttx
• Fixed Wireless .I
E H06AN Lr, E HOGAN LN
m
E REP
W
M
E ICE
5
z
m
A
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The residential maps show there are clear gaps with unserved residents and census blocks in
various locations throughout Lodi including in the center of the City, to the east and a small
pocket in the northwest, as well as various small unserved blocks scattered throughout the City.
The services with the most coverage in Lodi are delivered via cable, which serves more than half
of the City. Fiber to the premises, or FTTx, is in two small clusters in the center of the City, most
s https://www.cpuc.ca.gov/Broadband_Availability/
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36
likely claimed to be provided by AT&T, however we were unable to confirm this actual service
in the market analysis.
The maps depict a community where many residents have only one choice of a broadband
provider, and in the case, they have two choices, the DSL provider may not meet the FCC's
definition of broadband at speeds at or above 25Mbps. This leaves the majority of Lodi's
residents without competition, and many lacking access to the basic levels of broadband to
maintain necessary digital access.
Figure 23: CPUC Business Coverage Maps in Lodi
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37
For businesses in Lodi, the map above depicts a similar picture as the residential market. The
majority of Lodi's businesses have one option for broadband, which is supported by coaxial
cable. There are several gaps in service where areas are unserved, meaning no providers offer
service to those census blocks. A small number of businesses have access to fiber (in green),
but the services are not sufficient to support a thriving tech -based economy or grow economic
development throughout the City.
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SUPPLEMENTAL INFORMATION: REGULATORY ISSUES
State policy and regulatory frameworks vary across the country regarding provision of
fiber optic -based services by a city. Implementing policies related to broadband is a
vital role that local governments play in expanding access and creating a competitive
market. Magellan Advisors evaluated specific federal policies to ensure any plans and
recommendations regarding Lodi's potential provision of fiber optic -based broadband
services is consistent with policy and regulatory requirements. 9 We also considered
implications of regulations related to emerging next generation 5G wireless services.
Much of the current legislation at the federal, state, and local levels relates to the
coming of 5G, which will be accompanied by additional encroachment activities as more
fiber is deployed to support additional wireless telecommunications facilities.
A. Federal Regulation of Broadband
Due to federal preemption, 10 the FCC's approach to regulating broadband often
determines the extent that state and local governments may also regulate broadband.
However, the FCC has less ability to use its preemption powers to invalidate state laws
which govern municipalities. Because municipalities are considered a creation of state
law and agencies of the state, stricter rules apply which limit when federal law can
preempt a state's abilityto regulate its municipalities.11 Accordingly, while it is important
for a municipal provider to understand the interplay between federal and state law in
governing broadband, state laws which apply specifically to municipal broadband are
likely valid and not preempted by contradictory federal policy.12
Besides contradictory state laws which apply specifically to municipal broadband, FCC
orders and regulation do have considerable ability to limit and determine state law in
the area of communications, and a federal policy of deregulation generally limits and
state and local laws which would limit deployment of broadband infrastructure or have
an anticompetitive effect. As discussed above in the introductory paragraph, in 2018,
the FCC reclassified "broadband internet access service"—including both fixed and
s The following discussion does not constitute a legal opinion and should not be construed as such. Questions about
interpretation or applicability of these or other provisions of federal or California law should be referred to legal
counsel.
10 When commercial activities primarily occur interstate, as opposed to intrastate, Congress has the ability to regulate
these commercial activities and invalidate state or municipal regulations which contradict or oppose the federal
regulations. See In the Matter of Restoring Internet Freedom (In Re: Internet Freedom), 33 F.C.C. Rcd. 311, $$ 194-204
(2018).
11 Tennessee v. Fed. Commc'ns Comm'n, 832 F.3d 597, 610 (6th Cir. 2016) (citing Nixon v. Missouri Mun. League, 541
U.S. 125, 140 (2004)).
"See id. at 613.
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39
mobile service—as an "information service" instead of "telecommunications service," as
each are defined in the Telecommunications Act of 1996 ("TA96").13 This was a reversal
of its 2015 Open Internet Order14 in which the FCC initially classified broadband internet
access service (both fixed and mobile) as a telecommunications service. The FCC
described the effect of this reclassification as ending "utility -style regulation of the
internet ...."15 As classified as a "telecommunications service," broadband internet
service was subject to many of the regulatory obligations of Title II of the
Communications Act, and broadband internet service providers were generally subject
to common carrier requirements. 16 In ending this utility -style regulation in favor of
deregulation, the FCC announced its preemption of any state or local laws which would
contradict this approach.17
In addition to defining what communication technologies are designated
"telecommunications services" and "information services," the FCC otherwise interprets
other provisions and definitions of the TA96, including defining different types of
broadband services and infrastructure. Providers of broadband should familiarize
themselves with the FCC's interpretations and guidance, as its classifications can
determine which federal rules apply to specified broadband services, and the
applicability of certain federal requirements can influence which state and local rules
apply, to the extent such federal rules preempt the state or local law.
As the FCC considers "broadband internet access service" an "information service," and
thus deregulated (as opposed to "telecommunications service" - i.e., basic telephone
service - which are regulated as common carriers), it is important to note the FCC's
current definition of "broadband internet access service," which it defines as:
. . . mass-market retail service by wire or radio that provides the
capability to transmit data to and receive data from all or substantially
13 see In Re: Internet Freedom (interpreting 47 U.S.C. § 153(24), (53)).
14 Protecting and Promoting the Open Internet, WC Docket No. 14-28, Report and Order on Remand, Declaratory
Ruling, and Order, 30 FCC Rcd 5601 (2015) (Title II Order).
" Id. at ¶ 2.
16 1d. at 37 — 57.
17 We therefore preempt any state or local measures that would effectively impose rules or requirements that we
have repealed or decided to refrain from imposing in this order or that would impose more stringent requirements for
any aspect of broadband service that we address in this order. Among other things, we thereby preempt any so-called
I'lleconomic" or "public utility -type" regulations, including common -carriage requirements akin to those found in Title
II of the Act and its implementing rules, as well as other rules or requirements that we repeal or refrain from imposing
today because they could pose an obstacle to or place an undue burden on the provision of broadband Internet access
service and conflict with the deregulatory approach we adopt today. Id. at ¶196.
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all Internet endpoints, including any capabilities that are incidental to
and enable the operation of the communications service, but excluding
dial-up Internet access service.
The term "broadband Internet access service" includes services
provided over any technology platform, including but not limited to
wire, terrestrial wireless (including fixed and mobile wireless services
using licensed or unlicensed spectrum), and satellite. For purposes of
our discussion, we divide the various forms of broadband Internet
access service into the two categories of "fixed" and "mobile." With these
two categories of services—fixed and mobile—we intend to cover the
entire universe of Internet access services at issue in the Commission's
prior broadband classification decisions, as well as all other broadband
Internet access services offered over other technology platforms that
were not addressed by prior classification orders. We also make clear
that our classification finding applies to all providers of broadband
Internet access service, as we delineate them here, regardless of
whether they lease or own the facilities used to provide the
service. "Fixed" broadband Internet access service refers to a
broadband Internet access service that serves end users primarily at
fixed endpoints using stationary equipment, such as the modem that
connects an end user's home router, computer, or other Internet access
device to the Internet. The term encompasses the delivery of fixed
broadband over any medium, including various forms of wired
broadband services (e.g., cable, DSL, fiber), fixed wireless broadband
services (including fixed services using unlicensed spectrum), and fixed
satellite broadband services. "Mobile" broadband Internet access
service refers to a broadband Internet access service that serves end
users primarily using mobile stations. Mobile broadband Internet
access includes, among other things, services that use smartphones or
mobile -network -enabled tablets as the primary endpoints for
connection to the Internet. The term also encompasses mobile satellite
broadband services.18
The FCC has also listed certain services it does not consider "broadband internet access
service," including: (i) data services which provide connectivity to a limited number of
Zs Id. at ¶¶ 21-22.
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41
internet endpoints in conjunction with the offering of certain products or services such
as "e -readers, heart monitors, or energy consumption sensors;" (ii) video or voice
services provided by internet service providers, as these services are otherwise
regulated; (iii) virtual private network (VPN) services; (iv) content delivery networks
(CDNs); (v) hosting or data storage services; (vi) Internet backbone services (if those
services are separate from broadband Internet access service, as these services have
historically not been considered "mass market," because they usually do not provide
the capability to transmit data to and receive data from substantially all Internet
endpoints); (vii) premise owners such as coffee shops, bookstores, and airlines and
providers of private end-user networks such as libraries and universities, and other
businesses which acquire broadband Internet access service from an internet service
provider in order to provide their guests and invitees Internet access on location; and
(viii) personal Wi-Fi networks created by users of broadband internet access service who
do not intentionally offer the benefit to others. Each of these are not considered service
providers because they do not market and sell the broadband internet access to
residential customers, small businesses, or other end-users such as schools and
libraries.19 A municipality which markets internet access to its residents, businesses,
and schools and libraries is likely to be considered a broadband internet access service
provider by the FCC and subject to FCC regulations; therefore, any municipal provider
of telecommunications services should familiarize themselves with the various FCC
reporting, filing and other requirements regarding fees, reports and data. While the
FCC's current regime supports deregulation and free-market principals in relation to
these services, the agency is limited in its authority to preempt state laws related to
municipalities, even if those state laws create greater restrictions than the federal
regulations.
B. Federal Regulation of Wireless Services
Wireless services and technology has been largely unregulated since its inception in the late
1980's - from a rate and tariff standpoint. However local authorities and the Federal
Communications Commission have been in an ongoingjurisdictional battle over siting practices
and zoning requirements for wireless facilities for some time, which will be discussed further
below. At the center of the jurisdictional battle today is 5G wireless service.
The placement of wireless facilities is governed by an interrelated legal framework
characterized by shared jurisdiction between state/local authorities and federal authority (the
Federal Communications Commission or FCC). The past two decades have seen increasing
federal preemption of state and local authority by the Federal Communications Commission
191d. at ¶¶23-25.
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(and Congress), most recently in its "Small Cell Order".20 The U.S. Code provides the basis for
federal preemption where it allows local authorities to regulate the "placement, construction,
and modification" of wireless communications facilities but subject to certain limitations.21
Those limitations include:
• City regulations may not "prohibit or have the effect of prohibiting the provision of
personal wireless services"22;
• City regulations may not "unreasonably discriminate among providers of functionally
equivalent services '23;
• Any denial of an application to place, construct, or modify a personal wireless facility
must be based on "substantial evidence contained in a written record"24; and,
• City regulations may not "regulate the placement, construction, and modification of
personal wireless service facilities on the basis of the environmental effects of radio
frequency emissions to the extent that such facilities comply with the Commission's
regulations concerning such emission S.,,21
In one specific area - radio frequency (RF) emissions - the Federal Communications
Commission (FCC) has been assigned complete regulatory jurisdiction, under the 1996
Telecommunications Act which preempted local regulation of RF safety standards in favor of a
uniform national RF safety standard under FCC jurisdiction .26 "The FCC's limits for maximum
permissible exposure (MPE) to RF emissions depend on the frequency or frequencies that a
person is exposed to. Different frequencies may have different MPE level S.,,27 Local authorities
can require compliance with FCC RF standards be demonstrated in evaluating 5G siting
applications. Applicants often make this demonstration part of the application package. Local
authorities may not however deny wireless communications facilities siting applications based
on RF emissions - Congress has preempted local authority on this subject and placed
jurisdiction in the hands of the FCC.
20 Declaratory Ruling and Third Report and Order; In the Matter of Accelerating Wireless Broadband Deployment by
Removing Barriers to Infrastructure Investment; WT Docket No. 17-79; In the Matter of Accelerating Wireline
Broadband Deployment by Removing Barriers to infrastructure Investment; WC Docket No. 17-84; Released by the
Federal Communications Commission, September 27, 2018. ("Small Cell Order" or "Order".)
2147 U.S.C. § 332(c)(7)(A).
22 47 U.S.C. § 332(c)(7)(13)(i)(1).
23 47 U.S.C. § 332(c)(7)(13)(i)(11).
24 47 U.S.C. § 332(c)(7)(13)(iii).
2s 47 U.S.C. § 332(c)(7)(B)(iv).
2e 47 U.S.C. § 332(c)(7).
27 A Local Government Official's Guide to Transmitting Antenna RF Emission Safety: Rules, Procedures, and Practical
Guidance; Local and State Government Advisory Committee, Federal Communications Commission, June 2, 2000, at
page 3.
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C. What is 5G?
"5G" is the fifth generation of wireless technology driving evolution of the wireless
communications technology platform. First generation, "2G" and "3G" wireless service was
provided beginning in the 1980's and 90's using large towers, "4G" was characterized by
development of "apps" that needed sustained reliable connectivity which in turn drove antenna
densification, while "5G" relies upon even more closely spaced, small antennas. Consequently
wireless carriers such as AT&T, Verizon, the newly merged T-Mobile/Sprint and their contracted
outsourced infrastructure providers (e.g., Crown Castle, Mobilitie, etc.) are increasing demand
for access to city -owned and utility -owned structures and public rights-of-way to accommodate
"4G/4G+" and "5G" "small cell" deployments. Current "4G/4G+" deployments are aimed at
densification and increasing capacity in high -use areas while 5G small cell facilities are also
being deployed in larger numbers to greatly increase speed and data capacity on a "fill-in" basis.
Deployment of high -band "5G" is distinguished from the present "4G" based wireless service by
use of low power transmitters with coverage radius of approximately 400 feet, 5G thus requires
closer spacing of antennas and more of them. Small cells bring the network "closer" to wireless
service users to deliver greatly increased data capacity, faster connectivity speeds and an
overall better wireless service. As stated by the FCC,
The wireless industry is currently deploying and planning for additional
construction of large numbers of small cells - the number of these facilities is
expected to grow rapidly over the next decade. S&P Global Market Intelligence
estimates that between 100,000 and 150,000 small cells will be constructed by
the end of 2018, and that small cell deployments are expected to reach
455,000 by 2020 and nearly 800,000 by 2026. AT&T has reported that a
substantial majority of its infrastructure deployments over the next five years
will be small cell sites. In addition, Verizon is deploying small cells in several
urban areas, including New York, Chicago, Atlanta, and San Francisco. Sprint
announced last year a goal of deploying 70,000 small cells within two years.Z$
In the years following this FCC pronouncement all wireless providers did indeed begin
deployment of 5G (during 2019), and the deployment continues in the US with three wireless
carriers (given the recent merger of T -Mobile and Sprint) but perhaps at a reduced pace given
financial and business impacts of the COVID-19 pandemic. However, both AT&T and T -Mobile
are on target to offer "nationwide" 5G using low -band spectrum by mid-year.29
"Streamlining Deployment of Small Cell Infrastructure by Improving Wireless Facilities Siting Policies; Mobilitie, LLC
Petition for Declaratory Ruling, WT Docket No. 16-421, Public Notice, 31 FCC Record 13360, December 22, 2016, at
page 3-4 (citations omitted). ("Improving Wireless Facilities Siting Policies Public Notice").
29 AT&T "plans to reach nationwide coverage this summer" (2020).
https:Habout.att.com/newsroom/2020/5g_announcements.html (viewed on May 27, 2020). "T -Mobile has launched
nationwide 5G: Here is what that means." https://www.cnn.com/2019/12/03/tech/tmobile-5g/index.html (viewed
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5G networks operate multiple frequencies in three bands using millimeter wavelengths - the
highest of which is anticipated to offer download/upload speeds of 1 Gbps. The actual speed
and range the consumer gets depends on a variety of factors, including what frequency is being
used by the service provider - low -band, mid -band, or high -band. There are tradeoffs among
the different bands, between speed and distance/coverage. General observations:
• Low -band frequencies work well across long distances and in rural areas; speeds are
greater than 4G but slower than other 5G frequencies.
• Mid -band frequencies are currently sought after since they permit greater speeds while
covering relatively large areas.
• High -band frequencies provide the fastest speeds but in more limited circumstances
such as close to the antenna and in areas without physical obstructions (i.e., windows,
buildings, walls). Thus, high band will work well in dense areas where antennas can be
placed every few hundred feet. This spectrum delivers the high speeds that are
commonly associated with 5G when the subject comes up.
• It is therefore likely that 5G networking will be a combination of low, mid, and high -band
frequencies.
• Also, obtaining 5G service requires using a 5G -ready device, of which at present there
are only a handful (though the number is growing).
5G networks are designed to provide increased efficiencies while decreasing latency and are
designed for improving the performance of connected devices that define the "Internet of
Things" or IoT.30 Examples include autonomous vehicles, healthcare monitoring technologies,
ultra -high-definition video, virtual reality, and many more applications that are ripe for
development. Indeed, any "tech buzzword" will benefit from 5G's faster speeds and reduced
latency. The transition to 5G will not occur overnight, and 4G and 5G will coexist such that when
a device drops 5G signal a handoff to 4G LTE should be imperceptible.
Does Wireless Service Require Fiber Optic Networks?
There is a common public misconception that "wireless service" is indeed fully wireless, end-to-
end. In fact, typically the only "wireless" component to wireless service is the wireless
transmission over radio spectrum between the user's cell phone and the cell tower at either or
both ends of the ca 11.31 Wireless service places significant demands on the wireline network for
connection of each cell tower or small cell antenna to wireless providers' network facilities.
on May 27, 2020). See also, "What is 5G? The definitive guide to the 5G network rollout";
https://www.tomsguide.com/us/5g-release-date,review-5063.html (viewed on May 27, 2020).
3' There is not a universal definition of "Internet of Things" but it generally refers to scenarios where network
connectivity and computing capability extends to objects, sensors and everyday items not normally considered
computers, and allows these devices to generate, exchange and consume data with minimal human intervention.
31 In some cases, operators have used radio spectrum to transmit consumer data and voice traffic from the transmitter
on the tower to the base, where it is then connected to the landline network. But this engineering practice is going by
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In recent years, wireless providers connected their towers to their network with fiber
connections under "Fiber -to -the -Tower" programs, procuring fiber connectivity from incumbent
local exchange companies and other sources. The 4G LTE evolution of wireless technology and
services supported and encouraged much greater consumer demand for bandwidth and data,
which in turn required fiber capacity for each cell tower to carry all the traffic to the wireless
provider's network. Evolution to 5G network technology greatly increases wireless provider
demand for fiber -based network capacity. 5G relies on an even denser network of cells with
shorter range at higher frequencies. This denser cell network will require an even denser fiber
network to support those cells. Verizon's CEO Lowell McAdam characterized just how dense in
a presentation to investment analysts:
Verizon small cells and densification efforts are driving the deployment of
1700 -strand fiber in Boston, where the company is undertaking a major
network upgrade, McAdam told attendees at a Verizon analyst meeting ... In
comparison, he said, the company deployed six -strand fiber when it began
deploying its ROS landline broadband and internet service in the early 2000s.
Verizon worked closely with its supplier Corning to get 1700 fiber strands in a
single sheath, McAdam said, also noting that the company recently placed a
$300 million order with another fiber supplier Prysmian.
"The largest fiber network in the country will be wireless" and will be operated
by Verizon to provide backhaul and other types of connectivity, said McAdam.
In Boston, Verizon is leveraging fiber that will support small cells to also
support an expansion of the company's ROS offering and a smart city trial.
Potentially the company could repeat that strategy in other markets as its
wireless network densification continues.
"Placing fiber across the country" is a big opportunity, McAdam said. 32
A recent study and report by Deloitte noted that "Deep deployment of fiber optics into our
nation's network infrastructure might not be as glamorous as the eagerly anticipated launch of
fifth -generation mobile networks (5G); however, it is just as important—if not more so. In
fact, 5G relies heavily on fiber and will likelyfall far short of its potential unless the United States
significantly increases its deep fiber investments."33 The study estimates that the US will need
the wayside as it consumes valuable radio spectrum and is otherwise less desirable from an engineering perspective,
in favor of fiber connection of the transmitters on the tower to the base for connection to the landline network.
" http://www.telecompetitor.com/ceo-verizon-wireless-network-densification-will-drive-deployment-of-largest-fiber-
network-nationwide/
33 https://www2.deloitte.com/us/en/pages/consulting/articles/communications-infrastructure-upgrade-deep-fiber-
imperative.html
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to invest $130 - $150 billion in the next 5-7 years in fiber infrastructure in order to support the
roll out of next generation wireless.
just as in other cities, in Lodi requests to encroach on public rights-of-way and attach small cell
antennas to City -owned lightpoles, for example, will be accompanied by requests to place fiber
optic cable for backhaul and network connection, whether via boring, trenching, or other
placement technique. The City needs to have appropriate administrative practices and policies
in place to address these requests for encroachment permits and placement of antennas on
City -owned structures when they come. In addition, the City may consider policy steps such that
the City benefits from future fiber deployments in the public rights-of-way.
D. The FCC's Small Cell Order
The FCC's Small Cell Order limits local authority in many areas include fees (most notably the
annual fee limit of $270 per pole), requirements and criteria that may be used, time frames,
and provisions of some state laws. The Order permits fees only to the extent they are non-
discriminatory ("no higher than the fees charged to similarly -situated competitors in similar
situations"), and are a "reasonable approximation" the government entity's "objectively
reasonable costs" specifically related to the deployment.34
The Order sets out fee levels which are "presumptively reasonable" are $270 per small wireless
facility per year, $500 application fee for up to five facilities, plus $100 for each facility beyond
five.35 Higher fees can be charged if the state or local government entity can show the higher
fees are a reasonable approximation of cost and the costs themselves are reasonable and being
assessed in an non-discriminatory manner.36 Beyond fees, the Small Cell Order also addressed
state and local requirements in the areas of aesthetic requirements, undergrounding
requirements, and minimum spacing requirements using the "materially inhibits" standard
created by the FCC in its Small Cell Order.
The Small Cell Order was appealed to the Ninth Circuit Court of Appeals, which recently issued
its Opinion37 largely upholding the Small Cell Order but with one exception:
The exception is the Small Cell Order provision dealing with the authority of
local governments in the area of aesthetic regulations. We hold that to the
extent that provision requires small cell facilities to be treated in the same
manner as other types of communications services, the regulation is contrary
to the congressional directive that allows different regulatory treatment
among types of providers, so long as such treatment does not "unreasonably
"Small Cell Order, at paragraph 50.
35 Id., at paragraphs 78-79.
36 1d., at paragraph 80.
37 Opinion Denying Petitions in Part, City of Portland v. FCC, No. 18-72689 (9t' Circuit), at page 31.
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discriminate among providers of functionally equivalent services." 47 U.S.0 §
332(c)(7)(13)(i)(1). We also hold that the FCC's requirement that all aesthetic
criteria must be "objective" lacks a reasoned explanation.38
And:
In sum, the requirement that aesthetic regulations be "no more burdensome"
than those imposed on other technologies is not consistent with the more lenient
statutory standard that regulations not "unreasonably discriminate." The
requirement that local aesthetic regulations be "objective" is neither adequately
defined nor its purpose adequately explained. On its face, it preempts too
broadly. We therefore hold those provisions of Paragraph 86 of the Small Cell
Order must be vacated.39
E. The FCC Rules under the Spectrum Act
Prior to the Small Cell Order, the "Spectrum Act" 4° enacted by Congress in 2012 added new
requirements and directives to the Federal Communications Commission (FCC) for processing
and approval of wireless deployments. To implement the Spectrum Act, the FCC issued new
regulations to interpreting the Section 6409(x) requirements and directives of the Act related to
local authorities processing of applications for wireless communications facilities. In brief, the
Act tightens the application of "shot clock" timelines, and requires local jurisdictions to approve
certain collocations and modifications to existing wireless communications facilities under
shortened explicit deadlines, if it is an "eligible facilities request" - which is defined as any
request for modification of an existing tower or base station that does not substantially change
the physical dimensions of such tower or base station, involving (1) collocation of new
transmission equipment; (2) removal of transmission equipment; or (3) replacement of
transmission equipment. The new FCC regulations established defined standards for what for
"substantial change" and implemented the statutory changes to "shot clock" regulations.
F. The FCC's "Clarification" Ruling
The FCC recently made another ruling which attempts to preempt local authority regarding
placement of wireless facilities by "clarifying" "the meaning of our rules implementing Congress'
decisions in section 6409(x) of the Spectrum Act of 2012"41. The Declaratory Ruling on June 10,
2020 has been appealed by numerous parties including state and local government
38 Id., page 31.
39 Id., page 52.
41 See Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. No. 112-96, 126 Stat. 156, § 6409(a) (2012)
("Spectrum Act"), codified at 47 U.S.C. § 1455(a).
41 In the Matter of Implementation of State and Local Governments' Obligation to Approve Certain Wireless Facility
Modification Requests Under Section 6409(a) of the Spectrum Act of 2012, WT Docket No. 19-250 and RM -11849, FCC
20-75 (released Jun. 10, 2020) ("Declaratory Ruling")
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organizations and entities.42 Among other things the Declaratory Ruling purports to "clarify"
existing FCC rules originally adopted in 2014 to implement the Spectrum Act. The cities
challenge the FCC's ruling on the basis that it violates federal requirements for rulemakings,
and is arbitrary, capricious and an abuse of discretion in seeking to change existing FCC rules
regarding applicability of "eligible facilities requests".
G. State and Local Policy
The urgency of state and local policy considerations for small wireless facilities stems from the
fact that many carriers consider street lights and utility poles to be "ideal" supporting structures
for placement of small cell antennas and equipment, which drives the cities' need for standards
and guidelines on placement of antennas and other facilities on or near these structures. Cities
and counties often prefer installation of small cell wireless facilities on streetlights owned by
the local authority based on the positive visual qualities of these facilities when built in
conformance with design standards, efficient use of assets and the public rights-of-way, as well
as in support of Smart City initiatives as described throughout this Plan.
Wireless providers are advocating for their preferred form of legislation in state legislatures as
well as at the federal level (especially the FCC), designed to preempt and limit local authority
over matters pertaining to small cell deployment. Specifically, in California, SB 649 was
presented to the State Legislature and passed the State Senate and Assembly in September
2017. However, it was ultimately vetoed by Governor Brown. The bill would have significantly
reduced local authority over small cell pole attachments in the public right-of-way, including
aesthetics, safety and revenue.
To achieve a City -specific balance between local authority and federal preemption, Magellan
Advisors is able to assist the City in assessing existing wireless and wireline policies, and
updating them where required to maximize local control over facilities deployment, including
an updated Telecommunications Ordinance, Small Cell Deployment Standards, a Master
License Agreement, and a Dig Once policy or ordinance.
H. Dig Once Policy or Ordinance
"Dig Once" can be defined as policies and/or practices that foster cooperation among entities
(especially utilities) that occupy public rights-of-way, to minimize the number and scale of
excavations when installing infrastructure (especially telecommunication S43) in public rights-of-
way. Dig Once has numerous substantial benefits, including promoting and supporting the
placement of broadband infrastructure (e.g., fiber-optic cable and conduit), reducing the
4' Appeals include The League of California Cities, the League of Oregon Cities, and the cities of Glendora, Rancho
Palos Verdes and Torrance in California, Texas Municipal League, Texas Coalition of Cities for Utility Issues, Michigan
Municipal League, the US Conference of Mayors and many other cities.
43 Many utilities are "monopolistic' providers (such as gas, water/sewer and electric) but there are a number of
telecommunications providers that seek permission to encroach on public rights-of-way, including cable TV
companies, competitive telecommunications companies, and wireless communications companies.
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consequences and disruptions of repeated excavations (traffic disruption, road deterioration,
service outages, and wasted resources), and enhancing service reliability and aesthetics.
Dig Once accomplishes the goal of minimizing costs of constructing separate trenches and
facilities - via shared costs of construction. The cost savings are significant. The Federal
Highway Administration estimates it is ten times more expensive to dig up and then repair an
existing road to lay fiber, than to dig support structure for fiber (e.g., conduit) when the road is
being fixed or built. According to a study by the Government Accountability Office, "dig
once" policies can save from 25-33% in construction costs in urban areas and approximately
16% in rural area S.44 In addition, development of Dig Once standards and guidelines for
deployment of conduit and fiber will facilitate economic development and growth, as it enables
cost-effective staged or gradual deployment of broadband infrastructure by local authorities.
Dig Once implementation requires revision to the planning and coordination process for
construction projects in the public rights-of-way. When subsurface utility work occurs, it
presents opportunities for the City to install new fiber in the right-of-way at reduced costs via
coordination of work. Dig once and jointtrench policies allowthe Cityto take advantage of other
subsurface utility projects for the installation of fiber. This enables the City to expand its
ownership of fiber anytime subsurface utility work occurs, at preferential costs to new
construction. The concept can
also extend to required placement of conduit for fiber-optic conduits whenever the ground is
opened, as expressed in recent Congressional legislation.
I. Governance
Governance ensures that maximum public benefit is realized from any public investment in
network infrastructure, whether by fostering competition, meeting public sector requirements,
or minimizing negative impacts of development. Governance aligns investment with public
goals and priorities. Policy guides development, laying out what can be built and how. Political
will is the starting point for the governance and policies simply because without it there is
nothing to govern and no possibility for policy. The City of Lodi has demonstrated political will
by undertaking this planning effort.
J. Political Will
It is important for the City to assess and build political will, which means providing a strong
rationale for this Plan to influential people, including appointed and elected officials, executives
with major employers and prospective investors, and those citizens who are well-connected to
others. Rationale for broadband can be based on risk of loss—such as poor economic
competitiveness—but the strongest rationale is built on this Plan. Broadband can be used to
improve operations, increase impacts, reduce costs, and transform economies.
" https.Ileshoo.house.gov/issues/economy/eshoo-walden-introduce-dig-once-broadband-deployment-bill
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The process of building political will is as important as the individuals involved and the rationale
for action. Indeed, all three work together: the process must be tailored to the individuals and
rationale. For broadband, the rationale revolves around uses and impacts as well as availability,
costs, and performance. Support from business executives and technologists reinforces this
rationale. These stakeholders are most likely to respond to peers, particularly personal
outreach from top public officials. Generally, the process involves:
1. Clearly articulate project goals and objectives in public documents
2. Identify, educate, and mobilize internal champions to garner support from stakeholders
3. Reach out to and inform councils, commissions, and community stakeholders
4 Organize a task force of diverse advocates
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SUPPLEMENTAL INFORMATION: BROADBAND BUSINESS MODELS
This analysis provides alternative business and financial models that the City could utilize to
enhance broadband services in the community. Depending on Lodi's preferences for risk,
reward and control, these models provide information on the funding required, revenues, costs
and financial performance. Magellan recommends that the City consider these three generally
utilized business models, shown in Figure 13.
Figure 24. Business Models for Lodi to Consider
Lodi provider dark fiber to
competitive providers, charging
fees for use of the infrastructure.
There is no master plan for
deployment of the network to
homes or businesses. Providers
simply utilize MU where they
identify opportunities, and Lodi
would negotiate with separate
customers.
Cities using this model
Palo Alto, CA
Columbia, MO
Bartow, FL
Lodi provides retail internet,
voice, and video services to
homes and businesses directly.
Lodi assumes all funding and
operational responsibilities,
including billing, and customer
service and support functions,
and would compete directly with
private service providers.
Cities using this model
Chattanooga, TN
Longmont, CO
BrightRidge, TN
I ICIVVVI n II III U. Ll Ul LUl C,
continuing its expertise in "poles
and wires," while the private
partner services homes and
businesses. The partner
maintains the customer
relationship, including marketing,
billing, and all customer support.
Cities using this model
Huntsville, AL
Westminster, MD
Lincoln, NE
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52
A. Lodi Leases Fiber
Under this business model, the Lodi network would be built and operated primarily for utility
operational purposes, while offering excess fiber capacity as dark fiber leases to customers and
retail service providers. Under an operating agreement, the fiber infrastructure could be made
available to any retail providers to drive broadband competition and make broadband services
more widely available to homes and businesses throughout the community. Because of the
limited market for dark fiber services, this is a difficult model to make feasible on its own but
becomes viable when it is employed as a value -add when utilities deploy fiber for grid
modernization and municipal needs.
For example, Palo Alto Utilities in California built a 200+ mile fiber network to interconnect its
substations together, enabling AMI and SCADA communications over a utility -owned
infrastructure. Once the network was built, it began leasing excess capacity to service providers
and connected its dark fiber network to the Palo Alto Internet Exchange (PAIX), which allowed
the network to interconnect with more than 100 competitive carriers. In Palo Alto, carriers use
the fiber backbone for last -mile connectivity to individual businesses. Today, Palo Alto
generates about $2 million annually from its dark fiber leasing program.
Figure 14 illustrates other municipalities that lease dark fiber with rates for these services.
Figure 25. Cities with Dark Fiber Leasing & Rates
City of Lakeland
FL
City of Bartow
FL
Eugene Water & Electric Board
OR
Palo Alto Utilities
CA
Springfield Utility Board
OR
City of Holly Springs
NC
City of Rock Falls
IL
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$100
$125
$21
$336
$16
$50
$100
53
B. Lodi Provides Services
Under a retail business model, Lodi Utilities would own, operate and deliver all services directly
to residential and organizational users in the Lodi service area. It would compete with the
private sector for customers and it would be responsible for all operations, customer service,
billing, provisioning and management of the broadband network. Customers would pay the
utilityfor services, and the utility incurs all costs and assumes all risks. This section takes a closer
look at the services that Lodi Utilities could provide to both the residential services market and
the business services market.
The industry is experiencing a time when people are "cord cutting," cancelling their traditional
cable TV service, and opting for "over -the -top" video services such as Netflix, Amazon, and Hulu.
In response, an ever-increasing number of content providers are adapting to these changes by
offering much of their video content over the internet. The abundance of alternative sources of
entertainment is making U.S. households rethink the need to pay for satellite or cable television
service, which includes many channels that never get watched.
Home phone has also experienced cord cutting and today only about 35% of households
maintain home phone service, and subscribership continues to decline each year. However,
many residents still subscribe to home phone service as a backup for their cell phone, for
connection to security systems and for general peace of mind.
When considering services to offer, Lodi Utilities should have a clear understanding of customer
demand. Communities with large percentages of millennials would rather subscribe to over -
the -top services than traditional cable TV, while generally having low home phone penetration.
Conversely, communities with older populations still prefer traditional cable TV rather than
over -the -top services and have higher penetration of home phone services.
Existing providers in Lodi offer competitive packages including internet, TV and home phone.
To be competitive and to attract customers, Lodi Utilities should launch a retail broadband
offering with services that are competitive in the market today, which means offering cable TV
and phone services. Further, Lodi should anticipate subscribership declines in these services
over time but should provide them to have competitive offers in the market.
Traditionally, TV and phone were very capital intensive to include in broadband bundles.
Utilities would invest millions of dollars in IPTV headends and voice switches to offer
competitive services. Today, the landscape of television and telephone service has changed. In
both cases, virtualized environments require little investment to provide TV and phone service,
alleviating the need for substantial investment in technologies that will soon be obsolete. These
services can be provided using white label providers such as MobiTV for television services, and
phone services provided by Momentum, Allianza, or Skyswitch.
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54
These proven technologies allow smaller utilities to pay per -subscriber for services with almost
no sunk cost in equipment. They also reduce the need for network technicians that traditionally
managed equipment needed to provide TV and home phone.
C. Lodi Partners with Providers
Under a partnership model, Lodi Utilities would create a partnership with an existing
broadband provider to jointly develop a FTTP network. In most cases, Lodi would be likely
responsible for operations of the fiber plant while the partner would be responsible for funding
equipment and ongoing customer -facing operations, such as marketing, billing, and customer
service. The partner provides all retail services to customers and customers interface directly
with the provider, while Lodi maintains a position of infrastructure owner. The private partner
collects all revenues and pays a portion of the revenue to Lodi Utilities, enough to cover Lodi's
debt service for financing the FTTP plant, fund reserves and future expansion and cover any
ongoing operating costs it may incur in the partnership.
Figure 15 illustrates the responsibilities of Lodi or its partner under each of the potential
business models. As a dark fiber provider, Lodi would operate directly with a customer, and
would be required to invest in the network infrastructure to support the needs of its dark fiber
customers. Under the retail model, Lodi Utilities is responsible for the entire network all the
way to the customer premises, including provisioning and all customer support services. Under
a partnership model, specific roles depend on the strengths that each partner brings. In a
partnership, the utility is generally responsible for the physical infrastructure while the partner
supplies content services and customer support functions.
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Figure 26. Lodi's Responsibilities in Each Business Model
Engineering Design
Feeder and Distribution
Premises Fiber Drop
Lodi
Customer Equipment
Provider
Headend and Equipment
Lodi
Facilities and Data Center
Lodi
Vehicles and Maintenance
Equipment
Lodi
Staffing
Lodi
Content
Provider
Customer Service
Lodi
Billing and Provisioning
Lodi
Network Operations
Lodi
Lodi
Utilities
Provides
All Functions
Q:l
Private
Provider
Lodi
Private
Provider
Among these business models, public-private partnerships stand out as an option for utilities
that seek to manage risk while maintaining vital infrastructure as a public asset. Many find
partnership models desirable and have thus explored opportunities for creating such
partnership. As a utility considering a possible partnership, the concepts of risk, reward and
control are important to understand and will be discussed in the next section.
D. Benefits of Partnerships
As Lodi evaluates the possibility of a public-private partnership, it should understand the
process of seeking a partnership. An ideal partnership should include an evaluation of benefits
to the utility and the broader community. The following considerations will allow for a better
understanding of the benefits when evaluating partnership opportunities:
• Publicly owned assets in the right-of-way, such as streetlights, traffic poles, and conduit,
which may be leveraged for in-kind services
• Planned projects for joint trenching
• Economic Improvement Zones that might be targeted
• Competitive rates, marketing strategies, and revenue sharing
• Expanding the network to include underserved and unserved areas
Public-private partnerships offer an array of benefits to communities, both on and off the
balance sheet. From decreasing telecommunications costs to increasing access for all, each of
these benefits should be measured when considering a partner.
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E. Risk, Reward & Control in Partnerships
To most utilities, the business of broadband is a new venture, and many lack the technical or
organizational capacity or even the desire to build and operate a broadband utility, so those
utilities may partner with a public or private entity that can fill a critical long-term and strategic
need. A partner or partners can be considered for any needed role in the new broadband utility,
so this section offers some points around the pros and cons of entering a broadband
partnership.
As Lodi considers broadband, it should consider both the opportunities and the potential
pitfalls by paying attention to the interwoven concepts of Risk, Reward and Control. A successful
partnership must complement these three concepts of each partner, and there will unavoidably
be tradeoffs within this framework for each model. For example, every partner would welcome
lots of rewards, but the partner must also be willing to take on a certain amount of risk. Another
partner may value the control aspect of the partnership, but to do so means that partner must
be willing to share in the other aspects.
RISK
It is not possible to entirely avoid risk at any level in broadband deployment. But calculated and
measured risk often yields benefits that would otherwise have been unattainable. One of the
most enticing components of a partnership is that it can reduce the utility's risk while helping
achieve its broadband goals.
Public financing to support the partnership could be one of Lodi's great risks, though this could
be a worthwhile investment to enable Lodi to retain some ownership and control of the assets
in a partnership model. Although it will entail some financial and political risk due to required
financing, the long-term dividends will be advantageous. This is especially true if Lodi can
execute a meaningful partnership with a private entity that will share in the risk.
Trade-offs may continue even if Lodi enters an agreement that doesn't require it to directly seek
capital investment. For example, Lodi may find a partner that is willing to use its own capital.
Even if Lodi does not directly seek financing, it must commit to a guaranteed payment schedule
and its credit rating could be impacted if a private partner arranges the financing.
Managing retail broadband networks is costly and ever-changing and introduces new risks for
utilities. Utilities that enter the retail market directly are understandably targeted by hostile
incumbent providers that make it challenging for the broadband utility to compete. Part of the
attraction to the public-private partnership model is that private entities operating in this
competitive space today are accustomed to managing these risks, and the partnership strives
to leverage these capabilities to reduce risk for the utility.
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1EA IM
As Lodi considers expanding its fiber infrastructure, it should continually weigh the benefits it
expects to receive as part of a partnership against its potential risk. One component is the
potential for a great degree of flexibility between partners, as financial returns aren't the only
reward valued by some partners. That is, Lodi can consider its community and economic
development priorities and pursue those benefits and rewards on the front-end of a
partnership arrangement.
Although public-private broadband partnership models are relatively new and evolving all the
time, there are several examples that the City can look to as guidance on how it might want to
proceed. It can begin by asking what are the rewards and benefits that it would like to see from
the fiber initiative.
Although benefits cannot be reliably calculated at this stage, Lodi can potentially look to other
electric utilities to get a sense of the goals other partnerships prioritized for the public entity's
benefit. This may help Lodi determine how to balance its risks, and which areas to focus on in
its pursuit of a partner.
CONTROL
Because this is the start of Lodi's broadband journey, it can choose during the negotiation
process its desired level of involvement in infrastructure deployment, network maintenance,
and operations. That is, the City can determine from the outset what level of involvement it
would like to have at every stage and in every arena of the public-private partnership process.
There are ways that Lodi can retain more control within the public-private partnership, and the
most important way is through retaining ownership of physical assets. This must be balanced
with risk, as it is likelythat Lodi will be required to fund part of the fiber deployment investment,
yet the more ownership it has in the fiber asset, the greater degree of control it can maintain.
This enables Lodi to make decisions about placement of assets, the pace and phasing of
deployment, and the overall network footprint. Further, it ensures that if the partnership fails
for any reason, Lodi still has a physical asset that it can use to negotiate a new partnership or
begin its own direct retail operations.
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SUPPLEMENTAL INFORMATION: FIBER BROADBAND ARCHITECTURE
As aspects of physical network design and deployment are discussed, it is important to
understand the various physical network components and their functions that together create
a fiber-optic network and the broadband utility in Lodi.
The fiber network to be deployed in the Lodi Utilities service area consists of three separate
groupings of technology that must be negotiated with various vendors and service providers
and then deployed into the service area communities. As shown in Figure 27, these groups
consist of the central office, the feeder/distribution network, and the fiber drops that connect
the network to member homes and businesses.
Figure 27. The Lodi Fiber-optic Network Architecture
Broadband
Shelter
Fiber
Backbone Fiber
Feeder
Cable
4% k%
Splice Case
� T
Fiber Aerial
Distribution Access
Cable Terminal
Fiber Service Drop
Fiber
Distribution
Hub (FDH)
_-
Splice Case
__
Fiber
Distribution Ground
Cable Access
_ ` Fiber
service
drop
Terminal
The recommended architecture for a network to support the scope and geographic scale of the
Lodi Utilities service area requires a network hierarchy that provides scalability and flexibility,
both in terms of initial network deployment and accommodating the increased demands of
future applications and technologies. Magellan utilizes these guiding principles for network
design to accommodate current and future needs, while minimizing unnecessary cost:
• Capacity - ability to provide efficient transport for data, even at peak levels
• Availability - elevated levels of redundancy, reliability, and resiliency
• Diversity - additional fiber routes to minimize impact from fiber failure
• Redundancy - ability to detect faults and re-route traffic
• Scalability - ability to physically grow network, increase data capacity and evolve with
newer technologies
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• Manageability - dashboard provisioning to manage subscribers and services
• Flexibility - ability to provide different classes of service to different customers
• Adaptability - can allow service providers on the physical layer with separate fiber
strands, or on the logical layer with a separate VLAN or VPN
• Security - controlled physical access to all equipment and facilities, plus embedded
network firewalling, segmentation, and filtering
The Lodi Utilities Fiber -Optic Backbone
The Lodi Utilities fiber-optic network would be connected to the internet through what is known
as a central office. The central office securely houses a set of networking equipment and
maintained in a physical data center environment. The physical location of the central office will
require at least two or more routes of the internet backbone into and out of the service area to
act as redundant convergence points of network traffic.
To reach customers, data moves out from the central office and into Lodi communities inside
fiber-optic cables that are either suspended from utility poles or buried underground.
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Figure 28. Network Equipment
Equipment Shelter (Exterior) Equipment Shelter (Interior)
w� ai, uuu,u, w�uuwuu
ILj
n,
Fiber Distribution Hub (Splitter Cabinet) Optical Network Terminal (At Each Home)
1'
Core Switching & Routing Equipment
Headend/Data Center Environment
Feeder and Distribution Network
The network of fiber-optic cables that spreads throughout the community is known collectively
as the Feeder and Distribution network. As the name suggests, this portion of the network
"feeds" the waves of light from the data center into neighborhoods throughout the service area.
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With the Lodi conceptual design, the electric substations act as network nodes throughout the
service area.
Figure 29. Fiber -to -the -Premises Conceptual Network Design
As the fiber-optic cable passes through a neighborhood, the fiber-optic cable connects to a
Local Convergence Point (LCP), which can be located either inside a facility or inside a pole- or
pad -mounted cabinet in the field. From this LCP, the optical signal is split and distributed into
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up to 32 different connections from the Network Access Point (NAP). It is from the NAP that the
final connection is made into customer premises via the fiber service drop.
Outside Plant Specifications
Aerial specifications are highly dependent on the pole segments and pole ownership. Any future
design engineering study will identify the final overhead requirements and specifications.
Overhead placement standards and specifications should be coordinated through public policy
process with input from relevant community stakeholders, where applicable. Likewise,
underground specifications should follow prevailing building codes and engineering standards
for Lodi. As needed and as possible, local codes should be updated with fiber-optic and
broadband -friendly perspectives. With fiber cable and conduit placement, the specifications are
more defined and standardized, as summarized in Figure 30 below.
Figure 30. Outside Plant Design Specifications and Assumptions
• Backbone cable, 288 -count fiber
• Lateral cable, average 96 -count fiber
• Single mode, loose -tube cable
• jacketed central member with outer
polyethylene jacket
• Sequential markings in meters
Aerial will be ADSS in power space
• 12 fibers per dry buffer tube
• Color coded buffer tubes based on
ANSI/TIA/EIA 598-B Standard Color
Fiber Service Drops
• 36" minimum acceptable depth
• 2" HDPE smooth wall reel -mounted pipe
• Warning tape installed at 12" or 18"
• Maximum fill ratio of 50%
• Maxcell or smaller innerduct
• Average pole span length is 200 feet
• All underground directional bore with no
rock
Vault placement at intersections, every
300ft in corridors to house lid -mounted
pedestals and splice enclosures
To reach the individual customer, connections are made via "fiber service drops," or "the drop,"
which refers to the collection of equipment and processes to physically connect customer
premises to the feeder and distribution network via fiber-optic service lines. At the home or
business, the fiber enters the premises at the Optical Network Terminal (ONT), typically
mounted near or alongside the utility meter on the side of a building. From there, the customer
may connect their own wired or wireless networking equipment for sharing the connection with
computers, phones, and appliances inside and around the premises.
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Whether Lodi owns the portion of the network beyond the node depends on the business
model and partnership arrangement. Those "drop costs" can be borne by the service provider,
as some utilities and cities prefer the LCP or node to serve as the demarcation point of their
network ownership, while others prefer to own the drops that connect to the customer
premises.
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SUPPLEMENTAL INFORMATION: CONSTRUCTION ESTIMATES
Magella
Fiber to the Premise Construction Estimate ADVISORS
IL Assumpdons
does not include equipment or drop costs
splitter cabinets sized at 288 count
avg size fiber priced at 96 count
24" min depth
(1) 2" conduits
hand holes every 400'
no rock adder included
pricing include soft surface restoration & Maintenance of traffic
FTTP Aerial Footage 527,8_56
FTTP Underground Footage 474,877
Premise Count 29,739
Item Labor Price Unit
Quantity
Subtotal Notes
Directional Bore (2) 2"
$ 12.00 FT
$
474,877
$ 5,698,524
Furnish & Install Muletape in New duct
$ 0.25 FT
$
949,754
$ 237,439
Install #12 Tracer wire
$ 0.25 FT
$
474,877
$ 118,719 assumes no rock
Install Fiber Cable in Duct - Including All Slack
$ 0.80 FT
$
569,852
$ 455,882
Remove & Restore Concrete
$ 18.00 SQ FT
$
4,749
$ 85,478 assume 1 sq. feet per 100 feet of install
Install Handhole
$ 300.00 EA
$
1,900
$ 569,852 every 250'
Install New Splice Case & Prep Cable
$ 250,00 EA
$
4,011
$ 1,002,733 every 250'
Ground Splice Case
$ 150,00 EA
$
4,011
$ 601,640
Prep Cable in cabinet
$ 250,00 EA
$
71
$ 17,750
Splice Fibers
$ 20.00 EA
$
64,175
$ 1,283,498 assumes 8 per nap multiplied by 3
Install splitter cabinet
$ 2,500.00 EA
$
71
$ 177,500 assumes 250 connections per 288 cabinet
install concrete base
$ 600.00 EA
$
71
$ 42,600
Terminate Fibers
$ 25.00 EA
$
38,880
$ 972,000
Test Network
$ 2,500.00 ALL
$
1
$ 2,500
Install Marker Post
$ 35.00 EA
$
1,425
$ 49,862 75% of handholes
Install Marker Post with Test Station
$ 50.00 EA
$
475
$ 23,744 25% of handholes
Install pole attachments
$ 80.00 EA
$
2,933
$ 234,603 assumes 180' avg span lengths
Install Strand
$ 1.10 FT
$
527,856
$ 580,642
Install snow shoes
$ 100.00 EA
$
1,056
$ 105,571
install aerial slack
$ 1.80 FT
$
52,786
$ 95,014
install / lash aerial cable
$ 1.80 FT
$
527,856
$ 950,141
tree trimming
$ 5.00 FT
$
26,393
$ 131,964 assumes 5% of aerial route needs tree trimming on this project
install pole risers
$ 310.00 EA
$
147
$ 45,454 assumes 5% of poles
install down guy & anchors
$ 210.00 EA
$
440
$ 92,375 assumes 15% of poles
Make Ready budget
$ 1,000.00 pole
$
293
$ 293,253 assumes 10% of poles
Item Material
Labor Total
Price Unit Quantity
$ 13,868,738
Subtotal Notes
Mule tape
$ 0.05 FT
$
949,754
$ 47,488
96 count fiber
$ 1.05 FT
$ 1,150,494
$ 1,208,019 includes 5% waste - average size cable
Splice Trays
$ 45.00 EA
$
4,011
$ 180A92
Splice Cases
$ 706,00 EA
$
4,011
$ 2,831,718
Handholes
$ 650.00 EA
$
1,900
$ 1,234,680
#12 Tracer Wire
$ 0.35 FT
$
474,877
$ 166,207
Ground Rods
$ 25.00 EA
$
4,011
$ 100,273
Marker Post
$ 45.00 EA
$
1,425
$ 64,108
Marker Post with Test Station
$ 65.00 EA
$
475
$ 30,867
2" Pipe
$ 1.00 FT
$
474,877
$ 474,877
pole attachment hardware
$ 45.00 POLE
$
2,933
$ 131,964
6m Strand
$ 0,10 FT
$
527,856
$ 52,786
snow shoes
$ 80,00 EA
$
1,056
$ 84,457
lashingwire
$ 0.01 FF
$
527,856
$ 5,279
u guard
$ 125.00 POLE
$
147
$ 18,328
anchors
$ 125.00 EA
$
440
$ 54,985
288 count splitter cabinet w tails - fully loaded
$ 8,200.00 EA
$
12
$ 98,400
576 count splitter cabinet w tails - fully loaded
$ 14,000.00 EA
$
59
$ 826,000
cabinet pad
$ 600.00 EA
$
71
$ 42,600
1 x32 splitters
$ 800.00 EA
$
639
$ 511,200
Material Total
Contingency
Total FfTP
$ 8,164,728
217E
$ 26,697,597
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