Regional Technology Plan Three Bridged Islands Arrowsic...

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3 Water St. Machias, ME 04654 www.connectwithaxiom.com Regional Technology Plan Three Bridged Islands Arrowsic, Georgetown, Southport Submitted by: Mark Ouellette & Susan Corbett August 10, 2018 207.255.0679 [email protected] [email protected]

Transcript of Regional Technology Plan Three Bridged Islands Arrowsic...

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3 Water St.

Machias, ME 04654

www.connectwithaxiom.com

Regional Technology Plan

Three Bridged Islands

Arrowsic, Georgetown, Southport

Submitted by:

Mark Ouellette & Susan Corbett

August 10, 2018

207.255.0679

[email protected]

[email protected]

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3 Bridged Islands Technology Plan

Table of Contents

Study Background and Structure

Executive Summary

Benefits of Fiber Optics Proposed Fiber Technology

Community Plans Arrowsic

Georgetown

Southport

Backhaul

Cost Saving Measures

Final Thoughts

Grant Funding Resources

Attachment 1: Arrowsic Street-Road Segment Costs

Georgetown Street-Road Segment Costs

Southport Street-Road Segment Costs

Addendums: Digital Inclusion Plan

Broadband Opportunity Council Report

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Background

The three communities of Arrowsic, Georgetown and Southport have come together as a consortium

of the Three Bridged Islands (TBI). The Island Institute has been an indispensable partner to the TBI

Broadband Committee providing behind the scenes advice, resources and guidance with an RFI for

Broadband Planning Services that was responded to by a handful of potential providers. Axiom was

chosen and tasked with providing a plan for deployment of a Fiber-to-the-Home (FTTH) network in all

three communities. TBI Broadband Committee, while independently working in each of their

respective communities did come together on some common goals.

Goals:

Every home be hooked up to the fiber system (equal access for all)

Fiber was the best investment over other technologies that would not stand the test of time

While each community wanted a plan that could stand on its own, their was a recognition

that cost savings could be found by working together to implement fiber networks in each

community simultaneously

The committee was interested in exploring out of the box thinking that might reduce costs

Given these considerations, the report that Axiom has produced followed a Broadband Deployment

Kit methodology that we use to help communities not only plan, but get to implementation and

beyond.

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Executive Summary

This section will give the communities a brief overview of the fiber-mapping path in each of the three

towns and the estimated cost of the overall project. More detailed descriptions will follow in each of

the individual community sections.

The Three Bridged Islands Broadband Committee (TBI Broadband Committee) was concerned that

internet connectivity in each of the three communities was lagging and not keeping up with the

demand of its citizens for better speeds and reliability. At the same time, each community

recognized the digital divide and the real possibility that their internet connectivity was likely not

going to withstand future needs, jeopardizing or hindering the vibrancy in each of the three towns.

Current providers were frustratingly unresponsive, and the hope would be that a new system, would

address the needs of the TBIs for 20 years or more.

Working together

The Three Bridged Island communities by coordinating efforts around the planning, implementation

and operation of a new internet system will enjoy cost savings. While difficult to estimate, it’s

possible that construction costs could be reduced by 10% or more. Additional savings could be

realized through the operational economies of scale that could be achieved. It makes good financial

sense to work together. Axiom has added a Cost Saving Measures section later in this report that

goes into greater detail.

Technology

It has become clear through the process that fiber optics makes the most sense for the Three

Bridged Islands (3BIs) for a number of reasons. These benefits are further illuminated throughout

the report:

Futureproof- the system will be in place for well over twenty years

Growth- the system can accommodate ever increasing demand for more speed, without any

additional investment into the system

Reliability- Fiber is the most reliable technology to deliver consistent bandwidth with little to

no interference to the system- even at peak usage times

Objectives of Internet System

The system will serve every home in all three communities

The system will provide equal access at all locations- no matter where you live you will have

the same choices for service as everyone else

The system is capable of delivering a Gigabyte (1000Mbps) to each home

The system can deliver true symmetrical service- same speed up or down

The proposed system will not exasperate the current situation where parts of each of the 3BI

communities have different levels of service, depending on where your home is located or who your

provider is. This new internet system eliminates this issue.

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Fiber Maps

The maps of all three communities are color coded to help the community understand how Axiom

recommends that road be served.

The Yellow Line is the trunk fiber that will carry the bulk bandwidth throughout the community. This

fiber will have many strands of fiber that will then be offloaded to other fiber that will serve various

neighborhoods and homes.

The Pink Line represents drop cables that will be strung along utility poles that penetrate areas not

served by the trunk line.

The Blue Line represents areas where we believe you can lay the fiber on the ground to serve

residential homes.

Arrowsic Fiber Map

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Georgetown Fiber Map

Southport Fiber Map

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Total Cost of Project

Fiber Materials

$1,227,102

Fiber Labor

$1,255,249

Licensing & Make Ready

$428,980

Replacement Poles (10%)

$507,000

Regen hardware

$637,675

Customer Premise

Hardware & Installation

$2,325,000

Total Estimated Cost

$6,381,006

This estimate relies on a number of assumptions.

Utility pole licensing and Make Ready is an estimated cost per pole. Through the application

process, the licensing agent and all of the current users of the utility poles come together on site (in

each of your communities) and assess each pole and the cost associated with each of the providers

moving their lines to accommodate another provider. We have an average cost per pole estimate,

but until the actual evaluation is undertaken in the licensing process, the actual costs cannot be

determined.

One of the variables in the pole licensing process is the number of poles that may need to be

replaced. There are several reasons for pole replacements, and without individual pole inspections

by the utility, this cost is variable, until the licensing process proceeds.

The other category costs can vary depending on who you choose as a vendor. RFP processes have

brought wildly different estimates to construct a system, but this gives the 3BI Broadband Committee

a touchstone of what costs of building a system in all three communities should generally cost.

Costs of such a system can seem expensive, but when you factor in the benefits and longevity of the

system, it actually will be an investment that will last well beyond traditional community expenditures

of road repair or replacement and large equipment purchases such as a fire truck. The next section

will expand on the benefits of fiber and the attributes that make it a smart, cost effective investment

for the 3BI’s future.

Monthly Operating Revenue and Expenses

For any potential provider to respond to an RFP, the provider must be able to understand their roles

and responsibilities in a public-private relationship with the 3BIs. Below are estimated the number of

homes expected to take service and the gross revenue derived from those customers. The operating

expenses include a reasonable maintenance/break-fix budget that would be set aside for significant

internet system damage that could occur over the life of the system. Creating a rainy-day fund will

help defray significant damage or replacement costs due to utility pole damage or replacement

needed from natural disasters that are weather related, human error such as car crashes that could

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take out equipment or utility poles, or many unforeseen issues that the provider of service would

need to be ready for. Revenue projections, overhead and cost considerations vary from provider to

provider. These are estimates that Axiom has put together to give the 3BI Broadband Committee an

understanding of how revenue might compare to expenses.

Revenue

Axiom believes that a 50% subscription rate is achievable, meaning that every other home that could

get served will take service. This is the national average for FTTH projects. In addition, Axiom

created three rate groups of service and estimated revenue from each rate group.

It is broken down this way:

Speeds Customers and cost Revenue per subscriber rate

25/25Mbps

775 customers @$59.99 $557,907/year

50/50Mbps

335 customers @$69.99 $281,360/year

100/100Mbps

51 customers @ $109.99 $87,510/year

Total Estimated Yearly

Revenue

$926,776.80/year

Revenue estimates of over $900,000 based on 1161 subscribers (50% of homes take service)

Operating Expenses

Operating expenses are the expenses that are incurred by the provider to operate and maintain the

internet system. These expenses include:

Overhead (billing, yearly cost of utility pole licensing, bandwidth, collections, etc.)

System Maintenance (break/fix and operation of equipment)

Onsite support (on-site equipment inspection and replacement at the home)

Technical support (phone support for issues at the subscriber home, includes trouble shooting

and remote equipment diagnostics)

Total estimated yearly cost of maintaining system and subscriber home equipment, and creating

rainy-day fund: $480,000/per year

Yearly revenue and operating expenses seem to indicate the possibility of the system supporting

some portion of a municipal bond that would be needed to build the system.

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Benefits of Fiber Optics

Fiber optic internet systems are the future and Broadband Committees often get questions about the

technology choice or the need for such systems. This section will help community members

understand the benefits of fiber optics and its superiority over other technologies, including DSL and

co-ax cable. Both DSL and cable are serving the majority of your communities now.

Fiber is a long-term investment in a community’s future

Fiber supports 21st century economic opportunities

Fiber leapfrogs communities that are left behind to the front of the pack

Fiber, over the long run, is a less expensive technology

One of the major concerns with fiber systems is the up-front cost. However, over time, other

technologies would need to be replaced, upgraded or will be deemed obsolete. On the other hand,

fiber will allow you to scale the bandwidth delivered as needed, all while using the same fiber

distribution network over a period of decades.

Just one visual example will

underscore the capabilities of a

fiber connection verses a legacy

copper network connection. With

today’s technology, one fiber the

thickness of a human hair can carry

more data that 4,000 top-speed

DSL lines.

Homes that are being served by copper, either through DSL from the phone company, or with co-ax

from the cable company have significant limitations in service because of how each technology

works. In the case of DSL, not only is the driving technology outdated, but the old copper lines are

susceptible to corrosion that can severely impact the reliability of a subscriber connection.

Furthermore, DSL is severely limited in the distance it can push a signal (3-mile maximum), meaning

those homes furthest from the telco equipment are faced with connections that often cannot reach

even a paltry 3Mbps download speed.

In the case of coaxial cable (co-ax), used by TV cable providers, capacity is still an issue, but for

different reasons than with DSL. Compared to a fiber-optic system, cable is not nearly so scalable –

for every step up in speeds, equipment needs to be upgraded both at the home and at the cable

plant. Furthermore, cable systems were designed primarily to push data down to the customer, a

significantly different model than the emerging needs for telecommuting and interactive video, which

require high bandwidth in both directions. Finally, there is a major concern with the fact that cable is

a shared system, meaning that the signal strength you receive is dependent on how much bandwidth

is being drawn by other users that are also connected to that line of cable. Cable companies

commonly oversaturate their subscriber networks by a ratio of up to 100:1, leading to inconsistent

speeds for the end user.

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How it works is the secret to higher speeds

“Broadband” describes the fastest method of delivering high-speed internet to subscribers. While

DSL and cable utilize existing phone and TV infrastructure to transmit data as frequency “vibrations”

over copper wires, fiber networks transmit data using light over specialized cables that contain glass

fiber strands. Light moves at 186,000 miles per second, and this is what enables speeds of 1 Gig

(1000Mpbs) or much more per connection- 100 times faster than a 10Mbps DSL connection and 10

times faster than a 100Mbps cable connection. In addition, both DSL and cable suffer from the

limits of their own technology, making them less than ideal choices into the future.

Wireless is an interesting choice and is certainly being considered in major urban markets where the

density of buildings makes fiber optic cabling expensive and complicated. Wireless service, while

reliable, is not as reliable as fiber optics and can be susceptible to weather conditions and

movement of outdoor equipment due to wind. Wireless also requires a direct line of sight;

obstructions are not a friend of a wireless signal. While it has the capability to be as fast as fiber,

reliability concerns and reliance on line of sight make wireless installations best suited to very dense

urban, or certain rural situations where the physical environment allows for reliable, high speed

wireless systems, where costs make wireless a serious consideration.

Will Fiber Become Obsolete Like other Technologies?

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While we cannot predict the future, all indications are that fiber optics is here to stay for a very long

time. Frankly, this technology has already been used for many, many years, which means that there

are trillions of dollars of fiber installed globally. A whole industry has grown up around how to utilize

fiber to its fullest capacity to make all of our lives better. This industry has proven very good at

developing new electronics to push more and more data through existing fiber lines.

Most people think of fiber as a new technology, but in reality, it has been used for “backbone”

connectivity as far back as the 80s, with hundreds of fiber optic cables running across the sea floor

all around the world.

What is new, is that fiber is starting to be used to serve homes in places like Austin and Chattanooga

and right here in Maine on the islands of Islesboro and Cranberry Isles, where FTTH (Fiber-to-the

Home) networks are being deployed. Because of the extensive network of fiber already deployed

and continuing to be deployed, it is very unlikely that we would see any major shift in market forces

that would make fiber optics obsolete. Most telecom observers believe that 5G cellular technology is

many, many years away from possibly replacing even a traditional DSL or cable connection.

What is in a fiber-optic cable?

An individual optical fiber (the size of a human hair) is surrounded by several layers of material that

strengthen and protect the fiber. A fiber-optic cable can have any number of “fibers” ranging from 1

to several 100s.

Benefits of Fiber Technology

Speed and Capacity. Many experts say that FTTH connections are the only technology with enough

bandwidth to support the projected consumer demands over the next decade.

Future proof. Because of fiber’s capabilities, new technological innovations are being invented every

day to utilize fiber’s superior ability to transport tremendous amounts of data at blazingly fast

speeds. Technologies such as 3D holographic high definition television and gaming will someday be

everyday items in households around the world. FTTH will be able handle the estimated 30 gigabit-

per-second needs of such equipment… and this is just one technology. Think about the new ways

that you use the internet that seem commonplace now that were not even conceived of 10 years

ago.

One delivery system. Right now, a consumer can receive telephone, video, audio, television and

almost any type of data transmission using a single seamless FTTH connection. That trend will

continue as consumers are given increasing array of a la carte choices for how they receive their

various communication and data and streaming choices. Subscribers are also realizing that

receiving bundled services through a fiber connection can save money.

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Reliability. Fiber is the most reliable connection you can have. In surveys across the state of Maine,

the #1 complaint is reliability. An internet connection is becoming a necessity, not a luxury. When

connectivity is interrupted or slowed down unexpectedly or inexplicably consumers are furious that

they cannot accomplish the on-line task, leading to a significant loss of productivity or time.

Community Benefits

Job Creation- There are many examples of fiber networks creating jobs by either supporting existing

businesses or attracting new ones

Business Attraction- When we say business attraction, we really mean businesses that are looking

for the kinds of connections that can move large amounts of data, quickly- architects, designers,

banks and other heavy users

Entrepreneurship- Fiber helps induce young people to locate and work from anywhere

Telemedicine- The medical field and how patients and providers interact is undergoing seismic

changes. One of those changes is the way patients are able to be seen, treated, monitored and are

increasingly being given tools to manage their own health care, right from their home. A fiber

connection has the capacity to manage these data transmission uses, which in turn facilitates our

elders aging in place

Education- Creating equal access for all eliminates “the homework gap” for those students that are

increasingly required to complete assignments on-line but are unable to do so from their home

because of a lack of an adequate internet connection. Adult learners also benefit from on-line

learning options that utilize interactive video or other tools that those with better connections can

access.

Increased Home Values- A Broadband Communities study indicated that FTTH networks increase the

value of a $300,000 home by an average of $5,000-$6,000. Another study by the FTTH Council in

conjunction with the University of Colorado showed that homes with a FTTH connection are worth, on

average, 3.1% more than homes that do not have a fiber connection

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Arrowsic

Fiber Map of North Arrowsic

Fiber Map of Middle Arrowsic

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Fiber Map of South Arrowsic

Red Dots are 911 reported homes, businesses and structures

Yellow line is trunk fiber

Pink line is Drop Fiber on utility poles (less fiber strand count)

Blue/Gray Fiber is same drop fiber, (possibly even less strand count) AND placed directly on

the ground

The type of fiber dictates the cost per foot of that fiber, with the yellow trunk fiber being the most

expensive per foot, the pink, less expensive and the blue/gray being the least expensive.

This plan was built to serve every home in the community and would allow for future growth as

homes were built. Homes that are not directly served by our initial assessment would be served with

additional engineering on a case-by case basis.

Components of Cost of Project

Fiber Materials

Fiber Materials refers to the cost of the trunk cable and associated equipment to hang the cable and

the equipment needed to power the internet system.

Fiber Labor

Fiber Labor refers to the cost of manpower needed to string the fiber along the utility poles.

Licensing and Make Ready

Licensing and Make Ready refers to the cost of applying for utility pole rights and the associated cost

of making the poles ready to accept a new fiber cable. In order to install new fiber optics cable on

utility poles, a licensing process is in place that also evaluates each pole for readiness to accept a

new cable. Each provider (other than the electrical) would move the current lines to accommodate a

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space for a new cable. The cost of this process is estimated in our calculations and can change

depending on the application process costs associated with each pole.

Replacement Poles (10%)

We estimate that 10% of the poles, through the licensing process might need replacement. There

are two major reasons for pole replacements. First, the amount of equipment or utility lines on a pole

deem it necessary to increase the height of the current pole to allow for an additional line to be

placed on it (pole too short). Or the current pole is aged to the point where it would be unsafe to

place the additional line strain on the pole without a replacement pole. (Aged poles). We make an

estimate, but these issues get addressed through the application and Make Ready process.

Regen Hardware

Regen hardware is the equipment that would be used to power the internet system and control each

individual connection through this central system. These costs also include a heated and cooled

utility shack that would house the equipment.

Customer Premise Hardware and Installation

These costs are associated with the equipment needed at each home, the drop cable and the labor

cost associated with each customer installation.

Cost Breakdown by Street or Road segment

Because of the large number of street/road segments, we have included those in an appendix, for

those looking for those costs.

Plan for Arrowsic includes:

Internet system will be built to serve all homes

We assume that 50% of homes will take service- estimated at 122

Potential annual revenue estimated at $112,425

Axiom has not developed a seasonal rate; revenue assumptions are based on all homes

paying the same rate

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Georgetown

Georgetown North Map

Georgetown Middle Map

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Georgetown Middle Lower Map

Georgetown South Map

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Blue Dots are 911 reported homes, businesses and structures

Yellow line is trunk fiber

Pink line is Drop Fiber on utility poles (less fiber strand count)

Blue/Gray Fiber is same drop fiber, (possibly even less strand count) AND placed directly on

the ground

The type of fiber dictates the cost per foot of that fiber, with the yellow trunk fiber being the most

expensive per foot, the pink, less expensive and the blue/gray being the least expensive.

This plan was built to serve every home in the community and would allow for future growth as

homes were built. Homes that are not directly served by our initial assessment would be served with

additional engineering on a case-by case basis.

Components of Cost of Project

Fiber Materials

Fiber Materials refers to the cost of the trunk cable and associated equipment to hang the cable and

the equipment needed to power the internet system.

Fiber Labor

Fiber Labor refers to the cost of manpower needed to string the fiber along the utility poles.

Licensing and Make Ready

Licensing and Make Ready refers to the cost of applying for utility pole rights and the associated cost

of making the poles ready to accept a new fiber cable. In order to install new fiber optics cable on

utility poles, a licensing process is in place that also evaluates each pole for readiness to accept a

new cable. Each provider (other than the electrical) would move the current lines to accommodate a

space for a new cable. The cost of this process is estimated in our calculations and can change

depending on the application process costs associated with each pole.

Replacement Poles (10%)

We estimate that 10% of the poles, through the licensing process might need replacement. There

are two major reasons for pole replacements. First, the amount of equipment or utility lines on a pole

deem it necessary to increase the height of the current pole to allow for an additional line to be

placed on it (pole too short). Or the current pole is aged to the point where it would be unsafe to

place the additional line strain on the pole without a replacement pole. (Aged poles). We make an

estimate, but these issues get addressed through the application and Make Ready process.

Regen Hardware

Regen hardware is the equipment that would be used to power the internet system and control each

individual connection through this central system. These costs also include a heated and cooled

utility shack that would house the equipment.

Cost Breakdown by Street or Road segment

Because of the large number of street/road segments, we have included those in an appendix, for

those looking for those costs.

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Plan for Georgetown includes:

Internet system will be built to serve all homes

We assume that 50% of homes will take service- estimated at 517

Potential annual revenue estimated at $460,378

Axiom has not included a seasonal rate; revenue assumptions are based on all homes paying

the same rate

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Southport

Southport Map-North

Southport Map-Middle

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Southport Map- South

Green Dots are 911 reported homes, businesses and structures

Yellow line is trunk fiber

Pink line is Drop Fiber on utility poles (less fiber strand count)

The type of fiber dictates the cost per foot of that fiber, with the yellow trunk fiber being the most

expensive per foot, the pink, less expensive and the blue/gray being the least expensive.

This plan was built to serve every home in the community and would allow for future growth as

homes were built. Homes that are not directly served by our initial assessment would be served with

additional engineering on a case-by case basis.

Components of Cost of Project

Fiber Materials

Fiber Materials refers to the cost of the trunk cable and associated equipment to hang the cable and

the equipment needed to power the internet system.

Fiber Labor

Fiber Labor refers to the cost of manpower needed to string the fiber along the utility poles.

Licensing and Make Ready

Licensing and Make Ready refers to the cost of applying for utility pole rights and the associated cost

of making the poles ready to accept a new fiber cable. In order to install new fiber optics cable on

utility poles, a licensing process is in place that also evaluates each pole for readiness to accept a

new cable. Each provider (other than the electrical) would move the current lines to accommodate a

space for a new cable. The cost of this process is estimated in our calculations and can change

depending on the application process costs associated with each pole.

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Replacement Poles (10%)

We estimate that 10% of the poles, through the licensing process might need replacement. There

are two major reasons for pole replacements. First, the amount of equipment or utility lines on a pole

deem it necessary to increase the height of the current pole to allow for an additional line to be

placed on it (pole too short). Or the current pole is aged to the point where it would be unsafe to

place the additional line strain on the pole without a replacement pole. (Aged poles). We make an

estimate, but these issues get addressed through the application and Make Ready process.

Regen Hardware

Regen hardware is the equipment that would be used to power the internet system and control each

individual connection through this central system. These costs also include a heated and cooled

utility shack that would house the equipment.

Customer Premise Hardware and Installation

These costs are associated with the equipment needed at each home, the drop cable and the labor

cost associated with each customer installation.

Cost Breakdown by Street or Road segment

Because of the large number of street/road segments, we have included those in an appendix, for

those looking for those costs.

Plan for Southport includes:

Internet system will be built to all homes

We assume that 50% of homes will take service- estimated at 522

Potential Annual Revenue estimated at $404,337

Axiom has not developed a seasonal rate; revenue assumptions are based on all homes

paying the same rate

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Backhaul

Backhaul refers to the bulk bandwidth that would be distributed to each internet subscriber.

Because of the layout of the three communities, Arrowsic and Georgetown could use a different

backhaul provider than Southport.

While we have not yet determined which backhaul provider will be engaged by the ultimate operator

of the system, this part of the system typically comes down to the lowest price, therefore keeping the

Operational Expenses as low as possible, as backhaul is often the largest expense to the provider of

service.

Another consideration with backhaul would be being able to buy several Gigabytes (1 Gig=

1000Mbps) of service that could serve the three communities of the 3BIs. This amount of bandwidth

limits the number of companies able to deliver this amount of wholesale bandwidth.

On the Arrowsic and Georgetown side, FairPoint (now Consolidated Communications) can deliver up

to a 10G circuit to almost any place in either community. Because Consolidated has fiber and

established service in both communities, this is likely the least expensive option. In addition to this

option, the Three Ring Binder runs right by the entrance road to Arrowsic, and its technically possible

to extend a fiber line from the 3 Ring Binder down into Arrowsic where it would connect with the fiber

system we are proposing.

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This is a more expensive option and we would argue that the added benefits of possibly being

attached to the 3 Ring Binder would not outweigh the additional costs associated with bringing fiber

across the bridge to Arrowsic.

For Southport, the options are different. For one, you have existing Spectrum service throughout the

community. Spectrum does offer bulk bandwidth wholesale pricing, but we are not sure if they would

entertain such a purchase, given that the bandwidth would be used to compete against them. This

would have to be explored more fully.

Again, Consolidated Communications has extensive fiber networks across the state and they may be

the least expensive option, if they currently have fiber on the island.

LCI is the local provider and is interested in running fiber to the community or being a bulk

bandwidth provider. This would still require the bridge crossing and is likely more expensive than

provisioning a circuit already on island from Spectrum or Consolidated. However, LCI is quite flexible

and is a known entity in the community and might consider supporting a project with some of the

capital cost of constructing the connection, if there was a long-term benefit to them that would allow

them to recuperate cost over time.

To get a better understanding of cost, a Gigabyte (1000Mbps) of wholesale service would cost in the

range of $2000-$2500 a month.

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Cost Saving Measures

One of the reasons Axiom was hired by the Three Bridged Islands was because of potential cost

savings and innovative ideas through our experience as a constructor and operator of internet

systems. As you are well aware, Axiom prides itself on outside the box thinking that can bring cost

down by saving money in a variety of ways with a focus on three areas:

Combined savings by moving the project forward together

Time Savings realized with some innovative ideas

Cost savings realized by variations to traditional utility pole infrastructure

Through our experience in our current last mile network in Washington County, the fiber construction

we are undertaking on Cranberry Isles and our extensive planning work throughout the state, Axiom

has a reputation for creative ideas, while not compromising on quality or operability. Clients and

customers looking to keep costs down especially appreciate this approach.

As always, you can count on Axiom to be transparent and allow the communities to understand the

tradeoffs, compromises and costs of each and every decision to help them gain a better appreciation

of their unique situation. Axiom believes that every connection counts and that remote, difficult to

serve locations deserve connects that can propel them economically and socially.

Combined Savings by all three communities funding project together

It is hard to estimate the cost savings that could come if the construction contractor would be able to

buy the equipment, the cabling and other parts of the construction in bulk for all three communities.

Perhaps up to 10% of equipment cost. There could also be some savings on the cost of installation,

if the RFP was for all three communities. Even if all three communities build at the same time, the

size of the project remains small, by industry standards. That said, we are confident that some

savings could be derived through bulk purchase.

Of course, these savings would only be realized if all three communities were working with one

construction company. Here’s how these savings might play out.

Let us assume 10,000 feet of fiber optic cabling cost .50/foot, but if you buy 25,000 feet for all

three islands, the cost is .30/foot, producing a savings of $5,000 to the overall project.

Another example; if we were to purchase all of the CWDM equipment at once we might be able to

realize a 10% savings, possibly recovering $10,000-$12,000 in cost than if the equipment was

purchased separately for each town.

Time Savings

We all know the old saying “Time equals money” and that is certainly the case in which we are trying

to limit the trunk fiber, which is the most expensive and difficult to work with, and expand the use of

drop fiber, which is lighter and easier to handle. In addition, in both Arrowsic and Georgetown, we do

believe that time savings are derived by placing fiber on the ground in certain areas, as identified in

our mapping.

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Cost Savings

By using as much drop fiber and on the ground installation as possible, this leads to significant cost

savings also. Every pole you can avoid placing fiber on saves an estimated $450 in make ready cost,

avoid 10 poles= $4500 in savings. In addition, every pole that is avoided that would otherwise need

to be replaced saves $3000/pole, avoiding $30,000 in cost per 10 poles that would not need to be

replaced. These cost savings can really add up.

PLUS, it is more likely that storm issues that affect utility poles will not affect those fiber lines that

are on the ground.

Pros and Cons on placing cable on the ground

There are technical and aesthetic concerns with placement of cable on the ground. And certainly

high-traffic, paved areas where the cable would be more vulnerable to being cut are not ideal

locations to consider this type of installation. In addition, once the fiber is on the ground, we would

then bring the fiber to each home on the ground. People’s yards are more likely areas for fiber to be

cut or damaged by yard equipment.

However, on balance, we would argue that the cost savings associated with fiber on the ground

versus using licensed utility poles to bring the cable aerially is substantial and fiber on poles is just

as likely to be damaged by falling trees or damage to the utility pole by an automobile than by issues

that may affect it on the ground.

Here are some common questions about placing fiber cable on the ground:

It is not electrified in any way and unlike electrical wiring, safe to touch, play with and even

break, with no effect on whoever or however than occurs

It’s stronger than you might think. The cabling we are suggestion is rated to be outdoors,

hung aerially, put on the ground or buried underground

Breaks in the fiber are relatively easy to fix

We have managed on the ground fiber distribution systems (Squirrel Island) and installed

fiber on the ground (Cranberry Isles). In addition, Georgetown has a small section of fiber

that is serving customers that was put on top of the ground

Labor and Equipment

Any local municipal labor or equipment that could help with the installation would potentially save on

equipment rental, and local labor that could be absorbed by each of the communities. Having a

good inventory of local resources and labor can help defray costs to the project.

Operational Expenses

While not directly related to the cost of the construction, having a single operator should reduce

operational expenses, by unifying billing, technical support and other functions, and create better

profits that should help the operator stay viable for many years and make the ongoing investments

necessary to improve service levels and equipment functionality over the life of the system. It is hard

to quantify cost savings, but this is an important part of keeping the system up to date and

functioning at its optimal level.

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Grant Funding Resources

State Grant Funding Resources The ConnectME Authority offers two types of grants - Infrastructure and Community Broadband

Planning Grants. For the purposes of this report, the planning grant is not a consideration. We

would recommend looking toward Infrastructure grants, details can be found here:

http://maine.gov/connectme/grants/

Axiom has extensive knowledge of these grants, and has received over $1Million in funding.

Grant proposals must meet the state standard of 10/10Mbps

Grant limits are suggested, but typically $100,000, which must be matched 1 to 1 with a

combination of cash and in-kind services

Area targeted must be unserved or severely underserved (service that is less than 1.5Mbps

download

Typically, ConnectME grants open for applications annually in the spring.

The Maine Community Foundation has regional grants that can support initiatives up to $10,000.

http://www.mainecf.org/GrantsNonprofits/AvailableGrantsDeadlines/CommunityBuildingGrantProgr

am.aspx

Grants available up to $10,000

Local decision makers by county

Various criteria that needs review

Deadline February 15th of each new year

Northern Boarder Regional Commission Grants, http://www.nbrc.gov. The Commission accepts

grant applications from across the northern border regions of Maine, New Hampshire, Vermont and

New York.

Requires at least a 1 to 1 cash match

Must be tied to quantifiable job creation

Very competitive

Contact: Andrea Smith at (207) 624-9813 or [email protected] for information on

deadlines and program parameters.

Federal Grant Funding Resources

U.S. Department of Commerce- Economic Development Administration (EDA) provides funding for

economic development projects across the state of Maine. Maine projects are reviewed and

administered by EDA’s local representative, Alan Brigham at (215) 316-2965 or [email protected].

Programs and eligibility can be found at www.eda.gov

Various funding programs

Guidelines encourage regions to incorporate BB investments in their regional strategies

(CEDS)

Funding requires match

U.S. Department of Commerce- Broadband USA is helping communities nationwide ensure they

have the broadband infrastructure, digitally literate workforce and engaged citizens to thrive in

the Digital Economy. Details can be found here: https://www2.ntia.doc.gov/

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Provides direct (one-to-one) assistance to communities

Resource rich website- no direct grants

Building a self-assessment tool for communities

U.S Department of Agriculture- Rural Development has a number of grant programs worth

investigating. Local office in Bangor, contact Tommy Higgins, Acting State Director, (207) 990-

9160. More information on programs in Maine can be found here: www.rd.usda/me

Rural Broadband Access Loans and Loan Guarantees Program

Several other competitive grant programs to explore eligibility and criteria

U.S. Department of Treasury- New Markets Tax Credits (NMTC) has recently clarified the eligibility

of broadband infrastructure and related activities are eligible for NMTC provided they meet

certain criteria located here:

https://www.cdfifund.gov/Documents/2015%20NMTC%20Application%20QA%20FINAL.pdf

Axiom is exploring the potential of NMTC funding

Eligible census tracks are being reviewed

It’s unclear without investigation if the towns of Arrowsic, Georgetown and Southport may be

eligible

Broadband Opportunity Council Funding Report- U.S. Dept. of Commerce and USDA released a report

in January 2017 listing all federal broadband funding resources - See attached Addendums.