city of spruce grove fibre-optic broadband strategy fibre...

June 17, 2019

City of Spruce Grove Fibre-Optic Broadband Strategy

IBI GROUP

Fibre Optic Broadband

Strategy

Committee of the WholeJune 17, 2019

June 17, 2019


IBI GROUP

Objectives

Why is Broadband Important?

Current State of Broadband

Strategic Decisions

Business Model Options

Recommendations

High-Level Deployment Plan & Cost

2

Agenda

1

2

3

4

5

6

7

June 17, 2019


IBI GROUP 3

Strategic Objectives*

1. Create partnerships with the private sector in securing improved and

competitive broadband services to retain and attract investment

in our commercial and industrial areas;

2. Leverage the City’s investment in its own fibre optic

infrastructure as a key component to a more comprehensive and

integrated broadband network;

3. Establish the capacity over time to achieve an open access network

that the City can utilize to promote competition and generate a

financial return.

*Economic Development Strategy & Action Plan Update 2017-2021, September 8, 2018, Objective 8 ‘Ensure that Spruce Grove

businesses have access to state-of-the-art broadband services at competitive rates which are increasingly essential to attract

and retain high quality businesses and jobs’

June 17, 2019


IBI GROUP

Objectives



Strategic Decisions


Recommendations


4

Agenda

1

2

3

4

5

6

7

June 17, 2019


IBI GROUP 5

Technology is Continuously Transforming the World

• Transformation is accelerating

• Internet of Things and Big Data

• Connectivity and Mobile Technologies – 5G

• All Things Blockchain

• Digitalization and Manufacturing

• 3D Printing, Additives, Intelligent Materials

Science

• Artificial Reality / Virtual Reality

• Artificial Intelligence and Machine Learning,

Robotics

June 17, 2019


IBI GROUP

• It has disrupted almost every form of

business on the planet

• Untethered skills can be anywhere

• It is creating a new world order – geopolitics

• More affordable, safer locations have an

advantage

• Savvy rural regions can become

competitive

6

‘Access is the great equalizer…and is key

for widely distributed innovation

opportunities.’

~ Prof. Manuel Trajtenberg –Chair,

OECD/National Economic Council

Technology is a Global Equalizer

June 17, 2019


IBI GROUP 7

Top 10 List – Location Decision-Making Priorities*

*Global Trends ~ Local Opportunities in Economic Development Lee Malleau, April 2018

Decision-Making Factor Ranking Percentage

Security and Safety 1 61%

Connectivity and Broadband 2 51%

Supportive Business Environment 3 49%

Transportation and Logistics 4 43%

Income and Prosperity 5 40%

Strong Community Leadership 6 39%

Return on Investment 7 39%

Affordability and Accessibility 8 38%

Access to Markets 9 33%

Access to Capital Financing 10 32%

June 17, 2019


IBI GROUP

Broadband-Enabled Technologies

Internet of Things (IoT) – a system of objects

embedded with computing devices (i.e. electronics,

software, sensors, etc.) that are connected through the

internet to enable them to send/receive data

Artificial Intelligence (AI) – the simulation of human

intelligence processes by machines. It can give rise to

the use of robotics to perform human tasks.

Blockchain – a decentralized digital ledger in which

transactions or records can be made chronologically and

publically. It is a growing list of records, called blocks,

which are linked and secured using cryptography.

These technologies require broadband as a foundation for connectivity and have the

potential to influence various economic sectors.

8

June 17, 2019


IBI GROUP

Municipal Broadband Enables Smart City Technologies

Roadway Sensor Networks

Smart Metering

Video Surveillance

Speed Monitoring/ Variable Speed

Limit Systems

Connected/ coordinated traffic

signals

Sensor Networks (IoT)

Connected public facilities

9

June 17, 2019


IBI GROUP 10

Driving Forces

Call to Action

Regional Attention – EMRB / Edmonton Global

Receptive Governments

Support/ encouragement from business community

Successful community models to follow/ leverage

Shift to Information Economy / Broadband as a Utility

Historical lack of interest from commercial providers

Internet ‘dead zones’

June 17, 2019


IBI GROUP

Objectives



Strategic Decisions


Recommendations


11

Agenda

1

2

3

4

5

6

7

June 17, 2019


IBI GROUP 12

Current State

Business Interviews*:

• Business is generating 1000MB of data per day,

with ongoing storage needs above 1TB – need at

least 100Mb/s to perform daily data backups

• Need ability to use video conferencing, video

uploads, nightly file backups

• Quotations of high installation costs($100,000+)

• Relocating to other industrial areas where

broadband is readily available

*Taylor Warwick Consulting Limited, May 2016

June 17, 2019


IBI GROUP 13

Market Survey Information**

• Broadband is seen as an essential service to 95% of

the respondents surveyed. Uptime and reliability are

issues along with speed.

• Half of businesses are struggling with service levels

• Competition and ability to choose is important to 50% of

businesses

• Half of respondents would pay an increase of 20% for

gigabit speeds; 30% would pay upwards of a 40%

increase

**Market Survey Report, Lightcore Group Inc. April 2017

Current State

June 17, 2019


IBI GROUP 14

CIRA Spruce Grove Industrial Results

Download: 20.6 Mb/s

Upload: 8.9 Mb/s

June 17, 2019


IBI GROUP

Broadband Speeds (Download)

73%

20%

8%

15

<20 Mbps

20-50 Mbps

50+ Mbps

CIRA Spruce Grove Industrial Results Average Download: 20.6 Mb/s

June 17, 2019


IBI GROUP

Broadband Speeds (Upload)

72%

13%

14%

16

<5 Mbps

5-10 Mbps

10+ Mbps

CIRA Spruce Grove Industrial Results Average Upload: 8.9 Mb/s

June 17, 2019


IBI GROUP

Do

wn

loa

d s

pe

ed

0

5

10

15

20

25

30

35

City Centre CommercialCRTC Standard 50 MBps

Alberta Average 21.7 MBps

17

CIRA Spruce Grove Commercial Results

Download: 16.6 Mb/s

Upload: 7.2 Mb/s

June 17, 2019


IBI GROUP

Download Broadband Speeds

98%

2%

0% 50+ Mbps

20-50 Mbps

<20 Mbps

18

CIRA Spruce Grove Commercial Results Average Download:

16.6 Mb/s

June 17, 2019


IBI GROUP

Upload Broadband Speeds

33%

66%

0% 10+ Mbps

5-10 Mbps

<20 Mbps

19

CIRA Spruce Grove Commercial ResultsAverage Upload: 7.2 Mb/s

June 17, 2019


IBI GROUP

Objectives



Strategic Decisions


Recommendations


20

Agenda

1

2

3

4

5

6

7

June 17, 2019


IBI GROUP 21

1. Technology (Fibre)

2. Wholesale vs. Retail

3. Build and/or Partner

1. Create partnerships with the private sector in securing

improved and competitive broadband services

2. Accelerate and leverage the City’s investment in its own

fibre optic infrastructure as a key component to a more

comprehensive and integrated broadband network;

3. Establish the capacity over time to achieve an open

access network that the City can utilize to promote

competition and generate a financial return.

Strategic Objectives Decisions on Tactics

Build and lease

out dark

fibre/ducts to

private sector

Do Nothing

Publish Plans

search for

private sector

partner

(RFI/RFP)

Create a PPP

(Public –

Private

Partnership)

Build and run a

public network to

businesses,

innovation districts

and community

anchors

Build and run

a public

network

(business

and

residential)

June 17, 2019


IBI GROUP

40 Gb/s

22

• Future proof investment

• Lowest operations/ maintenance costs

• Useful life beyond 30 yrs.

• Open network access

• Cost effective in urban areas

• Globally deployed

Why Fibre? What about 5G?

• Needs a fibre backbone

• Mobile technology – businesses

need hardwired services

• Costs for services will be high

due to spectrum costs

• Carrier technology – high density

cities

• Deployment timelines TBD

June 17, 2019


IBI GROUP

Strategic Decisions and Considerations

Build and leaseout

dark fibre/ducts to

private sectorDo Nothing

Publish Plans

search forprivate

sector partner

(rFI/rFP)

Build and run a

public network

(business and

residential)

RetailWholesale

23

Build and lease

out dark

fibre/ducts to

private sector

Do Nothing

Publish Plans

search for

private sector

partner

(RFI/RFP)

Create a PPP

(Public –

Private

Partnership)

Build and run a

public network to

businesses,


and community

anchors

Build and run

a public

network

(business

and

residential)

June 17, 2019


IBI GROUP

Wholesale Model

City of Spruce Grove

Business ModelsCITY OF SPRUCE

GROVE

SERVICE PROVIDER

Own and Maintain Local

Electronics

Direct and manage local technician installations and repairs

Local Marketing and Sales

Support

Network Operations and

Provisioning

Customer Service & Technical

Support

Billing

Internet Service

Television Services

Telephone Services

Community

Examples:

24

June 17, 2019


IBI GROUP

Retail Model with Outsourced Operations

Local

FibreLeased

Backhaul

Connection

Leased

Backhaul

Connection

Business ModelsCITY OF SPRUCE

GROVE

OUTSOURCED

OPERATIONS

PROVIDER

Own and Maintain

Local Fibre

Direct and manage local technician installations and repairs

Own and Maintain

Local Electronics

Network Operations

and Provisioning

Leased BackhaulConnection

Customer Service &

Technical Support

Local Marketing and

Sales Support

Billing (on behalf of

City)

Internet Service (on

behalf of City)

Television Services

(on behalf of City)

Telephone Services

(on behalf of City)

Community

Examples:

25

June 17, 2019


IBI GROUP 26

No long-term contract required.

• Pricing 20-30% less than incumbents

• 1000 Mb services create a strategic advantage for business attraction

O-NET Example

June 17, 2019


IBI GROUP

Objectives



Strategic Decisions


Recommendations


27

Agenda

1

2

3

4

5

6

7

June 17, 2019


IBI GROUP 28

Business Model Options and Analysis

Build and leaseout

dark fibre/ducts to

private sector

Publish Plans

search forprivate

sector partner

(rFI/rFP)

Build and run a

public network

(business and

residential)

Build and lease

out dark

fibre/ducts to

private sector

Do Nothing

Publish Plans

search for

private sector

partner

(RFI/RFP)

Create a PPP

(Public –

Private

Partnership)

Build and run a

public network to

businesses,


and community

anchors

Build and run

a public

network

(business

and

residential)

June 17, 2019


IBI GROUP 29

Strategic Decisions and Considerations

Build and leaseout

dark fibre/ducts to

private sector

Publish Plans

search forprivate

sector partner

(rFI/rFP)

Build and run a

public network

(business and

residential)

Build and leaseout

dark fibre/ducts to

private sectorDo Nothing

Publish Plans

search for private

sector partner

(RFI/RFP)

Create a PPP

(Public –Private

Partnership)

Build and run a public

network to businesses,


and community

anchors

Build and run a

public network

(business and

residential)

June 17, 2019


IBI GROUP

Objectives



Strategic Decisions


Recommendations


30

Agenda

1

2

3

4

5

6

7

June 17, 2019


IBI GROUP 31

High Level Strategic Recommendations

The City’s strategic long range plans for broadband improvement can be focused

around the following major areas of effort and investment:

S1. Reinforcing and accelerating existing City plans and capital budgets to build

out the City’s fibre ring to connect City facilities, improving broadband capacity

and providing improved reliability of the City’s broadband communications

infrastructure.

June 17, 2019


IBI GROUP 32


S2. Working closely with commercial telecommunications carriers to facilitate their

continued investment in commercial and industrial areas, as a priority. The City’s role is

not one of direct funding or subsidy of carriers, but to work collaboratively on

aspects such as planning and coordination of City utility projects, coordinated

planning/ engineering and construction approvals to reduce the time and cost of

installation of carrier infrastructure, with a particular emphasis of coordinating and

encouraging carrier investment at the time of City civil work occurring during

roadway and underground utility projects.

June 17, 2019


IBI GROUP 33


S3. Seeking to drive synergies between planned (i) City civil

construction projects and (ii) The City’s planned fibre ring to install

additional conduit to provide for future broadband capacity in the

City’s industrial and commercial areas.

S4. Investing in the creation of a Smart City strategy that will provide

guidance on the adoption and use of Smart City technology and

infrastructure throughout many aspects of municipal operations and

inform the future needs of the City’s fibre infrastructure.

June 17, 2019


IBI GROUP

Objectives



Strategic Decisions


Recommendations


34

Agenda

1

2

3

4

5

6

7

June 17, 2019


IBI GROUP 35

NUMBER ACTION EXPECTED OUTCOME TIMINGRECOMMENDED

BUDGET

LEADDEPARTMENT

1Advance negotiations with telecommunications carriers

Agreement with telecommunications carriers to facilitate construction planning and coordination

2019 N/A Economic Development / IT

2a

Perform engineering route design Public Works to RCMPand Campsite Transit Centre in advance and solicit businesses near the planned route for interest in a municipal fibre optic connection.

Finalize the route to allow for:

i)Application of grant funding forconstruction from other levels ofgovernment

ii)Market demand assessment of business interest

iii)Further cost certainty of construction

2019 $68,000 IT/ Economic Development

2b

Review of municipal engineering standards and inclusion ofconduits in future roadway/ utility construction projects

Review and coordination of planned deep utility construction projectsto allow for the inclusion of conduit to support future broadband connections.

2019 in advance of finalizing construction scope and

project tendering

$15,000

(engineering consulting)

Engineering

Broadband Strategic Plan Recommendations

June 17, 2019


IBI GROUP 36


BUDGET

LEADDEPARTMENT

3

Reprioritize and advance the sequencing of the City’s Municipal Fibre Ring Plan (2021 – 2026, CI417.5) to construct the segments connecting the Public WorksBuildingto the Integrated RCMP Building and the Campsite Transit Centre(utilizingthe Diamond Avenue alignment)

Advance the timing of the Municipal Fibre Ring to create an anchor investment as a platform to allow for future connections to businesses in close proximity to thebackbone

2020 $502,463

Existing budget, advance from 2022

Information Technology

4

Add the Arena Project in the City’s Municipal Fibre Ring plan

Include new facility requirements TBD (align todeveloptimelines)

$150,000 Information Technology

5

Develop a full engineering and business plan for the build out of a fibre optic infrastructure, identifying municipal and business needs and considering opportunities for cost recovery

Using the results of the market survey/ solicitation identified in item #2; develop a full business andengineering plan for council approval.

2020 $130,000 Economic Development / IT


June 17, 2019


IBI GROUP 37


BUDGET

LEADDEPARTMENT

6

Upon successful deployment of a pilot project, budget for full deployment based on market demand for services

Allocate capital for broadband investment to support economic development

2021-2024 2021: $1,060,000(Industrial SE)

2022: $1,910,000(Industrial SW)

2023: $1,590,000(Commercial North)

Economic Development

7

Invest in the development of a Smart City Strategy

Create a strategic road map for the adoption of Smart City connected technologies and the need for future City fibre optic facility investment to support this road map

2020-2022 $275,000 InformationTechnology


June 17, 2019


IBI GROUP 38

Municipal Broadband

Proposed

Phase 1 Industrial SE

Phase 2 Industrial SW

Phase 3 Commercial

North

June 17, 2019


IBI GROUP 39

Municipal Broadband• Some overlap with City

plans

• Some additional savings

possible with other

municipal civil work

(roads, deep utilities)

June 17, 2019


IBI GROUP 40

PHASE DESCRIPTION NUMBER OF PARCELS

CAPITALBUDGET ($M)

MAINTENANCE COSTS(3%, ANNUAL)

1 Industrial SE 99 $1.06 $31,770

2 Industrial SW 154 $1.91 $57,420

3 Commercial North 110 $1.59 $47,700

Total 363 $4.56 $136,890

Per Parcel: $12,562/ parcel $377/ parcel

PHASE DESCRIPTION NUMBER OF PARCELS

MONTHLY COST RECOVERY (20% TAKE RATE)



1 Industrial SE 99 $167.45 $70.48 $46.24

2 Industrial SW 154 $196.31 $82.02 $53.45

3 Commercial North 110 $230.08 $95.53 $61.89

Total 363 $198.67 $82.97 $54.04

Broadband Strategic Plan Cost Estimates and Financials - Preliminary

June 17, 2019


IBI GROUP

Questions?

June 17, 2019


IBI GROUP

Thank you!

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