Benton PUD Commission Session · 2019. 9. 10. · Broadband Stratesic Plan ni ns Benton PUD...
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Broadband Stratesic Plan ni ns Benton PUD Commission Session September 10,2019 l:00 p.m. - 4:00 p.m. (times are approximate) Gommission Welcome and Open Commissioner Jeff Hall lntroduction Chad Bartram Broadband Business Performance Chris Folta Rich Nall Discussion/Pause Point Broadband Business - Financials Chris Folta Discussion/Pause Point Break NoaNet Dave Spencer Discussion/Pause Point lmpacting Technologies Chris Folta Challenges Chris Folta Path Forward: Opportunities Questions/Discussion Chris Folta
Transcript of Benton PUD Commission Session · 2019. 9. 10. · Broadband Stratesic Plan ni ns Benton PUD...
Broadband Stratesic Plan ni ns
Benton PUD Commission SessionSeptember 10,2019l:00 p.m. - 4:00 p.m. (times are approximate)
Gommission Welcome and Open Commissioner Jeff Hall
lntroduction Chad Bartram
Broadband Business Performance Chris FoltaRich Nall
Discussion/Pause Point
Broadband Business - Financials Chris Folta
Discussion/Pause Point
Break
NoaNet Dave Spencer
Discussion/Pause Point
lmpacting Technologies Chris Folta
Challenges Chris Folta
Path Forward: Opportunities
Questions/Discussion
Chris Folta
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BnoenBAI\D SrnnrEGIC PTIxNTNGSBpTEMBER 10, 2AI9
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>-¡it; -. :. ;itt¡"fiíãner¡a¡e r{¡iic"
AcpNDA
* Broadband Business Performance
.l NoaNet
* Impacting Technologies
* Challenges
* Path Fonnrard: Opportunities
* Recommendation Summ aty
InËtrHÊ*åS
BnOEDBA¡{D BUSINESS PBnFoRIvTANCE
BETTU E4'lr'0 '3-*5r-=-'1==
ORIGINAL Punposg
Broadband is the "Next UtilityttBridge the "Digital Divide"Businesses and public entities unserved/underservedLimited access and high costs
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Enhance Livability of the CommunitySchools, hospitals, libraries, city services
Promote Economic Development
Enhance Utility OperationsUtil:rze NoaNetts expansive network
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DEffinr Ed.ll.l, 1¡1=..1.=;,
Pr-nxNrNG AND DrREcTroNBroadband Planning
Annual budget cycleRegular strategic discussions/workshopsUpdates to wholesale rates, terms and conditions
Strategic Planning with Commissioners
June and October 20tlDecember 2012
June and Jrly 2013
Muy and June 2015
Decemb er 2016 (Access fnternet Promotional)Muy and Septemb er 20!7
NoaNet Network Coordinated Services
January 20ll: ImplementationFebruary 2014: Expanded Billing, Outside Plant, Engineering Services
January 2017: Fee structure change to percent of gross revenues
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BEffiU E-=F.A.D '=:=-:-r*=
RgSOLUTIoN 2432: BnoADBAND SrnnrEGY
Continue to account for broadband finan cial activitieswithin the Electric System Fund; comply with WashingtonState AuditorWholesale rates to retail service providers urill be based on
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competitive pricing principles; finan ciaÏmalntatn n tlv
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NoaNet will continue to provide management ofbroadband business through Network Coordinated ServicesDistrict will remain an active o\ilner/rnember of NoaNetand to provide periodic updates to the Commission
STAFF RECOMMENDATION: Consider future modification tofinancial planning direction to allow for emergirg proiects*
* prospective Broadband business opportunities for Commission consideration
nnI Rd¡aHeRól¡cPowgP@ícø
CUnRENT SrerpCovering O&M and Capital Costs
Incremental customer growth & revenue preservation
Limited and Focused Capital investmentSmall-Medium BusinessLine Extension Credit 8.L = 75o/o x MRC x TermLine Extension Credit 8.2 - Up to $10k credit w/ 2 yr. Term
Partnerships & Strategic Agreements
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o NoaNet Momentum (20 .7 2o/o ownership)Improving Fin ancial Pro for ÍttaChallenges in capital fundingHi Capacity Projects returning on irn'estmentsNetwork Coordinated Services
BEffinn E4'lr'1, 1-.-==+-
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RnrEs, Tpnnns & CoNDTTToNS
Resolution 2491: Februany 2019
Addressed factors considered when establishing R, T & CAffirmed Line Extension Credits (LEC) 8.1 and 8.2
WHEREAS, The District takes multiple factors into consideration when establishing therates, terms and conditions, including but not limited to:
STAFF RECOMMENDATION:a
Continue LEC B.l andB.zFocus on targeted marketing of netrvork services
Evalu ate options for trench / conduit cost improvements
rightsof-way access to provide services, capltal budgets, and broadband
p ity of existing ftber optlc backbonrecovery, ava
limitations.
BEtÍot æoF A'll î--===--=
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NprwoRK CooRDTNATED Spnvrcn s
NoaNet NCS - Comprehensive Services
24x7 Network Operations Center
Nenvork Troubleshooting
Engineering Design
Sales and Marketing
Service Provisioning
After-hours Emergency
Equipment and Facility Maintenance
I R€l¡able RólicPorerPdidq
BUSINESS SBnvICES OFFERED
Transport
Access InterfietFixed Wireless
InternetPoint-to-Point Síirele s s
Dark Fiber: Negotiated Contracts
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I Rel¡at{e R¡ticPows Prwids
Benton PUDNetwork tlap 2019
at&t¡t¡x
Includes fibersacquired throughagfeements:
Pacific NothwestNationalLabotatories
Bonneville PowerAdministration
City of Richland
Department ofEnergy
Energy Northwest
Franklin PUD
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FlnlÊtr Hod8
LegendI E¡¡dtrF
-
ÁÈr1d
-
Pre,{lrflEclcalætt Olþp
-
UrÉË$or¡t
Prossar l{ûrb
4fr#"qp"flr-t
O&M AND CEpITAL ITvTpRo\IEMENTS
Maintenanceo
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Emergency repairs >$66k YTDReplacing aging infras tructure
NoaNet Response
Improvements to the networkNode and fiber capacity ,rpgrades
Multi-Protocol Label Switching (MPLS)
BETIT'T E4'A'n lrs-==;
JL NoaNet..1 r,,-.r¡ñn r.,... !i.,-¡
Benton Consolidated Re rt - 2018 to 2019 YTD
îI
149
Benton RT tíckets2019 YTD
Ell{ERmT nElO{ytD sO{Ff TESTOwEO Br WßELe56 ÊE5O|VED EflrÊtftÉr RË5S|,WD 5$ilfi IESOIVED BV UrË[E!5 ßEs¡ût¡rEO
tt i¡t6rfttÊR É¡r6riltÊi 8Yfr6rïtÊñ BY r*oc rroc cY iloc
205
Benton RT tickets2018
Él$$¡ga rtsorvfo 5or¡€¡ RtSow¡o Er wrñH,fss {f5or!To ft]rtRÈfr ñtSotrr[o tor.fl [ft)rìÆD Ef ryGËtrts ift{tÌrfiDtyfltctt{úfR ftl6li¡tEf, grtxclñtfR Brxoc toc 8Yt{K
¡ CPE
rs S{lllEf
2018 End-of-Year lìevice Count
r CPE
r Sût{Ëf
2019418
1111
24
16
41
LzE
2018ItL7
IL7
23
13
21
715
18t55
18r'
B,€PUD
MonthlanFeb
Mar
Total
AprMayJun
lulAUE
5ep
OctNov
Dec
REnÍot ffii--F.A.fl -*-.r"eåH!E
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MERKETING ETTORTS
NoaNer met with all RSP's in Q2 2019:
Providirg list of on-net and near-net buildings
Prequalify buildings below the $10K
I dentify Mrlti-Ten ant buildingsDeveloping flyers and welcome packages
Looking at pricing options for Small Business
BUILD "THAT" NEIGHBORHOOD
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The TransformativePower of Broadband
i.if üi ;::r:::rp:::.p-.
æ":ffih^" NE
ffiE
'KPUD +ffi
Jl-?f
Ethernet & MPLS Services
No¿Neîclrendy*ßbßi.83ês¡ndgo!émñeñr€ô¡¡6bydclivcri¡g 1eðdi¡9cdgc tcclrnology a..oss ôn e¡lêôsivc high.specdbå.bone ¡h,oogh MPLS {Mlitip'orocol b&l swhching) which ß ¡lùlly oè5hed priv¡re neùor! to e¡süre m¿x ñ!D redùñdá.cytôprovidé h 9h reliàb;|iry.
Mp:,o::ì.rñsrspikcs:rp!r-ràtbr.ìir,1\.*dptildb,riovÈ¡.ErF r.e:
rfd r(, r rotr.t ro rìj1N. /n lil¡\)
NoàNels Elheh¿l Fc¿tu.¿3:
r H3¡rÞ',É¡.¿l<frs,Ê.¡vryì
é R0c!' ¡r.l,oùr0i ic,.dv.
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SBnvICE ORDERS CovTPARISoN
2018 Quotes: 257
2078 SO Access Internet: 68
2018 SO Other: 1987
2019* Quotes Totalz I022019* SO Access Internet: 43
2019* SO Other:2568
*Year through August L5th
Batfnt E-=F A'0 ï::=-Er{ï
NnTwORK PBnFoRIvTANCE
2018
Q1 99.9e9% 100.000% Q1 9fr.999% 100.m0% Q1 99.99o/o 99.s)%Q2 ge.eee% 100.000% Q2 99.999% 9f1"982olo Q2 99.99% 100.000Á
Q3 99.999% 100_0m96 Q3 99.999% 1m.(n00Å Q3 99.99% 100.00%Q4 99.999% 100.000% Q4 e9.999% S).978o/o Q4 99.99% 100.000å
Reqional Network
Goal Actual
Reoional Network
Fiber Backbone
Goal Actual
Fiber Baçkbone
Goal Actual
Customer Fiber
Goal ActualWireless
Goal Actual99.9% 99.9olo
99.91o 99.90Á
99.9% 99.90Á
99.9% 99.9olo
Wireless
Goal Actualgft.9% gft.900%
99.9% s.994%99.9%gft.9%
Q1
Q2Q3Q4
2019
Goal Actual
Ql ge.eee% 100.0üì96 QÎ gfr.gfilÐgå
Q2 ee.eseyo 100.000% Q2 gfr.gfxl96
Q3 e9.999% Q3 99.9flgst
Q4 99.999Yo Q4 sr.frfrf)96
Customer Fiber
Goal Actual100.fm96 Q1 99.99Yo s.gflr96100,m096 Q2 99.99Yo gfl-998%
Q3 99.990/6
Q4 ee.ee%
Q1Q2Q3Q4
rureI RelhHe R.öl¡cPffiP@lls
DISCUSSIoN
BEffinr E4'lr'0 !.=-*;
BnO¡,OBAND BUSINESS I FIxINCIALS
I EReliable Ptôl¡cPdsPdidtr
Net Cash History
S3,ooo,ooo
s2,ooo,ooo
Sl,ooo,ooo
So
(s1,0oo,ooo)
(s2,000,000)
(s3,ooo,oo0)
2000 200]- 2002 2003 2004 2005 2006 2007 2008 2009 20to 2071 20]-2 20!3 20L4 20L5 20L6 20]-7 20L8 20t9pro
Forma
Net Cash returned to Rate Payers
201,1,-2019 : 52,9 62,5 42
Net Cash Fundingfrom Rate Payers
2019: s9,91,0,306
Peak Net Cash Funding from Rate
Payers 201-0: S 12,872,848
IAnnual Net Cash Funding +Operating Revenues
2O79 ProForma
2,4t3,253
(1,001,676)
(L,286,709l-
r24,869
20t8
2,250,449
(936,989)
(1,243,227].
60,646
20L7
2,t64,5OO
(840,934)
(95L,73L)
358,405
2016
2,046,069
(931,788)
(757,5001
352,9t7
2015
2,023,22O
(L,O2L,403)
(773,5321
223,767
2074
2,tgg,gt3
(979,511)
(648,005)
545,262
2013
r,972,L25
(885,425)
(708,5L2)
376,696
20L2
L,6t9,726
(69t,377l,
(430,6461
623,852
20tl
1,591,991
(671,688)
(577,036)
292,200
20L0
1,L83,51g
(709,660)
(738,7431
(405,962)
I Annual Revenue
¡Annual O&M Expense
r Net Capital Expense
I Net Cash tol(from) Electric
I
s2,3s0,000
s2,100,000
S1,85o,ooo
S1,6oo,ooo
S1,35o,ooo
s1,100;000
ssso,ooo
56oo,ooo
S¡so,ooo
s100,000
-S150,ooo
-s4oo,ooo
-s650,000
-s9oo,ooo
-S1,15o,ooo
-s1,400,000
fn
Net Cash Funding of Broadband*
Rel¡atile Pt¡)l¡cP@sPrwids
*Does not include maintenance revenue and bad debt expense
S2,4oo,ooo
S2,2oo,ooo
52,ooo,ooo
sl,goo,ooo
$1,600,000
S1,4oo,ooo
s1,2oo,ooo
Sl,ooo,ooo
s8o0,0oo
s600,000
s400,000
s200,000
So
Broadband Revenue History*
20]-9 ProForma
550,000
250,000
42,000
54,000
300
36,000
1.,480,953
2018
531.,L79
177,L67
43,098
48,551
312
36,500
t,4L3,642
20t7
524,642
76,323
64,924
50,181
312
56,463
1,391,655
2016
522,741
75,282
76,764
312
69,372
t,3o1,597
20L5
345,737
89,610
L19,181
364
86,428
1,381,900
2014
286,664
97,395
135,09L
468
t46,t24
1,523,07!
20L3
248,L94
113,516
286,457
t,Lo7
L48,184
L,174,667
2012
50,8L5
133,765
278,533
2,379
t64,52L
988,7L4
20tr
L55
142,380
370,388
3,090
213,844
852,L34
!,746
2010
L34,O23
330,L96
3,1.64
199,8L3
5'J"4,578
rN Contracts
I Access lnternet
r Fixed Wireless
I lnternet Transport Service
rWiFi
rTDM
t Ethernet
IIReve n ues"503,490
Negotiated Contracts (Dark Fiber) - "Grow Revenues"Projected th rough 201,9: 53,061,,872
"Susta in
through 2019: 5
ernet
BEffinr E4'lr'1, !=.=-=.:=,
*Does not include maintenance revenue and bad debt expense
BnOEDBAND BUSINESS I FINIxCIALS
Net Cash Funding
Cumulative Revenues
lnception to Date(6ltsl
Operating Revenue
Capital Contributions (Others)
Total Revenues 5 29,O7t,4t9
Cumulative Costs
Operating Expenses*
NoaNet Assessments and Support
Capital lnvestment
Total Costs s (3g,go4,617l
Net Cash Funding (From Ratepayers) s p,733,tggl
Net Book Value of Assets
7
21.,829,969
(L2,O47,7r4)
(3,297,648)
5523
S rr.oss.goo
- - -,k-
I Flelieble A¡llicPowsPdidd
* Does not include depreciation expense: (5L1,773,2891
Snnen CBrr FlxexcrAls (PnoposED TBnMs)
Carrier will use 2 fibers for $395 / rno. MRC with option touse 2 rnore for $100/mo. MRC
BEflTOT
a
Ssgs
60
42
550746
8s01_5
Sog,Eoo
550746
Small Cell Sites
MRC
Finance Term (months)
LEC (MRC x TERM x75%l
Construction Estimate
CIAC from NoaNet
1650/site x 42 sites
NTE District Cost
osal: CostSmall Cell Pro42
Sggs
L20
Sr,ggo,goo
300Sog
100
Small Cell Proposal: RevenueSmall Cell Sites
MRC
Contract Term (months)
Small Cell Revenue
CIAC from NoaNet
1650/sitex 2sites
Contract Revenue
IFWIffiFSlt'JyF.Rtå99
NB:r PnBSE,NT V IUE AT 5% DISCoUNT Re:rp
Small Cell Project Financial Analysis
5.O%Discount Rate
Cash Outflows $ 2,Ot9 Total 2020 - 2029
Gross Capital s (815,850) s
sTotal Cøsh Outflows
75 (87s,8s0) S
Cash lnflows $ 2,Ot9 Total 2020 - 2025,
ctAcSmall Cell Revenue (42 sites)
S 69,300
l_,990,800
Total Cdsh lnflows s 69ÅM 5 1"990,8U)
lmpact to BB Cash Flow S 046,sso) S r,99o,g@
s
s
Net Present Value S 790,69g
BErfu E=FA'0 l=='=-=;
NBr PnnSENr VerUE AT 30Á DISCoUNT RerB
Small Cell Project Financial Analysis
3.O%Discount Rate
Cash Outflows 2019 Total 2O2A - 2029
Gross Capital s (81s,8s0) s
s7
Total Cash Outflows 5 ß11850) 5
Cash lnflows s 2,019 Toral 2O2O - 2029
ctAcSmall Cell Revenue (42sites)
Total Cosh lnflows
Impdct to BB Cosh Flow
s 69,300 ss 1,990,800
5 6ggw S l"ggo,Bw
S Q46,sso) 5 r,ggo,gw
Net Present Value S gsL,æg
BEffinr
==F lr' lr r-:==.===-r.==
Npr CesH Frow PpnFoRrvrANcE
I
202320222021
(1.,124,696') (1.,t57,227) (t,t76,
(1,085,468) (1,085,468) (864,
2,760,239
199,080
2,775,6M
L99,080
2,627,55L
199,080
728025467
2,547,967
99,540
(L,203,324)
(81"5,850)
(r,07L,
73,500
2,4t3,253
í,001,676)
(1.,32L,709)
35,000
Forecast
9L7 646229,206
with Small CellBroadband Cash Flow Ana
SmallCellC|AC
Operating Expenses
ctAc 589,482 120,152 89,079 M,463
(r,021,924) (935,652) (854363) (946,5771
2,024,66L 2,046,069 2,164,499 2,250,450
(1,363,013) (877,652) (1,040,810) (r,287,690)Capital
tional Small Cell Capital
Operating Revenues
Additional Small Cell Revenues
BroadbandNet Cash
Rolling Five Year Cash Flow
Previous Five Years
Forward Five Years
26
ÆÐrEt+tì?il
nnReliaue R.blicPowsPwids
BnO¡,OBAND BUSINESS I PnoFoRMA
BEflfOil ntàltG
BENTON PUD PRO FORMA2023
Revenues'$ 2,341.23s
$ 419,000
$ 199,080
Ð zrvcvrJ-tv
Operating Expenses$ (788,363)
$ (388,360)
$ (1,176,723')
Gapital Expenditures
$ (30,000)
$ (75,000)
$ (75,000)
$ (75,000)
$ (25o,ooo)
$ (75,000)
$ (75,000)
$ (20e,468)
$ (864,468)ç It fìÁ.{ {q{ì
$ 918,128
2022
$ 2,306,640
$ 409,000
$ 199,080
Þ zrv-t4rr zv
$ (776,481)
$ (380,746)
$ (l,157,2271
$ (30,000)
$ (75,000)
$ (75,000)
$ (100,000)
$ (450,000)
$ (75,000)
$ (75,000)
$ (205,468)
$ (r,085,468)!È tt tÃ2 AqÉl
$ 672,O25
2021
$ 2,272,551
$ 349,000
$ 199,080
Þ ¿rózvroJ-1
$ (751,416)
$ (373,280)
$ (1,"t24,696)
$ (30,000)
$ (75,000)
$ (75,000)
$ (100,000)
$ (450,000)
$ (75,000)
$ (75,000)
$ (205,468)
$ (1,085,468)!h t2 t.lal 4â l
$ 610,467
2020
$ 2,238,967
$ 309,000'$ 99,540
Ð zro4t rcvt
$ (705,2e6)
$ (365,961)
s (1,071,2571
$
$ (30,000)
$ (75,000)
$ (75,000)
$ (100,000)
$ (523,500)
$ (75,000)
$ (75,000)
$ (176,324)
Þ (ö1C,öþU)
$ (1,945,6741c l? ft,l a o?ftì
$ (369,4241
2019
$ 2.163.253
$ 250,000
Ð ¿,cl-l.t,¿Ð.t
$ (642,891)
$ (358,785)
$ (l,001,676)
$ 35,000
$ (65,e86)
$ (20,000)
$ (125,000)
$ (125,000)
$ (75,000)
$ (600,000)
$ (75,000)
$ (75,000)
$ (160,723)
$ (1,286,709)c tt taa Le//ll
$ 124,469
LINE ¡TEM DESCRIPTION
Transport. Wreless. Dark Fiber Revenues
\ccess lnternet Revenue
Srnall Cell - "\Mlite"
I (,ratt tfevenues
NoaNet NCS
Fiber Leases, Maintenance, Dstrict Labor
O&M Direct Gosts
Aid to Construction
Air Spoiler Project
New Developnents
Future Backbone Upgrades
Laterals b<tensions
Line Ertension Credit 1
Line Fxtension Credit 2
PrerrÍse Eectronics
Core Eectronics
lrloaNet NCS LaborSrrall Cell - "\¡trite" LEC'l
To.tal CapitalTotal O&M and CapitalNet Cash To/From Broadband
àF.A.D Rèliable R.ülicPower Plovider
AccESS IxTERNET MoDEL: 2OI8
tEtInt
5t4
500
880
875s
32s1
RevenueMonth
!9
125
544
sL1e
LO2
Fiber Revenue
2to
000
987
Sgs
= Construction Estimate - *MRC*7
10,000 Credit
6
Lt9
702
2
1_00
20
LEC 1
LEC 2
58
L3
r
91_
987
I Reliable R"ölicPowtrP@ids
LTNB ExTENSIoN CnpDIT PgnFoRMANCE: 2OI9
F.ÑLnrã
NET tEC 1 YTD 2019
Monthly Revenue
s28.140
NET tEC 2 YTD 2019
Monthly Revenue
S+,szo
On-Net YTD
Monthlv Revenue
Ssoo
Combined New Builds & On-Net YTD 2019
Monthlv Revenue
s33,1-60
2019 LEC YTD
Net Construction Capital
S393.428
Average Fiber Revenue
s970
Average Fiber Revenue
Si.os
Average Fiber Revenue
$100
Average Fiber Revenue
s431
AtoC
s62.701
Capital
597.44L
Capital
5226,144
Capital
So
Capital
s324,L85
Lateral YTD
569.243
Averase Fiber Build Costs
s3,360
Average Fiber Build Costs
5s,273
Averase Fiber Build Costs
So
Average Fiber Build Costs
54.zro
tEC 2 YTD
5261,.179
Fiber Customers
29
Fiber Customers
43
Fiber customers
5
Fiber Customers
77
LEC 1 VTD
SL2s,7ol
Rel¡able R¡)licPower Pþv¡der
o
MpASU RING PBnFo RIvTANCE
STAFF RECOMMENDATION:Measure performance going forward for LEC 8.1 and 8.2
Not based on specific product set
Better defines performance in terms of RrTrC and Policy
Revenues drive deeper expansion of fiber network
DErfnr E4'lr'1, !.,===-
f)rscussroN /BREAK
nnI Bd¡{¡ble R.blicPrysPurids
InnpecrrNc TpcHNoLo crEs
BErfnr E4'lt'0 =-=--s--1;=
Suerr Cpn/sc
Macro cell coverage largely built outCoverage issues
4G LTE Infill strategy for lrow...bridge to 59
FCC RulingMunicipal Infrasttucture in public rights-of-way
Cities passing ordinances, adopting standards
5G standards being finali zed
National Carners ^te
coming
a
a
a
a
o
o
BEffinr
='=F A'D þ=;=E-r.+=;
Suen Cpn Pno¡EcT IJpoerB
Proiect with t'Sf/hite" moving fonnrard
Site walk with carrier completeVast maiority *ill install on street light infrastructureILCA with City of KennewickStandards and fees developingLine Extension Credit ($815k) moved to 2020 budget
STAFF RECOMMENDATION:Continue to evaluate options to provide backhaul - dark fiber,pursue new rnacro cells, expand network cap acity
o
O
BErfar E4'A'1, ii=.-:::;
o
RpSIDENTIAL FTTXFiber to the X (home, curb, node, edge)
Wave Holdings bought Frontier assets in WA, OR, MT, IDSome RSP's offering FTTH using BPUD as backhaul
o
a
Networkoperator
Fiberto the X
FTTC
FTTB
- Fiber cable
- copper cable
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o STAFF RECOMMENDATION:RSP's should lead efforts bringing fiber into residential areas
Continue to evaluate collabotation options
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Am azon w¡ll launch thousands of satellites toprovide internet around the world3,236 sotellítes will pravide înternet from low Earth arbítBy Jon Pûner | @JonPorry I ¡pr +, 2t19. 11:18am EDT
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. SpaceX: plans for I2r000 satelliteso OnerWeb: plans for 650 satelliteso Facebook: starting to develop internet satellites
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Comm oditization of ServicesFaster/Cheaper
Competition for broadband servicesPotential overbuilding of BPUD fiber network
Constrained Market/ Revenue SaturationIncremental customer growth may not increase revenueNew revenue streams neededFund continued reliable operation of core networkPreserve original purpose
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Perrr FonweRD: OppORTUNITIES
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Lit services revenue growthAccess lnternet - Small & Medium Businesses (sustain revenues)
Dark fiberStrategic oppotunities: adapt to customer demands (growrevenues - with emerging opportunities)
SíitelessFixed multi-point wireless - managed ramp downPoint to Point - case by case solutions
Cellulat backhaul
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FTTXEvaluate Fiberhoods, LIDs, RSP model inside neighbothoods
Evaluate business cases for:Increased capitaL investment with measured returnApplication of Line Extension Credits
- Strategic investments that preserve network effic acy
Net Cash FlowPositive (Fonvard and Look Back)
Negative if short term capital investment delivers long term gains
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PartnershipsNoaNetTri-Cities Utilities
STAFF RECOMMENDATION:Cover O&M and capital expenses
Evaluate business cases and opportunitiesNet positive revenue preservation transitioning to growth. Access-internet - small and medium businesses. Cellular expansion to small cell and 5G
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What to do with I{i-C apacity spe cial proiects?Typical budget does not include Hi-C apacity ptoiect growth
j Revenues alone may not fully cover proiects in shon termNet cash may be negative for short term
Slhat if severalproiects come in close succession?Access to capital (reserves) not assumedDepends on District financial position, electric rates, need for rateactions, finan cialpolicy
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STAFF RECOMMENDATION:Bring business case funding options for Commission consideration
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RB coMMENDATT oN SUnnMARY
Res. 2432
Potential future modification to allow for emergrng proiects
Continue utilizing NoaNet for network management
Rates, Terms & Conditions:Continue Line Extension Credits
Focus on targeted marketing of network services
Evaluate options for tten cli,/ conduit / construction cost improvements
Access Internet: Proforma rnanagement, Commission updates
Small Cell/scPursue dark fiber, nerv macro cells, expand network capacity
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RBcoMMENDATT oN SUnnMARY
FTTX StrategiesRSP's should lead effots bringing fiber into residential areas
Continue to evaluate collabotation options
Path Fonnrard
Continue current course; stay within guidelines
Access lnternet (sustainrevenue); Small Cell /55 (grow revenue)
Emergrg ProiectsCommission consideration for strategic business cases/funditg options
Outcome continues to look very positive for Broadband
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