The business of broadband

Tellus Venture!Associates

®

© 2012 Tellus Venture Associates

The business of broadband 30 October 2013


Broadband attracts business, drives growth

Bandwidth is a basic requirement for business location decisions

Rank City 2Q11 Ave. Mbps1 San Jose, CA 13.72 Fredericksburg, VA 8.53 Monterey Park, CA 8.24 Fremont, CA 8.25 Staten Island, NY 7.66 Columbia, MD 7.57 Jersey City, NJ 7.58 Riverside, CA 7.59 Oakland, CA 7.5

10 Fairfield, CA 7.3

Top U.S. Cities Average Measured Connection

Speed

Source: Akamai

Broadband’s Effect on San Joaquin County Employment

Jobs

210,000

225,000

240,000

255,000

270,000

2005 2007 2009 2011 2013 2015

NominalHigh broadband growth

Source: Sacramento Regional Research Institute

Almost 50K job-years created by improved broadband access


Broadband value chain Not a lot different from water, electricity

• Tier 1 Internet connection • Bandwidth

• Long haul fiber • Maybe several providers

• Long haul access point • Middle mile fiber • Central office/NOC • Local trunk distribution fiber • Lateral fiber • Customer drop • Customer premise equipment

Local trunk fiber

Leased DSL line

Carson City

Digital 395 fiber

Leased fiber

Fiber laterals

US395long haul

access point

MAE WestTier 1 access

Los Angeles Barstow

Digital 395 fiberLeased fiber

San Jose

1 WilshireTier 1 access

June Lake

CPE

CPE

CPEMammoth Lakes

10x speed, same price

Reno

Fixed wireless

NOC

Telcooffice


The Internet is made from other people’s stuff

You have to pay for fiber lines, access and bandwidth

Carson City

Digital 395 fiber

Leased fiber

US395long haul

access point


Los Angeles Barstow


San Jose


June Lake

Mammoth Lakes

Reno


It doesn’t just wander into town

Someone has to build the middle mile

SR158 middle mile

Carson City

Digital 395 fiber

US395long haul

access point

Barstow

June Lake

NOC

Telcooffice


Last mile determined by cost & value of customer

Even when subsidized, ROI might not support capex

Mammoth Lakes



A tale of two cities San Leandro & King City

{Geek}is the new Sexy


Distance & location matter You mean the Internet isn’t free?

Los Angeles

San Jose

June Lake

Salinas

King City

Reno

Barstow

Santa Cruz

50¢ per Mbps

$135 per Mbps$10 per Mbps

You're kidding, right?


Lit San Leandro $2 million private fiber build in city conduits, Watsonville has similar plans


And then the competition shows up...

Local trunk fiber

Leased DSL line

Carson City

Digital 395 fiber

Leased fiber

Fiber laterals

US395long haul

access point


Los Angeles Barstow


San Jose


June Lake

CPE

CPE

CPEMammoth Lakes


Reno

Fixed wireless

NOC

Telcooffice

Local ventures can take on incumbents


Cities of San Leandro, Palo Alto, Santa Clara in dark fiber business

Chattanooga building fiber to the home, offers Gigabit service

Even so, communities are developing broadband

Willing to invest in infrastructure & partner with private companies

City of Lompoc runs a wireless Internet utility

Cities of Benicia, Brisbane lighting up industrial parks

Private communities evaluate, partner on fiber systems

IP Networks, local groups partner on north

coast fiber build

Sunesys-led middle mile project

Industrial grade 91-mile fiber route:Santa Cruz - Watsonville - Castroville - Salinas - Chualar - Gonzales - Soledad

Tellus Venture Associates


Accessible middle mile fiber lowers costs

Otherwise, you’re at the mercy of Comcast, Charter, AT&T

Salinas

Gonzales

Soledad

Los Angeles

San Jose

Watsonville

King City

Santa Cruz50¢ per Mbps

$10 per Mbps?

$10 per Mbps

A solvable problem

© 2013 Tellus Venture AssociatesTellus Venture Associates

Five last mile projects for three counties

Surfnet in Santa Cruz & Monterey, Pinnacles Telephone in San Benito, Etheric wireless region-wide

Tellus VentureAssociates

®

Contact:Steve Blum+1-831-582-0700steveblum@tellusventure.comwww.TellusVenture.com

Tellus Venture Associates

Tellus VentureAssociates

®

• Municipal fiber projects in San Leandro, Palo Alto, Benicia, Salinas, Oakland.• Municipal wireless projects in Los Angeles, Oakland, Folsom, Lompoc.• Broadband policy development in Watsonville, Alameda, Morgan Hill• Community broadband system planning and implementation at The Villages

in San Jose, Rancho Murieta near Sacramento, Corona.• Private ISP planning & funding in Monterey, Santa Cruz, San Benito, Nevada

Counties.

Planning, management and business development consulting for community broadband

The business of broadband

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