NonProfit@Tallahassee Business Plan Available: talfiber.com
TalFiber
Slide 2
To provide high speed, future proof, privacy-friendly, secure
and cost competitive Internet experience to the citizens of
Tallahassee city by incorporating sensible and cost-effective
technologies. This experience will be supported by a team of
customer-oriented quality staff whose overriding priority is to
provide professional service to our customers resulting in complete
customer satisfaction. Revenue stream for the city in the long run
(preferably 20+ years) Increase home values in Tallahassee (>
1.7%) Help Education (Free to Schools and Libraries) At competitive
rates (Google Fiber prices + $10) Extraordinary customer service
Mission Statement
Slide 3
Board: Mayor Architect : Kumar (15+ Years of Experience) System
Administration / Networking : Yu Wang (10+ Years experience) Fiber
Layout : Dial Communications (City Experience) HyPower (Installer
for Verizon FIOS) Hardware: Cisco/Juniper/Calix (Major Deployments)
2 Interns (with experience) 2 Full time Employees after setup A
city owned non-profit in 10 years The Agile Team
Slide 4
Roughly 120k houses in Tallahassee First pilot project: 1600
houses (1Gbit, 40Gbit upgradable) Penetration percentage : 100%
Pilot succeeds, we expand from there Duration: < 2 year
deployment (Project begins 2015) Market Summary
Slide 5
Revenue : $80/house/month * 10 years = $9600/house (+TV later)
$300 / house initial layout price =.48M Total for 1600 houses =
15.84M in 10 years Initial investment 5M for fiber layout 2M for
networking equipment + Personnel cost = 3 x 125k x 10 = 3.75M
(including Kumar) + Internet Cost = 36k x 12 x 10 = 4.3M Total Cost
= Approximately 15.05M in 10 years Loss @ 3% interest = 3.43M (10M
investment) -.79M (profit) 2.64M (@1.6k / house. Get it from CDD -
$13 / month. Also recover from new builds) Sell it as raise in
property prices (we can also make it conditional on property value
raises) New house tax in the area (one time) 1.5% for internet
(recovers the 5k in increase of property value) Pilot Project
details
Slide 6
People: Unhappy with Comcast/Century Link/Satellite
Opportunities: Helps us get closer to deploying high speed internet
in the entire city Creates competition (Comcast / Google / Century
Link) A lot of other advantages Problems: Capital intensive Risk:
Technological : If some internet technology comes that wipes out
everything else Execution : 1500+ homes do not sign up at this rate
Internet providers raise their rates (One of the negotiations does
not go through) Availability of hardware (Fiber) / Installers
Opportunities
Slide 7
Technology: Active Ethernet Upgradable to 40Gbit / sec Base
connections at 1Gbit / second Fiber inside the house No PON shared
1Gbit like Google or other deployments Backbone = 28 Miles in 2
loops 1514 houses covered Business Concept
Slide 8
The Initial Backbone 27 Miles 1514 houses connected so far
Slide 9
Google Only offers at places where they know their investment
is low Provo/Kansas City: City has already invested considerable
amount of money Now Google owns it. Data collection and
advertisement on individuals at a scale never seen before Threshold
of sign up : 25% High Risk of another Comcast / AT&T / Verizon
type monopoly (Verizon just tampered with users web requests using
super cookies) Tallahassee = At least 5 years down the road Comcast
Unhappy customers (Max speed 50Mbps) Double dipping (Netflix
peering) Common Problems: Bad Customer Service Unknown
Oversubscription No Server allowed Competition
Slide 10
5 year goal: Setup and Serve the 1500+ houses Expand to
government agencies in the area Expand the backbone to incorporate
a larger number of homes/apartments in the neighborhood Be viable
for a takeover by a private company if needed Measurable
Objectives: Good customer service Market share > 1% of
Tallahassee 10 year goal: Compete with Comcast/Google in the market
Penetrate the market to > 2% without taking additional capital
Goals and Objectives
Slide 11
Initial investment required : 10M @ Low interest rate of <
3% preferably Create the first deployment using this capital, then
slowly grow in area/size Financial Plan
Slide 12
Requirements for the following resources at no cost: Personnel
: Legal Department Review permit applications within 5 business
days Technology : Detailed mapping software, Aerial placements of
fiber on poles Finances : 10M Distribution : No charge for rights
of way Promotion : Mayor speech / Awareness Products : Fast
internet Services : Internet [TV]. Resource Requirements
Slide 13
Risks: Technological Execution Capital Rewards: Control a very
important commodity (the new Electricity/water) Solve
privacy/security issues Control pricing Keep customers happy 20
year deployment possibility Risks and Rewards
Slide 14
Near term Capital Personnel Delivery of fibers right now is 1
year away from commitment Delays: The longer we wait, the closer
Google Fiber/Comcast become a competition Long term Control issues
(What happens at 10 year term limit) Profitability Customer Support
Key Issues
Slide 15
You Make available $50k using an RFP asap. Introduce me to :
Lewis Shelley (Legal) Make available all fiber maps / electricity
wiring maps of the pilot area Start working on 10M 50k capital
request Me Formation of the initial Non-Profit Company: TalFiber
Detail the legal terms around it with the legal team in the city
Form a more precise business plan. TalFiber Hires engineering
consultants for making a precise technology plan Start working on
actual commitments from multiple parties with the help of the legal
department My consultancy cost: Not to exceed $125k / year.
$150/hour (Average State rates: CIO = $331/hour. CTO = $251/hour)
Objective: Jan 15 th 2015, Reach a go/no-go decision. Next Step
Source: Florida DMS
Slide 16
Questions Notes: * In talks with Google to develop a tool for
optimizing their fiber development cost (for active Ethernet
deployment technology) Might get funded from there to do the pilot
project (50k+)