Henry County Fiber Optic Initiative

1. Henry County Fiber Optic Initiative March 5, 2012 9:00 AM

2. Overview • The problem • The solution • Why fiber is “future proof” • What is needed, next steps

3. The Problem • Current Expenses • Level of Service • Economic Development

4. Expenses – Leasing Service Today

5. Current Level of Service • Schools currently have .0015 Mbps per student of Internet bandwidth or about 1/1000th what home broadband delivers. • Equates to about 11.3 Mbps per school • Henry County currently have .02 Mbps per employee of Internet bandwidth or about 1/100th what home broadband delivers. • Equates to about 1.1 Mbps per building. • Henry County government utilizes more bandwidth per employee because we also service many E-Services directly to Citizens, such as Video of Board Meetings, Electronic access to Tax information and payments, • Many areas of the county are not serviceable at all, including most parks.

6. Economic Development • Henry County has been eliminated for consideration because of lack of redundant suppliers of Fiber Optics. Cite Douglas County, Microsoft Datacenter most recently. • http://www.11alive.com/video/default.aspx?bctid=993700419001 • Targeted Industry Study – Cite Study • Firms are beginning to near-shore customer-care and processing centers for complex support and solutions management function • Proposed new investment in fiber telecommunications infrastructure would provide a transformative new asset • Digitization of every form of information continually opening new opportunities for entrepreneurs and innovators

7. END RESULTS • Flexibility and ability to serve UN-Served locations such as Mount Carmel Park Soccer Complex, traffic signals, etc. • 10 times the bandwidth for less cost than is currently being paid for service. • Provides Private Sector opportunity for Economic Development (Wholesale of Dark Fiber Only – NO services).

8. Definition of Terms used • Dark Fiber – Fiber that has not been attached to any equipment, and provides no utility or benefit without equipment. No services are provided over dark fiber. • Interconnect – Connections made from one building to another. This is often called a LAN or Local Area Network, sometimes called a MAN, or Metropolitan Area Network. Allows transmission of data from one building to and from another. Alone, this is NOT the Internet. • Internet – A global network of interconnected networks. • It is a network of networks that consists of millions of private, public, academic, business, and government networks, of local to global scope, that are linked by a broad array of electronic, wireless and optical networking technologies. • It is over the Internet that computer users are able to access email, web sites, and many other services. • The HUB of the Internet for our area is located in Downtown Atlanta, and on a map looks much like transportation network.

9. THE “HOW”

10. The “HOW”, (continued) • Build a Fiber Network, as specified in plan. • Government Only Service for HCBOC, HCBOE, HCWSA, Cities and other government entities optional (their choice). • Operations of the network would be outsourced to a company experienced in running such a network. • Any surplus capacity (i.e. Fiber strands) would be offered for lease in a Non-Discriminatory fashion at market rates for wholesale dark fiber access. (limit of 20% available to any single company or subdivisions including parent/child of company) • Any revenue to be used to pay down debt service and/or to expand network for economic development and/or education. • Note: Due to construction methods, petroleum costs, labor costs, etc. It can actually be less expensive to buy MORE fiber than less. • Example: A 4 strand Fiber Cable costs about $110 per strand for 1000 Feet. A 144 strand Fiber Cable costs about $16 per strand for 1000 feet. When bought in bulk these numbers go down even more. http://store.cablesplususa.com/aq1444h1f-dwb.html • Most of the cost associated with a Fiber Optic network is the LABOR and permitting costs, not the raw material.

11. The “HOW”: continued • Total Cost = $14,000,000 financed at 2.5% for 15 years. • Variable or Recurring costs – • Principle and Interest = $1,143,590.50 • Annual Operating Expenses = $331,000 (46) • Total Annual Expenses = $1,474,590 • 15 Years, and we own the whole thing. Then the Government, Schools, expenses go to the operating costs only of $331,000 per year. • Savings Per Year after payout = $1,169,000 • Level of Service increased 10 X current levels for Internet Access and 50 X for backbone infrastructure. • Each government facility and school would receive 100 Mbps of Internet on a 1 Gigabit Dedicated Fiber Network

12. Why Fiber is “future proof” • The laws of physics limits the capacity that wireless can accommodate in a terrestrial setting. • There is a 2.2 second time delay for satellite transmissions (due to the distance and the time it takes signals to be routing to and from earth) – this is called “latency”. • Speed of light – anything faster? • Wave-division multiplexing – means one strand of fiber can simultaneously transmit signals at different wave lengths.

13. Next Steps • Staff seeks approval to pursue Letters of Commitment from HCBOE, HCWSA • Other letters of commitment from other government entities (Cities, GDOT, etc.) • Staff seeks approval to move forward with financing options to bring back to the Board for further discussion. • Staff seeks approval to engage Rural Broadband to update the business plan – removing the commercial component.

14. Questions / Comments Thank You.