Connecting Your Community: Bringing Broadband to Town

1. Connecting Your Community:Bringing Broadband to Town CASE STUDY: TOWN OF SHENANDOAH Kimberly L. Alexander Vice Chair Shenandoah Wireless Broadband Authority (SWBA)

2. SHENANDOAH BROADBAND PROJECT • Economic Development Strategy (Benefits of Service) • The Search for a Broadband Solution – USDA Grant • Selecting a Vendor – Private Partner • Structuring a Deal • Cost to Locality • Cost to Customers • Speeds of Service • Take-up Rate Projections • Pro-Forma Profits • Service Coverage Area • Special Benefits of the USDA Program • Making SWBA (state guidelines) work with USDA grant requirements • Composition of SWBA

3. Economic Benefits of Service Economic Challenges: - Poor transportation infrastructure - Plant closings / high unemployment - Low-skilled labor, limited opportunity • Improve the efficiency of existing industry and small business • Encourage the growth of home-based businesses, possibly to where they would require formal office/retail space • Marketing tool and incentive for new businesses and entrepreneurs

4. Educational Challenges: - Less than 6% have B.A. degree, only 2.8% have graduate or professional degree - Access to post high school education and training, limited access to online educational opportunities Educational Benefits of Service • Community Computer Center – free access • Distance learning, satellite college classrooms, online courses • New local training facility – credit and non-credit courses, professional development, workforce development, on-site computer training • Improve local workforce / build human capital

5. Health Care Challenges: - 1 doctor, 1 dentist, 1 pharmacy - 20 miles to the nearest hospital - No 24 hour Rescue Squad coverage Health Care Benefits of Service • Improve customer service and communications with insurance companies & government agencies • Accelerate customer requests & medical response times by sending electronic claims and digital x-rays to other health care providers • Allow health care providers to obtain CE and other credits online in order to renew licenses • Enhance communication with suppliers, third party prescription payers, accounts-receivable collectors, and professional service providers

6. Health Care Benefits of Service (cont’d) • Update prescriptions and medical and dental records • Provide sufficient bandwidth to allow for video conferencing and the application of telemedicine • Business incentive to attract new health care providers to Town • Provide local medical professionals with a necessary link, via teleconferencing, to a multitude of doctors and specialists throughout the Commonwealth

7. Public Safety Challenges: - No 24 hour Town Police coverage - 1.5 to 2 hour delays for search/arrest warrants due to travel time to magistrate - Limited Police & Fire Department resources and training opportunities Public Safety Benefits of Service • Mobile computers in vehicles will increase Police efficiency and productivity • Increase Police efficiency by enabling magistrate video conferencing • Provide Police and Fire departments with access to a wider variety of training opportunities, as well as a broader audience for the public safety classes they teach

8. The Search for a Solution • Attempted negotiations on several occasions with local internet, telephone, and cable service providers • Simply not cost-effective for them to deploy a high speed internet service in our rural area (population 1,878), especially considering regional topography • USDA Rural Utilities Service – Community Oriented Connectivity Broadband Pilot Grant • Initially our grant application was denied, but with some additional effort and help from our Congressman and Senator, we were awarded $643,493 from this program, the 11th largest of only 72 awards made nationwide, and the larger of only 2 in Virginia.

9. Selecting a Vendor – Private Partner • RFP – very general • Many different ways to attain our goal • We stated our problem and asked for solutions • Proposals submitted by companies throughout Virginia • All proposals were different, offered different technologies, and offered varying degrees of service • Partner selected PRIOR to grant submission; their assistance was instrumental in preparing a successful grant application

10. Structuring a Deal • USDA grant pays for all capital investment • USDA grant pays labor for vendor to install equipment • Vendor sets up customers on system, they are vendor’s customers (NOT Town’s) • Vendor provides Town with $41,576 match in the form of 2 years of free DS3 Transport and T1 Bandwidth • All equipment purchased with grant funds is TOWN equipment, which vendor LEASES from Town; vendor pays Town an equipment lease fee, $15 per customer per month • Vendor provides all customer service and repairs • After 5 years, Town and vendor may renegotiate partnership and/or ownership of equipment

11. Cost to Locality • USDA Grant requires 15% match • Town match comes from following sources: • Computer Center Rental Value of Town Building (in-kind) • Town Website Training for Public (in-kind staff hours) • Vendor Match (in-kind DS3 Transport & T1 Bandwidth) • Senior Citizen Computer Training (in-kind volunteer hours) • Additional appropriated funds from Town OR future in-kind match from other sources • Other costs to locality include: • Town staff time for grant administration • Legal fees (which may be substantial, but often necessary)

12. Cost to Customer • Residential or single user products range from <$35/mo. (256k) to <$70/mo. (1544k) • Business or Network user products range from <$105/mo. (256k) to <$471/mo. (1544k) or $698/mo. for greater than 1544k. • Business or Network user pricing includes domain name hosting, email administration, unlimited email addresses, and 50mbs of disc space • First 256 customers get free installation (if residential or single user) and ½ price installation (if business or network user) ($150 value each) • 20 Business customers will get free service for one year (at Town’s discretion – business incentive)

13. Speeds of Service

14. Speeds of Service

15. Take-Up Rate Projections • Town Demographics: 941 Households, 100 Businesses • Based on an Economic Development Survey, 50% of respondent households are interested in broadband prices ranging from $30-$50/mo. From the business community, 42% of respondents indicated interest. • The vendor’s pro-forma assumes that customers will purchase only the lowest end broadband service products. • Note that the 90% assumed take-up is of the percentage of interested households/business, NOT 90% of the total households/businesses.

16. Pro-Forma Profits Based on Projections *Note - Grant pays for Year 1 and Year 2 only, then vendor assumes costs of equipment purchases and repairs *Note – Vendor pro-forma projections assume that Town transfers equipment ownership after Year 5

17. Service Coverage Area • Initially, service will be made available at affordable rates to all residents and businesses within the Town’s corporate limits, as well as all businesses within 1 mile of boundaries • Town may decide to extend service beyond these boundaries into the County, but (per USDA) may not extend service into other incorporated areas with grant funds • Funding is being pursued through other sources that would allow the Town to build on this system and extend service throughout all of Page County, and into other surrounding areas

18. Special Benefits of the USDA Program • Community Computer Center (mandatory) • Classrooms • Video conferencing • 25 public access computers • Free access for 2 years to all critical community facilities (Town Hall & other Town Facilities, Police Department, Fire Department, Rescue Squad, Library, Health Facilities, Schools, etc.) (mandatory) • Free Service to 20 Businesses for 1 year • Free connections to first 256 customers

19. Making SWBA (state guidelines) work with USDA grant requirements • USDA provides grant to Town – requires Town control of funding and project • Virginia Wireless Service Authorities Act and laws of the Commonwealth of Virginia require control by the Shenandoah Wireless Broadband Authority (SWBA) • What is the process? • SWBA authorizes funding for vendor • SWBA requests funding from Town • Town either advances SWBA funding and requests reimbursements from USDA or requests advance from USDA and forwards funding to SWBA • Maintain separate accounts

20. Composition of SWBA • SWBA (5 member BOD) – Appointed by Town Council • Current Board of Directors includes 2 Town Councilmembers, 1 former Councilmember, former Town Director of Economic Development, and Citizen providing Training at CCC • 4 members of SWBA can vote to remove 1 member • CEO of SWBA is the Town Director of Economic Development, who administers the grant • SWBA Treasurer is Town Treasurer • SWBA Secretary is Town Deputy Clerk/Deputy Treasurer • Town feels that its interests are secure, USDA feels that its interests are secure, Town and SWBA comply with all state guidelines and requirements

21. Contact Information Kimberly L. Alexander Vice Chair, SWBA CDBG Coordinator, City of Harrisonburg (540) 432-8923 (540) 421-4717 Kima@ci.harrisonburg.va.us CDBG@ci.harrisonburg.va.us