CITY MANAGER CITY OF STAFF REPORT VENTURA 805-654-7740 • [email protected] • www.cityofventur-a.ca.gov AGENDA ITEM 13A Date: September 10, 2019 Council Action Date: September 16, 2019 TO: Honorable Mayor and City Council FROM: Alex D. McIntyre, City Manager SUBJECT: Broadband Presentation and Broadband Infrastructure Policy Workshop SUMMARY The receipt of vastly differing responses to the City's Broadband Infrastructure Request for Proposals has raised important policy questions. Staff has outlined policy questions and is seeking Council feedback. Staff will use the feedback provided by Council to refine the next Council recommended action and the firm best suited to meet the broadband needs of the community. RECOMMENDATION a. Receive a presentation from Digital West Networks and SiFi Networks America for the City's Broadband Infrastructure Project. b. Hold a broadband infrastructure policy workshop and provide comments regarding policy considerations that may influence the City's investment in broadband infrastructure. DISCUSSION/ANALYSIS Economic Development Committee Review The Economic Development Committee (EDC) had two opportunities for discussion and to provide direction on Staff's effort to collaborate with private investment firms to create a fiber optic network in the City. The EDC provided comments and direction on the Broadband Infrastructure RFP to include a desire for a City-Wide fiber to premises network, minimal disruption to Public Works, private funding, indemnification requirements, no cost to the City and become revenue generating. The EDC met a second time to hear presentations from the three firms that submitted proposals and Broadband Presentation and Broadband Infrastructure Policy Workshop September 9, 2019 Page 2 of 6 recommended that the firms that will leverage private investment present their proposals to the Council for policy consideration. Broadband Infrastructure Policy Considerations: City Council directed staff to collaborate with private investment firms to create a fiber optic network in the City. To support this direction, staff developed a Broadband Infrastructure Request for Proposal to identify private firms and strategies to fund and implement a citywide broadband network. The City's Broadband Infrastructure RFP resulted in three very different proposals and suggested approaches in developing Broadband Infrastructure. Given these vast differences, staff has outlined additional policy questions that require Council feedback to adequately evaluate proposals. Once clarified, staff will return to Council with a recommended firm and the associated agreement. Policy Questions • Should time required to implement proposed solution be a critical factor? Staff recognizes that the speed of deployment of broadband technologies is an important characteristic in each proposal's evaluation. What is Council's time horizon in delivering broadband services to the community? Does the Council expect a complete solution in delivering services or a phased approach in accomplishing the objectives? • Should the approach installing fiber be a critical factor? There are a variety of infrastructure solutions to provide broadband services to the community including wireless, underground fiber, and aerial fiber. What is the Council's preference? • Is internet service speed a critical factor? The speed at which an Internet Service Provider (ISP) can deliver services will play a critical role in user migration to a proposed network. Currently, Spectrum advertises download speeds in excess of 1000 Mbps while AT&T advertises speeds of 75 Mbps. While these may be sufficient download speeds, the concern is that the speeds are not symmetrical, which means that the upload speeds do not match the download speeds. Symmetrical speeds are critical as cloud computing has driven the need for real time cloud-based applications that require additional bandwidth, both in download speed and upload speed. How critical is it that the proposed network offers symmetrical speeds? Broadband Presentation and Broadband Infrastructure Policy Workshop September 9, 2019 Page 3 of 6 • After installation is completed, does ownership of the network matter? There are several different ownership models of fiber infrastructure, from a city having no ownership of the fiber to a city owning and maintaining the entire network. Does the Council want the City to have an ownership stake in fiber infrastructure? • Shall the ownership of the fiber provide exclusivity of use? Currently, Spectrum and AT&T own infrastructure and provide their own internet services to customers in the City of Ventura. There are other models where one entity owns infrastructure and then leases the use of this infrastructure to ISPs to provide internet services to the community. Another ownership model allows the owner of the asset to provide internet services and lease the use of the infrastructure to other ISPs. What ownership model does Council prefer? • Shall the City provide any funding or City assets into the development of the fiber network? Is Council willing to contribute funds to support broadband infrastructure or is the expectation that the projects be completely funded through private . sources? How important is the sources of funding for the proposed broadband infrastructure project? • Should the fiber network generate any revenue to the City? How important is the revenue generating component of this project? Would Council prefer a delayed full deployment of broadband infrastructure in the City for the potential of revenue earlier on, or does the need for immediate broadband services outweigh the need for additional revenue? Policy Consideration Comparison Matrix 2 years from commencement of construction Broadband Presentation and Broadband Infrastructure Policy Workshop September 9, 2019 Page 4 of 6 Combination of buried 100% fiber installed and aerial fiber will be underground utilizing used to build the micro trenching backbone network technology Will use the method with the lowest cost for final laterals to home or office and will deploy a "wireless first" approach Commercial: Commercial: 200 Mbps-10 Gbps 100 Mbps-100 Gbps Symmetrical Speeds Symmetrical Speeds Residential: Residential: Fiber: Symmetrical Fiber- 2.5 Gbps Speeds 1 Gbps Download and 1.25 Wireless: 20-50 Mbps Gbps Upload speeds Download and 10-20 Mbps upload speeds City will own 48 strands All fiber will be owned of fiber supporting the by Sifi or their affiliates City's traffic signal network and the associated conduit Newly installed conduit and fiber will be owned by Digital West Digital West will provide SiFi will allow several services and allow any ISPs to provide licensed ISP to services over the wholesale fiber services network and circuits Broadband Presentation and Broadband Infrastructure Policy Workshop September 9, 2019 Page 5 of 6 All viable existing City All viable existing City assets will be assets will be considered considered Funding Source would Whitehelm Capital not be provided without would fund project in a mutual NOA full before construction (letter from Whitehelm was included as an attachment Provided the City with 3 No direct financial funding options, option 1 contribution required by would not require any the City direct financial contribution from the City Will assess a 5% fee Revenue share with 3% that will be assessed to of total revenues all internet customers beginning in year 30 and remitted to the City on a quarterly basis beginning immediately Impact to the City's Unfunded Traffic Signal Project On May 13, 2019, Council authorized the Mayor to execute an agreement to finalize the design of the City's unfunded Traffic Signal System Upgrade Project. Fiber communication lines to support this upgrade are a major component and estimated to cost upwards of $4,000,000. Proposals from SiFi and Digital West include an attempt to mitigate the $4,000,000 expense. Digital West proposes to install all the fiber to support this project and allow the City to maintain the ownership of the existing conduit and new fiber. Si Fi proposes to install all the fiber necessary to support the project and then charge the City a "nominal rate per month", this fee would be negotiated prior to installation. Broadband Presentation and Broadband Infrastructure Policy Workshop September 9, 2019 Page 6 of 6 FINANCIAL IMPACT There is no known direct fiscal impact associated with Staff's recommendation. Prepared by: Mitchell Cameron, Senior Management Analyst ATT AC HM ENT: A City of San Buenaventura Broadband Infrastructure Project RFP B Digital West Networks Proposal C SiFi Networks America Proposal ATTACHMENT A C ITY OF Vf.NTURA July 18, 2019 Request for Proposal {RFP): City of San Buenaventura Broadband Infrastructure Project The City of San Buenaventura ("City") is requesting proposals from qualified teams to provide creative solutions for implementing a gigabit Fiber to the Premises (FTTP) network to all residential, commercial, and government buildings in the City, along with preparing for the provision for enabling future developments upon completion of installation. This solicitation is intentionally open-ended to permit potential Proposers to offer the creative solutions to the Project Objectives listed below. The City seeks to enable broadband for the City's residents and businesses, to stimulate economic development and encourage market competition, and enable Smart City technological advancements ·by developing partnerships with third-party public or private