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June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Fibre Optic Broadband
Strategy
Committee of the WholeJune 17, 2019
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Objectives
Why is Broadband Important?
Current State of Broadband
Strategic Decisions
Business Model Options
Recommendations
High-Level Deployment Plan & Cost
2
Agenda
1
2
3
4
5
6
7
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 3
Strategic Objectives*
1. Create partnerships with the private sector in securing improved and
competitive broadband services to retain and attract investment
in our commercial and industrial areas;
2. Leverage the City’s investment in its own fibre optic
infrastructure as a key component to a more comprehensive and
integrated broadband network;
3. Establish the capacity over time to achieve an open access network
that the City can utilize to promote competition and generate a
financial return.
*Economic Development Strategy & Action Plan Update 2017-2021, September 8, 2018, Objective 8 ‘Ensure that Spruce Grove
businesses have access to state-of-the-art broadband services at competitive rates which are increasingly essential to attract
and retain high quality businesses and jobs’
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Objectives
Why is Broadband Important?
Current State of Broadband
Strategic Decisions
Business Model Options
Recommendations
High-Level Deployment Plan & Cost
4
Agenda
1
2
3
4
5
6
7
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 5
Technology is Continuously Transforming the World
• Transformation is accelerating
• Internet of Things and Big Data
• Connectivity and Mobile Technologies – 5G
• All Things Blockchain
• Digitalization and Manufacturing
• 3D Printing, Additives, Intelligent Materials
Science
• Artificial Reality / Virtual Reality
• Artificial Intelligence and Machine Learning,
Robotics
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
• It has disrupted almost every form of
business on the planet
• Untethered skills can be anywhere
• It is creating a new world order – geopolitics
• More affordable, safer locations have an
advantage
• Savvy rural regions can become
competitive
6
‘Access is the great equalizer…and is key
for widely distributed innovation
opportunities.’
~ Prof. Manuel Trajtenberg –Chair,
OECD/National Economic Council
Technology is a Global Equalizer
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 7
Top 10 List – Location Decision-Making Priorities*
*Global Trends ~ Local Opportunities in Economic Development Lee Malleau, April 2018
Decision-Making Factor Ranking Percentage
Security and Safety 1 61%
Connectivity and Broadband 2 51%
Supportive Business Environment 3 49%
Transportation and Logistics 4 43%
Income and Prosperity 5 40%
Strong Community Leadership 6 39%
Return on Investment 7 39%
Affordability and Accessibility 8 38%
Access to Markets 9 33%
Access to Capital Financing 10 32%
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Broadband-Enabled Technologies
Internet of Things (IoT) – a system of objects
embedded with computing devices (i.e. electronics,
software, sensors, etc.) that are connected through the
internet to enable them to send/receive data
Artificial Intelligence (AI) – the simulation of human
intelligence processes by machines. It can give rise to
the use of robotics to perform human tasks.
Blockchain – a decentralized digital ledger in which
transactions or records can be made chronologically and
publically. It is a growing list of records, called blocks,
which are linked and secured using cryptography.
These technologies require broadband as a foundation for connectivity and have the
potential to influence various economic sectors.
8
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Municipal Broadband Enables Smart City Technologies
Roadway Sensor Networks
Smart Metering
Video Surveillance
Speed Monitoring/ Variable Speed
Limit Systems
Connected/ coordinated traffic
signals
Sensor Networks (IoT)
Connected public facilities
9
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 10
Driving Forces
Call to Action
Regional Attention – EMRB / Edmonton Global
Receptive Governments
Support/ encouragement from business community
Successful community models to follow/ leverage
Shift to Information Economy / Broadband as a Utility
Historical lack of interest from commercial providers
Internet ‘dead zones’
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Objectives
Why is Broadband Important?
Current State of Broadband
Strategic Decisions
Business Model Options
Recommendations
High-Level Deployment Plan & Cost
11
Agenda
1
2
3
4
5
6
7
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 12
Current State
Business Interviews*:
• Business is generating 1000MB of data per day,
with ongoing storage needs above 1TB – need at
least 100Mb/s to perform daily data backups
• Need ability to use video conferencing, video
uploads, nightly file backups
• Quotations of high installation costs($100,000+)
• Relocating to other industrial areas where
broadband is readily available
*Taylor Warwick Consulting Limited, May 2016
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 13
Market Survey Information**
• Broadband is seen as an essential service to 95% of
the respondents surveyed. Uptime and reliability are
issues along with speed.
• Half of businesses are struggling with service levels
• Competition and ability to choose is important to 50% of
businesses
• Half of respondents would pay an increase of 20% for
gigabit speeds; 30% would pay upwards of a 40%
increase
**Market Survey Report, Lightcore Group Inc. April 2017
Current State
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 14
CIRA Spruce Grove Industrial Results
Download: 20.6 Mb/s
Upload: 8.9 Mb/s
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Broadband Speeds (Download)
73%
20%
8%
15
<20 Mbps
20-50 Mbps
50+ Mbps
CIRA Spruce Grove Industrial Results Average Download: 20.6 Mb/s
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Broadband Speeds (Upload)
72%
13%
14%
16
<5 Mbps
5-10 Mbps
10+ Mbps
CIRA Spruce Grove Industrial Results Average Upload: 8.9 Mb/s
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Do
wn
loa
d s
pe
ed
0
5
10
15
20
25
30
35
City Centre CommercialCRTC Standard 50 MBps
Alberta Average 21.7 MBps
17
CIRA Spruce Grove Commercial Results
Download: 16.6 Mb/s
Upload: 7.2 Mb/s
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Download Broadband Speeds
98%
2%
0% 50+ Mbps
20-50 Mbps
<20 Mbps
18
CIRA Spruce Grove Commercial Results Average Download:
16.6 Mb/s
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Upload Broadband Speeds
33%
66%
0% 10+ Mbps
5-10 Mbps
<20 Mbps
19
CIRA Spruce Grove Commercial ResultsAverage Upload: 7.2 Mb/s
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Objectives
Why is Broadband Important?
Current State of Broadband
Strategic Decisions
Business Model Options
Recommendations
High-Level Deployment Plan & Cost
20
Agenda
1
2
3
4
5
6
7
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 21
1. Technology (Fibre)
2. Wholesale vs. Retail
3. Build and/or Partner
1. Create partnerships with the private sector in securing
improved and competitive broadband services
2. Accelerate and leverage the City’s investment in its own
fibre optic infrastructure as a key component to a more
comprehensive and integrated broadband network;
3. Establish the capacity over time to achieve an open
access network that the City can utilize to promote
competition and generate a financial return.
Strategic Objectives Decisions on Tactics
Build and lease
out dark
fibre/ducts to
private sector
Do Nothing
Publish Plans
search for
private sector
partner
(RFI/RFP)
Create a PPP
(Public –
Private
Partnership)
Build and run a
public network to
businesses,
innovation districts
and community
anchors
Build and run
a public
network
(business
and
residential)
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
40 Gb/s
22
• Future proof investment
• Lowest operations/ maintenance costs
• Useful life beyond 30 yrs.
• Open network access
• Cost effective in urban areas
• Globally deployed
Why Fibre? What about 5G?
• Needs a fibre backbone
• Mobile technology – businesses
need hardwired services
• Costs for services will be high
due to spectrum costs
• Carrier technology – high density
cities
• Deployment timelines TBD
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Strategic Decisions and Considerations
Build and leaseout
dark fibre/ducts to
private sectorDo Nothing
Publish Plans
search forprivate
sector partner
(rFI/rFP)
Build and run a
public network
(business and
residential)
RetailWholesale
23
Build and lease
out dark
fibre/ducts to
private sector
Do Nothing
Publish Plans
search for
private sector
partner
(RFI/RFP)
Create a PPP
(Public –
Private
Partnership)
Build and run a
public network to
businesses,
innovation districts
and community
anchors
Build and run
a public
network
(business
and
residential)
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Wholesale Model
City of Spruce Grove
Business ModelsCITY OF SPRUCE
GROVE
SERVICE PROVIDER
Own and Maintain Local
Electronics
Direct and manage local technician installations and repairs
Local Marketing and Sales
Support
Network Operations and
Provisioning
Customer Service & Technical
Support
Billing
Internet Service
Television Services
Telephone Services
Community
Examples:
24
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Retail Model with Outsourced Operations
Local
FibreLeased
Backhaul
Connection
Leased
Backhaul
Connection
Business ModelsCITY OF SPRUCE
GROVE
OUTSOURCED
OPERATIONS
PROVIDER
Own and Maintain
Local Fibre
Direct and manage local technician installations and repairs
Own and Maintain
Local Electronics
Network Operations
and Provisioning
Leased BackhaulConnection
Customer Service &
Technical Support
Local Marketing and
Sales Support
Billing (on behalf of
City)
Internet Service (on
behalf of City)
Television Services
(on behalf of City)
Telephone Services
(on behalf of City)
Community
Examples:
25
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 26
No long-term contract required.
• Pricing 20-30% less than incumbents
• 1000 Mb services create a strategic advantage for business attraction
O-NET Example
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Objectives
Why is Broadband Important?
Current State of Broadband
Strategic Decisions
Business Model Options
Recommendations
High-Level Deployment Plan & Cost
27
Agenda
1
2
3
4
5
6
7
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 28
Business Model Options and Analysis
Build and leaseout
dark fibre/ducts to
private sector
Publish Plans
search forprivate
sector partner
(rFI/rFP)
Build and run a
public network
(business and
residential)
Build and lease
out dark
fibre/ducts to
private sector
Do Nothing
Publish Plans
search for
private sector
partner
(RFI/RFP)
Create a PPP
(Public –
Private
Partnership)
Build and run a
public network to
businesses,
innovation districts
and community
anchors
Build and run
a public
network
(business
and
residential)
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 29
Strategic Decisions and Considerations
Build and leaseout
dark fibre/ducts to
private sector
Publish Plans
search forprivate
sector partner
(rFI/rFP)
Build and run a
public network
(business and
residential)
Build and leaseout
dark fibre/ducts to
private sectorDo Nothing
Publish Plans
search for private
sector partner
(RFI/RFP)
Create a PPP
(Public –Private
Partnership)
Build and run a public
network to businesses,
innovation districts
and community
anchors
Build and run a
public network
(business and
residential)
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Objectives
Why is Broadband Important?
Current State of Broadband
Strategic Decisions
Business Model Options
Recommendations
High-Level Deployment Plan & Cost
30
Agenda
1
2
3
4
5
6
7
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 31
High Level Strategic Recommendations
The City’s strategic long range plans for broadband improvement can be focused
around the following major areas of effort and investment:
S1. Reinforcing and accelerating existing City plans and capital budgets to build
out the City’s fibre ring to connect City facilities, improving broadband capacity
and providing improved reliability of the City’s broadband communications
infrastructure.
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 32
High Level Strategic Recommendations
S2. Working closely with commercial telecommunications carriers to facilitate their
continued investment in commercial and industrial areas, as a priority. The City’s role is
not one of direct funding or subsidy of carriers, but to work collaboratively on
aspects such as planning and coordination of City utility projects, coordinated
planning/ engineering and construction approvals to reduce the time and cost of
installation of carrier infrastructure, with a particular emphasis of coordinating and
encouraging carrier investment at the time of City civil work occurring during
roadway and underground utility projects.
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 33
High Level Strategic Recommendations
S3. Seeking to drive synergies between planned (i) City civil
construction projects and (ii) The City’s planned fibre ring to install
additional conduit to provide for future broadband capacity in the
City’s industrial and commercial areas.
S4. Investing in the creation of a Smart City strategy that will provide
guidance on the adoption and use of Smart City technology and
infrastructure throughout many aspects of municipal operations and
inform the future needs of the City’s fibre infrastructure.
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Objectives
Why is Broadband Important?
Current State of Broadband
Strategic Decisions
Business Model Options
Recommendations
High-Level Deployment Plan & Cost
34
Agenda
1
2
3
4
5
6
7
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 35
NUMBER ACTION EXPECTED OUTCOME TIMINGRECOMMENDED
BUDGET
LEADDEPARTMENT
1Advance negotiations with telecommunications carriers
Agreement with telecommunications carriers to facilitate construction planning and coordination
2019 N/A Economic Development / IT
2a
Perform engineering route design Public Works to RCMPand Campsite Transit Centre in advance and solicit businesses near the planned route for interest in a municipal fibre optic connection.
Finalize the route to allow for:
i)Application of grant funding forconstruction from other levels ofgovernment
ii)Market demand assessment of business interest
iii)Further cost certainty of construction
2019 $68,000 IT/ Economic Development
2b
Review of municipal engineering standards and inclusion ofconduits in future roadway/ utility construction projects
Review and coordination of planned deep utility construction projectsto allow for the inclusion of conduit to support future broadband connections.
2019 in advance of finalizing construction scope and
project tendering
$15,000
(engineering consulting)
Engineering
Broadband Strategic Plan Recommendations
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 36
NUMBER ACTION EXPECTED OUTCOME TIMINGRECOMMENDED
BUDGET
LEADDEPARTMENT
3
Reprioritize and advance the sequencing of the City’s Municipal Fibre Ring Plan (2021 – 2026, CI417.5) to construct the segments connecting the Public WorksBuildingto the Integrated RCMP Building and the Campsite Transit Centre(utilizingthe Diamond Avenue alignment)
Advance the timing of the Municipal Fibre Ring to create an anchor investment as a platform to allow for future connections to businesses in close proximity to thebackbone
2020 $502,463
Existing budget, advance from 2022
Information Technology
4
Add the Arena Project in the City’s Municipal Fibre Ring plan
Include new facility requirements TBD (align todeveloptimelines)
$150,000 Information Technology
5
Develop a full engineering and business plan for the build out of a fibre optic infrastructure, identifying municipal and business needs and considering opportunities for cost recovery
Using the results of the market survey/ solicitation identified in item #2; develop a full business andengineering plan for council approval.
2020 $130,000 Economic Development / IT
Broadband Strategic Plan Recommendations
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 37
NUMBER ACTION EXPECTED OUTCOME TIMINGRECOMMENDED
BUDGET
LEADDEPARTMENT
6
Upon successful deployment of a pilot project, budget for full deployment based on market demand for services
Allocate capital for broadband investment to support economic development
2021-2024 2021: $1,060,000(Industrial SE)
2022: $1,910,000(Industrial SW)
2023: $1,590,000(Commercial North)
Economic Development
7
Invest in the development of a Smart City Strategy
Create a strategic road map for the adoption of Smart City connected technologies and the need for future City fibre optic facility investment to support this road map
2020-2022 $275,000 InformationTechnology
Broadband Strategic Plan Recommendations
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 38
Municipal Broadband
Proposed
Phase 1 Industrial SE
Phase 2 Industrial SW
Phase 3 Commercial
North
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 39
Municipal Broadband• Some overlap with City
plans
• Some additional savings
possible with other
municipal civil work
(roads, deep utilities)
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP 40
PHASE DESCRIPTION NUMBER OF PARCELS
CAPITALBUDGET ($M)
MAINTENANCE COSTS(3%, ANNUAL)
1 Industrial SE 99 $1.06 $31,770
2 Industrial SW 154 $1.91 $57,420
3 Commercial North 110 $1.59 $47,700
Total 363 $4.56 $136,890
Per Parcel: $12,562/ parcel $377/ parcel
PHASE DESCRIPTION NUMBER OF PARCELS
MONTHLY COST RECOVERY (20% TAKE RATE)
MONTHLY COST RECOVERY (50% TAKE RATE)
MONTHLY COST RECOVERY (80% TAKE RATE)
1 Industrial SE 99 $167.45 $70.48 $46.24
2 Industrial SW 154 $196.31 $82.02 $53.45
3 Commercial North 110 $230.08 $95.53 $61.89
Total 363 $198.67 $82.97 $54.04
Broadband Strategic Plan Cost Estimates and Financials - Preliminary
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Questions?
June 17, 2019
City of Spruce Grove Fibre-Optic Broadband Strategy
IBI GROUP
Thank you!