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Chatham County, Georgia - May 26, 2017

Agenda
2

Feasibility Study Overview


Demographic and economic overview
State of Broadband in Chatham County
Stakeholder meetings and survey results
Conceptual Network Design
Overview of Financial Models Considered
Discussion and Q&A
Recommendation and Proposed Next Steps

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Chatham County Study Focus Area
3

Focus area of study


includes each city in
Chatham County:
Bloomingdale
Garden City
Pooler
Port Wentworth
Thunderbolt
Tybee Island
Vernonburg
Unincorporated Areas
Savannah not included

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Demographic and Economic Overview
4

Relatively high levels of:


Young adults, ages 20 to 34
Educational achievement
United States Georgia Chatham County United States Georgia Chatham County
85 years and over
75 to 84 years
Bachelor's degree or higher
65 to 74 years
60 to 64 years
55 to 59 years
Some college or associate's degree
45 to 54 years
35 to 44 years
25 to 34 years High school graduate (includes
20 to 24 years equivalency)
15 to 19 years
10 to 14 years
Less than high school graduate
5 to 9 years
Under 5 years
0% 10% 20% 30% 40% 50%
0% 5% 10% 15%

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Demographic and Economic Overview
5

Strong in hospitality, arts, entertainment, food


services, recreation, and retail trade
United States Georgia Chatham County United States Georgia Chatham County

Education, healthcare, social assistance $66,857


Graduate or professional degree $61,370
Arts, recreation, hospitality services
$53,695
Retail trade
$50,595
Public services and administration Bachelor's degree $49,989
Professional, scientific, management services $42,617

Manufacturing $33,820
Some college or associate's degree $31,673
Transportation, warehousing, utilities
$29,808
Construction
$28,043
Finance, insurance, real estate High school graduate (includes
$26,350
equivalency)
Wholesale trade $24,426

Information $20,361
Less than high school graduate $19,611
Agriculture, forestry, fishing, mining $17,670

0% 5% 10% 15% 20% 25%


$0 $20,000 $40,000 $60,000

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State of Broadband in Savannah
6

Nominally strong, but inconsistent, residential


offerings
Up to 300 Mbps/25 Mbps for $99.95/mo.
Minimum: 5 Mbps/1 Kbps for $60
Fewer retail offerings for business
Up to 150 Mbps/20 Mbps for $264/mo.
Few competitive options: Cable or DSL
Costly direct builds, long-term contracts

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Areas that Meet Broadband Definition
7

Shaded area
represents areas
that meet the
25Mbps/3Mbps
FCC definition of
broadband.

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Areas with 3+ Service Providers
8

Shaded areas
represent areas of
Chatham County
serviced by at least
3 non-wireless
service providers.

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Areas with Fiber-Optic Service
9

Shaded areas are


served by Fiber-
Optic Service
Providers.

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Survey Responses
10

Surveys promoted across County and City websites, with


printed surveys collected throughout county via randomly
acquired volunteer responses.
Household Responses: 1,092
Business Responses: 45

Response rates yield high statistical relevancy of data.


Households: 95% confidence level with a 3% margin of error
Businesses: 95% confidence level with a 8% margin of error

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Household Survey Findings
11

No
1.7% Reasons for not having internet access
Services too expensive 76.5%
Yes
98.3%
Not available at my home 17.6%

Too slow or unreliable 5.9%

No need for internet 0.0%


Households with
internet access 0% 10% 20% 30% 40% 50% 60% 70% 80%

Non-subscribing
households with
Yes
58.8% No members required to
41.2%
do schoolwork or
training online

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Internet Access and Cost
12

Cable 80.6%
DSL 14.7% Connection
Fixed Wireless 2.7%
Satellite 1.0% method of
Mobile Wireless
Fiber-optic
0.7%
0.2%
Chatham County
Dial-up 0.1% households
0% 10% 20% 30% 40% 50% 60% 70% 80%

under $30 $30-49 $50-74 $75-99 $100-149 over $150

All Types 5.8% 17.8% 37.5% 22.3% 11.7% 4.8%

Fiber 50.0% 50.0%

and what it Mobile 16.7% 16.7% 33.3% 33.3%

costs. DSL 7.1% 31.0% 42.1% 7.9% 11.1%

Cable 5.6% 15.4% 37.0% 25.4% 11.3%

Fixed 21.7% 26.1% 17.4% 21.7% 8.7%

Satellite 14.3% 42.9% 14.3% 14.3% 14.3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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Household Broadband Satisfaction
13

Yes No Unsure
All Types 27.5% 62.0%

DSL 24.2% 67.2%


Does your current
Cable 27.3% 61.5%

Mobile 33.3% 50.0%


broadband service
Fixed 34.8% 60.9%
meet your
Satellite 50.0% 50.0% household needs?
Fiber 100.0%

0% 20% 40% 60% 80% 100%

Price, available
services and
support are
major issues

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Household Demand Indicators
14

Yes Households with Households with a Yes


57.4% No
42.6% teleworkers home-based 26.2% No
73.8%
business

1 (Not Important), 2, 3 4, 5, 6, 7 8 9 10 - Extremely Important


Rank the
importance of 14.3% 82.9%

the internet 2.9%


0% 20% 40% 60% 80% 100%

United States Chatham County

3 or more
90.0%
94.5% Internet-enabled
5 or more
47.0% devices in U.S. vs.
82.9%
8.7%
Chatham County
10 or more
24.3% households
0% 20% 40% 60% 80% 100%

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Business Internet Access
15

How Cable 43.4%


Mobile 22.6%
businesses Fiber 11.3%
access the DSL 11.3%

internet Fixed 7.5%


T-1 3.8%

0% 10% 20% 30% 40% 50%

How different sized businesses


access the internet
No
Businesses 2.2%

with
internet Yes
97.8%
access

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Business Survey Findings
16
Yes No Unsure

All Chatham 33.3% 59.3%

Business Mobile 16.7% 66.7%

needs DSL 25.0% 50.0%

being met? Fixed 33.3% 66.7%

Cable 35.3% 58.8%

T-1 50.0% 50.0%

Fiber 50.0% 33.3%

0% 20% 40% 60% 80% 100%

Support,
Speed and
Reliability
are some
issues

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Business Internet Access
17

under $49 $50-99 $100-149 $150-199 $200-299 over $300

All Chatham 25.5% 17.0% 19.1% 10.6% 27.7%


DSL

Mobile
60.0% 20.0% 20.0%
What
25.0% 12.5% 25.0% 25.0% 12.5%
Cable 27.3% 31.8% 22.7% 13.6% businesses
Fixed 25.0% 25.0% 50.0%
pay
T-1 50.0% 50.0%
Fiber 100.0%

0% 20% 40% 60% 80% 100%

Subscribed Speeds versus Measured Speeds


Chatham County Businesses Subscribed Speeds Measured Speeds Percent Difference
Download Speed (Average Mbps) 66.6 41.96 -37.0%

Upload Speed (Average Mbps) 28.29 14.72 -48.0%

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Phased Build Approach
18

Phase 1 Phase 2
Government and Public Safety Schools and Towers
177.48 Miles 88.24 Miles

29 County Buildings 33 Public and Private Schools


8 Parks 14 Libraries
Sites 9 Fire Stations 174 Wireless Towers
Connected E-911
10 Sheriff Offices
5 Healthcare Facilities

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Conceptual Network, Phased Approach
19

Government and Civic


Schools and Libraries
Health and Public Safety
Communications Towers

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Phase One Public Services
20

Government and Civic


Schools and Libraries
Health and Public Safety
Communications Towers

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Phase Two Schools and Towers
21

Government
Government
andand
Civic
Civic
Schools
Schools
andand
Libraries
Libraries
Health
Health
andand
Public
Public
Safety
Safety
Communications
Communications
Towers
Towers

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Fiber Business Models
22

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Viable Business Model Options
23

Public-Public Public-Private
Partnership Partnership

Owns network with Jointly owns the


public partner/s network with private
partner/s
Provides fiber to

community anchors Provides fiber to
community anchors
Sells dark fiber to
retail providers as a Retail partner would
customer serve customers

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Proposed Network Financial Overview
24

Sites Phase 1 Phase 2


Mileage 177.48 Miles 88.24 Miles
29 County Buildings;
8 Parks; E-911; 33 Public+Private Schools;
Sites Connected 9 Fire Stations; 14 libraries;
10 Sheriff Offices; 174 Wireless Towers
5 Healthcare Facilities
Capital Cost $13.3M - $17.7M $6.6M 8.8M
Annual O&M Costs $250K - $350K $150K $225K
Total O&M Costs Over 20
$5M - $7M $3M 4.5M
Years
Total Costs Over 20 Years $18.3M - $24.7M $9.6M - $13.3M
Reductions in County Costs $6.4M $0
Total Cost of Ownership $11.9M - $18.3M $9.6 - $13.3M

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20 Year Overview without Partner
25

Over 20 Years Phase 1


Capital Cost $13.3M - $17.7M
Average $15.5M
Operating Costs $6,000,000
Cost Savings for County Remote Sites $6,400,000
Total Capital and Operating Cost Remaining $15,100,000
Annual Cost Reductions or Revenues Needed $755,000

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20 Year Overview with Private Partner
26

Over 20 Years Phase 1


County Capital Contribution $6,400,000
Provider Capital Contribution $9,100,000
Total Capital $15,500,000
County Cost Reducations $6,400,000
County Simple Payback 20 years
County Operating Costs $1,000,000
Provider Revenue Share to County $1,000,000
Net Cost to County $0.00

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Partnership Network Benefits
27

The Public-Private Partnership option could create


three benefits for the County:
1. Reduce the total amount of capital and operational funding
required by the County
2. Alleviate the Countys requirement to operate the network
3. Through the retail provider, create a revenue source that helps
sustain the overall network

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Public-Private Partnership Benefits
28

In a Public-Private Partnership, benefits to the County


would be:
Zero net cost to the County over 20 years
Fiber connectivity to all public organizations in the Phase 1
for a substantially lower cost than in a public-public model
Protection against future cost increases
Access to County-owned tower infrastructure at no cost
An ongoing revenue stream to cover inflationary and small
operating costs.

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Fiber Infrastructure Principles
29

Increase Broadband Adoption and Utilization


Increase Opportunities for Personal and Community Growth
Narrow the Digital Divide
Improve Digital Competitiveness
Improve Public Efficiency and Effectiveness
Enhance Economic Development
Support improvements in Reliability and Affordability
Support all with a county-wide Fiber infrastructure

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Business Model Keys to Success
30

Fiber-optic networks are long-term infrastructure rather than


one-time projects.
Broad support from stakeholders and community is essential.
Focus on the benefits of broadband rather than technology.
Balance community benefit and financial sustainability to remain
successful over the long-term.
Focus on organizational strengths when evaluating solutions.
Build on current capacities and resources
Consider public and private partnerships to address weaknesses

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Recommendations and Next Steps
31

Chatham County should pursue a joint-ownership model in a


multi-year phased approach in conjunction with the cities in the
county, including Savannah and a Private Partner.
Formalize a County-wide Broadband Infrastructure Program
Develop and promote Broadband-Friendly Public Policies
Dig Once, Joint Trenching, GIS inventory, evaluate permitting processes
Make it easier to encourage fiber growth from retail service providers
Explore state and local strategic partnerships
Establish guiding principles, invite retail service providers to partner
Pursue Fiber Infrastructure project in SPLOST VII referendum

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Next Steps
32

Recognize fiber-optic networks as a long-term infrastructure like


1 road and water systems as opposed to a one-time project.
Formalize a county-wide Broadband Infrastructure Program and
2 develop a Fiber Master Plan
Incorporate Broadband Friendly Public Polices and streamline fiber
3 permitting processes to encourage broadband growth.
Formalize a county-wide fiber consortium or collaboration through
4 development of a Memorandum of Understanding (MOU).

Develop and solicit a Request for Interest from service providers to


5 participate in network opportunities or become potential partner.
Pursue sources of significant funding, such as the SPLOST VII, for
6 solidifying the County's share of a fiber partnership.

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Tara Jennings
Director
Nick Batey
Director of Information and Communication Services (ICS)
Considerations

Infrastructure
Gulfstream and SCAD
The future broadband will be as
it is today if we take no action
ICS Recommendation

Allow us to pursue the PPP, starting with the


local ordinances
Full governance and implementation plan to
be presented
Chatham County, GA - May 26, 2017