Agmt 2017 Magellan Advisors for FIber Optics Master Plan 2017-18

Home

Magellan will work with the City to define the range of business model options to evaluate for expanded fiber deployment, which may include the following: • Wholesale dark fiber and/or services in partnership with telecommunications providers; • Expanded retail services to a range of customer segments, which may include residential; • Partnership models with existing broadband providers or other public utilities in the region; • Others to be determined. Magellan will evaluate the current financial and budgetary environment for the network. We believe that San Leandro's decision-making process for a network expansion needs to include financial analysis of the proposed hardware solution and the operational costs that San Leandro will incur in deploying the selected solution. These operational costs include more than equipment service contracts; the selected solution will have financial impacts across many aspects of San Leandro's operations, We want to make sure these are evaluated so the City understands all financial impacts to the organization. Once documentation is complete, we propose to analyze current and future needs for San Leandro and the Lit San Leandro network. Magellan proposes that we ask and answer the following key questions in the needs assessment: • What are the long-term needs of San Leandro's current customers including types of service, bandwidth scalability, performance, and reliability? • Can San Leandro expand its service offerings to attract new customer segments? If so, what customer segments are anticipated and what services will these customers require? • Are San Leandro's products and services competitive in the market and how can the expanded network create competitive advantages for San Leandro to expand its customer base in the community? • What is the current environment in metropolitan area networking that San Leandro should consider for improve competitiveness and meet current and future customer needs? • How is the network currently managed and what operational goals does San Leandro want to achieve in expansion of its network? Financial Planning and Our Broadband Financial Model Magellan proposes using our Broadband Financial Sustainability Model to ensure that San Leandro has a full understanding of the business and financial sustainability of various broadband initiatives. Using these tools will allow San Leandro to evaluate different business models and make informed decisions on which are most adequate for the City and community—including environments that require no funding. Our financial models have been specifically developed for broadband utilities and are very similar to electric utility rate studies. Our models are widely used tools to model feasibility and financial performance for over 50 municipal broadband providers. Magellan's financial modeling tools have been utilized to plan and manage broadband network investments for over$500 Million in broadband projects nationwide, including $250 Million in Broadband Stimulus investments under the NTIA BTOP grant program. Using our financial tools, we suggest using the following process to conduct the business model analysis and make recommendations. We would propose using a 10-year period to analyze the project: Consulting Services Agreement between City of San Leandro and Magellan Advisors 07/17/2017 for Fiber-Optics Master Plan Exhibit A—Page 6 of 10