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<br /> 110 <br /> <br />Phase 1 is mostly finished today and is <br />the network that the City shares with <br />Lit San Leandro. Funds have already <br />been expended to build this network <br />either through direct investment by <br />LSL, and/or through other provided <br />grant funding. <br /> <br />Phase 1 covers a large portion of the <br />City and passes within 500 feet of <br />roughly 3,000 businesses or potential <br />subscribers. Lit San Leandro owns a <br />288 strand bundle through this <br />portion, of which the City owns 30 <br />strands of fiber with unrestricted use <br />(while in the EDA expansion areas the <br />City owns an additional 48 strands of <br />fiber with restricted/noncompetitive <br />use). . In addition, the City maintains <br />and operates a separate 72 strand <br />bundle along the original route that connects the majority of its buildings, community <br />centers, and libraries, as well as traffic signals and other City owned facilities. <br /> <br />The City currently does not lease any fiber or bandwidth to any for-profit companies but <br />has left that to LSL. LSL’s current business model is to sell dark fiber to businesses <br />through ISPs such as Crosslink and Paxio, who then in turn sell broadband services to <br />the end customer. <br /> <br />It should be noted that the Lit San Leandro fiber assets are within conduit provided by the <br />City. This arrangement allowed the local provider (LSL) the ability to greatly reduce their <br />infrastructure costs when compared to a “traditional” type of build. LSL was able to <br />capitalize on existing City assets to reduce costs and thereby offer affordable broadband <br />services to the community. <br /> <br />If an outside vendor constructed a network a similar fiber-optic network without the benefit <br />of existing conduit, it may have cost as much as $12,000,000. Given the availability of <br />existing conduit, we estimate that the cost for the fiber was reduced to around $3.0M- <br />$3.5M. This network build also provided the City with 30 strands of fiber in the original <br />area and 72 within the expanded area under the first amendment to the agreement. <br /> <br />The costs shown below do not show the value of the Phase 1 asset, but the potential out- <br />of-pocket expenses to build the network. <br /> <br /> <br />Figure 64. Phase 1 – Existing Fiber Network