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<br /> 174 <br />Best Effort services use a method of “sharing” the fiber with other users (encrypted and not <br />viewable by the other users), but still get burstable speeds as outlined above. There are better <br />economies of scale in a best effort scenario, hence the lower price. <br />Many businesses in San Leandro cannot afford, and do not need, dedicated services. By offering <br />the tiered services, the City creates a larger available market. <br />Our recommendation is that Lit San Leandro move from a dark fiber leasing only business, to a <br />“lit” services provider to better enhance the goals of the City for economic development. <br />The primary assumptions used to estimate the Phase 1 and 2 include: <br />• 100% City Facility Take Rate <br />• 30% Commercial Business Take Rate for businesses within 500’ of core network assets <br />with 3-year ramp per phase <br />o 20% of businesses within 500 ft of the core network <br />o $720 per month for 1Gbps/1Gbps transport services <br />o $360 per month for 100Mbps/100Mbps transport services <br />▪ All rates are wholesale to an ISP; the ISP would charge full retail prices for services <br />• 7% Vertical Assets Leases with 5-year ramp starting in 2023 (not available in Phase 1) <br />o $400 per month with backhaul, or $180 per month for lease only <br />Other off-balance sheet benefits to consider: <br />• Each phase can be profitable, but most profitable if managed as a single network <br />• Model does not consider any savings from opportunistic builds <br />• Model is only one potential model for the City <br />• Model does not show any cost savings the City would have by not leasing from existing <br />carriers <br />• Revenue will be from businesses within 500 feet of the fiber run and from leasing of <br />vertical assets and fiber to wireless providers <br />• No Smart City costs were included in the model <br /> <br /> <br /> <br /> <br /> <br /> <br />