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Municipal Comm. Utility Study Contract ~~~E ~~~ MEMORANDUM May 10, 2005 .,._,_...... :_) J . i TO: The Honorable Mayor and City Council Members (~J FROM: Michael C. Van Milligen, City Manager SUBJECT: Municipal Communication Utility Feasibility Study The City issued a Request for Proposals for a Municipal Communication Utility Feasibility Study. Three proposals were received. An RFP Review Committee interviewed each of the applicants. Cable Franchise Administrator Merrill Crawford is recommending City Council authorization to negotiate and execute a contract with the lowest priced respondent, Vernon Research Group, in partnership with Virchow Krause & Company and Columbia Telecommunications Corporation to conduct a Municipal Communication Utility Feasibility Study for the City of Dubuque in the amount of $89,900. This exceeds the budget by $39,900, which will come from the Cable TV fund balance. I concur with the recommendation and respectfully request Mayor and City Council approval. J [I I / /--- /'1 1 . / t I / . / i. _ I 7] L, K ,L Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Merrill Crawford, Cable Franchise Administrator . 5U~~E ~~~ MEMORANDUM May 11, 2005 MEMO TO: Michael C. Van Milligen, City Manager FROM: Merrill Crawford, Cable Franchise Administrator~ SUBJECT: Municipal Communication Utility Feasibility Study INTRODUCTION: The purpose of this memorandum is to recommend that the City Manager be authorized to negotiate and execute a contract with Vernon Research Group in partnership with Virchow, Krause & Company and Columbia Telecommunications Corporation to conduct a Municipal Communication Utility Feasibility Study for the City of Dubuque. BACKGROUND: At their March 21,2005 meeting, the City Council authorized the issuing of a Request For Proposals for a Municipal Communication Utility Feasibility Study. This action is pursuant to City Council Priorities and CIP Project No. 540071- 62716, previously funded to $50,000. On May 22, printed copies of the RFP were mailed to ten firms who had expressed interest or were otherwise known to conduct such studies. The RFP was also posted to the City of Dubuque website. Within the week, a printed copy was mailed to an additional firm by request, and two others noted that they had downloaded the RFP from the website and did not require a separate mailing. Three written proposals were received in response to the RFP by the April 25, 2005 deadline. Each proposal was offered by a team of three firms combining specialized experience and credentials. All three proposals were found to meet the minimum criteria of the RFP. The proposals and pricing are as follows: · Black and Veatch Corporation, of Overland Park, KS, in partnership with Utility Financial Solutions and Satisfaction Development Systems, at a cost of $94,640. · Elert and Associated, of Stillwater, MN, in partnership with Dain International and Springsted, Inc. at a cost of $141,000. · Vernon Research Group, of Madison, Wisconsin & Cedar Rapids, IA, in partnership with Virchow, Krause & Company and Collumbia Telecommunications Corporation at a cost of $89,900. t The written proposals were reviewed by an RFP Committee consisting of City Manager Michael C. Van Milligen, Assistant City Manager Cindy Steinhauser, Economic Development Director David Heiar, Public Information Officer Randy Gehl, Water Department Manager Bob Green, Greater Dubuque Development Corporation Executive Director Rick Dickinson, and myself. The committee then met with representatives of each vendor team for live presentation and discussion during the week of May 2 - 6, with follow-up questions by teleconference on Monday, May 9. The committee discussed, evaluated, and ranked the proposals prior to opening the sealed envelopes containing pricing data. The proposal rising to the top in this competitive process was that of the team led by Vernon Research Group. This was also the proposal offered at the lowest price. While that price is $39,900 more than the $50,000 currently budgeted, I have reviewed the status of the Cable TV Fund balance in the context of CIP projects and anticipated Fiscal Year 2005 operating revenue and expenses, and estimate that the additional cost of the proposed Feasibility Study can be paid from the Cable TV Fund. If the City Council concurs with the committee's recommendation, the next step will be to negotiate and execute a contract with the vendor team and implement an ambitious project schedule which would commence the project by June 1, complete market research by July 15, and deliver a final report by August 26, 2005. RECOMMENDED ACTION: The recommended action is that the City Council authorize the City Manager to negotiate and execute a contract with Vernon Research Group, in partnership with Virchow Krause & Company and Columbia Telecommunications Corporation to conduct a Municipal Communication Utility Feasibility for the City of Dubuque, in accordance with the terms of the RFP and the proposal. It is further recommended that $39,900 from the Cable TV Fund be added to the existing CIP Project budget for this study. cc: Barry Lindahl, Corporation Counsel Randy Gehl, Public Information Officer Ken Tekippe, Finance Director Dawn Lang, Budget Director Municipal Communications Utility Feasibility Study For City of Dubuque Dubuque, Iowa .. ... .. .. ... ... .. &&4&44 ............... ............ ... AA 'Y' ~ VirchOWKrause . &company VERNON RESEARCH GROUP 1962 First Avenue NE Cedar Rapids, IA 52402 Ten Terrace Court P.O. Box 7398 Madison, WI 53707-7398 888.710.7278 800.362.7301 vernonresearch.com virchowkrause.com . . . Columbia .-.. Telecommunications . . . Corporation TeIBcomnulIcaIon Syatams EngIneeIIng 5550 Sterrett Place Columbia, MD 21044 intemetctc.com April 23, 2005 Table of Contents SECTION 1 - REQUIRED DOCUMENTS A. LETTER OF TRANSMITTAL B. PROFilE OF THE FIRMS........................................................... 1 1. Vernon Research Group.................................................................. 1 2. Virchow, Krause & Company, LLP....................:...........................4 3. Columbia Telecommunications Corporation ..................................5 C. QUALIFICATIONS .......................................... ...... ...................... 7 1. Vernon Research Group ..................................................................7 2. Virchow, Krause & Company, LLP ................................................ 9 3. Columbia Telecommunications Corporation ................................17 D. PROJECT PERSONNEL .......................................................... 25 1. Vemon Research Group ................................................................25 2. Virchow, Krause & Company, LLP ..............................................27 3. Columbia Telecommunications Corporation ................................29 E. FEES AND COMPENSATION .................................................. 30 F. REFER ENCES ...... .......... ............................ ...... ..... ............. ...... 31 1. Vernon Research Group ................................................................31 2. Virchow, Krause & Company, LLP..............................................31 3. Columbia Telecommunications Corporation ................................33 G. NON-CONFLICT OF INTEREST STATEMENT ....................... 34 SECTION 2 - OVERVIEW A. SCOPE OF SERVICES ........................................................~.... 35 B. PROJECT SCHEDULE ............................................................. 39 C. ROLE OF CITY OF DUBUQUE EMPLOyEES......................... 40 D. METHODOLOGY OVERViEW.................................................. 41 SECTION 3 - MAIN BODY OF RESPONSE A. SCOPE OF SERVICES - DETAilED........................................ 44 SECTION 4 - ADDITIONAL CONTRACT REQUIREMENTS .. .. .. .. .. .... ............ .......... ......... ...... ...... ... A. EX CE PTIONS..... ....... ................. ....... ....... ...................... ..... ...... 54 B. CERTIFICATE OF INSURANCE .............................................. 55 ATTACHMENTS VERNON RESEARCH GROUP A CERTIFICATE OF INSURANCE I!!I V.rchowKrause 8i.corqB't{ ... Columbia ...-. Telecommunications ...... Corporation . .. ~.u... B,*nsEa;ietiv vernonresearch.com virchowkrause.com internetctc.com SECTION 1 Required Documents ,;;.~':i ......... ... ... ... ... ... ... ........... AAAA ............ ...... ~ VERNON RESEARCH GROUP 1962 First Avenue NE Cedar Rapids, IA 52402 A. LETTER OF TRANSMITTAL April 23, 2005 City Clerk City of Dubuque 50 W. 13th Street Dubuque, IA 52001 SUBJECT: Municipal Communications Utility Feasibility Study Proposal We appreciate the opportunity to submit our proposal for a Municipal Communications Utility Feasibility Study. For this project. Vernon Research Group, based in Cedar Rapids, Iowa has teamed with Virchow, Krause & Company, LLP (Virchow Krause) and Columbia Telecommunications Corporation (CTC). The Vernon Research team with our partners, Virchow Krause and CTC, offers the City of Dubuque our nationally renowned experience working with more than eighty communities across the country. Our team approach offers you the combined staff resources and experiences of Vernon Research Group, Virchow krause, and CTC, while keeping a single point of responsibility. We Understand Community Connectivity Needs Municipalities across the State of Iowa and across the country face important connectivity decisions on how to make broadband services more available and affordable for their communities. Communities realize that reliable broadband connectivity services are required to: retain and attract businesses, serve their institutions, and enrich the lives of their citizens. Some municipalities choose to offer competitive services over their own infrastructure; others choose to fill gaps with dark fiber or other niche services, while other communities create alliances with their incumbent service providers. During the past year, Iowa communities have been offered a new connectivity planning model by various interest groups. The models suggest the municipality finance a Fiber-to-the-Premises (FITP) infrastructure to allow any service provider to offer voice, video, and data services to the community. On the surface, the model sounds attractive and appears to be good deal for the community. However, this new model may not be the "win-win" opportunity it is touted to be and the best solution for the City of Dubuque may be a set of different business models and technologies. Our process will review and record what models and technologies make sense for the City of Dubuque. This study will review the feasibility and outline appropriate business models that will enable the City of Dubuque to enhance the availability and affordability of advanced connectivity services. The study will: · Evaluate the current state of service offerings in the City of Dubuque and the potential market for new services including the following: . o Determine current and future broadband needs; identify services that are currently available and their respective costs. o Identify any service gaps. o Outline strategies for improving and expanding the broadband infrastructure to facilitate the availability and affordability of enhanced connectivity services. · Examine the range of residential, business, and community applications that are evaluated with the availability of advanced connectivity services. City Clerk City of Dubuque April 23, 2005 Page 2 . Address various business model options such as creation of partnerships and alliances, leasing of infrastructures, offering wholesale services, and offering retail services. . Examine the range of technology platforms (FfTP, wireless, other) that will support the desired applications and services. The Vernon Research Team The Vernon Research team has more experience and resources to meet your needs and to lead this project than any other provider you may consider. . We have a large database of thousands of surveys from businesses and residents across the country, which we will use to amplify and enrich our feasibility studies for the City of Dubuque project. . We don't offer pre-determined, 'off-the-shelf solutions.' We seek and find the solutions to match your unique needs. . We won't be reinventing the wheel. Our ability to offer more customized solutions is due in part to our vast depth of experience with other studies. While we offer custom solutions, our large reservoir of data and significant history of experience in these types of studies means we don't have to do a lot of the basic groundwork. Our experience allows us to focus on 'your specific objectives. Please review the following factors, which, we feel, distinguish the Vernon Research team from other firms: The Vernon Research team does not offer construction services, and we are not agents for any equipment or service vendor. We are not after construction or equipment contracts. Our recommendations are not driven by the prospect of obtaining a construction contract or an operating agreement. Our recommendations are designed to help the City of Dubuque avoid risks, understand opportunities, reduce connectivity expenses, and satisfy the City of Dubuque. Commitment -The team has long-standing traditions and solid reputations for providing high quality consulting services and research to the public sector. To illustrate that commitment, Vernon Research Group has recently introduced new products and services for municipal research and Virchow Krause has a separate practice group devoted entirely to serving public sector entities. Combined with both companies' private sector experience, Vernon Research Group and Virchow Krause offer unparalleled objectivity and trustworthiness, giving our results and analysis exceptional credibility. Experience - The bottom line is we've both done it before. We deliver more in-depth, insightful, and innovative approaches than any of our competitors. And, with the Vernon Research team, there is no wondering what you're going to get. We've developed effective reporting styles that have clearly and concisely provided answers to the questions you are now asking. For example, much of Vir chow Krause's success lies in our understanding of the needs and pressures municipalities face. This comes from Virchow Krause's Public Sector groups continuing relationship with over 300 non-profit organizations, 175 municipalities, and 275 public utilities. Virchow, Krause & Company, LLP has been requested to present at seminars at the regional and national level, including seminars of the American Public Power Association. The members of the Vernon Research team have extensive consulting experience. As a team, we will deliver a I quality plan that will give you the information the City of Dubuque needs to take a proactive role in advancing the availability and affordability of broadband services. City Clerk City of Dubuque April 23, 2005 Page 3 Independence - As a respected market research firm with clients across the country from Fortune 1000 on down, Vernon Research Group has a reputation for solid, reliable research without slant or distortion. We.have done work for both sides of some issues and our name stands for research that tells it like it is, with the results forming our recommendations rather than vice versa. As a certified public accounting firm, Virchow Krause is required by industry standards to maintain independence in all client services. You can be assured that any recommendations we make will be made with an independent evaluation of the facts. Our team's goal is to be your most valued advisor, not to obtain a construction contract. Technology Understanding - Our experience and background in utilities and networks will ensure that the City of Dubuque will be able to review connectivity solutions that will meet its objectives now and in the future. Our recommendations will be unbiased and independent assessments of both technology and vendors. We have assisted several clients in the selection of a variety of vendors and technologies, including: · Fiber-to-the-Premises (FTI'P) - Passive Optical Networks (PON) - Ethernet-to-the Subscriber (BITS) · Fiber-to-the-Curb (FfTC) · Fiber-in-the-Loop (FlTL) . Wireless - Wi-Fi -WiMax - MMDS . Broadband over Powerline (BPL) We believe the selection of the Vernon Research team will provide the City of Dubuque with the best possible team to serve you. Our firms are large enough to assure you top quality professional service, yet small enough to provide personalized service responsive to your needs. We appreciate the opportunity to submit our proposal and look forward to presenting our approach to prepare a proposal. If you have any questions or need additional information, please contact Bob Woodward at 543.2194, or Thomas Asp at 800.362.7301, ext. 2613. We look forward to working with you on this important project. Sincerely, SEARCH GROUP, ~tb~ MWV/jas Enclosures c: Thomas Asp, Partner, Virchow, Krause & Company, LLP Joanne Hovis, President, Columbia Telecommunications Corporation ''''...".~,-----' B. Profile of the Firms -...thevalue of research is directly proportional to the degree to which findings are actionable.. .. .."......... .A...... 64A& AAA ...... " VERNON ReSEARCH GROUP ~ VlrchowKrause 8i~ ... Columbia ----Telecommunications --... Corporation ...leill.a....~_Elpmg As indicated, Vernon Research Group (Vernon Research), Virchow, Krause & Company, LLP (Virchow Krause), and Columbia Telecommunications Corporation (CTC) have teamed for this project. Our team approach offers the combined staff resources and expertise while maintaining a single point of responsibility. In each of the following sections, we provide d~tails on the experiences, references, and resources of each firm. The Vernon Research team brings direct and current experience reflecting leading edge technology and business practices. The methodology that we have proposed for this project is complete in its understanding of the project requirements, yet provides numerous opportunities for regular communications between the City of Dubuque and team members as well as the flexibility to incorporate new information into the project when those opportunities occur. We can fully appreciate the unique opportunity you have extended to our team in allowing us to provide our proposal for this project. The Vernon Research team brings a cost effective approach that provides both the experience and knowledge of issues related to the advancement of available and affordable connectivity services. We look forward to assisting the City of Dubuque in this important effort. 1. VERNON RESEARCH GROUP Vernon Research Group is headquartered in mid-America and has conducted research studies in all US States, Mexico, Canada, and throughout Western Europe and Asia. Founded in 1987 in Cedar'Rapids, Iowa, Vernon Research Group is located within a ISO-mile radius of more than I million people in small cities and within a few hours drive of Chicago, Milwaukee, Minneapolis, Omaha, Kansas City and St. Louis. We have built our business on these key beliefs and practices: . Our market research is a powerful tool for identifying, qualifying, and prioritizing opportunities and threats in the marketplace, and a guide to wise action. · Our carefully designed and executed research programs provide a strong foundation for making sound business decisions in today's quickly changing marketplace. · Our goal is the prescriptive research program that focuses on our client's current needs while uncovering future considerations. · We believe that the value of research is directly proportional to the degree to which findings are actionable. Our mission is to provide insightful information that can be immediately applied to strategic marketing and management decisions. vernonresearch.com virchowkrause.com lnternetctc.com 1 B. Proflleof the Firms · Our strength is providing our clients concrete applications that directly link research findings to marketing and management decisions. · Our collective decades of experience and widespread knowledge of various industry issues affords us the solid foundation of understanding necessary to mine richer, more insightful data, and to develop the strongest linkages of findings to action. · Weare committed to taking the research process a step further by working with our clients to apply key research findings to practical, strategic decisions that will have a measurable impact on their business. Vernon Research Group offers a wide range of qualitative and quantitative approaches to collecting and analyzing data. We specialize in custom research design, and our thorough post-collection analysis is focused on discovery of strategic opportunities. We work closely with our clients to design, execute, and analyze qualitative and quantitative studies that produce results that are useful and immediately actionable. Verno~ Research Group often conducts both qualitative and quantitative types of studies, because we believe the two approaches are not mutually exclusive. Generally speaking, qualitative research is most appropriate for identifying and fleshing out unknown issues. Quantitative research is most appropriate for testing the issues using a sample that is representative of the larger population. We often opt to use the two approaches together as complementary parts of a two-phase study. Qualitative Qualitative research is directed toward gaining an in-depth understanding of participants' perceptions and behavior. Using these qualitative methods, we provide our clients with the kind of detailed understanding possible through less-structured open-ended questioning, extensive probing, and observation of participant behavior. Our typical qualitative methodologies include: ........... a.. ... " .... .............. ".AIt. .."" ...... " . Focus groups . Ethnography . Tele-focus research (unstructured, one-on-one, in-depth interviews with selected respondents) . Elite in-depth Interviews VERNON RE SEARCH GROUP Quantitative Our quantitative approaches are designed to gather hard data that can be analyzed using the most advanced statistical methods in the industry. The primary advantage offered by most quantitative approaches is that the results of these studies can be generalized to the entire target population-something qualitative methods cannot, by themselves, provide. ~ VlrchowKrause 8i~ . .. Columbia ... Telecommunications ...~:...~ vernonresearch.com vlrchowkrause.com intemetctc.com 2 B. Profile of the Firms We use a variety of techniques in gathering quantifiable data, including: . Face to face surveys . Telephone surveys . "Secret Shopper" surveys . On-line internet-based surveys . Computer Assisted Personal Interviews (CAPI) . Voice of the Consumer (VOC) panels . Group sessions using the Option Finder@ Interactive Keypad system . Choice-Based Conjoint - Paper and Pencil Administration - CAPI Administration On-line Administration . Adaptive Conjoint Analysis On-line Administration - CAPI Administration For typical quantifiable studies, the interview process is highly controlled to ensure that questions are asked in the same way of every respondent. Questions most often include response alternatives or request scalar/numeric responses. The larger sample sizes typical of quantitative studies ensure that results accurately reflect characteristics of the target population. Our analytic approach to all of our quantifiable studies typically makes use of many of the following: . ........... ........ ........ ...... .... ~ · Chi-square and related tests of association for nominal data · Difference of means tests and exploratory methods appropriate to ratio- level data · Non-parametric alternatives to difference of means tests . Analysis of Variance (ANOV A) · Multivariate Analysis of Variance (MANOV A) . Regression Analysis - Multivariate Linear Regression Analysis - Multivariate LOGIT, PROBIT · Conjoint Analysis - Hierarchical Bayesian derivation of point estimates for part-worth values - Price Sensitivity - Market Simulations Importance Analysis - Utility Analysis · Discriminant Analysis · Perceptual Mapping using: - Factor Analysis - Cluster Analysis . Latent Class Analysis . Scaling and Multidimensional Scaling · Segmentation Modeling using: - Cluster Analysis - CHAID - Latent Class Models VERNON RESEARCH GROUP ~ VlrchowKrause 8i~ . .. Columbia .-.. Telecommunlcatlons ,..... Corporation . .. ..........~. SyIlimI &Igi'llnj vernonresearch.com virchowkrause.com internetctc.com 3 B. Profile of the Firms Our mission is to serve as your most valued advisor. Independent - - - Review Independent - - - Assurance Independent - - - Recommendations .. .. .. ... .. .. ... ............ ........ A....".. ...... ...... y VERNON RESEARCH GROUP ~ VlrchowKrause 8(company . .. Columbia --. Telecommunications ~... Corporation . .. 1IIeixlMlIbI~~ · Trending and Forecasting using: - ARIMA - Survival Analysis 2. VIRCHOW, KRAUSE & COMPANY, LLP At Virchow, Krause & Company, LLP, our commitment is to help our clients succeed in meeting their strategic goals. - Virchow, Krause & Company, LLP, a partnership, was established in 1931 and today consists of over 1,000 associates in 14 locations. We are ranked as one of the wrgest consulting and accounting firms in the United States. Our depth of staff ensures that we will meet your financial and consulting needs, yet we cultivate and retain the entrepreneurial mindset that all organizations need to keep them fresh and focused on client service and in delivering innovative ideas. We will strive to meet your complete satisfaction. Virchow, Krause & Company, LLP is a partnership headquartered in Madison, Wisconsin. Our headquarters are located at: Virchow, Krause & Company, LLP Ten Terrace Court P.D. Box 7398 Madison, WI 53707-7398 800.362.7301 You will be served by Virchow, Krause & Company, LLP's Public Sector and Non-Profit Practice Group which consists of over 120 professionals. We provide services to nearly 330 utilities and 330 municipalities nationwide. Over the past three years, we have provided services to counties and communities in 26 states in the United States. Included in this practice is a group of professionals that provide consulting services to municipal utilities of all types throughout the nation. The specialized focus of this Public Sector Consulting Group gives our staff the understanding of the issues your organization faces and gives them the experience to find effective solutions. Services that our Public Sector Consulting Group provides to our clients include: · Advanced communication business plans and feasibility studies · Market research . Competitive analysis and risk management . Strategic planning . Electric unbundling studies · Power supply evaluation and contract negotiation . Cost of service and rate design for water, wastewater, storm water, I landfill, and gas utilities . Assessing Automatic Meter Reading System needs and benefits . Operational and organizational reviews . Information systems analysis vemonresearch.com vlrchowkrause.com internetctc.com 4 B. Profile of the Firms · Customized workshop training sessions for management and board members · Human resources consulting, including analysis of employee benefits, compensation and pay-for-performance based systems . Utility valuation services Our Public Sector Practice Group is required to maintain complete independence in our evaluations, analysis, and reporting. This assures our evaluation will be fair, objective, and intended to serve the best interest of your organization and the taxpayers in your community. Virchow Krause chooses not to offer construction services, nor do we endorse equipment and network vendors. This is a critical component that separates us from other firms and will assure management that we will identify all pertinent issues involved in this venture. As a member of the Securities Exchange Commission (SEC) Practice Section of the American Institute of Certified Public Accountants, we have successfully passed all peer reviews, where independent firms review our work and practices. This can give you the highest level of confidence of Virchow Krause meeting the latest industry professional standards. Our ongoing internal quality control program is a critical component associated with our ability to continue to provide the highest quality services to our clients. You can be confident that our methods and practices uphold the highest ethical standards and ensure complete independence. If you would like more information on our services, articles and industry involvement, please view our website at www.virchowkrause.com. 3. COLUMBIA TELECOMMUNICATIONS CORPORATION CTC is a 22-year-old company located in Columbia, Maryland. CTC provides communications engineering consulting services for public sector and non-profit clients throughout the United States. Since 1983, we have provided wide- ranging coinmunications engineering consulting services for hundreds of clients around the country, with particular concentrations in the Southeast and Southwest, on the West Coast, in the Midwest, and in the Mid-Atlantic region. Like Virchow Krause, CTC is also exclusive to public sector clients and has extensive expertise with local government. ......... ....... ........... ...... .... ... CTC is not affiliated with equipment manufacturers, communications carriers, cable operators, or service providers. We represent the interests of our clients-- not of the industries with whom they negotiate. Our expertise and independence enable us to evaluate the advantages and lifetime costs of different approaches, make independent recommendations, explain and justify our conclusions to policymakers and decision makers, oversee engineering and communications projects, and to verify project status and project completion. VERNON RESEARCH GROUP ~ VlrchowKrause 8i~ . .. Columbia _Telecommunications . .. Corporation 'IIlelllmlIllal ~ ~ CTC works with the full range of existing and emerging technologies to prov)de services in technology planning; communications network assessment and implementation; and project management. We hold incomparable expertise in supporting local governments to develop broadband communications networks using fiber optics and other technologies. From New York to Santa Monica, we vernonresearch.com virchowkrause.com internetctc.com 5 B. Profile of the Firms have planned, designed, negotiated, and implemented sophisticated telecommunications projects that control expenses and minimize disruption. CTC has worked for numerous clients on a broad range of networking planning and infrastructure design tasks. We have planned telecommunications networks using a multitude of transmission technologies and architectures. We have created fiber optic master plans, including fiber routing and specifications. We have planned both LANs and W ANs to provide integrated voice, video and data capabilities for educational institutions, state and local governments, and non- profit institutions. We have also provided technical support in the design, development, and construction of these networks. We have conducted detailed user requirement analysis interviews and cost modeling, specification of system components, system certification, and performance modeling, among other tasks. Further, detailed information is available on request. ............... Il1o......... ....... ,...... ...... ..... ... VERNON RESEARCH GROUP ~ Vn:howKrause &:COf11)iII1Y . .. Columbia ___lilT elecornmunlcatlons ,...- Corporation ... .......~....._~ vernonresearch.com vlrchowkrause.com lnternetctc.com 6 c. Qualifications 1. VERNON RESEARCH GROUP Vernon Research has done numerous studies for private and public organizations in the area of technology, utilities, public opinion and community citizen attitudes and opinions. Some of our more recent clients in this area include: Client ..-::, ;;"~,_{~:,~-i'i':y~.::::'!..:~;',:j;'~:' ~'.~~'ffJ!t :;:;;;~'t:!i'.',r,,<."\ ~:~:'--:';,::j~":i'"-- \;';: Alliant Energy ATe (American Transmission eompany) NMe(Nuclear Management eorporation) eity of West Des Moines/H.R. Green Ames, Iowa .. .. .. .. .. .. .. .... .. II .. ... ........ .... ......... ...... .. VERNON RESEARCH GROUP ~ VlrchowKrause &:~ . .. Columbia ..... Telecommunications ,...... Corporation . . . Ta.uI......sr-~ :.~'/.~ "'t' ;'?;:',~'''~':'<',:~-"iJ;>'~;:~:/,' " , CO...n. .....ta......-.d....c........t.. ............. .....'D~f~'\!/......'!R~Ale~~,1)p~~nntitin:",. ',- ;.. ". ~_ -' ."-_'-,r~.....~~-M':';;1;~}.'(~:;I:',~-~i!'*"'~~;Jid,_,,_~',~~~...i'~-'._.;."fr~~~.l,\:~~ Shawn Kapper 608.458.4819 Terry Ann Peterson 262.506.6819 Steve Dykstra 608.877 .3630 eheryl A Bredenbeck 715.377.3374 L. R Anderson F.E. 515.222.3460 Mark A Duben P.E. 515.278.2913 Ames Chamber of eommerce and Ames Tribune 2004 and previously 2004 and previously 2004 2003 2001 Various. Numerous studies of both internal and external respondents. eustomer Satisfaction. Measure customer satisfaction with A TC design engineering services. Stakeholder research. Study of expectations, satisfaction and preferences ofNMe stakeholders. Citizen Study. Survey of attitudes and opinions regarding the community water supply including willingness to pay additional fees for quality improvement. Community quality of life, development and referendum research. Determine citizen priorities, attitudes and opinions toward a number of community issues and project. vernonresearch.com 7 vlrchowkrause.com Internetctc.com c. Qualifications Cedar Rapids, Iowa 2001,2002, 2004 Paul Pate 319.286.5051 Linn County, Iowa Linda Langston 319.892.5000 1997,1998, 2000,2004 Marion, Iowa Thomas D. Treharne 319.377.1581 2004 Amana, Iowa Kristie Wetjen 800.579.2294 2004 ............ .. " ..... .. .. .......... ....... ...... ...... ... VERNON RESEA.RCH GROUP ~ VrchowKrause &:COf11)aI1Y ... Columbia ... Teleccmmunlcations ,..... Corporation ... TeUI..Ir.IIaIISJiIII~ :,D...............:..:.....~.....:......: t:...~:..J~{:? Taxpayer Study. Extensive citizen input and conjoint analysis for use in gauging citizen priorities, attitudes, opinions and openness to tax Tate hikes. Also measured citizens for city performance of services. Research and Strategic Planning. Conduct market research, focus groups and other methods for developing new five year plan and goals. Included human resources and technology components. Strategic Planning. Focus groups and other methods for determining city use of Brownfield area. Visitor attitudes and opinions toward the colonies. Uncovered community strengths and weaknesses through eye of visitors. Recommended ways to increase visitors and tourists. vernonresearch.com vlrchowkrause.com 8 Internetctc.com c. Qualifications 2. VIRCHOW, KRAUSE & COMPANY, LLP <~ ":1 ::::_il;~~~f;-_WY,-r:j';i,',;~~S!;V;~'i~~~~~~\~-~~;:r~t~;.':,'k::~~::,'f;t,~"~":i ~_';_'~~:~:;;~~'_.":'~~~t:t:"'- .:,-::,~!.'_,::,..;,;_:j~" ," ',f' "'. ,'. - ~,-- ,.'- Client Pulaski Electric Department Moorhead Public Service .... .. .. .. ..... .......... ............. .... ...... ... ... VERNON RESEARCH GROUP ~ VlrchowKrause Bicompany . .. Columbia .....a. Telecommunications ........Corporation . .. TIlo.."..Wo.II~"epmg eC)n~~t Mr. Ron Holcomb General Manager Pulaski Electric System 128 S. First Street Pulaski, TN 38478 Mr. Bill Schwandt General Manager 500 Center A venue, Second Floor City Hall P.O. Box 779 Moorhead, MN 56560-0779 218.299.5400 2005 D~j'e,}?~();ih"j"nri~'i~i~;~g.~"'..,;!'il;,! '."'~1"'C'+'" "c",~l;..,.~'3~~~~~~, 2004 2002 Fiber to the Premises Business Plan. Develop a cost benefit analysis and marketing plan to deliver state-of-the-art services once a fiber-to-the- premises network services considered include video-on- demand, cable television, Internet, HDTV, and support of VoIP. Wireless Business Plan. Develop a cost benefit analysis and mutual marketing plan to offer a low cost essential Internet service to residents and businesses in the community. Project scope includes working with various community leaders and officials to obtain necessary approvals and commitments. Telecommunications Feasibility Study and Business Plan. Leverage the existing dark fiber network to advance the communication capabilities of the community. The study includes market research to assess the market need and opportunity for Moorhead Public Service to provide communication services to the community via an FTTP network. Project scope includes development of cost-benefit analysis, risk assessment, and competitive analysis. vernonresearch.com internetctc.com vlrchowkrause.com 9 c. Qualifications Client Tennessee Municipal Electric Power Association (TMEPA) Village of North Aurora, IL City of Naperville, IL Genesee County, MI ... ... . " .. ..... .."........ ."'..... ...... ...... .... ~ VERNON RESEARCH GROUP ~ VIrChowKrause &:COf11B1Y I.. Columbia ..... Telecommunications ,..... Corporation III ......lMiICIlalll~..~ Contact C' ;',- "',,' "'l""""-' Mr. Mark Smith Attorney-at-Law Miller, Martin PLLC Suite 1000 Volunteer Building 832 Georgia A venue Chattanooga, TN 37402-2289 ....,J)ate,i. '.' ,,,".' ~ :~""'>:C';~:i -."', '__',~ 2005 .;ef;pj~tn~Q!ipJift.D~~,'" Telecommunications Strategic Plan. Provide in- depth ana:lysis of municipal- offered telecommunications services for five cities in Tennessee (3 with FITP). Develop forward-looking strategic plans based on historic and forecasted financial data, competitive environment, and technological advances. Commercial Broadband Feasibility Study. Provide an analysis of current telecommunications issues and opportunities in and around the community, and develop recommendations and strategies designed to advance the available connectivity options. 2004 Telecommunications Rate Study. Conduct a high-level study to determine the costs and benefits associated with the implementation of a new telecommunications system, and provide a detailed comparison to the costs and benefits of the existing system. 2004 LinkMichigan Broadband Strategic Plan. Development of a strategic plan to improve availability and affordability of broadband services. Project scope includes assessment of existing telecommunication infrastructure, outline available services, and identify gaps in broadband availability and affordability. Particular attention is paid to economic development benefits as a result of broadband services anq creation of job employment opportunities. Ms. Sue 2004 McLaughlin Village Administrator Village of North Aurora 25 E. Street North Aurora, IL 60542 Mr. Steve Carson IT Director City of Naperville 400 South Eagle St. Naperville, IL 60540 Tom Goergen Asst. Director Planning Commission, Genesee County 1101 Beach St, Room 200 Flint, MI 48502 vernonresearch.com vlrchowkrause.com internetctc.com 10 c. Qualifications Village of Pleasant Prairie, IL City of Bellevue, WA City of Sullivan, IL ......"".... A........... ......... ........... ...... ..... 't' VERNON RESEARCH GROUP ~ VlrchowKrause BiCXlf11)Cll1Y . .. Columbia "Telecommunications Corporation ... ~iI:406s,stBn~ Mr. Mike Pollocoff Village Administrator Village of Pleasant Prairie 9915 39th Ave. Pleasant Prairie, WI 53158 Mr. Gary Clesson 301 116th Avenue SE, Suite 450 BelIevue, W A 98004 425.452.6899 Ms. Sue Buttry Treasurer 2 West Harrison St. Sullivan, IL 61951 217.728.7815 .'.-,.... ".J 2004 2004 2004 2003 ".-,'.-. .;' -" ",":~,elitJ!l~_~~,; Fiber Optic Plan. Develop a business plan for the installation of a fiber optic ring in order to provide connectivity services for area industrial parks. Telecommunication Business Plan. Conduct market research to identify broadband service and demand gaps. Develop a range of business models from regional fiber connectivity to ubiquitous wireless services, to hot spots. Fiber Optic Assessment. , Develop fiber optic plan to connect key city buildings, schools, and business parks. In association with the fiber plan, complimentary wireless strategies were developed. The wireless will provide connectivity to facilities not located on the fiber backbone. Broadband Market Assessment. Assess for the residences and businesses in the City of Sullivan. Analysis included a comparison of perceived performance of cable television, Internet, and telephone providers. In addition, the assessment outlined potential strategies, given the market research results, to advance the availability and affordability of broadband services. vernonresearch.com vlrchowkrause.com Internetctc.com 11 c. Qualifications Client W~-~'::ft-;''-~f:':''_'~>J:~~~~'?lt!i~~:~''r'~::::f1;~''-~~'~'/~_;t' - . - '. -. ,iCQn:m~t Medina County Economic Development Corporation (MCEDC) and Medina County Board of Commissioners, Medina County, OH Allegan, St. Joseph, and Kalamazoo Counties of Michigan (ASK) Bryan Texas Utilities ............. .... ..... .... ...... ."'... ...... ...... ... VERNON RESEARCH GROUP ~ VIf'ChowKrause BiCOf11)al1'{ . .. Columbia .... Telecommunications Corporation . . . 1IIecamulblilY ~..&pmg Mr. Jim Doutt Executive Director Medina County Economic Development Corporation 144 N. Broadway Street Medina, OH 44256 330.722.9215 . , . "; . , . ;". ',..,. -; ~,- . , -. "" ." - .,' ~ . ...Ui!l~"{/?'.'i1;t~gjt~R~st;ipJ!9AtMi~~ 2003/2004 Project involves Development of a Fiber Optic System Business Plan for the County and the MCEDC. Project scope includes a telecommunications industry analysis, determination of current connectivity uses of identified public and private institutions, determination of present costs incurred by identified institutions, development of a cost/benefit analysis, and potential financing and partnership opportunities. LinkMicbigan Broadband Strategic Plan. Development of.a multi-county strategic plan to improve availability and affordability of broadband services. Project scope includes assessment of existing telecommunication infrastructure, outline available services, and identify gaps in broadband availability and affordability. Particular attention is paid to economic development benefits as a result of broadband services and creation of job employment opportunities. Mr. John Sych Senior Planner Kalamazoo County Planning & Community Development .201 W. Kalamazoo Ave. Kalamazoo, MI 49007 269.384.8115 2003 Mr. Wayland Simmons Product Manager - New Ventures 205 E. 28th Street Bryan, TX 77803 979.821.5753 2003 Broadband Feasibility Review. Conduct a high-level analysis of the potential opportunity of Bryan Texas Utilities to provide cable television and Internet services in the community. The review included a cost estimate of a Fiber-to-the-Home (FITH) alternative and required market shares to maintain cash flow and debt service requirements. vernonresearch.com vlrchowkrause.com Internetctc.com 12 c. Qualifications Client Saint Clair County, MI Upper Great Lakes Educational Technologies, Inc. (DGLETI) A......... ....JI. .A...A .....& ...... ... VERNON RESEARCH GROUP ~ VlrChowKrause Bicompany . .. Columbia _Telecommunications Corporation ... irlImw~Sr*n~ '.CQn~ct Vickie R. Ledsworth Director of Business Retention & Community Services Economic Development Alliance of St. Clair County 735 Erie S1., Ste. 250 Port Huron, MI 48060 877.982.9511 Mr. Andrew Bek Director 217 N. Front Marquette, MI 49855 906.228.4143 '.<' _:_<;_~it.,. -f,1) :<;"". ... ....,,,," n~m"I""""4~~J~~~~t!9"..-"" 2003 LinkMichigan Broadband Strategic-Plan. Development of a strategic plan to improve availability and affordability of broadband services for the 15 counties in Michigan's Upper Peninsula. Project scope includes assessment of existing telecommunication infrastructure, outline available services, and identify gaps in broadband availability and affordability. Particular attention is paid to economic development benefits as a result of broadband services and creation of job employment opportunities. 2003 LinkMichigan Broadband Strategic Plan. Development of a strategic plan to improve availability and affordability of broadband services for the 15 counties in Michigan's Upper Peninsula. Project scope includes assessment of existing telecommunication infrastructure, outline available services, and identify gaps in broadband availability and affordability. Particular attention is paid to economic development benefits as a result of broadband services and creation of job employment opportunities. Intemetctc.com vemonresearch.com virchowkrause.com 13 c. Qualifications County of Muskegon, MI Barry, Ionia, and Kent Cou,nties of Michigan (BIK) a... ... .& ... ..... .... .. .. .... ........a ......6. A ...... ...... '" VERNON ReSEARCH GROUP ~ VII"ChowKrause Bicompany . .. Columbia ...-. Telecommunications ,..... Corporation . .. Tllealn..._.Sylin~ Mr. Eduardo Bedoya, Information Systems Manager Central Services Building 141 Apple Avenue Muskegon, MI 49442 231. 724.6485 Mr. Alan Vanderberg Assistant County Administrator Office of the Administrator County Admin. Building 300 Monroe A venue NW Grand Rapids, MI 49503 616.336.3511 .:n~!~, 2003 2002 to 2003 . . . . .- . ;e" ......":t,..U.. . .,.' "'~'lil' . . e ' ~. '0' .".,;,.;;itmo",i? .;,.~.gD ., .,.llii"': LinkMichigan Broadband Strategic Plan. Development of a strategic plan to improve availability and affordability of broadband services. Project scope includes assessment of existing telecommunication infrastructure, outline available services, and identify gaps in broadband availability and affordability. Particular attention is paid to economic development benefits as a result of broadband services and creation of job employment opportunities. LinkMichigan Broadband Strategic Plan. Development of a multi-county strategic plan to improve availability and affordability of broadband services. Project scope includes assessment of existing telecommunication infrastructure, outline available services, and identify gaps in broadband availability and affordability. Particular attention is paid to economic development benefits as a result of broadband services and creation of job employment opportunities. vernonresearch.com vlrchowkrause.com lnternetctc.com 14 c. Qualifications Client Calhoun, Branch, Hillsdale, Jackson, and Lenawee Counties of Michigan (CBHJL) County of Cass, MI ........ .......... .......... ..... ...... ...... '" VERNON RE SEARCH GROUP ~ VtrchoWKrause Bicompany . .. Columbia .-. Telecommunications Corporation ... ,...."'IiI:alo..SyllIIIEIpIi1g Contact D4<ite. '. ..Erni.,.,..t'~eser,iri~on'Aj; . ":;;"'~~~~"-~'''_)'''''t'C'~~';l-,~~~~"S,~~~!'",~,,.~~r~':A~!1'~'y.:~:_" Ms. Kathy Eftekhari Marshall Economic Development, City of Marshall 323 W. Michigan A venue Marshall, MI 49068 269.781.5183 Terry Proctor County Administrator Cass County Building 120 N. Broadway Street Cassopolis, MI 49031 616.445.4420 2002 to 2003 2002' to 2003 LinkMichigan Broadband Strategic Plan. Development of a multi-county strategic plan to improve availability and affordability of broadband services. Project scope includes assessment of existing telecommunication infrastructure, outline available services, and identify gaps in broadband availability and affordabiIity. Particular attention is paid to economic development benefits as a result of broadband services and creation of job employment opportunities. LinkMichigan Broadband Strategic Plan. Development of a strategic plan to improve availability and affordability of broadband services. Project scope includes assessment of existing telecommunication infrastructure, outline available services, and identify gaps in broadband availability and affordability. Particular attention is paid to economic development benefits as a result of broadband services and creation of job employment opportunities. vernonresearch.com virchowkrause.com Internetctc.com 15 c. Qualifications Client '..~ij~ct .... . CINC . Houlton Water Company ...... .. .&.. ..... .... ......... ....... ...... .... ~ VERNON ReSEARCH GROUP ~ VlrchowKrause BiCOlt1B1Y . .. Columbia .1II1II... Telecommunications ,..... Corporation . .. lIIio.._...._~ Mr. Donald Johnson c/o Eau Claire Area School District 500 Main Street Eau Claire, WI 54701 715.852.3081 2002 :'-"- .:,>"- -' '.-...<.,-" -.' "- " . -. -'. ->..J~f>>j~J}~!;ri,pti9D."."e. Telecommunications Feasibility..Study, Business Plan Development - Condominium Network. Study includes evaluating the feasibility of establishing telecom services, developing a business plan and making system recommendations. CINC consists of two cities, two counties and four educational districts (including two State colleges) that wish to construct a condominium fiber network to interconnect their facilities. They also wish to lease the dark fiber to potential partners. Telecommunications Feasibility Study and Business Plan. Investigate communication technologies that meet the needs of Houlton Water Company, the residences of Houlton, and area businesses. Project scope includes development of cost- benefit analysis, risk assessment, and competitive analysis. Mr. John Clark General Manager 21 Bangor Street Houlton, ME 04730 207.532.2259 2002 vernonresearch.com v1rchowkrause.com Internetctc.com l'_--:~ 16 c. Qualifications 3. COLUMBIA TELECOMMUNICATIONS CORPORATION CTC has extensive experience planning, designing and evaluating communications networks. CTC has advised dozens of local and state governments regarding the benefits and disadvantages of deploying new infrastructure. CTC has worked with communities considering municipal broadband deployment and in their negotiations with cable operators and fiber optic and wireless communications providers. Significantly, CTC works only for public sector and non-profit clients. We are independent of equipment vendors, construction companies, and systems integrators; as a result, we can provide our clients with an impartial opinion. We have advised some clients that municipal broadband is a strong option from an engineering perspective-and we have advised others against it. In addition to an independent approach, CTC offers an aggressive engineering approach. All CTC work is conducted or overseen by licensed professional engineers. Our technical project managers are all licensed professional engineers and hold advanced degrees in engineering or related science fields. We have 22 years of history in the design and evaluation of fiber optic, wireless, and coaxial cable networks - ranging from the very earliest municipal networks in the 1980s (coax networks in cities such as Cincinnati) to the largest municipal deployments of the 1990s (fiber I-Nets in cities such as New York) to the cutting-edge new technologies of recent years (the region-wide network interconnection in the DC-metro area; the FITP builds in the Northeast). CTC currently advises three local governments in the Washington, DC area regarding technical issues in their discussions with Verizon Communications regarding its FITP deployment. CTC is conducting ongoing inspections of the FITP physical plant under construction by Verizon in suburban Maryland. CTC is currently advising the City of Los Angeles regarding likely carrier FITP construction and has prepared engineering studies and cost estimates for FITP for several municipal governments. CTC provides telecommunications engineering consulting services to numerous jurisdictions to support municipal network planning and implementation as well as other advanced networking and technology projects. ........... ......... .......... ........ ...... ...... 'I' CTC provides technical support in the planning, evaluation, development, and construction of municipal networks. CTC also designs and implements integrated local area networks (LANs) and wide area networks (W ANs) to provide voice, video, and data capabilities for educational institutions, state and local governments, and non-profit institutions. CTC conducts user requirements analyses, cost modeling, system planning, specification of system components, system certification, performance modeling, system implementation oversight, maintenance and support, and facilities inspection, among other tasks. Specific tasks include: VERNON RESEARCH GROUP I!!I VlrchowKrause &:company . . . Columbia "Telecommunications Corporation ... lliIIaII'_"'Sjllln~ . Long-term telecommunications planning to identify and evaluate requirements for voice, video, and data transmission needs; vernonresearch.com virchowkrause.com Internetctc.com 17 c. Qualifications . Planning, design, and construction oversight of municipal and institutional networks utilizing fiber optic, coaxial cable, radio, wireless, satellite, and microwave technology; . Integration of existing equipment and applications into new network plans; . Identification, selection, and oversight of potential vendors to provide applications identified during the planning process; - . System-level planning for high-speed, integrated networks; . Oversight of system construction and implementation; . System performance oversight; and . Identification and implementation of emerging networking and Intelligent Transportation Services (ITS) strategies. Summaries of selected projects follow. Additional experience information is available upon request. Mesa, Arizona Mesa is a large suburban city located ten miles east of Phoenix. CTC has provided extensive assistance for the City of Mesa and its electric utility in physical plant and networking. Projects include: . Develop communications infrastructure to promote economic development andtosuIJPort the City's communic_ations needs. . Determine the City's voice, data, and video requirements for government needs. . Design a fiber optic ring to serve the City power utility. . Systematically inventory all areas of planned water, sewer, or road construction. . Develop a Citywide infrastructure plan for constructing communications conduit and leverage existing City utility poles to maximize City benefits and provide capacity to the private sector. . Test and deploy a local emergency alert system operating over the analog and digital channels of all cable television systems in the City. ............. .... .... A'" ............. ....... ...... .... ... For the fiber optic ring, CTC designed physical routing for fiber optic cable on City power utility poles, designed entry and exit into the power substations, determined power utility needs, recommended a fiber optic count, and developed a technology concept that enabled the City to provide communications for its internal purposes, sell or lease bandwidth in City fiber, sell or lease fiber optic capacity on the ring, co-locate equipment from other networks and providers in hub buildings near substation facilities, and provide interconnection with other networks and carriers. VERNON RE.SEARCH GROUP As part of the E-Streets initiative, CTC designed with City staff a network of over 30 miles. maximizing the use of fiber negotiated from communications providers in the right of way and the use of roadways and canal ways where utility and road construction were expected in the near future. Relative to a ~ VIrchoWKrause Bicompany ... Columbia __Telecommunications Corporation . .. ra...._......SjIII..~ vernonresearch.com virchowkrause.com Internetctc.com 18 c. Qualifications network that was not coordinated with construction, the design is expected to save the City millions of dollars. CTC designed a standardized conduit standard usage scheme that provides four conduit for the City and up to eight conduit for commercial or other future use. The City has been able to collect revenue to offset construction cost by selling conduit in key corridors. CTC also worked with the City to design a system of vaults and manholes that enables non-City users to separately connect with their conduit without need to interact with the City conduit or the conduit of other carriers using the conduit bank. CTC worked with the City and vendors to ensure that fiber could be "blown" or otherwise placed in sensitive areas where vaults and manholes could not be placed at close intervals developed with the City's civil engineers the detailed conduit manhole and vault design. CTC also completed a technical feasibility study for the City to potentially expand the City's fiber optic and conduit infrastructure via point-to-point, "hotspot" or mesh wireless communications, potentially for intelligent transportation system applications such as cameras, and for public area free Internet access for citizens. National Capital Region Network Interconnection CTC has. served as consulting engineer and technical architect for 'an ongoing major regional network interconnection effort oriented at Homeland Security objectives. The National Capitol Region Interconnection effort has had, to date, four distinct phases. CTC is about to begin the fifth stage, which involves actual interconnection of numerous municipal networks in Washington, DC, Virginia, and Maryland. The project is funded by the Department of Homeland Security and administered by the District of Columbia. CTC serves as principal engineer/architect for the entire project. The following are brief descriptions of the four initial phases that led to DHS funding. First-Stage Engineering Assessment of Interconnection In late 2oo2learly 2003, CTC prepared a fIrst-stage engineering assessment of potential interconnection for a number of communities in Northern Virginia. CTC's recommendations included: ............. ..... A.. .... ....... .... ... .. '" · Inventory existing applications and services across jurisdictional boundaries; · Evaluate initial bandwidth needs; · Inventory needs for future applications and services across jurisdictional boundaries; · If justified, determine options and costs for physical interconnection to a shared interconnection point or to network sites near the municipal borders; · Agree on a set of technical standards and protocols for transport-only interconnection between existing state and local government networks; I VERNON ReSEARCH GROUP ~ VIrChowKrause &:company . .. Columbia .e. Telecommunications ...~:...~ vernonresearch.com vlrchowkrause.com internetctc.com 19 c. Qualifications · Introduce applications of mutual benefit to network users that take advantage of economy of scale of connected network (redundant Internet service, satellite links, video bridge, long distance telephone); and · If sufficient demand and political justification emerge, explore how aspects of some or all of the interconnected networks can be merged, such as databases, applications, and network access policies. Second-Stage Engineering Assessment of Interconnection: Focus on Public Safetv In early 2003, Alexandria, Arlington County, and Fairfax County agreed to jointly explore the potential interconnection needs of individual agencies, with a particular focus on public safety. CTC met with public safety officials, surveyed potential interconnection routes, and prepared preliminary cost estimates. CTC also met with Comcast to discuss the availability of fiber for interconnection. The key second stage recommendations include: · Create physical connections over fiber optics, utilizing spare fibers in existing Comcast and Cox cables between cable headends. If these fibers cannot be negotiated or obtained from the cable companies at reasonable cost, CTC recommends that the communities have the cable --operators Gonstruct fiber between I-Net sites situated near the borders oftlie-communities. · Utilize Gigabit Ethernet technology and IF protocol; . Locate the interconnection network logically outside existing community network security, utilizing dedicated switches and firewalls at a point of presence for each participating community; · Contract with Comcast and Cox to maintain and repair fiber as an extension of services provided under the current I-Net agreements; · Designate single points-of-contact between community network staff and the cable companies for troubleshooting; and . Design the network to be capable of scaling so as to enable the addition of new participating entities, using a variety of physical connection types and network bandwidth. .............. ...... ..... ...... .... " CTC assisted Alexandria and Arlington County to plan a video arraignment and payroll interconnection pilot project, with the network readily scalable for future applications. The communities contracted with Comcast to construct the link between an Alexandria fIre station and an Arlington community center using Gigabit Ethernet technology for the electronics. VERNON ReSEARCH GROUP Third-Stage: Engineering Evaluation of Disaster Data Recovery Center The Northern Virginia participants in the MetroCIO group requested in December 2003 that CTC perform a feasibility study for an information technology recovery center in Northern Virginia that would enable the participants' IT resources to remain functional in the event of a natural or other disaster. I!!I VlrchowKrause Bicompany . .. Columbia .-. Telecommunications Corporation . . . ......"....... SyIIIn &J.iillllilt vernonresearch.com virchowkrause.com internetctc.com 20 c. Qualifications CTC determined the likely range of costs "of such a facility, the interconnection network required to serve the facility, the center's potential capabilities, and the advantages and disadvantages of a community-owned center relative to a leased facility or leased recovery service. The study was completed in February 2004. In April 2004, CTC presented the results of the study to the Northern Virginia Regional Commission (NVRC). Fourth-Stal!e Enlrineerinl! Assessment of InterconnectionlData Recovery and Backup As follow-up to the NVRC response, CTC conducted a next-stage engineering study to determine costs and further specify the steps needed to implement regional interconnection. The study provides the framework for the communities' budgeting process and for applications for grants. CTC introduced the engineering study at the July 2004 MetroCIO meeting, in the presence of officials of the National Capitol Region Federal Department of Homeland Security. Ventura, CA CTC assisted the City to plan the migration and upgrade of a fiber optic network. To this end, CTC conducted a range of tasks including: . Detailed analysis of the existing network architecture and topology; . Documentation of existing networks and network usage of users/agencies to be integrated into the network; . Detailed planning, including fiber routing and specifications for fiber and terminal equipment; . Preparation of RFP specifications such as equipment, installation, configuration, and systems integration of backbone and data equipment, training of City staff, equipment maintenance, and network support; . Evaluation of the project plan submitted by bidders; and . Implementation support such as coordination, management, and technical oversight ofthe successful bidder. ............ ............ ......... ......... ...... .... 'f' Arlington County, V A CTC planned with the County an 80-location dedicated fiber optic network constructed at the same time as the cable television rebuild. CTC developed specifications for the network electronics, oversaw the work by the systems integrators and cable operator, developed acceptance test procedures for the fiber optic network, and oversaw and conducted tests of the fiber optic networking. CTC reviewed design maps and conducted field inspections to verify the accuracy of the maps and the quality of the construction in the right- of-way, as well as installation in the facilities. CTC specified termination panels in the facilities and oversaw the design of building entry. VERNON ReSEARCH GROUP f!I VlrchoWKrause &:COf11B1Y . .. Columbia .... Telecommunications Corporation ... ......,....w...SyIIIn~ On an ongoing basis CTC has worked with the County to investigate options for scaling the network beyond the original sites. These have taken a number of different forms. The first is the use of dedicated RF channel capacity on t1\e vernonresearch.com virchowkrause.com internetctc.com 21 c. Qualifications cable television system for a dedicated DOCSIS based cable modem network on the cable system which enables the County to scale its network at high bandwidth and high security to locations where fiber optic build is not cost effective. These include small and temporary locations, residences, small businesses, health providers, and non-profit agencies. CTC developed estimates for the equipment as well as ongoiAg staffing and maintenance costs, specified requirements for headend and modem equipment, and evaluated various equipment options. CTC conducted extensive discussions with cable system engineers to determine such issues as acceptable use of the network and how to manage co-location at the cable headend. In addition, CTC engineers worked to resolve potential issues of interference between the County network and the cable operator's subscriber cable modem service, which involved development and implementation oftest procedures at Comcast's Cherry Hill, NJ laboratory. The system is the only multi-user DOCSIS cable TV system with more than one provider on separate RF networks -- in other words, a truly open access environment on the cable modem system. CTC is currently assisting the County to develop a highly robust backhaul network for public safety radio communications as the County upgrades its radio communications infrastructure. For this task CTC studied the bandwidth requirements and sites that needed to be interconnected. At this point CTC also determined thal-the-public safety fiber communications system would have multiple benefits for the County including improving the robustness and reliability of existing fiber optic network because its ring architecture would be able to interconnect key locations on the existing Star topology fiber optic network. CTC then developed street level routing for the network including pole design. CTC developed cost estimates for make ready and construction work by contractors. CTC developed a set of information for decision makers detailing the advantages and disadvantages of the fiber optic relative to a microwave communications option. CTC also began discussions with Virginia Dominion Power and Verizon Communications, the owners of the utility poles, to determine what contractual issues exist for the County in using the poles. ............ ........ ...... ......... AA ., Northbrook, IL Northbrook is a northern suburb of Chicago. It covers 13 square miles and has 12,500 homes. CTC provided initial planning, cost estimation, strand mapping, and aerial and underground construction specifications for a City-wide fiber- optic network. The network was activated at the end of 2004. CTC is currently assisting the County to determine the technical feasibility of extending its municipal network to underserved areas and offering commercial Internet access services. VERNON RESEARCH GROUP Initial Planning: In 1998 the Village of Northbrook negotiated a cable franchise agreement with 21st Century Communications to construct an overbuild cable TV system with dedicated fiber optics for educational and governmental use. CTC provided the Village technical support for negotiations, including a government and educational technical requirements analysis and presence during many of the negotiation sessions. CTC estimated the cost of constpuction ~ VlrchowKrause BiCOfl1B1Y . .. Columbia ..... Telecommunications ,.... Corporation ... TIliwIl........s,tltn~ vernonresearch.com vlrchowkrause.com Internetctc.com 22 c. Qualifications using both a fully fiber-optic and a hybrid fiber/coax network and provided a system level plan for network integration. The Village had extensive data requirements that were not being reliably served by their existing coaxial cable network and leased telecommunications circuits. In addition the Village had an aging voice infrastructure and significant recurring charges for voice and data services. The schools an9 park district had similar limitations in their networks. The Village did not have significant expertise in communications outside plant, and did not operate a municipal power utility. Therefore the most logical approach to obtaining dedicated communications infrastructure was to negotiate dark fiber from the cable operators. Construction: 21 st Century began construction of the network in 1999 and transferred the Franchise agreement to RCN Communications in the midst of the build. When 3,700 of 12,500 homes were built RCN chose to cease construction of the network. The Village went to court to remedy the breach of the franchise agreement. The Village settled with RCN and obtained ownership of the outside plant that had been constructed by RCN and the funds to complete the network. RCN also agreed to remove the cable plant that would not be used by the Village. CTC SUl'Y.-eye.d the cable plant for the Village and found that the as-built and design maps submitted by RCN were not consistent with the actual construction. erc developed cost estimates for removal of abandoned plant and for construction of the remaining cable plant and assisted the Village in obtaining agreements with the power company, Commonwealth Edison, and the telephone company, Southwestern Bell Communications for use of pole attachme_nts abandoned by RCN and new attachments that would be needed to complete the network. The Village used these cost estimates to brief Village decision makers, the park district, and the five school districts potentially served by the network. ............ ...... ........ ...... ...... l' CTC developed AutoCAD maps of the aerial and underground routes that would be needed to serve the educational and governmental facilities. Detailed design maps at the pole level were created for construction. Maps indicated areas where existing RCN plant could be reused and where new pole attachments, underground conduit, and manholes and handholds would be needed. The design was modified to optimally serve the Village's institutional needs. A flexible fiber optic architecture was developed with two rings and diverse physical routing between each site and two hubs. A splice matrix was developed to provide the redundant paths over the fiber and to also facilitate the addition of new institutional, residential, or business locations with minimal or negligible disruption to active users on the network. Fiber counts in the initial design were modified so that there would be sufficient fiber for foreseeable needs, but the count was limited so that splicing and termination costs would not be excessive. VERNON ReSEARCH GROUP ~ Vn:hoWKrause &:COfI1B1Y . .. Columbia _Telecommunications Corporation ... TeIl...ll.........s,.nEiPilI vernonresearch.com vlrchowkrause.com Internetctc.com 23 c. Qualifications erc developed a 6O-page bid document Of detailed construction specifications, which were provided to prospective bidders along with a CD-ROM of the design. The bid document included general contractor requirements; safety and health standards; inspection and project control procedures; work specifications for make-ready, underground and aerial construction, splicing, and termination; description of required materials; and testing specifications. It included prices per task and unit cost for each construction procedure and type of materials. The document then estimated the total number of the various tasks and materials that would be needed for the project and requested cost estimates for each phase of the project. erc worked with the Village to evaluate bids based on cost and the demonstrated experience of the construction companies. erc assisted in developing a scoring methodology, provided quantitative and qualitative analysis of the proposals and contacted references of the construction companies and other communities and customers who worked with the companies. Once construction began, erc worked with the Village Utility Coordinator to address issues and questions during the course of construction. Actual construction costs were thirty percent less than the original estimates. Over the course of the project, CTC network engineers worked with the Village to determine the governmental, educational, and park district requirements for voice, data, and video on the network, reviewing the functionalities arid costs with the user groups. CTC's final recommendation was for an all Internet Protocol (IP) network. CTC developed specifications for equipment at the hub facilities, key sites, and general user sites for network equipment. erc also developed specifications for voice networking using IP-based switching and end user equipment. Based on the specifications the Village selected a vendor and procured the equipment. The network was activated in 2004. In the process of planning the fiber optic network, it was found that there were serious deficiencies in internal building wiring. erc assisted the Village in planning and estimating the cost for replacement network cabling to support the new data and voice network. Most recently, erc conducted a technical evaluation of the benefits of extending the network to areas underserved by private carriers and offering commercial services to businesses and residences in the area. ............. .... .... .... ..... ...... ... .. " VERNON ReSEARCH GROUP ~ VII"ChowKrause Bicompany . .. Columbia ....Telecommunications ,..... Corporation . . . ............SflllnEiP\lt vernonresearch.com vlrchowkrause.com Internetctc.com 24 D. Project Personnel We match the capabilities of our personIlel with your requirements. Our project team consists of experts with experience in many areas of telecommunications, network management and operations, fiber optics, data services, wireless services, cable television, finance, business management, and research. The people we have to serve you are experienced personnel who routinely deal with complex client situations. They have the knowledge and experience to deal with issues in a responsive and constructive manner, and bring a balance of technical discipline and creativity. The project team is composed of experts in each area of methodology and design for the telecommunications enterprise. The following provides brief biographies of our project staff. Complete resumes are presented in Exhibit I of this proposal. 1. VERNON RESEARCH GROUP Monica Vernon is president and founder of Vernon Research Group, a 17-year- old full-service custom market research firm. She works with the management of various organizations to determine marketing and management goals and strategy. She has designed hundreds of studies for a variety of organizations industries and has a well-documented ability to gain insightful information that provides study conclusions and recommendations that have proven to be of great value to for tnar~eting messages, deCision-making and industry management . . purposes. Vernon Research Group under the direction of Ms. Vernon has developed and served such clients as Pella Corporation, Honeywell, John Deere Waterloo Works, Hon Industries, AEGON USA, Alliant Energy, and a number of community financial services organizations. . Vernon Research Group designs, develops, fields, analyzes, reports and assists in application of market and employee research studies for use in marketing communications, new product development, employee development and in sales and customer service programs Ms. Vernon received her BA and her MBA from the University ofIowa. She is currently an adjunct marketing instructor with the U of! College of Business' John Pappa john Entrepreneurial Center where she developed the entrepreneurial marketing class. Prior to her 18-year career in market research, Vernon worked in marketing, news writing and public relations positions. ............ .......... ....... ... .... 'f' Maude Dornfeld joined Vernon Research Group in 2004 as Director of Research, bringing with her 15 years of experience as a market research practitioner. Her specialties include new product development, brand tracking, customer satisfaction and loyalty measurement, program evaluation and direct marketing. She is skilled in advanced quantitative methodologies such as choice-based conjoint, logistic regression, and times-series analysis/forecasting. VERNON RESEARCH GROUP ~ VlrchowKrause BiCOf11B1Y . .. Columbia ..... Telecommunications fill ... Corporation . . . -...."...lcaloDSylIIn~ Her responsibilities at Vernon Research Group include design and writing of survey instruments, determination of sampling strategies, data analysis including exploratory techniques, graphing, bivariate and multivariate statistics, the development of research reports, synthesis of findings into conclusions and the formation of recommendations. vernonresearch.com virchowkrause.com Internetctc.com 25 D. Project Personnel Previously, she worked as a research director at the Seniors Research Group (a subsidiary of Market Strategies, Inc.) where she developed a values-based segmentation of the 50+ market. She also acquired extensive expertise in the automotive industry and targeted marketing while employed at The Polk Company in Southfield, Michigan. Ms. Dornfeld earned her Bachelor of Arts in sociology from_Macalester College in Saint Paul, Minnesota and her Master of Arts with doctoral studies in sociology from the University of Minnesota. Pat Lyons joined Vernon Research in 1999 as Vice President and Chief Operations Officer. He is responsible for financial, administrative, project coordination, field management and data integrity functions at the firm. Mr. Lyons served as Vice President of Corporate Marketing at The Central Companies before joining Vernon Research Group, and has a thorough understanding of brand management, database marketing, multi-channel distribution, and relationship depth research. He is a specialist in organizational structure, job design, and change management. Pat received undergraduate degrees in Economics and Psychology from Simpson College and The University of Northern Iowa. He holds an MBA from Drake University and a Masters Degree in IndustriaUOrganizational Psychology from UNI. Tom Klobucar, Senior Research Consultant, brings extensive experience in international and domestic consumer and public opinion research, survey study .design, sampling, and statistical analysis. Tom has designed and conducted numerous research projects in a number of countries in addition to the United States, including the Russian Federation, Ukraine, Georgia, Uzbekistan, Lithuania, Hungary, the Federal Republic of Germany, and a host of other European and Asian states. Tom's unique qualifications and experience contribute a strong sociaUpsychological perspective to Vernon Research Group's custom study designs and research models. .... .... .. .. ...... ...... ...... .. 'I' Mr. Klobucar earned his Bachelor of Science from Angelo State University in San Angelo, Texas and both his M.A. and Ph. D. from the University ofIowa. A member of the American Association for Public Opinion Research, the Market Research Association, and several other professional organizations, he is widely published in his field and has presented his work at numerous conferences around the world. Tom was most recently published in the Journal of Political Marketing. VERNON RESEARCH GROUP Bob Woodward joined Vernon Research Group in 2004 as a Manager of Business Development. His responsibilities include the development and design of market research programs and new business acquisition. Bob has extensive business experience with both for-profit and non-profit entities and has managed several multi-million dollar businesses, divisions and departments. He also has a background in market research, marketing, sales and technology. ~ VlrchowKrause BiCOf11B1Y ... Columbia ..... Telecommunications ,.... Corporation . . . THu..1......s,iIIlI1I~ Prior to joining Vernon Research Group, Bob held the positions of Managing Director of Weekly Publications for Woodward Communications, Inc. and Associate Publisher of the Dubuque Telegraph Herald. Previously he served as vernonresearch.com virchowkrause.com internetctc.com 26 D. Project Personnel General Manager of Specialty Publications for WCI and held the position of Associate Manager of University Book Stores at the University of Iowa. Bob holds his B.A. in Business from Loras College and serves on several for- profit and non-profit boards including Woodward Communications, Inc., and Junior Achievement. He has also served on the board for the Dubuque Area Chamber of Commerce. 2. VIRCHOW, KRAUSE & COMPANY, LLP Thomas Asp, Partner, has been serving public power systems for over 20 years. Mr. Asp's experience includes electric system and telecommunication system design, cable television systems, as well as evaluating the financial impact of projects on utility operations, and providing expert testimony. He is recognized as an expert in evaluating and offering recommendations regarding municipal broadband communications systems. Mr. Asp has been actively involved with telecommunication market research and feasibility analysis for over 7 years. In addition, Tom has 10 years of product management experience in the Cellular Mobile Telephone, Automatic Meter Reading, and Distribution Automation industries. Tom joined Virchow Krause in 2000. Tom earned a Bachelor of Science in Electrical Engineering from North Dakota State University and a Masters in Business Administration University of St. Thomas - St. Paul, MN Lynn Nordin, Manager, has been active in the telecommunications industry for over 30 years. Lynn has specialized in the design of all areas of telecommunications including outside plant, fiber optic facilities, central office equipment engineering and transmission equipment engineering. He has extensive project management experience in the deployment of telecommunications systems and is experienced in telecommunications network operations. Lynn attended the University of Wisconsin - Eau Claire and is certified in project management by George Washington University I ESI International. .. .. .. .. .. .. . ... .. ...... .... ......... .A..... ...... ..... .. Bob Herbst, Senior Manager since 2004, specializes in telecommunication system design, project management, competitive analysis, market planning, market research, and new product development. He has extensive experience consulting with and selling to Fortune 500 and Fortune 1000 service providers and equipment vendors. Bob has worked with service providers to review product and service bundling and packaging strategies, reduce churn, and increase revenues. He has directed major primary, secondary research (due diligence) projects, focus groups, and primary research for new software and hardware product development for V oIP and IP technology firms. Bob also worked with start-up technology companies to launch their products, build distribution channels, and build relationships with prospective partners. VERNON RESEARCH GROUP ~ VlrchowKrause 8(company . .. Columbia ~- Telecommunications ,..... Corporation ... 'IIIeIl.i.......sr-~ Bob earned a Bachelor of Arts in Political Science University of Wisconsin - Madison, and a Masters of Business Administration from Edgewood College - Madison, WI. vernonresearch.com virchowkrause.com lnternetctc.com 27 D. Project Personnel Cheryl Johnson, Senior Consultant in the Public Sector Practice Group since 2003, experience includes consulting with local government and enterprise for over 20 years and her experience includes: cable television franchise development and negotiation; PEG access development and review; broadband network feasibility studies; V oIP telephone system implementation! management, and community needs assessments. Cheryl will serve as the Project Manager for this project. Cheryl served as Broadband Program CoordinatorlProject Manager for the City of Saint Paul, MN; Communications Administrator for the Village of Mount Prospect, IL; as a municipal consultant, and other local government positions. Ms. Johnson has a degree in mass communications from Western Illinois University - Macomb,lL Mike Johnson, Senior Consultant, joined Virchow Krause in 2001 and has been active in the electric industry for almost a decade. Mike has a vast array of experience in preparing electric cost of service studies and rate designs. He also has extensive automation experience from evaluation of AMR systems to project management of installations. Mike has prepared and evaluated business plans and cost benefit analyses for several cooperatives and municipal utilities considering implementing load management and AMR systems. His experiences also include developing the most recent version of the Virchow Krause unbundling electric revenue requirement and cost of. service model that was used on nearly 20 studies in the past year. Mike earned a Mechatronics/Higher National Diploma (combined electrical and mechanical engineering equivalent to Bachelor of Science degree);it St. Helens College, St. Helens, England. Robin Lisowski, Senior Consultant, in the Public Sector Practice Group since 2002, specializes in public sector consulting. Robin has experience in policy analysis, operational and organizational reviews, benchmarking, and consolidation studies. Robin earned a Bachelor of Arts in Political Science and Spanish from Augsburg College and a Masters in International Public Affairs from the University of Wisconsin - Madison (La Follette School of Public Affairs). .......... ....... ........ "''''''' AA .. Megan Steiner, Consultant, joined Virchow Krause in 2004 and provides key support for numerous market research, benchmarking, and process re-engineering projects involving municipal utilities. Megan has experience in quantitative and qualitative data analysis. VERNON RESEARCH GROUP Megan earned a Bachelor of Business Administration in Finance and Business Economics from the University of Notre Dame. I!!I VtrchowKrause 8(COf11)aI1Y ... Columbia "..Telecommunications ,..... Corporation . .. ~........SptI"EflJn.nl vernonresearch.com virchowkrause.com internetctc.com 28 D. Project Personnel 3. COLUMBIA TELECOMMUNICATIONS CORPORATION Andrew Afflerbach Ph.D., P.E., CEO and Director of Engineering, specializes in system-level planning, design, and implementation of wide-area and local-area telecommunications networks. His expertise includes emerging technologies and state-of-the-art technological applications. Dr. Afflerbach has assisted numerous local governments and tlOn-profit institutions with technological projects - ranging from fiber-optic to wireless communications networks; from educational to homeland security applications; from cable system performance evaluation to development of local emergency override capabilities; and from negotiations with the telecommunications industry to technical briefing of Commissioners and staff of the Federal Communications Commission. David L. Randolph, P.E., holds a Professional Engineer License and has 35 years of broad and diversified experience including 10 years in the teaching and broadcast fields and 25 years of progressive communications expertise. Mr. Randolph has been responsible for design, construction, operation, and maintenance of thousands of miles of cable plant and numerous cable systems. He has extensive experience in franchising and operation of cable systems. He has been responsible for construction of new systems, rebuilds, and upgrades for over 200 cable systems using microwave, fiber optic, and active-reverse technology. He has overseen both analog and digital addressable technology, and high-speed data. He has designed IP telephony systems for provision over cable television systems. Matthew DeHaven, Senior Engineer. As a Senior Engineer with Columbia Telecommunications, Mr. DeHaven specializes in video communications and broadband telecommunications technology for institutional needs. Mr. DeHaven has extensive engineering experience designing, developing, installing, and overseeing integration of local and wide area networks for institutional and ITS applications, video-networking solutions, and peer-to-peer information systems. He has served as CTC's Senior Engineer on numerous wide area network projects. .... ..... .... ..... ...... ...... ...... ... Mr. DeHaven assisted in planning and implementation of a state-wide network in Delaware for the purpose of providing traffic information and traffic control capabilities to transportation management facilities. Such a network allows remote control of traffic signal systems and variable message displays, while providing real-time traffic surveillance in the form of video images and microwave sensor data. Mr. DeHaven has developed expertise in the numerous forms of technology utilized in this type of project, ranging from fiber optics to wireless digital spread-spectrum communications. VERNON ReSEARCH GROUP ~ VlrchowKrause Bicompany . .. Columbia __Telecommunications Corporation . .. ~"""""'s,Menerpmg vernonresearch.com virchowkrause.com Internetctc.com 29 E. Fees and Compensation Please see the sealed envelope which contains the detailed description of the proposed fees and compensation. .....".. ..... .... ...... .... ~ VERNON RE SEARCH GROUP ~ VlrchowKrause Bicompany . .. Columbia .... Telecommunications --... Corporation ... ..........s,.m..... vernonresearch.com v1rchowkrause.com Internetctc.com 30 F. References In addition to the references prescribed in Section 1, we offer the following references: 1. VERNON RESEARCH GROUP . City of Ames Mr. Ted Tedesco, Mayor Room 214515 Clark Avenue P.O. Box 811 Ames, IA 500 10 515.239.5105 · City of Cedar Rapids, Iowa Mr. Paul Pate, Mayor 50 2nd A venue Bridge Cedar Rapids, IA 52401 319.286.5051 · City ofWes Des Moines Mr. Larry R Anderson, P.E. West Des Moines, IA 515.222.3460 2. VIRCHOW, KRAUSE & COMPANY, LLP · Pulaski Electric System Mr. Ron Holcomb, General Manager Pulaski Electric System 128 South First Street Pulaski, TN 38478-3216 931.363.2522 931.363.4743 (fax) .. .. .. .. .. .. .. .."..".... ........... ......... ...... .... ... PROJECT: Conducted residential market research to assess interest in Internet, cable TV, and telephone services. Surveys also provided the basis for Customer Value Management comparison of the utility providers in Pulaski. Results from the survey were also leveraged in developing performance measurements to enhance Pulaski electric services. VERNON RESEARCH GROUP PROJECT: Develop a fiber-to-the-premises (FITP) business plan. Activities including preparation of business models, cost analysis, and probabilistic outcome analysis. ~ VlrchowKrause 8(company ... Columbia -'. Telecommunications ,..... Corporation ... ~''''''SyiIIflI&piIg vernonresearch.com vlrchowkrause.com Internetctc.com 31 F. References · Norwood Municipal Light Department, Norwood, MA Mr. Kevin Shaughnessy 206 Central Street Norwood, MA 02062-0040 781.762.3203 781.769.0660 (fax) PROJECT: Financial Projection Update for Norwood's Cable Television and Internet Service Offerings (200312004). Creation of a management tool for budget development and understanding the market share and contribution margin requirements to maintain cash flow and debt service. PROJECT: Broadband Services Feasibility Study (2001). Assess and evaluate communication technologies, potential market share, public benefit, community needs, and economic feasibility of installing a utility owned broadband Internet, CATV, and telephone network for the residences and businesses of Norwood. · Moorhead Public Service Bill Schwandt General Manager 500 Center A venue Second Floor City Hall P.O. Box 779 Moorhead, MN 56560-0779 218.299.5400 218.299.5193 (fax) PROJECT: Broadband Services Feasibility Study. Assess and evaluate technologies, conduct market research, develop a risk assessment, prepare cost-benefit analysis, and recommend various connectivity business places. PROJECT: Wireless Business Plan (2004). Develop a cost benefit analysis and mutual marketing plan to offer a low cost essential Internet service to residents and businesses in the community. Project scope includes working with various community leaders and officials to obtain necessary approvals and commitments. ..... .... .. .. ........... ...... ...... .... ., VERNON RESEARCH GROUP I!I VIrChoWKrause &:company . .. Columbia ....Telecommunications --... Corporation . . . Ta...........Spm&vlMl vernonresearch.com virchowkrause.com Internetctc.com 32 F. References 3. COLUMBIA TELECOMMUNICATIONS CORPORATION . Mesa, Arizona Mr. Cory Gherkins Broadband Development Administrator Financial Services Department, E-Streets & Licensi~g Division PO Box 1466 Mesa, AZ 85211-1466 480.644.2910 · Arlington County, Virginia Mr. Jack B. Belcher Ph. D. Chief Information Officer Office of Technology & Information Services 2100 Clarendon Blvd., Suite 612 Arlington, V A 22201 703.228.3191 · Prince George's County, Maryland Mr. Nate Archey Institutional Network Director Office of Information Technology &.Communications County Administration Building, Room 3000 14741 Governor Oden Bowie Road Upper Marlboro, MD 20772 301.952.3079 a.. .. .. .. .. .. .... .. .. .a.. ....... ......... ...... All. ... VERNON RESEARCH GROUP I!!j VlrchowKrause &:company ... Columbia .- Telecommunications Corporation . . . ............5yIlIII &iglwi1g vernonresearch.com virchowkrause.com lnternetctc.com 33 G. Non-Conflict of Interest Statement The price for this proposal was arrived independently without collusion, consultation, communication, or agreement as to any matter relating to such price with any b' er or 'th any other competitor. ,~ onica Vernon, President V emon ~arket Research ...11........ .. .. .... ..... ...... ............ ~~. ~. ... VERNON RESEARCH GROUP ~ VI'ChowKrause &:~ ... Columbia .-.. Telecommunications --... Corporation ... Ta..1I......&r*n&pmg vernonresearch.com vlrchowkrause.com Internetctc.com 34 SECTION 2 Overview A. Scope of Services STATEMENT OF UNDERSTANDING' Strong business and strategic planning is the foundation of success in a new venture. The Vernon Research team market assessment services are recognized in the marketplace as a highly reliable indicator of expected results. Team experience and strict independence are the foundation of the planning process. The proposed work plan reflects our experiences with communities across the country. We have worked with many communities that are offering or are evaluating a plan to offer advanced telecommunication services to their citizens. We have found that the availability of affordable advanced connectivity services are critical factors in economic development, quality-of-life, and community planning. Our report will include, at minimum, aU sections are listed in the RFP's scope of services, as well as an Accountants' Compilation Report and a Monte-Carlo simulation of financial forecasts. In addition, we will provide the City of Dubuque histograms, cross tabulations, and other data gathered and tabulated during the study process. Our market research includes: . Interactive education session with area businesses and residences. . Survey of a random selection of Dubuque households. . Survey of a random selection of Dubuque businesses. . Interviews with selected institutional users. . Interview with selected government and educational users. . Interviews with selected area commercial and industrial businesses. Based on our experience with similar projects, we feel separate surveys will better evaluate the unique needs of the city's households and businesses. We fully comply with all requirements included in the City of Dubuque's request-lor-proposal (RFP). If at any time, we conclude with reasonable certainty that a public utility is not feasible for the City of Dubuque, we will consult with the city as to whether further investigation of another financing or ownership option for a city-wide network is warranted. The ongoing focus of the analysis will follow only those models that are feasible or promising, and which services emerge from earlier stages of information gateway and analysis. ............ ......... A"". ...... .... ... Our workplan is based on our experience with similar projects and your RFP. The workplan steps are detailed under Section 3 of this proposal. The specific project objectives include: VERNON RESEARCH GROUP . Facilitate the development of the mission and value statements for the City of Dubuque related to advancing data services. . Conduct market research for residential, commercial and industrial customers to determine: ~ VlrchowKrause Bicompan'f _ Perceptions relating to existing advanced communication providers. - Demand for advanced communication services. - Comparison of customer value of utility services. - Satisfaction of connectivity services. - Support of the City of Dubuque involvement advancing connectivity services. ... Columbia .... Telecommunications ,.... Corporation ... ~na9pin&pllg vernonresearch.com virchowkrause.com Internetctc.com 35 A. Scope of Services . Perform a detailed competitive and risk assessment. - Threat of new entrants - Threat of substitutes - Bargaining power of suppliers - Bargaining power of buyers - Intensity of rivalry amongst providers . Identify and assess the existing and potential competitors. - Corporate strategies - System technical evaluations - Local service offerings - Pricing - Customer satisfaction and loyalty - Community ties and loyalty - Competitive assessment · Outline and review appropriate business and technology models that meet Dubuque's objectives (capability, affordability, profitability). The business models reviewed will allow a phased build out, starting with the City of Dubuque needs. Models include, but are not limited to: - Encourage existing providers to upgrade infrastructure and expand offerings. - Select a niche technology, such as wireless Internet, to complement existing services. - Pursue a dark fiber network to facilitate new service offerings. Implement a Metropolitan Area Network capable of delivering lite services to area businesses. - Overbuild the incumbent providers and offer residential and commercial telephone, Internet, and CATV services (enterprise model). + All services (voice, video, data) + Video and data services + Data only service - Implement an Open Access Network that can support multiple telephone, Internet and CATV providers. - Buyout of existing provider(s) .. Conduct regular meetings with the study committee to review project status, preliminary findings, and next steps. - "GolNo-Go" decision points for each alternative - "Dead-end tracks" identification · Review available financing models and comment on their appropriateness for the City of Dubuque. Financing models include: - State and Federal Grants - Corporate and Foundation Grants - Education Grants - Revenue Bonding - General Obligation Bonds - Internal Financing fir, & .. .. .... ...... .A"'. ...... .... ... VERNON ReSEARCH GROUP ~ VirchowKrause 8i.COfq)aIPI . .. Columbia ... Telecommunications Corporation ... -w.c..1llIt.aSJllen~ vernonresearch.com virchowkrause.com internetctc.com 36 A. Scope of Services Vendor Financing - Partnerships and Alliances · Outline available technologies and provide implementation cost estimates and the applicability to the City of Dubuque and customer needs. In addition, we will provide insights on the technologies shared to support ancillary services. Technologies to be reviewed include:- - Fiber-to-the-Premises (FITP) - Wireless (Wi-Pi, WiMAX, other) - Metropolitan Area Network (MAN) fiber The recommended technologies will include a conceptual design, map, and project costs. · Provide insights on the benefits of supporting ancillary services. · Provide financial analysis for a variety of business models: - Dark Fiber - Metropolitan Area Network - Open Access Model The financial analysis will include: - Cash flows over a 10 year period - Present value analysis (15 years) - Capital cost projection - Estimated working capital - Market penetration analysis - Estimated operating costs - Projected sources of revenue variable costs · Provide an economic assessment of public financing and operation of a city-owned communication network where services are offered by multiple competing providers. .... .. .. .. .... .... ........ ...... ....... .... .... 't' · Outline potential alliance opportunities for advancing options and cost sharing. Included in the analysis is a discussion of advantages and disadvantages. · Present a business case which includes the total cost to construct, operate, and maintain the infrastructure and business systems for providing the proposed services. Staffing requirements and job descriptions for each job. Phased build out plan, including schedule for completeness. Identification of alliance opportunities for implementing and delivering broadband services. VERNON RESEARCH GROUP ~ VirChowKrause 8i.companv ... Columbia .-... Telecommunications ,...... Corporation . .. ...............sr-&pmg vernonresearch.com virchowkrause.com Internetctc.com 37 A. Scope of Services Based on our experience, the results of this project will provide high value to the City of Dubuque. The results will allow management to make informed decisions and proactively serve the future of the citizens and businesses in Dubuque. Our recommendations will be made with complete independence. The identified project team is available to initiate and complete the feasibility study in a timely manner. The project timeline is detailed on the next page of this proposal. ......... ....... A... ...... .... .., VERNON ReSEARCH GROUP PJ VtrchowKrause Bimmpany ... Columbia __Telecommunications Corporation ... ~""'SI*n~ vernonresearch.com virchowkrause.com internetctc.com 38 B. Project Schedule The following is the proposed milestone schedule based upon a May 23rd consultant selection. Our progress memorandums and deliverables during the project will keep the study committee informed as to the project's status at all times. At minimum, we will provide monthly updates by voice, e-mail, or other correspondence. We will schedule frequent on-site visits to Dubuque (project kick-off, interviews and education sessions, competitive assessment meetings, and final presentation). In addition, since Bob Woodward, the-team Project Manager, is located in Dubuque, we are able to meet with the committee on an as-needed basis without occurring incremental travel expenses. In addition, we are flexible in adjusting the schedules as required by the City of Dubuque. Specific project milestones include: . Consultant selected by May 23, 2005. . Complete kick-off meeting and initial committee discussions by June 1, 2005. . Complete market research by July 15,2005. . Review preliminary involvement models with the City of Dubuque staff by August 1, 2005. . Distribute draft report to the City of Dubuque staff by August 12, 2005. . Distribute final report to the City of Dubuque staff by August 19,2005. . Present findings to city council by August 26, 2005. ........ ..10.. .... ... .... ". VERNON RESEARCH GROUP ~ VIrChowKrause 8i.00Iq)CIIly . .. Columbia gA. Telecommunications ....COrporation . .. lIIIo-..~SpIin&plilg vernonresearch.com vlrchowkrause.com internetctc.com 39 C. Role of City of Dubuque Employees The following is a list of activities and tasks that we anticipate involvement with the City of Dubuque employees or representatives. . Provide copies of: Existing cable television franchise agreement and any proposed new agreements. Ordinances that may impact telecommunication options (communication towers, water tower access, light pole access, etc.). Previously conducted studies (if any). Latest copy of Mediacom's submittals (financial statement, other) to the City of Dubuque. . Summarize and discuss any correspondence to providers regarding: Service concerns (performance, availability, cost). Adding new services. Addressing concerns of area cities and businesses. . Contribute to feasibility analysis via: Participation in the regular project meetings. Representation at the education sessions and interviews (optional). Provide insights on which commercial, industrial, governmental, and institutional users may be beneficial to include in the interviews. Review of project demands including the written surveys. Encourage local media to publish meeting announcements for the educational sessions. In addition, we ask that the City of Dubuque make facilities available to conduct the project meeting, interviews, and educational sessions. .... .. .. .. ill, ........ ..... ...... 44 ,. VERNON RESEARCH GROUP I! VrchowKrause Bimfq)an'{ ... Columbia _Telecommunications Corporation . . . ......_iwdI.srsn~ vernonresearch.com virchowkrause.com intemetctc.com 40 D. Methodology Overview From our experience, communities planning to facilitate the availability and affordability of connectivity services must answer a number of key questions, including: . What is the proper role (catalyst, enabler, provider)? Who are the existing providers and what services do they offer? . Who is using connectivity services? . What is the appropriate level of involvement? . What are the service gaps? . What are the risks (doing nothing or becoming pro-active)? . What are the regulatory and legal restrictions? . What customer segments are underserved? . How can we future proof any investments? . What are the initial steps to proceed? . What set of parameters should be used to gauge the progress? . What technologies are appropriate to meet our unique community needs? The scope and degree of participation is dependent on local market conditions. A clear and concise definition of the issues and opportunities will influence the selection of the appropriate business model and technology selection. Review Framework The need for robust data connectivity (point-to-point, point-to-multi-point, Internet, other) is no longer an item of distinction -it's a necessity. For communities and regions to remain economically viable, access to affordable, high-speed connectivity is essential. Communities and regions that do not have access will be simply left behind. Our efforts with municipalities have shown that the first step in pursuit of the goal of advancing the availability of high-speed connectivity is education. Although the use of the Internet and other connectivity services has increased productivity and created opportunities, many businesses do not see the benefit of high-speed connectivity services. In fact, some businesses feel threatened by the Internet and its capabilities. ........ ill,.. ill, .. .. ill, ..... .... ....... ...... y The "digital divide" is not just availability and affordability of access. The "digital divide" includes hardware availability, training on how to use access, and education as to the benefits of greater connectivity and broadband access. Bridging the "digital divide" is not just a private sector or a public sector issue. Solutions will require a joint effort, and may require a new business model. Regulatory changes, on both a state and federal level, will be necessary to address the connectivity issues, just as were required as electric and telephone service evolved in the underserved areas. VERNON RESEARCH GROUP ~ VtrchowKrause BiCXJl11B1Y . .. Columbia "..Telecommunications ,.... Corporation . . . lIkM......spns~ Financial Analysis All financial analyses are performed in accordance with standards established by the American Institute of Certified Public Accountants. All financial' projections are accompanied with a Management Representation letter, Accountants' Compilation Report, and Summary of Significant Accounting Policies. vernonresearch.com virchoWkrause.com internetctc.com 41 D. Methodology Overview Our financial analysis will clearly indicate all assumptions used in the analysis, the bases for the assumptions, and the sensitivity of the results to key assumptions. The analysis will provide detailed schedules that show: . Operating income and cash flow . Net present value analysis . Projected revenues and benefits . Uses and sources of funds . Operational expenses . Depreciation schedule . Debt service analysis For each model developed, we will conduct a sensitivity analysis.on selected assumptions. The assumptions that are identified to have the most impact to the projected results will be used in a Monte-Carlo simulation that will provide insights on the likely outcome of the service offerings. . Identify 6 to 10 of the assumptions with the greatest sensitivity to the projected results. . Review the assumptions and determine: . A reasonable value range that can be projected for each identified assumption The dependency of a given assumption to another (Le., impact of price on market share). Create functions for the identified dependencies. Determine the type of distribution we expect for each identified assumption + Normal, or + Uniform Construct a Monte-Carlo simulation for each of the identified assumptions Using the Monte-Carlo simulation, based upon the range and distribution of the assumptions, we will project the expected outcome within a 95 percent confidence interval. ........... ......... ..... ...... .... ~ Reporting Not only do we offer a complete financial plan, including statistical analysis, we understand public sector reporting requirements. VERNON Re SEARCH GROUP With the issuance of Governmental Accounting Standards Board (GASB) Statement No. 34 - Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments - certain accounting and financial reporting requirements must now be followed in accounting for and recording the infrastructure in the community, i.e., roads, bridges, and other community infrastructure, including broadband facilities. Those facilities that are installed by a community must be recorded at their cost and depreciated' over their useful lives on the county's financial statements. ~ VirchowKrause 8(company ... Columbia _Telecommunications Corporation . . . lIIioam........ &r*III&piIf vernonresearch.com virchowkrause.com Internetctc.com 42 D. Methodology Overview The feasibility studies we propose will provide the City of Dubuque with an understanding of the availability and affordability of providing certain advanced communications services in the City of Dubuque. The feasibility studies will include the following: · Determine the current and future connectivity needs. - · Identify services that are currently available and their respective costs. · Detail the current status of the communities' connectivity infrastructures. · Outline strategies that will bridge any connectivity gaps in availability and/or access to advanced connectivity services. · Address any "digital divide" issues. · Provide data on existing infrastructure and competition in the communities. · Review various methods of implementing broadband technology. · Identify current and future needs for businesses and institutions. · Provide recommendations to the City of Dubuque to advance the affordability of connectivity services. .. .. .. .. .. .. .. .... .... II." ........ .."'.. ...... ..... y VERNON RESEARCH GROUP I!!I VrdlowKrause BiCOl11Jil1V ... Columbia ---. Telecommunications filii... Corporation . .. ...._.....SJIIIq~ vernonresearch.com vlrchowkrause.com internetctc.com 43 SECTION 3 Main Body of Response A. Scope of Services - Detailed Over the past decade, the pace of technological development in the advanced communications industry has increased rapidly and we have become more reliant on advanced communications services for everyday living. It is estimated that over 70 percent of American homes currently have access to the Internet and over 80 percent have cable or satellite television service. Nationwide, over 40 percent of residential users are using high-speed Internet access, once thought only applicable to large commercial and business users. Businesses increasingly rely on the ability to transmit large amounts of data. access information resources, and use video as part of normal operations. Those businesses and homes without competitive access to advanced communications services are at a significant disadvantage in the competitive global marketplace. Over this same decade, regional technology gaps have evolved. At times, the gaps are a result of a given community's size, and other times it is dependent upon strategies of the local incumbent provider. In response to these trends, municipalities have sought to develop advanced communications infrastructure and services to enhance the economic development prospects and quality of life in their communities, or as a source of additional revenue. While some municipals have historically operated some aspect of communication services, the emergence of broadband technologies offers new horizons to consider. From our experience, communities planning to facilitate the availability of advanced communications marketplace must answer a number of key questions, including: .. '" '" .. .. ...& .... .... .... ....... ...... ...... .... T . What are the motivating factors? . Who are the competitors and what services do they offer? . What are the opportunities to generate revenue? . What is the appropriate level of involvement? . What services are appropriate to pursue? . What are the risks? . What impact does market share and pricing have to the financial results? . What are the regulatory and legal restrictions? . What technologies are appropriate to meet our unique needs? . How can we future proof our investment? . What are the initial steps to proceed? . What set of parameters should be used to gauge the need to continue or expand services? . What partnerships are appropriate? VERNON RESEARCH GROUP Market demand, risk, and fiscal benefits determine the appropriate level of industry involvement. A broad involvement in ownership of a fiber optic system or services may result in significant revenue generating opportunities, either as a community-owned and operated advanced communication business, in partnership with one or more service providers, or an open access network. ~ VirchowKrause BiaJl11lCll1V . . . Columbia ...... Telecommunications ,..... Corporation ... ......_.....SyIlInEfPlill vernonresearch.com virchowkrause.com internetctc.com 44 A. Scope of Services - Detailed The scope and degree of revenue opportunities are dependent on local market conditions. A clear and concise definition of the anticipated customer base, the products to be delivered, the cost of these products, techniques to deliver these products to the customers, and the risks involved will all influence revenue potential. Our proposed market research details each of these issues offering insight and direction for advancing available connectivity sery.ices. The Vernon Research team will develop the business plan by executing the following steps: A. Project Initiation 1. Conduct an On-Site Strategy Session Our project team will meet with City of Dubuque representatives to discuss project objectives necessary to complete the study. Specific discussion points may include: . Establish standard terminology to be used in the project. . Review information analysis procedures and required resources. . Review the scope of work to be performed, develop an appropriate timetable, and discuss any changes to the Scope of Services. . Define any existing community connectivity plans or FlTP project analyses completed or underway. . Understand the goals and objectives of the studies and research methodology. · Review the identified stakeholders and potential required services. · Identify potential key stakeholders inside and outside of the City of Dubuque. . Review project schedule and key milestones. . Brainstorm on community partner ideas. 2. Conduct Market Research Overview Our research program will produce important insights for the City of Dubuque with regard to the region's connectivity environment, including, but not limited to: ............ ......... .... ...... .... ... · What types of telecommunications and broadband service do residences, business and public sector customers currently use? And for what types of services, systems, programs etc? · What do they see as the limitations of their current situation? · What additional capabilities are they currently interested in adding? In order to do what? For example, is their goal faster data transfer, more in- depth data transfer, etc. · What are their expectations for their current and future high-speed needs and how well does the current provider meet those needs (Gap analysis). · How aware are respondents of current high-speed options? · Considering future needs, which of the products and services do the customers have plans to add in the next year or two? · Considering future needs, how likely would respondents be to purchase communications services from new providers if they were available? Support and wholesale infrastructure utility? VERNON RESEARCH GROUP ~ VirchowKrause BicorJ1B1V . . . Columbia ~- Telecommunications ,..... Corporation . . . ....._i:IIll.SpIms~ vernonresearch.com virchowkrause.com internetctc.com 45 A. Scope of Services - Detailed . With demographic and some psychographic questions answered for the various populations - residential, business and public sector - an in-depth analysis wiU be possible. Methodology Data collection methodology for this market study will include randomly sampled surveys of residential decision makers, business decision makers and public sector decision makers. The interviews will be conducted by telephone and we estimate that they will be approximately 10-12 minutes in duration. Survey Instrument We wiU develop all survey instruments in coUaboration with the Vernon Research team and City of Dubuque. The surveys will be scrutinized for objectivity and for their ability to gain answers to all questions at hand. After the surveys are approved, we will move to field-testing. Field Test Field-testing is standard practice at Vernon Research Group. We will plan to conduct a smaU sample field test with randomly selected citizens to ensure that the purpose of the surveys are clear, that the questions are clear and unbiased and the mechanics of the survey are smooth. Once we complete the field tests we'will make a report on any recommended changes prior to continuing data collection. Pending input from the clients, modifications to the survey instruments will be made, researchers will be retrained on the modified instruments, and actual data collection will then begin. Data Collection Telephone interviews will be the data collection method for these studies. Trained interviewers in a supervised setting using a computer-assisted telephone-interviewing program will conduct all interviews. Sampling Plan We will conduct a random sampling of the City of Dubuque decision makers from each of three key segments: Residences, Businesses and the Public Sector. We suggest: .............. ............ .......... ..... ... .. ... . 400 from the residential sector, . 100 in the business sector, and . 50 in the public sector. For the residential sample, the following sampling errors are: VERNON RESEARCH GROUP Sa Ie Size 100 200 300 400 Sam Ii Error -19.79% :t6.92% :t:5.64% :1:4.88% It!! Vn:howKrause 8i.~ . .. Columbia ...-. Telecommunications ...... Corporation . . . liIimIlIIbIGaI SfllnI.... vernonresearch.com virchowkrause.com internetctc.com 46 A. Scope of Services - Detailed For the business and public sector surveys we estimate there are a total of 1,500 in the area and feel the samples suggested will be very representative. When combined with the residence surveys the sampling error will be less than :1:4%. We will make three or more attempts on each contact randomly reached. Computers will reCord the call dispositions so that we will haye a statistical record of attempts, completes, refusals, etc. Mter the entire sample is gained, analysis of the data will begin. Analysis of Data Upon completion of the data collection processes, we will conduct a thorough analysis of all data and create an in depth report of findings, conclusions and recommendations for application of the findings. Our general analysis will focus on discerning patterns and trends characteristic of the total sample. In addition, we will individually examine any subgroups of interest (e.g., demographics) to illuminate areas of similarities and differences. Statistical tests appropriate to the research questions and format of data will be used to identify significant relationships between variables and significant differences between subgroups. We will also code and tabulate open-ended responses. Reporting Research Results Vernon Research Group will synthesize all studies to yield the findings, present conclusions and make recommendations for future courses of action relating to current and future demand for telecommunications and broadband services in this market area. We will prepare a complete client package for every study conducted that includes findings, condensed conclusions, and a full set of recommendations for a wide range of management, marketing and communications strategies. We find it can be helpful to make both preliminary and final presentations of findings, in case additional questions arise from the initial meeting that can be explored through alternative forms of analysis. In addition, we will be available for consultation and insights after each study is completed. " .. ..... .... ..... ...... AAA A.t. ... VERNON RESEARCH GROUP I!! VirchowKrause BiCOlTfSlY . .. Columbia _Telecommunications .. . Corporation ~"""'SpIIn~ vernonresearch.com virchowkrause.com internetctc.com 47 A. Scope of Services - Detailed On a periodic basis; we will review the feasibility of the given tracks. If at any time we determine that one or more tracks or options are infeasible for the City of Dubuque, we shall consult with the city as to whether further investigation of those particular tracks or options is warranted in the course of the feasibility study. ...... .. .... ..... .... ... .A. ... VERNON ReSEARCH GROUP ~ VI'ChowKrause BiCOf11JCll1V ... Columbia .-. Telecommunications Corporation . .. TIIlcl........SplIn~ 3. Perform a Competitive Assessment In order to assess the viability of establishing an advanced connectivity system in communities, we will use Porter's Five Forces Model as one of our evaluation tools to assess community risk. The five forces are: . Threats of new entrants - How easily can new competitors enter the market? . Threat of substitutes - How easily can services be replaced? . Bargaining power of suppliers - How easily can delivery of services be influenced by suppliers? . Bargaining power of buyers - How easily can buyers influence the fees we charge? . Intensity of rivalry - How intense is competition for advanced communication services? The document will include accessibility, type, capacity, and use of advanced connectivity services in Dubuque. . Develop list of current providers including generic coverage areas and costs for services provided. . Determine location, condition and type of current infrastructure access points. . Identify providers oftelecommunication used by the residential and small business markets (phone, video, and Internet access). . Identify the local offerings of the existing CATV, Internet, and telephone providers. Review the pricing of current service offerings. . Identify providers of high capacity transport services (TI and above) in the region. . Identify the current service offerings of the telecommunications companies serving the high capacity transport needs of businesses in each region. . Perform a comparative evaluation of the incumbent systems, with available data, to determine its capability of meting the broadband needs of the area. Service characteristics (speed, other) Monthly recovery costs One-time costs Limitations and issues . Assess competitive environment and customer satisfaction. . Understand community ties and loyalty. . Provide a comparative analysis of the offerings between companies providing the same type of services. Nature of services, including speed Monthly recurring costs One-time costs Provider's likelihood of success vernonresearch.com virchowkrause.com internetctc.com 48 A. Scope of Services - Detailed 4. Conduct Network Design and Costing Review We will review the available technologies and the tradeoffs of cost and performance. In addition, the network models can be applied to the business case to assist }n determining which approach best serves the needs of Dubuque in the long-term. This allows Dubuque to make an informed decision on what network to pursue. A review of advantages and disadvantages of the technologies will be provided in this step. In addition, we will provide insights on the migration ability of each technology. The results of this step' will provide a conceptual design, map, and projected implementation costs for the involvement models identified. In summary, CTC proposes the following work plan: A. Review design standards; B. Drive through proposed service area and inspect physical plant; and C. Conduct and document an analysis of the design and inspection. A. Review Design Standards For each potential technology, CTC will review the design standards of a universal communications infrastructure. CTC will evaluate the architecture and choice_2f components relative to other systems and industry standards. CTC will evaluate the degree to which the design permits interoperability with components of multiple equipment manufacturers. The review will include requirements to support multiple operators of telephone, cable, Internet, telecommunications, and other services. CTC will also review the construction and installation practices to be used in the deployment. B. Survey of Proposed Service Area CTC proposes to conduct a drive-through of a representative sample of the proposed service area. CTC recommends that this survey be conducted jointly with CTC and the City of Dubuque staff. CTC will investigate likely costs and timeline of construction. CTC will survey areas of underground and aerial construction, residential and business customers, expected new build areas, freeway, railroad, and waterway crossings. CTC will discuss with the City of Dubuque staff issues relating to permitting and pole attachment that are particular to the City of Dubuque. C. Conduct and Document a Conceptual Design ........ ....... ...... ...... .... . CTC will estimate the mileage required to serve the customers in the service area and estimate the cost to complete the FTTP or selected network. VERNON RESEARCH GROUP CTC will document any concerns about the design and cost estimates. CTC will evaluate the existing construction and installation of service. CTC will provide a prioritized list of engineering recommendations for the City of Dubuque's consideration. We will provide a conceptual design, map, and projected implementation costs. ~ Vn:howKrause BiCOfl1D1V . .. Columbia ... Telecommunications ...Corporation ~sr-&vimilI vernonresearch.com virchowkrause.com internetctc.com 49 A. Scope of Services - Detailed 5. Develop a Phased BuiJdout Plan & Ass.ess Operation Issues Plans will be inclusive for a phased build out, beginning with the City of Dubuque and progressing with recommendations for the phasing in of the remainder of the system. We will also review operational and other costs associated wi!h the project that can directly impact the feasibility of the project including: . Staffing levels, associated benefits and salaries . Bi11ing issues including development and interface with existing systems . Network management based on type of network . Legal and consulting fees . Business initiation costs . Franchise expenses . Network maintenance and insurance . Pole attachment and/or Right of Way access and fees . Make ready costs . Marketing . Office expenses . Facility expenses (lease vs. purchase) These issues will be discussed in the report and quantified in the costlbenefit analysis. 6. Provide Insights' on Financing Options It may be possible and essential for the City of Dubuque to receive a grant to help assist in the costs of establishing an advanced communications business. We will provide an overview of potential grant sources including: . State and Federal advanced communication initiative grants . Corporate and foundation grants . Home Security project grants . Education grants (FCC's e-rate etc.) . Other In addition, how the City of Dubuque obtains authorization to enter the business will impact the various financing alternatives. .. ... .. .. .. .. .. .... ....... ........ ....... ...... .... ., In addition, we will present a range of financing options and their impact to the business model. VERNON RESEARCH GROUP . Revenue Bonds . Revenue BondlLetter of Credit . General Obligation Bonds . Special Condition Loans . Vendor Financing . Equity Partners . Other Grants typically require filing in the 4th or 1st quarter of each year. I!!I VirchowKrause 8i.COI11B1V . .. Columbia .. raT e1ecommunicatlons --....COrporation . .. ......**-SJlIIn~ vernonresearch.com virchowkrause.com internetctc.com 50 A. Scope of Services - Detailed 7. Outline Potential Partnership (AUiance) Opportunities Alliances will be sought that may foster the development of the communication products and services and ones that may improve the overall profitability of the business. We will review the advantages and disadvantages of various {orms of partnering, how it could be done, with whom it might be done with (names of potential partners if available) and estimated costs and expectations of both parties in a partnership mode. These relationships can lower the risk of constructing the infrastructure and offer expertise that can assist Dubuque in meeting its goals and objectives. Potential alliances include Competitive Local Exchange Carriers (CLEC's), Internet Service Providers, CATV headend providers, and other municipalities. Additionally, we will detail dark fiber management and construction options and opportunities (condominium fiber etc.) and potential partners to provide expertise and offset risks. 8. Detail Required Staffing We will identify personnel and expertise issues and identify areas where Dubuque may need to expand the skills of existing staff or hire additional staff and job descriptions. Included in this section is the analysis of billing methods, and a discussion of the operator. hours for technical support and customer representatives. 9. Evaluate Sources of Revenues From the results of the previous steps, we will provide insights and recommendations on the appropriate involvement models to address the identified needs. Potential involvement models may include: ......... ....... ............. .... ...... .... " · Internal Services Network which supports public safety and other needs · Dark Fiber (first phase of a Metropolitan Area Network allows for bypass and aggregation of connectivity services) · Metropolitan Area Network which provides lit voice, data and broadband services to the commercial and industrial customer segments · Open Access Network (allows multiple providers to deliver services over the infrastructure) · Hybrid Open Access Network - Selected business "partners" are sought to deliver retail services over the infrastructure. VERNON RESEARCH GROUP ~ VirdlowKrause BiCOl'l1D1Y . .. Columbia .... Telecommunications ,..... Corporation ...~S\'IRB~ Included is a review of any opportunities for partnerships with both end users and service providers. Our recommendation of approaches will be based upon a balance of the identified opportunities and risks, economic developed benefits and the likelihood of success. I vernonresearch.com virchowkrause.com internetctc.com 51 A. Scope of Services - Detailed We will prepare a costJbenefit analysis, which will include pricing and market penetration assumptions for the CATV, broadband Internet, specialty services, and other identified markets. Our costJbenefit analysis will also provide working capital projections. In addition to providing costJbenefit analysis for individual service offerings, the model will include an overall analysis for viable potential services detailed in this proposal and identified in the market research. . The financial analysis will leverage the results of the market research and provide: - Sensitivities of key assumptions including, but not limited to: + Market penetration + Pricing + Operating fees + System construction + Staffing levels - Base, best, and worst case analysis. The costJbenefit analysis will follow accounting standards and will not rely on cross-subsidization or off balance sheet debt to skew results. The analysis will also provide schedules that detail: . Operating income and cash flow . Net present value analysis . Subscriber revenue by service . Subscriber revenue by customer/customer class . Debt service analysis . Reserve fund requirements . Uses and sources of funds . Operating expenses . Operational savings . Depreciation summary . Projected construction costs summary for network, hardware, buildings and other equipment Additional appendices for each service will further analyze the costs and revenues associated with the project. ............ ......... ...... ...... ..... . One of the most critical components of a financial analysis is to determine the impact that varying assumptions will have on the project. We will perform a sensitivity analysis of the factors used in the costJbenefit analysis. The sensitivity and breakeven analysis will assist the village in assessing the downside risks of the project. For example, if the analysis assumed a 35% market penetration for Internet, what would occur if the penetration were reduced to 25%? What happens if Internet pricing is reduced 10%? 20%? VERNON RESEARCH GROUP ~ VirdlowKrause 8i~ ... Columbia ... Telecommunications Corporation . . . TeWlu..icdalasr-~ This portion of the analysis will quantify the breakeven point of the project; 'i.e., at what point will this new venture recover the project's capital costs and provide an adequate return to each community. This task will use the Monte- Carlo simulation as described in Section 2 of this proposal. vernonresearch.com virchowkrause.eom Internetctc.com 52 A. Scope of Services - Detailed 10. Provide a Schedule of Activities & Tasks We will discuss the preliminary steps that will be necessary to initiate the business. Included is a discussion of requirements to enter into offering telephone services including: . Interconnection agreements, . Number portability, and . 911 access. We will also outline the key risks of Dubuque entering into the communication business. Not only understanding competition risks is important, but the supply chain is as well. Our recommendation will be based upon what is best for the cities and their citizens. 11. Develop Report and Recommendation Our recommendations will include: . What is needed? . What is doable? . What is practical? . What alliances would enhance community objectives? . How public-private "partnerships" might asset the community. As indicated, we will provide insights on financing options. The current trends in the investment and commercial banking community in providing financing for the type of ventures that the City of Dubuque are considering are key. It has been oUr experience that the financial investment and banking industries are skeptical of municipal telecommunications ventures without solid research, business planning, and positive revenue projections. To fully assist the financial community in understanding the City of Dubuque's desire and plan to develop a municipally-owned telecommunications system, our team will provide "banker- ready" financial statements of the recommended business model. We will provide the City of Dubuque with one (1) written copy and one (1) electronic copy in .pdf format on CD of the draft written report documenting all of our findings and recommendations including an executive summary. Once the draft report has been reviewed and approved by management, the City of Dubuque will be provided with one (1) hard copy of the final report and up to twenty (20) electronic copies in .pdf format on CD. ... .. ..... .. .. ........... .... ..... ...... ... We will also conduct an in-person presentation of our final findings and recommendations in summary form. VERNON RESEARCH GROUP ~ VifChowKrause BiOOfq)ally . .. Columbia _Telecommunications ...~~o:...~ vernonresearch.com virchowkrause.com internetctc.com 53 SECTION 4 Additional Contract Requirements A. Exceptions We accept all conditions and considerations as outlined in the Request for Proposal (RFP). ... .. .. .. ... .... .......... ....... ..... ...... ...... 'I' VERNON RESEARCH GROUP ~ ViI"ChowKrause Bicot11B1Y II I Columbia _Telecommunications 11.~~~&pIf vernonresearch.com virchowkrause.com internetctc.com 54 B. Certificate of Insurance A copy of our certificate of insurance is contained in Attachment A of this proposal. As indicated in the certificate, our existing policy has: General Aggregate Limit Personal and Advertising Injury Limit Each Occurrence Limit $1,000,000 500,000 500,QOO Upon contract award, we agree, if necessary, to modify our policy to meet the City of Dubuque's requirements. .......6 ..... ..... .A.A. ....... ...... 'I' VERNON ReSEARCH GROUP ~ VrchowKrause Bicot11B1Y I I. Columbia --. Telecommunications ,....Corporation I. I .........tMBll/IIinfrGlmi1t vernonresearch.com virchowkrause.com Internetctc.com 55 Attachments ATTACHMENT A Certificate of Insurance ............ ............. ....... .... ...... .... .., VERNON RESEARCH GROUP f!I VrchoWKrause BiCOlJ1)al1V . . . Columbia _Telecommunications ...~=:-~ vernonresearch.com virchowkrause.com Internetctc.com FROM : VRG 64/21/~665 01:01 FAX t{). :3193647307 Apr. 21 2005 10: 52AM P2 91B775388365 CUST PAGE 82/82 ACDRD", CERTIFICATE OF LIABIUTY INSURANCE u~~ 04..2 ":~OO lliIS CERTIACAtE IGlSSUeD AS A MATTiR OF IHFOAMA11ON ONLY AND CONflUlS NO PliGHTS UPON TH& CERTIFICATE; HOLDER. THIS CEftTFICA'ni DOES NOT AM!ND, ~xnNO OR ALTaR tHE COVERAGE AFFOAOeD B'V THE POue,n 8 W INSUflEAS AFFORDING CQVEAAGI! ~~H rtford Casualt In. Co ~~~Hartford underwriters Ins Co INC/PlJ:S P':(877}S38-BS26 MtJINC/III JtOt.MES MURPHY&: ASSOC, 827199 ~;(B6G)467-e730 P. O. BOX 29611 T'l'B NC 2822 iMIIUREII VERNON RESEARCH GROUP I ~ &: PAT l",iY'ONS 1962 1ST AVE .NE AR .RAPIDS (;OVERAGES me. MONICA i02 THE POlICIes l>>' INS1JRANOI UJTID nl.OW HAVE" IllUED TO THE INSURED NAMED ABOVE FOR THE I'OUC:V "IUOO INDICATED. NOTWITHSTANDIJfG Aftff flEQUlREMEN'r. TBI\iI O~ CONDmOH af> ANY COPll1lACT OR OTHER OOCUMINT VtImf flESPl!cr TO WliICH THIS tEfmflCATE MAY BE ISSUED OR MAY ...M..... T~e lNSORANCf NIFORDED BY TI-E POLICIES DESCflBED HIiRBN 111U~ TO AU. TNI TMM', IXCl.USIONS ...~ CONDitiONS OF SUCH fiUCwA AOQflRGATEUMITS SHOWN UAY H....VE el!1N ~IClVCIO rt PAlO ~ ~ tn"e CII' ~ NIJtW MJtfaIt r 'JIOIII ,.,. J!!fIII'oW UMIi1TY .1. 000 000 A IAl GENtAAllJ.tl1tll.n'( 91 SBA 8Q6873 01/01/05 01/01/06 FlflE DAMAGI! ,- .. MIl .300.000 X =:J I:LNMS MADE 00 ~ MmEl/1I ,10.000 Business Liab I PUlSONH. .. MN IIe.MlV .1.000.000 ~ElW. NHRlIATI 1$2.000.000 ~L~~M~~NI\I Il'RoOUCTS . 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INDEAVOfl 1'0 MAll D"'VS WAI1"I1N NOTa (10 DAYS FOR NON.PAW8N'M TO THE et;RT1FICATI! Attn: City Clerk HOt.Oaft NAM~ TO T1iE LEFT. IiIUT fAUJRfi to DO eo SHAU. HPOSe NO IoeLIGAnolll OR t.lAlIlU1Y OF ANY IClHO UI'ON THI! INBUREfI, rrs AlWIn QA SO West 13th St. .... ATlVII. Dubuque, !.A 52001 ~~ I-. - ACORD 25-8 (7It1. e ACONJ CORPORATION 1988 I ACORD CERTIFICATE OF LIABILITY INSURANCE II I>>.TE CMM/DDIrNY) TII 02108105 r pRC)OUCER THIS CERTIFICATE IS. ISSUED AS A MATTER OF INFORMATION ~dgeview AlJency ONLY AND CONFERS NO RIGHTS UPON THE. CERTIFICATE HOLDER.~IS CERTIFICATE DOES NOT AMEND. EXTEND OR I'~.O. Box 123 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 301 W.. Main Sl ....SURERS AFFORDING COVERAGE . itarshaU WI 53559-0123 NAlC, NSURED VlRCHOW KRAUSE & CO UP INSURER A: CaDitollndemnitv Corooration I POBOX 7398 "_: .r- .. IlSURER B:. ..;....".. INSURER C: MADISON WI 53707-7398 INSURER D: I INSURER E: - COVERAGES THE POlICES OF INSURANCE USlED BElOW HAVE BEEN ISSUED TO THE INSURED NAMED ASCHE FOR. l1:IE POlICY PERJQO INDICATED. NOlWllHSTANDING AN{ REQUIREMENT. TERM OR CONOlTlON OF NfY CONTRACT OR OlHER DOCUMENT wrm RESPECT TO WHICH THIS q:RTFICAlE MAY BE ISSUED OR I MAY PERTAIN. lHE IHSURANCE AFFORDED BY THE POlICIES DESCRIBED tEREIN IS SUBJECT TO Allll-E TERMS. EXClUSIONS AND CONOl11ONS OF SUCH POlICIES. AGGREGAlE UMITS SHOWN MAY HAVE BEEN REDUCED BY PAlO a.AIMS. I~ ~ POlICY NUMBER POUCY EFFECTIVE POlICY EXPIRATION lMTS .!LENERAI. LIABIUTY EACH OCCURRENCE s 1.000.000 ,A. X COMMERCl.Ill GENERAl UABUTY BPOO176824 01-01.2005 01-01-2006 DAMAGE TO RENTED s 250.000 I ClANS MADE [!] OCCUR MED E)(p /AnI one_I S 5.000 PERSONAL & NN KJURY S 1.000.000 GENERAL AGGREGATE S 2.000,000 I ~AGGREnLMTriPER PROOUC1S-~AGG s 1.000.000 POlICY ~ LOC ~ LWlIUTY COMBINED SINGLE LMT $1.000.000 I~ BPOO176824 01-01.2005 01-01-2006 lEa ei:ddent) - ANY AUTO - ALL OWNED AUTOS BOOl. V tlJURY SCHEDULEO AUTOS (Per peoson) $ - ..!. HIRED AUTOS ~~i BOOl. VN.JURY I ..!. ~(~I tperllCCidenl) $ NCJK.OWNED AUTOS PROPERlY DAMAGE $ (per IICCidenl) ~EUARnY ~~ - AUTO OHlY - EA ACCIlENT I s I ANY AUTO OTHER 1HI\H .EANX . S AUTO 0HlY: AGO S EXCESSIUMBREUA UABLITY EACH OCCURRENCE S 5.000,000 IA :!J OCCUR 0 ClAIMS MADE BPOO176824 01-01-2005 01~1-2006 AGGREGI'oTE $ 5,000,000 s ~oe~ $ X REmmoN s 10,000 s I \ WORKERS COMPENSATION NIID I WCSTAlU- I I OJ!!- EMPLOYERS" LIABILITY wc00176824 01-01-2005 01-01-2006 $ 1,000,000 Nf'( PROPRlETOR/PARTNERIEXECU1lI E.L EACH ACCIlEHT OFFICER/MEMSER EXCUlOED7 E.L DISEASE - EA EMPLOYE S 1 000.000 I ~~......~under .. s 1.000.000 E.L DISEASE - POlJC'(LNlT I OTHER I DESCRIPTION OF OPERAllOHS I LOCATIONS I VEtKLES I EXCUISlOHSADDeD BY ENOORSEIIENT I Sl'ECIAl PROVlSIOHS I "::ERTIFlCATE HOLDER CANCElLATION $HOUl.ONf'f OFTHE ABOYEDESCRlBED POUCIES BE CAHCEUED BEfORE THEEXPIRATlOH I>>.TE 'rHERE9F. THE ISSUIIIG INSURER WILL ENDEAVOR TO IIAIL ...!L I>>.YS WRITTEH NOTICE TO THE CER1lFICATE HOUlER NAMED TO THE LEFT, BUT FAIUIRE TO DO SO SHALL IIIPOSE NO OBLIGATION OR lIMlUlY OF ANY IOHD UPOH THE INSURER. ITS AGENTS OR REPRESENTATIVES. AUTtlORIZEO REPRESENTATIVE <> ACORD 25 (2001/08)