Resolution - 2023 - 23-13 - City Of Eagle Digital Access Master Plan - 06/01/2023 RESOLUTION No.23-13
A RESOLUTION OF THE CITY OF EAGLE, IDAHO, ADOPTING THE CITY OF EAGLE
DIGITAL ACCESS MASTER PLAN.
WHEREAS, the City of Eagle finds that Telecommunications infrastructure is as important to
the community as streets,electricity,water,and sewer;and
WHEREAS, the City of Eagle finds that businesses, government, and citizens all need
affordable,fast,and reliable access to information networks; and
WHEREAS, the City of Eagle finds that such essential networks are not readily available within
the City and limits businesses, schools, hospitals, and government in their ability to function; and
WHEREAS,the City of Eagle desires to provide the City-citizens,business,and public entities-a
road map for the provision of fiber optic utilities within the City;and
WHEREAS,the City of Eagle has funded the development of a Fiber Optic Master Plan;and
WHEREAS, the City of Eagle adopted the that the "Municipal Fiber Optic Network Planning
Policy", Resolution 21-19 dated September 14, 2021 to serve as guidance in the development of a Digital
Access Master Plan;
WHEREAS, the Eagle City Council finds the Digital Access Master Plan consistent with the
Municipal Fiber Optic Network Planning Policy; and
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
CITY OF EAGLE, IDAHO adopts "Municipal Fiber Optic Network Planning Policy" dated September
14,2021,attached hereto as Exhibit A, is hereby adopted by the City.
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This Resolution will be in full force and effect upon its adoption and approval this day of June 2023.
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Table of Contents Page | 1
FIBER VISION STATEMENT
EXECUTIVE SUMMARY
CITY MODEL
Unbundled Infrastructure
Goals, Objectives & Policies
Financial Projections
IMPLEMENTATION
Policy Structure
Design/Engineering
Community Engagement
Construction
City Department
Phasing
APPENDIX
Feasibility Analysis
Risk Assessment
Community Engagement
Eagle Broadband Survey Results
Comparison of Available Media
Market Analysis
Network Architecture
Funding Opportunities
GLOSSARY / ABBREVIATIONS
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5
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Contents
Digital Access Master Plan
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Vision Statement Page | 3
Vision Statement
The City of Eagle recognizes that
broadband internet is an essential
service for life done right. Eagle is
committed to bringing affordable
high-speed internet to all residents by
investing in the development of fiber
infrastructure. City-owned fiber will
open digital roads to more service
providers, increase competition, and
future-proof broadband for residents
and local businesses.
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Executive Summary Page | 5
Executive Summary
The City of Eagle is building a Citywide fiber optic network to establish local control of essential public
infrastructure, position the City for economic development, and eliminate existing gaps in the network. This
Digital Access Master Plan outlines the City’s rationale for developing this utility and key components to planning,
building, and operating this infrastructure.
Existing Conditions
A lack of broadband competition in Eagle has resulted in the continued use of outmoded DSL and coaxial cable
as the predominant infrastructures in Eagle. Costs are higher as redundant infrastructures must be constructed
and maintained for service competition because the services are bundled with the infrastructure. This market
situation would never have arisen naturally except that the two competing infrastructures were originally built
for analog voice and cable. Today they compete for digital access, which was not imagined when they were
originally constructed.
Providers
Existing service providers are very limited within the City of Eagle, Sparklight and CenturyLink are the
primary providers in Eagle. The average speeds delivered by the primary residential and business
carriers for 2021, along with a sample of 205,008 speed tests as measured by M-Labs, is as follows:
• Sparklight: 61.64 Mbps download / 8.2 Mbps upload.
• CenturyLink: 24.78 Mbps download / 4.95 Mbps upload.
Note: See the Appendix for the M-Labs citation.
Pricing
In Eagle, most residents and businesses subscribe to wireline internet services from the cable operator
(Sparklight) and the telephone incumbent (CenturyLink).
Sparklight’s pricing ranges between $65 -$91 per data collected from subscribers in Eagle.
CenturyLink’s standard pricing ranges from $50 - $65 for residential ISP services in Eagle.
Survey Results
Consumer Reports conducted a nationally representative multi-mode survey of 2,565 adults administered
by the National Opinion Research Center (NORC) at the University of Chicago in June 2021 with the
following results:
• 76% of Americans say that internet service is as important as other necessities.
• Forty-three percent (43%) of Americans with broadband service in their household say they
are dissatisfied with the value they get for the money.
• Three out of four Americans feel that municipal or community broadband should be allowed
because it would ensure that broadband access is treated like other vital infrastructure such
as highways, bridges, water systems, and electrical grids, allowing all Americans equal access
to it.
A 2022 City of Eagle Survey of over one thousand respondents, found that 96% of Eagle’s residents and
businesses support a targeted municipal solution focused on improving access for providers and choice
for subscribers. The survey conducted by the City survey found that the average monthly broadband
Executive Summary Page | 6
costs paid in Eagle were $86 for residents and $158 for businesses. 85% of respondents felt these rates
were higher than what they would define as “affordable.”
Note: See the Survey Section found in the Appendix for detailed survey information.
Problem Statement
Digital infrastructure is the freeway of a digital economy and key strategic infrastructure— Digital infrastructure
is the freeway of a digital economy. Determining how to manage this key strategic infrastructure (treating the
infrastructure as a public utility, or as a private public partnership, or as the incumbent’s responsibility to build
and maintain) is a critical decision when discussing growth objectives for the City and future economic
development. Key limitations of the current model include:
The infrastructure is treated as an amenity rather than as an essential public service/utility
Competition happens at the installation of infrastructure rather than the services layer. This is not
sustainable financially and has led to a monopoly in services.
The infrastructure and services are bundled together. This obscures the actual cost of infrastructure
and services thus further limiting competition.
Existing service providers are not aligned with the interests of subscribers. Providers want the
maximum price the market will bear to bolster profits, where subscribers want to minimum price
while maximizing the service. The lack of true competition perpetuates this misalignment.
Solution Summary
The City of Eagle recognizes that digital infrastructure is an essential public utility in modern society. The current
mobile economy and digital lifestyles demands fast, effective, and cost-effective digital access. Eagle is
developing this system to leverage this infrastructure to bolster the local economy and enable long-term
opportunities in education, healthcare, public safety, efficient delivery of government services, and the general
economy. The City of Eagle will use existing institutional authority to build, maintain, and operate an automated
open access fiber optic infrastructure owned by the City. This system will enable private service competition to
every address in Eagle as the cornerstone of a broader digital infrastructure strategy.
The City will take ownership of its digital access policy and the community’s infrastructure needs in the following
ways:
Open access allows multiple internet service providers
(ISPs) to share the same wiring to connect consumers,
providing better capital investment returns and more
competitive choices for faster, cheaper internet access.
Executive Summary Page | 7
The City will begin treating digital infrastructure as essential in a digital economy and operate the
infrastructure as a utility.
Fiber is a public utility because it is an essential infrastructure that is critical to the modern
economy, fiber is an essential function critical for societal success. Providing digital access as a
public utility will result in the maximum level of service at the lowest possible cost. The current
market in Eagle has a lack of adequate competition, a City-owned utility-based infrastructure
affects affordability, ubiquity, and quality of service.
An open access model will be deployed to enable dynamic competition. The City will be a neutral
host of the infrastructure under this model.
Open access is a model that divides the infrastructure and services into two separate systems,
infrastructure (the fiber backbone) and the service provider (the service providing internet access).
Much like other community infrastructure elements, parks, road systems, and airports, the fiber
infrastructure is developed and regulated by the City to be shared by multiple internet service
providers. The goal of an open access system is to develop the infrastructure so to lower costs to
an ISP to provide service thus increasing choice and competition. For an open access system to
realize its potential, it is critical for the infrastructure owner to be a neutral host. This means the
neutral host is not incentivized to privilege one service provider over another. Instead, the
incentive is to focus on enabling robust shared infrastructure operated on a non-discriminatory
basis.
Infrastructure and services will be unbundled, so competition happens at the services layer
rather than at the infrastructure layer.
An unbundled model separates the network cost’s primary functions into three buckets:
1) Infrastructure Capital Cost,
2) Ongoing Network Operations, and
3) Services.
It is critical to separate these costs to optimize each bucket. Separation is necessary for the City
to become a neutral host.
The City will seek alignment with subscribers to deliver maximum value for minimum cost.
Subscribers want maximum value for minimum cost. The City wants to enhance livability, increase
economic development, enable important anchor institutions like healthcare and education, and
be a good steward supporting natural and human resources. As digital infrastructure becomes
increasingly important to each of these things, the significance of alignment with the network
owner and operator also increases. The City of Eagle is aligned with the interests of subscribers in
enabling a network that delivers maximum value for the minimum cost.
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City Model Page | 9
City’s Business Model
The key enabler transforming the existing broadband delivery model is for Eagle to own and control its digital
infrastructure. Once Eagle is the infrastructure owner, the City can use other tools to drive desired outcomes.
Private market solutions are incentivized to deliver the least service for the maximum price. True utility models
are incentivized to deliver the maximum service for the least cost. Eagle must apply this utility model to
optimize the desired outcomes.
A lack of broadband competition in Eagle has resulted in the continued use of outmoded DSL and coaxial cable
as the predominant infrastructures in Eagle. Costs are higher as redundant infrastructures must be constructed
and maintained for service competition because the services are bundled with the infrastructure. This market
situation would never have arisen naturally except that the two competing infrastructures were originally built
for analog voice and cable. Today they compete for digital access, which was not imagined when they were
originally constructed.
Unbundling of Infrastructure
Traditional analog phone, cable and cell services require specific physical and organizational structures and facilities (e.g.
cables, equipment, power) for service delivery. Technological advancements have made it possible to digitize these
services and the broad adoption of the Internet Protocol has made it possible to deliver them over any network medium
or infrastructure. This unbundling of services from infrastructure presents an opportunity for the City of Eagle to improve
broadband access and affordability through the creation of a single open digital access infrastructure that is robust
enough to serve every potential provider at every address. This plan details the strategies the City intends to implement
and their expected outcomes using terminology that is nuanced, overlapping and, at times, misunderstood. For these
reasons the following terms should generally be understood to mean the following for the purposes of this plan:
Infrastructure refers to the necessary
physical structures, facilities, and
devices to be constructed or installed
by the city to create an open digital
access system.
Infrastructure Provider is the entity in
an open access system responsible for
the construction, maintenance, and
operation of the underlying
infrastructure, but not for the service
delivery. For the purposes of this plan
this is the City of Eagle.
Utility Service refers to a layer of
operations maintained by the
infrastructure provider in software that
automates functions directly for service
providers and subscribers. These
functions could be compared with the
functions provided by public entities
when they provide lane striping, traffic
signs, and law enforcement for the
public roadway system. These
operations enable a system that
supports public, private, and
commercial traffic in an open or self-
service fashion.
Service refers to the supplying of retail
digital services such as internet, video,
voice, or other services an end user
could typically subscribe to monthly.
Service Provider is typically a private
entity providing a final or retail service
to subscribers in a marketplace using
the public open digital system. While
service providers are responsible for
their service delivery, they are not
responsible for the construction,
maintenance or operation of the
infrastructure used to deliver the
service. This provides the means to
create a truly open and competitive
market for services, but it also requires
clear demarcations in roles and
responsibilities between the
infrastructure provider, service
providers, and subscribers.
Provider
Internet Service Provider
Subscriber refers to the consumers of
the infrastructure and services.
Through unbundling these are often
presented separately to the subscriber
as utility fiber service from the
infrastructure provider and retail
network services from the service
provider.
City of Eagle Internet Service Provider Subscriber (Resident/Business Owner)
City Model Page | 10
Public utility models are properly applied to the construction, operation, and delivery of essential infrastructure
and services. These institutions exist to support essential functions critical for societal success. Using these
same frameworks for digital access will result in maximum service at the lowest possible cost, in contrast with
the current market in Eagle, which lacks adequate competition and utility-based infrastructure to achieve the
affordability, ubiquity, and quality of service desired. Eagle is launching Phase 1 of its Citywide project by
building a backbone and connecting core City facilities. The City of Eagle will use existing institutional authority
to build, maintain, and operate an automated open access fiber optic infrastructure owned by the City. This
system will enable private service competition to every address in Eagle as the cornerstone of a broader digital
infrastructure strategy.
Eagle will separate its infrastructure from the services operating across the infrastructure to enable competition
among service providers. Several utility models provide examples of this kind of separation.
Water pumping or treatment systems can be separate from distribution systems. Power distribution and
transmission infrastructure is often separated from generation. Wastewater treatment plant operations can be
separated from collection system(s) to serve more than one collection system as a service.
It is also important to note that these separations are not only possible but fundamental for the electric grid.
The national grid is interconnected. The electricity received by an end customer could come from any
generation point, as demonstrated by outages where one generation point can affect service in a separate
distribution system. These same outcomes are experienced in digital transport and access systems where the
services are now supported outside the core monopoly infrastructure. Ethernet/IP has allowed for technical
unbundling. It is now time to follow suit with business models.
Scale often determines the value of separating these systems. Digital access is now global, so the scale would
indicate a clear economic value in creating and maintaining separation between infrastructure and services in
digital infrastructure. Fiber optic infrastructure is a natural monopoly (i.e., no new value is gained by having
multiple infrastructures because fiber offers nearly infinite speed and capacity). However, significant value will
flow to subscribers by exposing service providers to competition.
Therefore, it is logical to use utility frameworks to support one robust locally owned digital infrastructure and
foster commercial competition across that infrastructure. This will not only improve affordability but will also
lead to choice, innovation, and competition.
The City will apply public utility models to construct and operate an automated open access fiber optic system.
The application of these frameworks will result in models completely different from industry models. It should
be expected that industry experts will say that the modeling used by Eagle is incorrect because it differs from
the industry standard. Eagle’s pursuit of universal availability and affordability will lead to completely different
outcomes for the businesses and residents of Eagle.
The industry may view this infrastructure as competitive to their interests. The City is not offering a competitive
solution because the industry will be invited to deliver its services across the City’s fiber optic infrastructure. It
can do so at virtually no upfront capital costs. However, the industry will face competition from other private
providers.
City Model Page | 11
City’s Goals, Objectives, & Policies
The Eagle plan is not designed to replicate current systems. Instead, this infrastructure and the supporting
strategy are meant to transform services, local control, network reliability, and the cost of services via
competition. The first step in any paradigm shift is the hardest, but this is the right first step because only by
owning the infrastructure can Eagle provide the necessary foundation to ensure the desired outcomes. It is also
the right public investment because it avoids favoring any single private provider by eliminating monopoly
infrastructure capital costs for both incumbent and new providers while at the same time not preventing any
provider from using Eagle’s new infrastructure or continuing to use private infrastructure.
Goals
Create a long-term digital infrastructure solution that offers residents and businesses in Eagle the
reliability, speed, and market competition they seek.
Make fiber optic digital access affordable and available for all Eagle residents.
Objectives
Use public funds to ensure open public infrastructure for all residents and businesses.
Enable true competition and choice for private services with an open access fiber optic
infrastructure utility.
Leverage established municipal utility operational models for funding, construction, operation, and
fees.
Leverage established municipal utility powers, tax exemptions, and liability benefits to keep costs
down and improve service levels.
Policies
1. Enable competitive choices for citizens. Bring multiple providers to market and
ensure that digital infrastructure is an essential service like streets, sewer, and water.
a. Use public funds to invest in open public infrastructure to enable true competition and choice for
private services.
b. Codify an open access fiber optic infrastructure utility to hold and manage the infrastructure in a
proprietary or enterprise fund for public benefit.
City Model Page | 12
c. Leverage established municipal utility operational models for funding, construction, operation, and
fees.
d. Leverage established municipal utility powers, tax exemptions, and liability benefits to drive costs
down and service levels up.
2. Focus on affordability and accessibility. The City will leverage public funding for
investments in long-term sustainable capital solutions versus short-term,
unsustainable solutions of public subsidies made to private service providers.
a. Separate public infrastructure investment and operation from private service investment and
operation in law, ordinance, and practice.
b. Recognize fiber optic media as the preferred infrastructure investment for fixed installations.
c. Establish ethernet as the infrastructure communications standard.
3. Create local value for Eagle.
a. Local control over infrastructure will make the network more responsive to local needs, including
services directly available to Eagle residents for their use without requiring a commercial service or
internet provider, which is immediate.
b. Improve property values by installing affordable fiber optic infrastructure—available to every address,
which takes time.
4. Leverage existing investments and institutions for support.
a. Use established public assistance resources to provide municipal fiber optic utility training, support,
and devices to improve adoption and digital literacy.
b. Seamlessly fold this new municipal utility operation into existing City operations for the benefit of all
by requiring in policy that all intracity connectivity be performed by the fiber optic utility.
c. Implement joint powers and cost-sharing agreements with any publicly funded entity inside or outside
the City when mutually beneficial and possible.
5. Ensure a sustainable rate/utility fee based on capital and operational cost recovery,
not excessive reserve funding or profit.
a. Fees shall be based on infrastructure costs agnostic to services consumed or provided.
b. Fees shall be established, published, charged, and collected using established municipal utility
infrastructure, assets, and systems.
6. Use the infrastructure as a platform for innovation.
a. Seek to create and improve the digital opportunities available to all Eagle residents.
b. Present the open access infrastructure as a platform to enable innovation by City residents.
c. Encourage innovation through fee structures that focus on infrastructure costs agnostic to bandwidth.
City Model Page | 13
Financial Projections
This report's financial projections focus on making access reliable and affordable for all residential subscribers.
Early project phases will help validate the cost model for commercial and anchor institutions. An open
marketplace will have a meaningful and positive impact on the cost of access for Eagle’s residents, businesses,
and anchor institutions. Additionally, participation from businesses and anchor institutions will lower the cost of
network operations for all subscribers.
The financial analysis of the Eagle Fiber Network projects the following residential and commercial monthly
rates for 1 Gig symmetrical internet connectivity: Residential Monthly Rate = $55.00 | Commercial Monthly Rate = $65.00
Note: These fee rates include an estimated $10 monthly charge for 1 Gbps internet in addition to the City’s monthly utility fee rate.
What will this cost?
To make sense of the cost, we need to understand what Eagle residents are paying today:
Projected Costs
Estimated Residential Services Monthly Costs 100% Buried
Infrastructure Costs $25.00
Maintenance and Operations Costs $20.00
ISP Services Costs [1,000 x 1,000 Mbps] $10.00
Estimated Monthly Total $55.00
Source: https://www.newamerica.org/oti/reports/cost-connectivity-2020/
City Model Page | 14
Key Drivers
• Shift to the utility model.
• Use public financing.
• Provide automated open access functionality to enable competition between service
providers.
Impact
The national average for 100 Mbps connectivity is $69. Based on survey data (see Appendix),
Eagle residents are paying an average of $86 per month. M-LAB speed test data for 2021
shows that speeds averaged 61.64 Mbps download and 8.2 Mbps upload. The modeling
shows an average monthly cost of $51.39 and symmetrical speeds of 1,000 x 1,000 Mbps. An
automated open access network will put downward pressure on M&O costs through
automation and service provider costs through competition.
Cost Comparison
Below is a comparison of per Mbps cost of service using the standard packages and advertised cost
published on each provider’s website.
Network Provider >>>
Cost Per Mbps – Plan 3 No Offering $16.66
3/.5 Mbps Plan N/A
Cost Per Mbps – Plan 15 No Offering $3.33
15/.75 Mbps Plan N/A
Cost Per Mbps – Plan 30 No Offering $1.67
30/1.5 Mbps Plan N/A
Cost Per Mbps – Plan 60 No Offering $.83
60/5 Mbps Plan N/A
Cost Per Mbps – Plan 100 $.55
100/10 Mbps Plan
$.50
60/5 Mbps Plan N/A
Cost Per Mbps – Plan 200 $.33
200/20 Mbps Plan No Offering N/A
Cost Per Mbps – Plan 300 $.27
300/30 Mbps Plan No Offering N/A
Cost Per Mbps – Plan 940 $.13
940/50 Mbps Plan
$.07
940/50 Mbps Plan
$.05
1000/1000 Mbps Plan
Eagle Fiber Network
City Model Page | 15
How will the City Pay for the Utility
Achieving these projected rates depends on using American Rescue Plan Act (ARPA) funding as an initial
investment in an enterprise fund to establish a municipal fiber optic utility. This municipal infrastructure
utility will provide a path for public investments to create a public broadband infrastructure open to any
provider, helping to prevent public broadband investments from becoming de-facto corporate subsidies
for incumbent operators.
Once this initial investment from ARPA is exhausted, the City will achieve the lowest cost for capital
possible by utilizing municipal bond processes to fund continued expansion. The state statute provides
these prescriptive bond processes for essential infrastructures like power, water, and wastewater
systems. By following these prescriptive processes, the development of a progressive digital utility that
serves the community’s essential broadband needs at the lowest possible costs for all stakeholders,
including the incumbent industry.
Additional information can be found in the appendix of this document. See page 23.
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Implementation Page | 17
Implementation
The initial project scope will include the following:
1. Connecting City properties and building the backbone infrastructure to support new development as
quickly as possible. As part of this project, establish locations to serve as fiber access points for fiber-to-
the-home and fiber-to-the-business. Initial project objectives include improving reliability, enabling
competition, reducing costs, taking ownership, and supporting improved internal operations, including
public health and safety.
2. Validating the cost structure that is modeled in the Digital Access Master Plan.
3. Providing key team members at the City with firsthand exposure to design/engineering, construction, and
operations for a fiber optic system.
4. Validating the ability of an open access system to positively support city operations while also addressing
gaps in private competition and service choice and lowering the cost of services.
Policy Structure
Declare infrastructure as an essential public service. Draft, adopt, and implement the policy frameworks
necessary to create and establish a municipally owned digital access infrastructure.
• Create an ordinance to establish an open access fiber optic infrastructure to be operated as a utility.
• Create and adopt a policy to support the funding and construction of the infrastructure Citywide.
• Create and adopt a policy to ensure that new developments will include this new utility infrastructure.
Acquire City Leadership Approval
• Prepare to advance the full initiative to the City Council for approval.
• Deploy the initial project and subsequent phases as approved by the City Council.
Financing
Establish initial funding and fee schedules for an initial project that maximizes the benefit of available
ARPA funding and provides a sustainable foundation to support the expansion of the infrastructure to
every address. Refine the strategy for financing subsequent phases of the project beyond the initial
project phase. Pursue state and federal broadband funding and grant opportunities.
Design / Engineering
Perform the appropriate design level to meet the initial project’s needs, new development, and subsequent
buildout phases. Prioritize paths to new development and implement design standards that include the fiber
utility for new development.
Implementation Page | 18
Community Engagement
Collaboratively refine the community engagement plan. Community engagement is the most critical sub-project
for successfully deploying a publicly owned fiber optic infrastructure.
Note: See the detailed description in the Appendix
• Implement a community engagement and demand aggregation process.
• Develop a process, potentially a competitive process, to establish initial take-rate and determine
neighborhood phasing.
Construction
Develop internal construction resources and supplement third-party construction for cost benefits and quality
assurance. While municipalities typically outsource construction, the City of Eagle has a unique opportunity to,
through upfront investments, establish a City-owned utility that will pay long-term dividends. The principal
reasons for the City to make these investments are:
1. Cost savings: Because the City will be constructing a fiber asset throughout the City over a period of years,
the initial investment in equipment and skilled labor can be recovered over time. A cost-per-foot analysis
shows that an internal City construction crew could be expected to install conduit at an average cost of
$12.00 per foot. This cost analysis accounts for equipment purchase, maintenance, and fuel costs. It
appropriates fully burdened labor rates for the required positions. And it compares favorably with the
current commercial rates from contractors, which typically fall between $15 and $20 per foot.
2. Quality control: Insourcing will provide the City with direct control and oversight:
• Of how, where, and when the infrastructure is installed.
• Over the quality of the installation.
• Over the public relations associated with working in easements and rights of way that cross or about a
property owner’s parcel. This is an advantage, as property owners will hold the City accountable for the
work being performed, even though the work may be outsourced to a private contractor. This direct
arrangement between the City and property owners often results in better public relations outcomes.
3. Internal resource development: As a part of the plan execution, the City will enter the fiber optic
infrastructure business. Developing a team to lead and perform construction will establish the necessary
internal expertise and resources to support ongoing operations.
To accomplish this work, the City has contracted with EntryPoint Networks, which has direct experience in
supporting municipal fiber providers to build systems that provide cost savings by insourcing the largest portion
of the network and outsourcing to strategic segments. The savings represented above in bullet one has been
experienced by the City of Ammon as internal resources were developed to support construction and
operations. Recent research and the experiences of numerous local and state governments show that bringing
critical functions under public control, increased service quality, and cost-savings making better use of public
investment.
Source: Insourcing often leads to better service and cost-savings
Implementation Page | 19
Establish a City Utility Department
Establish and formalize Fiber as an enterprise fund within the City, separate it from all other activities. Similar to
Water and other utilities Fiber, once established should function on its own without the infusion of general fund
monies from the City.
Department responsibilities:
1) Managing the fiber optics project and budget, directing construction per the approved design, and
coordinating work with other City staff and design team members.
2) Interfacing between citizens, contractors, providers, and local government officials.
3) Reviewing and implementing project design aspects as needed and coordinating adjustments to
support constructability and budget outcomes.
4) Reviewing work products, quality control, and budgeting.
5) Mentoring and developing internal vision and expertise.
6) Evaluating construction project management software options.
7) Conducting procurement for construction.
• Obtaining necessary quotes or creating request for proposal (RFP) and request for quote (RFQ)
documents.
• Establishing sole source arrangements where necessary.
Phasing Plan
The construction of the City’ utility will be accomplished in both financial and construction phases. The phasing
plan focuses on creating revenue as the City utilizes ARPA funds for initial construction. High-level estimates
indicate that after purchasing the equipment necessary to support construction, just over $4 million will remain
to fund materials and labor for construction. Based on the cost of materials and labor combined with the
weekly footage estimates, this initial investment of $4 million will be exhausted at some point in year three (3),
depending on market rates and workforce performance. For this reason, the City should focus on maximizing
this investment's revenue potential, resulting in steady monthly revenue for capital recovery and a
demonstrated take-rate. Both will be required to obtain bond financing in support of continued construction.
Based on this strategy, the following phasing is recommended:
• Phase 1: City Hall to Heritage Park to Molinari. (6 months)
• Phase 2: City Hall to Orval Krasen Park to install a serving location to provide access. (3 months)
• Phase 3: City Hall to Guerber Park to support park function and service to new development north of Hill
Road, crossing HWY 44 and serving Merrill Park.
• Phase 4: Orval Krasen Park to water pump stations along Floating Feather west toward Palmer Lane to
connect the City properties that will serve as fiber access locations and ultimately feed the new
development to the north and west of the City. (6 months)
Implementation Page | 20
Concurrently with these phases, high-demand areas within the City should be identified using a survey via a
sign-up portal for property owners. Demand should also be developed in areas with an installed access location.
Construction to the homes and businesses should commence immediately after the above phasing is completed
or concurrently as it makes sense to drive demand.
Implementation Page | 21
This phasing needs to be developed and more rigor applied to estimating costs and timelines for these phases
once agreed upon. This should create a three-to-five-year action plan for the City within the strategic plan with
some flexibility to support as much revenue creation as possible.
https://survey123.arcgis.com/share/8
5f1c12edb4741d2851982eb83eefa02
To express an interest in the
City’s Fiber Utility to your
Neighborhood use the links
below:
Page | 22
Appendix Page | 23
This appendix is intended to provide detailed information and studies that
supports the City’s digital master plan and help provide further understanding
of the City’s intent in creating a municipal fiber utility.
APPENDIX
Feasibility Analysis
Risk Assessment
Community Engagement
Eagle Broadband Survey Results
Comparison of Available Media
Market Analysis
Network Architecture
Funding Opportunities
GLOSSARY / ABBREVIATIONS
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23
25
35
41
45
47
51
55
57
63
Appendix
Digital Access Master Plan
Page | 24
Appendix – Feasibility Analysis Page | 25
Feasibility Analysis
Fee Structures
Methodology
Eagle has several unique factors that are part of the City’s implementation. These factors include the use
of funding of roughly six million ($6M) in American Rescue Plan Act (ARPA) funds as an initial
investment, the initial costs of establishing a municipal construction operation, and an essential need to
provide access to the infrastructure for new development as quickly as possible. Idaho cities are
precluded by state law from participating in commercial enterprises, charging fees for profit, or
borrowing money outside the specific prescriptive paths provided for in the statute.
To meet all these necessities, Eagle will employ a municipal utility operational model that leverages the
lowest cost for capital and implement fee rates that recover costs. Costs that need to be recovered as a
part of Eagle’s operational model primarily include 1) the cost to build the system, and 2) the cost to
operate the system. These are exclusively infrastructure costs as the operational model Eagle will
implement separates infrastructure from service and unbundles the underlying costs for users. Service
delivery will incur cost in addition to the City’s fees. Unbundled service delivery fees will be set, billed,
and collected by providers directly to subscribers as a commercial activity for profit outside of the City’s
enterprise operations.
This operational model differs from the industry’s traditionally vertically integrated model and provides
the following benefits:
• Lower cost for capital
• Able to treat the infrastructure as essential and provide access to all (ubiquitous)
• Enables service competition which is superior to infrastructure competition because it:
o Lowers the cost for new entrants and innovation.
o Protects consumers from cartel like pricing from monopolistic models by creating true
competition using a public infrastructure operated at cost for essential services.
o Typically eliminates data caps and contracts because service providers have little to no
capital investment to offer services.
Because this model differs from the traditional vertically integrated model that combines infrastructure
and service costs into one fee, it is important to remember that while the fees charged to system users
will include their per unit costs for 1) capital recovery and 2) system maintenance and operation. There
will be another fee charged separately to the subscriber directly by their chosen provider for their
services.
The monthly utility fee charged to users will include the following:
1) Capital cost recovery for construction.
Appendix – Feasibility Analysis Page | 26
2) A reserve fund sufficient to support equipment (network electronics) upgrades and changeout
based on the lifecycle.
3) Operations which include open access and technical support.
4) Plant maintenance and operation (cable, duct, and vault repairs).
These activities are detailed in the following sections to support a recommended monthly utility fee of
$45 per month for residential service and $55 per month for business service, as shown in the tables
below.
Note: The City’s operations DO NOT provide retail internet service or any other commercial services.
The City’s operations are limited to providing a fiber connection at every address that commercial
service providers can use to offer their services directly to the residents and businesses in Eagle. An
additional fee of $5 to $50 monthly, depending on the service or package chosen and paid directly to
the provider by the subscriber, will be required for retail services, including the internet.
Proposed Residential Rate
DESCRIPTION AMOUNT
Capital Recovery $25.00
Reserve $5.00
Operations (Tech Support) $5.00
Infrastructure Maintenance $10.00
ESTIMATED MONTHLY
RESIDENTIAL RATE $45.00
Proposed Commercial Rate
DESCRIPTION AMOUNT
Capital Recovery $27.50
Reserve $7.50
Operations (Tech Support) $7.50
Infrastructure Maintenance $12.50
ESTIMATED MONTHLY
COMMERCIAL RATE $55.00
Capital Improvement Costs
Capital improvement costs are the costs incurred to construct the digital infrastructure. For this analysis,
these costs were calculated using a high-level geospatial design that would install a single fiber to the
12,580 addresses or properties currently located in Eagle. An active ethernet architecture was used for
this design to provide superior performance and flexibility. Because the establishment of an open 50+
year digital infrastructure improvement capable of supporting the public health, safety, well-being, and
economic vitality of the City’s businesses and residents is the goal of this strategy The architecture
supports the following aspects:
• Symmetrical speeds (equal bandwidth capacities for upload and download).
Appendix – Feasibility Analysis Page | 27
• An active ethernet architecture (simple, low costs upgrades for any address that do not require
system-wide forklift equipment upgrades affecting every customer system-wide).
• An average of 30% spare fiber count is available throughout the City for future innovation or
expansion.
These design metrics are different from industry standards because the purpose of the City’s
infrastructure differs from a typical commercial activity. Typical industry investments are geared
towards closed infrastructure that bundles costs to maximize profits. Cities are precluded by state law
from participating in commercial enterprises or charging fees for profit. There is no profit calculated into
the City’s capital investment. Instead, typical public bonding methods and interest rates determine the
fees necessary to recover capital. Because these models rely on the infrastructure being viable beyond
their amortization terms of 20 or 30 years, the architecture and design must emphasize long-term value
over short-term return.
A high-level design was supplied to the City of Eagle by Biarri Networks that identifies 12,580 existing
and 1,500 new development properties to be connected for a total of 14,080. This design provided a
complete bill of materials (BOM) for both materials and labor. This information was used to calculate an
estimated cost of $39,310,589 for a Citywide fiber optic capital improvement that would connect these
existing addresses.
Material costs were calculated using a bill of materials (BOM) that included all the inside and outside
plant materials, electronics, equipment, and other items required to install the improvement based on
actual price quotes from similar projects obtained in Q3 of 2021.
A labor rate analysis estimated a 30 to 40 percent cost savings for a project of this scale when utilizing
City labor and equipment compared to commercial contractor labor rates that were provided in bids for
similar municipal projects in 2021.
Appendix – Feasibility Analysis Page | 28
These results are also supported by the historical experience of other cities, like Ammon and Mountain
Home, Idaho, that are constructing similar projects. In-house labor and equipment rates were used to
calculate the cost estimates for this analysis.
Individual capital recovery fees are calculated by dividing the Citywide total by the total number of
properties connected to the system. This provides the average cost to connect each property. Before
dividing the $39,310,589 project total by the 14,080 properties to be connected, the City’s $6,000,000
ARPA investment is deducted from the common or shared costs of the project so that every property in
the City will benefit from this investment over time. Applying these ARPA funds reduces the project total
to $33,310,589 for a cost of $2,366 per property.
The Effect of Take-Rate
If state law provided true utility treatment for this infrastructure, calculating the amount needed from
the properties monthly to recover the capital costs would be as simple as determining the loan term and
interest rates used to finance the $2,366 per property. If this were the case, the capital recovery portion
for a residential property would be expected to be under $14 per month per property based on the City
utilizing a 20-year bond at a 4.5% interest rate. Achieving this financial performance requires 100%
property participation and results in the lowest possible cost per property.
$0.00 $10.00 $20.00 $30.00 $40.00 $50.00
MIN
MAX
LABOR COST PER FOOT
in-house outsourced
Appendix – Feasibility Analysis Page | 29
As state law does not provide the legal authority to require 100% participation for the City’s existing
properties, projecting a capital recovery fee per participating property will require estimating how many
property owners will request and pay for a fiber optic improvement. Because participation is voluntary
or market-driven, property owners are unlikely to sign-up for services or pay for the installation of a new
connection unless there are service improvements, cost savings, or some combination. Feasibility
models for private commercial operators will typically estimate a 30% take-rate meaning that three (3)
out of ten (10) homes will sign-up for service using the new infrastructure. This superior bandwidth can
be delivered reliably without increasing the consumers’ monthly costs. Take-rates of more than 30%
improve financial performance. Nationally collected data indicates that public open access models
typically achieve a take-rate of more than 50% within five (5) years by providing superior choices in
bandwidth, performance, and reliability, combined with an improvement in overall costs. The cost
improvements will typically include a lower monthly cost for similar bandwidth or improved bandwidth
for a similar or reduced monthly cost. This analysis expects the City to successfully achieve a 60% take-
rate, where six (6) out of ten (10) properties will request and pay for service as construction passes their
property. This performance in take-rate is expected because the City will offer improved bandwidth and
cost reductions. The rapid pace of new development will also fuel this take-rate performance, where
adoption rates of more than 60% should be expected as new occupants will not have the complication
of being tied to existing contracts or ordering a new installation to connect to the City system.
Correctly calculating the monthly user fee necessary for debt service requires separating shared or
common costs from the individual costs incurred from installing a line through the property and the
electronics in a home or business. While individual costs are not incurred for properties that do not
request a connection, all common or shared costs are spread equally across only participating
properties. This makes the take-rate or the number of properties that participate compared to the
number passed with the infrastructure the most significant factor in calculating monthly user fees, as
shown by the graph below.
23,595
24,674
25,754
26,833
27,913
28,992
30,072
31,151
32,231
33,311
16,758
8,762
6,097
4,764
3,965
3,432
3,051
2,766
2,543
2,366
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
THE EFFECT OF TAKE RATE ON COSTS
INDIVIDUAL COSTS IN THOUSANDS TOTAL PROJECT COST IN MILLIONS
Appendix – Feasibility Analysis Page | 30
Higher levels of participation will increase the total project cost but decrease individual costs as the
shared common costs are distributed among more participants, as shown. The estimated total project
cost to install fiber Citywide if six (6) out of ten (10) properties participate (60%) is just under $29
million, as shown, while the individual costs drop to $3,432 per participating property. Municipal bond
rates would be expected to provide a 20-year amortization at a rate of 4.5% resulting in an estimated
monthly cost of $22 per participating property. A small percentage should be added to this base amount
to mitigate any model variability, given these costs are averaged, that commercial installations typically
cost more than residential installations, and that successful bond issuance will require the collection of a
fee capable of mitigating the variability associated with the model.
This analysis shows that a $25 monthly fee for residential capital recovery and a $27.50 monthly fee for
commercial capital recovery would be sufficient. These amounts also align with the capital recovery
rates used by other open access operators like UTOPIA, which charges a $30 monthly infrastructure fee
for residential service, and Idaho Falls, Idaho, which charges a $25 monthly fee for residential service.
Reserve Fund
The reserve fund is primarily created to provide the funding required to change and upgrade the
electronic equipment used in the fiber optic system. The fiber optic cable has completely different
performance metrics and estimated lifespans compared to the electronics that send the light signals
down the fiber strands. For this reason, the costs associated with maintaining the fiber cable, duct, and
vaults are maintained as a separate function labeled “Infrastructure Maintenance” in this analysis.
The total cost for electronics at a 60% take-rate is estimated to be $3,081,949.93. If new equipment has
a three (3) year manufacturer’s warranty, no funding should be required for the first three (3) years of
any equipment’s operation. Assuming an annual failure rate of 10% per year and a projected lifespan of
ten (10) years for equipment will result in a yearly average annual cost of $308,195. Assuming a take-
rate of 60% (8,456 subscribers) and setting a monthly fee of $5.00 per month will result in collecting
$507,360 to fund this need annually. Overfunding this reserve will be important to support the costs
associated with infrastructure improvements, including bandwidth and reliability improvements, as well
as supporting the temporary deficits incurred by new development when the City’s portion of the
infrastructure has been installed but no connect fee has been collected.
This analysis shows that a $5 monthly fee from residential customers and a $7.50 monthly fee from
commercial customers would be sufficient to fund an adequate reserve over time. These amounts also
align with the capital recovery rates used by other open access operators like UTOPIA, which charges a
$30 monthly infrastructure fee, a portion of which is used to fund a reserve.
Operations and Technical Support
True open access models separate the infrastructure from the service by providing one cost for
infrastructure agnostic to the services offered or consumed and a separate cost charged directly to the
consumer for each subscribed service by the provider. This effectively provides choice and competition
without requiring the financial support necessary to build, maintain, and operate multiple digital
infrastructures resulting in lower costs and better performance for all stakeholders.
Appendix – Feasibility Analysis Page | 31
Because the City has set forth a requirement for open access functionality and expressed a desire to use
automation to reduce costs and improve the customer experience, the costs provided in this analysis
are based on the current market rates charged for open access automation and support by third-parties.
This analysis shows that a $5 monthly fee from residential customers and a $7.50 monthly fee from
commercial customers would be sufficient to fund a third-party to provide an automated open access
software platform and customer support for service providers. These amounts are based on actual costs
being charged for these services by providers today.
Infrastructure Maintenance
Infrastructure maintenance is paid to the City to keep the fiber cable, duct, and vaults all in good repair.
In considering these costs, this analysis must determine what the projected lifespan of the fiber itself
might be.
Single-mode fiber optic strands were first installed in production environments starting around 1975.
Many early installations are still in use, well over 40 years later. Since then, fiber cables have only
improved as manufacturers have improved their techniques. Today’s fibers are nearly perfect and are
expected to last even longer than fibers made thirty or forty years ago. Material scientists have created
models to predict how long fiber should be expected to last. These studies show that properly installed
fiber has a failure rate of 1 in 100,000 per kilometer per year between years 20 and 40 after installation.
This means that the fiber installation contemplated in this analysis should easily last forty years and far
beyond. These same studies show that the chances of buried fiber being cut are 1 in 1,000 per kilometer
per year. This means it is 100 times more likely for a fiber to be cut than to have it naturally fail. These
statistics prove that damages from fiber cuts and the resulting weaknesses created by the repair splices
are a far larger threat than any known lifespan or degradation of the fiber over time.
For these reasons, this analysis only contemplates funding the workforce and materials necessary to
maintain operations each day of the year. The skillset and hours required to support infrastructure
maintenance could be pulled from the construction workforce as needed with the funding required for
labor and materials to provide infrastructure maintenance from the fees collected as a part of the
monthly utility rates for the fiber optic department. Once construction is complete, the City will not
have to retain the workforce. Still, it should select employees with the proper skillsets and work ethic
required to support ongoing operations.
This analysis shows that a $10 monthly fee from residential customers and a $12.50 monthly fee from
commercial customers would provide $1,089,792 annually based on a 60% take-rate and if 30% of all
customers are business customers. Rough estimates indicate that a workforce of five (5) full-time
employees (FTEs) would be sufficient to meet ongoing infrastructure maintenance needs. These
positions could include two (2) plant technicians, two (2) network specialists, and an administrator.
Annual fully burdened rate totals would be at most $500,000 for this workforce. Operational overhead,
including office space, vehicles, fuel, and maintenance equipment, would not be expected to exceed
$200,000 per year for a total of $700,000 per year, well under the revenue provided by the fee rate and
leaving the remaining $208,160 to be used to purchase the materials required to repair physical damage
to the infrastructure or carried over as a reserve to protect against potential future damage or needs.
Appendix – Feasibility Analysis Page | 32
Potential Revenue from Other Sources
The City should be prepared to respond to requests to access the municipal fiber system for uses
outside of utility operations. Requests to lease some dark fiber strands or for specifically dedicated
circuits separate from open access utility operations may be requested by third-parties or property
owners in need of specific service level agreements (SLAs) that don’t align with the service level outlined
in the City ordinance, resolution, or policy. For example, wireless providers may desire to use the City
fiber asset for backhaul but require that their equipment be the only equipment used to light and
operate the circuit or link due to specific needs such as the protocols used to provide service, alarm, and
notify the wireless operator of an outage. Community anchor institutions may desire the City to
purchase separate equipment from the equipment used to create the open access environment to
establish a physical separation between the utility system and their operations to better support specific
security and performance metrics that might fall outside the utility system’s ability to provide.
These requests represent an opportunity to support additional community needs. The City could
provide them based on the availability of the required fiber strands and colocation space. The City fiber
optic ordinance, fee resolutions, and policy should reflect this possibility by clearly stating that the use
of the City’s fiber asset outside of standard utility operations is allowed based on availability and
payment of a fee for such use as negotiated by fiber department administration and approved by
Council. Because these revenues are expected to be minimal compared to utility fee revenues and are
typically based on cost recovery for each specific situation, they are not considered a part of this
analysis.
Digital Services
The separation provided by the open access model primarily contemplated in this analysis requires that
commercial service providers deliver the retail services provided to the properties using the City’s
infrastructure. It should be noted that this model requires a subscriber to pay a retail service provider
directly for the service and to also pay the City’s monthly utility fee for access to and use of the City’s
fiber optic infrastructure. The retail service most desired by business and residential subscribers is
broadband internet access. Monthly residential rates for broadband internet access range from under
$5 to $25 per month, depending on the provider and bandwidth subscription. Business rates vary based
on the business type and use case. Phone service and channelized video content could also be provided
using voice over internet protocol (VoIP) or internet protocol television (IPTV) standards as requested by
the providers and subscribers. These additional costs will bring the total monthly cost for retail
broadband internet service of one (1) gigabit into a range of $55 to $70 per month, which represents a
lower cost, better performance, and better value overall for the service in comparison with the currently
available options.
New Development
This analysis recommends that new development be a strategic priority for the City. Implementing
policies to assure the City’s fiber optic infrastructure is installed as a routine part of development as
quickly as possible is critical because the cost to install the infrastructure at the time of development
(greenfield) is roughly 40% of the cost associated with installing it after development construction is
complete (brownfield). This cost savings is achievable because the City’s fiber optic infrastructure can be
installed in trenches already opened for other dry utilities like power and gas. A legal requirement for
new developments to install fiber ducts and vaults as required by the City should be established in
ordinances, resolutions, and policies as soon as possible. Something similar requiring building
Appendix – Feasibility Analysis Page | 33
contractors to install fiber ducts to an interior location capable of supporting the termination of City
fiber equipment within the property should also be legally established as soon as possible. This will
effectively result in dramatic cost savings for these installations and provide a path for the City to install
fiber to each address within the development, just as it does with the City water utility.
A connection fee should be charged at the time of building permit issuance just as a connection fee is
charged to connect to the City water system because the City will have some costs associated with
installing the fiber cable in the ducts and vaults provided by the developer and builder and connecting
these additional properties to the existing system,
The basis for such a fee can be calculated using the costs derived from the Citywide high-level
engineering analysis. Separating the costs for the fiber duct and vaults, including installation labor, while
leaving the costs associated with purchasing and installing the fiber cable and electronics, including
splicing and termination, results in an estimated cost to the City of $1,195 per residential lot. Additional
incremental costs will likely be associated with development phasing and construction coordination. The
City should also be aware that some costs will be incurred before the connect fees are paid, effectively
creating a draw on reserves by new development, like the drawdowns experienced by the water utility
for new development.
The City will need to adequately plan for growth. This may require a developer to dedicate a parcel
within the development to the city for use by the City fiber utility. Site improvements may also need to
be shared by the developer based on the specific circumstances of the development.
This analysis recommends a residential connection fee of $1,450 and a commercial connection fee of
$1,950. These fees are based on the actual costs incurred by the City utility to provide fiber access to
the properties in a new development.
Local Improvement Districts
The authority for a City to create a local improvement district (LID) is established in title 50, chapter 17
of the Idaho Statutes. A LID is a temporary geographic entity created by the City to install and fund an
improvement for private property owners within the district boundaries. LID authorities include the
ability to finance the design and construction of improvements such as pressurized irrigation, sewer,
domestic water, sidewalks, curbs, gutters, and fiber optics. At the end of construction, through a formal
public process, property owners who have received an improvement are notified and have an
opportunity to pay their assessment or allow it to be placed as a lien against their property and paid for
over time via a municipal bond. It is important to note that the use of a LID, as considered in this plan, is
limited to an “opt-in” model, which means that a property owner must request an improvement or
“opt-in” to participate. In this model, there is no cost or assessment to
properties that do not participate or ask to receive an installation. This model provides property owners
with an economical way to pay the hookup or construction costs of installing or upgrading various
utilities and/or infrastructure. It is important to note that it also protects the City from financial risk as
the costs are distributed to the property owners. The law protects the City from liability in the event of
default on the part of a property owner.
Appendix – Feasibility Analysis Page | 34
Total Projected Revenue
Revenue to the City from the utility fees recommended as a part of this analysis would be expected to total
$4,866,048 annually based on a 60% take-rate. These fee rates can produce the necessary financial
performance based on the estimated take-rate and compare favorably with industry-standard costs. With
approximately $2,536,800 going to capital recovery and $507,360 going to a third-party to support operations,
approximately $1,821,888 will be left annually to support the City’s operational needs and build a reserve fund.
52%
10%
38%
$4,866,048 PROJECTED ANNUAL REVENUE
AT SCALE
Debt Service:
$2,536,800
Third Party
Support: $507,360
City Operations:
$1,821,888
Appendix – Risk Assessment Page | 35
Risk Assessment
The City seeks to understand the primary risks of building and operating a municipal fiber optic network and to
actively manage those risks not only during construction but also on an ongoing basis during network
operations.
The following is an analysis of the main risk factors facing the City of Preston if it pursues its fiber-to-the-
premise deployment. Ten risk factors are identified:
1. Take-Rate Risk
2. Subscriber Churn Risk
3. Project Execution Risk
4. Equipment and Technology Risk
5. Community Engagement Risk
Take-Rate Risk
Take-Rate Risk (demand risk) is the risk that the City builds out the network and ends up with a take-rate that is
lower than expected.
Likelihood: Take-rate risk is an important risk factor and is a function of the value proposition of the
network and how well that value proposition gets communicated and managed before, during, and after
construction. High take-rates lead to lower network costs for subscribers. This creates a virtuous cycle
where lower costs lead to higher take rates. The reverse is also true.
Impact: Positive take-rates and performance will compound to the benefit of all stakeholders. Negative
take -rates lead to higher costs and churn which create a negative spiral that compounds until the
network is not sustainable.
Mitigation: To mitigate take-rate risk, demand aggregation must be managed before, during, and after
construction and give consumers a value proposition that makes them voluntarily committed to the
network infrastructure.
Subscriber Churn Risk
Subscriber Churn is the risk that customers sign up and then do not remain subscribers to the network.
Likelihood: Today, customers are primarily motivated by cost, speed, and customer service. Churn is
possible and is a consequence of customers pursuing an option to get better value from an alternative
solution. The likelihood of churn is higher if a new market solution simply replicates the incumbent
model.
6. Cost Modeling Risk
7. Timeline Risk
8. Regulatory Risk
9. Middle Mile Risk
10. Pole Attachment & Make-Ready Risk
Appendix – Risk Assessment Page | 36
Impact: The impact of churn on the network is potentially catastrophic if it reaches a level where the
capital and operational cost abandoned infrastructure cannot reasonably be shared by remaining
subscribers.
Mitigation: The risk of churn goes down under a business model where 1) the customer connection is
treated as an improvement to the property and 2) the value proposition is strong enough to make the
customer committed to the network.
Project Execution Risk
Project Execution includes strategy, planning, project management and fulfillment of the project plan and
operational execution.
Likelihood: Project execution failure is possible and is a function of the effectiveness of project planning,
management, controls, and execution.
Impact: The severity of impact is in proportion to the effectiveness of project management and
execution. A worst-case scenario is one where project execution affects the value proposition, which in
turn affects take-rate and churn.
Mitigation: This risk is reduced by hiring or partnering with skilled project managers and key strategic
partners and creating alignment among key team members on the project and operational plans.
Further, it is important to develop project controls that are monitored and reported to senior leadership
monthly.
Equipment & Technology Risk
Equipment & Technology Risk includes software and hardware solutions and is the risk that equipment failure
rates are higher than expected, major software bugs are unresolved, operational reliability is lower than
expected, and/or that the technology lifecycle leads to faster obsolescence than is expected. An additional risk
is scalability risk for a network the size of Eagle.
Likelihood: Solutions with short deployment histories, unreliable references, unclear quality assurance
and test procedures, weak professional teams, and poorly architected scalability abstractions present
increased equipment and technology risk.
Impact: The impact of this risk category is moderate because it is possible to vet both software and
hardware systems to assess this risk. The base technology of the network will be fiber optic cable and
that has sufficient history to present a minor risk to the project. Remaining risks include electronics and
software systems.
Mitigation: Implement thorough due diligence processes with trained professionals to scrutinize
references, architecture, software abstractions, quality control systems and the professional histories of
vendors being considered.
Appendix – Risk Assessment Page | 37
Community Engagement Risk
Community Engagement Risk includes the marketing, education, and communication processes and strategies
used to inform residents and businesses about the value proposition offered by the network.
Likelihood: Community engagement risk is possible but something that can be managed and monitored
through proactive engagement. Poor planning, management and execution increases the level of risk.
Community engagement can be handled by internal City staff. However, the risk increases if staff
member resources are inadequate for a project of this size. There are external marketing professionals
available to assist with the community engagement processes.
Impact: Community engagement is a key driver of project success due to the relationship between
community engagement and take-rate.
Mitigation: Leverage the skills of marketing professionals and provide sufficient resources to make it
easy for residents to learn the basic value proposition through a variety of education and
communication strategies.
Cost Modeling Risk
Cost Modeling Risk is the risk that the financial modeling performed significantly misstates actual design,
construction, and/or operational costs.
Likelihood: There is enough industry data to reasonably validate cost estimates. However, there is
significant market volatility currently due to supply chain disruptions and labor supply pressures.
Impact: Cost overruns can have a meaningful impact on network construction and sustainability.
Mitigation: Risk is reduced by validating financial assumptions against industry assumptions, market
conditions, and accounting for local economic variables.
Timeline Risk
The benefits of building the network at an accelerated pace and include the following:
1. Each phase requires legal, financing, and accounting transaction costs. Building the network with fewer
phases will lower the overall transaction costs for the project.
2. Building at a faster pace will result in an accelerated time to break-even.
3. An accelerated timeline reduces the potential for unexpected movement in interest rates.
Likelihood: Costs are likely to be higher for an extended buildout period. However, there may be
execution risk exposure for accelerating the buildout, depending on the experience and capacity of the
construction partner.
Impact: Costs will be incrementally higher for an extended buildout schedule and maintenance and
operations will have a longer ramp to sustainability.
Appendix – Risk Assessment Page | 38
Mitigation: The City can manage the buildout schedule following a cost/benefit analysis of the options.
An important consideration is alignment with construction partners. If the City is going to outsource
construction, it should consult with potential construction partners about the alternative construction
schedules to make sure that the City’s strategy is amenable to key construction partners.
Regulatory Risk
Regulatory Risk is when state or federal regulations impede the City from successfully building or operating a
municipal network. EntryPoint has not sought a separate legal opinion but can comment on regulatory risk
based on industry experience in Idaho and nationally.
There is no federal regulatory barrier to the model contemplated by the City of Eagle. There is also no clear
prohibition or authority contained in Idaho State Law. Instead, there is implied authority under the police
powers provided in the statute. Additionally, numerous Idaho public entities have successfully funded, built,
and now operate digital infrastructure under models like the one contemplated by the City of Eagle. As part of
the planning process, the City of Eagle has obtained specific legal memos to mitigate the regulatory risk
associated with funding, constructing, and operating a digital infrastructure.
Likelihood: Historically, incumbent operators have taken legal action to stop several municipalities from
building a competing network whenever they have a legal basis. Our interpretation is that there is a
legal basis for Eagle to build this infrastructure, as summarized above.
Impact: If a claim were to be brought against Eagle, it could take extensive time and cost to contest or
appeal the claim—but this is unlikely.
Mitigation: Any implementation that falls outside the legal memos obtained as part of the planning
process should be subject to legal review in a memo.
Middle Mile Risk
Middle Mile risks include the following:
1) Lack of redundant options on divergent paths
2) Pricing risk – the cost of connecting to middle mile carriers
3) The risk of being stranded or isolated without a viable path to an internet exchange point
Likelihood: Eagle will likely have multiple middle mile paths back to an internet exchange point in Boise.
Impact: The middle mile risks listed above could have a significant impact on network success but all of
them have a low likelihood of occurring because of Eagle’s location.
Mitigation: The City can mitigate and possibly eliminate middle mile risk by building redundancy to the
network by having multiple backhaul providers or multiple independent paths back to the Boise internet
exchange point.
Appendix – Risk Assessment Page | 39
Pole Attachment & Make-Ready Risk
This is the risk that pole owners cause unexpected and significant impact on costs or timeline due to delays in
make-ready and pole attachment work.
Likelihood: Because Eagle plans to bury all or most of its network, this risk is limited to any area where
the City deploys on utility poles. If poles are used, some may need replacement or repair.
Impact: Make-ready work for pole attachment can have a meaningful impact on costs and timeline if the
pole owners are non-responsive or want the city to replace old poles.
Mitigation: A buried network has many long-term maintenance advantages and is the primary strategy
for Eagle.
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Appendix – Community Engagement Page | 41
Community Engagement
Evaluation & Education
Document the current state of broadband and determine the level of interest among residential users and
business owners.
Community Survey
Residents and business owners were surveyed to determine the level of interest in a municipal fiber
network. Education and promotion programs should be influenced by ongoing survey engagement and
response. A complete copy of the community survey can be found on page 45.
Publish Educational Information
Leverage website content specific to the municipal fiber program to outline the core message of
broadband as a utility lower cost, increase choice and subscriber control, and foster digital inclusion.
Use customized videos to educate online visitors on the following:
a. Functionality of the community fiber network
b. Options for services
c. Frequently Asked Questions (FAQ)
Mapping Community Interest
Distribute an “I am interested” sign-up form with an associated heat map where residential and business
property owners can register as someone interested in municipal fiber.
Marketing & Promotion
Utilize press releases and utility bill inserts to promote the municipal fiber program, driving traffic to the
fiber website to educate community members, generate interest, and encourage community
participation.
Use all available social media platforms (e.g., Facebook, Instagram, Twitter) to promote the fiber
network.
Neighborhood Entrance and Yard Signs
As construction (fiber build) begins in a neighborhood, Eagle can post signs at neighborhood entrances
announcing the construction and letting residents know they can still sign-up to get connected while
crews are in the neighborhood.
As homes are connected in the neighborhood, yard signs are placed in the yards of subscribers,
indicating that the home now enjoys a fiber broadband connection.
Appendix – Community Engagement Page | 42
Grassroots Engagement
Webinars & Open House Events
Eagle can use webinars and open house events to educate residents and business owners about the
fiber project, ask questions and become educated about the business model, infrastructure, and costs.
Webinars and open houses are promoted using utility bill inserts, press releases, public service
announcements, local news reports, City websites, social media platforms, and more.
Webinars and open house events are intended to educate residents, promote the network, and identify
fiber champions in the various neighborhoods (fiber zones).
Fiber Champions
Fiber champions are individuals that demonstrate a voluntary commitment to promoting the network
within their neighborhood. Fiber champions may be incentivized by the practice of building in those
neighborhoods that have the highest level of engagement or demand (initial fiber zones are connected
in order of take-rates – highest to lowest). Fiber champions assist sign-up efforts within their designated
neighborhood (fiber zone). They organize and lead neighborhood meetings where neighbors can learn
about the Eagle fiber program. Eagle leaders and employees provide support to the fiber champions in
their efforts. Fiber champions drive conversations and contractual commitments of neighbors via the
door-to-door sales and education campaign.
Door-to-Door Campaign
Individuals (possibly college students from CSU) representing the network contact residents and
business operators within the planned footprint to answer questions and ascertain the potential
subscribers’ interest in participating. [Yes (Opt-in) or No (Opt-out)].
This direct person-to-person contact allows everyone in the community an opportunity to ask questions,
clarify understanding, and express interest in participating.
To maximize the effectiveness of this process, door hangers are distributed to every home and business
before canvassing a neighborhood. These inform property owners that a representative will be stopping
by to explain the value proposition, answer questions, and determine the level of interest from potential
subscribers.
Door-to-door campaigns are very effective in giving people an opportunity to learn and ask questions in
a one-on-one interaction.
It is important to support this effort with public notifications, press releases, mass emails, websites,
social media sites, mobile applications, and other community outreach venues. This may include outside
professional marketing or public relations firms.
Commissions for a door-to-door campaign can be funded by a sign-up fee or wrapped into the
infrastructure installation cost.
Appendix – Community Engagement Page | 43
Community Resources
A Citywide broadband project creates an opportunity to collaborate with business students and faculty
at universities and colleges. University students can be effective representatives for an Eagle network
and gain real-world marketing and business experience.
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Appendix – Eagle Broadband Survey Results Page | 45
Eagle Broadband Survey Results
The Consumer Reports nationally representative multi-mode survey of 2,565 adults administered by NORC at
the University of Chicago in June 2021 as referenced in this report can be downloaded in its entirety at the
following link:
Source: https://advocacy.consumerreports.org/wp-content/uploads/2021/08/CR_Broadband-Survey_8_2021_VF.pdf
The City of Eagle surveyed residents and business operators to assess the sentiment regarding existing internet
services and the level of support for a municipal fiber network. Professional survey administrators did not
develop the survey. Key findings from the survey include the following:
Total Responses 1,119
Respondent Designation 1,054 Residential 94.95% 56 Commercial 5.05%
Primary Use of Internet 932 Email 83.29% 922 Entertainment 82.39% 842 Shopping 75.25% 756 Work 67.56% 649 Social Media 58.00% 344 School 30.74% 291 Gaming 26.01% 277 Business 24.75% 95 Other 8.49%
Current Internet Access 1,063 Fixed Wire Connection 95.00% 50 Cellular Connection Only 4.47% 6 Do Not Have Internet 0.54%
Type of Internet Connection 309 DSL (CenturyLink) 29.37% 649 Cable (Sparklight / Cable One) 61.69% 67 Fiber 6.37% 4 Satellite 0.38% 7 Other 0.67% 16 Don't Know 1.52%
Current Internet Reliability 83 Poor 9.49% 175 Fair 20.00% 273 Good 31.20% 229 Very Good 26.17% 111 Excellent 12.69% 4 No Internet 0.46%
258 Poor/Fair 29.49%
Current Internet Speed 118 Poor 13.49% 219 Fair 25.03%
And the Survey
Says...
Appendix – Eagle Broadband Survey Results Page | 46
256 Good 29.26% 188 Very Good 21.49% 90 Excellent 10.29% 4 No Internet 0.46%
337 Poor/Fair 38.52%
Current Internet Affordability 226 Poor 25.83% 353 Fair 40.34% 183 Good 20.91% 74 Very Good 8.46% 35 Excellent 4.00% 4 No Internet 0.46%
579 Poor/Fair 66.17%
Average Monthly Cost of Internet 823 Residential $86.24 46 Commercial $158.02
Affordable Residential Internet 20 $0 - $20 2.29% 178 $21 - $40 20.34% 363 $41 - $60 41.49% 179 $61 - $80 20.46% 86 $81 - $100 9.83% 30 $101 - $120 3.43% 11 $121 - $140 1.26% 8 $140+ 0.90%
Support City-Sponsored Broadband 601 Yes 68.69% 238 Possibly 27.20% 36 No Internet 4.11%
839 Yes/Possibly 95.89%
Appendix – Comparison of Available Media Page | 47
Comparison of Available Media
Today's primary media used for internet access in the United States includes DSL, coaxial cable, wireless, and
fiber optic cable.
DSL stands for digital subscriber line, and it is one of the technologies used to provide internet connectivity to
homes and businesses. DSL uses existing telephone lines and a transceiver or modem to bring a connection into
a home or business and allows the household to use the internet and make telephone calls simultaneously.
AT&T is the incumbent telephone company in Eagle and uses DSL technology. DSL is asymmetrical (the
download speed is much faster than the upload speed) and is a dedicated connection capable of download
speeds up to 100 Mbps depending on the DSL standard, copper line age, and distance. Most consumers are
accessing the internet via DSL experience speeds between 5 – 25 Mbps.
Coaxial Cable uses copper cable designed with one physical channel that carries the signal surrounded by a
layer of insulation and then another physical channel, both running along the same axis—hence the coaxial
name. Coaxial cable is asymmetrical and shared between up to 200 customers or more. The most recent cable
standard of DOCSIS 4.0 can provide up to 10 Gbps in shared bandwidth depending on supported standards and
other environmental factors. The standard implemented in Eagle is 3.1, and the maximum speed available is
940 Mbps. In addition to the limitation of sharing among many customers, another limitation of coaxial
infrastructure is that the signal begins to degrade after 300-400 feet.
Fiber Optic Cable sends information down strands of glass known as optical fibers, which are less than the size
of a human hair. These fiber optic strands can transmit 25 Tbps today. Researchers have successfully
demonstrated a transmission experiment over 1045 km with a data rate of 156 Tbps. Fiber optic cables carry
information between two places using optical (light-based) technologies, which convert electrical information
from the computer into a series of light pulses. Fiber optic cable is capable of symmetrical speeds up to 25
Tbps, and the signal can travel as far as 60 kilometers, approximately 37 miles, without degrading. Fiber optic
infrastructure is also less expensive to deploy than any other existing wireline infrastructure. Because the
difference in capacity between fiber optics and alternative media is so significant, fiber optics should be the
foundational media for any new broadband infrastructure project when financially feasible.
Appendix – Comparison of Available Media Page | 48
Wireless internet access is made possible via radio waves communicated to a person's home computer, laptop,
smartphone, or similar mobile device. Wireless internet can be accessed directly through AT&T Wireless,
Verizon Wireless, T-Mobile, or by a wireless internet service provider (WISP).
5G is the fifth generation of technology used in cellular networks and refers to a standard for speed and
connection. Because of the extensive marketing around the emergence of 5G, many people wonder whether
5G will replace fiber optic cables. 5G depends on fiber optic infrastructure. All wireless technologies work better
the faster they get back to fiber optics. 5G is not broadcast on a single frequency. There are several frequencies
used by 5G networks, which have different advantages and disadvantages—depending on the application.
• Low-band 5G operates between 600-850 MHz. This is only moderately faster than 4G with speeds
between 50-250 Mbps and offers similar coverage areas for each cell tower.
• Mid-band 5G operates in the 2.5-3.7 GHz range and delivers speeds between 100-900 Mbps. While
offering less range per cell tower, this type of 5G will be the most common implementation of 5G
networks for many years. It is a compromise between network speed and range in both medium-density
urban areas and less dense rural regions.
• High-band 5G is the band that is most associated with 5G. Operating at 25-39 GHz, this is known as the
"millimeter wave" spectrum and delivers gigabit speeds (currently tested as high as 3 Gbps). The
millimeter wave transmitters have a very limited range and require the deployment of many small
transmitters. Each transmitter connects to fiber optics.
Source: What frequency is 5G? Here’s what you need to know about the high-speed cellular network generation and its range of
frequencies
Satellite internet is a wireless internet connection that is available nearly everywhere in the United States.
While it is relatively slow in comparison to cable or fiber optic connections, satellite internet access is faster
than some DSL options. This makes it a good option for some rural premises.
Satellite internet speeds range from 1 Mbps – 100 Mbps for download speeds and it is common to have latency
and packet loss issues because the signal must travel to space and back. Satellite internet providers include
HughesNet, ViaSat, and Starlink. These providers DO NOT promote themselves as a solution for suburban or
metro areas.
Satellite internet does require special equipment, including a satellite dish that connects to a communication
satellite in space.
Wi-Fi is common in homes and commercial buildings and is a way to deliver a network connection from a
network hub over a wired connection to wireless devices via a wireless access point. Most people access the
internet over a wireless connection, but it is important to remember that wireless connectivity ultimately
depends on a wired connection and wireless access works best the faster it gets back to a wire.
Appendix – Comparison of Available Media Page | 49
Upload vs Download Speeds
In addition to the fact that fiber optic cable will offer exponentially greater bandwidth than DSL and coaxial
cable, fiber optic cable also offers the ability to deliver symmetrical speeds. In an asymmetrical connection, the
download speeds are much faster than upload speeds.
Upload speed is the amount of data a person can send in one second, and download speed is the amount of
data a person can receive in one second. Upload speeds can be especially important for businesses, including
home-based businesses or people who work from home. Applications that depend on good upload speeds
include sending large files, cloud applications like Microsoft 365/One Drive, Google Docs, Dropbox, VoIP,
FaceTime, Skype, Microsoft Teams video, Zoom, WebEx, hard drive backups, and in-house web hosting.
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Appendix – Market Analysis Page | 51
Market Analysis
Incumbent Offers and Pricing
In Eagle, most residents and businesses subscribe to wireline internet services from the cable operator
(Sparklight) and telephone incumbent (CenturyLink).
Sparklight
Sparklight advertises the following residential ISP services in Eagle:
Speed (Mbps)
[Down / Up]
6 Month Rate
[Contract Required]
Standard Pricing
[+ Taxes and Fees]
Data
Caps
Install
[Fee]
100 / 10 $45.00 $55.00 350 GB TBD
200 / 20 N/A $65.00 700 GB TBD
300 / 30 N/A $80.00 1200 GB TDB
1000 / 50 N/A $125.00 1500 GB TBD
Taxes and fees often represent an additional (20%-30%) of standard pricing.
Shared Network – Speeds are “up to” and are not guaranteed.
Speeds are not symmetrical.
Modem with Wi-Fi – $10.50 per month.
Availability depends upon location – not available in all areas.
CenturyLink
CenturyLink advertises the following residential services in Eagle:
Speed
[Down / Up]
Standard Pricing
[+ Taxes and Fees]
Install
[Fee]
3 Mbps / .5 Mbps $50.00 Self-Install
15 Mbps / .75 Mbps $50.00 Self-Install
30 Mbps / 1.5 Mbps $50.00 $99.00
60 Mbps / 5 Mbps $50.00 Self-Install
100 Mbps / 10 Mbps $50.00 $99.00
940 Mbps / 50 Mbps $65.00 Included
Taxes and fees often represent an additional (10%-15%) of standard pricing.
Speeds are “up to” and are not guaranteed.
Speeds are not symmetrical.
Modem with Wi-Fi – $15.00 per month.
Availability depends upon location – not available in all areas.
Internet
[Billings]
Speed (Mbps)
[Down / Up]
$80.00 150 / 5
$65.00 200 / 20
$91.13 300 / 30
$75.00 1000 / 50
Internet
[Billings]
Speed (Mbps)
[Down / Up]
No Data No Data
$59.00 15 / 3
$55.00 40 / 5
No Data No Data
No Data No Data
No Data No Data
Information in the table above is from Sparklight’s website. Data from Sparklight
Information in the table above is from CenturyLink’s website. Data from CenturyLink bills.
Appendix – Market Analysis Page | 52
Sparklight Business
Sparklight advertises the following business ISP services in Eagle:
Speed (Mbps)
[Down / Up]
Promo Pricing
[3 months rate]
Standard Pricing
[+ Taxes and Fees]
Install
[Fee]
25 / 10 Not Disclosed Not Disclosed TBD
50 / 5 Not Disclosed Not Disclosed TBD
150 / 15 Not Disclosed Not Disclosed TBD
300 / 30 Not Disclosed Not Disclosed TBD
1000 / 50 Not Disclosed Not Disclosed TBD
Taxes and fees often represent an additional (20%-30%) of standard pricing.
Shared Network – Speeds are “up to” and are not guaranteed.
Speeds are not symmetrical.
Availability depends upon location – not available in all areas.
CenturyLink Business
CenturyLink advertises the following DSL business ISP services in Eagle:
Speed
[Down / Up]
Standard Pricing
[+ Taxes and Fees]
Install
[Fee]
1.5 Mbps / .5 Mbps $50.00 Self-Install
15 Mbps / .75 Mbps $50.00 Self-Install
40 Mbps / 3 Mbps $50.00 Self-Install
60 Mbps / 5 Mbps $50.00 Self-Install
80 Mbps / 10 Mbps $50.00 $99.00
100 Mbps / 10 Mbps $50.00 Self-Install
Taxes and fees often represent an additional (10%-15%) of standard pricing.
Speeds are not symmetrical.
Modem with Wi-Fi – $15.00 per month.
Availability depends upon location – not available in all areas.
Note: Market research conducted in December 2021 / January 2022.
Internet
[Billings]
Speed (Mbps)
[Down / Up]
No Data No Data
$75.00 50 / 5
$91.72 No Data
$129.90 No Data
No Data No Data
Internet
[Billings]
Double Play
[Billings]
No Data No Data
No Data No Data
No Data No Data
No Data No Data
No Data No Data
No Data No Data
Information in the table above is from Sparklight’s website.
Information in the table above is from CenturyLink’s website. Data from CenturyLink bills.
Data from Sparklight bills.
Appendix – Market Analysis Page | 53
Speed Test Data
M-Lab is a research consortium that provides open data from speed tests across the United States. Academic,
scientific, and public interest research organizations rely on M-Lab's open data. Every time an individual runs a
speed test through an open-source integration of M-Lab's tools, the data is saved in Cloud Storage hosted by
Google and made available to the public via BigQuery. The data below is the speed test results in the City of
Eagle from January 1, 2022, to December 31, 2022. The sample size for this 12-month period includes 205,008
speed tests.
The average speed delivered by Sparklight (CableOne) in Eagle is 92.17 Mbps download/11.3 Mbps upload.
CenturyLink’s average speed in Eagle is 32.56 Mbps download/7.62 Mbps upload. Syringa Networks delivers
average speeds of 111.03 Mbps download/49.09 Mbps upload in Eagle.
Appendix – Market Analysis Page | 54
Appendix – Network Architecture Page | 55
Network Architecture
The two main network designs are switched (active) ethernet and passive optical networks (PON). The key
difference between these two models is that PON is a shared infrastructure (32, 64, or 128 neighbors share a
connection), and ethernet gives subscribers their connection. Eagle is deploying a switched ethernet
architecture to improve reliability, avoid vendor lock-in, and facilitate network automation.
Switched Ethernet Network
The switched ethernet architecture provides a dedicated connection for each customer rather than a shared
connection. The customer experience is significantly better than in a shared architecture during periods of
network congestion because the throughput of a switch-based architecture is superior to a shared architecture
during network congestion.
Passive Optical Network (PON)
Passive optical networks (PON) use time division multiplexing (TDM) technologies to create a bus or shared
architecture with performance like coaxial cable installations. In a PON network, splitters are placed in the field,
and a single fiber connection is shared between 32, 64, or 128 premises. This shared architecture may result in
packet loss during periods of peak usage. Additionally, upgrading individual connections relies on complicated
vendor-specific solutions if possible. The topology can also make it more difficult to isolate and troubleshoot
faults in a PON network. PON equipment suppliers also use proprietary management platforms to establish
long-term vendor lock-in.
Proponents of PON architecture will argue that PON is less expensive than an ethernet design. That was true
historically. This change in pricing differences was driven by the fact that all data center deployments use
switched ethernet architectures. The enormous growth of data centers over the past 20 years has driven down
the cost of ethernet electronics.
Network Segments – Definitions & Costs Allocations
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Appendix – Funding Opportunities Page | 57
Funding Opportunities
The LID Process
The authority for a City to create a local improvement district (LID) is established in title 50, chapter 17 of the
Idaho Statutes. A LID is a temporary geographic entity created by the City to install and fund an improvement
for private property owners within the district boundaries. LID authorities include the ability to finance the
design and construction of improvements such as pressurized irrigation, sewer, domestic water, sidewalks,
curbs, gutters, and fiber optics. At the end of construction, through a formal public process, property owners
who have received an improvement are notified and have an opportunity to pay their assessment or allow it to
be placed as a lien against their property and paid for over time via a municipal bond. It is important to note
that the use of a LID, as considered in this plan, is limited to an “opt-in” model, which means that a property
owner must request an improvement or “opt-in” to participate. In this model, there is no cost or assessment to
properties that do not participate or ask to receive an installation. This model provides property owners with an
economical way to pay the hookup or construction costs of installing or upgrading various utilities and/or
infrastructure. It is important to note that it also protects the City from financial risk as the costs are distributed
to the property owners. The law protects the City from liability in the event of default on the part of a property
owner.
Recommended First Steps
The City should determine the level of interest in the various regions or neighborhoods. Once there is
sufficient interest to justify a project (50%), the legal boundaries for the district will need to be
described. A non-contiguous area could be selected based on the demand. The City then drafts a
resolution for adoption that announces the intention to create a LID and tasks staff with publishing a
public hearing date to receive comments from property owners within the district’s boundaries. Formal
notices are also mailed to affected individual property owners stating the project’s estimated total cost
and the estimated assessment amount that should be expected from participating properties.
Creating the District
After receiving public testimony regarding the potential creation of an improvement district, the City
Council will vote to adopt an ordinance creating the district. Upon ordinance passage, the district can
proceed with designing the improvements, preparing, and advertising bid documents, and receiving
competitive bid responses.
Constructing the Improvements
Upon receiving competitive bids, the City will verify that the costs are still in line with those advertised
with the formal notice published and mailed out as a part of the LID creation. Once costs are verified,
the district may borrow funds for construction and install the improvements.
Assessment Roll
Upon completion, the City will compile all pertinent expenses involved in constructing the
improvements to determine the overall costs assessed to the district. Because the City will operate the
improvement as part of its fiber optic utility, the installation costs will be divided equally among all the
properties that received an installation. As a part of closing out the district’s construction phase, a list of
Appendix – Funding Opportunities Page | 58
properties and their assigned cost is prepared. Properties that received a fiber installation will have an
assessment amount due, and those that did not will show a $0 balance. This list is called the assessment
roll, which is presented to the City Council for approval at an advertised public hearing.
Public Hearing
All property owners within the district will be notified of the public hearing date set for a regular City
Council meeting. The public hearing will allow owners to comment on the assessment roll. Upon
confirmation of the assessment roll, the City will prepare a billing for each property owner and outline
payment options. Protests will be considered and documented.
LID Payment
Once the assessment roll has been set, each property owner shall have thirty (30) days to prepay the
assessment in full without additional interest charges. After the prepayment period, any remaining
assessments shall be totaled, and financing arranged (usually in the form of municipal bonds) by the
City. Payments are made annually for the term of the bond, which could be for ten (10), fifteen (15), or
twenty (20) years, with the first payment due one (1) year from the last day of the prepayment period.
The City will send annual billings before the due date. Deferments of payments are subject to state and
local laws that prescribe financial penalties, collecting future payments as a part of county taxes, or even
foreclosure for affected properties.
Key Considerations
Using a LID process to construct fiber optic improvements involves a prescriptive process defined by
state law. The process has specific pros and cons when used to construct optional fiber optic
improvements.
PROS
• Protects all other City funds.
• Protects the City from liability.
• Protects the bondholder.
• Provides good financing terms for participating property owners.
• Provides for property owner payoff at any time.
• Treats the cost of improvement as a “one-time” cost rather than an ongoing fee.
• Financial responsibility is correctly placed on the properties that receive the benefit.
• The improvement adds property value.
• Costs are attached to the property, not the owner, in the event of a property ownership
change.
CONS
• Cumbersome, antiquated processes required by law.
• Optional participation requires take-rate for feasibility.
• Optional participation introduces risk.
• Requires progressive public engagement to drive adoption.
• Assessment is not recorded until the project is complete (title search will not show)
While the law establishing LID functions is decades old, making the process somewhat cumbersome,
there is some latitude within the statute for the City to make decisions that could improve the actual
Appendix – Funding Opportunities Page | 59
implementation. For example, it is the responsibility of the City to outline and establish how the “opt-in”
process will be managed. The City could require an upfront sign-up process that proves sufficient
demand for an area. This process could result in a signed agreement that commits a property to an
improvement installation once the LID is created. Some cities in Idaho have also put language into these
upfront agreements that allow them to collect monthly payments in smaller amounts to meet the
annual amount due for the property. However, the authority to do this is not prescribed in the statute.
The LIDs Effect on the Monthly Utility Fee
One of the most significant effects of using a LID process is how it changes the capital recovery for
improvements. The recommended fee structures laid out so far in this report include a “capital
recovery” charge of $25 for a residential installation and $27.50 for a commercial installation. These
rates were calculated using a design average for these installations in Eagle based on an initial 30% take-
rate in the first three (3) years, rising to a 60% take-rate within five (5) years. This method of recovering
capital costs is well suited to municipal operations with an established revenue because bond issuance is
based on the capacity of the revenue model to cover required payments.
The LID capital recovery process requires an annual payment from properties with a balance due for
improvements. There is no provision in the law to collect the payments monthly. However, with the
property owner agreement, there is nothing in the law to prohibit a monthly payment. The significant
challenge lies in the legal requirement that participants in a LID pay ONLY their share of their project. In
practice, this means that over time the City will have differing amounts due from various properties that
must be tracked by individual property because each LID will have slightly different costs for property
owners. This makes utilizing a flat rate charge as a portion of a monthly utility fee both legally
ambiguous and practically impossible.
As a result of these legal frameworks, utilizing the LID process will effectively uncouple the capital
recovery process from the monthly utility bill for consumers. This unbundling will effectively reduce the
monthly rates by $25 for a rate of $20 per month for residential fiber and $27.50 for a rate of $27.50 for
commercial fiber. The cost for construction will be recovered through local improvement districts and
new development connect fees. Both cost recovery mechanisms are uncoupled from the monthly utility
fee and present stable, predictable ways that can be used to pay the costs of construction and
expansion separately from the monthly utility bill. The City Council should remember that mixing the
two options of revenue bonds and LIDs will create multiple utility rates over time that will be challenging
to justify to the public and administer in practice.
Infrastructure Grants
The City and its partners will pursue all available federal and state broadband grant opportunities that may be a
fit for Eagle’s proposed project. The City will rely on advice from legal counsel and industry experts as it seeks
and utilizes state and federal funding assistance.
Potential capital sources may include:
• American Rescue Plan Act (ARPA)
• Infrastructure Investment and Jobs Act (IIJA)
• FCC’s Affordable Connectivity Program (ACP)
• State Grants
Appendix – Funding Opportunities Page | 60
• Other
American Rescue Plan Act (ARPA)
The final rule for the Coronavirus State & Local Fiscal Recovery Funds (SLFRF) is part of ARPA and took
effect on April 1, 2022. The United States Treasury Department guidance states: The final rule significantly
broadens eligible broadband infrastructure investments to address challenges with broadband access,
affordability, and reliability.
The Coronavirus State and Local Fiscal Recovery Funds may be used to make necessary investments in
broadband infrastructure, which has been shown to be critical for work, education, healthcare, and civic
participation during the public health emergency.
Source: Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule
Infrastructure Investment and Jobs Act (IIJA)
President Biden’s Infrastructure Investment and Jobs Act (IIJA) seeks to ensure every American has access
to reliable high-speed internet. Broadband internet is necessary for Americans to do their jobs, to
participate equally in school learning, health care, and to stay connected. Yet, by one definition, more than
30 million Americans live in areas where there is no broadband infrastructure that provides minimally
acceptable speeds—a particular problem in rural communities throughout the country. And, according to
the latest OECD
data, among 35 countries studied, the United States has the second highest broadband costs. The
Bipartisan Infrastructure Law will deliver $65 billion to help ensure that every American has access to
reliable high-speed internet through a historic investment in broadband infrastructure deployment. The
legislation will also help lower prices for internet service and help close the digital divide, so that more
Americans can afford internet access.
Source: President Biden’s Bipartisan Infrastructure Law
FCC’s Affordable Connectivity Program (ACP)
Congress created the Affordable Connectivity Program, a long-term, $14 billion program, to replace the
Emergency Broadband Benefit Program. This investment in broadband affordability will help ensure we can
afford the connections we need for work, school, health care and more for a long time. The maximum
monthly benefit will change from $55 per month to $30 per month for households not located on
qualifying Tribal lands.
Source: Emergency Broadband Benefit
Individual State Broadband Grants
Broadband Equity, Access, and Deployment (BEAD) program funding includes $42.45 billion that focuses on
connecting underserved areas by distributing money through state grants. The legislation gives the
National Telecommunications and Information Administration (NTIA) 180 days to establish the program
and develop funding guidelines. It is unclear how long after those states will begin awarding broadband
grants.
Each of the 50 states will receive an initial allocation of $100 million from the $42.45 billion pot, with
additional funding to be distributed based on coverage maps that have yet to be put out by the Federal
Appendix – Funding Opportunities Page | 61
Communications Commission (FCC). To receive funding, each state must submit a five-year action plan that
identifies locations that should be prioritized for support; outlines how to serve unconnected locations;
and assesses how long it would take to build out universal broadband.
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Glossary Page | 63
Glossary
Broadband Terminology
Traditional analog phone, cable and cell services require specific physical and organizational structures and facilities (e.g.
cables, equipment, power) for service delivery. Technological advancements have made it possible to digitize these
services and the broad adoption of the Internet Protocol has made it possible to deliver them over any network medium
or infrastructure. This unbundling of services from infrastructure presents an opportunity for the City of Eagle to
improve broadband access and affordability through the creation of a single open digital access infrastructure that is
robust enough to serve every potential provider at every address. This plan details the strategies the City intends to
implement and their expected outcomes using terminology that is nuanced, overlapping and, at times, misunderstood.
For these reasons the following terms should generally be understood to mean the following for the purposes of this
plan:
Infrastructure refers to the necessary physical structures, facilities, and devices to be constructed or installed by the city
to create an open digital access system.
Infrastructure Provider is the entity in an open access system responsible for the construction, maintenance, and
operation of the underlying infrastructure, but not for the service delivery. For example, a city, county, or state could be
responsible for the construction, maintenance, and enforcing the laws for proper operation of the public roadways, but
not for the vehicles or traffic on the road.
Service refers to the supplying of retail digital services such as internet, video, voice, or other services an end user could
typically subscribe to monthly.
Service Provider is typically a private entity providing a final or retail service to subscribers in a marketplace using the
public open digital system. While service providers are responsible for their service delivery, they are not responsible for
the construction, maintenance or operation of the infrastructure used to deliver the service. This provides the means to
create a truly open and competitive market for services, but it also requires clear demarcations in roles and
responsibilities between the infrastructure provider, service providers, and subscribers.
Subscriber refers to the consumers of the infrastructure and services. Through unbundling these are often presented
separately to the subscriber as utility fiber service from the infrastructure provider and retail network services from the
service provider.
Utility Service refers to a layer of operations maintained by the infrastructure provider in software that automates
functions directly for service providers and subscribers. These functions could be compared with the functions provided
by public entities when they provide lane striping, traffic signs, and law enforcement for the public roadway system.
These operations enable a system that supports public, private, and commercial traffic in an open or self-service fashion.
Glossary Page | 64
Industry Terms and Abbreviation
Term Description Definition / Narrative
Aerial Fiber-optic network cables
installed on existing utility
poles
Aerial fiber deployments are one of the most cost-effective methods
of installing fiber cables. Rather trenching and/or boring for
underground installations, operators can simply use existing pole
infrastructure to deploy the cables.
Asymmetrical Broadband download and
upload speeds are not the
same
An asymmetrical connection does not have equal download/upload
speeds. For example, 60/3 means 60 Mbps download and 3 Mbps
upload speed.
Bit Binary digit The most basic unit of data in telecommunications and computing.
Each bit is represented by either a 1 or a 0 in binary code.
Buried Fiber-optic network cables
installed underground in
conduit
Buried fiber deployments, unlike aerial, are protected from
weather damage by being buried below the freezing point in the
ground.
Microtrenching Fiber strands in conduit are
placed in a 2”-3” wide trench
that is usually cut in asphalt
roadways.
Microtrenching is a fiber network construction technique that lays
the protective conduit that houses the fiber strands below and at
the side of a roadway. It requires much less digging and much less
disruption than other network building methods.
Digital Divide Digitally unserved and/or
underserved neighborhoods
and/or demographic -
typically lower-income and
rural communities
The gulf between those who have ready access and affordability to
the internet, and those who do not.
DOCSIS Data Over Cable Service
Interface Specification
An international telecommunications standard that permits the
addition of high-bandwidth data transfer to an existing cable
television (CATV) system.
DSL Digital Subscriber Line A technology for the high-speed transmission of digital information
over standard phone lines.
Fiber Fiber-optic Thin flexible fibers with a glass core through which light signals can
be sent with very little loss of strength.
GB or Gig Gigabit = 1,000,000,000 Bits
or 1,000 Megabits
A unit of information equal to one billion (109) or, strictly, 230 bits.
Gbps Gigabits per Second Billions of bits per second.
GHz Gigahertz One billion hertz, especially as a measure of the frequency of radio
transmissions or the clock speed of a computer.
Glossary Page | 65
Internet
Exchange
Point
IXPs or IXes or internet
exchange point
An internet exchange point is the central point where all
internet traffic flows for routing. This is analogous to the role
of a central post office for the U.S. postal system.
ISP Internet Service Provider A company that provides subscribers with access to the
internet.
K or KB Kilobit(s) A unit of computer memory or data equal to 1,024 (210) bits.
MB or Meg Megabit = 1,048,576 bits A unit of data size or network speed, equal to one million or
1,048,576 bits.
Mbps Megabits per second Millions of bits per second.
MHz Megahertz One million hertz, especially as a measure of the frequency
of radio transmissions or the clock speed of a computer.
Middle Mile Middle mile communications
provider
In the broadband internet industry, the "middle mile" is the
segment of a telecommunications network linking a network
operator's core network (central office) to the nearest
internet aggregation point.
m-LAB Measurement Lab m-Lab provides the largest collection of open internet
performance data on the planet.
NTIA National Telecommunications
and Information
Administration
NTIA is the Executive Branch agency that is principally
responsible for advising the President of the United State on
telecommunications and information policy issues.
PON Passive Optical Network A passive optical network, or PON, is designed to allow a
single fiber from a service provider the ability to maintain an
efficient broadband connection for multiple end users.
Symmetrical Broadband download and
upload Speeds are the same
A connection with equal download and upload speeds. For
example, with a 500/500 Mbps fiber internet connection you
get 500 Mbps of download AND 500 Mbps of upload speeds.
Take-Rate The percentage of subscribers
in a network
A tabulation of broadband penetration rates. The calculation
is determined by dividing the number of subscribers by the
total number of potential subscribers in a network footprint.
Tbps Terabits per Second Trillions of bits per second.
8K Video Ultra-High-Definition Video Television resolutions of 7,680 pixels horizontal x 4,320
pixels vertical.
Glossary Page | 66
Open Access Network Terms
Term Description Definition / Narrative
Backbone Shared fiber infrastructure
from aggregation point to
network operations center
The backbone fiber runs from an aggregation hut back to the
network operations center.
Common Shared fiber infrastructure
from drop to the closest
aggregation point
The common is the shared fiber infrastructure in a
neighborhood that runs from a drop to the closest
aggregation hut.
Drop Segment of the fiber network
from street into home or
business
Drop is the fiber that runs from the street to the premise
(home or business).
Middle Mile Shared fiber infrastructure
from network operations
center to internet exchange
point
The middle mile is usually third-party fiber that runs from the
network operations center to the closest internet exchange
point. The cost of the middle mile is included in the monthly
M&O utility fee and is borne by all network subscribers.
Network
Operator
Department or company that
manages the network physical
infrastructure
The organization that manages the network physical
infrastructure on a day-to-day basis. The network operator
may or may not be the owner of the physical network
infrastructure.
Service
Provider
A company that offers
services to consumers on the
network
A company or organization that offers services (ISP and
other) over the open access physical network infrastructure.
Subscriber A customer / consumer on
the network
Household or business that participates as a subscriber on
the network.