DCM&S Beyond 95% Superfast Pilot Project Feasibility Study

Transcription

1 DCM&S Beyond 95% Superfast Pilot Project Feasibility Study AB Internet Ltd The Upper Lodge Sewell Road Lincoln LN2 5QX Tel:

2 TABLE OF CONTENTS GLOSSARY... 6 PART 1 NETWORK DESIGN... 8 INTRODUCTION... 8 Background... 8 Project Introduction... 8 Document Scope... 8 Intended Audience... 9 MARKET DIMENSION Project Area Subscriber Base TECHNICAL DESIGN Assumptions Made Design Summary Why is Wireless So Good? Proximity to Other Competing Superfast Networks Deployment by AB and the Wider Marketplace The Proposed Core Network Local Topography Considerations Top Level Topology and Site Identification Identified Sites Switching Layer Point to Point Connections Sustainable Power - EcoPOP s Service Delivery Encapsulation End Users Perception and Experience Access Layer Contention Ratio and User Experience Infrastructure Sites Abergavenny Monmouth Chepstow & Caldicot Total Combined Cartesian Coverage WAN Backhaul Options The Technology and Vendors Monitoring

3 Future Proofing Wholesale Peering Network Infrastructure End User Traffic Handover Wholesale ISP s, OSS & BSS Our Technical Team OSI Model Layer 1&2 Service Delivery OSI Model Layer 3 Service Integration SERVICE DETAILS AND PRICING MODELS Essential Broadband Dedicated Internet Access (DIA) Leased Line Replacement Service Compatibility Chart Customer Approach STATE AID AND NGA COMPLIANCE Comparable Deployment OPERATIONAL AND BUSINESS SUPPORT SYSTEMS Operational Support System Business Support Systems Additional Operations and Management System Tools DEPLOYMENT PROJECT PLAN Risks & Mitigation Local Planning Authority Land Acquisition Licensed Radio Hardware Fibre Excess Construction Charges Inclement Weather Soil Pressure Testing Subscriber Uptake Administrative& Legal delays Regional Electricity Company Power Supply Risk Register Project Outputs AUTHORITY RELATIONSHIPS DCM&S Monmouthshire County Council PART 2 COMMERCIAL MODEL

4 Our Commercial Assumptions Capital Expenditure and Sources of Funding Operational Costs ARPU and Take-up Key Costs and Revenue Drivers Delivery Milestones Rate of Return and Payback Capital Cost per Premise Authority Funding per Premise Network Capacity Sensitivity Analysis PART 3 LESSONS LEARNED COMMERCIAL MODEL NARRATIVE Sensitivity of Costs & Assumptions Commercial Viability Further Commercial Commentary Increased CPPP Through Network Complexity Overspill END USER FEEDBACK AND STATISTICS End User Learning and Input The Market and Service Take-up Service Speed Take-up OTHER ISSUES ENCOUNTERED AND RESOLUTIONS Location Of Existing Masts Cost Of Antenna Aperture Space Cost Of Power Delivered To Site APPROPRIATENESS OF SOLUTION Solution Scalability Sector Capacity Structural Loading Point to Pont Capacity Uplink Capacity IP Transit (Fibre Backhaul) Core Layer Connectivity Access Layer Connectivity Passive Network Masts Poles and On-building Infrastructure

5 Spectrum Wholesale Offering Sustainable Power OTHER LESSONS LEARNED Postcode Data (Intervention areas) End User Engagement Model Identifying Suitable Infrastructure Total Theoretical Connectable Base

6 GLOSSARY AONB ARPU BTOR CPE CPPP DCM&S EcoPOP FTTC FTTP FWA ISP IXP L2TP LAC LLR LOS NGA NOC OSS PADI PCP PoP PTMP PTP REC SLA SSSI VLAN Area of Outstanding Natural Beauty Average Revenue Per User BT Openreach Customer Premises Equipment Cost Per Premises Passed Department of Culture Media and Sport Eco Friendly PoP Fibre To The Cabinet Fibre To The Premises Fixed Wireless Access Internet Service Provider Internet Exchange Point Layer 2 Tunnelling Protocol Local Access Concentrator Leased Line Replacement Line Of Sight Next Generation Access Network Operations Centre Operational Support System PPPoE Active Discovery Initiation Primary Connection Point Point of Presence Point To Multipoint Point To Point Regional Electricity Company Service Level Agreement Site of Special Scientific Interest Virtual Local Area Network 6

7 WAN Wide Area Network 7

8 Part 1 Network Design INTRODUCTION Background This document has been designed and compiled to illustrate and explain the results of the recent feasibility study for the provision of an NGA compliant Broadband Internet access platform in Monmouthshire, Wales, in accordance with the Department for Culture Media and Sports and BDUK. The report has been prepared and written by AB Internet, a UK market leader in the development and deployment of commercially sustainable Superfast and NGA compliant Wireless infrastructure. This pilot project received funding from Broadband Delivery UK (BDUK), via the Superfast Broadband Innovation Fund, which opened for bids on the 21 March The Fund was made available to suppliers to explore ways to take superfast broadband to the most remote and hardest-to-reach areas of the UK. This report is the first deliverable from the pilot project, and will help share knowledge gained from the Fund across the industry. While BDUK endorse the publishing of this report, the views contained within the report solely reflect the findings and opinions of the supplier, and do not necessarily reflect the thoughts or opinions of BDUK. Project Introduction The net effect of poor Internet connectivity for business and residential properties is very well documented and the reasons for such poor connectivity are well know. Over the past few years Government bodies and the private sector have invested a significant amount, both regionally and nationally, to combat the issue regarding the UK s copper wire infrastructure. AB Internet has been commissioned by the Department of Culture Media and Sport through a stringent tender process to investigate and document the feasibility of deploying a large scale wireless Ethernet network for the delivery of Superfast and NGA compliant Internet Access services in Wales. AB Internet proposes to build a hybrid Fixed Line/Fixed Wireless Superfast rural broadband network, based on the same architecture that it has successfully rolled out across many parts of the UK. All services on the proposed pilot network will be delivered via an end to end Ethernet compliant Wide Area Network with industry standard Interconnection facilities for wholesale and resale partners to connect in to. The platform will be capable of offering service speeds from 2Mb/s to 50Mb/s to business and residential customers in areas deemed by many as being out of reach of traditional fixed line technology. Document Scope This feasibility study is split into 3 distinct and separate parts, the updated Network Design, the Commercial Model and the Lessons Learned section. Part 1, Network Design, details many of the relevant components and considerations in the development and deployment of the proposed new platform. It covers assumptions made concerning the market and location before illustrating how a wireless platform can be, and should be built to ensure long term high availability and quality of service to the end users. The technicalities of each layer of topology are covered together with the factors affecting and influencing the decisions made in regard to this specific proposed deployment. The Operational Support Systems developed by and used by AB Internet are also detailed together with the 8

9 Business Support and billing systems to suit. The Network Design section is concluded with a proposed project plan and a discussion concerning the main risks and potential barriers to the project s completion. Part 2, Commercial Model, dedicated to the commercial complexities of the network including a brief narrative explaining the capital and revenue requirements and findings. This part of the report will be in the form of a spread sheet and will be referred to in the narrative. Finally, Part 3, Lessons Learned details the lessons learned during the compilation of this report and discusses many considerations which should be taken into account if investigating the suitability or practicability of a large scale wireless solution. Intended Audience It is assumed that the reader has both an understanding of the BDUK project and a basic working knowledge of Ethernet based Network architecture. It is also assumed that the reader is conversant with, and sympathetic to, the difficulties faced by many users who are unable to connect to an Internet service, delivered over traditional underground mediums, which can not satisfy their needs in terms of speed and resilience. 9

10 MARKET DIMENSION The ultimate objective of the BDUK program is to increase the available bandwidth to all business and residential properties in the UK. The attenuation of the electrical signals passed over copper bearers connecting millions of properties around the UK to their local telephone exchanges is the root cause of the problem. These cables were never designed to propagate switched digital modulation protocols over such distances and as such have been the bottleneck for so many. Over the course of the programme, BTOR have worked to move the optical path closer to the customers by installing additional street cabinet s, backhauled to the exchange by Fibre, and have moved the multiplexers into these new cabinet further reducing the cable length from the customers to the first optical path. Clearly there is a significant cost associated all with this engineering work, especially at a national scale, and there are many scenarios where communities are just too far from their local exchange to commercially justify the civils work required to connect their new proposed PCP back to the telephone exchange. Around the UK there are tens of thousands of properties in this situation, for reasons born from commercial or technical complexities, their local community will not be benefitting from the underground investment program and as such are open to other technologies such as FWA. Project Area We have been commissioned by DCM&S to investigate the installation of a Pilot project with the goal of investigating the installation of a platform to deliver NGA access speeds in a last 10% area and to glean knowledge and information and share it on our journey. After very lengthy discussions with the Welsh Government it was decided that Monmouthshire would be the focus of our activities and deployment. Monmouthshire is a county on the South East corner of Wales bordering Gloucestershire and Herefordshire. It has a population of around 91,300 and its land mass is approximately 850 Km². It enjoys rolling hills and picturesque valleys with 6 major towns, the largest being Abergavenny forming the main conurbation clusters. This illustration shows the projection of NGA coverage at the end of The grey area in this image represents forecasted NGA coverage by one or more service providers and as you can see this covers at least 90% of the county. The white areas however indicate the last 10% where no service provider will be offering NGA services and it is in these areas where the feasibility study has taken place. These white areas, for many varying and unique reasons, will not benefit from the Superfast Cymru deployment or any other BDUK investment and it is these NGA White areas where we plan to deploy our NGA and Superfast infrastructure. 10

11 Subscriber Base According to the Welsh Government there are approximately 1696 properties in these white areas and we will need to cover as much of that as we possibly can to build up the potential revenues, and as such the sustainability. These 1696 properties will be a mixture of individual buildings, small new developments and farm buildings, most of which will have a very real need for the infrastructure. This heat map image illustrates the disparate and random nature of the distribution of target properties in a typical NGA White area and goes some way to illustrate the difficulties faced by network designers dealing with these type of projects. The circles on this map of Abergavenny show the number of properties in NGA White areas by size and colour. Small green dots represent 1 or 2 properties in a unique postcode and large red dots are 50+, again in a unique postcode. When the heatmap is studied the reader can see that the town itself is well served and is clearly included in the NGA deployment plans but it is the surrounding areas which have been excluded. The challenge for a FWA operator is to deploy a platform which encompasses and includes as many of the small green dots as possible. It is often the case that the small hamlets and individual properties are nestled deep inside small valleys and burns and will never be able to connect to a terrestrial FWA solution and in those cases a satellite solution is their only option. 11

12 TECHNICAL DESIGN Assumptions Made As this is a feasibility study only at this stage, we have been forced into making several bold assumptions regarding not only the design and shape of the platform but also the subscriber base and uptake. This was due to a lengthy delay understanding where this Pilot Project would take place. Where there are infrastructure sites identified we are assuming that we will be able to conclude negotiations with not only the land owner, but also the Local Planning Authority for permission to build a structure at each site. It is likely that some of the sites will not come to fruition and we will need to organise an alternative however providing not too many sites fail to complete, this should not change the shape of the topology or the commercials significantly. As discussed in the lessons learned, radio does not respect political boundaries or postcodes, it does not understand the boundary of the NGA White area and although this project will focus in the White areas illustrated above, it will no doubt attract customers outside this boundary but are in fact well within range of the service. For the purposes of this document and its context of learning for the reader, the report will concentrate solely on the uptake within the 1696 identified NGA White properties available to this project and the network design will of course reflect this. The reality is such that the project will attract significant more customers than this. However, our boundary is firmly placed within the NGA White areas illustrated in the grey and white county map on the previous pages. In terms of our customer uptake predictions and expectations, we will use 18% of the target area, as this figure is quoted by many credible sources as being the average figure across the UK. 1 The actual uptake may be higher than this as the current speeds in the area are very slow and no doubt we will experience a minor surge in orders as soon as the marketing message begins to penetrate the target area. When calculating the extended number of properties covered by the actual and incidental radio coverage we sought clarification from Shared Resource Service Wales as to the number of properties in every postcode in Monmouthshire, and used this in our calculation of the total number of properties covered by the platform. In areas outside of Monmouth, we assumed there was an average of 15 properties per postcode, 12 residential and 3 businesses in our calculations. Design Summary In terms of each element of the network, dedicated capacity fibre connectivity will be brought to key infrastructure nodes, thereafter, IP transit will be delivered across the region via licensed Point-to-point Microwave radios connecting a network of Prime Node and Secondary repeater PoPs, each of which will include Point To Multipoint wireless infrastructure, transmitting 360 degrees sectors. Fixed line connectivity to the end user (FTTC, FTTDP and FTTP) has been disregarded since the proposed solution is a more flexible architecture for both retail and wholesale purposes; it will provide Superfast Services (of up to 50MB) across the widest possible geographic area and will also offer the best value for money. It will also offer a hybrid network that is not only capable of supporting contended residential broadband services, but also offers high capacity dedicated links (Internet access and Leased line), resilient connections and Public Sector Capacity. 1 Source

13 Its effectiveness is such that coverage will reach even the most challenging areas; areas where only basic broadband (2MB) is expected in fixed line terms, will be capable of superfast speeds thanks to AB Internet s network. In terms of delivering service levels to the community, for all Fibre and Point-to-Point licensed wireless connectivity, all links are delivered to a minimum of 99.99% availability on the transmission path with an 8 working hour restoration of service. Additionally, each infrastructure PoP will have either redundant or fully sustainable power supplies. Access layer wireless availabilities are designed around 99.85% availability but this is a design parameter, and is not contractually enforced SLA with the end user. All repairs to the end user are made on a best efforts basis. The solution provides the fastest possible mechanism for service rollout, with no threat from unsecured wayleaves and complex digs, yet provides a platform for future growth and migration to optical paths to the end user, as and when this is commercially viable. Delivery of IP transit via fibre to select nodes will Ensure extremely high capacities with soft upgrade paths Be delivered to multiple points for capacity uplift and resilience Provide a dedicated layer 2 connection to core peering points (no double transit) Distribution of the IP transit regionally via licensed wireless will: Ensure high capacities (multi Gigabit) Provide high availability (up to %) Offer the possibility of true resilience Provide the lowest cost of MB per mile. Final delivery of broadband service via 5.8GHz PtMP radio will: Provides Superfast broadband speeds at a cost per property passed significantly lower than any fixed line alternatives Provide services of up to 50MB to the end user. (residential) Provide a connection with room for growth (Radio units capable of 100MB throughput) Establish a scalable business case (with upgrade to fibre services should the business case justify it) Establish a sustainable business case Why is Wireless So Good? Fixed Wireless Access networks work particularly well in all locations and geo-types. Rather than looking at where it works well, it is probably better to consider its strengths and then document how this fits well with the proposed AB Internet project. Positive benefits include: A. Reach Fixed Wireless Access networks will generally comprise of two types of wireless infrastructure; Fully Licensed Point-to-point and light licensed Point to Multipoint equipment. Point-to-point links can be established up to 50km in a single hop, or a multiple chain of hops and at the node of each of these hops, a PtMP wireless access layer can provide ubiquitous superfast coverage across 360 degrees and up to 15Km in radius form the hub; that s over 700km2 per access layer PoP. B. Rapid 13

14 With no way-leaves to secure (or to threaten) the project and no complex (and costly) trenching & ducting work, superfast wireless services can be deployed very quickly and cost effectively. Taking the example of two villages, 5km apart; village A has a Superfast service and Village B is in an intervention area, if Village A has a wireless based service, customers in Village B can be connected the next day, and if superfast fibre is at Village A, then B can be connected in less than a month. Using the same metrics as Reach the 700km² area is enabled all at the same time. C. Resilient Wireless makes a particularly effective means of resilience and business continuity through path, power and bearer resilience. All these benefits are applicable across the Geo-types, but it is those benefits of A and B that make a Fixed Wireless Access network particularly relevant for the deployment of sustainable superfast services in the most remote and difficult to reach rural areas. It is in these challenging landscapes and environments that AB Internet has carved a proven track record of delivering the fastest possible services to the most rural customers. It is in these areas that current FTTC or FTTP or even FTTDP services remain very expensive in terms of Cost Per Premises Past and yet the inverse is so for FWA Networks. AB Internet has successfully deployed such networks in the most remote parts of The UK including mountainous areas such as Snowdonia, and open rolling countryside in Lincolnshire. Using this experience, the metric for average minimum numbers per PoP to ensure sustainability are 40 or more subscribers for a large village PoP and 10 or more for a small repeater PoP in another part of a village or a small hamlet. However, it should be remembered that large PoP s are typically deployed to cover areas rather than specific villages or hamlets. In this sense, that critical mass of 40 subscribers now applies to the 700km²PoP model Some network operators will deploy services at extremes of range and in Near Line of Sight scenarios to drive down cost. AB is not an advocate of either of these methodologies as it only compromises service quality and leads to problems at a later stage. The second issue; Line of Sight is the main limitation of FWA networks, it means that service can only be provided to a customer or site whose premises can actually see the PoP. The most common assumption is that the flatter the land, the better but this is not always the case; hills and mountains provide excellent vantage points, obviating the need to build large mast structures. Usually, LOS obstructions are more of a very local nature and involve trees or buildings obstructing the line of sight. AB internet overcomes line of sight limitations by: 1. Detailed RF propagation modelling at an early stage; nominating site locations that give ubiquitous coverage and where possible, overlapping wireless coverage to provide alternative bearings on a regional scale, creating alternative path options. 2. Building a number of small local village PoPs to give multiple local options for clear LOS 3. Deploying its unique Eco-PoPs which allows AB to install PoPs on the highest and most remote hills which would not be economically viable if powered by a REC supply. They also provide a fully sustainable and reliable power supply. Proximity to Other Competing Superfast Networks Wireless adheres to physics, not to postcodes or cabinet locations. It is inevitable then that the proposed network, (in terms of design or incidental coverage) will overlap existing superfast capacity. Whilst there will be no intent in design to overlap NGA Black or Grey areas for commercial purposes, this will be a simple fact of FWA deployment. However, this overlap is actually of benefit to the project as a whole: where there is already 14

15 a Superfast deployment, there is almost always BTOR plant which we can use to connected to our core network. Deployment by AB and the Wider Marketplace Deployment in remote rural areas has challenges associated with the scale of deployment. AB Internet will use its experience of rolling out remote rural networks by: 1. In the survey stage, using its core surveying team and aerial survey platform to ensure the largest area can be covered in the shortest and most economical time 2. Deployment of villages and hamlets by group, rather than by house 3. The use of key subcontractors that AB has an existing relationship with (Arqiva and T James) to add extra capacity at the core install phase. 4. The use of local installation sub contractors (for client end) volume deployment 5. Resellers and Service partners (wholesale channels) will also do I&C as well as maintenance work in the local area. 6. For wholesale partners who interconnect with AB at our peering locations, no physical installation work is needed; AB Internet will effect layer 2 connectivity; the partner merely makes the connection at Layer 3 and above. The Proposed Core Network Our network deployments are designed from the outset to be scalable and to plug into our national platform, regardless of the number of network segments, subscribers or services, and for it to conform to all the relevant and latest telecommunications peering, interconnecting and exchanging protocols to ensure the greatest possible interoperability between us, our transit providers and our wholesale partners. Our national network is carried throughout the UK over the well renowned high availability Cogent platform, and we peer at both Telehouse Redbus Sovereign in London and IFL2 in Manchester to deliver our transit to our subscribers and interconnect with our partners. 15

16 Local Topography Considerations In order for us to design the core network to connect to our national platform we must first consider the local topography. Monmouthshire has many rolling hills and meandering rivers as can be seen from the topological survey shown here with the Brecon Beacons to the west dominating the landscape and the Wye Valley meandering down the English Welsh border to the East. FWA networks are best suited to landscapes with hills, as these vantage points give engineers the opportunity to span great distances with licensed high capacity microwave links and can install the Access Layer equipment at great heights to ensure the deepest penetration into the market place. Fortunately, the potential market place footprints are located near high ground and we can take advantage of that, not only to exploit the maximum coverage but also to allow us to link all the infrastructure sites together. Top Level Topology and Site Identification In order to determine the shape of the topology, the designer must look at the footprint of the demand and overlay this information onto the topography information. In doing so we can glean an early insight into where the network nodes need to be located. In this case the NGA White areas are located in or near: o o o o o Abergavenny Monmouth Chepstow Caldicot Caerleon We can now use this information to determine approximately where each of the nodes need to be built. At the very top level we can see a ring forming around the areas of demand. It is always best to look for circular routes, as the lower level network infrastructure can use rings to re-route traffic in the event of a site failure. In this case we are fairly lucky in that there is high ground near most of the areas of concern. There are a number of factors to consider when selecting sites: Commercials Careful consideration needs to be taken over the commercials of a site. Most Mobile Operator Locations (MOLO s) are prohibitively expensive to rent space on as their owners commercial models work in a 16

17 fundamentally different way to an ISP s. Whereas they will be able to justify a significant figure for aperture rental on a another operators structure because they will have up to 1000 subscribers using a site, we will often have only customers associated with a site commanding the same ARPU. A typical mobile operator or agent will charge somewhere in the region of 5000 to rig, and per annum to rent the required space on an existing commercial tower. That cost, together with the fact that there may only be around 20 customers all paying 25 per month associated with that site, quickly pushes that option out of commercial reach. One can quickly see that the national MOLO agents and site owners have priced themselves out of the new and emerging FWA Ethernet market. It is because of this very reason that most FWA Operators choose to go around and bypass the UK s existing towers and masts, and either build their own, or negotiate with the owners of tall buildings directly. Arqiva, who act on behalf of an estimated 80% of the UK s radio real estate, is becoming wise to this and has introduced discounted rate cards for smaller ISP s, but this unfortunately will only help dealing with small entities akin to local IT support companies who operate a local WiFi network for their local community, not a national player like AB Internet. For these reasons and more, we choose to build our own structures first and seek to rent space on others last. Until the UK s radio real estate agents can offer space on towers for < 1000 per annum it will always be better to build new structures, something both central and local Government must be aware of and take into consideration when commissioning infrastructure projects. Topological Considerations As discussed earlier, there should be no major geographical contours (hills and dips) which will limit the range of the signal. So the site should be at a high elevation such as a hill top or tall building. The point to point radio WAN must be in line of sight of its neighbouring tower(s) to maintain the integrity of the radio WAN ring. There should also be no major landscape obstacles to block the signal (e.g. buildings close to the mast) or any obvious new building developments underway that will impact on the node site. Access Considerations There should be good access to the new sites, both for installation and for maintenance. Ideally an existing road should be in place, or at the very least a track suitable for 4x4 access. Special attention to the location needs to be taken as to the risk of adverse weather. Hazardous winter conditions are made worse with altitude and a site located at the top of a mountain may be inaccessible during the worst snowfalls of the year. Underground Plant Considerations In most cases the site will need to be connected to a REC supply, therefore a site fairly close to an existing power line is best. In cases where the site acquired or needed is more than 1km from any source of power a renewable energy solution will need to be investigated. Some, but not all, sites will need to connect to the PSTN for Fibre and copper backhaul. The installation of new ducting and cabling can be more expensive than power, and as such, only sites which have no requirement to connect to the BTOR network should be installed at significant height and away from conurbation. Legal and Negotiation Considerations Some land owners will be happy to sell pockets of unworkable land, others will only entertain a leasehold. In both cases, negotiations will need to be pursued and these will take a varying amount of time depending on many factors, predominantly how busy the land owner or agent is. We always try to engage early with the owner, and stress the need for the Site Share Agreement to be signed quickly, cheaply and easily, as upon the result of a rejection or denial, the topology of the platform will fundamentally change and this risk needs to be managed carefully. This process can be problematic, as no single solution can be applied to all site owners as it is very much a human process. Site share negotiations can be protracted (up to 6 months) and the outcome uncertain. It is often best to investigate if an early access agreement can be signed during the lengthy and expensive negotiations. 17

18 Taking into account all of the above and by making the assumption that all of the identified sites complete through the deployment phase we can begin to see the shape of the network. There is land around Abergavenny which is high enough to serve the local population and can see Monmouth. From the Monmouth site there is a pocket of land near Chepstow and through to a site north of Caldicot. From there we need to cross the KemeyGraig to pass through Caerleon and back up to Abergavenny. As you can see a ring is forming around the target area and this will form the basis of our network design. Identified Sites For the purposes of the feasibility study, 7 sites have been identified and used in this model and report. These 7 sites are known to satisfy all of the above requirements and will be used as the main infrastructure sites for the platform. The coverage afforded from these sites is projected as being around 80% of the NGA White areas, and as such, approximately 3 infill sites will need to be built in addition. The exact location will be confirmed in the deployment phase when we have better visibility of the market place and the requirement. The sites discussed in the document are new sites and not confirmed. No contact should be made with the landowners or agents, as only limited conceptual and exploratory dialogue has taken place on some of these sites so far in order to qualify this document. The main sites identified for the project are: Site Name Structure Type Height Latitude Longitude Pen-Y-Graig Tower 30m Pentre-Gwynddel Tower 30m Skirrid Farm Tower 20m The Graig Tower 27m Ash Grove Quarry Tower 30m Bently Green Tower 30m Caerlicyn Tower 25m and compiled on a map they look like the illustration below: 18

19 Now if you refer back to the original demand image previously in the report you ll see that Abergavenny, which had a large concentration of NGA White, has 3 main infrastructure sites surrounding it, the coverage of which will be illustrated later in the report. The Graig is in place as a stepping stone to not only cover Monmouth but also to continue the network coverage down to Ash Grove Quarry, and as such down along the coast. Bently Green is then connected back up to Caerlicyn on the KemeyGriag to shoot the network back up to the Abergavenny cluster. The green lines on this image represent the confirmed line of site profiles used to build the network core point to point layer. There are 3 sites surrounding Abergavenny purely because of the size of the target footprint. The others are much smaller, and as such, warrant only one site. Remember however that there are at least 3 more sites to identify and build, the locations of which will not be identified until these first sites have been confirmed, as the time required to design, negotiate and build is exponential and we must do everything to mitigate the risk of wasting time through one site failing to conclude and complete. Switching Layer We are a Cisco based company using both optical and electrical MetroEthernet technology giving us the very latest capabilities on our network. We switch at 1Gb/s or higher and stack our devices accordingly. All equipment in the deployment will be Gigabit compliant and all switches offer both electrical and optical presentation. Our routers are usually 7200 series and 4500 series switch chassis and afford multiple redundant power supplies and I/O cards to ensure maximum resilience. All our software systems and servers operate on High Availability Linux clusters including our RADIUS and AAA. We are proactive open source developers running our own customised advanced firmware on our radio access layer and have developed a unique operational support system and NOC platform to monitor every single element of our network. Our VLAN structure is quite simple, with our Essential Broadband and Management traffic having their own VLAN s. Each DIA customer is dedicated their own VLAN as is each LLR customer. This offers us the maximum amount of flexibility for the customer as they can connect into their VLAN from anywhere in our network. Point to Point Connections Fixed line backhaul will be augmented regionally with fully licensed point-to-point microwave radio links. These links are designed specifically for the deployment of highly reliable networks in remote areas and represents the most cost effective means of doing so. AB Internet has an existing commercial agreement with SIAE Microelettronica, and proposes the same for the pilot project (subject to Procurement Rules). These radios are: Available in multiple frequency bands with spectrum managed by Ofcom, typically 7-26GHz. 19

20 Protected frequency allocation, no possibility of interference Symmetrical and synchronous capacity Un-contended connection Links deployed over a range of up to 50km in a single (line of sight) hop. Links can be provided on an up to % basis Capacities form 100Mb to 2Gb in both 1+0 and 1+1 configurations. Typically MTBF of around 70 years Most of our 100+ infrastructure sites are linked using fibre or 13Ghz / 15GHz / 23GHz secure private licensed links and are usually configured in a ring topology ensuring maximum resilience and redundancy. The speed of each link is dictated by the laws of physics, range and Ofcom s permitted power levels. We can and will use >=200Mb/s licensed point to point links between the main sites identified above using the manufacturer equipment detailed later in the report. Sustainable Power - EcoPOP s Network elements across the various types of PoP generally use REC power supplies. This supply backed up by UPS power protection as well as surge arrest and, where appropriate, high capacity generators in the case of long-term power outages (planned or otherwise). The network will also deploy wholly sustainable powered Ecological Points of Presence or EcoPoP. These are generally secondary or repeater sites that will provide a Local Access facility in the most isolated areas, or are used to bypass natural obstacles blocking Line of sight. AB Internet s Eco- PoP s: - Are wholly wind and solar powered and have deep discharge gel battery cells. - Ensure that broadband services are unaffected by power cuts. - Need no wayleave or land disturbance for AC power supply cables - Offer over 8 days of reserve power in the event of complete failure of wind and solar supply - Are controlled with an intelligent on-site controller and an IP connection Service Delivery Encapsulation We offer 3 principal services over our infrastructure, Essential Broadband, Dedicated Internet Access and Leased Line Replacement, all of which are discussed in more detail later in the report. Essential Broadband customers will connect onto AB Internets core Network Access VLAN and their Router will broadcast a PPPoE connection PADI request. Our LAC s (Cisco 7200 series routers) installed at each infrastructure site will 20

21 intercept these broadcasts and proxy the request to the relevant wholesale ISP by tunnelling each request down separate L2TP tunnels. The ISP will authenticate the request and should their RADIUS ACCEPT the connection, the RADIUS attributes assigned by the ISP will be bound to the customer s connection, this will include rate limiting attributes, DPI policies etc. Customers, who are connecting to our LLR, will simply have their Layer 2 connection tagged with their associated VLAN and traffic shaped inside the CPE. The DIA service is delivered as a simple routed block with no PPP encapsulation. LLR is a Layer 2 product so has no IP address or routing associated with it, this is down to the customer and all our CPE is fully 802.1q compliant end to end, meaning we can use any suitable hardware running our firmware to deliver any of our services. 21

22 End Users Perception and Experience The user will have a Wireless antenna installed on the side of their building at height (CPE). Our engineers will connect a router to the indoor unit of this device and be given a PPPoE username and password by either AB Internet or an AB Internet wholesale ISP. Once online the user will be connected via a publicly routable IP address and connected directly to the AB Core network and the Internet. Should the subscriber choose another ISP, their experience will be similar however their IP addressing will be from a different RIPE registered source. Access Layer Our radio access layer uses 5.8GHz light licensed Ubiquti radios serving a total of upto 150Mb/s through the air interface and offering Broadband speeds of up to 100Mb/s in each sector. Each site has installed 3 x 120 Sector Access Units and a means of backhaul or connectivity to the core network ring. 22

23 Each CPE connecting to an infrastructure site is tagged to the appropriate VLAN depending on their Service Provider or their subscription type. If the subscriber is connected to a contended service such as Essential Broadband then multiple connections will reside in one VLAN interface in the switch, rate limited to the relevant subscription speed class, this ensures the contention is carefully controlled at the local infrastructure site to eliminate congestions in our core network, plus it gives us end to end QoS capabilities to enable us to honour CIR commitments to DIA and LLR customers. Our LLR customers CPE is configured as a QinQ trunk device as we will pass their 802.1q tags through our platform end to end also. We have developed a transparent Deep Packet Inspection service which detects Peer to Peer file sharing traffic and blocks any suspicious sources and rate limits legitimate traffic to ensure our customers enjoy the highest possible speeds available without being hampered by local users torrenting DVD s and downloading potentially illegal content etc. Contention Ratio and User Experience Our contended services operate at a maximum of around 20:1 in the switch at the customers local infrastructure site, with our Business services operating at around 10:1. This is controlled using Cisco virtual interfaces inside the MetroEthernet switch at the site and gives us full control of all our contended, uncontended and prioritised traffic. Controlling contention at the local LAC rather than in the core gives our subscribers much more bandwidth at peak times and less fluctuating speeds. To ensure NGA classification users will only be installed within 6000m LOS of their local POP so the sector on the mast can operate all clients at the maximum modulation level and speed. Infrastructure Sites We already have an established profitable FWA platform in Monmouthshire and have introduced a step change in the connectivity for many people and businesses in the area. The proposed network in this feasibility study lies near to our existing platform and could if necessary connect directly to it to assist with commercial subsidy or from a technical perspective in terms of backhaul availability and resilience. The 7 sites identified in this report as being the early positions, are critical to the remaining 3 forecasted required sites used to infill the final areas where more specific low land coverage is required. The exact location of these remaining 3 sites will be decided in the next phase of the project however for the purpose of the feasibility study we will include them in the commercial details in Part 2 and make assumptions of their presence and coverage to suit. The commercials of these sites however will no doubt be comparable to the identified 7 in this coverage plot. 23

24 As stated previously, the platform will need approximately 10 sites to provide enough coverage for the target areas, currently 3.8% of the properties in Monmouthshire. Abergavenny The chosen infrastructure sites so far offer us the following coverage starting with the Abergavenny cluster of sites. Here on the 3D plot of Abergavenny you can see the 3 sites chosen to provide the most optimum coverage for the target footprint. The NGA White areas are predominantly in the forefront of the image to the right and heading away from the POV up the River Usk. The yellow in the next image shows the combined cartesian radio coverage from all three sites near Abergavenny, and therefore represents the area where the pilot project can offer AB Internet s NGA services. Monmouth The next site to illustrate is The Graig. This site can be seen by all 3 sites in Abergavenny and the site to the south near Tintern. As you can see it has extensive coverage over the town of Monmouth to open up as many opportunities to connect to our core Fibre network as possible. 24

25 Incidentally there are no linking sites in this image as the scale on this illustration is set to 12000m across the graphic and all other sites are further afield. 25

26 Chepstow & Caldicot To aid the reader we have grouped these 3 sites together as they are all intrinsically linked and overlap in coverage slightly. The NGA White areas in South Monmouthshire are slightly more complex to reach as the local topography and radio patterns emitted from the obvious sites do not conform to the shape of the postcode data therefore we can see a significant amount of overspill and incidental coverage from the masts. This is unavoidable due to the small clusters of target market, and this issue is discussed in more detail on the Lessons Learned section of the study. Total Combined Cartesian Coverage And finally an image of the complete coverage afforded by the construction of the Pilot Project network. As you can see in order to cover the estimated 3.8% of the counties properties, the new network infrastructure will need to cover significantly more. When the remaining 3 sites are installed to infill the gaps in coverage, the network footprint will of course be larger. It must be reported that by taking into account the total actual footprint of coverage, and analysing the postcode data and number of properties therein, the total estimated number of properties covered by the complete platform exceeds 35,000, which is significantly more than the 1696 that this project is permitted to target. This extra coverage is a direct and positive consequence of a FWA deployment in comparison to a Fixed Wire alternative, the ramification of such are discussed in the Lessons Learned. 26

27 WAN Backhaul Options All the connectivity afforded by the coverage needs to be backhauled out onto the Internet from somewhere, and we have chosen a primary option location of Monmouth and a secondary of Newport, the exact location will be identified and negotiated in the next stage of this project. Monmouth lends itself well to be the primary uplink site as it is a major town with ample BTOR plant and it is the closest point to our NOC and core engineering resource. The uplink site is rather simple in comparison to the main infrastructure sites in that it only consists of: A fault tolerant Cisco switch A 7200 Cisco router A Layer 2 Fibre connection to our core network Resilient power supplies One or more licensed microwave links to the nearest towers This uplink site can really be anywhere, but the two fundamental requirements and prerequisites for suitability are the ECC s from BTOR during provisioning and the LOS to preferably 2 or more of the infrastructure sites. 27

28 The Technology and Vendors We use SIAE Microelectronica AL Series PDH >=100Mb/s licensed radios giving us unparalleled reach for backhaul at up to a staggering 5x9 s availability and up to 60km downrange connectivity and have deployed many of these around the country. We also use the Bridgewave AR Gigabit radio series operating in the 80GHz spectrum. It is extremely reliable and offers us true Gigabit throughput rates at Layer 2 and is the market leader in the 80GHz arena and to date have not experienced a single fault in their hardware. Our access layer for this project will be Ubiquiti Nanobeams and Nano Stations running our in house built firmware. Ubiquiti is fast proving itself to be a formidable force in the wireless industry as it has chosen to release the SDK for its firmware and therefore open it to open source developers such as ourselves. This has allowed us to change the inner workings of the software running on the units so they now work perfectly with our carrier class deployment as we have been able to fix many of the production bugs these units suffer from because they are designed for a wide and diverse market, not necessarily specialist carriers such as ourselves. Monitoring We proactively monitor our network 24/7/365 using Nagios as seen by the screenshot of a network segment in North Wales below: The Nagios platform allows us to monitor all the key components in the network at an exceptional level of detail. It gives us the opportunity to monitor everything from the status of individual Ethernet ports all the way up to throughput and congestion graphing. The system can be configured to alert and alarm when a specific configurable condition or threshold is met and these alarms can be in the form of s or text messages, a very powerful and handy system indeed. We interface this monitoring through our own in house PHP/MySQL and SNMP development integrated into our OSS. After three years in the making, and still under development, our OSS API is a fully automatic radius, accounting and provisioning system for our staff and engineers, which is linked into each client account on our website when they click My Account. This OSS is a key component in our system as it absolves the staff of most of the technicalities and complexities of deploying and maintaining microwave networks and it empowers our staff and engineers with real-time AJAX driven information about customers, deployed assets and infrastructure in any device with a browser. The system even supports real-time antenna alignment and signal strengths of individual network components whilst engineers are in the field. The OSS API through Nagios will SMS text and alert the relevant engineers should it find any issue on the platform, and acts as a virtual controller overseeing every single radio asset on the platform and records several key components of information to help us diagnose any issues, even customers CPE. As an ongoing in house development, every 28

29 line of code has been written by us in house to satisfy our unique requirements and sharpen our competitive edge. Future Proofing Assuming we operate a maximum contention of 20:1 on our 50Mb product, we can serve 40 customers per sector if all customers subscribe to highest speed. In reality, and based on our national customer portfolio, less than 30% will subscribe to products exceeding 25Mb. However we shall use prudence and due diligence in this example and assume the worst case scenario, every customer subscribing to the maximum speed. This will give us a theoretical maximum of 120 customers per infrastructure site and with 10 sites in total across the whole project, we can accommodate 1200 connections before we need to intervene and upgrade. Should any sector become full, we simply climb the tower and install an additional sector on a different frequency. As stated earlier, in our experience around only 10%-30% of subscribers will take the highest speed product whilst the majority will sign up to the cheaper services meaning that the above model of 120 subscribers per site is biased towards the unlikely, to the point in fact whereby we have never run out of capacity in a sector, not even in city centre deployments due to the popular slower speed, cheaper services which we offer. Sometimes Supercheap is better than Superfast. Through prudent planning and capacity projection we have built a national network with a churn rate of <1%, largely due to customer satisfaction. As time goes by our service speeds increase, as does the customers insatiable appetite for bandwidth. This is a simple change in the RADIUS speed class for each customer and subject to capacity planning; a simple reboot of the customers CPE will bring them back online at their newly supported speeds. We can continue to do this for the lifetime of the customer and support this activity by increasing the backhaul speeds on the fibre and microwave bearers providing the link to the core network, and where necessary introducing new sectors on existing towers and by building new sites where needed. Our DIA and LLR services can operate in excess of 100Mb/s because we use more expensive radio equipment to connect the customers premises to our network. This capital expenditure firmly puts this equipment and speed out of the reach of the small business and domestic customers, however new equipment is being developed all the time, and when it becomes affordable it will be a simple case of technology refresh to swap out the users CPE to gain access to >100Mb/s services positioned in the Broadband price market. One of the most important elements when considering future proofing a wireless network is the location of the tower assets and the coverage it affords, as the boxes you use to provide the service are irrelevant, time moves on, speeds increase, prices come down, technology improves and as long as the customer is in range of the network infrastructure, they will always be able to subscribe to very fast and commercially competitive products. 29

30 Wholesale Peering One of the key elements to building a commercially sustainable network is to offer wholesale facilities through Open Access practices to encourage other operators to offer services across one common platform. Doing so introduces competition into the market, an increase in market and public awareness and builds an educated user-base, keen to subscribe to increasingly competitive products and services. In order to partner with an operator wishing to provide connectivity services over any segment of our platform including this proposed network, we firstly need to establish the existence of the technical and operational prerequisites by the operator. Network Infrastructure The new service provider must have their own network infrastructure and IP transit facilities hosted in an Internet Exchange Point preferably in one of AB Internet s IXP and peering home points. This is the Internet connectivity which they will use to provide the Layer 3 Internet transit to their customers as the wholesale partner will not have access to AB Internet s transit to the Internet. We will deliver each of the wholesale ISP s end user connections over to the wholesale ISP s network in the IXP for them to transit out onto the Internet themselves. The connection between the wholesale ISP and AB Internet needs to be sufficiently fast and resilient to carry all of their end users traffic and as such we recommend 2 x 1Gb/s ports with optical presentation configured with a cable break resilience protocol such as spanning-tree or equivalent. These two cables will be connected at one end to an AB Internet core switch in one of the IXP s agreed with the new wholesale partner and the other ends will be plugged directly into the wholesale ISP s core switch. If the wholesale ISP has no equipment in any of the IXP data centres which AB Internet reside in, then, at an agreed annual rate, AB Internet can provide an L2TP interface on its network to allow the new ISP to tunnel a Layer 2 connection directly into the AB Internet core network in place of the 2 x 1Gb/s mentioned above through both of their Internet Transit connections. This agreed and bespoke annual premium will be in place to cover the cost of the extra IP transit incurred by AB Internet and the double transit to establish the link. Whilst this solution is not ideal for either party it is common practice in the industry as it is in most cases cheaper to L2TP connect 2 operators together using existing transit capacity than establishing a physical presence in an IXP for the purposes of only one interconnection. 30

31 End User Traffic Handover Once the above connectivity is in place and a firm, resilient Layer 2 connection is established between AB Internet and the new wholesale ISP the final configuration of the handover mechanism can implemented. All Customer traffic is encapsulated inside PPPoE and our LAC s on each infrastructure site are constantly listening for PPPoE authentication broadcast requests. These packets, known as PADI requests will originate from the end users router or computer trying to connect to the Internet usually located in their building. These requests will come from all users on the platform regardless of their chosen ISP. The LAC will intercept this broadcast traffic and interrogate the radius realm in the end users username. If the username wishing to get online is an AB Internet user (e.g. user@abinternet.co.uk), then the credentials will be sent to our RADIUS server and subject to the credentials being correct, the user will be permitted to go online. If the username contains a realm which is not an AB Internet realm i.e. user@wholesaleisp.com then the LAC will check the wholesaleisp.com realm against its list of wholesale operators for authenticity. If the realm does in fact contain a relevant string then the request if forwarded to our LTS which queries the relevant ISP s RADIUS and AAA platform for their decision as to whether this user of theirs can connect. If the wholesale ISP s, BSS / OSS and RADIUS system approve of this customer connecting, they will return to the LAC, an ACCESS ACCEPT packet along with any relevant RADIUS attributes for the LAC to implement. The LTS then creates a new L2TP tunnel to the wholesale ISP s point of interconnection with us and from that point the ISP will provide the necessary IP transit to the customer. During the lifetime of end users connection to the Internet, our LAC will feed the ISP s RADIUS and AAA platform with usage and utilisation data so the relevant ISP has all the information they would have if the customer was connected to their own access layer. Wholesale ISP s, OSS & BSS As detailed above, in order to offer a service to their own customer base, the wholesale ISP must have their own PPPoE termination facilities, RADIUS Authentication, billing solution and IP Transit which is normal for credible Tier 2 ISP s. The ISP will also need to provide their own publically routable, customer IP addressing. 31

32 This model is a well practiced industry standard offering transparent PPPoE proxying from the wireless users CPE directly to the Wholesale ISP offering a truly transparent Layer 2 service directly to the end user from the Wholesale ISP. The wholesale ISP will be able to offer the new customer login credentials in context with the ISP s radius realm e.g. newuser@wholesaleisp.com rather than newuser@abinternet.co.uk, something which is critical in the branding and customer ownership experience for both parties. It is essential that the ISP has their own internal administration, billing and support facilities in operation AB Internet will only assist in the connection and maintenance of each user at Layer 2 in the same way that BT Openreach would assist one of its resellers. All wholesale partners are allocated a direct Sales Executive to liaise with as a single point of contact. They are also given a PIN number to access the NOC and the support staff 27 hours per day through our telephone system. The NOC is the operations centre based in Lincoln which has access to every component of the AB Internet platform and is where the main engineering resource is based to enable the fastest possible reaction to any network or customer issues. Once the wholesale ISP was been processed through the above establishment procedure and they are confirmed as live they become a channel of sales and support within the AB Internet OSS and BSS systems so we can track the owner of the end user and our system knows who to bill. If there is a technical support issue then the customer will call the wholesale ISP first. The ISP can query their RADIUS platform in real time to see if the user is in fact online and deal directly with all first line issue. If the ISP suspects a problem at the access layer level, e.g. a tree has grown in the LOS to the infrastructure site then the ISP will call us. We will deal direct with the ISP acting as their level 2 support and if necessary send out an engineer to resolve the issue or effect a fix. These tasks are documented as project Work Orders and support tickets as discussed in this document and are bound to not only the customer but also the wholesale ISP. This ensures a scalable management application which offers a detailed history of every connection to the network regardless of the operator. Our OSS gives us the ability to overview not only our performance against each end user but also against each wholesale ISP. Our Technical Team All our network engineers are highly skilled, fully qualified tower climbers and riggers, with full rope rescue at height certification, and every asset and component of our system across the whole country has been installed without the use of contractors, giving us an unparalleled level of skills sets and competency across the board in house. This has given us an unrivalled level of expertise in the industry and pushes us firmly forward as one of the industry leaders. The proposed network will use the same model as proven elsewhere, namely the delivery of wholesale circuits through our Layer 2 partners; TalkTalk, Openreach and BT. These circuits will comprise of dedicated and symmetrical Fibre Connections (multi gigabit) EAD, EFM and Wholesale residential broadband products. OSI Model Layer 1&2 Service Delivery Physical delivery of the service will be accomplished by a team of both mast and roof qualified field engineers. Typically, engineers form AB will provide the installation resource for PoP and Core infrastructure sites, whereas, a mixture of both AB Internet and approved sub-contractors will be used for client-end installation. Various client-end installation sub-contractors will be used. In addition to large organisations, such as Kelly Communications, Arqiva and T James Communications, AB Internet will use a network of local installation engineers (usually satellite dish installers). This has the benefit of controlling cost, improving the speed of deployment, and also puts money back into the local economy. 32

33 OSI Model Layer 3 Service Integration Layer 3 and above integration and installation is all performed internally. 33

34 SERVICE DETAILS AND PRICING MODELS Essential Broadband Essential Broadband - Retail Product description Contended Broadband Service Service Speeds Monthly usage* Connection Monthly Name Download Upload Download Upload fee fee EHB2 2Mb 2Mb EHB4 4Mb 4Mb EHB10 10Mb 10Mb 100Gb 50Gb EHB25 25Mb 10Mb EHB50 50Mb 25Mb Static IP Address 4.50 zero Service includes: Free WiFi router Full Installation Free Hosting account Notes: Monthly usage governed by a loosely monitored Fair Usage Policy 12 Month Minimum term Connection fee includes installation All prices include VAT Customer premises equipment (except WiFi router) remains property of AB Internet Essential Broadband - Wholesale Product description Wholesale Contended Broadband Service Service Speeds Monthly usage* Connection Monthly Name Download Upload Download Upload fee fee EBW2 2Mb 2Mb EBW4 4Mb 4Mb EBW10 10Mb 10Mb 100Gb 50Gb EBW25 25Mb 10Mb EBW50 50Mb 25Mb Static IP Address 4.50 zero Service includes: Free WiFi router Full Installation Free Hosting account Notes: Monthly usage governed by Fair Usage Policy 12 Month Minimum term Connection fee includes installation All prices include VAT Customer premises equipment (except WiFi router) remains property of AB Internet Essential Broadband is our most popular Internet Access product and offers a wide range of services with exceptional availability and some of the fastest upload speeds in the industry. 34

35 Dedicated Internet Access (DIA) Dedicated Business Connectivity - Dedicated Internet Access Product description Uncontended symmetrical corporate Internet access Service Speeds Monthly usage Connection Monthly Name Download Upload Download Upload fee fee DIA2 2Mb 2Mb 200 DIA5 4Mb 4Mb 350 DIA10 10Mb 10Mb Unlimited Unlimited DIA50 50Mb 50Mb 1000 DIA Mb 100Mb 1500 Service includes: Installation 99.85% Availability (higher figures on request) 4hr restoration of service Priority PIN access to customer services Static IP Addressing (/29 address space) Notes: 12 Month minimum term All prices subject to survey 5% Discount for 3 year term All prices exclude VAT Customer premises equipment (except WiFi router) remains property of AB Internet Ethernet Presentation 1+1 High Availability Options 1Gb/s service also available Wholesale customers receive 20% discount on retail list price Our DIA service is equivalent to having a private leased line to the Internet, shared by no one, and is backed by our extremely competitive 99.85% SLA, positioning us along side our national competitors. This service is a true business class service and is the connection of choice for many of our larger customers. 35

36 Leased Line Replacement Dedicated Business Connectivity Leased Line Replacement Product description Dedicated and uncontended link between two sites Service Speeds Monthly usage Connection Monthly Name Download Upload Download Upload fee fee LLR2 2Mb 2Mb 300 LLR5 4Mb 4Mb 400 LLR10 10Mb 10Mb Unlimited Unlimited LLR50 50Mb 50Mb 1200 LLR Mb 100Mb 1800 Service includes: Full Installation and integration 99.85% Availability (higher figures on request) Layer 2 Ethernet Presentation QinQ Support 4hr restoration of service Notes: 12 Month minimum term All prices subject to survey 5% Discount for 3 year term All prices exclude VAT Customer premises equipment (except WiFi router) remains property of AB Internet 24Hr proactive circuit monitoring Priority PIN access to customer services Charges irrelevant of distance between two sites so long as both remain on net 1Gb/s service also available Wholesale customers receive 20% discount on retail list price In areas where customers have multiple sites covered by the same AB Internet network segment, and are paying for leased line circuits between buildings, it is often substantially more economical per Mb to interconnect the sites over our microwave network than over traditional fixed lines. We can, and do, offer LLR services nationally also to customers on a bespoke build basis, and again is very popular with larger customers. 36

37 Service Compatibility Chart All Our services are compatible and work well with all IP multimedia services such as VoIP, On Demand TV, YouTube and Skype etc. Our platform does not block, hinder or rate limit customers statefull traffic, with the exception of peer to peer file sharing, and they are free to choose any provider and any website they wish for their on demand experience. The following table illustrates our recommendations of our services for our customers to best enjoy their online multimedia experience. Contended Broadband services - complimentary technologies and service applicability: SKYPE (Video and Voice) Compatibility VoIP Telephony (sip trunked) Streaming Media (e.g iplayer, YouTube, Netflix and Lovefilm) HD Streaming Media (e.g iplayer, YouTube, Netflix and Lovefilm) Video Conferencing All Packages All packages capable of delivering SIP Trunked VoIP service, as delivered by our recommended partner VoIPtalk. All Packages, but 4Mb and up for best results All Packages, but 10Mb and up for best results All Packages, but 10Mb and up for best results Customer Approach AB Internet has a highly refined customer acquisition model that has successfully engaged with and connected over 40 rural communities in England, Scotland and Wales. It proposes to use the same model to engage with customers through the pilot project Lifecycle: The process has 5 key stages: 1. Engagement Local government & Community Champions The initial stages of dimensioning and fulfilling the opportunity; Identifying Local authorities with an established need to address broadband not-spots. Typically, these local authorities would have already identified: Key areas Such as The Golden Valley in Herefordshire. Key Local Champions who are agents of change within the local parishes. AB Internet will engage with these at an early stage, to establish: A conduit to the locals The proposed network location and its proximity to IP transit Friendly Landowners as potential site share landlords 2. Engagement End user identification and early promotion 37

38 Presenting to the locals at a series of village hall meetings, generally after hours. This is the first time that the end users will get a chance to meet with AB Internet, to find out more about proposed services and ask questions. At this point, customers are asked to complete an Indication of Interest form. This is a way for AB Internet to see how many end users are interested, the anticipated service uptake (speeds) and most importantly, the location of the customers for an accurate Geoplot. 3. Local execution Main rollout At the rollout stage, customers are contacted individually and asked if they now wish to convert their indication of interest to a firm order. The installation is booked at this stage. It is quite common that at the installation stage, for reasons such as Obstructed Line of Sight, or range from nearest node, a certain percentage (usually around 30%) of client installs will be referred. The client is informed and the status logged on the geo plot. The senior engineering team then takes ownership of the referred clients and either: Establishes a geographic pattern of referrals, leading to the build of a new PoP to satisfy a group need, or; Addresses individual referrals with more appropriate wireless equipment In a small case, (usually less than 5% of the original number of orders) the connection will be failed. In this case, the customer is informed that the only viable option for them is satellite. 4. Local /Regional Promotion Following the main rollout and connection of the early adopters, AB Internet takes the message to a wider customer audience with demand generation campaigns using mixed media, but all with a common thread of We have delivered Typically, these campaigns are very traditional in nature as the target audience is usually quite conservative and always digitally excluded. Some examples of the latest campaign, using a non-proprietary image (that can be adopted by Wholesale channels or Councils to underline the delivery message) can be seen here, using Broadband Bob, delivering your Superfast Service as an anchor image. AB Internet would use the same methodology to engage with customers in pilot areas. 38

39 5. Closeout Phase The final phase, at the end of the project, seeks customer feedback on the cradle to grave process. The output of this contributes to the future learning process. 39

40 STATE AID AND NGA COMPLIANCE AB Internet can confirm that its solution and proposed project can meet the minimum requirements for approving public subsidy of NGA under the UK s state aid decision. The network will meet all NGA Technology Guidelines, including a demonstration of meeting a step change, provision of a wholesale access at benchmarked prices. It will also seek meet other requirements, as per contract schedule 2, section 9, including the re-use of existing infrastructure assets where possible, agreeing a claw-back process and compliance with transparent requirements. In general terms, the proposed solution will be exactly the same as AB Internet s commercially deployed networks around the UK in that it will deliver: 1. A step change in end user speeds. For most users in target areas, current speeds are usually less than 1Mb. AB Internet s proposed service will be a step change for these users AB Internet Package Essential Broadband 2 (EB2) Essential Broadband 4 (EB4) Essential Broadband 10 (EB10) Essential Broadband 25 (EB25) Essential Broadband 50 (EB50) Headline Download Speed 2Mb 4Mb 10Mb 25Mb 50Mb Essential Broadband Services are deployed nationally at speeds from 2Mb all the way up to 50Mb, as can be seen here on AB Internet s Website. The network will consist of both Fibre, wireless and switching elements that are all capable of delivering in excess of the minimum 30Mb requirement, whether this is considered on a contended or uncontended basis. What follows is the proposed infrastructure along with capacities and preferred types. However, note should be made that the final selection of equipment will be via an open and transparent tender process, as such, even if the brand changes, the functional specification will not. Network Infrastructure Proposed Mfr and type Deployed in Type and headline capacity Fibre Connectivity Either: Core Layer N x 1Gb Openreach Talk Talk Business or BT Wholesale Licensed Radio, Point To Point SiaeAL series Core Layer Initial deployment at 200Mb Each link capable of upgrade to 800Mb. Next generations of radio will be commercially available in Q with capacities up to 2Gb Light Licensed Radio, Point To multipoint Ubiquiti Rocket Titanium with 19dB 120 degree sector antenna Access Layer (PoP) 150Mb aggregate air interface capacity, per sector, delivered via 40

41 Light Licensed Radio, Point To multipoint Switching Option 1 Ubiquiti Nanobridge Option 2 Ubiquiti Nanobeam Option 3 Ubiquiti Nanostation Option chosen is dependent on client physical location Access Layer (client end) Access/Core Layer Gigabit Ethernet port. (minimum of 3 sectors per PoP) Option 1 150Mb aggregate Air interface with 100MB Ethernet interface Option 2 150Mb aggregate Air interface with Gigabit Ethernet interface Option 3 150Mb aggregate Air interface with 100MB Ethernet interface All switches deployed are gigabit Ethernet specified 2. Delivery of a reliable service at a very high speed Wireless links are designed around an availability of 99.85% (access layer) and 99.99% in the core layer. 3. Deliver a substantially higher upload speed than basic broadband Even the basic package achieves a much higher speed than the national average of 0.4Mbit/s (OFCOM May 2013) AB Internet Package Essential Broadband 2 (EB2) Essential Broadband 4 (EB4) Essential Broadband 10 (EB10) Essential Broadband 25 (EB25) Essential Broadband 50 (EB50) Headline Upload Speed 2Mb 4Mb 10Mb 10Mb 10Mb 4. All services and infrastructure deployed on a wholesale basis. AB Internet has a comprehensive wholesale portfolio and infrastructure sharing policy, this is realised in the following ways: Resellers, can resell standard AB Internet packages, yet retain ownership of the customer Service partners can re-badge AB Internet s services in a completely white labelled fashion, owning the customer support and provisioning relationship. AB Internet will also provide these wholesale partners with free access to AB s Open source Network Management tools, so that these wholesale partners have a real time view of their cloud without huge investment. Transparent Capacity ISP s can interconnect with AB Internet at Layer 2 to achieve a completely transparent wholesale offering. Infrastructure Share All mast structures and PoP sites are open for sharing at commercial rates (in the case of an aperture only requirement); this includes any available co-location and power. For wholesale partners also wishing to take advantage of AB Internet s wholesale backhaul connectivity, aperture and collocation rates are subject to a discount tariff of greater than 30%. 41

42 5. Fibre services to end users will be made available when commercially viable AB Internet can comply with this through: Its Layer 2 partnership with TalkTalk, deploying wholesale fibre services nationally Existing relationships with NGA installers Kelly Communications, Openreach The capability of deploying Fibre to the premise on demand. Comparable Deployment Lincolnshire County Council Wireless Broadband Pilot Scheme In March 2013, AB Internet signed a contract with Lincolnshire County Council on a BDUK scheme to deliver a Wireless Broadband Pilot Scheme in East Lincolnshire. This 300,000 ERDF Funded project was subject to State Aid Clearance and was intended to prove Fixed Wireless Access as a viable means of delivering High Speed Broadband to Rural Areas designated as NGA White with little or no perspective of 2Mb speeds let alone High Speed. Budget was allocated to be spent in any 1 of 3 proposed pilot areas. In reality, AB Internet was able to demonstrate best value by rolling out its services to 2 of the 3 identified areas instead of just one, with 12,500 premises past (Including both intervention area and incidental coverage) at a cost of 26 per connectable property. The East Lincolnshire Pilot Scheme delivers contended residential services (2mb to 50Mb) alongside dedicated High Capacity business services on the same core network, promoting sustainability and is sold in both a retail and wholesale (white label) environment. The high speed wireless broadband service uses fibre IP transit and is delivered to end users via 7 core Fixed Wireless Access nodes, a mix of masts and existing structures designed and built by AB Internet. The Pilot currently has more than 300 people signed up for the Essential Broadband service. The LCC pilot project was completed at the end of May 2014 with the build of the final mast, at which time a White Paper was written, documenting the lessons learned on fixed wireless access platform, specifically: - The technical performance of the wireless service - Robustness and resilience - Rollout obstructions, circumventing what was learned - Service uptake analysis - Consequential Technical Innovations. 42

43 OPERATIONAL AND BUSINESS SUPPORT SYSTEMS Operational Support System Our Operational Support System has been designed, developed and written in house exclusively for our unique needs. The software is split into modules comprising of: Work Orders and Task Support Tickets Subscriptions Resellers and Wholesale Network Tools The software allows our team to administer the daily functions of our business and our resellers with ease and the system is constantly under development. The images on the left show an example of a typical 50Mb/s subscriber in rural Wales (all personal details have been disguised). The first image shows the customers account with us on the OSS, the portal credentials for this user so they can check and verify their Internet Access login credentials and download usage together with their billing address. This screen also lists all the subscriptions this particular customer subscribes to and in this example we can see that this customer is subscribing to our Essential Broadband Plus 50Mb service. Below this our staff can see the usage for this user and subscription for the past 12 months. Each section of screen links into another, which contains more details, right down to individual RADIUS records or daily activities and bandwidth utilisation by the customer for the operator. This first screen also shows (although not captured on the screen shot) all the history of work orders and support tickets for this particular customer. The second screenshot shows a Work Order for the same customer and the history and progress of the task. You can see that the Work Order was in fact for the installation of this customer in the example and this took place in May this year. Our contractors also have access to our OSS, specifically the Work Order module so they can log in when ready to review and accept installation and service call outs at their own convenience. This gives all parties the greatest amount of flexibility and freedom to organise their own logistics and helps mitigate the risk of too many staff being involved with simple business as usual tasks. 43

44 Business Support Systems The Business Support System will complement the OSS via an integrated package known as Open ERP. Open ERP manages the contractual and financial relationship with the customer and traditional methods of running separate packages, to manage the finances and contractual relationship have been amalgamated into a single package in OpenERP. Here, the whole customer life is managed from initial enquiry through opportunity management, installation, billing and where appropriate, cessation and de-installation. As the name suggests, Open ERP is an open source package that has been adapted to fit the rural operator s business profile. It is integrated with the OSS to ensure seamless technical and financial operations. In a continuation of the previous example you can see on the left image the same customers agreement in place and a printout of their first bill. Additional Operations and Management System Tools The start of the relationship with a customer often begins with the question will I get service in my area?. Typically, local residents or businesses would have heard of the project, or seen some form of advertising, and the customer will initially be interested to see if there are services in their area. Where most wireless operators will typically show a flood map of coverage, derived from a single coverage map, that is usually out of date as soon as it s printed, AB Internet will use a fully automatic and real-time coverage checker, based on live RF propagation modelling, that is displayed online. Users enter in postcode data and a coverage map is presented to them: The pin on the map can be moved by the client. This allows clients to accurately position the pin on a building, rather than simply relying on a postcode. The result then not only tells them what services are 44

45 available to them, but also, where the wireless signal is coming from, assisting them further identifying if large trees or buildings could be a problem. The live coverage checker can be seen here: A hidden, yet significant benefit of the online coverage checker is not just one of client engagement, but by logging each and every service enquiry, this not only builds up an accurate demand picture, but in the case of orders resulting from enquiries, allows the operator to build a bespoke (or augment existing) network of PoPs to satisfy the local demand. This ensures that the proposed network is built according to demand. decisions concerning network design and site acquisition. The image on the left shows some of the market intelligence we have been able to gather over the past 3 years across Monmouthshire. Each blue pin represents an individual property where the owner or enquirer has indicated that the speed of their service is insufficient for the needs, most of which will be 2Mb or slower. Looking at the data the reader can quickly see the pockets or clusters of potential users and the disparate nature of the demand. This internal and private data is critical when network planning as it is not influenced by political or corporate bias. It is considered factual and therefore is used as evidence when making Naturally, the operational management systems noted above are all available through an authenticated web session, therefore, wholesale channels can benefit from engagement at all levels. This is especially useful for a white labelled broadband service, as wholesale partners can operate with a dedicated window of status of their client cloud Taken as a whole, AB s Network Management system treats all network elements (Regardless of media) as a single ubiquitous bearer, and is an integrated platform that comprises both OSS and BSS. The proposed regional platform for the local area would simply be an extension of this proven system. In all aspects of operational management, from the software on the backhaul and access layer wireless units, through to the business critical OSS and BSS, an open-source architecture is used as a basis for all platforms. This ensures: End to end transparency when working with the wholesale market Limited reliance on proprietary software and (sometimes erratic) support Cross platform support, where OSS and BSS software can be displayed on many devices. Reduced cost, contributing to sustainability 45

46 DEPLOYMENT PROJECT PLAN s 46

47 Risks & Mitigation In this project plan there are many assumptions made concerning the time taken by 3 rd parties to complete their respective tasks. It is assumed that there are minimal delays when using sub-contractors and specialists in our field work concerning civils and engineering. We are also assuming that there are no lengthy delays connecting to the National Grid on those sites which require a REC connection. With a project of this size there will always be unforeseen delays due to others, and it is these risks that need to be managed carefully, however there are no barriers to the project. Local Planning Authority The single largest risk to the project is the Local Planning Authority rejecting permission to build the towers in the positions we need them. Without their cooperation the network will be forced into adopting a different shape and will take at least 3 months longer to build. We can mitigate this risk by engaging early and establishing a direct relationship with the local planning consultant at the LPA. We have found that by sitting down with them face to face and explaining all the details of our plans, who has commissioned our work and who will benefit, we get a much warmer and sympathetic engagement. Again in our experience they will often assist us when we discover a site, and investigate if there are any reasons why a site would be rejected by default, in turn saving us weeks of wasted time. When a good relationship is established, LPA s will be able to help us on areas of ONB and SSSI and even local by-laws, all imperative to know before application submission. The planning stage is quite obviously a dependency of all the other phases in the project as we cannot do anything without planning permission. It is unlikely that any LPA would decline every application and as such we will know very quickly through dialogue and pre planning application meetings whether there is a risk of site not being granted planning permission. Engagement with local communities at an early stage, prior to submission of planning application will also underpin the planning application success; by local demand stimulation and so mitigating exposure to individual planning objections. Land Acquisition Early in the project our engineers will be engaging with the local community to understand who the local land owners are and where they live. Early engagement with land owners often mitigates the risk of lengthy delays as in our experience they are usually open to a dialogue where they are set to gain. Finding land and negotiating with land owners is often quite straight forward, after all everything has a price. The secret to a speedy dialogue is to involve the legal representatives when required as early as possible as they are often the slowest party to conclude their involvement. Licensed Radio Hardware There can be 6 week delays on licensed point to point hardware due to manufacturers making to order. This is compounded by our requirement to seek a licence from OFCOM first, which will in turn dictate the frequency and sub band for each end of the link. We cannot order the required hardware until we have this information, as if we make an assumption we run the risk of those frequencies being used and licensed to someone else in the area. Fibre Excess Construction Charges Our options for Fibre backhaul are from Monmouth and Newport as stated earlier. The exact location will be decided based on the cost of digging the Fibre to the uplink site. The cost of this is at this stage is unknown and 47

48 we won t know the details until we start our enquiries. It has been known for these Excess Construction Charges (ECC s) imposed by BTOR to exceed 100k, and as such would render most projects impossible on commercial grounds. In most cases the ECC s average around 2k to dig and blow a new Fibre to one of our uplink sites in a major town. We can mitigate the risk of insurmountable ECC s by building the core network close enough to two major towns, as per the design, to give us the largest possible number of opportunities for connectivity. Inclement Weather Site surveying work dictates clear line of sight. This is generally only possible with visibilities of many kilometres. Although the vast amount of survey work has been completed, nevertheless, with work continuing into the winter months, so, the likelihood of survey delays increases. It is very likely that we will be pouring the concrete plinths during December and January. The contractor is likely to ask for a short extension to the curing time due to the mix being exposed to temperatures below 5 C. In the event of severe freezing temperatures we will need to delay the pour as the resulting mix will freeze and the mixture will lose a small but measurable amount of structural integrity. This will be unacceptable for the tower structures and as such we will need to delay the pour. Should the weather outlook be extremely cold for the foreseeable future we will ask the contractor to deliver heated (10 C) concrete and use thermal insulation on the shuttering to ensure the first critical 48 hours expires so that the mixture can set to a minimum of 2mm/N². The erection of the towers could also be affected by the weather also as we will need to undertake a risk assessment at the start of each climb and we cannot climb in frosty conditions for the obvious slip hazard. Soil Pressure Testing Because of the delays in defining the final intervention areas for this project, AB Internet was unable to carry out extensive soil pressure testing at chosen sites during the survey phase. Therefore, at this point, there is a risk that the selected areas may fail the load bearing minimum requirements for mast installation. However, this risk is mitigated by two points: i. Failure of soil load testing doesn t necessarily mean failure of site, it merely means re-design of concrete plinth. This has a small effect on the capital costs, due to the need for more concrete and the potential larger footprint may also have a small effect on the recurring site rental. ii. In the unlikely event that the site fails the tests completely, AB Internet will need to source an alternative. This only impacts timings and has a small effect on the capital cost, by virtue of a second site and soil pressure survey. Subscriber Uptake The predicted uptake of 18% of the intervention 1,696 premises, giving 305 subscribers has been modelled in the attached business case. In the event that subscriber numbers are lower than anticipated, the mitigation to this exposure is the connection of subscribers from incidental coverage in: NGA white areas from regions close to Monmouthshire NGA Grey areas in Monmouthshire and in other counties. Superfast Cymru blue areas that still have no satisfactory superfast provision. 48

49 In the case where subscriber levels exceed the predicted demand, The Business Model shows that the network is capable of supporting a subscriber base of around 100% take up with only moderate investment which can be finance through its own profits and positive cashflow. Administrative& Legal delays Project rollout timings could be compromised by administrative and legal delays associated with State Aid sign off. Exposure to this will be mitigated by timely completion of all State Aid documentation, as well as a clear and detailed response addressing every State Aid condition and NGA Compliance point. Regional Electricity Company Power Supply For the installation of masts on Green Field sites that rely on a wholly new REC power supply, there is the risk that charges for connection to the national grid may be significantly more expensive than planned. In this case, AB Internet will install fully sustainable power supplies. This is covered in greater detail later in Other lessons Learned 49

50 Risk Register Identification Assessment Risk Management Risk Identified Likelihood (H/M/L) Impact (H/M/L) Mitigation - Local Planning L M - Engage early with Authority LPA and local Rejections on community to educate individual towers all regarding project and objectives. - Rally support from local community to mitigate the risk on individual objections - Land Acquisition Failure - Delay to project waiting for Licensed radio Hardware - Unaffordable Fibre Excess Construction Charges - Inclement Weather hinders tower work - Soil Pressure Testing proves ground to be unsuitable L L - Approach local farmers with a healthy budget to purchase / rent pockets of unfarmable land - Engage support from the local community and encourage them to speak to land owner so they know who will benefit H M - Order the hardware as soon as the planning application for the infrastructure site is submitted to mitigate delays L M - During site acquisition for the uplink ensure the chosen location is on or near the 21CN network and there are multiple service providers in the connecting exchange L L - RAMS will identify the immediate and local risk. There are few was to mitigate the risks of inclement weather however they effects on staff can be mitigated with the correct clothing L M - In the event of CBR test showing ground will not support 100Kn/m², manufacturer will redesign the plinth dimensions to accommodate the load bearing properties of the soil. - If the ground fails spectacularly then plinth can be piled Further Observations - Most LPA s are keen to cooperate especially with the backing of the local Council. If a site is rejected we will need to move to a contingency site. - Land owners are usually keen to do a deal and not often open to negotiations - Many suppliers will offer sale or return on commonly used components - On rare occasions ECC s can exceed 50k however they average around 2-5k - Initial tower works takes only around 5 days. If there is no weather window it is not safe to climb, the only option is to reschedule - Most soil tests will pass and if the ground proves to be soft a larger flatter plinth usually passes the structural calculations Timescales Person Responsible Level Risk 6 weeks - Management M/L from start - Project Manager date Immediate 6 weeks from start 12 weeks from start February to July December to January - Management - Project Manager - Management - Project Manager - Management - Project Manager - Management - Project Manager - Engineers - Management - Project Manager L L L L L 50

51 - Low Subscriber Uptake - Administrative and Legal delays - Regional Electricity Company charges excessive however costs will need to be investigated L M - 18% of the 1696 forecasted to connect however network footprint covers around connectable properties and therefore the likelihood of this risk is very low L M - Timely completion of State Aid documents as well as clear and detailed responses addressing every State Aid condition and NGA compliance point M L - Early engagement with the REC and landowners to ensure the locations chosen are as close to HV power lines and transformers as possible. - Power can often be taken from landowners with an agreed consumption rate should the REC charges be too excessive - Most sites can be powered using renewables however care must be taken with the power calculations From network Live date - Management - Sales Team Immediate - Management L April to July - Management - Project Manager L L Project Outputs For too long, the outside world has always seen FWA as a technology to deploy on the margins and FWA operators have typically battled over a national market share of <1%. AB Internet firmly believes that with the maturity of FWA technology in terms of throughput, reliability and the cost of installation, FWA is now positioned well for a bigger share of the market. AB Is clear in what it wants to achieve in terms of this Pilot Project; to prove to the marketplace that Wireless technology is absolutely the right technology for this requirement and to share with other operators (even competitors) the lessons learned from the Pilot. In doing so, AB would be promoting the national adoption of a sustainable superfast solution whilst making the addressable market, that it would eventually share, that much bigger. The written outputs of the pilot project are first and foremost to educate the reader about Fixed Wireless Access networks, as deployed by national carriers such as AB Internet and to establish their suitability as a bearer mechanism for NGA in projects going beyond 95% superfast coverage. Simultaneously, the network project proposed by AB Internet will identify for DCM&S (and publicly) a number of touch-points or key requirements that must be considered when rolling out a Superfast FWA network in the next round of F10/SEP funding. This can be best thought of as a series of tick-boxes for local or central government. Whilst it will be a significant opportunity for learning, AB Internet may be forced as part of this process to reveal key intellectual property. AB Internet is willing to open the vast majority of its learning into the public domain; after all, this is where the best national benefit will be derived. 51

52 The timing of outputs will follow three phases: Feasibility Phase, Rollout Phase and End of Project Phase. The relevant outputs will be thus: 1. Feasibility Phase During this Phase, AB Internet will survey the chosen area and will deliver a report at the end of the phase. This report will comprise: a. Logical network design including IP Transit ingress and wireless backhaul. b. RF propagation plots of the target area. c. Rollout plan d. Predicted uptake; demographic plots e. Detailed risk register. AB will also submit a monthly progress report to DCM&S 2. Rollout Phase a. Weekly report to DCM&S and local authority containing: 3. Project Closure Phase Rollout milestones achieved Orders signed in the intervention areas Orders signed in incidental coverage Customers connected Total customers waiting for connection. The final report will discuss all aspects of the network performance, and will analyse and report on the relevance of FWA as a credible NGA technology. Final report content will include: Technical issues a. A report on network performance in the backhaul and Access layers in terms of: Speeds (Max performance, Headline and Average) Latency Jitter b. To deploy and report on a range of CPE equipment at different points on the network and to report cost/performance benefits of High, Medium and Low tier Customer premises equipment c. To show how a FWA network can deploy differing classes of service on the same infrastructure. d. Identifying if the new generations of Next Gen 5.8GHZ PtP wireless units have a role to play in middle-mile backhaul in Rural Areas e. Establishing the effect (if any) that a mixed bearer network has on service levels 52

53 f. To show how important the delivery of a real/true IP address to customer s CPE is vital in a successful NGA FWA network. g. To demonstrate the role of renewable power in deployment of FWA networks. Commercial/Financial Issues h. To define a credible and demonstrable metric for cost per premises passed. i. Commercial and financial reporting of key ratios including product uptake, Cost/revenue analysis, Sustainability metrics j. To identify and refine the drivers for uptake of white labelled services by larger wholesale channels. At the same time, refining the best-fit proposition for the different scale of wholesale channels k. Establishing de minimis levels for users on a per node basis l. Identifying what part commercial masts play in large scale deployment of FWA networks Other Issues m. To establish what is a reasonable delivery time for a network of such a scale n. To establish a metric for customer installation lead times. This will include time to door, time to install, and time to return or fail o. To report an accepted failure metric which is the percentage of customers that cannot economically access a Superfast FWA service due to Line Of Sight Issues p. To obtain customer feedback on the (end user perspective) suitability of an Superfast FWA network for the delivery of services including VoIP, Streaming Media, File Download, Gaming. q. To analyse and report user data usage trends and then report the feasibility of an un-capped monthly usage service and if not, what are the most appropriate Fair Usage Policies. r. The effect of the Local Planning Authority on FWA networks and how to mitigate the risk. s. To analyse and report on suitability of the adopted milestone plan and payment structure 53

54 AUTHORITY RELATIONSHIPS AB Internet would see the relationship with DCMS as relatively low intensity and mainly loaded at the front and back end of the project, whereas Local Government organisation(s) would play a more active role in the intermediate stages, assisting with network rollout. Specifically: DCM&S Act as Local government dating agency for target area identification Assistance with any state aid clearance issues during the project rollout phase Assistance with any legal challenges (state aid or other) that might arise on contract award or during pilot project rollout phase Nominate a single point of contact within DCM&S for Project liaison (for AB Internet to report weekly progress and key metrics) Ensure timely settlement of invoices. Procurement counsel. Monmouthshire County Council Assistance with the Local Planning Authority helping overcome any issues with Planning Presence at fortnightly progress monitoring meeting Acting as a dating agency to local communities and broadband champions. To play an active role in joint PR and promotional activities Ensure harmony and transparency with existing BDUK framework agreements Open access to roof space on council buildings, for PoP installation (where geographically appropriate) 54

55 Part 2 Commercial Model All of the information in the narrative below can be related back to the detailed commercial model supplied as part of the study. Our Commercial Assumptions Capital Expenditure and Sources of Funding The total net expenditure assumption for this project can be broken down as follows: Phase Source Amount Feasibility Phase DCM&S 195,800 AB Internet Ltd 21,100 Deployment Phase DCM&S 593,200 TOTAL 810,100 For the purposes of the report it must be noted that AB Internet has agreed to pay the full cost of the connection of each property to the network also, at a maximum value of 280 per premises. With the projected 309 subscribers, this equates to a net figure of 86,520 plus the connection of the 4 projected premium DIA and LRR subscribers of 4,000. The total cost to the authority to see this pilot project to fruition would be the 789,000 plus 39,160 to cover the VAT for the feasibility report totalling 828,160. The total capital expenditure for the project is 593,200. Operational Costs The project enjoys minimal operational costs of the 6 years modelled: Source Description Amount over 6 year model OFCOM Licensing for microwave 25,000 frequencies BTOR Fibre backhaul from main uplink 56,000 site Land Owners Rental for any land we are unable 50,000 to buy Customer Support Support and maintenance 11,076 ARPU and Take-up The following table illustrates our assumptions regarding the Average Revenue Per User of the life of the project split into the 4 different categories we have been asked to discuss. Service Subscribers Total Recurring Income Total Connection Income Essential Broadband Retail ,246 34,997 Essential Broadband Wholesale 29 26,365 2,417 DIA 3 103,879 4,200 LLR 1 46,440 1,500 55

56 Key Costs and Revenue Drivers The two largest costs in this project, predictably so, are staff and structures. The key driver in terms of costs is the disparate distribution of the target 1696 properties. It is logical to assume that if all properties were together in one housing estate, we would be able to service their requirements with only 1 site, therefore with significantly less investment. This is however not the case, the islands of white in the target areas need significantly more infrastructure to cover them and this is directly linked to the cost. Delivery Milestones In the project plan we have a target date of the 1 st of February 2015 for the first milestone and infrastructure site to be built. This date is achievable if everything goes to plan and we are able to start the project before the 1 st of October. Our contract dictates drawdown of funds for each site built and we are assuming the following: Date Description Amount December 2014 Feasibility Report 195,800 + VAT April Site completed 59,320 May Site completed 59,320 June Site completed 59,320 July Site completed 59,320 August Site completed 59,320 September Site completed 59,320 October Site completed 59,320 November Site completed 59,320 December Site completed 59,320 January Site completed 59,320 TOTAL 828,160 Rate of Return and Payback The model shows that taking into account the 309 subscribers plus the additional revenue from the DIA and LLR customers the model is profitable throughout with an accumulated profit before tax of 356,672 at the end of the financial year to 31 st of March It may be noted that in the commercial model we are indicating a profit before tax at 2016 of 481,164. This is due to the capitalisation of the deployment phase, from 2016 to 2020 there is a reduction in profit year on year, thereafter, accumulative profit increases as depreciation has been fully charged. A point which is relevant for the learning exercise is that if we were to build this platform without the project funding introduced by DCM&S it would take approximately 10 more years after the end of this projection before we would be able to make a profit. However, if we were to install this network under normal commercial terms, we would not be restricted to the 1696 White properties, and as such it is the funding boundary which is stifling the profitability, not the commercial model. Capital Cost per Premise We have looked carefully at the costs, the market and the topology, and have concluded that the CPPP for the properties in the NGA White area which is available to us is We have not included our marketing activities in this calculation for obvious reason however all the activities and costs associated with designing, developing and deploying the service are included. 56

57 In the lessons learned section of the study we demonstrate how the CPPP is reduced to only by taking away the restrictions associated with state aid and funding boundaries. Authority Funding per Premise In order to calculate this figure we need to consider the actual cost to connect each of the 309 customers. Description Source Amount Feasibility Study cost DCM&S 195,800 Feasibility Study AB Internet 21,100 Deployment DCM&S 593,200 Customer Connections AB Internet 90,520 Therefore the total ex VAT funding introduced by DCM&S is 789,000 and 111,620 by AB Internet totalling 900,620 for the entire platform. From this we can calculate that for each of the 309 subscribers on the network in this example there is a requirement for 87.6% of the funds to come from the authority. Network Capacity Sensitivity Analysis The proposed network has a fixed cost associated with it and a variable number of subscribers which can connect to it inside the catchment area. This fixed cost effectively buys an amount of infrastructure and resource availability in terms of bandwidth and backhaul. As stated earlier, the actual coverage footprint of the network covers around 35,000 properties however, in its current proposed configuration, the platform would not be able to support NGA compliant service if 18% of this 35,000 properties were to be offered connections. Therefore, as an interesting exercise, we can explore the relationship between the models Capex and Opex requirement to provide service to the planned 1698 and then begin to increase the number of subscribers to see which components require further investment to accommodate the increase in resource demand. To aid the discussion the following is assumed: 1. The projected costs and figure are based on building the model to NGA compliant standards whereby customers subscribing to NGA services will be able to download data at a minimum of 15Mb/s for 90% of the peak hour. 2. The Peak Hour used in our calculations is assumed to be between 22:00hrs and 23:00hrs as demonstrated by the image on the right which is the actual bandwidth consumption graph of our existing customers in South Wales. Based on those assumptions and taking into account the individual bandwidth constraints of each of the assets deployed to provide the service we can conclude the following. The initial model is documented at around 18% uptake and illustrates 309 subscribers in total (in a 1698 connectable property target market) and the total cost of which until March 2020 is 990,373. Without further funding the platform will be able to accommodate 458 subscribers which represents 27% uptake. At this point a licensed radio link will need upgrading and the addition a several small network components will increase the total cost of the project to 1,005,930. This then supports up to 54% uptake 57

58 in the target market representing 916 properties, at which point the busiest infrastructure site will need an optical path in the form of an EAD-LA from BTOR incrementing the total cost over the 6 year period up to 1,261,976. At 90% uptake another 2 licensed radio links will need to be upgraded and from that point the next major threshold will be the upgrade of the access layer across all sites, a capital investment which would be finance from the cumulative profits should then number ever reach these levels. However unlikely a > 100% uptake would be, the example serves to prove the robustness of the network and commercial model in that it is more than capable of satisfying the demands of the target area. Uptake Subscribers Subscribers CapEx OpEx Expenses Total Costs Range Min Max 0-27% , , , ,190 27%-54% , , ,850 1,005,930 54%-90% , , ,850 1,261,976 90%-100% , , ,850 1,313,250 1,400,000 1,200,000 1,000, , , , ,000 0 CapEx OpEx Expenses Total Costs 90%-100% 54%-90% 27%-54% 0-27% 0-27% 27%-54% 54%-90% 90%-100% It is possible to take a model of this scale and begin to use to investigate a regional deployment on the understanding that many of the infrastructure sites would need to have fibre backhaul to overcome the range and speed restrictions associated with licensed microwave equipment. This can however be mitigated by implementing multiple points of backhaul to break a regional deployment into topological clusters identical to this model, each of which would be profitable and self sustaining in its own right. This eliminates the technical obstacle of range vs. speed as wherever should a regional deployment be developed in a series of rings then multiple fibre backhaul connections could be installed to alleviate the traffic on the microwave links which server many upstream sites. 58

59 Part 3 Lessons Learned COMMERCIAL MODEL NARRATIVE At 850km², Monmouthshire is the 7th largest county in Wales, and with a population of 91,300 or, 104 per km²,it is ranked 15th in Wales in terms of population density. To put this in perspective, Monmouthshire is comparable to other areas where AB Internet has deployed network services, such as Anglesey at 98/km² and Conwy at 102/km². These areas share a common theme; grouped clusters in one or two major towns and villages of less than 50 dwellings along with single dwellings spread thinly across the area. The lessons learned in the feasibility study with particular reference to the commercial model show: Sensitivity of Costs & Assumptions As stated in the Commercial Study, with a retail ARPU of and a wholesale ARPU of 18.12, the model shows a profit at the end of March 2020 of approximately 356,672. However, if we were to assume that all users subscribe to the lowest speed service of 2Mb with an ARPU of retail and 9.38 wholesale, this reduces the profitability down to 181,518, a decrease of 49%. Conversely, if all users subscribe to the highest speed service of 50Mb at retail and wholesale, the profitability increase to 497,575 at the end of the period, an increase of 39.5%. Paradoxically, in both scenarios the operational expenditure will remain the same as we have been rather generous with the fibre backhaul estimated charges. Another key cost parameter to consider is the fact that the cost of capital equipment is high for the number of premises in the White area that we can target. It would not be unreasonable to expect that this number of premises could be served by 1/10 th of the capital equipment shown in this model if the users where within range of only one structure. Not only would profitability be improved but the cash deficit would be greatly reduced also. We have assumed 18% take-up of the service as per the national average. The effect of a reduced number of subscribers is discussed in the next section. Commercial Viability In our model we have included two of our premium Internet Access services called DIA and LLR. These services, as explained in the Network Design document, are available for customers who need uncontended internet access. It is unreasonable to assume that with 309 customers there will be no requirement for premium and corporate higher speed internet access products backed by a superior service level agreement and guarantee. In our experience there are usually 1 in 100 subscribers who needs more than our usual contended internet access service portfolio can offer, and because of this, all of our deployments, OSS and BSS systems are designed to accommodate these premium customers as they add a significant amount of revenue to any network segment. It is imperative for any FWA operator to identify and accommodate these commercial opportunities as they hold a significant commercial value and low churn rate, and are fundamental in the sustainability considerations as they are happy to pay much more. In our model we have assumed 3 DIA customers and 1 LLR customer attracting 33,840 of revenue into the model every year, and again from our experience this is very likely indeed. Interestingly enough, if you take out the DIA and LLR income, the model needs only 6.2% take-up from the original 1696 totalling 105 subscribers to break even. 59

60 Further Commercial Commentary In a commercial sense, other issues that have been noted in this feasibility stage include; Increased CPPP Through Network Complexity Fixed Wireless Access Networks work best, in all respects, when the wireless service is deployed across a large contiguous area of coverage. This makes the best use of economies of scale, by re-using coverage in as wide an area as possible and attracting a large subscriber base; driving down the cost per premises passed, attracting the widest subscriber base. The proposed pilot areas within Monmouthshire are disconnected intervention islands within a large geographic area. To provide service to these intervention islands with over-spill implications has three main effects: i. Significantly reduced number of properties eligible for intervention in the nominated area. ii. iii. A disproportionate, in typical wireless terms, capital cost of infrastructure to serve these areas. The combination of (i) and (ii) naturally pushes up the cost per premises passed. Because of these reasons, AB Internet s feasibility study shows that the cost per premises passed is significantly higher than its experience in other areas of the UK, thus: Area Cost Per Premises Passed Lincolnshire Pilot Regional F10 study DCM&S Pilot Project projected costs Nevertheless, the ultimate test comes, when comparing these figures to BDUK s work on a national stage, using headline figures thus: Stage Aim Funds Available Phase 1 Phase 2 90% Superfast Coverage, USC 2Mb Moving from 90% to 95% Superfast Coverage 530Million central funding, matched locally 250Million Government funding and 250 Million local funding, giving a total fund of 500 Million Number of properties Approximately 28 Million Cost Per Premises passed for superfast service < Therefore at the CPPP for the proposed pilot area represents reasonable value, as, it is delivering Superfast Services to the most difficult 5% of the area for a figure between the accepted values of Phase 1 (90%) and Phase 2 (95%) The original tender proposed that The regional figure noted below ( 93.94) represents what AB considers to be the top level in terms of CPPP for this particular project. And Intervention area properties 'last 10%' = 33,000 The feasibility study shows that the reasons for the anticipated CPPP are as follows: 2 This figure does not include the properties covered outside of the NGA White boundary but still in range of the service 60

61 Issue Original Tender Feasibility Commentary Scope Intervention Area The original tender called for a notional design based on an arbitrary or assumed network design without any guidelines for geotype or demand. Therefore the output design can only be considered a model environment Original area modelled the notional network on a ubiquitous county-wide network deployment This feasibility study has enabled AB Internet to research a defined area, to survey accordingly and to turn that into a refined network design. The proposed pilot area is for specific intervention areas, set in discrete islands within a county Wireless services are most effective when deployed across a wide, contiguous area and although the designed network covers almost 100% of the nominated white intervention areas: To achieve this coverage in such a dispersed manner dictates a network that crosses the whole county. Over 40% of the land mass covered by the network is already classified as either NGA Grey/Black or Superfast Wales Blue as such it is ineligible for state intervention. Addressable market Topography CPPP figures modelled on an addressable market of 33,000 premises passed with 50 sites. (Proposed Network was 15 Sites) Network model driving CPPP assumed county-wide network of mixed, predominantly open topography In baseline intervention area (without contributions from properties in Incidental coverage) There are only 1696 properties Topography of Pilot area dominated by a rolling topography of hills and valleys Original ratio on proposal that led to assumed CPPP was 660 intervention properties per site. The intervention area of the pilot project identified by the Feasibility only has 169 properties per site. Addressable market is a function of (a) The Height of the mast and (b) the topography. In the proposed intervention area, the hills assist with (a) but the rolling nature of the terrain compromises line of sight considerations (b) meaning a lower mast/subscriber density. Overspill In NGA Terms The proposed pilot network in Monmouthshire will address the demand in NGA White areas in The County and its 1,696 intervention postcodes. To address State Aid and double investment concerns, the network has not been designed to cover areas that are defined as either NGA Grey, NGA Black or Superfast Cymru Blue, as per Welsh Government Public Consultation of July

62 However, in planning this network, a degree of overspill is inevitable, by virtue of the following reasons: i. The more the rollout of superfast coverage moves towards the final 5%, overspill into areas already funded or identified as commercial rollout is inevitable. Avoiding incidental coverage is simply not possible even in the most remote areas. ii. Fixed Wireless Access services do not need access to local BT cabinets and does respect county/parish borders and postcode areas. It is only driven by topography and ground clutter. In terms of coverage in other counties Although targeting the white areas of Monmouthshire, the proposed network will also offer incidental coverage into identified white areas of: Torfaen In both cases Caerleon Newport Herefordshire (The Golden Valley) Gloucestershire (The Forest of Dean) Postcodes from other white areas outside Monmouthshire contribute to the capital sensitivity model in terms of CPPP. Whereas, subscribers from all areas are included in recurring revenue (sustainability) sensitivity analysis, as, it is assumed that the pilot network will also inevitably attract subscribers from incidental coverage area regardless of NGA or other operator rollout status. The income derived from these extra customers would in fact reduce the burden on State Aid funding and help reduce the CPPP. As the network is profitable and is modelled on an already known to be profitable business, the extra revenue gained from these customers outside the funded boundary to actually, not only contribute, but help develop and grow the service to the benefit of all customers regardless of their geotype, classification or geography. 62

63 END USER FEEDBACK AND STATISTICS End User Learning and Input AB Internet will deploy its Essential Broadband Services in the proposed pilot area, augmented by dedicated connectivity services for businesses. The core retail offerings will be as follows: Essential Broadband Retail Tariff Product description Contended broadband service Headline Speeds Monthly usage* Download Upload Download Upload Connection fee Monthly fee 2Mb 2Mb Mb 4Mb Mb 10Mb 100Gb 50Gb Mb 10Mb Mb 10Mb Static IP Address 4.50 zero Service includes: Full Installation, Free Hosting account Notes: *Monthly usage governed by Fair Usage Policy 12 Month Minimum term All prices include VAT Customer premises equipment (except WiFi router) remains property of AB Internet The Office of National Statistics classifies Monmouthshire as Prospering Smaller Towns Type B. This classification is the same type as much of Lincolnshire, an area where AB Internet has already deployed a large superfast network. So in terms of the demographic type, demonstrable parallels can be drawn on uptake rates, ARPU and customer price sensitivity. The Market and Service Take-up Monmouthshire has a spread of age group structure that mirrors Wales national figure. We can reasonably assume then, that uptake will be at the same rates as elsewhere in AB Internet s Welsh network, as age groups naturally have similar service adoption rates nationwide. 63

64 The key difference between Monmouthshire and a lot of the areas that AB Internet already serves is one of income, occupations and house value. In terms of average household income per annum, it is in the top classification of average salary group; 28,466-48,836pa*, putting Monmouthshire in the same group as Cardiff. Exactly the same can be said for the penetration of higher managerial and professional occupations* and with respect to the long term unemployed, Monmouthshire is in the lowest group, with only 0.8%-2.3% classed as unemployed*. Average house prices are approximately 50% higher than the welsh average**. (sources* Wales Rural Observatory **Land Registry and Office of National Statistics). Based on these figures, along with AB s direct experience in deploying to 3 rural communities in Monmouthshire, the proposed uptake figures of 309 subscribers is likely to be conservative. Therefore: Principal price sensitivity experienced elsewhere, relating to the average connection fee of 149 will not provide a significant barrier to uptake in Monmouthshire. As elsewhere, monthly tariffs are seldom an issue, as subscribers will always choose the most appropriate package that suits their budget and need. Service Speed Take-up Taking the geographic and demographic spread in Monmouthshire and using data from existing customers product distribution in the Monmouthshire area(existing customers of AB Internet), combined with other AB communities around the UK that match the same profile, it is reasonable to assume that the take-up in the proposed pilot area will be identical to AB s UK experience, namely: Customer break down by service speed EB25 16% EB50 20% EB10 30% EB2 11% EB4 23% 64

65 Although the majority of subscribers elect for a service speed at less than superfast levels, the most popular single product has changed over the past 12 months from 4Mb to 10Mb with a consequent rise in ARPU from to 25 per month. This is the result of two factors: i. Early adopters, moving from sub - 2Mb services, for whom any-fast is better than superfast and choosing a slower service. This represents the lower end of the distribution spectrum. ii. More mature users (in a connectivity sense) drawing either from their experience of a historic relationship with AB Internet services and upgrading or, bringing superfast experience in from other areas, due to work, or a move etc. Business/Residential subscriber split 38% 62% Residential subscribers Business subscribers 65