Appendix B: Residential and Small Business Market Assessment Draft

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1 Appendix B: Residential and Small Business Market Assessment Draft Prepared for City of Ocala July 2015

2 Contents 1 Residential and Small Business Internet Services in Ocala Digital Subscriber Line Cable Bright House Networks Comcast Cox Communications Florida Cable Fiber - Level Satellite DishNET Exede HughesNet Wireless Verizon Sprint AT&T Cricket Wireless T-Mobile... 9 Tables Table 1: Overview of Residential and Small Business Data Services in Ocala... 2 Table 2: Bright House Networks Residential Internet Internet Only... 4 Table 3: Bright House Networks Small Business Internet Internet Only... 4 Table 4: Comcast Residential Internet Internet Only... 5 Table 5: Cox Communications Residential Internet Internet Only... 5 Table 6: Cox Communications Small Business Internet Internet Only... 6 i

3 1 Summary This Appendix provides an overview of residential and small business services in Ocala today. These are the services with which a fiber-to-the-premises network would directly compete. The mid-range 1 fiber-based services that Ocala Utility Services provides today would not directly compete with the residential and small business services. However, as residential services improve in performance, some subscriber erosion will likely occur, and the utility will see pressure to reduce prices. Ocala Utility Services will also likely see competition with the mid-range services. For example, Comcast began offering Gigabit Pro service in select markets in 2015, a 2 Gigabit per second service priced at $300 per month with installation fees of up to $1, Given the installation and monthly fees, this service is priced out of most residential users reach. Further, the service does not have the bells and whistles that traditional Metro Ethernet has such as committed interface rates. However, if Comcast introduces Gigabit Pro in Ocala, it could be a formidable competitor with service and pricing that has not previously existed. 1 Ocala Utility Services provide a fiber based service that offers superior performance to cable modem and DSL services but does not offer a full range of service level agreements and committed interface rates as seen with Metro Ethernet and other enterprise grade services. 2 accessed July

4 2 Residential and Small Business Internet Services in Ocala Residential and small business customers in Ocala have access to a range of services, though individual service options are largely dependent on location. Table 1 lists the service providers and minimum price for each type of service that is available in at least some part of the Ocala not every service is available in every area of the City. Table 1: Overview of Residential and Small Business Data Services in Ocala Service Type Provider Minimum Regular Price (per month) Cable Bright House Networks $58 Comcast $39.95 Cox Communications $34.99 Florida Cable $28.06 Digital CenturyLink $54.00 Subscriber Line (DSL) Satellite DishNET $49.99 Exede $49.99 HughesNet $ G/4G Cricket $35 Sprint $35 AT&T $50 Verizon $60 T-Mobile $20 We found that numerous providers offer residential and small business services in Ocala. 2.1 Digital Subscriber Line CenturyLink is the only provider in Ocala that offers digital subscriber line or DSL service for residential and small business customers. CenturyLink offers digital subscriber line service for residential customers in Ocala starting at $34.95 per month for unbundled or standalone digital subscriber line service with a 12-month commitment. The speeds offered are 3 Megabits per second (Mbps) and 10 Mbps at $34.95 per month; 15 Mbps, 20 Mbps, and 25 Mbps at $71.95 per month. After the first year, the price increases to $64 for services with up to 10 Mbps speeds and $74 for services with up to 25 Mbps speeds. CenturyLink introduced fiber-based 1 Gigabit per second (1 Gbps) service in a few cities in the US including Orlando, FL. However, it does not appear to be available in Ocala. 2

5 CenturyLink offers digital subscriber line service for small business customers in Ocala starting at a promotional rate of $29.99 per month for 10 Mbps for a 12-month commitment along with a voice connection. Internet speeds of up to 80 Mbps are available in the City, though most business locations are likely to have access to speeds of up to 20 Mbps. Pricing promotions and speeds vary with location. The regular priced offering for speeds up to 20 Mbps and upload speeds of up to 2 Mbps is $ per month with a twoyear commitment. For speeds of up to 80 Mbps and upload speeds up to 40 Mbps, the price is $ per month with a two-year commitment. Table 1: CenturyLink Residential Internet Internet Only PACKAGE INTERNET SPEED REGULAR PRICE PROMO RATE 3.0 Mbps Up to 3 Mbps $54.00/mo. $34.95/mo. 10 Mbps Up to 10 Mbps $64.00/mo. $34.95/mo. 15 Mbps Up to 15 Mbps $74.00/mo. $71.95/mo. 20 Mbps Up to 20 Mbps $74.00/mo. $71.95/mo. 25 Mbps Up to 25 Mbps $74.00/mo. $71.95/mo. 2.2 Cable Four providers offer cable Internet services for residential and small business users in Ocala: Bright House, Comcast, Cox Communications, and Florida Cable Bright House Networks Bright House Networks offers residential Internet service in five tiers in Ocala as indicated in Table 2. Promotional pricing for 12 months is available for bundled services with TV and phone services. 3

6 Table 2: Bright House Networks Residential Internet Internet Only PACKAGE INTERNET SPEED PRICE Standard Lightning 15, 35 Lightning 75 Lightning 150 Lightning Mbps /1 Mbps upload 35 Mbps /3 Mbps upload 75 Mbps /5 Mbps upload 150 Mbps /10 Mbps upload 300 Mbps /15 Mbps upload $58/mo. $78/mo. $96/mo. $168/mo. $263/mo. Bright House Networks offers small business Internet service in five tiers in Ocala as indicated in Table 3. Speeds range from 25 Mbps with 2 Mbps upload to 325 Mbps with 20 Mbps upload. Prices range from $85 per month to $285 per month. Table 3: Bright House Networks Small Business Internet Internet Only INTERNET SPEED PRICE 25 Mbps /2 Mbps upload $85/mo. 50 Mbps /5 Mbps upload $135/mo. 100 Mbps /10 Mbps upload $185/mo. 200 Mbps /15 Mbps upload $235/mo. 325 Mbps /20 Mbps upload $285/mo Comcast Comcast offers residential Internet service from 3 Mbps to 150 Mbps speeds starting at $39.95 in Ocala as indicated in Table 4. Discounted prices are available if bundled with another service like voice or TV. A promotion rate for 12 months is being offered for some services for new customers. 4

7 Table 4: Comcast Residential Internet Internet Only PACKAGE INTERNET SPEED REGULAR PRICE PROMO RATE Economy Plus Performance Starter Performance Blast! Extreme 105 Up to 3 Mbps Up to 6 Mbps Up to 25 Mbps Blast! Internet - up to 50 Mbps Up to 150 Mbps $39.95/mo. $14.99/mo. $49.95/mo. - $66.95/mo. $24.99/mo. $78.95/mo. $39.99/mo. $114.95/mo. $89.99/mo. Comcast also offers service to small businesses in its service territory with speeds that range from 16 Mbps to 150 Mbps and upload speeds of 3 Mbps to up to 20 Mbps. Prices range from $69.95 per month for 16 Mbps and 3 Mbps upload package to $ per month for a 150 Mbps and 20 Mbps upload package Cox Communications Cox Communications offers Internet services via cable modem in standalone and bundled service packages in Ocala as indicated in Table 5. A promotion rate for 12 months is being offered for some services for new customers, though it does not include starter level services. Table 5: Cox Communications Residential Internet Internet Only PACKAGE INTERNET SPEED REGULAR PRICE PROMO RATE Starter Essential Preferred Premier Ultimate Up to 5 Mbps Up to 15 Mbps Up to 50 Mbps Up to 100 Mbps Up to 150 Mbps $34.99/mo. - $52.99/mo. $39.99/mo. $66.99/mo. $54.99/mo. $77.99/mo. $64.99/mo. $99.99/mo. $79.99/mo. 5

8 Cox offers Internet services for small businesses in three tiers for a three year contract. A service offering 10 Mbps and 2 Mbps upload is available for $67 per month. After the three-year contract expires, the rate increases to $77 per month. A 25 Mbps and 5 Mbps upload is offered at $144 per month and 50 Mbps and 10 Mbps upload services is offered at $194 per month. Discounted prices are available if bundled with another service like voice or TV. In addition, Cox may provide optical internet to businesses in certain parts of Ocala. Cox s IP backbone runs through the Gainesville/Ocala area. Optical internet is a dedicated internet service that is scalable from 1 Megabit to 10 Gigabit. Pricing will be significantly higher than Cox s small business internet services. Table 6: Cox Communications Small Business Internet Internet Only INTERNET SPEED Up to 10 Mbps and 2 Mbps upload Up to 25 Mbps and 5 Mbps upload Up to 50 Mbps and 10 Mbps upload THREE YEAR CONTRACT PRICE $67/mo. $144/mo. $194/mo Florida Cable Florida Cable offers consumer Internet services in a limited number of areas in Ocala ranging from 1 Mbps up to 100 Mbps in Ocala. The three different price tiers for consumer Internet are: 1) Lite from $ ) Standard from $ ) Plus from $ Fiber - Level3 Level3 provides internet services to businesses in parts of the Ocala area. Level3 offers enterprise internet speeds ranging from as low as 1.54 Mbps to as high as 1000 Mbps. A dedicated internet connection of 20 Mbps starts at $1362 per month and 100 Mbps connection starts at $1988 per month. A managed internet connection of 20 Mbps starts at $1668 per month and a 100 Mbps connection starts at $2,293 per month. 6

9 2.4 Satellite There are three providers offering satellite Internet for residential and small business customers in Ocala: DishNET, Exede, and HughesNet DishNET Satellite Internet access is available in the area as well. DishNET offers residential Internet packages in the region starting at $ Packages include: 1) Up to 10 Mbps speeds with a monthly cap of 10 GB of anytime data cap for $59.99 per month 2) Up to 15 Mbps speeds with a monthly cap of 50 GB of anytime data cap for $79.99 per month Exede Exede offers three Internet packages in the region each with up to 12 Mbps and 3 Mbps upload speeds. These packages are: 1) Evolution 5 with an anytime monthly 5 GB data cap (excluding s and web pages) for $49.99 per month 2) Evolution 20 with an anytime 20 GB monthly data cap for a 6-month intro price of $69.99 per month and $79.99 per month thereafter 3) Freedom with an anytime data usage cape of 150 GB for a 6-month intro price of $99.99 per month and $ per month thereafter HughesNet HughesNet has four packages available for residential users: 1) Choice with speeds up to 5 Mbps /1 Mbps upload and a monthly data cap of 5 GB of anytime data for $49.99 per month for 24 months and $59.99 per month thereafter 2) Prime plus with speeds up to 10 Mbps /1 Mbps upload with a monthly data cap of 10 GB of anytime data for $49.99 per month for 24 months and $59.99 thereafter 3) Pro Plus with speeds up to 10 Mbps /2 Mbps up and a monthly data cap of 15 GB of anytime data for $69.99 for 24 months and $79.99 thereafter 4) Ultra with speeds up to 15 Mbps/2 Mbps, a monthly data cap of 50 GB of anytime data for $79.99 per month for 24 months and $89.99 thereafter HughesNet also offers four packages for Internet services to small businesses. The Select 100 package provides speeds of up to 10 Mbps and 1 Mbps upload and a monthly data cap of 10 GB of anytime data and 20GB of business period data (8AM 6 PM) for $79.99 per month with a two-year contract. The Select 200 package provides additional upload speeds of 7

10 up to 2 Mbps and 30GB of business period data for $99.00 per month, and the Select 300 package provides additional upload speeds of 2 Mbps and 40GB of business period data for $ per month. Finally, the Select 400 package provides speeds up to 15 Mbps and 2 Mbps upload for $ per month. 2.5 Wireless Wireless service is available from five providers in Ocala: Verizon, Sprint, AT&T, Cricket Wireless, and T-Mobile Verizon Verizon offers two 4G LTE data packages with multiple choices for data allowances and pricing depending on the desired mobility and equipment chosen. The LTE Internet Installed Broadband Package is a data-only 4G LTE service with WiFi connectivity and wired Ethernet for up to four devices. There are speeds of 5 Mbps to 12 Mbps and upload speeds of 2 Mbps to 5 Mbps. Monthly prices range from $60 for a 10 GB data allowance to $120 for a 30 GB data cap. Overages are charged at $10 per additional GB. A two-year contract is required with a $350 early termination fee. Verizon offers a $10 monthly deduction for every month completed in the contract. Other standalone devices such as the JetPack MiFi provide a mobile solution with speeds of 5 Mbps to 12 Mbps and upload speeds of 2 Mbps to 5 Mbps. Prices for the 12 options of data allowances range from $30 per month for a 4 GB data allowance to $335 per month for 50 GB of data, in addition to a monthly line access charge of $ Sprint Sprint offers 4G LTE wireless data in Ocala. The three data packages offered range from 100 MB per month data allowance for $15 per month to 6 GB per month data allowance for $50 per month to 12 GB per month data allowance for $80 per month. Each MB over the limit is billed at a cost of $.05. A two-year contract is required as well as an activation fee of $36, and equipment charges for three different types of devices. There is also an early termination fee of $ AT&T AT&T also provides 4G LTE wireless data service in the area, but only offers one package type with a 5 GB per month allowance for $50 per month. There is an overage fee of $10 per 1 GB over the limit. There are also equipment charges with or without a contract and an activation fee Cricket Wireless Cricket Wireless, which recently became a subsidiary of AT&T, offers 4G LTE wireless service in Ocala with a speed of up to 8 Mbps with three options for data allowance packages. 8

11 Starting at $35 per month for 1 GB of data allowed there are also options for data allowances of 3 GB ($45) and 10 GB ($55).Data used beyond allowances are at reduced speeds. There is a $79.99 modem fee for an additional device. There is a $15 activation fee, but no contract or early termination fees T-Mobile Of the cellular wireless providers in the area, the least expensive wireless data option offered is from T-Mobile for $20 per month with a limit of 1 GB per month. T-Mobile offers additional capabilities and increasing data limits at incremental costs in a total of six packages up to $70 per month for up to 11 GB of data. Depending upon current promotions, the $35 activation fee may be waived. 9

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