WICKED BROADBAND REQUEST FOR INFORMATION (RFI) RFI Description: Contacts: Ultra-High Speed Common Carriage Fiber Network Wicked Broadband Project No: 20140124-01 Joshua Montgomery, Project Coordinator Email: joshua.montgomery@wickedbroadband.com Phone: (785) 840-6155 Kris Adair, Financial Coordinator Email: kris.adiar@wickedbroadband.com Phone: (785) 840-7989 Copy Requirements: Due Date & Time: Submit to Address: One electronic copy in PDF Format Letter of Intent: Friday, February 7, 2013 at 3:00 PM CST Final Response: Friday February 14, 2013 at 3:00 PM CST Joshua Montgomery Wicked Broadband P.O. Box 3532 Lawrence, KS 66047 e-mail: joshua.montgomery@wickedbroadband.com
Table of Contents Table of Contents... 1 Introduction... 2 Project Background... 3 History of Wicked Broadband... 4 Project Goals... 4 Approach... 5 Residential Service... 5 Business Service... 5 Community and Non-Profit Service... 5 City Fees & Rights of Way... 5 Common Carriage... 5 Buildout Requirements... 6 Technology... 6 Statement of Need... 6 Existing Fiber Assets... 6 Backhaul Capacity... 6 Marketing and Promotion... 7 Information Required to Respond to this RFI and Response Procedure... 7
Introduction Wicked Broadband is a Lawrence Kansas based Internet service provider specializing in ultra high speed broadband networks. The company began providing service in 2006 by designing and constructing one of the nation s largest mesh network systems. Over the next 5 years the company expanded its network footprint to include much of the rural community in surrounding Douglas County. In 2010 Wicked began installing and provisioning ultra high speed fiber-optic services. This has allowed the company to expand its services to include the same one Gigabit per second speeds provided by Google Fiber in Kansas City. The company s expertise in wireless broadband has translated extremely well to fiber. Engineers who are used to providing quality services over wireless infrastructure are able, on fiber, to provide robust, fault tolerant, high throughput services with ultra low latency. The following speed test was taken during prime time from a residential customer s home. Figure 1: Speedtest.net results from residential fiber customer 6:51PM CST, Jan 25, 2014 Wicked s fiber-optic service is 100x faster than the services currently available to the average American household. Wicked is seeking a municipal partner who is interested in having the company fund, design and deploy a fiber-to-the-premises network within their community. The selected municipality will be asked to provide in-kind support for the project. Wicked is looking for support like access to rights-of-way, pole attachments, co-location of infrastructure and marketing. This is similar to what Google Fiber received in Kansas City. The proposed project will take place in two phases. A pilot phase will be initiated to demonstrate the technology to local residents and grow awareness of Wicked and its capabilities. Once the pilot is completed and fully subscribed (30% subscription), the company will expand to include every neighborhood in the community where demand is sufficient to justify an investment (10% pre-registration). To ensure that the local municipality is fully vested, Wicked will require its selected partner to make some level of financial contribution to the pilot phase. The phase two expansion will be fully funded by Wicked and its partners. 2
As part of its commitment to the local community in Lawrence, Wicked currently provides free services to low income families, non-profit organizations and government entities. The company provides free Internet services to residents of the Lawrence Douglas County Housing Authority, Habitat for Humanity, the Lawrence Homeless Shelter, Just Food, Judah Worship Center, Ecumenical Christian Ministries, the Wakarusa Township Fire Department and many others. To promote business development and encourage local entrepreneurship, Wicked Broadband has recently announced a program to provide free service to new businesses in the community for their first six months of operations. The company also provides a free WiFi network that covers all of Lawrence s downtown shopping district. Wicked Broadband is seeking a forward thinking municipality in eastern Kansas or western Missouri that is interested in hosting a good corporate citizen that will add to the quality of life through leadership and support of local civic and philanthropic organizations. Project Background In May of 2013 Wicked submitted an economic development proposal to the City of Lawrence for a fiber to the premises (FTTP) ultra-high speed broadband network. Wicked currently provides this level of service to selected addresses in an area surrounding the University of Kansas campus. The proposed project would take place in two phases with the first phase taking the form of a 1,000 address pilot project. The second phase will be expansion into the rest of the community. The pilot neighborhood for this project was selected through a pre-registration drive where potential customers paid $10 each to pre-register for service. In preparation for the pilot project Wicked Broadband has installed gigabit fiber connections to a number of residential and business beta sites throughout the community. Federal law makes it illegal for municipalities to require Internet service providers to pay a franchise fee on broadband revenue. Despite this, Wicked voluntarily pays a 5% franchise fee to the City of Lawrence for use of the rights of way and certain City owned property. As part of the pilot project Wicked is simultaneously building a dense 802.11n WiFi network that will allow residents to connect, free of charge, to network resources at the City, County, USD497 and the University of Kansas. In exchange for a commitment to operate the new infrastructure as a common carrier network, pay a voluntary franchise fee, serve low income families, non-profits and government entities Wicked Broadband requested use of some of the City s existing dark fiber, underground conduit and other unused assets. To ensure that the City is fully vested in making the project successful, Wicked Broadband asked to keep the first $20k in broadband franchise fees (which it voluntarily pays) each year for 5 years. Finally, the company also asked for a one-time matching grant of $500k to implement the 3
pilot project. Further development of the network would be accomplished through internal funding. After waiting ten months for a response from the City of Lawrence our business team has questions as to whether Lawrence is the best partner for this project. For this reason Wicked is looking for a municipal partner who understands Wicked s value proposition and is committed to improving Internet service for its residents. History of Wicked Broadband Community Wireless Communications, Co. (DBA: Wicked Broadband) is a Kansas corporation founded in 2006 as a service provider to Lawrence Freenet. The company designed, built and operates a state-of-the art network in Lawrence and its surrounding area. From day one the company s goal has been to bring broadband services to everyone, everywhere, regardless of income. The company has always provided services to low income families and non-profit organizations at no cost. During its start-up period, Wicked grew from 2 to twenty-two employees over the course of a single year. Much of the wireless technology the company uses was developed in-house and is proprietary in nature. The company s technical team lead, Joshua Montgomery, is an Aerospace Engineer by training and serves as a Lieutenant in the Air Force s 184 th Intelligence in wing. Lt. Montgomery specializes in cyber security and cyber warfare. He is responsible for designing and supervising the construction of the Company s infrastructure. Business operations are headed by Kristie Adair. Kristie has over 15 years of industry experience and serves as an elected official on the USD 497 school board. As of 2012, Joshua and Kristie are the company s sole owners. Wicked Broadband is a native American woman owned small business. Project Goals Wicked s first and most important goal is to provide fast and reliable service its users. By providing robust high quality service, the company allows users to focus on using the Internet not how they are connected. It is Wicked s philosophy that the best ISP is the one customers never have to think about. Wicked s second goal is to make a difference in the communities we serve. We do this by providing network resources to low income households, non-profits and government entities. Wicked also seeks to make a difference by enabling small businesses to participate in the global economy through use of reliable high bandwidth Internet services. The better a business s connectivity, the better it can compete in the global economy. That means revenue for businesses, jobs for workers and economic growth for the local community. 4
Finally, Wicked seeks to provide long term sustainable return on investment for its owners and financial backers. Wicked has always been a company that focuses on long term success first and short term profitability second. Approach Wicked has a different approach to networking than other companies. Our staff understands that the best way to create a successful FTTP project is to ensure that as many residents as possible use the network. For that reason we are proposing the construction of a Common Carriage fiber network. Residential Service Services will be priced competitively with residential gigabit services in Kansas City where Google is charging $70 per month for a 1 gigabit per second connection. Pricing will be heavily dependent on the costs of bringing bandwidth into the selected municipality. Business Service In Kansas City, Google Fiber has so far focused only on residential Internet. Wicked plans to offer business service at highly competitive rates. In Lawrence, the company provides business service for $5.98/Mbps. Pricing in its new service area will be similar, but once again pricing is partially dependent on the costs of bringing capacity to the selected municipality. Community and Non-Profit Service Wicked Broadband will provide free service to all 501c(3) not-for-profit companies and government entities in neighborhoods where networks are constructed. City Fees & Rights of Way Wicked Broadband will pay the selected municipality a 5% special municipal fee on gross retail revenue in exchange for its use of city owned infrastructure and city services. This infrastructure includes, but is not limited to, access to city owned structures, light poles, transmission poles, utility power, underground conduit, hand holes, splice cases or other City property. Any and all wholesale operators making use of this system to deliver services will be required to pay the City 5% of gross retail revenues. This includes all wholesalers and is independent of the service type, delivery method or technology used. Wicked will enter into a right-of-way agreement with the selected municipality to govern the use of the rights-of-way. Common Carriage Lack of sufficient competition is one of the reasons that Internet service in the United States is slower, costlier and more limited than other countries. With that in mind, Wicked Broadband will run its new fiber network as a common carriage system. 5
Wicked will provide fixed wholesale pricing to any wholesale provider who is willing to purchase connectivity to at least one hundred (100) addresses. Providers can use the network infrastructure to deliver Internet, TV or telephone service. The expandable nature of fiber means that the infrastructure can also be used to deliver future highbandwidth services like holographic video. Buildout Requirements Wicked will initially build a network passing approximately 1,000 addresses. This number may be adjusted up or down depending on the size of the selected community. In the phase two of the project, the company will expand its fiber-optic network to include any neighborhood where 10% of the households or businesses are interested in subscribing. Technology Wicked Broadband has a slightly different take on technology than other FTTP providers. The uses active Ethernet to deliver service rather than the traditional Passive Optical Network(PON). There are a number of reasons for the company s choice of this technology, but the chief reason is that unlike PON, active Ethernet gives each address dedicated bandwidth. Homes and businesses do not share a last mile link with their neighbors. Wicked s fiber customers do not experience slowdowns at peak hours nor do entire neighborhoods experience outages due to the failure of a single piece of equipment. Wicked also installs excess capacity during its construction. The company s standard operating procedure is to install four fibers to each address. This means each address can subscribe to up to four separate services. One company might provide telephone service, another company might provide TV, both at the same address using the same infrastructure. The purpose behind this is to provide future capacity for growth and to promote competition in the local market. Statement of Need Existing Fiber Assets Wicked Broadband is looking to leverage existing fiber-optic assets in its selected community. Making use of unused fibers in existing fiber runs or dark fiber is among the easiest ways to keep the costs of new networks down. Wicked is seeking a municipality who has some existing fiber capacity in place to help defray the costs of bringing fiber-optic capacity into the various neighborhoods to be served. Backhaul Capacity One substantial impediment to building ultra high speed networks is providing data transport from the community being served to a tier 1 or tier 2 network provider. 6
One factor that will help to keep the costs of retail level services down is low cost data transport to Kansas City or another market where interconnects with tier 1 or tier 2 ISPs are possible. Marketing and Promotion For long term success, it is essential for any ISP to obtain enough market share to pay for its fixed costs. To achieve success, Wicked will need to achieve 30% subscription by year three of the project. Awareness of the project and the benefits it brings to the community is essential to achieving this goal. Wicked is seeking a municipality that will voice full throated support of its effort both to its residents and to the press. Wicked has already been featured in Forbes and Wired as an innovative operation that is replicating Google s success on a smaller scale. Figure 2: Wicked Broadband's Project Featured Nationally Information Required to Respond to this RFI and Response Procedure Wicked Broadband requests the following information in as much detail as is practicable from respondents: 1. Tell us a little about your community. What makes it special? What kind of activities, festivals and entertainment does your community enjoy? What is the major industry? How will ultra-high speed broadband benefit your residents? What is your vision for your community s future? 2. Provide a map of the City s existing fiber assets. Include the number of fibers, locations of splice cases and termination sites. Indicate how many dark fibers are available in each segment and how many the City is willing to part with. 7
3. Indicate the cost, if any, of accessing dark fiber. What kind of agreement or Indefeasible Right of Use (IRU) is the City willing to provide? Has the City provided fiber under an IRU in the past? If the City has provided IRUs in the past, please provide a representative copy. 4. Does the City own its utility poles? If so, please explain what kind of process or procedure the City envisions to apply for pole attachments. Can the City expedite the process? What fee structure does the City envision for the initial attachment process? Once fiber is attached to utility poles, what compensation would the City require on an annual basis per pole? 5. Does the City have access to long haul fiber? If so, which markets does this fiber connect the City to? What resources can the city make available to help access any long haul fiber? Provide a map of any long haul fiber assets. 6. What uses does the city see for Wicked s services to non-profits, government entities and low income households? Does the City have programs in place to ensure that low income neighborhoods have adequate Internet infrastructure? How does the City envision Wicked can identify low income families that are eligible for free service? Does the City have any plans or programs to provide low income households with computers to access the Internet? 7. Does the local school district have any interests in participating in a universal service program? If so, what role does the City see the school district playing in the project? Are there opportunities to co-locate facilities with the school district to reduce costs and provide better access to students? What kind of educational programs are available for students who might have little or no experience accessing the Internet? 8. The cost of building out last mile coverage can vary from as little as $500 per address to as much as $3,000 depending on the availability of above ground utility poles, the distance between houses and regulatory expenses. What kind of loans, grants or other financial participation is the City willing to consider to help defray the costs of initial network construction? 9. In Kansas City Google received stunning regulatory concessions and incentives from local governments, including free access to virtually everything the city owns or controls: rights of way, central office space, power, interconnections with anchor institutions, marketing and direct mail, and office space for Google employees. City officials also expedited the permitting process and assigned staff specifically to help Google. One county even offered to allow Google to hang its wires on parts of utility poles for free that are usually off-limits to communications companies. 1 What type of regulatory concessions can the City make available to help facilitate the project and keep expenses down? Does the City have facilities that it can make available to house servers, switches and the other equipment necessary to provision service? 10. What type of start-up or entrepreneurial programs does the City have to encourage residents to start new businesses? Does the City have a tech community that is involved in developing novel new software or hardware technologies? How does the City see Wicked s initiative 1 Lee, Timothy B. How Kansas City Taxpayers support Google Fiber, Sept 7, 2012, Ars Technica, Retrieved January 25, 2014, http://arstechnica.com/tech-policy/2012/09/how-kansas-city-taxpayers-support-google-fiber/ 8
benefiting the local business community? What steps can Wicked and/or the City take to help grow jobs in the local community? All interested respondents are required to submit a letter of intent via e-mail by 3:00 PM central daylight time February 7, 2014 to joshua.montgomery@wickedbroadband.com, or via hard copy to: Joshua Montgomery Wicked Broadband PO Box 3532 Lawrence, KS 66046 Please email a final copy of the RFI response in PDF format to joshua.montgomery@wickedbroadband.com by 3:00 PM Central Standard Time on February 14, 2014 9