Business Plan for a Carrier Neutral Location: Better Internet for Everyone

Business Plan for a Carrier Neutral Location: Better Internet for Everyone Frank Ohrtman WMX Systems 1

I. Executive Summary Goal of the Steamboat Springs carrier neutral location: solving multiple problems with one solution Demand for internet bandwidth in Steamboat Springs grows almost exponentially annually. Monopolistic pricing policies keep the price of internet bandwidth at levels uncompetitive with that of Front Range markets. A carrier neutral location (CNL) is designed to: a) aggregate demand b) secure middle miles services that in their aggregate are redundant, abundant and affordable c) drive down the cost of internet bandwidth for community anchor institutions, service providers and consumers and d) improve the quality of life for residents of and visitors to Steamboat Springs. What is a CNL? A CNL (also known as aggregation point, meet me room or carrier hotel) is a marketplace for telecommunications services. That is, sellers of middle mile services are physically co-located with buyers of last mile services. This switching center enables a very cost effective business model for the exchange of telecommunications services thus sparing service providers from building or leasing their own buildings for this purpose. The Steamboat Springs CNL as owned and operated by Northwest Colorado Broadband, Inc., a 501c3, will occupy a space at the Steamboat Springs School District Administration Building and will consist of: a) a telecommunications rack, b) equipment cabinets c) a router, d) patch panels to connect switching equipment e) cooling equipment and f) a generator. A Request for Proposal (RFP) has been issued by NCB and a number of middle mile service providers are expected to provide competitive bids. Is the CNL financially feasible? The Steamboat Springs CNL will require an outlay of almost $100,000. How will the members of Northwest Colorado Broadband, Inc., see a return on their investment? The CNL is financially feasible if for no other reason it enables the members of NCB to buy the levels of bandwidth necessary to complete their respective missions within their respective budgets. For example, Steamboat Springs School District is currently buying 45 megabits per second of internet bandwidth for $5,000/month or $111.11/Mbps/month. The school district needs 1 Gbps to accomplish its mission. If it were to buy that amount of bandwidth per month at the current per Mbps ($111.11), the cost would be over $1 million per year. By constructing a CNL and inviting competition into the market with the introduction of other middle mile providers, the cost per Mbps could drop to at least $30/Mbps/month or even as low as $5/Mbps/month making the cost of 1,000 Mbps/month equal to the 45 Mbps/month package the school district is currently buying. Is the CNL sustainable? 2

The level of services offered via the CNL will expand over time. In Year One, the CNL will service only NCB members. As noted above, a level of commerce where alternative middle mile providers compete for the multi-gigabit per second business of the NCB members. In Year Two, last mile providers may add their demand to the demand side of the CNL which makes offering services for the middle mile providers through the CNL that much more lucrative. By Year Two, NCB may issue an RFP for a Distributed Antenna System (DAS) that would support expanded cellular and Wi-Fi services throughout Steamboat Springs. Conclusion Given the exponential growth in demand for internet bandwidth in Steamboat Springs coupled with the direct connection between broadband availability and economic development, the NCB has no choice but to proceed with the deployment of the CNL. By doing so, Steamboat Springs can serve as an example for the rest of rural America in taking control of its broadband and economic future. 3

Table of Contents Introduction: Identify the Problem and Solve It... 1 Problem: Single Middle Mile = Single Point of Failure... 1 Solution: Multiple Middle Miles=Competitive Market... 2 Solution: Multiple Middle Miles=Reliable Service... 3 Problem: Limited Bandwidth Volume Options and High Cost of Bandwidth... 5 Problem: Dependence on Service Provider for IP addressing... 5 Solution = More Vendor Choice = Competition in Bandwidth Market = Better Internet for Everyone... 6 What is a CNL?... 7 CNL Case Study: City of Cortez and Cortez-Montezuma School District... 8 Day One for CNL Operations... 9 Day Two for CNL... 10 What s in a CNL and how much will it cost?... 10 Is the CNL Financially Feasible?... 12 Financial Argument #1: The CNL Delivers the Redundancy to Prevent Network Outages for NCB Members, Steamboat Springs Community... 12 Financial Argument #2: Got Bandwidth Necessary to Sustain 21 st Century Operations?... 13 Financial Argument #3: Cost of Bandwidth in Relationship to Bandwidth Necessary to Accomplish NCB Member Missions-Example Steamboat Springs School District... 13 Financial Argument #4: What is the cost to NOT build and operate the CNLsavings for taxpayers?... 14 Financial Argument #5: Who can buy bandwidth via the CNL and at what levels?... 15 Is the CNL Sustainable?... 16 What is the Breakeven Point for the CNL?... 16 Can the CNL sustain operations revenues from participants?... 17 What is the Return on Investment (RoI) for the CNL?... 19 Can the CNL scale to meet future demand?... 20 What is a Distributed Antenna System (DAS)?... 20 Benefits of the DAS vis-à-vis the CNL: Last mile services that are redundant, abundant and affordable... 22 Connecting NCB Member Community Anchor Institutions... 23 Fiber optic cable (buried)... 23 Fiber optic cable (aerial)... 24 Microwave... 24 Fixed wireless/cellular 4G... 24 Wi-Fi... 24 Competitive Analysis: CNL vs. CenturyLink Central Office... 25 United We Bargain, Divided We Beg: Leave No NW CO Town Behind!... 27 How to Get To Redundant, Abundant, Affordable Middle Mile in Northwest Colorado... 27 4

How To Get To redundant, abundant, affordable Last Mile In Northwest Colorado... 29 5-Year Broadband Master Plan for Northwest Colorado: Outline... 36 Conclusion: Is the CNL a force multiplier?... 39 5

Introduction: Identify the Problem and Solve It Steamboat Springs and other rural Colorado communities suffer from three main shortfalls in their broadband environment: a) A single middle mile prone to repeated, prolonged outages b) A bandwidth market geared for scarcity, ie limited quantities of bandwidth available at any price c) Scarcity of bandwidth offerings leads to a cost/megabit per second (Mbps)/month that is a multiple of Front Range pricing d) A dependence on service providers for IP addressing which holds the subscriber hostage Any middle mile solution must be redundant, abundant and affordable. This business plan explains how Northwest Colorado Broadband, inc. can achieve that goal. Problem: Single Middle Mile = Single Point of Failure On October 31, 2011, an 8-hour CenturyLink network outage left Steamboat Springs largely without any telecommunications and may have cost the economy an estimated $1 million. If such an outage were to occur at peak tourist traffic, the cost to the economy could be $1 million/hour. Steamboat Springs cannot rely on a single middle mile. Figure 1 Detail of single middle mile to Steamboat Springs an majority of other rural Colorado towns 1

Solution: Multiple Middle Miles=Competitive Market Building new middle mile can be an expensive exercise. It should be noted that there are a number of near term middle mile solutions. NCB has no desire or need to be in the middle mile business. NCB has issued a request for proposal (RFP) for alternative middle mile services to the CNL. Private sector middle mile service providers will deliver alternative middle mile solutions to the CNL. Figure 2 Potential additional middle mile solutions (fiber) for Steamboat Springs 2

Solution: Multiple Middle Miles=Reliable Service Figure 3 East and West routes ensure 99.999% up time for the CNL 3

Table 1 How reliability or "availability is measured Source: http://en.wikipedia.org/wiki/high_availability 4

Problem: Limited Bandwidth Volume Options and High Cost of Bandwidth What s wrong with the picture in the Table 1 below? Compared to Front Range school districts where internet connections are redundant, abundant and affordable, NW CO school districts are at a distinct disadvantage as ever more education applications move online. This situation will only be exacerbated in 2015 when TCAP testing goes online. Perhaps only one-third of CO schools are prepared to make that move. National Broadband Plan (2010) calls for 100 Mbps per school (not school district). HD videoconferencing (aka distance learning) requires 6 Mbps up AND down. SCHOOL DISTRICT DOWNLOAD SPEED (MBPS) UPLOAD SPEED (MBPS) Steamboat Springs 26 4 South Routt 4 2 Moffat County 7 5 Meeker 6 6 Rangely 10 8 Denver Public Schools 16 9 Table 2 School internet speed test results for NW CO school districts compared to Denver Public Schools 2010-2011 school year. COMMUNITY ANCHOR INSTITUTION DOWNLOAD SPEED UPLOAD SPEED Moffat County Courthouse 4 Mbps 3 Mbps Town of Rangely 1.5 Mbps 1.5 Mbps Routt County Courthouse 9 Mbps 12 Mbps Denver Public Library 100 Mbps 100 Mbps Table 3 Community Anchor Institutions of NW CO compared to Denver Public Library Problem: Dependence on Service Provider for IP addressing Introducing new market entrants will not in and of itself solve the internet bandwidth issues for Steamboat Springs. Internet Service Providers (ISPs) issue Internet Protocol (IP) addresses to their subscribers. Changing ISPs requires changing the entire IP addressing scheme for the subscriber (school district, etc), which presents a costly management burden. Any CNL solution should include the ability to communally own and manage IP addresses thus breaking a dependence on service providers which might use IP addressing to lock in their subscribers. 5

Solution = More Vendor Choice = Competition in Bandwidth Market = Better Internet for Everyone If one picture is worth a thousand words Figures 3 below illustrates the plight of Northwest Colorado as a whole in terms of broadband environment. The map illustrates where internet speed tests have been recorded for mobile phone service. A red dot indicates the test failed to meet the threshold for broadband (4 Mbps downstream and 1 Mbps upstream). No test achieved broadband status. This collective failure of all mobile service providers to offer broadband on their networks begins with the lack of a middle mile(s) that is redundant, abundant, and affordable. If cellular providers have little or no such access to middle mile services, then they will only offer 2G or 3G mobile services and cannot graduate to offering 4G services as a result. Figure 4 Speed tests of mobile devices in NW CO. Red dots indicate a failure to reach 3 Mbps down and 1 Mbps upstream Source: Colorado Broadband Data and Development Program 6

What is a CNL? A carrier neutral location or CNL (also known as aggregation point, meet me room or carrier hotel) is a marketplace for telecommunications services. That is, sellers of middle mile services are physically co-located with buyers of last mile services. This switching center enables a very cost effective business model for the exchange of telecommunications services thus sparing service providers from building or leasing their own buildings for this purpose. The Steamboat Springs CNL as owned and operated by Northwest Colorado Broadband, Inc., a 501c3, will occupy a space at the Steamboat Springs School District Administration Building 325 Seventh St., Steamboat Springs, CO, and will consist of: a) a telecommunications rack, b) equipment cabinets c) a router, d) patch panels to connect switching equipment e) cooling equipment and f) a generator. A Request for Proposal (RFP) has been issued by NCB and a number of middle mile service providers are expected to provide competitive bids. Figure 5 How a CNL improves the local broadband environment Figure 6 Scene from CNL in City of Cortez, CO City Service Building: 3 middle mile providers and 4 last mile providers enable Montezuma-Cortez School District to have the highest bandwidth to student ratios of any school district in the state. 7

Figure 7 Diagram for the layout for the CNL. CNL Case Study: City of Cortez and Cortez-Montezuma School District CNLs are nothing new. The City of Cortez, CO has operated a CNL for a number of years with great success. There are 3 middle mile service providers and 4 last mile service providers operating out of the CNL. One shining example of the CNL s success is the ratio of bandwidth to student at Montezuma-Cortez School District as illustrated in the table below. SCHOOL DISTRICT # OF STUDENTS BANDWIDTH BANDWIDTH PER STUDENT MULTIPLE OF DPS Denver Public 77,000 500 Mbps 6.5 Kbps 1 Schools (DPS) Montezuma- 2,000 2,500 Mbps 1,250 Kbps 192 Cortez School District Steamboat 2,300 1,000 Mbps 434 Kbps 67 Springs School District (proposed, post CNL) Table 4 Comparison of Denver Public Schools and rural school districts with access to a CNL in bandwidth per student 8

Day One for CNL Operations In its simplest configuration and business model, the CNL is a physical means for NCB members to aggregate their demand presenting lucrative demand figures for middle mile service providers. In agreeing buy large quantities of bandwidth at a single meet me point in Steamboat Springs, alternative middle mile providers are offered a cost effective means to enter the Steamboat Springs market. An unscientific figure for demand at the start of operations of the CNL is at least 3 and possibly 5 gigabits per second (Gbps). Figure 8 Day One for CNL: serve NCB members only with high levels of bandwidth at a low cost per Mbps 9

Day Two for CNL Once the physical components of the CNL have been thoroughly tested through service to NCB members by alternative middle mile provider(s) the CNL services will be expanded to include last mile service providers. In driving down the cost of middle mile services and boosting network quality (redundant) and quantity (abundant) all residents and businesses of Steamboat Springs can benefit from the CNL. The addition of a Distributed Antenna System (DAS) boosts last mile services in Steamboat Springs as does the inclusion of other last mile solutions (cellular providers, cable TV and Wireless Internet Service Providers). See Figure 10 below. Figure 9 CNL Day Two: last mile providers participate in the CNL driving down the cost while driving up the quality of internet services city wide. What s in a CNL and how much will it cost? The total cost of the CNL to be operational for the Day One scenario is approximately $91,000. See Table 3 below for details. See Appendix A for Bill of Materials for the CNL, Appendix B for the router specifications, Appendix C for microtrencher specifications and pricing and Appendix D for installation of cabinet, rack, patch panel and cabling. 10

Startup Expenses Northwest Colorado Broadband Inc. Sources of Capital Owners' Investment (name and percent ownership) Other investor 150,000 Total Investment $150,000 Startup Expenses Leasehold Improvements Drywall, cage, cleaning, painting 0 Install router, racks and cabling 0 Conduit build CO to CNL (micro-trencher or contractor) 65,000 Electrical wiring and generator installation 5,000 Total Leasehold Improvements $70,000 Capital Equipment List Equipment 0 Fixtures (racks, cabinet, cabling ladder) 0 Cooling 0 Total Capital Equipment $0 Other Expenses Consultants $15,000 Other expense 2 - Total Other Expenses $15,000 Reserve for Contingencies $60,000 Working Capital 5000 Summary Statement Sources of Capital Owners' and other investments $150,000 Total Source of Funds $150,000 Startup Expenses Leasehold improvements 70,000 Capital equipment 0 Other expenses 15,000 Contingency fund 60,000 Working capital 5000 Total Startup Expenses $150,000 Table 4 Total cost of establishing the CNL. 11

Is the CNL Financially Feasible? The CNL is financially feasible from more than one perspective. As discussed earlier, the broadband environment has more than one challenge, that is, it needs to be redundant, abundant and affordable. First, does the CNL offer a redundant middle mile so that there will be no repeats of the October 31, 2011 outage of 8 hours? What is the cost per hour to NCB members to be without adequate internet services? Second, does the CNL offer the levels of bandwidth necessary for NCB members to accomplish their missions? Third, does the CNL drive down the price of internet bandwidth such that NCB members can afford to buy the levels of bandwidth necessary to accomplish their missions. Financial Argument #1: The CNL Delivers the Redundancy to Prevent Network Outages for NCB Members, Steamboat Springs Community While it might be an interesting exercise to determine the cost of a CenturyLink network outage in dollars per hour in a) lost sales by retailers, b) lost productivity in the public sector (schools, city and county governments) and c) the private sector ($/hour/employee), suffice it to say that the outage of October 31, 2011 cost Steamboat Springs retailers at least $100,000/hour for 8 hours or $800,000 in lost sales. From a community perspective, the expenses (capital and operating) of the CNL pale in comparison to the cost of just one more CenturyLink middle mile outage. COST OF NETWORK OUTAGE IN LOST SALES OCT 31, 2011 ($100,000/HOUR X 8 HOURS) COST OF NETWORK OUTAGE IN LOST PRODUCTIVITY (# WORKERS X $30/HOUR X 8 HOURS) TOTAL COST OF OUTAGE 31 OCT 2011 ONE TIME COST OF CNL SAVINGS TO COMMUNITY OVER ONE NETWORK OUTAGE $800,000 1,000x$30x8=$240,000 $1,040,000 $70,000 $940,000 Table 5 Worksheet for determining cost of network outages for Steamboat Springs In the case of figuring a return on investment for the CNL is one hour in terms of lost sales. In terms of lost sales tax (8.65% state, county, city), the RoI is 10 hours of outage. 12

Financial Argument #2: Got Bandwidth Necessary to Sustain 21 st Century Operations? Until Steamboat Springs only middle mile provider, CenturyLink, offered their MO services, the basic data offering for businesses and government offices was the T1 at 1.54 Mbps up and down priced at about $1,000/month or about $700/Mbps/month. The Federal Communications Commission (FCC) defines broadband as 4 Mbps downstream and 1 Mbps upstream. Many businesses and community anchor institutions cannot meet the demands of 21 st century operations. Without an improved broadband environment, businesses will leave and CAIs will not be able to meet their mission requirements. Steamboat Springs School District, for example, will need 230 Mbps of bandwidth (2,300 students at 100 Kbps each) in order to meet mandated online TCAP testing in 2015. When one factors distance learning applications that require 6 Mbps up and down per sessions, it becomes clear that the current environment is woefully insufficient to meet near term demands of education. Online voting and other expectations will put strains on county election officials. Financial Argument #3: Cost of Bandwidth in Relationship to Bandwidth Necessary to Accomplish NCB Member Missions- Example Steamboat Springs School District CURRENTLY BUYING 45 Mbps @ $5,000/month COST/MBPS /MONTH WILL BUY W/CNL $111.11 1 Gbps @ $5,000/mo COST/MBPS /MONTH HYPOTHETICAL SAVINGS WITH CNL $5 $111,110 - $5,000 = $106,110/month* REAL SAVINGS WITH CNL* $45,000/month or $540,000/year *Buying 1,000 Mbps at $111.11/Mbps; however, 1 Gbps pricing in Steamboat Springs is about $50,000/month making for a $45,000/month savings in bandwidth costs for the school district Table 7 Example of cost savings in bandwidth costs for Steamboat Springs School District 13

Financial Argument #4: What is the cost to NOT build and operate the CNL-savings for taxpayers? NCB MEMBER CURRENTLY BUYING COST/MBPS/ MONTH WILL BUY W/CNL SSSD 45 Mbps $111.11 1,000 Mbps YVMC CMC Routt 100 County Mbps City of Steamboat Springs Totals 1. Courthouse and annex: 10 Mbps (Resort) 2. RCSO: 10 Mbps (Comcast) 3. Hayden Road + Bridge: 3 Mbps (Zirkel) 4. Oak Creek Road + Bridge 3 Mbps (Zirkel) 5. Hayden Fairgrounds (Optima) 6. Pt2Pt T1 YVRA to Annex (CenturyLink) 7. Pt2Pt T1 Annex to RC Sherriff s Office 8. 2 T1s Passenger Internet 3.08 Mbps YVRA (CenturyLink) 9. YVRA credit card system 1.54 Mbps (CenturyLink) 10 Mbps dedicated with spikes capped at 15Mbps 1. $100 ($1,000) 2. $9.99 ($999) 3. $15.33 ($45.99) 4. $15.33 ($45.99) 5. $90 ($90) 6. $160 ($160) 7. $330 ($330) 8. $200 ($400) 9. $150 ($150) TOTAL $3221/mo or $38,652/year $100 200 Mbps COST/MBPS /MONTH REAL SAVINGS WITH CNL $5 $45,000/month $5 $2721/month $5 $800/month $48,521/month or $582,252/year Table 8 Public sector NCB members (taxpayer $) to calculate annual savings in bandwidth costs and justification for participation in CNL. The CNL potentially saves a community millions of dollars per year while delivering the bandwidth the community needs to meet 21 st century demands. 14

Per Table 8 above, annual savings to Routt county taxpayers (Steamboat Springs School District, City of Steamboat Springs, Routt County government) by buying through the CNL is $48,521 per month or $582,252 per year. With capital expense of $90,000, that represents a Return on Investment for taxpayers of less than 2 months Financial Argument #5: Who can buy bandwidth via the CNL and at what levels? A recurring argument for better internet in rural Colorado is the need to ensure businesses can get the bandwidth they need to compete. In addition to private sector service providers buying hundreds or thousands of Mbps per month through the CNL, the ability to sell bandwidth in increments of 100 Mbps serves a number of purposes: a. Ensures all public sector offices have all the bandwidth they need to best serve the taxpayer b. Ensures businesses that require that level of bandwidth can buy from a source that is redundant, abundant and affordable ensuring their survival and competitiveness c. Ensures local service providers are not circumvented in sales of lesser levels of bandwidth (Example: traditional T1, 10 Mbps DSL, cable modem, etc) d. Drives competition in the last mile driving speeds upwards to meet demands for 21 st century residential and small business applications e. Ensures any additional tenants in the CNL will contribute to the revenue and sustainability of the CNL f. NCB is a not-for-profit corporation and may sell bandwidth directly to endusers. NCB will want to keep its management simple and sell bandwidth in increments of no less than 100 Mbps at market rates OR: g. NCB can avoid potential conflicts (majority of NCB members are public sector) with SB-152 in NOT selling the bandwidth directly to a private sector end user but rather providing a clearinghouse where suppliers are introduced to buyers through the CNL. Enabling a lower cost hub of internet services (compared to central office) drives down the cost of bandwidth for public and private sector consumers alike 15

Is the CNL Sustainable? What factors will sustain the CNL in year-after-year operations ensuring the health of Steamboat Springs broadband environment? Simple business questions come into play such as the balance between revenues and expenses. What is the Breakeven Point for the CNL? Cost Description Fixed Costs ($) Fixed Costs Repairs & maintenance (assumes a $500/month contract) $6,000 Accounting and legal $- Utilities (paid by SSSD) $- Insurance (liability separate from SSSD) $1,000 Depreciation (5%/annum on fiber conduit) $3,500 Other (specify) $- Miscellaneous (unforeseen expenses $- Total Fixed Costs $ 10,500 Breakeven sales level = $ 10,500 Table 9 Breakeven analysis for CNL. Compare to one month's potential savings on school district, Routt County and City of Steamboat Springs bandwidth savings at $48,521. 16

Can the CNL sustain operations revenues from participants? While the primary approach to the CNL is an effort by NCB members to gain internet service that is redundant, abundant and affordable, the costs and potential revenues of the CNL present important elements in the decision making process for the NCB and CNL. The following tables offer a pro forma for the CNL. Assumptions include: 1 Rack or cage space rental at $500/13 sq. ft. (room for one 19 inch rack) for tenants of the CNL (bring your own rack). Includes access to fiber optic cabling (lit fiber) between central office and CNL 2. A one-time move-in fee of $1,000 for tenants 3. NCB is a non-profit and cannot accrue profits, any surplus can be invested in the CNL 4. Purchasing new cabinets to house additional tenants Table 10 Year 1 financial projections for the CNL assuming revenue from participants Table 11 Year 2 financial projections 17

Table 12 Year 3 financial projections for the CNL Table 13 Year 4 financial projections for the CNL 18

Table 14 Year 5 financial projections for CNL assuming revenue from CNL participants. What is the Return on Investment (RoI) for the CNL? Table 13 below provides a summary of financial justifications for the CNL. The most compelling argument for the CNL is the Return on Investment when considering a repeat of the October 31, 2011 Northwest Colorado-wide network outage where RoI can be measured in hours. That consideration is followed by a tabulation in savings in bandwidth costs for NCB members where savings for Steamboat Springs School District alone equals an RoI of 2 months. Finally, in a conventional profit and loss equation, RoI is about 27 months. IN SAVINGS ON BANDWIDTH BUYS (SCHOOL DISTRICT, COUNTY AND CITY) IN HOURS OF CITY-WIDE NETWORK OUTAGE IN LOST SALES (EST. $100,000/HOUR LOW SEASON, $1,000,000/HOUR HIGH SEASON) IN HOURS OF CITY-WIDE NETWORK OUTAGE IN LOST PRODUCTIVITY (EST. $30,000/HOUR LOW SEASON) IN LOST SALES TAX REVENUE* DURING CITY- WIDE NETWORK OUTAGE IN PROFIT AND LOSS GIVEN REVENUES FROM TENANTS < 2 months < 1 hour 3 hours 10 hours 34 months *8.65% sales tax: state, county, city combined Table 15 Return on investment scenarios and figures for the CNL 19

Can the CNL scale to meet future demand? The question for any infrastructure project is Will this project meet future demands? Fiber optic cabling is theoretically unlimited in its capacity to deliver bandwidth. Ergo, even a single fiber optic cable (contains multiple strands each with its own unlimited capacity relative to current demand in Steamboat Springs). For the CNL, the answer is mostly yes when assessing total bandwidth capacity of the CNL. Bandwidth demand will only go up. Scaling to deliver more bandwidth (tens, hundreds of gigabits per second) is a function of the CNL s routing capacity (router). With current estimate of bandwidth demand at the CNL at 5 Gbps with a near term (a few years) growth to 10+ Gbps. At 20 Gbps of bandwidth through the router, NCB should budget for additional routing capacity. Given that the space allotted for the CNL is over 400 square feet and each rack might take 13 square feet each, there is more than adequate room in the designated space for future expansion of the CNL. At an undetermined point in future expansions, additional cooling capacity should be considered. In short, there should be little problem in scaling the CNL to meet future demand for at least the next decade. What is a Distributed Antenna System (DAS)? The town of Vail has a Distributed Antenna System which has greatly improved cell and smart phone service while simultaneously providing high bandwidth Wi-Fi service all of which contributes to the Vail experience putting the ski resort at an advantage over other Colorado destination ski resorts in terms of 21 st century amenities. A necessary prerequisite for a DAS is a middle mile that is redundant, abundant and affordable. Once a CNL has been established in Steamboat Springs, a logical progression for the community is the addition of a DAS, which will greatly improve Steamboat Springs broadband environment in terms of cell service, smart phone performance, and Wi-Fi as a replacement for expensive (in terms of $/Mbps/month) wireline services from the telephone or cable companies. 20

Figure 10 Outdoor Distributed Antenna System (DAS) improves cell and smart phone service while simultaneously boosting Wi-Fi services 21

Figure 11 Conservative estimate of potential broadband via Wi-Fi utilizing Steamboat Springs current fiber routes Benefits of the DAS vis-à-vis the CNL: Last mile services that are redundant, abundant and affordable In changing the middle mile market to one that is redundant, abundant and affordable, the CNL enables either existing service providers or new market entrants to change the math to an equation where they can offer more bandwidth, less money while still enjoying a profit. More importantly, residents and businesses as well will benefit through more bandwidth, less money. Of note, rather than paying $1,000/month for T1 service (almost $700/Mbps), businesses might pay $100/month for 50 Mbps services via Wi-Fi from the DAS. Equally important is that visitors to Steamboat Springs never suffer from network outages (October 31, 2011) or slow internet (does Netflix work at the condo?, what about the iphone?), an aspect of the Steamboat Springs experience. A DAS coupled with a CNL offer Steamboat Springs an alternative to the scenario of October 31, 2011 where a single middle mile outage downed most telecom services. By diversifying infrastructure and related services in the local broadband environment, the adverse impact of network outages is greatly reduced. 22

Connecting NCB Member Community Anchor Institutions Establishing the CNL is a powerful step in gaining better internet service in one s community, and the next question is: how do community anchor institutions (CAI) take advantage of the CNL? It does little good to solve the middle mile connectivity problem if public sector offices must still pay relatively exorbitant prices for internet bandwidth. As a result NCB should undertake planning for connecting city, county, library, school district and medical center facilities to the CNL. Technology-wise, there are two options: fiber optic cable via city/county/private sector fiber optic cable/conduit or wireless via a range of platforms and service providers. Fiber optic cable (buried) As the figure below indicates, City of Steamboat Springs either has conduit in place or planned for placement in the near future. Some service providers have fiber optic routes that might be leased for this purpose as well. Of note, CAIs that should have priority for connection via fiber optic cable include: a. Routt County Justice Center b. Yampa Valley Medical Center c. Yampa Valley Regional Airport d. All Steamboat Springs School District schools Figure 12 Examples of community anchor institutions that are high priority for fiber optic connection to the CNL Note proximity (or lack thereof) to planned conduit/fiber routes 23

Fiber optic cable (aerial) Fiber optic cable can be attached to power poles. This is less expensive than trenching fiber ($15,000/mile vs. $25,000/mile in loose soil). Power poles in Steamboat Springs are owned and managed by Yampa Valley Electric Association (YVEA), a rural electric cooperative where all consumers of electricity are members of the cooperative and can vote for board members as well as serving as serving on the board of directors. Some rural electric cooperatives in Colorado have used aerial fiber to solve their internet issues (SE CO Power Association built aerial fiber optic services to all schools in their footprint some 13 years ago, San Luis Valley Rural Electric will build fiber-to-the-home throughout their footprint over the next few years). It should be noted that the infrastructure of YVEA and almost all rural electric cooperatives is made possible through loans from the US Department of Agriculture s Rural Utilities Services (USDA RUS). USDA RUS will eventually encourage the rural electric with which they hold outstanding loans to support rural broadband build out. 1 Having overhead power lines may provide Steamboat Springs (or partner service provider) with a relatively low-cost means of building fiber-to-the-home/premises. Microwave Microwave presents a low cost alternative to fiber optic cabling. New products on the market deliver 1 Gbps over 10 miles line of sight for about $3,000 per link ($300/mile). 2 Microwave solutions can provide near-term or interim solutions prior to a city-wide fiber build-out. Local Wireless Internet Service Providers (WISPs) Zirkel Wireless and Resort Broadband have been very successful in deploying this or similar systems. Fixed wireless/cellular 4G Fixed wireless presents a low cost alternative to the telephone company s copper wire or a cable TV company s internet services. Ubiquiti products deliver up to 50 Mbps downstream with $300 radios and $50 customer premise equipment (CPE). Local Wireless Internet Service Providers (WISPs) Zirkel Wireless and Resort Broadband have been very successful in deploying these systems. Given City of Steamboat s ownership of light poles and other fixtures, permitting for installation of such a network is greatly streamlined. In addition cellular providers will have the potential to offer 4G services in the near future. Depending on data plans, 4G may be a viable last mile solution. Wi-Fi Per the earlier discussion of a DAS, new Wi-Fi products can deliver up to 100 Mbps downstream. Depending on a subscriber s needs this may prove to be a very cost effective solution in connecting CAIs and especially effective for providing connectivity to public sector employees and students when out of the office or off-campus. Given City of Steamboat s ownership of light poles and other fixtures, permitting for installation of such a network is greatly streamlined. 1 Conversation Frank Ohrtman with USDA RUS Deputy Administrator Jessica Zufolo, June 2012 2 Ubiquiti AirFiber, http://www.ubnt.com/airfiber 24

Competitive Analysis: CNL vs. CenturyLink Central Office The business proposition for the CNL, at its core, is that it poses a disruptive alternative to CenturyLink s central office. Disruptive technology is defined as being cheaper, simpler, smaller and more convenient to use than status quo technology. 3 Figure 13 CenturyLink central office in Steamboat Springs: thousands of square feet, $30,000 movein fee. Compare to CNL at 400 square feet and $1,000 move-in fee 3 Christensen, Clayton, The Innovator s Dilemma, Harvard University Press, 1997 25

Factor CenturyLink Central NCB Carrier Neutral Location Office Move-in fee $30,000 $1,000 Monthly rack space rent per quarter $300 $300 rack Power cost included in rack rent? No, add $300/month Yes Charge per cross connect/month $300 $0 Redundant power Yes Yes Redundant cooling Yes Yes Security: ISO27000-compliant? Yes Yes NEBS3-compliant Yes No Roof rights available for backhaul? No Yes Redundant middle mile No Yes Diverse east-west path No Yes Salt Lake City route No Yes Denver route Yes Yes Table 16 Comparison of CNL to Steamboat Springs CenturyLink central office. CNL is cheaper, simpler, smaller and more convenient to use than the central office and disrupts the central office business model. Despite the Telecommunications Act of 1996 and the 1990 s telecom boom it engendered, competition did not come to the local markets of rural Colorado. Some factors that contribute to an uncompetitive market in rural Colorado include: a) monopoly middle mile b) monopoly pricing on central office (the tollgate) services renders any effort to offer competitive pricing while simultaneously using the monopolist s central office impossible. 26

United We Bargain, Divided We Beg: Leave No NW CO Town Behind! Excerpts from Colorado Blueprint Region 11 (Routt, Moffat, Rio Blanco, Garfield, Mesa Counties) Goals Re: Telecommunications/Broadband/Cellular Develop access to current generation broadband and cellular technology in rural NW Colorado Support enhancements to cellular and broadband systems to ensure business access to reliable high-speed and highcapacity communications and social networking Promote private sector expansion of middle and last mile broadband, and increase speeds and coverage area of wireless cellular technology for residential and commercial uses More resources to address broadband/cellular in the rural areas are needed and there is a need for state leaders to recognize, that like most infrastructure the private sector is unlikely to fully fill the need. The private sector is unlikely to adequately service all areas private sector will only focus on those that are profitable. We really need DOLA grant dollars for infrastructure. Excerpts for Region 12: Jackson, Grand, Summit, Eagle Counties Improve and expand technology and telecommunications infrastructure and services (to include broadband and cellular service) How to Get To Redundant, Abundant, Affordable Middle Mile in Northwest Colorado The value of a network grows exponentially with the addition of each new node. Bob Metcalf, inventor of Ethernet It will not be enough to build an oasis of broadband abundance in Steamboat Springs or even Routt County alone. There exists a strong interdependence of communities throughout Northwest Colorado and telecommunications is an integral component of that interdependence. A fiber cut in Dillon takes out all telecommunications in Northwest Colorado. Ergo, it is important that this plan serve as a template for all other communities of Northwest Colorado. 27

The figure below provides a high overview of a Northwest Colorado where the telecommunications infrastructure is redundant, abundant and affordable. To that end, planners must ensure that all communities have: 1. Redundant links to the outside world a. More than one middle mile service provider terminating at a carrier neutral location in each town (scale may vary based on demand) b. Diverse paths in and out of town (east-west, north-south) c. Diverse technologies providing middle mile services (fiber and microwave) 2. Abundant access to the levels of bandwidth needed to keep them competitive a. Multiple gigabit per second speeds available to even the smallest towns b. National Broadband Plan suggested levels of bandwidth (Example: 100 Mbps minimal for every public school 3. Affordable or competitive middle mile services a. Measured in $/Mbps/month b. Must be comparable with urban pricing Regional Planners should not wait for parties outside the region to deliver solutions in the forms of: a) large government grants b) investment by incumbent service providers. 28

Figure 14 Infrastructure plan for NW CO offering "redundant, abundant and affordable" broadband and other telecommunications services. Note South Routt County School District How To Get To redundant, abundant, affordable Last Mile In Northwest Colorado The Distributed Antenna System described earlier in this business plan is not limited to services in town. It can be replicated on a wider scale throughout Northwest Colorado. In adhering to the principles of open access networks, multiple technologies (fixed wireless, Wi-Fi, cellular) and multiple service providers can be accommodated. With reduced costs of infrastructure through this arrangement, the barriers to market entry for last mile service providers in Northwest Colorado are greatly lowered or eliminated. Electric power is ubiquitous in northwest Colorado. As the figures below illustrate, anywhere there is electric service, a DAS can be added and there can be broadband as fixed wireless, mobile (3G/4G), and Wi-Fi. 29

Figure 15 Relationship between electric power lines, DAS and ubiquitous broadband Figure 16 How electric cooperatives' infrastructure supports Distributed Antenna Systems 30

TOWN SUGGESTED SOLUTIONS TO MEET BOTTOM-UP GOALS Aspen 1. Carrier Neutral Location servicing Pitkin County Government, medical center, Aspen Ski, Aspen School District, Colorado Mountain College, cellular providers) 2. East-West redundant fiber routes 3. Redundant middle mile microwave route 4. Expanded metro fiber ring 5. Redundant Last Mile via expanded Distributed Antenna System offering fixed wireless, 4G and Wi-Fi and utilizing Holy Cross Electric poles and other assets extending to Snowmass Village Avon 1. Carrier Neutral Location at Town of Avon or Eagle County Schools facility for service providers, Town of Avon, Beaver Creek Resort 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 4. Expand existing Distributed Antenna System along I-70 utilizing CDOT fiber assets and Holy Cross Electric poles and other assets Basalt 1. Carrier Neutral Location at Town of Vail or Eagle County Schools facility 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Expanded metro fiber ring 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 5. Expand existing Distributed Antenna System along I-70 utilizing CDOT fiber assets and Holy Cross Electric poles and other assets Breckenridge 1. Carrier Neutral Location servicing medical center, Summit County Government, Summit County Schools, Town of Breckenridge, Colorado Mountain College, Breckenridge Ski Resort, CenturyLink plus microwave provider (TBD) to provide redundant middle mile 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Expanded metro fiber ring connecting medical center, Summit county government, town hall 4. Redundant Last Mile via Distributed Antenna System in town and along I-70 offering fixed wireless, 4G and Wi-Fi Carbondale 1. Carrier Neutral Location at Town of Vail or Eagle County Schools facility for service providers, Colorado Mountain College, Town of Carbondale 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Expanded metro fiber ring 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 5. Expand existing Distributed Antenna System along I-70 utilizing CDOT fiber assets and Holy Cross Electric poles and other assets Craig 1. Carrier Neutral Location to service CNCC, Craig Medical Center, Moffat County Schools, Town of Craig, Yampa Valley Electric, Zirkel Wireless, Unite Private Networks, Strata Networks 2. East-West redundant fiber routes: CenturyLink and Strata Networks 3. East microwave routes: Zirkel Wireless 4. Expanded metro fiber ring (Unite Private Networks plus any city expansion) 5. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 6. Distributed Antenna system Along I-70 utilizing Yampa Valley Electric poles and other assets Dillon 1. Carrier Neutral Location to handle switching between fiber middle mile and last mile providers enabling advantageous service to community anchor institutions (Town of Dillon, Summit County Schools, Keystone Ski Resort, Colorado Mountain College) OR partner with Silverthorne for same 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) in partnership with Silverthorne 3. Metro fiber ring on CO 9 Keystone to north Silverthorne 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi along CO 9 to Keystone 31

Dinosaur 1. Microwave middle mile from Maybell and on to Rangely 2. Fixed wireless last mile (Wi-Fi in town) Eagle 1. Carrier Neutral Location for service providers, Eagle County Government, Eagle County Airport 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Expanded metro fiber ring 4. Redundant Last Mile via Distributed Antenna System offering 4G and Wi-Fi 5. Distributed Antenna system Along I-70 utilizing Holy Cross Electric poles and other assets Edwards 1. Carrier Neutral Location for service providers, Eagle County Government, Colorado Mountain College, Town of Eagle, 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi Frisco 1. Carrier Neutral Location servicing medical center, Summit County Government, Summit County Schools, Town of Frisco 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Expanded metro fiber ring connecting medical center, Summit county government, town hall 4. Redundant Last Mile via Distributed Antenna System in town and along I-70 offering fixed wireless, 4G and Wi-Fi Fraser 1. Carrier Neutral Location for CenturyLink/Grand County Internet/Slopeside Internet/Mountain Broadband/cellular providers plus East Grand School District, Town of Fraser 2. North-South redundant fiber routes (existing CnturyLink plus fiber route to regeneration site in Fraser on Union Pacific Railroad) 3. North-South redundant microwave routes (Grand County Internet to north and potential for connecting to Mountain Broadband to south and east which then connects to Front Range) 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 5. Distributed Antenna system along US 40 utilizing Mountain Parks Electric poles and other assets Glenwood Springs 1. Carrier Neutral Location serving City of Glenwood Springs, Colorado Mountain College, medical center, service providers 2. East-West redundant fiber routes 3. Expanded metro fiber ring 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 5. Distributed Antenna system Along I-70 utilizing Xcel poles and other assets Granby 1. Carrier Neutral Location for service providers, East Grand School District, Grand County Government 2. East-West redundant fiber routes 3. East-West redundant microwave routes 4. Expanded metro fiber ring 5. Redundant Last Mile via Distributed Antenna System offering 4G and Wi-Fi 6. Distributed Antenna system Along US 40 utilizing Mountain Parks Electric poles and other assets Gypsum 1. Carrier Neutral Location for service providers 2. East-West redundant fiber routes 3. East-West redundant microwave routes 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 5. Distributed Antenna system Along US I-70 utilizing electric poles and other assets Hayden 1. Carrier Neutral Location 2. East-West redundant fiber routes 3. East-West redundant microwave routes 4. Expanded metro fiber ring 5. Redundant Last Mile via Distributed Antenna System offering 4G and Wi-Fi 6. Distributed Antenna system Along US 40 utilizing Mountain Parks Electric poles and other assets Hot Sulphur 1. Carrier Neutral Location for service providers, Grand County Government 32

Springs 2. East-West redundant fiber routes 3. East-West redundant microwave routes 4. Expanded metro fiber ring 5. Redundant Last Mile via Distributed Antenna System offering 4G and Wi-Fi 6. Distributed Antenna system Along US 40 utilizing Mountain Parks Electric poles and other assets Kremmling 1. Carrier Neutral Location 2. East-West redundant fiber routes 3. East-West redundant microwave routes 4. Expanded metro fiber ring 5. Redundant Last Mile via Distributed Antenna System offering 4G and Wi-Fi 6. Distributed Antenna system Along US 40 utilizing Mountain Parks Electric poles and other assets Maybell 1. Microwave middle mile 2. Fixed wireless last mile (Wi-Fi in town) Meeker 1. Carrier Neutral Location serving Strata Networks, Town of Meeker, energy companies 2. East-West redundant fiber routes 3. East-West redundant microwave routes 4. Expanded metro fiber ring 5. Redundant Last Mile via Distributed Antenna System offering 4G and Wi-Fi 6. Distributed Antenna system Along I-70 utilizing Yampa Valley Electric poles and other assets Oak Creek 1. 100 Mbps microwave to South Routt County School District supplied by Zirkel Wireless 2. Fixed wireless last mile service fed by that microwave middle mile to community anchor institutions, businesses and residents of Oak Creek 3. Improved cellular service due to new CenturyLink fiber optic cable along CO 131 to AT&T tower(s) 4. Potential for aerial fiber optic cable middle mile and rural DAS given participation of Yampa Valley Electric Rangely 1. Carrier Neutral Location serving Strata Networks, Town of Meeker, energy companies 2. East-West redundant fiber routes 3. East-West redundant microwave routes 4. Expanded metro fiber ring 5. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 6. Distributed Antenna system Along CO 64 utilizing Ghost Lake Electric poles and other assets Redcliff 1. Microwave middle mile 2. Fixed wireless last mile (Wi-Fi in town) Rifle 1. Carrier Neutral Location as ReGen site and switching center for: Tri-States, CenturyLink, Comcast, CDOT Colorado Mountain College, Town of Rifle 2. East-West redundant fiber routes on I-70 connecting fiber routes on Union Pacific Railroad (aka Genuity route via Kremmling and Granby to Denver) and I-70 fiber assets such as CenturyLink and CDOT 3. DAS in town and along CO 64 thanks to power lines and other assets Silverthorne 1. Carrier Neutral Location to handle switching between fiber middle mile and last mile providers enabling advantageous service to community anchor institutions (Town of Silverthorne, Summit County Schools, Factory Outlet Stores, US Forest Service). Potential to serve Dillon, too. 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Metro fiber ring on CO 9 from north Silverthorne to Keystone Resort 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 5. Distributed Antenna system along I-70 utilizing CDOT fiber assets and Xcel Energy poles and other assets Steamboat Springs 1. Carrier Neutral Location at Steamboat Springs School District building for Yampa Valley Medical Center, Steamboat Springs School District, Colorado Mountain College, Zirkel Wireless, Resort, EAGLE-Net 2. East-West redundant fiber routes (CenturyLink/EAGLE-Net/Strata) 3. Potential for East-West redundant microwave routes; West to Strata point of presence in Craig; East route to 33

fiber point of presence in Granby 4. Additional aerial fiber middle mile on Tri-States and W.A.P.A. power transmission lines from fiber route on Union Pacific Railroad line (regeneration sites in Fraser, Granby, Kremmling) 5. Expanded metro fiber ring: city trenching plus route from CNL to Yampa Valley Medical Center 6. Redundant Last Mile via Distributed Antenna System in town offering fixed wireless, 4G and Wi-Fi 7. DAS along US 40 utilizing Yampa Valley Electric poles and other assets Vail 1. Carrier Neutral Location at Town of Vail or Eagle County Schools facility for Eagle County School District, multiple service providers, multiple medical centers 2. East-West redundant fiber routes on I-70 (CDOT, Comcast, CenturyLink) 3. Expanded metro fiber ring 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 5. Expand existing Distributed Antenna System along I-70 utilizing CDOT fiber assets and Holy Cross Electric poles and other assets Walden 1. 700 Mbps microwave to Walden supplied by Zirkel Wireless/Grand County Internet/Mountain Broadband (under discussion for years, needs some work in aggregating demand, building business case for market entry by these Wireless Internet Service Providers) 2. Fixed wireless last mile service fed by that microwave middle mile to community anchor institutions, businesses and residents of Walden 3. Aerial fiber optic cable middle mile and rural DAS (CO 14 and 125) given participation of Mountain Parks Electric Winter Park 1. Carrier Neutral Location for CenturyLink/Grand County Internet/Slopeside Internet/Mountain Broadband/cellular providers plus ski resort, cellular providers 2. North-South redundant fiber routes (existing CnturyLink plus fiber route to regeneration site in Fraser on Union Pacific Railroad) 3. North-South redundant microwave routes (Grand County Internet to north and potential for connecting to Mountain Broadband to south and east which then connects to Front Range) 4. Redundant Last Mile via Distributed Antenna System offering fixed wireless, 4G and Wi-Fi 5. Distributed Antenna system along US 40 utilizing Mountain Parks Electric poles and other assets Yampa 1. 100 Mbps microwave to Yampa supplied by Zirkel Wireless or other Wireless Internet Service Provider 2. Fixed wireless last mile service fed by that microwave middle mile to community anchor institutions, businesses and residents of Oak Creek 3. Improved cellular service due to new CenturyLink fiber optic cable along CO 131 to AT&T tower(s) 4. Aerial fiber optic cable middle mile and rural DAS given participation of Yampa Valley Electric Table 17 Solutions for towns of Northwest Colorado 34

ELEMENT # OF COST EACH (DEPENDS TOTAL COMMUNITIES LARGELY ON SITE SURVEYS AT EACH COMMUNITY) Carrier Neutral 17 $100,000 $1.7 million Location Distributed Antenna 17 $250,000 $4.25 million System Total 17 $350,000 per community $5.95 million Table 18 Potential costs of carrier neutral locations Figure 17 Rural electric cooperatives of NW CO. Enlisting the support and cooperation of Mountain Parks, Yampa Valley and White River Electric will be key to this plan. 35

5- Year Broadband Master Plan for Northwest Colorado: Outline This CNL business plan provides a high overview of broadband master plan for Northwest Colorado. The CNL for Steamboat Springs provides an excellent pilot project for many of rural Colorado s communities. Planning for the middle mile redundant, abundant and affordable middle mile provides a foundation not only for Steamboat Springs future broadband infrastructure but also provides leadership for surrounding communities. Action 2013 2014 2015 2016 2017 All schools on 100 Mbps+ connections in preparation for 2015 TCAP testing All medical centers on 100 Mbps+ connections CNL with redundant middle mile operating in Steamboat Springs serving most of Routt County CNLs operating in Moffat and Rio Blanco Counties All CNCC and CMC campuses have access to 100 Mbps+ connections All I-70 communities have redundant middle mile + CNLs + DAS All US 40 communities have 2013 2014 2015 2016 2017 36

redundant middle mile + CNL + DAS All CO 131 communities have redundant middle mile + CNL + DAS All CO 13 communities have redundant middle mile + CNL + DAS All CO 82 communities have redundant middle mile + CNL + DAS All CO 14 communities have redundant middle mile + CNL + DAS Review of infrastructure: will it support FirstNet 4G demands for redundant, abundant, affordable middle mile? DAS along majority of US 40 thanks to Mountain Parks and Yampa Valley electrics DAS along CO 131 thanks to Yampa Valley Electric DAS along I- 70 thanks to Xcel and Holy Cross All K12 school students have a minimum of 6 Mbps up and 37

down both at school and at home All Public Safety personnel have access to 4G or 4G equivalent technologies and speeds anywhere in NW CO, with or without FirstNet funding Table 19 Timeline for NW CO deployment of broadband infrastructure 38

Conclusion: Is the CNL a force multiplier? The single greatest hindrance to economic development in Northwest Colorado is its lack of 21 st century telecommunications infrastructure. Most notably a single middle mile that is not redundant, abundant or affordable. A carrier neutral location lowers the barrier to entry for prospective competitive market entrants while simultaneously driving down the cost of bandwidth and driving up overall network reliability (redundancy). For this reason alone, the NCB should move forward with the construction of the CNL. While some effort went into tabulating a conventional profit and loss business plan, the most compelling argument for the CNL is savings in internet bandwidth buys for NCB members followed by direct savings and better internet service for the community as a whole. Given an investment of less than $80,000 and a potential first year aggregate savings to NCB members of $1,000,000 or more, the CNL represents a force multiplier in terms of savings on internet bandwidth while simultaneously eliminating network outages and enabling better internet for everyone in Steamboat Springs. When tabulating a return on investment in terms of lost sales and productivity in the event of a network outage such as that of October 31, 2011, RoI might be measured in hours. If RoI is figured in terms of savings on bandwidth buys for NCB members such as the Steamboat Springs School District, RoI can be measured in months. If one does run a traditional profit and loss business plan for the CNL, the pro forma will show that revenue can exceed expenses resulting in more than adequate surplus to attend to maintaining and upgrading the CNL and delivering an RoI of about 27 months. The single greatest advantage of the CNL is the simplicity or ease of which the community can change its broadband environment in what is a very low cost solution that does not require the community to operate as a telecommunications service provider nor entangle itself in exclusive contracts (cable franchises, for example). The CNL and its non-profit sponsor, NCB, Inc., represent a fine form of leveraging a public-private partnership to improve the broadband environment of Steamboat Springs. This arrangement sets the example for 21 st century telecommunications infrastructures and value networks. Perhaps the greatest advantage of the CNL is that it provides a new foundation for the broadband environment of Northwest Colorado. By breaking out of the mold of monopolistic business models, the NCB gives rise to new infrastructure and business models not heretofore possible. By enabling a Distributed Antenna System, the CNL brings 4G mobile services and ubiquitous, city and possibly county-wide Wi-Fi to bring about a last mile environment that is redundant, abundant and affordable. The construction of the CNL is the only way Northwest Colorado can ensure it is not left behind in terms of a 21 st century global economy. 39