chebeague island broadband report984705d3-c709-4324-9040-19247d...process undertaken by island...

CHEBEAGUE ISLAND BROADBAND COMMITTEE May 24, 2019

Chebeague Island Broadband Report May 24, 2019

! of !1 7


SUMMARY

In November 2016 the Board of Selectmen formed an ad-hoc Broadband working group to “to advise the direction that the community should take in “ensuring Internet service adequate to the future needs of Chebeague Island“. After 2-1/2 years of research, the Broadband Committee has compiled this document to present the recommendations as outlined in 2016 and a plan to realize those recommendations.

Thank you for your input and taking the time to learn about this. Please let us know if you would like any resource material to back up our findings.

Who is on the Broadband Committee ? Ron McKinnon (chair), Chip Emery, David Hill Former members: Bev Johnson, Bob Libby and Chris Loder. Email: [email protected]

What was their mission ? The directive asks the committee to provide recommendations: What role should the Town play in the delivery of broadband Internet services, if any The nature and ownership of necessary infrastructure The role of any possible public/private partnerships

The directive also enabled the committee to: Seek planning grant money Hold public meetings to solicit input from the community Work with the incumbent Internet Service Providers: Consolidated Communications (Fairpoint) and Axiom

How they conducted their research ? Met with vendors, other communities, Island Institute and created DownBay Alliance with Long and Cliff Island. Attended events for ConnectME, Maine Broadband Coalition, Maine Community Foundation and other state entities. Developed and promoted an online survey. 40+ meetings on Chebeague, Portland, Rockland, Cranberry Isles and Augusta. Investigated online resources. Set up a Blog - 140+ posts. 176 subscribers. Followed State legislative action.

! of !2 7


! of !3 7

Timeline of Activity

Date Activity

Dec 2016 Telecom with Island Institute

Jan 2017 BB meeting-discuss 3 island coalition3 members @ Augusta-National ConnectME survey tool

Feb 2017 BBand meeting HallSet up Broadband Blog @chebeague.events

Mar 2017 Attend Maine Community Foundation Grant writing meetingJoin Google Group - Maine Broadband Coalition

Mar 2017 Develop mailing list for BlogAttended ConnectME grant application Webinar

April 2017 Meet at Casco Bay Lines with Cliff/Long/Chebeague (DownBay)/Island InstituteSelectman approve $5K survey funding

May 2017 Telecon with DownBay and Island Institute about Request for Engineering Survey (RFI)Island Institute sent RFI out to ten candidatesEstablish Survey Monkey Online Survey

June 2017 Establish phone line for Survey call in - auto link to email alertRFI proposals received & reviewed with DownBay and Island Institute

July 2017 DownBay committees individually review RFIHand out Survey Sign Up cardsTelecon with DownBay to confirm RFI and Axiom Schedule-saves Chebeague $75K Install Survey Sign Up card holders at public placesAxiom visiting Long and CliffAxiom visiting Chebeague

Date Activity

Aug 2017 weekly blog posts Island Institute Meeting HallAxiom working on Engineering study

Oct 2017 Axiom Study Finished

Nov 2017 BB Committee meetingDownbay Telecon meeting

Dec 2017 Axiom study submitted to Island Institute

Jan 2018 Responses from RFP and additional Axiom cost saving suggestions

Feb 2018 Update presentation to SelectmenMeeting with DownBay at Casco Bay Lines

Mar 2018 Island Institue Broadband Summit - RocklandMeeting with Mark Ouelette at Parish

July 2018 Produce Educational video for Web

Aug 2018 Pubic Meeting at Hall

Oct 2018 Selectmen’s meeting with Mark Ouelette of Axiom

Dec 2018 Discussion with BOS of applying for grant

Jan 2018 Broadband Outreach meetings with volunteers prep for WorkshopPublic Broadband Workshop at HallPut meeting video on Web

Mar 2019 BOS budget and warrant discussions

April 2018 BOS budget and warrant discussions

May 2019 Post workshop slides on webBOS budget and warrant discussions

Note : There have been 380+ views of our three Web videos


IMPORTANT FINDINGS FROM THE RESEARCH

Existing Infrastructure To determine the potential to improve the internet service, the committee had to assess the current level of service on the island. The research showed that there was a great disparity in the internet service across the island. This is primarily due to the nature of DSL (electrical signals) technology and the condition of copper wiring. With DSL, service degrades over distance from the source. The condition of copper wires also impacts the quality and reliability of the service.

If the Town takes a major role in providing internet service, then all property owners will share the cost burden. It only makes sense that all property owners also have the potential to benefit from the project.

The Committee’s recommendation is “EQUAL FOR ALL”; all premises should have the same level of service within their reach.

Nature of the Infrastructure The research showed that fiber optic cable is the least expensive and most proven way to bring internet to your house. It has been used around the world for over 40 years. It transmits with light, so it doesn’t matter how far you are from the main connection.

Recent developments in Ultra Wideband radio networks that operate in the millimeter wave (mmWave) spectrum such as Fifth Generation broadband (5G) have garnered a lot of interest for delivering the last leg of a network to the end user. They are just starting to roll this technology out in dense urban areas. These new technologies may have some application on Chebeague, but we may not have the density of population that realizes any significant cost benefits. The infrastructure is usually owned by others. We are a very small and low density market.

Although future technology of wireless and even electric transmission lines are in development, we have received no written proposals. Future levels of wireless use a signal which, although robust in content, can’t travel as far in the air. Interestingly, they need a fiber backbone to feed them.

Fiber is proven - before - the installation. It has been used for years in the School and Library. Island Institute Summit attendees were largely looking at fiber.

The research showed that there might still be a market for DSL services. DSL infrastructure will remain in place after the project and may still be used as long as a provider continues to provide the service. The DSL service may, in fact, benefit from a decrease in DSL subscribers.

The Committee’s recommendation is for a 100% optical fiber infrastructure all the way to the home strung primarily on existing poles through licensing with Consolidated Communications.

! of !4 7


Ownership of the Infrastructure

As we and others have discovered, many providers can not financially justify installing new infrastructure such as fiber in a small community like Chebeague. So, they usually recommend improving the existing infrastructure (typically DSL). This is what Consolidated proposed to Chebeague.

While owning the infrastructure represents a cost to the Town it is likely the only practical way to realize a 100% fiber network. It also puts the Town in a favorable position with respect to controlling who can provide service via the Town’s infrastructure. If they don’t perform well, Chebeague can find another provider

The Committee’s recommendation is for the Town to own the infrastructure and contract with a provider to maintain the infrastructure and deliver Internet service to subscribers.

5 - Financing and Article 4 at Annual Town Meeting

The research showed that, because of a number factors, the Town of Chebeague Island faces certain challenges in applying for federal or state grants.

These factors include:

Demonstrated support (often measured by a Town’s willingness to reserve funds for a Broadband project). Current level of service (we are underserved but not unserved) The ability to self-fund (such as a small tax base with low median incomes and property valuations).

However, with the changing political climate in Augusta and new State initiatives for Broadband the likelihood of some funding for Chebeague has increased. There is currently proposed legislation to increase available funds but the amount is being negotiated and will not be known until later in the year. So, we wanted to position ourselves for applying for grants. But the level of total funding is unknown and there is no accurate way to predict it.

Federal USDA Grants are also available.

Based on work supplied by Axiom Technologies (a current provider of DSL to the island) the estimated cost of a project supporting the findings above is approximately $1.435M.

Estimated Grant Timeline 2019 Summer - Maine State Legislature discusses funding levels for ConnectMe 2019 Fall - ConnectMe levels finalized and grant applications 2019 Winter - ConnectMe grants awarded 2020 Spring - USDA grant application 2020 Summer - USDA grants awarded

! of !5 7


The following is an estimate if we were to receive $250,000 in funding. We want to stress to everyone that we have no way of knowing what level of funding we might receive. These numbers are just estimates and we could receive more or less than $250,000.

The Committee’s recommendation is to:

1) establish a reserve of $250,000 specifically for applying for grants for a Broadband project. Details of Warrant A are on the Town Website.

2) apply for grants of at least $ 250,000

3) fund any shortfall through a municipal bond.

6 - Financial Hardship Reimbursement During our outreach, some islanders expressed concern about not being able to pay higher costs. With Axiom, we have discussed a way to help them. Most of the money would come from subscribers of the new system.

The Committee’s recommendation is that the Board of Selectmen keep this option available and evaluate its feasibility at a later date.

Company to Build and Operate Infrastructure

Developing a long-term relationship with a service provider is usually beneficial for both parties. The RFI process undertaken by Island Institute in 2017 clearly showed that Axiom Technologies, as the only respondent, understood the challenges of working on an island and would adapt to creative solutions.

The research has borne out that the Axiom project on the Cranberry Isles benefited from this approach.

Possible Grant Scenario

TTL Project $1,435,000

Chebeague Broadband Fund authorized by Warrant 4 $250,000

Grant $250,000

TTL Amount for Bonding $935,000

Monthly Tax Increase per $100K house valuation $4.346

! of !6 7


The Committee’s recommendation is that the Town enter into an agreement with Axiom Technologies to assist the Town in the grant seeking process, pole survey process and to develop an initial island-wide network design drawing.

User Experience Cost: Based our our estimated level of funding shown above, a user with a $200,000 property will see about a $8.75/month increase in their tax bill due to the project. With first tier service 25 mbps/ 5 mbps the service pricing is about $70 per month.

Benefit: a typical DSL user that currently has ‘reasonable’ service might get DSL speeds of 7 mbps/ 1 mbps. With an all-fiber service this would be 25 mbps/ 5 mbps. With fiber (unlike DSL), your speed won’t change when more users are on the service. Upload speed (very important to conducting business) is many times that of DSL.

Other Information This document is available on the Town Website.

Also available on the Town Website are the following documents:

Details of Axiom’s Financial Proposal

An example of a Public/Private Ownership

Preliminary Build Out Schedule

! of !7 7

FRANCHISE AGREEMENT FOR

The Town of Chebeague Island AND

AXIOM

FRANCHISE GRANTED BY Chebeague Island, MAINE TO AXIOM

THIS AGREEMENT is entered into on XXXX, XX, 2019 by and between the Town of Chebeague Island, ME a municipal corporation organized and existing under the laws of the State of Maine (hereinafter referred to as “Chebeague” or “The Town”), and Axiom Technologies LLC, a Limited Liability Corporation duly organized under the laws of the State of Maine, with a place of business located at 3 Water Street, Machias, ME 04654 (hereinafter referred to as “Axiom”). WITNESSETH WHEAREAS Chebeague is interested in entering into an agreement for the purpose of granting an internet franchise within the town and establishing procedures governing the internet system installation and operation, both of which being services to be provided by Axiom. And NOW THEREFORE, the parties agree in consideration of the promises, mutual covenants and other good and valuable consideration as follows: Axiom will oversee the construction of town-owned internet delivery system, operate and maintain the town-owned fiber optic system (hereinafter known as “The System”) that connects premises on Chebeague Island. As described in detail in the sections below, Axiom is committed to serving the seasonal and year-round residents of Chebeague with The System that is expected to be in service for at least 30 years into the future. The Town will provide funding for this project of up to $250,000 and is committed to raising the remaining funds through federal and state grants to fund the project total cost estimated at $1.45M. If successful in being approved for grant funding, construction of this project will likely begin sometime in 2020. Axiom will be provided exclusive rights to operate and generate appropriate revenue to sustain the internet system being built and to provide service to the citizens of The Town for a term described in Section III. In addition, some portion of revenue will be returned to The Town yearly, based on a formula included in this agreement.

I. COMPLIANCE WITH APPLICABLE LAWS AND ORDANANCES

Axiom shall comply with all, statutes, codes, ordinances, rules or regulations applicable to The System and its operation and will comply with the Equal Employment Opportunity Act.

II. EFFECTIVE DATE AND TERM

a. Initial Term: this agreement shall take effect and be in full force from the date of mutual signing of the agreement for a period of twelve (12) years, pursuant to the terms and conditions set forth in this document. During this term and any subsequent renewal term, Axiom shall have the exclusive right to use The System to provide internet services

to the residents of Chebeague. If Axiom meets all terms and conditions of this Franchise Agreement, an option for renewal for an additional twelve (12) years may be exercised. This option shall be exercised by Axiom by providing notice, in writing, of Axiom’s decision to exercise this option within the last year of operation of the Initial Term.

b. The Initial Term shall include a review of this agreement every four (4) years, which shall include:

i. Individual subscriber experience(s) 1. Number of service complaints 2. Reasons for service interruptions 3. General service experience by customer survey

a. Response times b. Review the performance of Axiom’s Island Representative

ii. Technological changes 1. Review and discuss current technology 2. Review any industry upgrades that are applicable to service on the

islands 3. Create a mutually shared investment strategy for any new upgrades

agreed upon c. Axiom agrees to meet service standards defined in Appendix A and Chebeague’s two

main objectives:

Broadband Objective

Equal Access for All-

The System, as designed will be able to deliver the same speeds and same reliability across the entire island. Every home, no matter where it is located, will have access to The System’s capabilities.

Own Our Own-

The System will be owned by The Town, giving the Town a leverageable position with the Internet Service Provider to ensure that expected levels of service and reliability are met, and that the ISP remains accountable to The Town through the elements of this agreement.

In addition, the System is built to withstand significant additional demand during the summer months while still delivering world-class service to the subscribers.

d. Should Axiom not meet these standards, The Town shall request a meeting with Axiom to determine how to fix any issues related to this specific section of the contract in Section II b. If it is determined that Axiom has not met the standard, Axiom shall have 90 days, or an agreed upon time frame to fix any service issues related to Section II b. If after 90 days or the agreed upon specified timeframe, Axiom has not acted or rectified service issues reflected in the meeting, The Town, as is its right under this agreement, may terminate the Franchise agreement by providing notice in writing to Axiom.

e. As described in Section II, every four years a thorough review of Axiom’s service will be discussed with the town. If service levels do not meet the standard set forth in this

Appendix A Each Party’s Responsibility- Expected Service Level Agreements

Responsibility of each Party It shall be the responsibility of Chebeague as the owner of The System to:

Hold the proper insurance in the event of a catastrophic event that disables The System Commit to Right of Way access to Axiom for the life of the contract Support Axiom’s marketing efforts to reach a profitable take-rate of customers on

Chebeague Island It shall be the responsibility of Axiom as the operator of The System to:

Hold insurance, naming The Town of Chebeague Island, as provided in Appendix B Understand that all fiber drops and equipment at the home will be the responsibility of

Axiom to repair and maintain at their cost Coordinate all emergency repairs, on behalf of the owner, due to unforeseen

circumstances that would require Axiom or sub-contracted crews to support Chebeague as needed in the event of a large outage due to equipment damage or failure

Commit to a revenue return to Chebeague according to the formula below, after one (1) year of operation:

o 25/5M customers- $10/per customer/per month o 50/10M customers- $10/per customer/ per month o 100/20M customers- $10/per customer/per month o 25/5M Seasonal customers- $8.50/per customer/per month o 50/10M Seasonal customers- $8.50/per customer/per month o 100/20M Seasonal customers-$8.50/per customer/per month

Expected Service Level Agreements from Axiom It’s important to Axiom and Chebeague that reasonable expectations are set for customer service issues and break/fix issues. Helping homeowners have reasonable expectations of response times for service disruptions or equipment are important to maintain, so that situations that arise can be tracked, monitored and repaired in a timely manner. This section is written to ensure mutual expectations of Axiom and Chebeague. Telephone Customer Service Axiom maintains customer service hours between 8am-4pm, Monday through Saturday. All service interruptions shall be initially communicated by Chebeague residents via a call to Axiom tech support. Any calls after hours are handled case-by case basis at the sole discretion of Axiom.

Service Calls For those issues that cannot be resolved via telephone, the on-island Axiom Field representative will be dispatched per the direction of Axiom to support any equipment troubleshooting or repair. Dispatch from Axiom Axiom maintains a Field Crew in Machias, ME, its headquarters. In the rare event that telephone and local service call is unable to resolve an issue, Axiom will dispatch to the island in a timely manner within 48 hours. Emergency Repairs In the event of a repair that involves multiple subscribers or equipment/cable failure, Axiom will work closely with Chebeague to determine if the event is insurable and ensure that the emergency is addressed as quickly as possible, including but not limited to Axiom Field technicians being diverted from other work to address the issue, and that the responsibilities as the owner of The System to provide payment of any expenses of emergency repair in a timely manner in accordance with the responsibilities each party described in the above section.

3 Water Street Machias, ME 04654 www.connectwithaxiom.com

Attachment A Construction Timeline

This construction timeline should be considered a guideline to what the Town and Islanders can expect from Axiom regarding the construction and delivery of service deadlines as described in the Franchise Agreement. Of note, any of caveats described in Section IV, could have a significant effect on the project timelines as described below: Estimated total project timeline: 9-12 months from signing agreement to begin to serve customers. Phase I-: First 6 months The first six months after the contract is awarded are dedicated to applying for pole licensing and working with the incumbent providers to complete make-ready on the existing pole line.

o Refine final pricing o Order telco shack- or retrofit existing space o Order regen equipment o Install shack and equipment/ready for operations

Phase II: Months 6-9

o Order all equipment and material for project o All trunk fiber installed, spliced, and tested

Phase III: Month 9- 12 (some overlap from Phase II)

o All drop to the homes completed and home connections begin o All home installs completed

Phase IV: Month 12

o Complete final hookups, if any remain o Clean up materials and equipment o Complete any final turn ups for service o Begin first full year of service to Islanders

Appendix C Homeowner Q & A

Axiom, as an agent of Chebeague, is going to be installing a Fiber to the Home Internet Solution that will be blazingly fast, highly reliable and that will easily scale up as the demand on The System changes over time. As part of our commitment to the community we have put together this guide that should answer most questions that homeowners have about the cost and how the service will come to their home.

Cost of Service Axiom will be offering multiple packages for homeowners and businesses to choose from. Business Rates, including rates for enhanced response times, have not yet been determined. As part of the negotiation with the town, a seasonal rate has also been established. Pricing for higher speed packages will be made available upon request. Symmetrical internet service (same speeds up and down), is available for an addition $5/month. Monthly Rates 25Mbps/5Mbps $69.99 per month 50Mbps/10Mbps $79.99 per month 100Mbps/20Mbps $109.99 per month Seasonal Rates* 25Mbps/5Mbps $713.99 annual fee 50Mbps/10Mbps $815.99 annual fee 100Mbps/20Mbps $1121.99 annual fee *Seasonal rates are paid in full annually and reflect a 15% discount off the regular rate. Seasonal service is active from May 1-Novermber 1 of each year.

Deposits for Installation During the construction period, Axiom will begin to process service requests by accepting a $99 reservation deposit. This fee will be credited fully to your account and applied against your monthly service charge once installation is complete and regular billing commences. IMPORTANT DETAILS Those who do not secure their no-cost installation by placing a deposit during the construction phase will be subject to a significant installation fee should they desire service in the future. Fully paid installations will require a visit from off-island contractors to run fiber to the home and splice into the network, as well as purchase of the electronics hardware associated with the installation. Although the fees for one-off installations after the network is deployed have not yet been determined, it is unlikely that they will be less than several hundreds of dollars per premise. Axiom strongly recommends taking service during the initial deployment period to

ensure connectivity at your location, to avoid future high install costs, and to maximize property value. The construction and installation schedule are not yet determined and is reliant on the timing of receiving notice of a decision on a USDA federal grant application or other funds. Once construction begins, scheduling is subject to change based on a number of factors, including weather, contractor delays, and other situations beyond Axiom’s control. Although we will make every effort to hook customers up to The System in a timely way, absolute guarantees about service start dates cannot be made. While your $99 deposit guarantees you a no-charge install, it does not secure a particular date or sequence for your install – installations will occur in the order dictated by the logistics of the fiber-buildout process. Customers connected during the no-charge install period are committing to a 2-year initial term of service with Axiom. Subsequent to the initial 2-year term, subscribers are free to change providers or terminate service as they see fit.

How does fiber get to my home? The design of The System will have the cabling run on the utility poles, and connections to each home will follow (as much as possible) the current electrical and phone connections from the utility pole to the individual home. Option #1- BY DEFAULT- if you have existing utility poles near your home, Axiom will run your connection aerially to your home from the nearest utility pole and will follow the electrical and phone service connections to your home as much as possible. Option #2- If the utility pole infrastructure does not reach your home, or is buried, it will likely be necessary to run the cable to your home ON THE GROUND. Cable is direct-burial rated and post-install should be tucked below sod with a spade or edger by the homeowner or caretaker/contractor to prevent cable damage in landscaped or trafficked areas. A conduit can also be placed to accept the cable at time of install. Upon request, Axiom will provide specifications to the homeowner for this type of install. When deposits are placed, each homeowner is acknowledging Axiom will run fiber aerially across their property as the default method of installation. Option #2 installations should be discussed with Axiom at the time of deposit. Axiom will work with individual homeowners to address reasonable concerns about cable routing and other issues while running the fiber, however additional costs may be incurred if homeowner requests are determined to require significant additional staff time for installation. Axiom will not be responsible for landscape restoration, replanting, repairing turf damage, or other remediation required as a result of any additional work completed at the behest of the homeowner.

Additional Dwellings/Family compounds No-cost installations to as many buildings as desired may be ordered as described above, by paying a $99 deposit and signing a 2-year contract for service at that building. Alternately, property owners are allowed to share a connection between buildings (garage, guest house, etc.) on their property (defined as one tax map lot), however wiring for these additional buildings is the homeowner’s responsibility. Sharing service between multiple properties (across multiple tax map lots) is not permitted, as costs for the town increase substantially if projected subscriber counts are not achieved. Should you so desire, Axiom will be available, at our customary rates, to consult on, design, and/or build customized solutions to integrate additional buildings on your property into a wired or wireless network, connecting back to your fiber connection.

chebeague island broadband report984705d3-c709-4324-9040-19247d...process undertaken by island...

Documents