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2007_0820_Packet
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2007_0820_Packet
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Roseville City Council
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Next Gene>-ationNetwark Plan <br />Page 6 <br />1.2.1.4 Costs and Financing Considerations <br />Based on CTC's experience with other municipal fiber optic construction projects, and <br />our meetings and surveys within NSCC, CTC estimates the cost of constructing a fiber <br />optic backbone ring and connecting the 108 sites to be $6 million p��s $1.9 million for <br />the electronics. It may be possible to reduce the fiber construction costs by as much as 50 <br />percent by leasing dark fiber from willing entities.' <br />The key way to understand the value of community-owned fiber is to compare its <br />financed cost to �he alteinatives. Assuming the cities financed the cost of building the <br />z�etwe�z-�C (financing the fiber over 20 years and the electronics over five years); the annual <br />principal and interest (P&I} payment would be $898,000. In addition to the P&� <br />payment, we estimate the annual operations and maintenance costs at $237,000 per year. <br />This z-esu�ts in an average cost per month of $880 for each of the selected sites (see Table <br />7, Section 8). <br />By co�nparzson, comparable functionality over leased circuits would cost far more than <br />that amount if the cities were forced by technological ancilo� regulatory change to replace <br />the I-Net with leased services. Qwest's Metro Gptical Ethernet offers high capacity, but <br />the lease costs are often prohibitive. For example, Metro Optical Ethemet monthly lease <br />fees range from $726 for 5 Mbps to $5,595 for 1 G}�+�s.�' <br />Assuming common industry pricing for IO Mbps and 1,000 Mbps private Ethemet, the <br />proposed NGN would cost $1.9 million per year, ad infr�iit�urrz if leased from Qwest — <br />compared to a one-time construction cost of less than $8 million (including both fiber and <br />networking equipment) to build the entire community-owned NGN. <br />We therefore estimate that the cost of fiber construction would be recouped in two years-- <br />based on comparable lease expenditures that would be incurred in the absence of the �- <br />Net--while providing enhanced user communications capabilities. At the same time, the <br />fiber NGN would scale with the jurisdictions' needs, with no additional costs for fiber. <br />If the cities are able to negotiate lease of dark fiber from third party providers, the fiber <br />construction costs can be reduced by as much as 50 percent and the payback period <br />would shrink r�rc,},�r, � i v i7 �I �y.' <br />� To better understand the potential of leasing dark fiber, NSCC issued a request-for-information (RPi) to <br />identified ca€riers in the region. Although only two respondents indicated the ability or interest to provide <br />dark fiber, we suspect many more options exist. CTC's experience suggests that potential dark fiber . � <br />providers will not sut-t'ace until NSCC makes a commitment to build or to acquire additional fiber <br />connectivity. � <br />¢ Lease fees listed are for a 60 �ton� contract. Sharter contracts are available, hut at a higher price. Section <br />7.1.5 and Appendix G provide additional detail. <br />7 See Section 9 for additional details. <br />all text and diagraFris �} CTC 2007 <br />
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