1.            City of Lawrence fiber access program

                        1.1.            Fiber leasing program

                                          1.1.1.            City to set a rate of $250/fiber-mile/year with a stated goal of leasing at least 50% of its available fiber within 48 months.

                                                            1.1.1.1.            Fiber to be available on a first come, first served basis

                                          1.1.2.            Lease fees will be waived for entities that:

                                                            1.1.2.1.            Provide free service to low income families and non-profits within their entire Lawrence service area

                                                            1.1.2.2.            Agree to offer symmetrical service of at least 100 megabits per second to residential customers

                                                            1.1.2.3.            Agree to pay a rental fee of 5% of gross revenue for use of the fiber

                                                            1.1.2.4.            Achieve connectivity to at least 300 residential households within 24 months of signing an agreement

                                                            1.1.2.5.            Operate fiber network as a common carriage system with low, fixed rates available to all parties on an equal basis

                                                            1.1.2.6.            Facilitate access to their fiber network through streamlined rules for interconnection (i.e. do not obstruct common carriers)

                        1.2.            City to implement a process to develop an approved fiber splice service list

                                          1.2.1.            Issue RFI

                                          1.2.2.            Include equipment & insurance requirements

                                          1.2.3.            Include requirement to follow city inventory and security procedures

      2.            CWC updated lease and license agreement

                        2.1.            In exchange for changes in the company’s current agreement, CWC will:

                                          2.1.1.            build out fiber access to 300 addresses in the next 24 months (Central & West Lawrence Pilots)

                                          2.1.2.            provide a WiFi network on top of the fiber network with free access for citizens to City, County, Library & USD497 network resources at no cost

                                          2.1.3.            continue to pay the city 5% of gross revenues as rent under section 23(a)

                        2.2.            CWC wishes for long term access under the terms of 1.1.2 above to

                                          2.2.1.            12 fibers in existing runs

                                          2.2.2.            24 fibers in new construction

                        2.3.            Each year from 2012 to 2019, the city waives the first $20,000 of rent derived from gross receipts in section currently known as 23(a)

      3.            Loan proposals for Downtown and East Lawrence Fiber Shed

                        3.1.            Why the city needs to be involved

                                          3.1.1.            All projects of this type require extensive involvement from municipalities.  To create a financially sustainable network takes either a massive investment of capital and national scale (Google Fiber) or participation from taxpayers (Longmont Colorado, Chanute Kansas, Chattanooga Tennessee, Lafayette Louisiana)

                                          3.1.2.            Financial viability requires low interest rates and long payment terms (patient capital).  Without city participation, no fiber project will be viable (i.e. project meets “but for” threshold).

                                          3.1.3.            Banks do not collateralize network projects in the same way they do real estate.  Similarly, banks do not collateralize roads, electrical grids, or water and sewage projects.

                                          3.1.4.            Post 2008, banks always seek to achieve a collateral position greater than 100% on a loan, unless the loan is government backed.

                                          3.1.5.            Equity investors are concerned about investing in Lawrence without participation from the City.

                                          3.1.6.            When successfully implemented, this approach sets a precedent for other communities to help fund CWC’s expansion in the same way.  This paves a path for a Lawrence-based business to expand to surrounding cities.

                        3.2.            According to conversations with the City’s consultant, CTC single-fiber passive optical network buildout typically sells for $1,000 to 2,000 per residential address.

                        3.3.            CWC proposes to build a four-fiber direct-backhaul network, which is inherently higher bandwidth, higher reliability, and lower operating cost, and should therefore be evaluated at price of at least $1,000 per residential address.

                        3.4.            In exchange for financial assistance, CWC commits that any city-backed buildout will:

                                          3.4.1.            Be operated as a common carrier network with low fixed wholesale costs available to any interested party

                                                            3.4.1.1.            Prices to be fixed as follows and adjusted annually based on the consumer price index as published by the Bureau of Labor Statistics

                                                                              3.4.1.1.1.            Monthly wholesale cost - $25.00 per month per drop (2014 Dollars)

                                                                              3.4.1.1.2.            Activation fee - $50.00 per drop, adjusted for CPI

                                                                              3.4.1.1.3.            Minimum wholesale order - 100 drops

                                                                              3.4.1.1.4.            Deposit - 3 months

                                                                              3.4.1.1.5.            Any price increases in excess of the agreed pricing would require approval from the City Commission.

                                          3.4.2.            Provide a WiFi network on top of the fiber network with free access for citizens to City, County, Library & USD497 network resources at no cost

                                          3.4.3.            Service 100% of households in built out neighborhoods with a goal of reaching 100% of Lawrence in 5 years

                                          3.4.4.            Provide a rent payment of 5% of gross revenue for the use of certain City owned fiber and conduit

                        3.5.            CWC proposes to submit not only the PIRC-approved arrangement, but also consideration of any other viable financial method, (i.e. a direct loan, grant, etc)

                        3.6.            Direct loan, forgivable loan or other mechanism

                                          3.6.1.            The loan guarantee, while conceptually logical, is difficult for the City in terms of encumbering funds

                                          3.6.2.            Collateralized by buildout

      4.            Will city staff back these proposed arrangements?

      5.            Does city management have a specific proposal it would support to capitalize the pilot project as discussed on September 10, 2014?

      6.            CWC is always amenable to any conversation to advance broadband availability in our community.