W2i Conference Dec 11 -12, 2007

1. W2i Conference Dec 11 -12, 2007

2. A Challenging Locale Superior was a boomtown in the 1890’s and in the 1940’s Can it prosper Again ? Until a WiFi Network was available, A broadband connection was out of reach for most residences

3. Emerging LastMile Technology - WIFI • WiFi technology provides an inexpensive and commonly available method of broadband transport for all communities (public and private), and is especially suited as the initial network in a broadband deficit area. • Experience shows that WiFi resources can be installed successfully in rural settings, thereby connecting cities and communities into one large grid, instead of islands of separate connectivity

4. Superior Map - WIFI Install Transit Points

5. A Sustainable WIFI Network

6. Collaboration by Government Committees and partnerships included financial and/or technical support, leadership and expertise from several agencies: • US Dept of Agriculture (USDA) • Az Dept of Commerce (ADOC) • Governor’s Information Technology Agency (GITA) • Pinal County Government • Central Arizona College Small Business Development Center • Arizona Small Business Association (ASBA) • Central Arizona Association of Governments (CAAG)

7. ABC INITIATIVE Focus of the Initiative The primary lesson learned from the Town of Superior effort is that competitive end-user rates can sustain a build-out of a last-mile broadband network, if a middle-mile broadband connection is available. Conversely, if a middle-mile connection or off-ramp is not available, the cost of both the last-mile network and the middle-mile, including off-ramp connection, cannot be affordably bourn by end-user populations because subsequent ROI requirements are higher than demand can bear. This becomes a dilemma for vendors and they turn their attention to more profitable or better ROI scenarios generally offered in urban areas. The only solution in such rural situations is outside intervention, including financial, technical, and administrative help.

8. Arizona’s Current Condition (ATIC/CIAC View) • It’s estimated that up to 1 Million citizens in Arizona do not have access to even FCC definitions of Broadband (Download and upload at 200Kbps) Of Arizona’s 225 communities of 500 population or more, an estimated 40- 50 have no Broadband availability. In many areas where Broadband is available, the rates for a T-1 line are 2 - 3 times more expensive than rates in Urban Arizona (Phoenix or Tucson). Though Providers indicate that over 80% of Arizona’s rural communities have access to DSL, such reported coverage is mainly in the more dense centers of those communities, leaving as many as 50% outside of DSL areas. Reporting that connectivity exists where so many cannot connect is also harmful to future deployment. 10% of Arizona’s School Districts have schools and Admin. facilities with only Dial-up (56k) connection to the Internet. • There are huge gaps in Arizona’s “Middle-Mile” infrastructure (Backhaul between a community and Tier One site in Phoenix or Tucson). • Telecom infrastructure in rural Arizona is incapable of supporting long-term economic development goals, with huge negative impacts.

9. Infrastructure Barriers in Arizona Note the Stranded single runs and lack of loops. Lack of redundant paths can devastate whole regions when outages occur. Note lack of Interconnection between areas of Telco owned Fiber Law of Supply and Demand evident in End user Costs for Broadband Tariff (2007) for T-1 line in Arizona >$350 + Distance charge (some as high as $1,500 per month)

10. Barriers to Broadband - Broadband not treated as Critical Infrastructure in law - Lack of Middle Mile Infrastructure and local off-ramps - Private Sector Owners are concerned about their ROI with infrastructure, and are typically NOT financially involved with the Applications running on the infrastructure, creating a disconnect of purpose. Connecting Applications to ROI – Difficult without aggregation - Right of Way is a major barrier and cost element of Deployment - Citizens pay for the same Right of Way over and over again (unlike other Critical Infrastructure). - Federal and State GIFT Clause – Prohibits Public dollars invested or used in the Private Sector – causes separate networks for government and for ordinary citizens (who pay twice) - Diffused Leadership – Till now, No collective voice or plan

11. ABC INITIATIVE Core Elements of the Arizona Broadband Connection (ABC) Initiative ABC initiative is a comprehensive plan of financial, administrative and technical help. - Middle-mile infrastructure issue addressed at a local level by funding local off-ramps for existing middle-mile and/or extending the middle-mile to a local area. (Arizona has many examples where middle-mile fiber goes through or passes close-by a rural community, but without off-ramp connecting the community.) - Only one-time funding for each intervention is required - State is not obligated for additional monies. Local Collaboration requirements: • Strong local political leadership and extensive Community involvement Actions by local government to define/support commitments. • Economic development opportunity must be defined • (Jobs, Business to Business, Distance-Learning, Quality of Life uses) - Up front Support from a wide variety of local business, residential, medical, educational, and government stakeholders (Provides Susceptibility for other grants) - “Anchor Tenants” commitments from both public and private of subsequent broadband deployments identified for long term Sustainability - Broadband “Awareness” Campaigns and education activities as part of the total program

12. ABC Initiative – Funding, Oversight, Administration Funding A $6 Million budget, over three years, was proposed to provide the necessary funding for 25 to 30 middle-mile ”off-ramp” projects in Rural Arizona at approximately $200K to $250K per intervention. Not included in the proposal but indicated as a separate and necessary adjunct to the ABC initiative is a $400K Statewide Broadband mapping project, which will help identify the rural areas with the specific types of middle-mile deficits. Oversight of the Initiative The initiative calls for an oversight committee comprised of leaders from Commerce, GITA, CIAC and the Governor’s office. This group will meet regularly to review current activity, and propose new projects as they are defined, with outreach to ATIC and other stakeholder representatives. Administration of the Initiative It is recommended that GITA house the necessary administrative staff, likely adding 1 additional FTE, to complement current outreach activities.

13. Sources of Policy & Conclusions CIAC/ATIC 11 Recommendations Arizona Broadband Initiative Framework (ABIF) Common “ To do ” Conclusions of these policy statements: • Inventory the State’s broadband infrastructure – A GIS Survey • Establish formal Leadership – Separate Arizona Broadband Development Authority or ABC Initiative under GITA • Utilize existing Models of Success as Template – Superior or Pinal County Model (Also other States’ Models – Kentucky) • Explore potential for Funding Survey and Initiatives within Government and from Private Sector Public Sources - CEDC, ADE, ADOT, DHS, other State Agencies, Fed Grants Private Sources - ATIC, Provider Community, Arizona Chambers of Commerce, Stakeholder Businesses