TalFiber
NonProfit@Tallahassee
Business Plan
Available: talfiber.com
Mission Statement
 To provide high speed, future proof, privacy-friendly, secure and cost
competitive Internet experience to the citizens of Tallahassee city by
incorporating sensible and cost-effective technologies. This experience will be
supported by a team of customer-oriented quality staff whose overriding
priority is to provide professional service to our customers resulting in complete
customer satisfaction.





Revenue stream for the city in the long run (preferably 20+ years)
Increase home values in Tallahassee (> 1.7%)
Help Education (Free to Schools and Libraries)
At competitive rates (Google Fiber prices + $10)
Extraordinary customer service
The Agile Team
 Board: Mayor
 Architect : Kumar (15+ Years of Experience)
 System Administration / Networking : Yu Wang (10+ Years experience)
 Fiber Layout :
 Dial Communications (City Experience)
 HyPower (Installer for Verizon FIOS)
 Hardware: Cisco/Juniper/Calix (Major Deployments)
 2 Interns (with experience)
 2 Full time Employees after setup
 A city owned non-profit in 10 years
Market Summary
 Roughly 120k houses in Tallahassee
 First pilot project: 1600 houses (1Gbit, 40Gbit upgradable)
 Penetration percentage : 100%
 Pilot succeeds, we expand from there
 Duration: < 2 year deployment (Project begins 2015)
Pilot Project details
 Revenue :
 $80/house/month * 10 years = $9600/house (+TV later)
 $300 / house initial layout price = .48M
 Total for 1600 houses = 15.84M in 10 years
 Initial investment
 5M for fiber layout
 2M for networking equipment
 + Personnel cost = 3 x 125k x 10 = 3.75M (including Kumar)
 + Internet Cost = 36k x 12 x 10 = 4.3M
 Total Cost = Approximately 15.05M in 10 years
 Loss @ 3% interest = 3.43M (10M investment) - .79M (profit)
 2.64M (@1.6k / house. Get it from CDD - $13 / month. Also recover from new builds)
 Sell it as raise in property prices (we can also make it conditional on property value raises)
 New house tax in the area (one time)
 1.5% for internet (recovers the 5k in increase of property value)
Opportunities
 People: Unhappy with Comcast/Century Link/Satellite
 Opportunities:
 Helps us get closer to deploying high speed internet in the entire city
 Creates competition (Comcast / Google / Century Link)
 A lot of other advantages
 Problems:
 Capital intensive
 Risk: Technological : If some internet technology comes that wipes out everything else
 Execution : 1500+ homes do not sign up at this rate
 Internet providers raise their rates (One of the negotiations does not go through)
 Availability of hardware (Fiber) / Installers
Business Concept
 Technology:
 Active Ethernet
 Upgradable to 40Gbit / sec
 Base connections at 1Gbit / second
 Fiber inside the house
 No PON – shared 1Gbit like Google or other
deployments
 Backbone = 28 Miles in 2 loops
 1514 houses covered
The Initial Backbone
27 Miles
1514 houses connected so far
Competition
 Google
 Only offers at places where they know their investment is low
 Provo/Kansas City: City has already invested considerable amount of money – Now Google owns it.
 Data collection and advertisement on individuals at a scale never seen before
 Threshold of sign up : 25%
 High Risk of another Comcast / AT&T / Verizon type monopoly (Verizon just tampered with
user’s web requests using super cookies)
 Tallahassee = At least 5 years down the road
 Comcast
 Unhappy customers (Max speed 50Mbps)
 Double dipping (Netflix peering)
 Common Problems:
 Bad Customer Service
 Unknown Oversubscription
 No Server allowed
Goals and Objectives
 5 year goal:
 Setup and Serve the 1500+ houses
 Expand to government agencies in the area
 Expand the backbone to incorporate a larger number of homes/apartments in the
neighborhood
 Be viable for a takeover by a private company if needed
 Measurable Objectives:
 Good customer service
 Market share > 1% of Tallahassee
 10 year goal:
 Compete with Comcast/Google in the market
 Penetrate the market to > 2% without taking additional capital
Financial Plan
 Initial investment required : 10M
 @ Low interest rate of < 3% preferably
 Create the first deployment using this capital, then slowly grow in
area/size
Resource Requirements
 Requirements for the following resources at no cost:
 Personnel : Legal Department
 Review permit applications within 5 business days
 Technology : Detailed mapping software, Aerial placements of fiber on poles
 Finances : 10M
 Distribution : No charge for rights of way
 Promotion : Mayor speech / Awareness
 Products : Fast internet
 Services : Internet [TV].
Risks and Rewards
 Risks:
 Technological
 Execution
 Capital
 Rewards:
 Control a very important commodity (the new Electricity/water)
 Solve privacy/security issues
 Control pricing
 Keep customers happy
 20 year deployment possibility
Key Issues
 Near term




Capital
Personnel
Delivery of fibers right now is 1 year away from commitment
Delays: The longer we wait, the closer Google Fiber/Comcast become a
competition
 Long term
 Control issues (What happens at 10 year term limit)
 Profitability
 Customer Support
Next Step
You
 Make available $50k using an RFP asap.
 Introduce me to : Lewis Shelley (Legal)
 Make available all fiber maps / electricity wiring maps of the pilot area
 Start working on 10M – 50k capital request
Me
 Formation of the initial Non-Profit Company: TalFiber
 Detail the legal terms around it with the legal team in the city
 Form a more precise business plan.
 TalFiber Hires engineering consultants for making a precise technology plan
 Start working on actual commitments from multiple parties with the help of the legal department
 My consultancy cost: Not to exceed $125k / year.
 $150/hour (Average State rates: CIO = $331/hour. CTO = $251/hour)
 Objective: Jan 15th 2015, Reach a go/no-go decision.
Source: Florida DMS
Questions
Notes:
* In talks with Google to develop a tool for optimizing their fiber development cost (for active Ethernet
deployment technology) – Might get funded from there to do the pilot project (50k+)