Hometown Advantage
Borough of Kutztown, FTTH Project
American Public Power Association
Municipal Broadband & Economic Development
1539 Longworth House Office Building
Washington, DC
September 25, 2003
Jaymes Vettraino, Manager
45 Railroad Street
Kutztown PA 19530-1112
610-683-6131 * (f) 610-683-6729
jvettraino@kutztownboro.org
“Keeping Your Money in Your Community Working for You!
1
Borough of Kutztown, PA
Population:
5067
Total Budget:
$17 million
Size:
1.5 square miles
Households:
2200
Rental properties:
45%
Student Residents:
1800
Median Age:
24.5 (2000 U.S. Census Bureau)
Median Income:
$49,653 (2000 U.S. Census Bureau)
• Kutztown University (enrollment of 8000+) located on western boarder
• Approximately twenty (20) miles from the Cities of Allentown and Reading, PA
• Low taxes relative to the surrounding communities
2
Services Provided by Kutztown
Electrical Utility
Sewer Treatment
Water Distribution
Telecommunications
Voice, Video and Data
Police Services
Planning and Zoning
Refuse/Recycling Collection
Parks and Recreation Opportunities
Railroad Management
Highway Maintenance
“Providing Utilities and Communications Services To Your Community”
3
First Look at Fiber:
Improve current municipal services:
•Supervisory Control and Data Acquisition System (SCADA)
•Automated Meter Reading (AMR)
1999 successfully implemented first
“fiber loop” to municipal properties
4
Initial Fiber Loop
5
Fiber to the Home (FTTH)
Objectives
• Enhance current municipal services
• Bring broadband technology to our community
• Create opportunities for Economic Development
• Control our own destiny in the “knowledge based economy”
• Complimentary function to our Electric Service (grow an existing asset)
• Diversify the Borough’s operations
• Reduce telecommunication costs for residents
6
Why FTTH?
•Leverage experience and knowledge of Borough’s electrical linemen
•Fiber optic experience with the original SCADA system
•Reliable, low maintenance technology
•“Turn-on” and “turn-off” without visiting the properties
•Make available “point-to-point” connections within the Borough
•Provide enough bandwidth for future applications
7
Plan #1
“Be the Turnpike”
1. The Borough would build a FTTH network to reach every home
and business.
2.
The Borough would then lease parts of the system to private
service providers to deliver content to customers.
The Borough was looking for partners for:
Design and Build the system
Cable Television
Telephone
Internet
RFP #1: December 11, 2000
Security
Only successful one partner was found: Design and Build
AMR
8
Plan #2
“Commit to three (3) services, fill-in the gaps with municipally built
content if necessary”
RFP #2: April 9, 2002
Partners found:
Design and Build :
Atlantic Engineering
Cable Television:
None: Needed to build television headend
Telephone:
D&E Communications (June 2002)
Internet (www access):
Adephia Solutions (backbone access only)
Internet:
DJazzed (e-mail user support)
9
System Construction
Cable Television Headend
Access to the World Wide Web
Adelphia Solutions
Net Work Operating Center
6 Main Fiber Feeds to the Town
4 Wire Fiber Drop to the Home
Telephone Dial Tone
10
Financing the Project
$2,185,000
from a 30 year taxable bond issue
$2,935,960
loan from the Borough Electric Fund
$710,000
budgeted in 2003, from cash on hand
Total Borough Properties passed:
2200 (all)
Total Residential Units Installed:
570
Total Multi-Dwelling Units Installed:
104
Ready to Serve Connections:
1036*
Ready to Serve Services:
3690*
* At this time, each residential unit can provide three services and each MDU can
provide 12 services. This number will continue to expand as the Borough offers
more services over the FTTH system.
11
Pricing
Television
Basic 32 Channel System
$15.00
Expanded 101 Channel System
$29.75
Premium 1 Television 7 channels
$15.00
Premium 2 Television 7 channels
Internet
64K
128K 256K 512K
$15.00
$15
$20
$25
$30
Discounts for multiple Services
768K
1Mb
$35
$40
Upload Speed
1Mb Download for all
Incumbent cable provider prices (70 channels):
Before Municipal project:
$33.63
After Municipal project:
$26.82
12
One Year Report
In August, 2003 the Borough of Kutztown released the first
“Hometown Utilicom (HU) Annual Report,” findings from that report:
•Meeting revenue expectations
•System reliability has exceeded expectations
•Exceeding first year customer projections
•Able to maintain the system independently ahead of schedule
•Total estimated community wide savings on cable television is
$200,000 from August 2002- August 2003*
* $200,000 represents savings generated by both HU customers and the savings realized by
customers who stayed with the incumbent service provider
13
Customer Growth
700
600
500
Actual Customers
400
300
Projected Customers (Aug.
2001)
200
100
Se
pt
e
m
be
r2
0
O 02
c
N t ob
ov e
e r
D mb
Ja ece er
nu m
ar be
y r
2
F e 00
br 3
ua
M ry
ar
ch
Ap
ril
M
ay
Ju
ne
Ju
Au ly
Se g
O pte ust
ct
ob mb
er er
20
03
0
Current penetration rate: 27%
1.8 Services per customer
(13 months)
14
Press for HU
15
Challenges
• Aggressive competition from
incumbent service providers
• Pressure from incumbents on
state and local politicians
Accomplishments
• SCADA monitoring and security of critical public
utilities.
• Awarded the 2003 Pennsylvania Governor’s
Award for Local Excellence
• Meeting or exceeding first year’s projections
• Aggressive competition from incumbent service
provides (reduced prices for residents)
• Bridging the “digital divide”
• No longer reliant on private companies for
economic development
• “Open access” for future multiple service
providers to enter a market, there by increasing
competition and reducing price.
• Providing multiple service with one wire (less
16
infrastructure).
Private Partners and Suppliers
Contributing to the National, State and Local Economy
Engineering:
Atlantic Engineering
Software and Hardware for FTTH:
Optical Solutions, Inc.
Fiber Optic Cable and Connectors: Corning, Inc., Fiberone, Inc. and others
External Batteries:
Alpha Technologies, Inc.
Cable Television Content:
National Cable Television Cooperative, Inc.
Telephone:
D&E Communications
Internet:
Adephia Solutions and DJazzed
Automated Meter Reading:
TWACS by Distribution Control Systems, Inc.
Security:
Local Company (soon to be announced)
Gaming Over the Internet:
Local Company (beta-testing)
Household Wiring:
Local Electricians
Computer Components:
Local Computer Suppliers
It would be impossible for Kutztown to design, build and maintain our FTTH
services without the support and innovation of our private sector partners
17
“In the 21st century knowledge economy, fiber optic communications systems will
be as important as any other public utilities in determining the economic viability
of a community. The Borough of Kutztown has decided to take responsibility for
its own economic future.” – Eric Ely, Borough Council President
18
Hometown Advantage
Borough of Kutztown, FTTH Project
American Public Power Association
Municipal Broadband & Economic Development
1539 Longworth House Office Building
Washington, DC
September 25, 2003
Jaymes Vettraino, Manager
45 Railroad Street
Kutztown PA 19530-1112
610-683-6131 * (f) 610-683-6729
jvettraino@kutztownboro.org
“Keeping Your Money in Your Community Working for You!
19