Savannah Community Broadband Network Alliance

SCOBBA: The Basic Business Model Features and Why It Works

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BASIC MODEL FEATURES:
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We aggregate demand and then sell our members Internet capacity, service and support.

We buy capacity at $0.50/mb and re-sell it to the aggregated demand at $1.00/mb.

We lease lines and buy bandwidth from a local builder/operators, thereby keeping the money
in the community.

We outsource all the technical and service elements to our local provider partner. In exchange
we get favorable, predictable, fixed rates; they get discounts for the aggregated demand.

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WE SOLVE MAJOR HEADACHES FOR:
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1) City - Past attempts have not fared well. No desire to run a network or compete with those that do.
2) Businesses - Have critical need for faster speeds at lower rates but current options are very limited.
2) Residents - Want it but can't get it in many places and too expensive in others.
3) Schools - Must have it and pay very high prices lot for access.
4) Econ Dev orgs - See the benefit but wisely, have no desire to own or run a network.

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DEMAND COMES FROM:
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1. Being the only viable provider in many spots
2. Delivering a product at 1/5 the prevailing rates.
3. Delivering a product up to 5x faster speed than currently available options.
4. The popularity of the idea of keeping local money in the community.
5. Delivering more reliable, consistent and symmetrical (upload/download) access.
6. Providing better, community-based customer service..
7. The community need for an open-access provider.
8. The attraction of being a Savannah community, open-access network.
Keep confidential, Do not share (prelim draft v1.0)

Savannah Community Broadband Network Alliance

SCOBBA: The Basic Business Model Features and Why It Works

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REVENUE COMES FROM:
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sponsorships

community donations

membership fees

sale of bandwidth to members

sale of hardware to augment member networks

sale of services to our members (ie. phone, entertainment, IT services, storage, hosting, etc....)

sale to other providers of transport across our network

ads from 12m+(?) eyeballs on the open wifi network

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OUR PLAN WORKS BECAUSE:
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1) It is not directly competing for same the customers of other access providers.
2) It would be the only open-access network, allowing us to lease transport to other service providers.
3) Our community-interest organizational model and unique partnership arrangement means we don't
have to gouge people to have a sustainable business model.
4) We don't have to build anything, own any assets, or run expensive operations because our local
partner handles the build, operation, management, billing and support.
5) We would not be beholden to the City for anything (permits, approval, funding, etc) because our
local provider is already contracted to build the city fiber net. Our net would only extend this work.
6) Our interests align with our local provider. (he has capacity, we have demand; he builds, we buy)
7) Unlike a government supported non-profit model, we would not be forced to build where the
demand is weak or the numbers don't work.
8) If for some reason we are blocked or delayed on the build-out, we have a Plan-B and a Plan-C to
leap over potential bureaucratic or physical obstacles.
9) The public and private WiFi network additions are easy and inexpensive once the fiber is installed.

Keep confidential, Do not share (prelim draft v1.0)

Savannah Community Broadband Network Alliance

SCOBBA: The Basic Business Model Features and Why It Works

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WHY USE A CO-OP MODEL ?
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1) Does not directly threaten the other providers. It's good for everyone, especially the members.
2) It is able to operate in the community interest and is not beholden to other outside interests.
3) A community-interest model (as opposed to a for-profit or support dependent non-profit) makes it
easy for public institutions to help without being accused of playing private-sector favorites.
4) Community-based model engenders a great deal of loyalty with their members and the community.
5) Co-ops can pay dividends (depending on the structure) that can reward investors who support it.
6) It immunizes us to objections that a government financed non-profit might face.
7) It reduces our exposure to the existing competition in the for-profit space.
8) Widespread membership participation fosters broad public support that increases membership.
9) The public-interest mission makes it easier to attract philanthropic and government seed funding.
10) The community-interest focus and model enables us to serve areas existing providers cannot.

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GOVERNENCE
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The Alliance would have 2-3 full-time staff to ensure quality of service, wide-spread brand
recognition, positive growth and smooth operations for its members.
Staff would be accountable to a Board of between 6-12 members from the Alliance. An
executive committee, made up of 3-4 members of the Board, would be responsible for
overseeing monthly operations and present issues to the full Board and/or membership body
for votes.
The members of the Alliance would typically be, but not necessarily limited to, service
consumers. Members would have voting rights in proportion to their service consumption or
contribution levels.
The full membership would be involved in major Alliance decisions such as retained earnings
dividend returns or expansion growth, speed and direction.
Keep confidential, Do not share (prelim draft v1.0)

Savannah Community Broadband Network Alliance

SCOBBA: The Basic Business Model Features and Why It Works

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WHO MIGHT BE OPPOSED
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ATT & Comcast

The pilot-project is too small to gain ATT's interest or feel threatened by it.

We will have an open network so they have an option to sell their services on our fiber (or not).

Hargray

They will notice the project but we are not completing directly for the same customers.

We will have an open network so they have an option to sell their services on our fiber (or not).

people who take telecomm money

Telecoms are the single largest lobby force in the country.

They pay others to push their agenda that often runs counter to the public interest.

They have no case to make and it would be embarrassing to attack a small community co-op.

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PROJECT RISKS
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1). Demand is weaker than predicted.
2). People are less willing to switch
3). City right-of-way entanglements
4). Poor operation/service kills reputation
5). Leadership won't get on-board
6). Hugh/low density demand imbalance
7). Poor management
8). Divisive co-op leadership
9) Unforeseen regulatory complications

Keep confidential, Do not share (prelim draft v1.0)

Savannah Community Broadband Network Alliance

SCOBBA: The Basic Business Model Features and Why It Works

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PROJECTED COSTS & ROLES:
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$15,000
(3 months - Jun-Aug 2015)
Planning
Architecture
Project Mngt
Raising capital
Building the community coalition
$330,000

(SCOBBA, SDBA, illuminomics)

(local partner, illuminomics)
(SCOBBA, illuminomics)
(SCOBBA, SDBA, illuminomics)
(SCOBBA, SDBA, illuminomics)

(1 year - Sep 2015 Aug 2016)

Sales & marketing

Leasing fiber
Buying bandwidth
Building-out where we can't lease fiber
Network monitoring and management
Customer Service
Technical Support
Billing

(SCOBBA)
(SCOBBA)
(SCOBBA)
(local partner)
(local partner)
(local partner)
(local partner)
(local partner)

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BROUGHTON SELECTED FOR THE PILOT PROJECT BECAUSE:
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1) Least controversial area to start.
2) Highest density for quick uptake to become revenue positive.
3) There is significant pre-build demand (37 sign-ups just from the first meeting!).
4) We have a ready-made champion in SDBA.
5) A significant portion of properties on Broughton are owned by only a few developers.
6) Broughton St is currently very poorly served.
7) It one of the least challenging infrastructure environments.
8) It the easiest place to connect to an existing fiber network.
9) Its the most dense, least distance neighborhood to the network back haul termination point.
10) Broughton St is by far the most visible area that provide maximum PR value.
11) Broughton, Congress and State streets offer the highest numbers of people needing free wifi.

Keep confidential, Do not share (prelim draft v1.0)

Savannah Community Broadband Network Alliance

SCOBBA: The Basic Business Model Features and Why It Works

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WE CAN LEVERAGE OUR EXPANSION BY:
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1) Getting low cost fiber transport from City and other providers.
2) Leasing fiber transport from other providers where we prefer not to build.
3) Jumping expensive land-based fiber gaps by using directed wireless (Airfiber)
4) Generating enthusiastic pent-up expansion demand.
5) Using a successful pilot project to attract expansion funding.
6) Attracting state and federal grants for our innovative model and approach.
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KEY COMPOUND LEVERAGE POINTS:
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1) Similar to the expansion of the municipal water system to direct growth, fiber will do the same.
Ability to influence the direction of growth.
2) The WiFi network will broadcast to the 12+ annual Savannah visitors.
Ability to influence the brand and image of Savannah for residents and visitors.
3) Our speeds and prices for telecomm services will foster greater competition among all providers..
Ability to influence telecomm prices and services that operate downtown.
4) The combination of low prices, high-speed, good service and keeping money local is a winner.
Ability to generate significant community goodwill.
5) Leaving a legacy by bringing the community together to solve a major problem is powerful.
Ability to set the once-a-decade benchmark for showing that Savannah can do great things.
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NEXT STEPS:
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1)
2)
3)
3)
4)
5)
6)

Jun 2015
Jul 2015
Jul 2015
Aug 2015
Aug 2015
Sep 2015
Nov 2015

- Finish writing the detailed business plan and business model.

- Continue organization and coalition building to reach critical mass.
- Secure funding commitments from major private and/or public donors.
- Form the legal entity and begin communication campaign.
- Sign contract with local provider(s).
- Begin network build-out.
- Begin offering service.
Keep confidential, Do not share (prelim draft v1.0)