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HomeMy WebLinkAbout7 Revised Broadband Pro Form S Public Util . . I Staff Report To: Board of Directors From: Alan Harry, Director of Telecommunications Services Date: July 12, 2002 Subject: Consideration of Broadband Issues— Revised Broadband Pro forma Per the Board's request, staff have prepared an updated Broadband pro forma which includes revised information pertaining to the costs and revenues associated with the provision of High Speed Internet Services, homes past information, and costs associated with the construction of a Fiber to the Home infrastructure. In addition, staff has compiled expenditures associated with the District's entry into the provision of Broadband Services. These costs are summarized in Attachment B of this report, and included as expenditure within the pro forma. No Board action is requested at this time. 0 Page 1 BROADBAND BUSINESS UNIT Income Statement Atsum ns Launch Date of Broadband Business Unit-2nd and 3rd Quarter 2003 Loan of$15 million,over 25 years,with interest Rate-7.5%(Interest Capitalized during years 1-3) Franchise Fees to be paid to Town of Truckee,Nevada and Placer Counties @ 5%of Gross Cable Television Revenues Staffing Levels;BBU Manager,Technicians(2),Customer Service Representatives(2) BBU to Provide- Cable Television,High Speed Internet,Business to Business Ethernet Connectivity BBU to be sole ISP for first year Lease of unused bandwidth not included in estimated revenues Yr.t Yr,2 Yr.3 Yr4 Yr5 Yrfi Vr7 Yr8 Ym Yr10 Homes passed 10,290 10,599 10,917 11,244 11,581 11,929 12,287 12,655 13,035 13,426 Video Penetration 25.0% 35,0% 38.0% 38.0% 40.0% 40.0% 46.0% 45.0% 50,0% 50.0% Video Subs 2,573 3,710 4,148 4,273 4,633 4,772 5,529 5,695 0,518 6,713 increase 1,137 439 124 360 139 757 166 823 196 Basic Rev./Monthly Cost 36.95 36.95 36,96 37.95 37.95 37.95 38.95 38,95 38.95 38.95 I No.of Channels offered 60 60 60 65 65 65 70 70 70 70 Digital Tier Penetration 10.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55,0% 60.0% Digital Tier Subs 257 742 1,037 1,282 1,621 1,909 2,488 2,847 3,585 4,028 Digital Tier Rev./Monthly Cost 10.00 10.00 10.25 10.51 10,77 11.04 11.31 11.60 11.89 12.18 Premium Penetration 20.0% 21.0% 22.1% 23.2% 24.3% 25.6% 26.8% 28.1% 29.5% 31.0% ' Premium Subs 615 779 915 989 1,126 1,218 1,482 1,603 1,026 2,083 Premium Rev./Monthly Cost 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 I PPV Buys Per Month 1.50 1.53 1.56 1.59 1.62 1.66 1.69 1.72 1.76 1.79 PPV Rev./Cost Per Movie 2.95 2.95 3.02 3,10 3.18 3.26 3,34 3,42 3.51 3.59 Cable TV Equipment Rental Charge 5.95 5.95 5.95 5.95 5,95 5.95 5,95 5.95 5 rJ5 5.95 Cable Installation Charge 29,95 29.95 29,95 29.95 29.95 29,95 29,95 29.95 29,95 29.95 Billing 0.40 0,42 0.44 0.46 0.49 0,51 0.64 0.56 0.59 0.62 ISP Penetration 5.0% 7.0% 9.0% 9.5% 9.9% 10.4% 10.9% 11.5% 121% 12,7% ISP Subs;TDPUD 516 ISP Subs;Platform 0 742 982 1063 1149 1243 1344 1454 1572 1700 ISP Rev. 39.95 39.95 39.95 39,95 39.95 39.95 39.95 30.95 39.95 39.95 I ISP Equipment Rental Charge 0.00 0.00 0.00 0,00 0.00 0.00 0.00 0.00 0.00 0,00 Total Buildings Passed 192 196 200 204 208 212 216 221 225 229 Building Penetration 50.0% 51.0% 52.0% 53.1% 54.1% 55.2% 56.3% 57.4% 58.6% 59.8% No.of Buildings Entered g6 100 104 108 112 117 122 127 132 137 Demand Per Building 10.0% 25.0% 26.8% 28.6% 30.6% 32.8% 35.1% 37.5% 40.1% 43,0% Ethernet Subs 10 25 28 31 34 38 43 48 53 59 Ethernet Rev./Month Cost 226.00 225.00 225.00 225.00 225.00 225.00 225,00 225.00 225,00 225,00 Telephony Subs 0 0 0 0 0 0 0 0 0 0 Telephony Rev. 0 0 0 0 0 0 0 0 D 0 Advertising Revenue/Sub 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36,00 36.00 Pole Make Ready costs to be distributed between Broadband and Electric Business Units at 30%-70%split Connection to' W W"to begin as 7-1",to"T4',to fiber to POP SCADA Services saving to Electric and Water Business Units=$122,000 annually. 07/1212002 I pregv=i year 20021 20031 20041 20051 20061 20071 20081 20091 20101 2011 Nawiiue SCADA(savings to Electric 8 Water Units) 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 ISP;TDPUD Operated 246,661.30 ISP;Platform 0.00 355,671.17 471,010.26 509,397.59 550,913.50 596,812.94 644,371.70 696,887.99 753,684.36 815,109.64 Cable Television;Basic 1,140,646.50 1,644,812.26 1,839,370.05 1,945,824.52 2,109,683,43 2,172,973.93 2,584,282.25 2,661,810.72 3,046,294A9 3,137,683.32 Cable Television;Digital 30,870.00 89,020.08 127,561.18 161,607.26 209,529.49 252,812.29 337,803.64 396,262.44 511,321.64 688,903,07 Cable Television;Premium 61,740,00 93,480.53 109,764,84 118,710.68 136,142.73 146,156.87 177,827.23 192,320.15 231,104.72 249,939.75 Cable Television;PPV 13,659.98 40,183.28 58,726,24 75,888.27 100,359.64 123,512.90 168,336,63 201,417.58 265,099A5 311,428.71 Business Ethernet 25,920.00 67,417.92 75,051.52 83,549.45 93,009.59 103,640.88 115,264.60 128,315.78 142,844.72 159,018.74 Bandwidth Lease(Telephony) 0 0 0 0 0 0 0 0 0 0 Equipment Rental;Cable Television 18,36Z65 52,972.30 74,047,71 01,522.97 116,768.53 136,276.10 177,648.67 203,309.03 255,943.48 287,587.41 Equipment Rental;ISP 0.00 0,00 0.00 0.00 0.00 0.00 0,00 0.00 0.00 0.00 Cable Installation 77,046.38 34,054.50 10,947.72 3,105.03 8,977.34 3,467.60 18,899,30 4,138.60 20,523.90 4,878.37 Advertising 92,610.00 133,543.62 149,339.92 153,820.12 166,773.39 171,776.60 199,046.13 205,017.51 234,631.15 241,670.09 In-Lieu-of-Franchise Fees 62,345,82 93,375.26 106,771.12 115,101.54 127,735.76 134,772.80 163,412.49 172,690,54 202,691.01 214,397,74 Gross Income 1,829,51180 2,633,164.66 3,037,819.43 3,265,425.89 3,612,157.64 3,828,330.00 4,545,480.16 4,811,479,72 5,583,44Z91 5,918,219.11 1-ess;Bad Debt and Collections 18,295.12 26,331.66 30,378.19 32,654.26 36,121.58 38,283.30 45,454,80 48,114,80 55,834.48 69,182.19 Toth income 1,811,216.68 2,606,833,01 3,007,441.23 3,232,771.63 3,576,036.06 3,790,046,70 4,500,025.36 4,763,364.02 5,527,613.43 5,850,036,92 Expendkunae Programming;Bask 456,258.60 657,924.90 735,748.02 778,329.81 843,873.37 869,189.57 1,033,712.90 1,064,724.29 1,218,517.80 1,255,073.33 Programming;Premium 33,057.00 51,414.29 60,370.66 65,290.87 74328.50 80,386.28 97,804.98 105,776.08 127,107.59 137,466.86 Programming;PPV 9,015,58 26,520.96 38,759.32 50,086.26 60,237.37 81,518.51 111,102.18 132,935.61 174,966.63 205,542,95 In-Lieu-of-Franchise Fees 62,345.82 93,375.26 106,77t12 115,101.54 127,735.76 134,772.80 103,412.49 172,590,64 202,691.01 214,397.74 PEG 12,348.00 17,805,82 19,911,99 20,509.35 22,236.45 22,903.55 26,539.48 27,335,67 31,284.15 32,222.68 Sales and Marketing 100,000.00 35,000.00 36,000.00 35,000.00 35,000,00 35,000.00 35,000,00 35,000.00 35,000.00 35,000.00 Access to W W W 120,000.00 120,000.00 120,000.00 144,000,00 144000.00 144,000.00 144,000.00 144,000.00 144,000.00 144,000.00 ISP Back Office 92,610.00 133,543.62 176,849,91 191,263.18 206,851.12 223,709.49 241,941.81 261,660.07 282,985.37 306,048,68 ISP Equipment share 20,659.42 29,646.68 39,260.68 42,460A3 45,920.95 49,663,51 53,711.08 58,088.54 62,822.75 67,942.81 Operations Facility Rent 0.00 0.00 0.00 229,500.00 229,500.00 229,500.00 229,500.00 229,500.00 229,500.00 229,500.00 Transportation Overhead 92,336.00 95,106.08 106,794.29 113,028.39 119,752.55 127,011.76 134,855.41 143,337.70 152,518.12 162,461.09 Administrative Overhead 4,466.00 4,599.98 5,165.30 5,466.83 5,702,05 6,143.16 6,522.53 6,932,79 7,376.82 7,857.77 Plant Maintenance(techs) 120,000.00 123,600.00 136,960.00 149,556.00 164,511A0 180,962.76 199,059.04 218,964.94 240,861.43 264,947.58 Utilities(electric,water,telco) 18,000.00 18,000.00 18,000,00 18,000.00 18,000,00 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00 Expensed Installation Costs 192,937,50 85,278.38 32,908.96 9,333.75 26,985.99 10,423,34 56,811.53 12,440.38 61,695.09 14,664.45 General 8 Administration Management and Stag 170,000.00 175,100.00 199,449.20 205,432.68 211,595.66 217,943.53 224,481.83 231,216,29 238,152.78 245,297.36 Employee Benefits(All) 114,886.00 118,332.58 134,787,77 138,831.40 142,996.34 147,286.23 151,704.82 156,255.97 160,943.66 165,771.96 Subscriber Billing 12,348,00 18,696,11 21,952.97 23,742.14 27,028.55 20,231,37 35,565A5 38,464.03 46,220.94 49,987.95 Other 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 16,000.00 15,000.00 16,000.00 15,000,00 15,000.00 opemting Expeneas 1,647,067.93 1,818,944.66 2,002,690.18 2,349,932.61 2,527,346.27 2,022,645.86 2,978,725.53 3,072,222.90 3,449,643.14 3,671,184.09 opetaling Income 164,148.75 787,888.36 1,004,751-05 882,839.03 1,048,689.79 1,167,400.85 1,521,299,82 1,691,142.02 2,077,970,20 2,287,852.83 Principle&Interest 1,412,803.00 1,412,803.00 1,412,803.00 1,412,803.00 1,412,803.00 1,412,803,00 1,412,803.00 Repayment of Start-up Costs 220,000.00 220,000.00 220,000.00 220,000.00 220,000.00 Togl Expeneae 1,647,067,93 1,OF 44.66 2,002,690.18 3,762,735.61 3,940,149.27 4,035,448.86 4,391,528.53 4,485,025.90 4,862,446.14 4,983,987.00 Nat Income 164.148.75 787,888.36 1,004,751,05 -740,963.97 -584,113.21 -465,40215 -111,503.18 58,339,02 665,167.29 875,049.83 mooing cas flow 164,14875 952,037.11 1956,788.16 1206,824,19 622.710.98 157,30883 45.00565 104,14467 76931197 1644,361.79 During 1st three years of operation facility rent,repayment of star-up costs and GM salary%waived. 07/12/2002 TRUCKEE DONNER PUBLIC UTILITY DISTRICT FiberRelecom/Broadband Related Disbursements through 5131102 Disbursements to Date Study&Analysis RMI/Navigant $102,667 Sierra Market Research 15,300 Vectren Financial Analysis 10,000 Third Networks, Inc. 286,000 District Labor&Overhead 183,907 Misc Materials &Supplies 16,232 614,106 Legislative Braitman &Associates 11,239 LAFCO 15,000 26,239 Legal Porter Simon 39,574 Dennis DeCuir 113 39,686 Financing Aggregate Networks 45,000 Communications Conduit RMI/Navigant 60,667 Williams Communications- Encroachment Permit 122,780 Misc Materials&Supplies 63,737 District Materials &Overhead 26,328 District Labor&Overhead 75,097 348,609 Total Broadband Related Disbursements 1,073,640 Broadband Analysis Board Packet7-17.xis/Board Summary 07112/20021 3:12 PM