Richard Lewis, city of Houston, TX CIO on EarthLink-Houston agreement

7/30/2019 Richard Lewis, city of Houston, TX CIO on EarthLink-Houston agreement

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Digital Houston InitiativeA Wireless Network for the RegionA Wireless Network for the Region

CITYCITY OFOF HOUSTONHOUSTONMuniWirelessMuniWireless: Texas07: Texas07

Richard LewisRichard LewisCIO, City of HoustonCIO, City of Houston

March 5, 20071


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CITY OF HOUSTONDigital Houston Initiative

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In March, the TITF stated itIn March, the TITF stated itss VISIONVISION ::

In August of 2004, the Greater Houston Partnership (GHP)formed a Focus Group of Corporate CIOs to Investigatethe Condition of the Regions IT Infrastructure

By January 2005, the Focus Group Recommended thatthe GHP Create a Technology Infrastructure Task Force(TITF) to Address Infrastructure Needs for the Region

Communities Fully Integrated by a Regional WirelessNetwork allowing Instant Access Anytime

Leveraging Education, Health Care, Transportation,Public Safety and Community Non-Profit Investmentsin IT Applications

Promoting Economic Development, Innovation andProductivity Improvements

Business Community Interest inBusiness Community Interest in

BROADBAND ACCESSBROADBAND ACCESS


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CITY GOVERNMENTCITY GOVERNMENT

RESPONSERESPONSE

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In October 2005, Mayor White responded toIn October 2005, Mayor White responded tothe Report by announcing that the City wouldthe Report by announcing that the City would

release an RFP for the private Financing andrelease an RFP for the private Financing and

Management of such a Wireless InfrastructureManagement of such a Wireless Infrastructure

City Staff who have been Following theCity Staff who have been Following the

Development of this Technology have beenDevelopment of this Technology have been

Organized into a Project Team and aOrganized into a Project Team and a

Nationally Recognized Consultant has beenNationally Recognized Consultant has been

Engaged for this EffortEngaged for this Effort

A Competitive Proposal Process has beenA Competitive Proposal Process has been

Executed to Realize this Vision that theExecuted to Realize this Vision that the

GHPGHPs Technology Infrastructure Task Forces Technology Infrastructure Task Force(TITF) has Outlined(TITF) has Outlined


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CITY GOVERNMENTCITY GOVERNMENT

OBJECTIVESOBJECTIVES

REDUCE / AVOID GOVERNMENT COST ofREDUCE / AVOID GOVERNMENT COST ofMOBILE DATA DEVICESMOBILE DATA DEVICES

( $600k Yearly Increasing to $2m )( $600k Yearly Increasing to $2m )

DIGITAL DIVIDE ACCESS andDIGITAL DIVIDE ACCESS and

EDUCATION ENHANCEMENTSEDUCATION ENHANCEMENTS

( i.e. more students with home access )( i.e. more students with home access )

INCREASE CONSUMER CHOICE andINCREASE CONSUMER CHOICE and

MAKE MORE AFFORDABLEMAKE MORE AFFORDABLE( previously $30 to $50 down to $10 to $20 monthly, fixed, nomad( previously $30 to $50 down to $10 to $20 monthly, fixed, nomadic and mobile )ic and mobile )

PROMOTE ECONOMIC DEVELOPMENTPROMOTE ECONOMIC DEVELOPMENT( Conventions, Tourism & the Bohemian Effect for Young Professio( Conventions, Tourism & the Bohemian Effect for Young Professionals )nals )

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BUSINESS MODEL:BUSINESS MODEL:

PUBLIC / PRIVATE PartnershipPUBLIC / PRIVATE Partnership

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)) City Government uses its substantial Real EstateCity Government uses its substantial Real Estateholdings and rights to Electric Utility as an Inducementholdings and rights to Electric Utility as an Inducement

)) Private Partner makes a $40 to $50 million dollar investmentPrivate Partner makes a $40 to $50 million dollar investmentin Wireless Broadband Technology for the Houston Regionin Wireless Broadband Technology for the Houston Region

andand

)) Parties agree to Wholesale Rate & other Key Business TermsParties agree to Wholesale Rate & other Key Business Terms

99 DESIGNSDESIGNS

99 DEPLOYSDEPLOYS99 MANAGES NETWORKMANAGES NETWORK


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TRANSPORTATION RELATEDTRANSPORTATION RELATED

PUBLIC SAFETYPUBLIC SAFETY

9 TRAFFIC SIGNALS

9 PARKING METERS

9 POLICE REPORTS

9 POLICE VIDEO and PHOTOS

9 FIRE BUILDING PLANS

9 SECURITY SURVEILLANCE

9 REDUNDANCY for WIRED NETWORK

during DISASTERS

9 WORK ORDER COMPLETION / UPDATE9 METER READING for UTILITIES

INFRASTRUCTURE MAINTENANCE & SUPPORTINFRASTRUCTURE MAINTENANCE & SUPPORT

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FUTUREFUTURE

PUBLIC SECTOR APPLICATIONSPUBLIC SECTOR APPLICATIONS


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FIELD INSPECTIONSFIELD INSPECTIONS

AVL for CITY VEHICLES and GPSAVL for CITY VEHICLES and GPS

9 BUILDING CODE

9 FIRE CODE9 HEALTH CODE

9 CITY CONSTRUCTION PROJECTION

9NEIGHBORHOOD CODE

FEDERAL HIGHWAY ADMINISTRATION hasFEDERAL HIGHWAY ADMINISTRATION has

LICENSED RADIO FREQUENCY SPECTRUM for use inLICENSED RADIO FREQUENCY SPECTRUM for use in

AUTOMATED VEHICLES SPEED CONTROLAUTOMATED VEHICLES SPEED CONTROL

FUTUREFUTURE

PUBLIC SECTOR APPLICATIONSPUBLIC SECTOR APPLICATIONS(continued)(continued)

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FUTUREFUTURE


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Other Public / Private ApplicationsOther Public / Private Applications

9 SCHOOL RECORDS ACCESS

9 Grades, Attendance, Reports, Homework Assignments, etc.

9 TELECOMMUTE and WORK at HOME

9 TELEMEDICINE for CHRONIC ILLNESSES

9 T1 ALTERNATIVES for BUSINESS CONNECTIVITY

9 LOW COST CELL PHONE REPLACEMENT

FUTUREFUTURE

PUBLIC SECTOR APPLICATIONSPUBLIC SECTOR APPLICATIONS(continued)(continued)

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CITY HOUSTON


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CITY OF HOUSTONDigital Houston InitiativeREQUIREMENTSREQUIREMENTS

PRIVACYPRIVACY

&&

COMPLIANCECOMPLIANCE

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Go to: http://www.houstontx.gov/it/wirelessrfp.html to see, starting on Page 21

NETWORKNETWORK

INFRASTRUCTUREINFRASTRUCTURE

SERVICES,SERVICES,

PROVISIONINGPROVISIONING

& PRICING& PRICING

OPEN ACCESSOPEN ACCESS

( Any ISP for Retail )( Any ISP for Retail )

MULTIMULTI--USEUSE1.1. Public ServicePublic Service

2.2. Public AccessPublic Access

3.3. Public SafetyPublic Safety

COVERAGECOVERAGE( 95% of City Outdoor )( 95% of City Outdoor )

( 90% of City Indoor )( 90% of City Indoor )

SECURITYSECURITY1.1. PhysicalPhysical

2.2. VirtualVirtual

3.3. Encryption, etc.Encryption, etc.

CUSTOMERCUSTOMER

SERVICESERVICE

CITY HOUSTON


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Evaluation/Selection ProcessEvaluation/Selection Process

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Evaluation / Selection ProcessEvaluation / Selection Process

EVALUATION CRITERIAEVALUATION CRITERIA POINTSPOINTS

Value to the Community 25

Value to City Government 10

Financial Capacity 10

Experience 30

MW/DBE P/F

Deployment Strategy & Plan 25

TOTALTOTAL 100100

CITY HOUSTON


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VALUE TO THE COMMUNITY

a. FINANCIAL PLANI. Economic / Financial Projections (Soundness) *

II. Community Inclusion Programs Investment* Evaluation performed by Outside Investment Banking Firm* Evaluation performed by Outside Investment Banking Firm

b. RATESI. Wholesale Rate (1 Mbps minimum)

II. Retail Rate for Low-Income (1 Mbps minimum)( Objective Mathematical Ratings )( Objective Mathematical Ratings )

VALUE TO CITY GOVERNMENT(Compensation for Use of City Assets)

I. Free and/or Discounted AccountsII. Up to 5% Free Public Access (Parks, etc.)III. Bandwidth, Capacity, Speed

Continued

CITY OF HOUSTON


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FINANCIAL CAPACITY *---

-

Financial StrengthAbility to Sustain Long-term Capital InvestmentSimilar Pending Commitments

Key Executives / Partners / Ownership Structure* Evaluation performed by Outside Investment Banking Firm* Evaluation performed by Outside Investment Banking Firm

EXPERIENCE

-- References, Services, Organizational CapabilitiesTechnical Architecture / Quality of Service Plan

DEPLOYMENT STRATEGY & PLAN

-

---

Strategy / Approach

Project Plan and MethodologyCoverageTimeline

MW/DBE PARTICIPATION- Pass / Fail based on 24% Good Faith Efforts

Continued

CITY OF HOUSTONCOMPETITIVECOMPETITIVE


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The City of Houston Received (5) ProposalsThe City of Houston Received (5) Proposals

9 Each Proposal has 1 Prime Contractor

and Multiple Partners9 Over 25 Companies Participating

9 7 of the Participants are Fortune 500 Companies

9 Numeric Ratings Complete

9 Negotiation Meetings commenced in Augustwith 2 Top Rated Proposers


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COMPETITIVECOMPETITIVE

SELECTION PROCESSSELECTION PROCESS

CITY OF HOUSTON


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PHASE 1

Initial Rating

PHASE 2

Short List & 2nd Rating Not Needed(Optional Based on # of Proposals & Complexities of Proposed Solutions)

PHASE 3

Top 2 Rated Proposers Invited toNegotiations on Key Deal Terms

Continued

CITY OF HOUSTON


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)The Mayor directed Negotiations on Key Deal Terms in a Mannertypical of Competitive Commercial Deals

)Both Firms responded to City requirements with the Understandingthat No Final Decisions or Recommendations would occur until allPrincipal Terms were Agreed to

)This occurred over Six Months with the Mayor, InformationTechnology Department Executives and the Citys Financial AdvisorActively Engaged

)Private Sector Executives Affiliated with Greater HoustonPartnership were consulted on Commercial Perspectives, withExperience being cited as one of the Key Factor for Success

)Earthlink is being Recommended for Negotiation of a DefinitiveAgreement that should move quickly and is Posting a $1 MillionLetter of Credit as Security and Good Faith

CITY OF HOUSTON

Digital Houston InitiativeNEGOTIATIONSNEGOTIATIONS

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CITY OF HOUSTON


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)Earthlink is financing the project out of available Cash, whileConvergent has represented a highly leveraged debt structure,

$86.5% Debt $13.5% Equity

)Citys Financial Advisor worked with Convergent to maintain

the competitive environment, although a firm commitment tofinancing did not occur

)Earthlink committed to commence work upon approval of theTerm Sheet with key personnel in Houston

)In addition, Earthlink is decentralizing its National Marketing

into a Regional Framework with Houston potentially becominga Regional Office for service to Houston, New Orleans, CorpusChristi, etc.

OTHER FACTORSOTHER FACTORSCITY OF HOUSTON

Digital Houston Initiative

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CITY OF HOUSTONESSENTIALESSENTIAL


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ESSENTIALESSENTIAL

TERMS OF DEALTERMS OF DEAL

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)) Network Operator to Finance, Design, Build, OperateNetwork Operator to Finance, Design, Build, Operateand Maintain the Network at its Sole Expenseand Maintain the Network at its Sole Expense

)) Deployment of the Network will be Completed Within 24 Months oDeployment of the Network will be Completed Within 24 Months offthe Effective Date of the Definitive Agreementthe Effective Date of the Definitive Agreement

)) Network Operator Must Provide Security to City to Ensure theNetwork Operator Must Provide Security to City to Ensure theImplementation is Performed According to Schedule, i.e. $Implementation is Performed According to Schedule, i.e. $5 million5 millionLetter of Credit with Minimum % Completion Milestones atLetter of Credit with Minimum % Completion Milestones at 12 and 2412 and 24

Months with a $2.5 Million Draw Penalty at Each MilestoneMonths with a $2.5 Million Draw Penalty at Each Milestone andand

Strong Termination ProvisionsStrong Termination Provisions

)) Wholesale Rate May Not Exceed $12 Monthly for the First SevenWholesale Rate May Not Exceed $12 Monthly for the First Seven (7)(7)YearsYears



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ESSENTIALESSENTIAL

TERMS OF DEALTERMS OF DEAL (continued)(continued)

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)) The Parties will Collaborate on the Digital Inclusion andThe Parties will Collaborate on the Digital Inclusion andNetwork Marketing in the First Two (2) Years with theNetwork Marketing in the First Two (2) Years with the

Network Operator Providing $2 million Cash and/or InNetwork Operator Providing $2 million Cash and/or In--KindKind

(GAAP Compliant) Contribution for this Purpose(GAAP Compliant) Contribution for this Purpose

)) Network Operator will Pay the City 3% ofNetwork Operator will Pay the City 3% ofALLALL Subscriber GrossSubscriber GrossRevenue on an Annual Basis to be used for InclusionRevenue on an Annual Basis to be used for Inclusion

Programs and to Defray the CityPrograms and to Defray the Citys Program Management Expenses Program Management Expense

)) Network Operator will Provide Coverage for 95% of the CityNetwork Operator will Provide Coverage for 95% of the CityOutdoors and 90% of the City Indoors,Outdoors and 90% of the City Indoors, CPE Devices Provided for EachCPE Devices Provided for Each12 Month Subscription and Rental Rate of $4 per Month for12 Month Subscription and Rental Rate of $4 per Month forLow IncomeLow Income

)) MW/DBE Participation Goal is 24% of the Service (Labor) PortioMW/DBE Participation Goal is 24% of the Service (Labor) Portionnof the Network Cost, Excluding Hardware and Software (MW/of the Network Cost, Excluding Hardware and Software (MW/DBEsDBEs

may Participate by Providing Hardware, Software or Servicmay Participate by Providing Hardware, Software or Services)es)



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ESSENTIALESSENTIAL


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)) City will Provide Assistance for Facilities/Leaseholds forCity will Provide Assistance for Facilities/Leaseholds forBase StationsBase Stations ( 100( 100--130 Locations )130 Locations )

)) Network Operator will Pay up to $14,400 Annually for EachNetwork Operator will Pay up to $14,400 Annually for EachCity Base Station LocationCity Base Station Location

)) Network Operator will Negotiate a Definitive AgreementNetwork Operator will Negotiate a Definitive Agreementwith the Citywith the Citys Electric Utility Franchisee Consistent withs Electric Utility Franchisee Consistent with

the Term Sheet Approved by the City and CenterPointthe Term Sheet Approved by the City and CenterPoint

EnergyEnergy

)) The City Commits to a Minimum of $500,000 in AnnualThe City Commits to a Minimum of $500,000 in AnnualNetwork Usage for City Government Operations afterNetwork Usage for City Government Operations after

Network CompletedNetwork Completed



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ESSENTIALESSENTIAL


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)) Network Operator to Provide Free Access for Up To 5% of the CityNetwork Operator to Provide Free Access for Up To 5% of the CityssGeographic Area (i.e., Parks, Libraries and Health CenteGeographic Area (i.e., Parks, Libraries and Health Centers)rs)

)) Acceptance Test Plan to Focus on Speed, Availability/ReliabilityAcceptance Test Plan to Focus on Speed, Availability/Reliability,,Coverage and Security of NetworkCoverage and Security of Network

)) Service Level Agreement to Require Reliability, Availability,Service Level Agreement to Require Reliability, Availability,Upgrades, Open Access to Wholesalers, Privacy, Security, etc.Upgrades, Open Access to Wholesalers, Privacy, Security, etc.

)) Coverage will also Exclude Areas where Electricity and SuitablCoverage will also Exclude Areas where Electricity and Suitablee

Mounting Platforms are not Available, with Annual ReviewMounting Platforms are not Available, with Annual Review ofofExcluded AreasExcluded Areas

)) Term is for Ten (10) Years with Two (2) Five (5) Year Renewal TeTerm is for Ten (10) Years with Two (2) Five (5) Year Renewal Termsrms

CITY OF HOUSTON Transportation, Infrastructure &Transportation, Infrastructure &


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C OF OUS ODigital Houston Initiative

p ,p

Aviation (TIA) Committee BriefingsAviation (TIA) Committee Briefings

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DATEDATE STATUSSTATUS

December 14, 2006December 14, 2006

Special City CouncilSpecial City Council

MeetingMeeting Update on Digital HoustonUpdate on Digital Houston

February 15, 2007February 15, 2007TIA CommitteeTIA Committee

Update on Digital HoustonUpdate on Digital Houston

March 9, 2006March 9, 2006

TIA CommitteeTIA Committee RFP ProcessRFP Process

June 15, 2006June 15, 2006

TIA CommitteeTIA Committee Update on Digital HoustonUpdate on Digital Houston

July 13, 2006July 13, 2006

TIA CommitteeTIA Committee

Update on Digital HoustonUpdate on Digital Houston

WiFi RFP EvaluationWiFi RFP Evaluation

September 14, 2006September 14, 2006

TIA CommitteeTIA Committee Update on Digital HoustonUpdate on Digital Houston

CITY OF HOUSTON

WiFi M h & WiMAXWiFi M h & WiMAX


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Digital Houston InitiativeWiFiMesh & WiMAXWiFiMesh & WiMAX

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WiFi Mesh & WiMAXWiFi Mesh & WiMAX

Source: Civitium, LLC

100 to 130 Base Stations

Approximately 10,000 to 15,000 AccessNodes with as Gateway Nodes

CITY OF HOUSTON


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NEXT STEPSNEXT STEPS Digital Houston Initiative

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)Council will be asked to Approve the Term Sheet, TriggeringEarthlinks Delivery of a $1 Million Letter of Credit

)Definitive Agreement to be Negotiated by the Parties over thenext 30 Days

)Definitive Agreement between CenterPoint Energy andEarthlink, based on November 2006 City/CenterPoint Term

Sheet

)Earthlink to perform Preliminary Lease Effort and RadioFrequency Analysis


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Digital Houston Initiative


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gA Wireless Network for the RegionA Wireless Network for the Region

QUESTIONSQUESTIONS

ANSWERSANSWERS

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Richard Lewis, city of Houston, TX CIO on EarthLink-Houston agreement

Documents

Transcript of Richard Lewis, city of Houston, TX CIO on EarthLink-Houston agreement