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MassachusettsTelecommunications
Symposium
MassachusettsTelecommunications
SymposiumBroadband’s Role in
Economic DevelopmentBroadband’s Role in
Economic Development
Doris Kelley
Business Development Manager,
Black & Veatch 319.235.2095
319.504.9066 mobile
07/26/04
Page - 2
Economic Development
1. Good highways?
2. Adequate water and sewer lines?
3. Utilities?
4. Railheads/port facilities?
5. Available land at reasonable prices?
6. Skilled work force?
7. Decent tax rates?
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Economic Development
Then Congratulations. In The Economic Development Game…
You Lose.
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Satisfying The Speed Need
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Primary Motivations
Stimulate Economic Development
Create Educational Advantages
Enhance Medical Services
Gain Competitive Advantage
Maintain & Grow Population Base
Provide new, valuable services to the community
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Case Study
A Case Study on the Economic Benefits a Communication Based Utility Brings to the
Community
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Economic Development Factor #1 - Good Highways
Interstate Highway: 1-380
Federal and State Highways:
U.S.: 20, 63, 218
Iowa: 21, 57, 58
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Economic Development Factor #2 - Adequate Water and Sewer Lines
Waterloo Cedar Falls
Capacity (gpd) 53,900,000 25,000,000
Ave. Daily Use 13,769,000 4,000,000
Peak Daily Use 28,780,000 10,423,000
Sanitation Service
Capacity (gpd) 36,500,000 7,680,000
Ave. Daily Use 18,40,000 5,000,000
Source: Cedar Valley Economic Development Corp.
07/26/04
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Economic Development Factor #3 - Utilities
Waterloo Cedar Falls
Electric Service Mid-American Energy
Municipal
Gas Service Mid-American Energy
Municipal
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Economic Development Factor #4 - Railheads/port facilities Local Motor Carriers: 20
Rail Service:
Chicago Central and Pacific Railroad
Iowa Northern Railway
Union Pacific Railroad
Airport:
Waterloo Municipal Airport
3 Runways
Commercial Carriers
Source: Cedar Valley Economic Development Corp
07/26/04
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Economic Development Factor #5- Available Land at Reasonable Prices
Industrial Parks Acres Zoning Tax Rate Price
Cedar Falls Industrial & Technology Park
775 Industrial & Office $36.56 $35,000-50,000
Midport America @ Waterloo Airport
2,000 M-2 Industrial $41.78 $30,000
Waterloo North East Industrial Park
240 M-2 Heavy Industrial $41.78 $25,000
Evansdale Technology Park
35 Industrial $31.03 $25,000
Source: Cedar Valley Economic Development Corp
07/26/04
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Economic Development Factor #5 - Available Land at Reasonable Prices
Industrial Parks Tax Increment Finance
State Enterprise Zone
Cedar Falls Industrial & Technology Park
Yes
Midport America @ Waterloo Airport
Yes Yes
Waterloo North East Industrial Park
Yes
Evansdale Technology Park Yes
Source: Cedar Valley Economic Development Corp
07/26/04
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Cedar Falls Industrial & Technology Park
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Economic Development Factor #5- Available Land at Reasonable Prices
Median Selling Price: 2001
Cedar Falls:
$105,000
Waterloo
$72,000
Average Home Sale Price: $99,649
Source: Waterloo/Cedar Falls Board of Realtors
Housing
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Economic Development Factor #6 - Skilled Work Force
Civilian Labor Population2001 2000 1999 1998 1997
67,400 67,100 69,600 69,200 68,700
Unemployment Rate
2001 2000 1999 1998 1997
3.4% 2.7% 3.8% 3.6% 3.6%
% of Total Employed 2001
Manufacturing 14,300 20%
Service 19,900 27.7%
Retail Trade 13,100 18.2%
Government 12,300 17%
Source: Iowa Work Force Development
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Economic Development Factor #6 - Skilled Work Force
Educational Attainment Levels
High School Graduate or Higher 79%
Bachelor’s Degree 21%
Source: Cedar Valley Economic Development Corp.
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Economic Development Factor #7- Decent Tax Rates
Waterloo: $41.78
Cedar Falls $36.55
Sales Tax: 7% (State – 5%; Local 2%)
Property Taxes(Per $1,000 of Taxable Value)
Source: Black Hawk County Assessor
07/26/04
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Telecommunications Services
CLEC
McLeod USA
POPs
MCI - Located in Waterloo
AT&T- Located in Waterloo
Long Distance Carriers
MCI
AT&T
Sprint
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Major Private Employers
Company Employees
John Deere* 5,072
Covenant Medical Center* 2,479
IBP, Inc.* 2,230
Allen Memorial Hospital* 1,400
Bertch Cabinet Mfg.* 1,262
Omega Cabinet Ltd.* 940
GMAC Mortgage Co.* 899
Hy-Vee Food Stores 851
Wal-Mart Stores 760
APAC* 600* Waterloo Based
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Major Private Employers (Cont.)
Company Employees
Viking Pump 485
Super Target* 350
Affina* 331
Martin Brothers 330
VGM & Associates* 300
Western Home 278
Doerfer Engineering 265
John Deere Community Credit Union 221
Principal Financial 221
* Waterloo Based
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Primary Motivations
Stimulate Economic Development
Create Educational Advantages
Enhance Medical Services
Gain Competitive Advantage
Maintain & Grow Population Base
Provide new, valuable services to the community
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Stimulate Economic Development
# of Businesses
Cedar Falls Industrial Park & Prairie Technology Park 125
Midport America @ Waterloo Airport 4
Evansdale Technology Park 1
Waterloo North East Industrial Park 5
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Target Corporation Distribution Center
Largest sq. ft. Iowa Project in the last 15 Years
1,350,000 sq. ft.
$40M Building
$60M in M/E
900 Full-time & 200 Part-time Employees
$25M Annual Payroll
Fun Facts:
33 Acres Under Roof
1 ½ Miles of Trench Footings, enough Concrete for 25 Miles of 2-lane Highway
Building can hold 90,000 Mini Vans
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New Construction Valuation
Cedar Falls Waterloo
1996 $32M $58M
2001 $65M $76M
2002 $101M $53M
Fiscal Year July thru June
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Cedar Falls Building Value: $96 Million and Counting
$100 Million in New Construction this Fiscal Year is a Distinct Possibility
“The Biggest thing During the Year was The Target Distribution Center; That Bumped Us Up Pretty Good.”
Waterloo Cedar Falls Courier, June 10, 2002
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C.F. Building Hits Record $100 Million
“Cedar Falls Set a Cedar Valley Construction Record this Fiscal Year, Topping Out at More than $101 Million.”
“Despite a Downturn in the National Economy, The City Blew Away all Existing Records in the Fiscal Year Ending June 30.”
Waterloo Cedar Falls Courier, July 12, 2002
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C.F. Building Hits Record $100 Million
“…Meanwhile, the city of Waterloo failed to escape the stalled economy. Suffering from declining commercial permits and no large industrial projects to boost the value, the city recorded less than $53 million in construction during the last fiscal year --- its lowest total in eight years.”
Waterloo Cedar Falls Courier, July 12, 2002
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Cedar Falls
Growth has been a Mix of Residential, Commercial, Corporate Office, and Industrial
Waterloo
Growth has been a Mix of Residential (25%) and Commercial/Retail (75%)
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Located Adjacent to the City of Waterloo, Cedar Falls’ Assessed Valuation has Increased at an Average Annual Rate of 7.4% over the Last Five Years, Despite State-Mandated Rollbacks in Residential Property and Machine and Equipment Assessment Rates. Moody’s Expects the Tax Base to Continue Showing Strong Growth due to Ongoing Residential and Industrial Development Projects.
Moody’s Investors ServiceMunicipal Credit Research
New Issue Published 3 Dec 2001
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Competitive Advantages
“Fiber Optics is the Key to Waterloo’s Future Growth,” (Mayor) Rooff said. “In Order for Waterloo with its Businesses to Move into the 21st Century, We Need Fiber Optic Capability.”
“I Believe it has Hurt Us Economically not to be able to Provide Fiber Optics to Businesses Locating in our City.”
Waterloo Cedar Falls Courier, August 21, 2001
07/26/04
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Competitive Advantages
Waterloo Refocuses on Attracting Jobs
The vast majority of new industries moving to the Cedar Valley are locating in the Cedar Falls Industrial Park, which has caused some discontent from local business leaders and residents wondering why Waterloo is falling short. While officials note any jobs created in Waterloo-Cedar Falls benefit the entire area, Waterloo needs industrial development to boost its tax base. Waterloo Cedar Falls Courier, Headline News, March 11, 2002
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Competitive Advantages
Plans for City’s Fiber-Optic System Hits Speed Bump
Excite@Home’s bankruptcy threw wrench in plans.Six months after being promised high-speed
Internet access by the local cable provider, businesses in some areas of the city are still using either slower or more expensive alternatives.
“What Internet access?” said Joe Burum,CEO of Waterloo Tent & Tarp. “It frustrates me that we have to use a second-tier DSL service that slows the process.”
Waterloo Cedar Falls Courier, April 3, 2002
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Competitive Advantages
Qwest to Offer DSL Service in Waterloo
“DSL Service is a Cutting-edge Technology and We’re Very Pleased to Bring it to Waterloo,” Said Max Phillips, Vice President of Policy and Law for Qwest in Iowa.
Waterloo Cedar Falls Courier, Headline News, April 25, 2002
07/26/04
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Competitive Advantages
Team Technologies
Principal Financial
Hawkeye Community Business Center
Crystal Distribution
Relocations & Expansions in Cedar Valley Since 1996
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Educational Advantages
Waterloo has 21 Buildings
ICN Feeds to ICN Rooms in 3 Buildings – Used for Distance Learning
Buildings are Connected to the Administration Building via a Frame Relay. All Buildings, Plus Administration have a T1 Connection
Mediacom has Agreed to Connect all 21 Buildings via Fiber
School District is Lacking the Capability of Multi Media, Streaming Video in 18 Buildings
Fiber Connection will Result in an Annual Savings of Approximately $100,000.00, Plus Costs for Equipment Support
Waterloo Community Schools
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Educational Advantages
Five Major Routes and Five Secondary Routes of Fiber Optic Transmission Line Link the City’s 10 School Buildings, Administrative Center, Central Services and Area Education Agency 7
Internet Service Provided Thru AEA 7 at No Cost
AEA 7 has a Fractional DS3
Fiber Connection Eliminates the Need for T1s
Cedar Falls Community Schools
07/26/04
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Educational Advantages
Cedar Falls Community Schools Received $1 M from the State Of Iowa to Provide Streaming Video On Demand to all School Buildings. All Classrooms will have Access to Distance Learning.
Pursuing the Opportunity of Students Accessing Streaming Video via a Home Connection using Cedar Falls’ Community-wide Telecommunications Network.
21st Century Learning Infrastructure
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Medical Advantages
Hospitals
Covenant Medical Center
Allen Memorial
Sartori
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To Increase & Maintain Population
Population
1990 2002 Increase
Cedar Falls 24,298 36,145 5.3%
Waterloo 66,467 68,747 3.4%
Black Hawk 123,798 128,012 3.4%
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The Winning Advantage
“What’s The Difference?”
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Cedar Falls, Iowa
Developed a Municipally Owned and Operated Telecommunications Network
Waterloo, Iowa
Depended on Existing Providers to Meet Current and Future Needs
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Telecommunications Services
Municipal City-Wide Fiber Optic Network
High-speed Fiber Connection
Dedicated Connection to the Internet
Cable Modems
FTTB
T1 through DS3 Level Service
Cedar Falls Industrial Park & Prairie Technology Park
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Cedar Falls, Iowa2003/2004 Data
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Business Growth
Cedar Falls Industrial Park & Prairie Technology Park
Number of Businesses 140
Number of Employees 4,250
Buildings – Sq. Footage 4.1M
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Major New Business Projects
PIPAC Centre On The Lake
Hamilton College
Performance Bodies
Crystal Distribution (expansion)
Wingate Inn (under construction)
Mudd Video Production Center (Fall 2004)
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Data Center & Carrier Hotel
Team Technologies LLC
12,000 Square Foot Data Center and Carrier Hotel
Feature World-Class Security
Power and Environmental Control Systems Specifically Designed for IT and Telecom Services
50-Mile Fiber Optics MAN
Extending the Network to Chicago, Des Moines and Internet National Access Points
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New Construction Value
2003: $80 Million
2004: $92 Million
Fiscal Year July thru June
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Increase in Land Value
Increase in Price Per Acre
From $35,000 to $50,000
To $35,000 to $70,000
Increase in Property Tax
From $36.55 to $36.95 for FY 2005
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Moody’s Investors Service
“Moody’s Upgrades to A1 from A2 the Rating on the City of Cedar Falls’ (IA) Sewer Revenue Bonds, Affecting $5.1 Million of Outstanding Parity Debt, Including Current Issue.
Sound Financial Operations Providing Ample Liquidity and Favorable Coverage Ratios.”
February 3, 2004
07/26/04
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Industrial & Technology Park Develop Into a City Within a City
“The City of Cedar Falls is Extremely Pleased with our Strong Continued Economic Development Growth that has Exceeded our Expectations. We Continue to Expand our Industrial & Technology Park while Maintaining our Focus on Quality Development and Job Creation,” Said Bob Seymour, Cedar Falls Community Services Manager. “The Cedar Falls Industrial & Technology Park has Basically Developed into a City Within a City.”
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Lasting Effects
Commerce
Politics
Philosophy
Art
Education
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Information Revolution
“(Communities) that Harness its Power and the Opportunities it Presents will Stand Tall as Great Powers and those that do not will Shrink in Every Aspect of Civilization.”
Michael K. PowellChairman, Federal Communications Commission
MassachusettsTelecommunications
Symposium
MassachusettsTelecommunications
Symposium
Small Cable System Thrives
Shrewsbury Electric and Cable Operations
Small Cable System Thrives
Shrewsbury Electric and Cable Operations
Thomas Josie
July 26, 2004
07/26/04
Page - 54
Conclusion
Municipal entities can successfully build/own/operate “State of the Art Broadband System”
Rates and services are competitive with industry
Financial return to Town, ancillary benefits, and Municipal Fiber Network surpasses alternatives.
* (SELCO is an incumbent operator without competition)
07/26/04
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What We Offer
Traditional Analog & Digital Cable Services
HD TV
Personal Video Remote (PVR) Services
Video On Demand
Broadband Internet - Residential/Business Services
Municipal Fiber Network
07/26/04
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Phones, Voice Mail – For Town Government, Schools, SELCO
Internet Service – Town Government, Schools
Data Network – All Municipal Buildings
Video Between Buildings
PEG use for Remote Shoots
Public Safety - Radio Repeaters
Municipal Fiber Network
07/26/04
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Value Added to Community
Lower Rates for Video Services
Customers Save $2M Annually
Local Control
Excellent Relationship with Issuing Authority
Financial Benefits to Town
5% of all Revenue (Including Internet)
3% for Public, Education, Government Access
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Value Added to Community
Superior Customer Service
One-Stop Shopping - Offices in the Town Hall
Municipal Fiber Network
Joint Operating Committee Town, School, SELCO
Town Website
www.Shrewsbury-MA.gov
07/26/04
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Keys to Success
Apply business/investment principles
Know Your Market – Keep it Local
Offer Competitive Services – Technology & Price
Integrate with Community – Schools, PEG Access, Local Businesses, Town Government
Customer Service – Keep Control!
Use Proven Technology
07/26/04
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Vitals
Homes Passed 13,900
Basic Subs 11,870 (85% Penetration)
Internet Customers 5,735 (41% Penetration)
Miles of Plant 190 mi
System Architecture HFC 860 MHZ250 Homes/Node
Annual Revenue (2003) $7.6 M
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Vitals - Rates
Expanded Basic (72 ch.) $30.55*
Digital, Expanded Basic Converter, VOD, Music, PPV (153+ ch.)
$42.50*
Premium (HBO) $10.95*
*No extra Taxes or Fees
07/26/04
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Policy to Ponder
Who Should ControlEssential Municipal Infrastructure?
-Thanks for Listening
MassachusettsTelecommunications
Symposium
MassachusettsTelecommunications
SymposiumMoving The Complex
To The UnderstandableMoving The Complex
To The Understandable
John Reynolds
Integrated Architectures
July 26, 2004
07/26/04
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Thoughts For The Day
Subscriber services drive all revenues.
Service providers are key to success.
Municipal networks’ customers are service providers.
Low costs and high volumes are the goal.
The success lies in flow-through automation.
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A Subscriber’s Simple Needs
Crystal clear telephone calls
Crisp video reception that does not blotch
Responsive interactive access to the Web
Bulk delivery of large content with no disruption of other services
07/26/04
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Sample Services List Voice:
Number portability Emergency services Directory assistance Operator assistance Caller ID
Data: High speed Internet Variable bandwidth Differentiated services Wireless hotspots
w/roaming VPN privacy Security controls Environmental controls Meter reading
Video Cable Local Satellite Video on Demand Virtual DVD Personal
videoconferencing
Radio Streaming channels Music on demand iTunes
User-provided services Content Application portal
07/26/04
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Service Providers: Wholesale Partners
TheMetropolitan
Network
SubscribersSubscribers
NetworkOperator Service
Providers
ServiceProviders
Orders,Service Calls,Retail Billing
Activations, Network Status, & Wholesale Billing
07/26/04
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Access Paths to a Subscriber
NetworkOperator
ServiceProvider
ServiceProvider
ServiceProvider
Internet
PSTN
Satellite
Subscriber
PC
TV
Telephone
The network operator must control the activation of paths from allthe service providers’ border gateways to the subscriber’s edge.
Subscriber’sEdge
ServiceProvider’sBorderGateway
07/26/04
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Key Network Operator OSS Processes
Service Creation
Service Provider Acquisition
Service Activation
Service Registration
Service Assurance
Billing
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Network Operator’s Provisioning Office
Service Creation
ServiceManagement
SystemServiceCatalog
ApplicationAdministrator
Applications administrators enter access service definitions into the service catalog and advertise the features.
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Service Provider Acquisition
Network Operator’sProvisioning Office
PRM
ServiceCatalog
Service Provider’sProvisioning Office
After acquiring a new service provider, the network operator administrator enters the contract parameters into the partner relationship management database.
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Service Provisioning and Activation
Network Operator’sProvisioning Office
Service Provider’sProvisioning Office
ProvisioningOrderEntry
RetailBilling
WholesaleBilling
Configuration
Activation
PRM
ServiceCatalog
Larger service providers will all want “flow through” activation for service paths to new subscribers.
This provides a dramatically lower unit cost and eliminates human transcription errors.
ClearingHouse
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Service Registration
Network Operator’sProvisioning Office
Subscriber’s Premises
NetworkEdge
Activation
WholesaleBilling
AccessDevice
Phone
PC
TV
• When an access device comes online, it registers with the “network edge” for access.
• The network edge checks with the real-time configuration policy manager database for access authorization.
CommunityAccessNetwork
WholesaleBilling
Configuration
PRM
ServiceCatalog
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Service Assurance
Network Operator’sNetwork Operations Center
Service Provider’sNetwork Operations Center
ServiceProviderGateway
Surveillance Surveillance
Service providers will want to havemajor alarms routed through totheir surveillance systems.
TroubleManagement
TroubleManagement
CommunityNetwork
SubscriberEdge
Device
ClearingHouse
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Billing
Network Operator’sBilling Center
Service Provider’sBilling Center
Subscriber
RetailBilling
WholesaleBilling
Network operator billsservice provider foraccess lease in advance.
Service provider billssubscriber for services.
Any usage-basedrevenue sharing isdistributed in arrears.
WholesaleBilling
Configuration
PRM
ServiceCatalog
ClearingHouse
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The Big Picture
Support Centers
CALEA
CustCare
Fiber
MunicipalOperations
Head End
MedicalCenter
Operations
UniversityOperations
RF
RF
Fiber
Fiber
PSTN
Internet
QoS
VPNPolicyCenter
ClearingHouse
AccessBilling
RetailBilling
TAC
Op Svcs
Dir Assist
LIDB
CNAM
FeatureServer
E911PSAP
ContentProviders
ContentProviders Service
Providers
ISP
RadioSP
ContentSP
TVSP
HVACSP
SecuritySP
ElectricSP
VoiceSP
ApplicationProviders
ApplicationProviders
LECsTNs, port
Provis-ioning
Dispatch
SubscriberDevices
EdgeDevices
BorderGateways
07/26/04
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The Larger Context
ServiceProvider
Inter-ExchangeProvider
NetworkOperator
ClearingHouse
NetworkOperator
Subscribers
Subscribers
Subscribers
Subscribers
Your Community
Another Community
Applications
Content
ServiceProvider
07/26/04
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Opportunities for Outsourcing
Network Operators
Technical Assistance Center
Flow-through activation
Dispatch
Wholesale (access) billing
Revenue sharing distributions
Roaming and settlement
Service Providers
Full OSS system, or:
Customer care
Interface to support providers
Activation gateway
TAC center
Retail billing
Access mediation gateway
Revenue sharing and roaming settlements
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Summary Service provider’s financial viability will be through the
delivery of differentiated services.
Everyone’s margins depend on automation of the high volume transactions.
Network operators will expand their revenues by acquiring an optimal number of service providers.
There are many opportunities emerging to reduce costs and complexity through outsourcing selected OSS operations.
The systems integration can be somewhat complex, but you don’t have to do it all yourself.