AD~net
Algoma District Community Network
|
AD~net Algoma District Community Network
|
|
|
ADnet Business Plan TABLE OF CONTENTS 1 Executive Summary2 Introduction3 Study Objectives and Methodology4 Structure of Technical Reports5 Business Plan5.1 Key information from technical reports5.1.1 Needs Assessment Overview5.1.2 Infrastructure Strategy Report5.1.3 Technical Plan Overview:5.2 Cost Summary5.3 Ownership issues5.4 Build vs. Lease5.5 Hybrid Solution5.6 Lease Solution5.7 Levels of Service5.8 Cost to members of ADnet5.9 Bud get5.10 Sources of Operating Revenue5.11 Reason funding is required5.12 Capital Funding Sources5.13 Wind-up Considerations5.14 Economic Impact5.15 Marketing Strategy5.15.1 Targeted marketing effort:5.15.2 Promotions:5.15.3 Public Relations Activities:5.16 Tasks, Responsibilities and Timelines5.17 Use of Standards, Administration of the Network5.18 Organizational Structures and a Human Resource Plan6 BUDGET ASSUMPTIONS: ADnet6.1 Operating Revenues/Inflows:6.2 Operating Costs:6.3 Contributions:6.4 Start-Up Costs: Executive SummaryIn the Spring of 1998, the Algoma District Community Network (ADnet), an association of public and private sector organizations, decided to undertake a needs analysis for a funding application to federal and provincial government bodies in response to an opportunity provided by the Northern Ontario Heritage Fund. This needs analysis would consider the future utilization of technology by its partners, propose alternatives for the development of a regional network, and review the implications of fitting within a broader framework, whether provincial, regional, or national/international in nature. A consortium of companies ("the PGA Consortium") provided the necessary expertise and resources to perform the needs analysis, propose strategies for the development of the network, develop a technical plan and prepare a business plan for review by the ADnet Board of Directors and subsequent submission to various funding agencies. The goal of the City of Sault Ste. Marie and Algoma Region partners is to develop a state-of-the-art community-wide network. The hope is that this district wide network could eventually link to similar initiatives throughout the north. ADnet is a member of the Northern Ontario Community Network (NOCN), which strives to link all major Northern Ontario centres and is confident that this goal will be achieved in 1999/2000. The implementation of these plans will provide an opportunity for the Algoma District to move forward and pursue new business opportunities. The proposal is about community-based partnerships. Partnerships will help to reduce the overall cost for the equipment, maintenance and bandwidth prices. It is also through partnerships that we can ensure on-going excellence in telecommunications. ADnet seeks to connect over twenty-five primary Algoma District communities, as well as a host of other townships, unincorporated settlements and First Nations groups distributed throughout the region. ADnet is a new initiative that does not replace or compete with any previous government program. It will reduce of cost of programs in areas such as health, education, municipal, and other government services. The ADnet project will provide enhanced benefits to smaller communities and an opportunity to attract new investment and to offer new services. ADnet has placed emphasis on the acquisition of affordable, high speed digital infrastructure that will carry a multitude of telecommunications traffic and applications. This emphasis results from a recognition in the ADnet served communities that driving down the costs of telecommunications were seen to the major limiting factor on the deployment within each community. A total of four reports were developed in support of the Technological Assessment of the Algoma District including:
The first three reports provided a significant amount of information supporting the formation of this business plan. These sizable documents have been bound separately and are intended as reference material to the business plan, adding detail and definition where the business plan has merely summarized the pertinent data. The focus of the business plan is to detail the components and activities, with costs and schedule, to implement the network infrastructure. Key elements drawn from the first three reports summarized in the business plan included the following issues:
A detailed five-year budget/income statement and cashflow was prepared for ADnet and its partners that demonstrates that the project will cost (over 5 years): Funding is required to launch and operate this project and is demonstrated by the budget/income statement included at the end of the report. Without funding, the project would have serious difficulty meeting its obligations and would not be able to cover the forecasted deficit identified in the budget/income statement. Funding will allow the project to get off the ground, and provide members of the community-based network with an opportunity to increase their access to up-to-date technology. It will increase economic development opportunities as a result of communities being able to sell themselves and potentially have the ability to offer discounted telecommunications rates. The financial statements, namely, the cashflow forecast provides a level of security that the network will be self-sustaining. Although the budget demonstrates that the network is operating in a deficit situation, it is also setting aside funds to replace the equipment (please note the depreciation). The network is however running a positive cashflow thanks to government funding. This positive cashflow will provide the foundation for self-sustainability in the long term, after funding commitments have been exhausted. Future demand will be driven by the application usage and bandwidth requirements of the applications. Without ADnet and government funding, members may not be able to implement the future applications identified in the "Current Assessment Report". For example, video conference, telemedicine, distance education, larger accesses to the internet, e-commerce and g-commerce applications, and remote management are among the applications that require large amounts of bandwidth and their future utilization will be based on access and cost issues. The economic impact ADnet is likely to have may be described in two ways, direct and indirect. The number of new jobs created for the purpose of maintaining the network measures direct impact. Indirect impact has two facets: 1) the number of new jobs likely to be created based on new telecommunications horizons, and 2) the number of jobs sustained by implementing the network. An optimistic estimate of indirect jobs to be created is 2,000. This estimate is based on: 1) up to 500 jobs related to ADnet business applications (e.g. GIS), 2) up to 500 jobs related to the Innovation Centre, and 3) up to 1,000 Call Centre jobs. It is important to note that telecommunications projects lay the foundation for the creation of many other jobs by providing a competitive advantage for the community to attract investment. This project also decreases the cost of operation for government-funded organizations which can re-invest monies saved into programming and improving services. In the Spring of 1998, the Algoma District Community Network (ADnet), an association of public and private sector organizations, decided to undertake a needs analysis for a funding application to federal and provincial government bodies in response to an opportunity provided by the Northern Ontario Heritage Fund. This needs analysis would consider the future utilization of technology by its partners, propose alternatives for the development of a regional network, and review the implications of fitting within a broader framework, whether provincial, regional, or national/international in nature. The consultants retained for the project were drawn from three primary firms: Planned Approach Inc., Global Bridgeworks Inc, and Avita Technologies Corp. These three firms formed the PGA Consortium for the purposes of this and other projects throughout Ontario. The PGA Consortium was joined by a number of supporting contractors, including Mr. Randy Sweetnam and Mr. Steven Cummings who contributed their substantial expertise in their respective areas. The PGA Consortium was contracted to perform the needs analysis, propose strategies for the development of the network, develop a technical plan and a business plan. School boards, hospitals, colleges, and other partners had already formed alliances and needed to know that their concerns in working under one network would be answered. Smaller communities needed service at a reasonable cost. PGA implemented strategies to ensure that partners would be confident that they could gain from the new alliance, were comfortable with the new network, and were able to buy in without sacrificing existing alliances and resources. The analysis takes into consideration the delicate balance between long term cost effectiveness and the viability of ownership issues. The goal of the City of Sault Ste. Marie and Algoma Region partners is to develop a state-of-the-art community-wide network. The hope is that this district wide network could eventually link to similar initiatives throughout the north. ADnet is a member of the Northern Ontario Community Network (NOCN), which strives to link all major Northern Ontario centres and is confident that this goal will be achieved in 1999/2000. The implementation of these plans will provide an opportunity for the Algoma District to move forward and pursue new business opportunities. Telecommunications has been described as the infrastructure of the future. It will enable organizations and community partners in all sectors to provide new services and respond to their customers and clients more effectively. The local availability of leading edge telecommunications services can act as a differentiator in attracting new business to an area. Advanced and cost-effective telecommunications can facilitate growth and global business competitiveness in existing local businesses. Larger centres in Canada currently have excellent telecommunications infrastructure, however it is in the smaller communities where the gap in high tech infrastructure occurs. The activities of ADnet and other community networks in Ontario encourage service price reductions. The lower cost of operation will assist communities in their campaigns to attract investment. The proposal is about community-based partnerships. Partnerships will help to reduce the overall cost for the equipment, maintenance and bandwidth prices. It is also through partnerships that we can ensure on-going excellence in telecommunications. The project will involve a total of twenty-five Algoma District communities. ADnet will connect multiple organizations within the following communities:
ADnet will also connect organizations with representation in these additional communities:
Once operational, ADnet will also be connected to NOCN, which will be connected to the OCN or Toronto for provincial, national, and international connectivity. ADnet has been incorporated as a Ontario non-profit corporation, as of Dec 4, 1998 as Incorporation Number 1316455. Copies of the articles of incorporation, Board Members and other information can be provided on request. ADnet is a new initiative that does not replace or compete with any previous government program. It will reduce of cost of programs in areas such as health, education, municipal, and other government services. The ADnet project will provide enhanced benefits to smaller communities and an opportunity to attract new investment and to offer new services. ADnet has placed emphasis on the acquisition of affordable, high speed digital infrastructure that will carry a multitude of telecommunications traffic and applications. This emphasis results from a recognition in the ADnet served communities that driving down the costs of telecommunications were seen to the major limiting factor on the deployment within each community. The objectives of the study were:
The study participants include the members of the working group, principle users, and potential users: ADIN, Algoma Business Computers, Algoma District School Board, Algoma District Social Services, Algoma Steel, Algoma University College, Algoma.net, Cameco, Community Development Corporations of East Algoma, Sault Ste. Marie, Superior East, City of Sault Ste. Marie, College Boreal – Dubreuilville, Contact North – Dubreuilville, Ecole Catholique Georges Vanier, ELNOS, Great Lakes Power, Group Health Centre, Hornepayne Community Hospital, HRC – Elliot Lake, Huron-Superior Catholic School Board, Ministry of Community and Social Services, Ministry of Natural Resources – Wawa, North Algoma Health Organization, North Shore Tribal Council, Northern Credit Union, Olav Haavaidsrud Timber Company, Ontario Provincial Police, Sault Ste. Marie Public Utilities Commission, Regional Employment Help Centre, Sault Area Hospitals, Sault College, Sault College – Elliot Lake, Sault Ste. Marie Police Service, Sault Ste. Marie Public Library, Sault Ste. Marie Economic Development Corporation, St. Joseph Health Centre – Blind River, Stellar Com, Township of Chapleau, Township of Dubreuilville, Township of Michipicoten, Township of Prince Public Library, Training Centre – Wawa, Wawa Native Network, Scotia Bank – Spanish. Overall, over 70 members of the various communities in the Algoma region were consulted. The project was also advertised extensively and members of the community were invited to information sessions. Information on ADnet is also available on the web at http://www.hiawatha.net/community/ADnet. The consulting group utilized the following methodology:
Four separate reports were developed for ADnet. The business plan is the fourth and final report. These reports detail the activities undertaken to identify user needs, future demand, governance, access issues, technology used, services available, future technology opportunities, partnerships, costs, and other issues. The consulting group provided recommendations to ADnet in each of these reports. The following describes the types of information that can be found in the technical report. Three technical reports were developed and are available. They are:
The following describes the material covered in these reports.
Present Status Assessment The Present Status Assessment documents the current and future business and technology resources in the Algoma Region. It includes:
ADnet Infrastructure Strategy The Network Infrastructure Strategy portion of the report documents the high-level strategies for the Network Infrastructure. A list of recommendations were provided to ADnet dealing with governance, network access, inter-operability and inter-connectivity, definitions for membership and cost, and a first view at a potential network architecture. Pros and cons of each strategy are identified. The Network Infrastructure Strategy Report includes the following:
Technology Plan The Technology Plan recommends the technical architecture that best meets the defined requirements and strategies. The consulting group issued a Request for Information to suppliers/carriers to ensure that up-to-date information was used to recommend the best alternative for the network architecture. The Technology Plan includes the following: The business plan details the components and activities, with costs and schedule, to implement the network infrastructure. This document is the Business Plan, utilized to obtain funding and to provide a framework from which ADnet can plan the introduction of its network. The business plan will:
The ADnet Technology Plan is the third of four reports that make up the primary deliverables for the ADnet technological study. The focus of the Technology Plan is to develop a more detailed design of the ADnet Community Based Network, based on the approaches and core principles defined in the earlier reports. A Request for Information was developed and issued to twenty-three (23) potential carriers, equipment suppliers and other interested parties. A total of eight (8) responses were received from the following organizations:
Each of the submissions was received in digital form and are available to the ADnet Board Members for detailed review should that be required. Each of the submissions was reviewed and summarized with respect to the scope of their response, the core technologies, business model, serviced areas, service levels offered and costs, fit to ADnet needs and technical feasibility. Comments and an overall assessment of each submission is also provided. A examination of the evaluation and assessment issues identified a number of fundamental choices required on issues of design/build/operate versus lease, and verification that the technologies proposed can integrate well with the key principles of the unifying conceptual architecture developed in the Technology Strategies report. On the key issue of demarcation between customer, local loop provider, CBN and carrier, it was suggested that the following principles be employed:
The evaluation criteria was based on an re-examination of each proposal, focusing on technology, availability and pricing. Detailed recommendations were developed for the ADnet backbone, network management, per-community local loop and remote communities. A summary of those recommendations follows: ADnet Backbone Recommendations ADnet’s role is to assist the region in closing the gap in corridors with poor and/or expensive access to telecommunications infrastructure. If a single backbone carrier was desired, Bell Canada provides the greatest coverage of ADnet communities, despite the fact that there are several sub-standard links and switches in some of the smaller centres. Since multiple backbone carriers are acceptable to ADnet, then further discussions and possibly negotiation should be held with Bell, ONTel and Regional Cable for the Sudbury-Sault corridor, then with Bell for the Sault-Wawa corridor and then finally with Bell and Trylon-TSF for the Wawa-White River and Wawa-Hornepayne corridors. The Technology Plan identified a need to upgrade telecommunications equipment in order to strengthen the various Algoma District corridors. The final decision will be based on the best deal ADnet can make when it issues the RFP. We know that ADnet will need to make a capital investment and have identified a broad brush budget for this investment. In the Sault, Great Lakes Interlinks’ private fibre connection across the International Bridge to the Lake State University network and then on to the MCI backbone provides a unique opportunity to add a redundant network connection for ADnet and the other Northern Ontario networks. Although there may be issues surrounding the use of this link, it is an option that should be thoroughly explored as part of the overall network planning activity. Any capital investment in carrier-based infrastructure should be negotiated with a lease-to-own arrangement with the carriers so that they assume full responsibility for the asset in a reasonable period of time. Through such investment, ADnet would retain rights for inserting access ports to permit local loop provider access to the CBN backbone. The communities in which it is anticipated there will be a need for such capital investment are the larger centres including the following:
It will be necessary to conduct detailed network engineering studies for each community to determine the actual available backbone switching capacity, the number and types of local loop providers, and finally the current and future customers of the services that could be offered in that community. To support the ADnet position in any negotiations with carriers, there will be a continuing need for researching, developing and presenting current and future demands for the region. This essential data will aid justification for further investment in the Region by the carriers and will provide incentive for further price reductions and service offerings available to ADnet. Network Management Recommendations For the carrier backbone network, ADnet has a limited role or responsibility for participating in the management of the infrastructure. This is due to the fact that ADnet is purchasing services to a collection of communities and does not require knowledge or control over the passage of packets – merely that they move end-to-end without errors or delays. With the use of a Service Level Agreement to support each of the endpoints, ADnet will be in a strong position to obtain the required level of services within the ADnet communities. For those customers requiring Service Level Agreements to support their network needs, this can be accomplished through customer purchased equipment capable of capturing the required statistical data and further decisions made by the customer whether to insource or outsource the monitoring and analysis function. This represents an end-point-to-end-point service monitoring, leaving the management of individual network elements or circuits to the backbone carrier. Per Community Local Loop Recommendations Each of the ADnet served communities has a different mix of current carriers that can provide ‘last mile’ services. Strategically, we believe it is best for ADnet not to assume responsibility for provisioning the last mile, and instead identify preferred or approved partners on a per-community basis. Local loop issues are micro systems that need to be resolved on a case-by-case, community-by-community basis. Some communities may be able to take advantage of fibre solutions, others may need to look at wireless. ADnet’s role is to ensure good backbone access throughout the district. Sault Ste Marie, being the major centre for the Algoma District, provides the richest choices for service, including Bell Canada, ONTel, Regional Cable and the Sault Ste Marie PUC. The levels of service available range from 56/128 Kb to 1544 Kb. Expansion to provide 10/100 Mbit and ATM OC-3 or higher services is possible but will require investment in some digital switching equipment. For those communities along the Sudbury-Sault Ste Marie corridor, the available carriers include Bell Canada, Regional Cable and to a lesser extent ONTel. The levels of service available range from 56/128 Kb to 1544 Kb. Expansion to provide 10/100 Mbit services is possible but will require investment in some digital switching equipment. For Chapleau and Wawa, Bell Canada is the only carrier that can provide services today. The levels of service available range from 56/128 Kb to 1544 Kb. Expansion to provide 10/100 Mbit services is possible but will require investment in some digital switching equipment. For Hornepayne and White River, Bell Canada is the only carrier that can provide services today. The levels of service available range from 56/128 Kb to 1544 Kb. For any ADnet customer that is outside a 7 km service radius of a community POP, Packetworks’ wireless solution provides a viable alternative for services up to 10 Mbit. Services of this type are likely to be one-off proposals to meet the specific needs of each customer. For those ADnet customers that are outside a 40 km service radius of a community POP, Packetworks’ wireless, Trylon’s microwave and Cancom’s satellite solutions provide viable services up to 10 Mbit and higher. Services of this type are likely to be one-off proposals to meet the specific needs of each customer. Implementation/Next Steps A range of potential next steps for the Backbone, Network Management and Local Loop Carrier selection is provided, focusing on the different scenarios that can be followed. These scenarios have been developed around likely sequences of events, and then individually reviewed for any potential technical, financial, logistical or political impacts associated with that particular scenario. For the ADnet Backbone and Network Management elements, it is seen to be important to align the ADnet selection process with the NOCN process that is now underway, in conjunction with a more detailed design of the respective ADnet CBN components in advance of a formal RFP for Backbone and Network Management services. For the Local Loop Carrier elements, it is less important to align with the NOCN process, other than understanding where the logical and physical demarcation point is for the NOCN and the ADnet CBN. Further inquiries to confirm service levels and pricing for each of the communities is suggested, under the auspices of qualifying with ADnet as a provider of local loop services.
Individual Communities As a fundamental principle in approaching a services solution, ADnet should seek solutions which are framed by ADnet as a whole and applicable to the whole District. As a consequence, problems with individual communities, or business cases should not be isolated as bargaining issues. For example, one to three individual communities may need intermediate or high cost solutions to level the telecom playing field throughout the District. It would be to a solution provider’s benefit to isolate these cases and request high cost solutions, using the FedNor frame relay roll-out model of community by community solutions. It would be to ADnet’s disadvantage to isolate these bargaining issues. Capital Equipment to be purchased by ADnet:
Individual Vendors The Technology Plan and Business Plan for ADnet seek to address issues with the following priorities:
Items a) and b) are significant to creating equitable access throughout the region. Item c) is a strategic goal concerned with the reliability and robustness of the network and is key to reliability in the network and enticing knowledge based industries to the North. Information presented in this proposal is based on an RFI and, as such, is indicative rather than final. "Best price" information will be elicited by a formal RFP, which will be framed by larger concerns of NOCN. These larger concerns will result in a flexible approach to contracts, for instance, directing funds to areas best suited to winning vendor requirements rather than providing an exclusionary list of specific types of equipment or services which will or will not be contracted for. Ownership of the network can be puzzling in an environment in which the status of the vendor is unclear. For instance, if a member of the consortium provides a service to the consortium as a whole, is that service "owned" by the member or by the consortium? And further, is the responsibility for developing technical horizons for that service the responsibility of the member or the consortium? Ownership, in many situations will need to be negotiated on a case-by-case basis. In some situations, leasing may be the most desirable option. One of the more difficult questions on ownership is how to properly utilize government funds. If ADnet enters into a long term agreement with a ‘contractor’ and allows the ownership of the equipment to pass on to this ‘contractor’, it is bound by the pricing and service levels offered by that ‘contractor’ for the long term. With market pricing shifting very quickly, this could disadvantage of the network. It also provides a government subsidy to a small number of private sector ‘contractors’. The recommendation for ownership is as follows (where feasible):
This proposal has the following benefits:
This is always the key question in the development of private/public networks when some or all of the stakeholders also own right of way through a community or geographic area. The build option allows the stakeholders to manage costs and to plan appropriate replacement and upgrade costs, were as the lease option, although not capital intensive also increases the operating cost of the partnering organizations. There is currently sufficient infrastructure and services provided in the region by a number of carriers suggesting that a build by ADnet is not necessary to accomplish connectivity goals. On the other hand, considering the current environment of deregulation and competition the stakeholders and customers should not have to pay the tariff rates for services. Any cost benefit analysis that is conducted should compare the cost of a build vs. tariff and special assembly rates for proper analysis. Therefore a build should only be considered if there is:
ADnet members are expected to pay for the cost of the network. It is not the intention of ADnet to have the telecommunications costs subsidized by government as it would lower the cost for only a short period of time and ADnet would have greater difficulty in becoming competitive in the long run. The intent is to utilize the group purchasing power to obtain a lower cost for members and to ensure that agreements are either short enough or flexible enough to keep prices low. ADnet will need government support to purchase capital equipment, and to defray the cost of administration on a short to medium term basis. Members will pay the following costs:
A five-year budget/income statement and cashflow is included in appendix. The consolidated project budget for ADnet and its partners demonstrates that the project will cost (over 5 years):
ADnet’s cost of operation will be covered by the following:
ADnet will be contracting out the management of the network and these costs will become part of the monthly invoice for telecommunications service to its members (item #2 on list of cost to members described earlier). ADnet will, however, hire 2 employees in a marketing/membership management position. The cost for these positions will initially be supported by government programs, however, must become self-sufficient in the long run. ADnet is proposing to cover cost of operations through a combination of their membership fees (item #1) and a small levy from the sale of bandwidth (item #2). On-going investment will be realized through the rental/leasing agreements (item #3) and the amount set aside for depreciation allowance, which is transferred as an ‘equipment replenishment fund’ in the cashflow budget. The current model provides for a fully self-sustaining situation and ADnet will be able to replace equipment as it becomes out-dated. Should ADnet not be able to realize the expected revenue levels, it may negotiate an agreement with a ‘contractor’ to take over ownership of the current equipment and re-invest into new equipment in the long term on ADnet’s behalf. This would avoid the cost of the ‘equipment replenishment fund’, and provide an improved cashflow. The depreciation allowance is not a cash outflow and the budget would not show the same deficit level.
Funding is required to launch and operate this project and is demonstrated by the budget/income statement included at the end of the report. Without funding, the project would have serious difficulty meeting its obligations and would not be able to cover the forecasted deficit identified in the budget/income statement. Funding will allow the project to get off the ground, and provide members of the community-based network with an opportunity to increase their access to up-to-date technology. It will increase economic development opportunities as a result of communities being able to sell themselves and potentially have the ability to offer discounted telecommunications rates. The financial statements, namely, the cashflow forecast provides a level of security that the network will be self-sustaining. Although the budget demonstrates that the network is operating in a deficit situation, it is also setting aside funds to replace the equipment (please note the depreciation). The network is however running a positive cashflow thanks to government funding. This positive cashflow will provide the foundation for self-sustainability in the long term, after funding commitments have been exhausted. Future demand will be driven by the application usage and bandwidth requirements of the applications. Without ADnet and government funding, members may not be able to implement the future applications identified in the "Current Assessment Report". For example, video conference, telemedicine, distance education, larger accesses to the internet, e-commerce and g-commerce applications, and remote management are among the applications that require large amounts of bandwidth and their future utilization will be based on access and cost issues. The economic impact ADnet is likely to have may be described in two ways, direct and indirect. The number of new jobs created for the purpose of maintaining the network measures direct impact. Indirect impact has two facets: 1) the number of new jobs likely to be created based on new telecommunications horizons, and 2) the number of jobs sustained by implementing the network. The minimum number of direct jobs created by this network will be three in year one and two in the second year and thereafter. These are employees of ADnet. A review of survey responses in the ADnet Current Status Assessment Report suggested that a significant number felt that lack of in-house technical expertise was an obstacle to further telecommunications development. We view this as less an obstacle than as an opportunity for ADnet to contribute to the economic well-being of the Region. ADnet will provide this expertise to its members, either through training or through outsourced contracts. Eliminating the obstacle will not only level the playing field for ADnet members, but should increase opportunities for ADnet as a whole to discover new efficiencies and applications. An optimistic estimate of indirect jobs to be created is 2,000. This estimate is based on: 1) up to 500 jobs related to ADnet business applications (e.g., GIS), 2) up to 500 jobs related to the Innovation Centre, and 3) up to 1,000 Call Centre jobs. It is important to note that telecommunications projects lay the foundation for the creation of many other jobs by providing a competitive advantage for the community to attract investment. This project also decreases the cost of operation for government-funded organizations which can re-invest monies saved into programming and improving services. The network will sustain employment in the Algoma District telecommunications industry by requiring the following operational support:
Membership at start-up: ADnet will begin with 18 paid-up members (as of February 15, 1999): Surveys indicate that thirteen ADnet members plan $________ in capital telecommunications spending in 1999. Seventeen members reported a total of $________ in operational expenditures. Based on the seventeen, we estimate an additional $________ in operational expenditures from the 20 other members who did not respond to the survey. We recognized that some of operational and capital expenditures will still need to occur beyond ADnet’s mandate, we have therefore discounted these amounts by 50% to provide a more realistic and conservative figure. These members have a combined annual spending of $________ in telecommunications costs. The budget provides an estimate of operational and capital expenditure revenues based on the contributions of members and carriers/suppliers.
Pricing: A discussion with approximately ___% of proposed members indicated that pricing was not the key decision factor in switching to the ADnet. Members indicated that community support of the initiative, opportunities for future economic development, opportunities for sharing technology and information were more important deciding factors in providing their support to the ADnet initiative. The current pricing structure would offer an estimated ___% overall savings to members once all costs including membership and equipment leasing is taken into account. If discount rates are higher than the __% budgeted figure, ADnet may chose to provide larger savings to members. The discount rate is a forecasted figure. However, its accuracy was checked against the prices obtained by other networks that have already issued an RFP such as NIPNet, whose agreement with Bell will generate an approximate ___% saving to its members. The membership fee of $_____ per year may discourage smaller operations from joining. On the other hand, ADnet may find that the operational costs of adding several small members outweigh the benefits. If ADnet wishes to encourage smaller members to join, it may chose to make special allowances and tier the membership fee, which would have the effect of reducing the cost of the membership fee to the smaller members.
Market Potential: ADnet begins with 18 committed members. However, since the community visioning sessions, another 19 potential members have come forward, participated heavily in the planning sessions and have indicated an interest to join. ADnet estimates that the strongest interest to join will be in the first two years, once the network is launched, the project receives media coverage, and with a strong push from new staff to encourage membership. The following charts provide our estimates for the market potential for adding members to ADnet. You will find the figures conservative (11-12 new members each year on average), however, ADnet wishes to control growth in order to ensure a strong and effective network and does not wish to inflate figures and jeopardize its financial stability. The original members will be the first to be connected to the network and once fully operational, ADnet will seek new members. ADnet will market the network through its own staff to attract new members and encourage further utilization of the network. The following explains the activities that will be undertaken:
Break-Even: It should be noted that ADnet is close to break-even with ___ members with the forecasted revenue level. The sensitivity is around __% from that level. At ___% of forecasted revenues, ADnet would have a negative cashflow at the end of year __ and would need to make decisions on whether to replace equipment or re-pay loan amounts. At that level, it would be able to continue operating, as long as it would find a source or method to replace equipment. The City of Sault Ste. Marie has already compiled a list of non-profit and private sector organizations. Information on other smaller communities is easily obtainable from the economic development office for the region or the municipalities. ADnet will utilize its existing members to obtain an introduction and make one or more official presentation(s) to these organizations to demonstrate the benefits of joining the network. Among the benefits will be:
A presentation on overheads will be prepared. A package of information will also be available and left with the potential new member. The information may vary based on pricing and services required by each member and therefore will need to be customized to the client. The membership system has been developed to allow the maximum flexibility for new members. New members will pay a monthly fee and avoid the unnecessary pressures of joining for an extended period of time. They are thus able to judge quickly of the benefits of ADnet and if not satisfied, can leave the network quickly and easily. ADnet believes that the relative ease in being able to join and leave the network will encourage organizations to become members. Staff members will be provided with an incentive package to bring in new members. Existing members and Board members will be asked to attend regional trade shows and special meetings to speak of ADnet and its network. ADnet has already contacted the media and will continue to forward invitations to press conferences and issue media releases to update the public on its activities. An information package will be sent out to all non-profit organizations and larger private sector organizations as soon as the network is operational to advise them of the network and the benefit it is extending to its members. An official opening will be planned to which media, members and potential members, and dignitaries will be invited.
Task Timeline Responsibility ___________________________________________________________________ Proposal Stage Business Plan to funding bodies ______ Charlie/Nick Funding review completed ______ Funding body Amendments completed (if required) ______ PGA/ADnet Final approvals ______ Funding body Preliminary Work RFP issued ______ Charlie/Nick Develop job descriptions Complete Randy Post job(s) Complete ADnet Board Hire personnel Complete ADnet Board Receive & review RFPs ______ ADnet Consultant Award & negotiate contract(s) ______ ADnet Board Implementation Stage (periods and schedule to be negotiated with contractor) Launch network Board, Funding bodies, Contractors Connect Sault Contractors Connect Elliot Lake, Wawa, etc. Contractors
ADnet will require the following three permanent staff in the first year. Beginning in year two, it is estimated that only the Program Manager and Administrative Assistant will be required. Program Manager Reports To: ADnet Board of Directors Salary Range: $______/hr Supervisor to: Administrative Assistant/Sector Developer Responsibilities:
Prerequisites:
Sector Developer Reports To: Program Manager Salary Range: $_____/hr Supervisor to: N/A Responsibilities:
Prerequisites:
Administrative Assistant Reports To: Program Manager Salary Range: $______/hr Supervisor to: Temporary project workers Responsibilities:
Prerequisites:
Membership forecast:
ADnet will begin with existing members who are defined as those organization who have already paid a membership plus those organizations who have actively participated in community planning sessions and indicated a strong interest in the project. The modest growth is attributed to the need to ensure the network is working adequately. Once the marketing campaign and network is fully operational, growth is expected to proceed at a relatively stable rate over the years.
|
