COUNCIL REPORT. Item Meeting date: August 13, 2018 Engineering & Public Works

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1 Item Meeting date: August 13, 2018 Department: Prepared by: Reviewed by: SUBJECT: Engineering & Public Works COUNCIL REPORT George Elliott, P.Eng., Director of Engineering & Public Works Greg McClinchey, Chief Administrative Officer North Frontenac Telephone Company (NFTC) Fibre Optic Utility Installation Report No. EPW RECOMMENDATION: It is recommended: 1. That Council receive Report EPW regarding the North Frontenac Telephone Company proposal to install fibre optic utility services in Mount Brydges, and 2. That Council direct the Chief Administrative Officer to prepare a standard Municipal Access Agreement based on CRTC formats to support the private sector fibre optic utility installation in Mount Brydges for Council consideration in September, and 3. That Council direct staff to explore opportunities to expand the fibre optic network to the surrounding areas of Mount Brydges to present options for a phase 2 implementation within the 2019 Budget deliberations. BACKGROUND The community of Mount Brydges and surrounding areas of Campbellvale and Delaware West have sporadic telecommunication utility services. The community is also excluded from the service expansion plan being advanced by the South Western Integrated Fibre Technology (SWIFT) Project. As a small (but rapidly growing) under-serviced area, the community broadly represents a sizable service and revenue opportunity to smaller telecommunication companies seeking to grow their market share. In this context, and given the Mayor and Council s ongoing efforts to enhance internet services available to the residents in and around Mount Brydges, Municipal staff have continued to explore opportunities to improve services and access to high-speed internet for area residents. With this in mind, in July 2018, the North Frontenac Telephone Company (NFTC) approached the CAO to enquire about opportunities of expanding high speed fibre optic services throughout Mount Brydges. The new utility would provide top quality phone, internet and television service. Page 1 of 5

2 Subsequent to that initial conversation, the Director of Information Technology and the Director of Engineering & Public Works met with the Vice President of NFTC to explore the new utility opportunity. The discussion confirmed that NFTC is very interested in providing private sector investments to build a comprehensive fibre optic network throughout the community of Mount Brydges by the fall of COMMENTS Fibre Optic Technology Fibre Optic technology is the best method available for telecommunications and internet service. The NFTC proposal will provide a single fibre optic cable connection to each home or business, directly from the primary hub. This approach provides the maximum service speed without interruption and conflict from other information flows. The NFTC proposal will provide a base package of 30 Mb speed with optional packages up to 1,000 Mb (1 Gb) service speeds. This service level is equivalent to large city downtown core services found in London and Toronto. The current typical internet speed in Mount Brydges is about 3 to 4 Mb, with a maximum potential of about 8 Mb. This service installation represents a significant upgrade for the community and a sizable economic development opportunity for businesses seeking to expand and grow via various online tools and platforms. Economic Development and Why Now? The current size of Mount Brydges is at the threshold for consideration of small market telecommunications providers. The growth projections of the new subdivisions alone, make Mount Brydges an ideal private sector investment opportunity. From an economic development perspective, this inquiry is a good example of If you build it, they (services) will come. With the increase in internet service level, Mount Brydges can expect an increase in the Home Based economy as well as an increase in businesses relocating to the community. Existing businesses will experience expansion opportunities and overall business improvements that were inaccessible prior to the fibre installation. The continued growth of the community and increases in services may drive other service expansions like shopping, general commerce, professional offices and institutions. In all, there is potential that the financial benefit to existing property owners may be increases between $10,000 and $50,000 in property values. NFTC Proposal and Time Lines The NFTC concept will connect onto the existing Bell central hub in the north end of Mount Brydges. This hub gives the direct access to the major infrastructure needed to deliver the high quality internet services. The NFTC system will provide a local Central Office Hub (small 12 x 12 brick building) from which direct fibre optic lines will be run to each property in Mount Brydges, including supply stubs to new subdivision areas. The NFTC hub would be proposed on a portion of Municipal property. The works would require Municipal Council approval, in September, of a Municipal Access Agreement to enable the designs to be undertaken through the winter. In March & April, additional Municipal approvals under the agreement, known as municipal consents would be obtained by providing the detailed design information to the Municipality. Through the period of May to September, 2019 the Page 2 of 5

3 works would be undertaken, including the municipal efforts toward utility locating for excavating purposes. The NFTC fibre optic network system is anticipated to be up and running by the fall of NFTC Ask of the Municipality To facilitate their private investment in the Mount Brydges community, NFTC has a few requests for support from the Municipality. First and foremost, they require a willing host demonstrated by Council support of the proposal and approval of a Municipal Access Agreement. The Municipal Access Agreement is a standard undertaking to permit private utilities to place their equipment in the Municipal road right of way. It is similar to easement rights across private property. NFTC has provided a draft document that has been prepared in accordance with standard CRTC provisions for all utilities across Canada. Their draft has been customized for use in London Ontario and has become their standard for across Ontario. The agreement is a governance document that addresses issues like ownership, maintenance rights, access rights, and cost responsibilities when the private infrastructure is impacted by other Municipal operations. The new Director of Legal and Legislative Services has already been tasked to review this template agreement to ensure its appropriateness. Assuming a positive outcome of that evaluation, staff propose to complete a draft of the formal document addressing any local concerns. That document will then be reviewed by Chief Administrative Officer and legal counsel prior to the final document being presented to Council for approval in September. In keeping with Municipal access needs, the NFTC proposal includes a central office hub which is a small brick building to house the primary connections of the fibre optic lines. This building is proposed to be located on Municipal Land and be covered in the Municipal Access Agreement. A final site for the building has not been determined and initial thoughts include locations such as the Tri-Township Arena, the Water Reservoir, or the Water Tower lands that are all relatively centrally located. The final site location will be selected following the approval of the Municipal Access Agreement and the commencement of the detailed design of their network. To ensure accurate coordination with the existing Municipal infrastructure and the Municipal planning forecasts, NFTC has requested technical mapping and data transfer to assist their engineering efforts. Items including systems mapping, County GIS layers, Zoning Mapping, forecasted growth objectives contained in Development Charges planning and future development linkage points for growth connections. In return, the Municipality will obtain final as built information to be linked to the County GIS and details of future stub connections for promoting continued growth and development. The provision of this information will be over the period of September 2018 to March 2019 and can be undertaken within the current staff workloads. The project will include excavations on every street in Mount Brydges. Accordingly, the Call Before You Dig utility locates will need to be done on every street in a timely, coordinated manner. This will facilitate the quick and efficient construction and start-up of the fibre optic network. This level of locate work will require a dedicated staff member for about 4 months of time. It is proposed that a student be Page 3 of 5

4 hired in the Environmental Services Division for the summer of This student will be able to undertake a variety of water and sewer operations tasks to enable a licensed operator to be dedicated to the utility locate needs. The cost of an additional student to support the locates needs is approximately $15,000 that would be funded from the water and wastewater rates budgets. Potential Expansion to Surrounding Areas The NFTC proposal is to provide the fibre optic network to the Mount Brydges community proper. The built up areas of the core of Mount Brydges have reached the threshold to support the private investment. In keeping with the Mayor and Council s desire to provide high-speed internet access to the rural areas of the Municipality, staff explored other opportunities with NFTC to possibly consider an expansion of service to the areas east of Mount Brydges to the Highway 402 corridor, Campbellvale and Delaware West. NFTC confirmed that this expansion is not only technically possible but may also be financially viable depending on the number of customers connected during the installation. Consideration of a Phase 2 deployment of the fibre optic network can be explored once NFTC is underway with the primary network development. Based on very cursory considerations, it is envisioned that a skeleton spine of fibre optics may be possible on Glendon Drive and Parkhouse Drive to the Highway 402 corridor as well as a spine along Adelaide Road through Campbellvale, across the Highway 402 corridor to Delaware West. This phase 2 expansion may be possible with Municipal top up contributions in addition to connected customer contributions. The top up contributions may be in the magnitude of $100,000 to $150,000. There is no need to consider the phase 2 works at this time and there would be no commitment to additional future works if the primary community of Mount Brydges is approved. Staff propose to continue to explore the phase 2 works and bring forward a detailed proposal to Council in the 2019 Budget deliberations. The budget proposal would address the revenue opportunities for the works including possible development charge contributions, one time infrastructure charge to all benefiting Mount Brydges and surrounding area properties, cost sharing with interested businesses and tax levy implications. If the phase 2 works were approved in the 2019 budget approvals cycle, the works could be added to the project to be undertaken immediately in the fall of If approved, the surrounding areas of Mount Brydges could also be fully serviced by the end of Cost Implications to Residents The NFTC financial model involves pre-sales of service contracts within the community. During the detailed design process, sales contacts with all residents in Mount Brydges will be undertaken in an attempt to set up service contracts. The NFTC pricing model is not established at this time. However, NFTC demonstrated that service contract costs in their other Ontario small market communities such as Charbot, Haliburton, Minden, Dutton and Wallacetown were all less than the large utility providers such as Bell and Rogers. Further, these lower costs are for a comparable and, in some cases, a significantly superior speed of service. Page 4 of 5

5 If a property signs up with NFTC prior to or during the installation period, there is no additional cost to extend the fibre optic line into the property. If the service is requested following the initial install process, an additional fee of approximately $300 can be expected for the later install. FINANCIAL IMPLICATIONS The NFTC proposal is a private sector investment opportunity. There would be no Municipal contribution or share in the project to service the phase 1 works of the built up area of Mount Brydges. The Municipal costs toward the initiative would include internal staff time in Engineering and Planning services to support the design process. As well, the out of pocket costs to support the initiative would total $15,000 to hire a summer student to enable dedicated utility locate staff. In the event that Council would choose to engage with a phase 2 expansion into lesser populated surrounding areas, additional top up costs may be required. The top up costs may be in the magnitude of $100,000 to $150,000. A future staff report during the 2019 budget deliberations is anticipated to provide full details to Council for consideration at that time. CONSULTATION The preparation of this report was done in consultation with: Chief Administrative Officer Director of Information Technology Services ATTACHMENTS None. Page 5 of 5

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