Business Case Design

To create a strategic planning framework and plan that has goals and strategies for increasing the adoption of broadband Internet service; PLT will create a Lean Build™ Business Case.

Each custom designed business case balances the requirements for meeting current and future demand for service with aggressive capital and operating expense management.  The Lean Build™ Business Case includes both a demand side and supply side study. It will also provide a Community Support Recommendation, which describes the form of support, quantifies it, which is critical in future grant submissions where in-kind matching is required, and the impact that expansion would have on community access to the Internet and the sustainability of the Internet Service Provider

PLT begins by projecting where broadband is now, and what demand for it is now and will be over time. This tool, PLT’s Attractiveness Index™, utilizes multiple public and private resources. For residential communities, PLT uses demographics such as the number of households, age and income of households, location of population in rural and urban areas and total population.  For businesses, PLT forecasts the propensity of businesses, by industrial sector, to employ various types of Internet access, such as dialup, DSL, and T-1 lines. PLT then considers based on demographic characteristics what portion of broadband adopters will be early adopter, majority adopters, or late adopters.

PLT will then create a model to forecast potential demand and market share over time between the new Internet Service Provider and its competitors. This model will incorporate much of the intelligence created within the Attractiveness Index™, for example:

1. An estimate of what broadband options exists for education and healthcare providers and major employers.
2. An estimate of what percentage of the household, small business population has access to at least one provider of either DSL or cable provided fast Internet service.
3. What the propensity of these groups to purchase a Broadband service will be.
4. Where these high, moderate and low propensity to purchase populations are located.
5. Where within the planned RISP network, are the locations where there is no cable or DSL provided Internet access as well as the size of the population not currently served.

PLT will develop revenue model inputs for the business case based on penetration and pricing assumptions (for residential and business customers) derived in consultation with the community’s representatives.

Finally, PLT’s will apply commonly accepted ISP class of service assumptions to develop a capital and operating expense budget to:

1. Construct a delivery (“Last Mile”) network robust enough to meet forecast demand. Total demand and the distribution of demand will dictate the type of network recommended be it fiber, fixed wireless or some other physical media.
2. Based on the size and distribution of demand and the availability of sufficient backbone capacity, a second transport model is constructed for the backbone network, sometimes referred to as the “middle mile”. The middle mile is the network to connect all of the distribution nodes together. Wherever possible, the middle mile will also connect the distribution network to the Internet’s backbone.

It is PLT experience that public access points on the Internet’s backbone are not available outside the nation’s largest cities. If this is the case for the target community PLT will also budget for the construction of network capacity to the community’s network to the Internet’s backbone.

The proposed preliminary engineering design and cost estimates will include prioritized implementation phases with cost estimates for each phase. These phases should be prioritized by needs identified in the Attractiveness Index™ needs assessment, ease of implementation given existing infrastructure, and level of impact on existing and proposed industries and residents.

Samples of PLT work product can be downloaded from the Resource Center.

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