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Austin Utilities Austin, Minnesota

Request-for-Proposal

for a Management Partnership

to Deliver Retail Broadband Access

over a Wireless Broadband Network

July 27, 2010

Proposal Due Date: 1PM, Mon., Aug. 23, 2010

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Table of Contents 1. Background and Purpose............................................................................... 3 1.1 Objectives..................................................................................................... 3 1.2 Private-Public Partnership Model ................................................................ 4 1.3 City of Austin Background ........................................................................... 5 1.4 Austin Utilities ............................................................................................. 6 1.5 Internet Offering .......................................................................................... 6 1.6 Request for Proposal Purpose Internet Offering ......................................... 7 1.7 Approvals .................................................................................................... 6 2.1 Wireless Network Documentation................................................................ 7 3. Management Partner Overview ..................................................................... 11 3.1 Responsibilities ............................................................................................ 11 3.1.1 Terms & Definitions................................................................................... 13 3.1.2 Management Partner Responsibilities....................................................... 14 3.1.2.1 Internet Service Provider (ISP) .............................................................. 15 3.1.2.2 Customer Services & Technical Support................................................ 15 3.1.2.3 Perform Network Operations. ................................................................ 18 3.1.3 Austin Utility Responsibilities..................................................................... 18 3.1.3.1 Network Ownership................................................................................. 18 3.1.3.2 Other Facilities........................................................................................ 19 3.1.3.3 Maintain Ownership of Subscriber. ........................................................ 19 3.1.3.4 Set Policies............................................................................................. 19 3.1.3.5 Provide Specified Support to Management Partner................................ 20 3.1.4 Subscriber Pricing and Compensation for services................................... 20 3.2. Partnership Proposals ................................................................................. 21 3.3. Partnership Preferences............................................................................... 21 4. Response Submittal Instructions..................................................................... 21 4.1 Filing of Proposals......................................................................................... 21 4.2 Questions ..................................................................................................... 22 4.3 Proprietary Information ................................................................................. 22 4.4 Respondent Qualifications and Experience .................................................. 22 4.5 Schedule........................................................................................................ 22 4.6 Presentations and Site Visits ........................................................................ 23 4.7 Austin Utilities Contact .................................................................................. 23 4.8 Rejection of Proposals .................................................................................. 23 4.9 Austin Utilities Vendor Selection.................................................................... 23 4.10 Escalation.................................................................................................... 23 4.11 Patents ........................................................................................................ 23 4.12 Information to Accompany Proposal............................................................ 24 4.13 Minor Irregularities........................................................................................ 24 Appendices A. Demarcation Points……………………………………………………………….. 25 B. Logical Diagram…………………………………………………………………… 26 C. RFP Response and Questions………………………………………………….. 27

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1. Background and Purpose Austin Utilities (located in Austin Minnesota) seeks to enhance the community’s quality of life by promoting the availability and affordability of mobile / portable high-speed and broadband data connectivity. Austin Utilities views high-speed wireless service as one way to more effectively compete in the municipal market space; attract and retain a wide variety of residents, businesses, organizations, and visitors; and enhance the efficiency and effectiveness of municipal and educational services. Applications of this technology range from support of interactive video communications for emergency responders to bringing access to multimedia-rich content to students at home. Many of the creative ways in which anytime-anywhere access to the Internet will be used can only be imagined by those who are willing to experiment with this innovation. 1.1 Objectives Austin Utilities seeks to enhance community development in the city by promoting the demand and affordability of high-speed and broadband data connectivity. Austin Utility’s visions to reach this objective include, but are not limited to, the following:

• Austin is a connected community, where all people have an equal opportunity to participate in civic affairs through all means possible, at all times possible, in all places possible.

• Austin is a place where community connections and the quality of life are enhanced by access to high-speed Internet access anywhere, at any time, by anyone.

• Austin is a community-wide Internet hot spot where all thrive civically and economically for a lifetime.

The goals to reach this objective include:

• Offer an always-on high-speed (symmetrical 1 Mbps) alternative priced to compete with dial-up services.

o Residential Market (under $25 per month, including the Customer Premises equipment (CPE).

o Small Business Market (under $35 per month, including the CPE). • Ensure that the broadband enterprise maintains a positive cash flow. • Increase awareness of the benefits of high-speed access. • Advance the community’s connectivity options and initiate an “unwired city

campaign. • Encourage new applications, such as telemedicine and distance learning. • Enable applications and other public services to support expanded public safety

service initiatives (video monitoring, remote access, other). • Recognize and support the benefits of high-speed mobile and portable

connectivity.

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1.2. Private-Public Partnership Model The service model being used by Austin Utilities is a public-private partnership. Information on the proposed model is included in Section 3 of this RFP, which essentially calls for Austin Utilities to exercise its core competencies while the private partner(s) to do the same. Appendix A shows a block diagram of the demarcation points between Austin Utilities and the Management Partner. Under the business model, Austin Utilities will:

• Own the wireless network electronic components (Access points, gateways, and media converters);

• Provide the core switches and routers; • Provide physical space and support infrastructure (electrical power, climate

control, physical security, etc.) as required to house central network components (switches, routers, and servers);

• Provide fiber optic network infrastructure; • Provide the primary connection to the Internet through a national, or regional

TIER 1 or 2 provider; • Provide community brand image; • Approve service offerings & prices; • Support marketing efforts; • Monitor financial performance; • Monitor customer satisfaction; • Finance network upgrades; • Manage demarcation between Austin Utilities & Management Partner, which

allows replacement of management partner, if required; • Maintain customer "hot-line" to allow feedback regarding management partner

performance; • Approve all marketing and promotion activities; • Control and maintain potential advertising revenues (i.e. Google, Yahoo &

others); • Provide access to Austin Utilities mounting assets for wireless network

components; and • Offer financing assistance for CPE’s and accessories.

The Management Partner will operate the ISP, lease access to Austin Utilities wireless network, and:

• Provide design, testing, and technical guidance, as needed • Assist in coverage testing and performance verification; • Assist in proof of performance testing; • Modify and/or optimize configurations of the core switches, routers, and other

wireless network components, as needed; • Assist with moving & setup of core switch equipment from SMIG office to Austin

Public Utilities;

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• Assist with procurement (if needed), and setup of new core router to replace Internet routing function previously provided by SMIG;

• Assist with new connection and configuration of new TIER 1-2 provider to Austin Utilities network;

• Work with SMIG to coordinate the move of subscriber’s email from existing SMIG server to new MP system;

• Acquire and install required servers and software for ISP hosting (billing, authentication, accounting, etc.) and email support (See the logical diagram in Appendix B);

• Issue monthly billing; • Provide help desk support for end users (minimum support hours 8AM to 8 PM

M-F, 10AM to 2PM Sat); • Provide physical space and support infrastructure for help-desk ,sales, and

administrative personnel and systems; • Provide physical space and support infrastructure (electrical power, climate

control, physical security, etc.) to house central network components (switches, routers, and servers) not located at a Austin Utilities facility;

• Operate & maintain network; • Direct sales & marketing efforts – we believe more subscribers can be acquired

with additional sales & marketing efforts; • Provide authentication server; • Maintain customer satisfaction; • Conduct & schedule professional installations; • Maintain and manage authentication (process and equipment); • Provide email services, including performing server maintenance; • Provide redundant Internet connectivity; • Monitor network; and • Collect operational statistics.

We are open to consider other business models as long as the best interests of Austin Utilities and the Austin community are served. 1.3 City of Austin Background Austin is located in Mower County, Minnesota, United States. The population was 23,314 at the 2000 census. It is the county seat of Mower County, located at the intersection of Interstate 90 and U.S. 218 in the southeastern part of the state. The town was originally settled along the Cedar River, and has two man-made lakes called East Side Lake and Mill pond. The Hormel Foods Corporation is the largest employer in Austin. Area According to the United States Census Bureau, the city of Austin has a total area of 10.9 mi². 10.8 mi² of it is land; 0.1 mi² is water. Population

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As of the census² of 2000, there were 23,314 people, 9,897 households, and 6,076 families residing in the city. The population density was 2,168.2/mi². There were 10,261 housing units at an average density of 954.3/mi². Of the 9,897 households, 27.2% had children under the age of 18, 48.6% were married couples living together, 9.5% had a female householder with no husband present, and 38.6% were non-families. Moreover, 33.4% of all households were made up of individuals and 17.2% had someone living alone who was 65 years of age or older. The average household size was 2.29; the average family size was 2.90. In the city the population was spread out, with 23.3% under the age of 18, 8.7% from 18 to 24, 25.1% from 25 to 44, 20.9% from 45 to 64, and 22.0% who were 65 years of age or older. The median age was 40 years. Income The median income for a household in the city was $33,750, and the median income for a family was $42,691. Males had a median income of $31,787 versus $23,158 for females. The per capita income for the city was $20,651. About 7.5% of families and 10.9% of the population were below the poverty line, including 15.0% of those under age 18 and 5.1% of those ages 65 or over. 1.4 Austin Utilities Austin Utilities is community-owned, not-for-profit water, electric, and natural gas supplier, created by local residents more than a century ago to provide high quality, affordable services tailored to the unique needs of the Austin area. Austin Utilities serves 12,428 electric, 10,386 natural gas and 9,038 water customers. Annual revenues top $55 million, and about 2.85% of gross revenues, or $1.57 million, in 2009, are contributed to the City annually in lieu of taxes to further support the community. To provide the high quality services Austin Utilities customers have grown accustomed to requires a staff of 90 full-time professionals to provide virtually uninterrupted services on demand - 24 hours a day, 365 days a year. Austin Utilities is directed by a 5-member Board of Commissioners. The commissioners are elected by the consumer-owners of Austin to represent their best interests. 1.5 Internet Offering Austin Utilities’ Internet offering consists of a low-cost, high-speed connection for residences and small businesses. The service, delivered via a wireless network (see Section 2 for additional information), will include the following features and characteristics:

• Plug & Play Customer Premises Equipment. o High power (200mW) wireless CPE o Supports 802.11b/g. o Supports 802.1x authentication and advanced encryption and

authentication standards (802.11i / WPA2). o External or high-gain antenna optional.

• Minimize truck rolls required to activate new customers (goal of less than 10%).

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• Network monitoring to identify high-use customers, and present customer specific data, such as Signal-to-Noise Ratios (SNR) and other parameters.

• A nominal service plan for $19.95 per month plus CPE costs for an always-on symmetrical 128 Kbps service with at least two e-mail accounts and support at least two connections per account.

• Relative to the nominal $19.95 service, additional tiered services offering: o Higher and lower data rates o Additional email accounts o Additional device connections o Static IP address o Roamer traffic (e.g. mobile accounts) o Web hosting o Online file storage o One-time visitors (hourly, daily, weekly rates)

1.6 Request for Proposal Purpose The purpose of this RFP is to solicit interest from potential partners for the possible citywide implementation.

• Austin Utilities may select one or more partners to participate in the project. • Austin Utilities is open to a wide range of fee options for the proposed business

model. Proposals that have the respondent sharing financial risks are preferred. • Austin Utilities may select one or several finalists to review in more detail, and

may require demonstrations of potential partner’s hosting and management services.

Austin Utilities will select the Management Partner based upon the proposed business model, technical response, and demonstrated experience that are deemed by Austin Utilities to be in the best interests of Austin Utilities and the community of Austin. Respondents to this RFP accept that all RFP processes and all transactions with project related service providers are conducted in compliance with applicable law and Austin Utilities charter provisions. 2. Wireless Network Documentation (Information Only) Austin Utilities has determined a set of principal requirements for wireless network equipment and solution providers. General network hardware includes:

• The Strix Systems OWS 2400 Series Wi-Fi mesh radio is used for all wireless nodes in the network.

• All retail CPE devices are to be based upon IEEE standards (802.11 b/g, other). The current CPE device being used is the Ruckus MM2211.

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• The system is capable of supporting Public safety-service applications, and if implemented must:

o Receive priority over retail Internet traffic. o Public safety-service applications can reside on same frequency as retail

traffic as long as no degradation of either traffic is seen. o Public safety-service applications can use 4.9 GHz band, as long as the

4.9GHz band is not used for retail traffic (direct to the subscriber or backhaul of retail traffic).

o Node-to-Node backhaul of traffic must not interfere with or limit available bandwidth for node-to-CPE and CPE-to-node communications.

The design includes the following characteristics: • The use of a wireless mesh routing technology, such that certain radio nodes

function both as wireless access points (WAPs) for client connectivity and as gateways with direct connectivity to the core switches/routers, while the other nodes function as WAPs and connect wirelessly to neighboring nodes for backhaul transport of traffic. The mesh network shall have the following characteristics:

Ability for each WAP to connect to multiple neighboring WAPs and route traffic automatically around WAP failures for improved network availability; and

The use of dedicated channels or frequencies for backhaul traffic versus connections to client devices (customers);

• The majority of radio gateways are connected via fiber optics; • A total of 345 radio nodes are deployed throughout the city.

12 fiber connected gateways are located throughout the city (see Appendix A for locations)

• The core Ethernet switch is currently located at SMIG’s office at 801 16th Ave. NE, and will need to be moved to an equipment cabinet at Austin Public Utilities.

• The core fiber-Ethernet network operates at Gigabit speed. • The Wi-Fi backbone operates at an over the air data rate of 54Mbps • Current break down of subscribers:

Starter (128Kbps) – 118 subscribers Select (1Mbps) – 412 subscribers Deluxe (up to 3Mbps) – 111 subscribers

• Typical daily peak traffic for the entire network is 20Mbps. Figure 1 on the next page shows the network utilization statistics.

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Figure 1

Potential Retail Customers The make-up of potential customers includes: Residences Approximately 9,900 occupied households are located in the City of Austin.

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• 7,864 - in single family and duplexes • 664 - in MFH in unit size of 3 to 9 • 556 - in MFH in unit size of 10 to 49 • 629 - in MFH in unit size of 50 or more • 187 - in mobile homes

In Table 2-1 and Table 2-2 we show a listing of apartment and senior housing in the City.

Table 2-1: Austin Apartments Type Name Address Units Served By

Apt Burr Oak Villas 400 10th Ave NW 18, in 2 buildings Network WAP’s Apt Chauncey Apts 310 2nd Ave NE 81 Indoor WAP’s Apt Whittier Place Townhomes 8 Network WAP’s Apt Austin Courtyard 308 2nd Ave NE 78 Indoor WAP’s Apt Webster School Apts 403 12th St NE 12 Network WAP’s Apt North Pointe Apts 12 Network WAP’s Apt Lincoln School Apts 911 5th Ave NE 30 Dedicated gateway Apt Key Apts 900 14th St NW 128 Indoor WAP’s Apt Center Court 200 25th St SW 51 Indoor WAP’s Apt Fair Oaks Apts 200 11th Ave NW 24 Dedicated Gateway Apt R & F Apts 1200 2nd Dr NE 39 Indoor WAP’s Apt Austin Apts 3rd Ave & 2nd St NE 17 Dedicated Gateway Apt Murphy Creek Townhomes 502 25th St 88 Indoor WAP’s Apt Prairie Sky Apts 1701 8th St NW 24 Dedicated Gateway Apt Whittier Place Townhomes 24 Dedicated Gateway Apt Mandolin Pl 203 31st St SW 72 Indoor WAP’s Apt Bremerton Townhomes 300 27th St SW 60 Indoor WAP’s Apt Western Manor Apt 303 27th St SW 72 Indoor WAP’s

Table 2-2: Austin Senior Housing Type Name Address Units Served BySr. Housing Pickett Place 808 1st Dr NW 100 Indoor WAP’s Sr. Housing Twin Towers 200 1st Ave NE 204 Indoor WAP’s Sr. Housing St. Mark’s Apts 1401 4th St SW 48 Indoor WAP’s Sr. Housing Our House Memorial Care 24 Dedicated Gateway Sr. Housing Primerose 1701 22nd Ave SW 64 Indoor WAP’s Sr. Housing Sacred Heart Apts 1200 12th St SW 26 Dedicated Gateway Sr. Housing Oaks Condominium 1200 18th Ave NW 40 Indoor WAP’s Sr. Housing Our House AL 204 14th St NW 20 Dedicated Gateway Sr. Housing Cedars of Austin 700 1st Dr NW 131 Indoor WAP’s Businesses We estimate that there are 900 businesses in Austin. The anticipated market for the wireless services are the smaller business and specialty users. For example, while it makes no sense for Hormel to consider use of the service for its Internet connection, they may be interested in maintaining roamer accounts for use by customer and suppliers visiting their facilities.

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3. Management Partner Overview 3.1 Responsibilities The Management Partner will be responsible for operation and maintenance of the wireless network. Given this, the Management Partner is expected to have experience managing, maintaining, and performance tuning wireless mesh networks. We have included a summary of responsibilities for Austin Utilities and the Management Partner in Table 3-1 and Table 3-2. The responsibilities are further defined in Sections 3.1.2 and 3.1.3. Austin Utilities goals/ objectives include:

• Reduce risk of operating expenses exceeding budget. • Minimize cash flow shortages if market share targets not reached. • Maintain Austin Utilities branding image. • Maintain a positive cash flow. • Ensure affordable high-speed access is universally available.

Austin Utilities is responsible for securing and paying debt, setting policies, approving pricing, and maintaining ownership of the customer. Austin Utilities owns the required attachments for the wireless access points and gateways. Austin Utilities will supply crews and equipment to replace and remove wireless access points and gateways. This support does not include supplying crews and equipment to maintain any point-to-multipoint backbone radio equipment. The management partner is responsible for the day-to-day maintenance and operations, acquiring the required customers, and maintaining the ISP.

Table 3-1: Austin Utilities Responsibilities Activity/Attribute Benefit Own & Finance Network • Reduce market barrier entry for private

management partner • Control universal coverage objectives • Control affordability

Provide wireless network Provide core network (routers & switches) Provide physical space and support infrastructure for core network and central servers as required

Provide primary Internet connection for the network from a TIER 1 or 2 provider

Install required fiber extensions Provide community brand image Lower customer acquisition costs

Lower customer acquisition costs

Approve service offerings & prices Maintain affordability objectives

Maintain affordability objectives

Support marketing efforts Reduce marketing costs by leveraging existing customer communication (newsletters, mailers, website, etc).

Monitor financial performance Ensure payments to Austin Utilities per partnership agreement

Monitor customer satisfaction • Ensure management partner maintains customer contact

• Protect Austin Utilities brand image Finance network upgrades

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Manage demarcation between Austin Utilities & management partner, which allows replacement of management partner if required

Maintain customer "hot-line" to allow feedback regarding management partner performance

Approve all marketing and promotion activities Control and maintain potential advertising revenues (i.e. Google, Yahoo & others)

Provide access to Austin Utilities mounting assets Provide financing for CPE purchase

Table 3-2: Management Partner Responsibilities Activity/Attribute Benefit Issue monthly billing Help desk receives a substantial number of billing

questions Provide network design and technical implementation guidance

Assist in coverage testing and performance verification Assist in performance testing

Provide physical space and support infrastructure for help-desk personnel and systems

Provide physical space and support infrastructure for core network and central servers as required

Provide help desk (8AM to 8 PM M-F, 10AM to 2PM Sat)

Spread help desk costs over a larger user base

Operate & maintain network Eliminates need for Austin Utilities to add technical staff Direct sales & marketing efforts Leverages existing marketing campaigns and advertising Setup & maintain core network (routers & switches) Provide AAA Servers (authentication, billing, monitoring, administrative, etc)

Setup & maintain AAA servers Setup and maintain Email server, or services for at least 1 Email account per subscriber

Allows for Email server/service to be located somewhere outside Austin

Maintain customer satisfaction Conduct & schedule professional installations Maintain and manage authentication (process and equipment)

Provide email services, including servers Operate the ISP Provide redundant Internet connection Provide CPE's and related hardware Monitor network Perform operational statistics Uncollectible service charges are the responsibility of both parties (Management Partner will not be required to pay Austin Utilities the subscriber fee for unpaid subscribers, nor will the Management Partner be reimbursed by Austin Utilities).

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3.1.1 Terms & Definitions Definitions of terms used in this RFP include: Add-on Service Revenues: Revenues obtained from additional services or enhancements such as Voice-over-Internet Protocol (VoIP) telephone, static internet Protocol (IP) addresses, parental filters, etc. Add-on service revenues do not include advertising revenues. Backhaul Network: Portion of wide-area-network used to transport information to/from the wireless network gateways (base stations) to the network switches/routers. Basic Service: Internet access service which delivers a burstable 1 Mbps symmetrical data connection. Austin Utilities currently has roughly 650 subscribers total. The majority of the subscribers currently subscribe to this $24.99/month 1Mbps service. Connectivity Service Revenues: Revenues obtained from the Dial-Up Buster, Basic, and Deluxe Internet access services. Connectivity Service: Service which provides the ability to connect with another device or facility; forming a logically continuous path between two or more devices/facilities. Examples include, but are not limited to Internet access, point-to-point connection between two facilities, Point-to-multipoint or routable connections among multiple facilities. Deluxe Service: Internet access service which delivers a burstable 2.5 to 3 Mbps symmetrical data connection. The decision of whether a 2.5 Mbps or 3 Mbps service defines the Deluxe service is to be mutually agreed upon between the Austin Utilities and the selected Management Partner. This service currently sells for $34.99/month. Dial Up Buster: Internet access service which delivers a burstable 128 Kbps symmetrical data connection for $19.99/month. Fiber Network: See backhaul network. Static IP: An Internet Protocol (IP) address which does not change each time a subscriber logs in or is authenticated. Sub-Backhaul Network: Point-to-Multipoint radio network connecting the Wi-Fi access points to the backhaul network Technical Support - Technical Support services include, but may not be limited to:

• Help Desk Support

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• Installation Support • Ongoing Subscriber Support • Troubleshooting (hardware, software, bridge, software and wiring issues) • Usage Support (How to Perform a Specific Task) • Remote support (remotely configure subscriber PCs) • Live Internet chat (available during Subscriber Service hours) • Email questions/support (answered within 24 hours) • Subscriber self help (web-based and CD support) • Billing/account Inquiries

Tier1 Support (minimum qualifications): Basic application software and/or hardware support for connectivity of callers and other products provided through this agreement. This would include new subscriptions; modifying existing subscription information (passwords, email addresses and billing plan); instituting subscription suspension & cancellation. Support is available 8AM to 8PM Monday through Friday and 10AM to 2PM on Saturdays. At least one senior staff member will be available per shift. Tier2 Support (minimum qualifications): The role of the Tier 2 agent is typically that of a senior staff member. Escalation to this level is appropriate when Tier 1 interaction has been unable to resolve the issue and further action transcends the authority of Tier 1 staff. Senior staff member will conduct one-on-one support activities with subscribers as needed. These individuals are also responsible for compiling periodic reviews of individual and team performance. Tier3 Support (minimum qualifications): This team is directly under the close supervision of the Management Partner management and engineers. Senior staff members have the authority to take actions that fall outside the standard operating policies. Escalation to Tier 3 is appropriate in cases where Tier 1 and Tier 2 interactions have been unsuccessful in resolving an operational issue. At this level there is typically a truck roll. Wi-Fi Network: Wireless network based upon subscriber access via IEEE 802.11b/g standards. Subscriber Churn Rate: The rate at which a subscriber switches his/her service provider. 3.1.2 Management Partner Responsibilities The Management Partner is responsible for all costs and expenses to operate and maintain the ISP, the wireless network, and electronic to optic interfaces to Austin Utilities fiber network. The Management Partner shall comply with all Austin Utilities standards, policies and performance contained in this RFP, as well as state data practices laws and other applicable statutes and rules. Additionally, the Management Partner (MP) shall perform the following services:

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3.1.2.1 Internet Service Provider (ISP) 3.1.2.1.1 Operate the Internet service. The MP infrastructure must use high availability technologies, redundant power supplies, redundant servers, and redundant physical connections to key resources (including Internet access). MP servers are used for DNS, e-mail hosting, website hosting, virus protection, and SPAM filtering. Ideally, customer data on each server shall be mirrored in real-time over a storage area network (SAN) or internally using RAID storage configurations. Each server shall be backed up nightly to tape, or other removable storage media. Monthly backups are to be archived and kept offsite for security and potential disaster recovery. Once a week MP shall perform partial restores of data from tape, or other media, to verify media integrity. Each server is also to have a monthly snapshot for disaster recovery assurance. 3.1.2.1.2 Maintain and manage authentication (process). 3.1.2.1.3 Provide email services, including servers. 3.1.2.1.4 Provide all services including servers required to operate the ISP including the AAA (Authentication, Authorization, and Accounting) servers. 3.1.2.1.5 Provide monthly operational statistics. 3.1.2.1.6 Respond to subpoenas regarding subscriber traffic. Using log files archived on MP servers, MP shall be able to identify subscriber’s based on IP addresses of CPE, usernames, or other unique identifying information. This information can be used in the event a subpoena is served for a subscriber. This information is archived on tape for not less than two years. All subpoenas for users will be coordinated by MP. The system must comply with all applicable federal and local laws for lawful interception of customer traffic. 3.1.2.1.7 Maintain Quality of Service (QOS) standards. 3.1.2.1.8 Provide physical space and support infrastructure for help-desk, sales, and administrative personnel and systems. 3.1.2.1.9 Provide physical space and support infrastructure (electrical power, climate control, physical security, etc.) to house central network components (switches, routers, and servers) not located at an Austin Utilities facility. 3.1.2.1.10 Provide design, testing, and technical guidance, as needed, during the network implementation. 3.1.2.1.11 Assist in coverage testing and performance verification. 3.1.2.1.12 Assist in proof of performance and/or pilot testing. 3.1.2.2 Customer Services & Technical Support.

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3.1.2.2.1 Perform subscriber contact. 3.1.2.2.2 Maintain subscriber satisfaction. 3.1.2.2.3 Manage subscriber expectations. 3.1.2.2.4 Hold periodic subscriber meetings to listen to what is working well, what needs improvement, and provide tips on getting more out of the wireless network. 3.1.2.2.5 Direct and fund sales & marketing efforts. 3.1.2.2.6 MP to create a Technical Support CD that is sent to all new subscribers and contains the following freeware features (if available).

• Anti-Spam software • Anti-Virus software • Pop-up Blocker • Spyware/Adware Blocker • Parental controls • Desktop firewall • Intuitive web-based set-up instructions with pictures • Video with voice-over set-up instruction • Remote Support and Configuration

3.1.2.2.7 Perform monthly billing. 3.1.2.2.7.1 Issue monthly billing in format approved by Austin Utilities. 3.1.2.2.7.2 Report uncollectible subscriber fees (bad debt). 3.1.2.2.7.3 Collect subscriber fees. 3.1.2.2.7.4 Deposit funds in destination approved by Austin Utilities. 3.1.2.2.7.5 Support credit card and Automatic Clearing House (ACH) transactions. 3.1.2.2.8 Provide Help Desk (8AM to 8PM M-F, 10AM to 2PM Sat.), including physical operating space. Customer service representatives are to respond to calls with greetings selected by Austin Utilities. Internal benchmarks to include average two minute TTA (Time to Answer) and average fifteen minute TTR (Time to Resolution). MP is to provide Austin Utilities with daily, weekly and monthly call statistics reports on a monthly basis. Austin Utilities shall also have access real-time reports via a secure web interface.

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3.1.2.2.8.1 The Help Desk staff shall be staffed sufficiently to provide the required Help Desk Support. 3.1.2.2.8.2 The majority of Help Desk Calls shall be answered in less than 2 minutes. Records and software will be available for Austin Utilities to monitor actual performance. 3.1.2.2.8.3 Randomly Applied Help Desk Performance Survey: This survey may be delivered through web-based technology or electronic mail. Performance criteria must be clearly defined in these surveys in order to permit analysis of quality and timeliness of service. The results of these surveys must be reported once each quarter. The originating subscriber survey data should be kept for a minimum of six months from its receipt and must be available to Austin Utilities upon request. The user survey will collect, at a minimum, the name of the agent, ticket number, area for narrative free form text entry by user, and the answers to the ratings on the following kinds of topics:

• Courtesy and professionalism demonstrated by Help Desk staff • Technical knowledge demonstrated by Help Desk staff • Problem solving skills demonstrated by Help Desk staff • Keeping user informed of the progress/resolution of ticket • Overall satisfaction of the service provided by the Help Desk staff

3.1.2.2.9 Provide Tier 1, Tier 2, Tier 3 support. 75% of Help Desk calls will be successfully resolved by Tier 1 support as measured starting upon a mutually agreed number of days after system acceptance by Austin Utilities. 3.1.2.2.9.1 Assistance for Macintosh users for operating systems still actively supported by manufacturer. 3.1.2.2.9.2 Assistance for Windows users for operating systems still actively supported by manufacturer. 3.1.2.2.9.3 Support for Linux users. 3.1.2.2.9.3.1 For Linux support allow for auto referral to Tier 2. 3.1.2.2.9.4 Good faith efforts to support older versions of the software will be made. 3.1.2.2.11 Supply, set-up and program the CPE. 3.1.2.2.12 Conduct & schedule professional installations. 3.1.2.2.12.1 Supply subscriber hardware and antennas for installations. 3.1.2.2.12.2 MP may charge subscriber a "competitive" installation fee if required (ideally $100 or less), Austin Utilities approval of proposed fees is required. 3.1.2.2.13 Free email transfer and forwarding up to 30 days after transfer from most other service providers. Subject to availability of access to prior provider system.

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3.1.2.3 Perform Network Operations. 3.1.2.3.1 Operate & maintain wireless network including fiber media converters. 3.1.2.3.2 Provide required wireless network firmware upgrades. 3.1.2.3.3 Maintain core network (routers & switches and authentication server). 3.1.2.3.4 Monitor and maintain Internet connection. 3.1.2.3.6 Monitor wireless and fiber network. 3.1.2.3.7 Document all repairs and replacements to the wireless network during and after the warranty in a logbook, a copy of which is updated and provided to Austin Utilities. 3.1.3 Austin Utility Responsibilities Austin Utilities retains the right to set policies, approve pricing in a timely manner, and maintain ownership of the subscriber, subscriber databases and records, the specified domain name, and all other intellectual property. Austin Utilities is responsible to fund all network hardware costs (excluding the CPE and other customer premises costs) to implement the wireless and fiber network. Austin Utilities is responsible for maintaining the physical fiber network including locates, repairing cuts, and other damage to the fiber cable. Additionally, Austin Utilities shall be responsible for the following: 3.1.3.1 Network Ownership 3.1.3.1.1 Own & finance all wireless and fiber network equipment including spares (excluding CPE and hardware for premises installation). 3.1.3.1.2 Provide required network financing. 3.1.3.1.2.1 Finance network implementation. 3.1.3.1.2.2 Finance network upgrades. 3.1.3.1.2.3 Pay for vendor maintenance contracts for the network. 3.1.3.1.3 Provide core network (routers & switches). 3.1.3.1.4 Provide physical space and support infrastructure (electrical power, climate control, physical security, etc.) as required to house central network components (switches, routers, and servers); 3.1.3.1.5 Provide fiber repair & maintenance (locates, other).

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3.1.3.1.6 Provide access to facilities for required network maintenance. 3.1.3.1.7 Provide material and labor for physical network upgrades, not including items explicitly identified as the responsibility of the MP or firmware updates. 3.1.3.1.8 Initiate contract for initial installation and activation of the network, including basic coverage testing and performance verification. 3.1.3.2 Other Facilities. 3.1.3.2.1 Provide access to Austin Utilities mounting assets 3.1.3.2.2 Provide access to City of Austin mounting assets. 3.1.3.3 Maintain Ownership of Subscriber. 3.1.3.3.1 Provide community brand image service will be marketed as an Austin Utility endorsed service. 3.1.3.3.2 Monitor subscriber satisfaction. 3.1.3.3.3 Maintain subscriber "hot-line" to monitor customer satisfaction performance. 3.1.3.3.4 Monitor feedback regarding MP performance. 3.1.3.3.5 Maintain ownership of domain names used for the Austin Utilities service offering. 3.1.3.3.6 Austin Utilities shall be responsible for any Austin Utilities mandated adjustments (write-offs) to accounts. 3.1.3.4 Set Policies. 3.1.3.4.1 Set operating policy. (Acceptable Use Policy, Privacy Policy, Service Agreement, other) 3.1.3.4.2 Approve service offerings & prices 3.1.3.4.3 Approve all marketing and promotion activities on a timely basis 3.1.3.4.4 Set policy for potential advertising and sponsorship revenues (i.e. Yahoo & others) 3.1.3.4.5 Advertising revenue (different than value added services) - Austin Utilities retains net revenue.

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3.1.3.4.5.1 Net revenue determined by gross revenues less mutually agreed upon MP incremental costs. 3.1.3.5 Provide Specified Support to Management Partner. 3.1.3.5.1 Utilities Commission shall appoint a person to act as Austin Utilities representative with respect to the work to be performed under agreements developed from the response to this RFP. He or she shall have complete authority to transmit instructions, receive information, interpret, and define Austin Utilities policy and decisions, with respect to the materials, equipment, elements, and systems pertinent to the work proposed. 3.1.3.5.2 Support marketing efforts via existing communication mechanisms. 3.1.3.5.3 Monitor financial performance, including reports as required by Austin Utilities. 3.1.3.5.4 Manage demarcation between Austin Utilities & MP, which allows replacement of management partner if required. 3.1.3.5.5 Sponsor educational workshops. 3.1.4 Subscriber Pricing and Compensation for Services. Austin Utilities has set the initial subscriber pricing per month as follows.

• $19.99 Dial-Up Buster (128 Kbps upload and download) • $24.99 Basic Broadband (1 Mbps upload and download) • $34.99 Deluxe Broadband (2.5 - 3 Mbps upload and download)

The initial pricing and revenue sharing for other connectivity services delivered via the wireless network are to be established by Austin Utilities Commission. If Austin Utilities reduces the subscriber pricing lower than the initial pricing, an equal reduction in the amount remitted to Austin Utilities by MP shall be made. If Austin Utilities increases the subscriber pricing above the initial pricing, an equal increase in the amount remitted to Austin Utilities by MP shall be made. MP shall propose a per-month per subscriber fee to be paid to Austin Utilities. MP shall retain all connectivity services revenue in excess of the proposed per month per subscriber, including revenues for additional services such as VPN’s, static IP’s, VoIP, and other. Subscribers have the option of purchasing the CPE. The purchase price is to be determined by Austin Utilities and the MP and may vary depending upon model and performance required to meet different subscriber needs. MFH’s and businesses not connected via the wireless network will be dealt with on a case-by-case base in terms of equipment investments and revenue sharing. Any net advertising or sponsorship revenue is Austin Utilities. MP will be reimbursed based upon mutually agreed incremental expenses, if any, required to support the selected advertising.

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3.2 Partnership Proposals Each partnership proposal is to provide details on their proposed services, potential contract terms, partnership terms and fees. The quoted fees are to be based upon monthly per subscriber. We have included a response form to be completed. Please use the supplied form (Appendix C) and follow the instructions provided in Section 4.4 in preparation of your response. 3.3 Partnership Preferences Preferences will be given to respondents that.

• Locate the operations, maintenance, support, and technical staff in a facility in • Austin. • Bring at least 5 years experience in operating and maintaining an ISP.

o Preference given to an ISP with experience in providing services in Austin. o Prior billing and billing dispute resolution required.

• Support Austin Utilities and City of Austin’s consideration of a digital inclusion program.

o Details of plan are under development. o Anticipate management partner to assist in training and education

seminars and courses.

4. Response Submittal Instructions 4.1 Filing of Proposals Respondents are to submit in a sealed package three (3) paper responses and an electronic version (pdf or word format) to: Kim Duncomb Support Services Director Austin Utilities 400 4th Street Northeast Austin, MN 55912 507.437.0820 kimd@austinutilities.com In addition, submit one electronic version (pdf or word format) directly to: Jay Gustafson First Mile Broadband 763.792.2093 x101 Jay@FirstMileBroadband.com All responses should be clearly marked “Proposal for Austin Utilities Wireless Broadband Network Management Partners". All responses are to be received by Austin Utilities prior to 1:00 PM on, Monday, Aug. 23, 2010.

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Proposals received after 1:00 PM, Mon, Aug. 23, 2010, will not be considered. It will be the sole responsibility of the respondent to have their responses delivered to Austin Utilities before the closing hour and date. All costs for preparation and submittal of the proposals are the responsibility of each respondent. 4.2 Questions Please email any questions you may have to Jay Gustafson at the email listed above. We will attempt to respond to all questions within 2 business days. 4.3 Proprietary Information Any proprietary information contained in the response should be so indicated. 4.4 Respondent Qualifications and Experience The response form and questions are presented in Appendix C. Each respondent is to provide the following information in their proposals: 1. Company Overview (no more than 2 pages) 2. Statement of Respondents Understanding of Responsibilities 3. Cost Proposal (monthly fee per subscriber, per managed device, and any misc. fees) and Terms. Cost should NOT include Internet bandwidth. If the respondent wishes to bid for Internet connectivity to Austin Utilities, it should provide a separate price quote from this RFP. 4. Responses to Questions (Appendix C) 5. References 6. Staff Qualifications and Experience 7. Audited Financial Statement for Organization (2009) Each respondent is asked to email Jay Gustafson their intent to respond by Aug 18, 2010. 4.5 Schedule The following is the schedule of events listed in the order of occurrence, showing the major milestones from issuance of the RFP to the contract award: Milestone Dates:

• Publish RFP for Partnerships – July 30, 2010 • Publish RFP First Notice – Aug. 3, 2010 • Publish RFP Second Notice – Aug. 10, 2010 • Intent to Propose Email Due- Aug. 18, 2010 • Close Vendor Questions for Partnership Proposals – Aug. 18, 2010 • Receive Partnership Proposal Responses – Aug. 23, 2010 • Recommend Preferred Partnerships to Utilities Commission – Aug. 30, 2010 • Select Preferred Management Partner- Sept. 1, 2010 • Complete System Conversion & Integration – September 29, 2010

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Austin Utilities reserves the right to change the schedule of events, as it deems necessary. In the event of a major date change, Austin Utilities will notify all known respondents. 4.6 Presentations and Site Visits All presentations and site-visits conducted in Austin will be the responsibility of the responder. After receipt of the proposals, Austin Utilities may request presentations of the respondent’s proposal response. Austin Utilities may also request visits to existing respondent installations. 4.7 Austin Utilities Contact Austin Utilities has designated Kim Duncomb to be responsible for coordinating communications between Austin Utilities and the respondents. 4.8 Rejection of Proposals Proposals may be rejected if they are deemed not in the best interest of Austin Utilities or the Austin community. 4.9 Austin Utilities Vendor Selection Following Austin Utilities review of the responses, they may:

• Select a vendor based upon the responses– then negotiate the price, scope, and functionality with selected vendor,

• Seek other solutions, or • Defer or cancel RFP.

Although Austin Utilities desires to have a lead partner, partial responses will be accepted and considered. 4.10 Escalation If any price quoted is subject to escalation, the terms must be clearly stated. 4.11 Patents The respondent must guarantee to insure Austin Utilities against any possible loss or expense by reasons of adverse claims under patents upon the use of the material proposed on. The successful respondent must agree that Austin Utilities shall not be disturbed in the use of such material by litigation based upon such adverse claims, and to that end, the successful respondent must agree to defend, at his own expense, any and all suits or proceedings that be instituted against Austin Utilities for the infringement or alleged infringement of any patents by the use of any said material, providing that such infringement shall consist in the use by Austin Utilities, in the regular course of operation, of said materials or parts thereof, provided Austin Utilities be not in default in its payments, therefore, and gives to the successful respondent immediate notice in writing of the successful respondent to do so.

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4.12 Information to Accompany Proposal The respondent must submit complete information concerning the services being proposed on. 4.13 Minor Irregularities Austin Utilities reserves the right to waive minor irregularities or minor errors in any proposal, if it appears to Austin Utilities that such irregularities or errors were made through inadvertence. Any such irregularities or errors so waived must be corrected on the Form of Proposal in which they occur prior to the acceptance by Austin Utilities.

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APPENDIX A

Demarcation Points

Fiber Gateway Locations

• SMIG - 801 16th Ave NE • Summner Elementary School - 805 8th Ave. NW • Westcott Field Water Tower - 1300 West Oakland Ave • Austin High School - 301 3rd St NW • Banfield Elementary School - 301 17th St SW • Austin Utilites SW Substation - 31st ST SW / 5th Ave SW • Southgate Elementary School - 1601 19th AVE SW • Woodson school - 1601 4TH ST SE • Ellis Middle School - 1700 4th Ave SE • Neveland Elementary School - 1918 Oakland Ave East • Austin Utilities North Plant - Co Hwy 16 N / 237th st • Austin Utilities Down Town Plant - 313 2nd AVE NE

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APPENDIX B

Logical Diagram

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APPENDIX C Bid Form & Questions Please use the following format to prepare your response. For your convenience, we have attached an electronic version of Section 3.1.2, Management Partner Responsibilities. 1. Company Overview (no more than 2 pages) Please provide a brief overview of your organization. Please emphasize expertise and benefits that your organization brings to Austin Utilities. 2. Statement of Respondents Understanding of Responsibilities Please state your compliance or non-compliance of each of the requirements in Section 3.1.2. Also for each requirement please provide a brief statement (1 or 2 sentences) on how you will approach or comply with the requirement. Please include any proposed equipment and software you will supply to meet the requirements. If you are proposing an alternative approach, please describe your approach, your responsibilities, and Austin Utilities responsibilities. 3. Cost Proposal (monthly fee per subscriber) and Terms Please provide a quotation based on the parameters outlined in Sections 3.1.4 and 4.10. 4. Responses to Questions Please provide a brief response to the following questions. 1. How many Internet subscribers do you support today?

i. What type of service is provided? (Dial-Up, wireless, etc) ii. Where are the subscribers located? iii. What percentages of subscribers are located in Austin? iv. What percentages of subscribers are located in Minnesota?

b. What experience do you have in working with Wi-Fi or other wireless service? c. Where will your proposed Help Desk be located? (City and State) d. Do you have any existing facilities in Austin, or MN? If so where? e. Where are you proposing to locate the central network components (severs, routers, switches, etc.)? f. We anticipate that converting dial-up customers to wireless is crucial to the success of the offering.

i. What is your experience in serving dial-up Internet users? ii. Please describe your approach to sales & marketing of the proposed services. iii. Please describe your approach in convincing dial-up users to switch to a high-speed alternative. iv. Please describe your approach in convincing DSL users to switch to a wireless alternative. v. Please describe your approach in convincing cable modem users to switch to a wireless alternative.

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g. We estimate that up to 10% of subscribers may require an external installation. Please describe your approach to ensure customer site visits are conducted efficiently and that the disruption to the premises is minimized. h. Please describe your experience with billing and handling billing disputes. i. Given the Austin market (see Section 1.5, opening of Section 2, and Section 3.1.4), how many subscribers would you anticipate capturing in year 1? In year 2? 5. References Please provide at least 3 references of organizations that you have performed similar services, ISP services, or related contracts. 6. Staff Qualifications and Experience Please list the key staff that will be involved in meeting the RFP requirements. For each staff person please list relevant experiences, expertise, and where the individual will be located. 7. Audited Financial Statement for Organization (2009) Please supply a copy of you latest audited financial statement.