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State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
State of Florida Telecom Business Model
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State of Florida Telecom Business Model

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Comprehensive report of who the Division of Telecommunications is, what we do, why we do it and how we do it.

Comprehensive report of who the Division of Telecommunications is, what we do, why we do it and how we do it.

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  • 1. Division of Telecommunications Business Model and Value 1st Edition, Version 2.0
  • 2. DivTel Business Model and Value 2.0 Table of Contents  Table of Contents .......................................................................................................................................................... 2  Executive Summary ...................................................................................................................................................... 4  General Document Layout ............................................................................................................................................ 6  SUNCOM Telecommunications Services .................................................................................................................... 8  SUNCOM’s Functions .............................................................................................................................. 8  History .................................................................................................................................................. 8  Services ............................................................................................................................................... 14  Customers ........................................................................................................................................... 18  Standards ............................................................................................................................................. 20  Unbillable Support of the Florida Government Enterprise ................................................................. 20  SUNCOM’s Purpose ............................................................................................................................... 23  Enterprise Cost Savings ...................................................................................................................... 23  Interoperability .................................................................................................................................... 26  Security ............................................................................................................................................... 26  Accountability, Customer Empowerment and Stakeholder Transparency ......................................... 26  Catalyst for Technological Transition................................................................................................. 27  SUNCOM’s Approach and Principles .................................................................................................... 28  Establishing Standards ........................................................................................................................ 28  Developing Services ........................................................................................................................... 28  Cost Accounting.................................................................................................................................. 30  Order Processing, Inventory and Billing............................................................................................. 38  Public Safety Telecommunications ............................................................................................................................. 39  Purpose of the Bureau of Public Safety Telecommunications ................................................................ 39  Statutory Obligations .......................................................................................................................... 39  Bureau of Public Safety Telecommunications Functions ....................................................................... 40  History ................................................................................................................................................ 40  Services ............................................................................................................................................... 42  How the Bureau of Public Safety Telecommunications Performs Its Mission ....................................... 45  Leveraging SUNCOM ........................................................................................................................ 45  Planning .............................................................................................................................................. 46  Keeping in Touch ................................................................................................................................ 46  Printed 2/4/2011 9:39 AM  Page 2 
  • 3. DivTel Business Model and Value 2.0  Balancing Needs versus Cost .............................................................................................................. 46  Engineering for Reliability with Performance Standards ................................................................... 47  Specialized software and data management tools ............................................................................... 47  Coordination ....................................................................................................................................... 47  Partnerships with Government and Industry ....................................................................................... 47  Committees ......................................................................................................................................... 48  Testing and Inspecting ........................................................................................................................ 48  Training ............................................................................................................................................... 48 Future of Telecommunications in Florida Government .............................................................................................. 49  Technology Convergence ....................................................................................................................... 49  Technology Convergence Opportunities for the Enterprise................................................................ 49  Convergence of Wireless ........................................................................................................................ 53  911 Modernization .................................................................................................................................. 55  SLERS Coverage Improvements ........................................................................................................ 55  Need for Telecommunications Convergence for Public Safety .......................................................... 56  Network Convergence ............................................................................................................................ 58  Intelligent Transportation System (ITS) ............................................................................................. 58  Florida LambdaRail (FLR) ................................................................................................................. 58  How Florida’s Telecommunications Assets could be Optimized ....................................................... 59  Local and Regional Governments ....................................................................................................... 60  Extending Customer Empowerment ....................................................................................................... 60  Enhancing Florida’ Economic Competitiveness with Broadband .......................................................... 61  DMS’s Broadband Statutory Mandate ................................................................................................ 61  General Strategy.................................................................................................................................. 61  Consensus Building and Partnerships ................................................................................................. 61  Mapping .............................................................................................................................................. 62  Broadband Strategic Planning ............................................................................................................. 62  E-rate Assistance to Schools and Libraries ......................................................................................... 63 Table of Attachments .................................................................................................................................................. 64 Endnotes...................................................................................................................................................................... 96 Printed 2/4/2011 9:39 AM  Page 3 
  • 4. DivTel Business Model and Value 2.0 Executive Summary  The Division of Telecommunications within the Department of Management Services provides Florida government enterprise level telecommunications strategic planning and services in two broad categories: 1) Voice, data and conferencing communications services for government under the brand name SUNCOM. 2) Planning, coordinating and fostering effective public safety telecommunications throughout the state at all levels of government. SUNCOM’s primary purpose is to reduce costs and minimize unnecessary usage of telecommunications services for the State of Florida. It achieves this from economies of scale, volume discounts, reducing vendor costs and risks, pooling services and focused expertise on getting the best value. Using product design and cost accounting techniques and a robust inventory/billing system, SUNCOM brings transparency, accountability and incentives to motivate and empower government customers to save. SUNCOM provides a variety of voice, data and conferencing telecommunications services over wires and wirelessly for a wide range of public sector customers. SUNCOM’s state agency customers are required by Florida Statutes to use SUNCOM, but the Legislature, Judiciary, counties, cities, universities and some private nonprofits are patrons as well. For users of its services, SUNCOM establishes interoperability and security standards both formally through Florida Administrative Code and informally through consolidation of common services. SUNCOM also acts as a catalyst for bringing the benefits of technological change through self- funded investments without incurring the cost premiums of early adopters and straggling participation. Despite periodic difficulties, SUNCOM has brought long term savings, innovation and standardization to Florida government since 1975. Its strategies have included use of a dedicated backbone when the market was restricted and expensive, then dismantling that backbone as competition grew. SUNCOM continues to enhance its contribution through its inventory and invoicing system, extension of Internet Protocol (IP) technology and further aggregation of government telecommunications like mobile services. The Bureau of Public Safety Telecommunications has five major statutory mandates:  Offer a single statewide radio system for use by all state and participating local law enforcement officials. The Bureau has met this requirement through the Statewide Law Enforcement Radio System (SLERS) under a public/private partnership contract.  Coordinate Florida’s public safety radio communications so that state, local and regional authorities can effectively communicate with assurance that they will not interfere with, or be interfered by, their neighbors. The Bureau meets this requirement through settings standards and frequency assignments, and providing assistance to local entities. Printed 2/4/2011 9:39 AM  Page 4 
  • 5. DivTel Business Model and Value 2.0   Set standards to enable state and local public safety entities to communicate with each other when they need to work together. The Bureau has met this requirement through standards for common “mutual aid” channels and by implementing the Florida Interoperability Network (FIN) which translates between disparate radio systems statewide.  Develop, enhance, and ensure the reliability and consistency of 911 services throughout the state. The Bureau, as the administrative arm of a board for this purpose, has met this requirement through setting standards, collecting and distributing funds and developing strategic plans for improvement.  Provide telecommunications support to the state during disasters. DivTel meets this requirement by planning and establishing standards of disaster communications and making its assets, services and staff available during disasters.In the future, DivTel faces significant challenges such as dilution of Florida’s enterprisetelecommunications infrastructure, necessary innovation in public safety telecommunicationsand the requirement to extend the reach of broadband throughout the state. But with the supportof effective public policies, DivTel has the right strategic approach, resource managementmethods and business culture to meet those challenges.Printed 2/4/2011 9:39 AM  Page 5 
  • 6. DivTel Business Model and Value 2.0 General Document Layout  This document is divided into three major sections: 1) SUNCOM Telecommunications Services, 2) Public Safety Telecommunications and 3) The Future of Telecommunications in Florida government. The first two sections are designed to answer the questions;  What is the Division of Telecommunications (DivTel)?  Why does it exist?  How does it perform its missions? The sequence of information presented gives the basics in the beginning then builds to more complex information. For example, in the section on SUNCOM, knowing what it does is a practical foundation for understanding why and how it does them. For public safety, knowing why it exists first leads to a better understanding what it does and how it achieves its purposes. With the context of what, why and how, exploring the future of Florida government telecommunications makes more sense in the last major section. Challenges and opportunities are presented there for public policy adjustments and adapting to new technologies. But not all readers need a comprehensive view of DivTel. For some, the whys may matter more than the hows, or SUNCOM’s history may be of no interest. Thus the document is segmented to allow readers to skip around or use it as a reference. The above Table of Contents and more detailed version in Attachment 2 will help readers find topics of interest. Printed 2/4/2011 9:39 AM  Page 6 
  • 7. DivTel Business Model and Value 2.0 Finally, this document makes extensive use of endnotes that elaborate, give additionalexplanations, refer to detailed sources or cite legal authorization. Because such supplementalinformation can be a distraction, endnotes rather than footnotes were used and the document isinformative even if they are never read. However, reading endnotes that elaborate is necessaryto achieve a more complete understanding of DivTel. The best way to do so is to separate thosepages to use as a companion document while reading the body.Printed 2/4/2011 9:39 AM  Page 7 
  • 8. DivTel Business Model and Value 2.0 SUNCOM Telecommunications Services  SUNCOM’s Functions  This section describes what SUNCOM does. The subsequent sections describe why and how SUNCOM does these things and the future direction SUNCOM expects to take. History  Early Local Phone Service Consolidation and Establishment of  SUNCOM  From recognition that enterprises as large as Florida government could achieve economies from internally coordinating telecommunications, the legislature appropriated funding for a few positions at the Department of General Services in 1973 to study and develop strategies. At the time, the focus was on a regulated, highly concentrated and profitable voice communications industry. This led to the 1975 establishment of SUNCOM in Florida Statutes. In that same year, DGS’s SUNCOM implemented its first multi-agency local phone system with consolidated billing to achieve savings. Establishment of the Dedicated Backbone  After the extension of the shared local service model to many state agencies, SUNCOM established a leased long distance backbone in 1986. Florida government was able to achieve long distance savings because these statewide circuits pooled long distance minutes outside the expensive market prices. This was also the genesis of the seven digit “SUNCOM number” in which no area code was required because calls traversed a network that was used by no customers other than SUNCOM’s. Data Communications are Added  The next major SUNCOM milestone came in 1989 added data communications to the dedicated backbone. Mainframe computers began to send messages through the same long distance circuits used for phone calls thus the state was able to achieve savings by simply using its infrastructure for both purposes. This ultimately led to the development of the SNA backbone on which IBM mainframes were not only able to communicate with their connected “dumb” terminals, but also with other IBM mainframes and their dedicated terminals. This brought huge interoperability savings to Florida government. 1 The Internet Revolution  The Internet was spontaneously recognized by everyone for its revolutionary impact in the mid 90s. Its universal communications language of computing (known as the Transmission Control Protocol/Internet Protocol or TCP/IP) was an innovative and open alternative to proprietary networks like the SNA backbone.2 But while still widely viewed within Florida government as a toy for college kids and tech-cowboys, SUNCOM with its sister DMS division, the Technology Resource Center (now the Southwood Shared Resource Center) designed a reliable and robust Printed 2/4/2011 9:39 AM  Page 8 
  • 9. DivTel Business Model and Value 2.0 State Intranet using TCP/IP in 1993. It ultimately served all state agencies as a viable businesstool. SUNCOM eventually established several Internet Protocol services on its backbone.State Technology Office Setback The State Technology Office (STO) was created in July of 2000 with the goal of achievingenterprise efficiencies for state computing. It was initially comprised of the Division ofCommunications (SUNCOM’s parent organization) and the Technology Resource Center. STOwas slated to aggregate all Florida government information technology, but was widely viewedas hastily planned and poorly executed. Hence it was dissolved between 2005 and 2007 througha series of budgetary and statutory actions.During the STO era, much of SUNCOM’s funds normally used to design, develop and managetelecommunications services were repurposed to STO enterprise information technologyconsulting and projects. This depleted SUNCOM’s trust fund, from which approximately $12million was disbursed monthly, to a balance of $15,500 by July 1, 2005. SUNCOM camedangerously close to the public sector equivalent of bankruptcy that would have required anunprecedented cash appropriation to pay SUNCOM vendors.MyFlorida Network: The MPLS Service Despite the loss of some focus in of the STO era, SUNCOM engineers were able to design anetwork to use innovative Internet Protocol (IP) technology known as Multi Protocol LabelSwitching (MPLS). MPLS held the promise of bringing all of the best features of existingSUNCOM IP services into one at considerable savings, faster speeds with more capabilities.Under the SUNCOM brand known as “MyFloridaNet” (MFN), the MPLS contract was awardedto AT&T in September 2006 and all customers were migrated by April 2008. MFN hasdelivered approximately $14 million in annual cost savings ever since.Dedicated Backbone Retired Simultaneous to implementation of MFN, SUNCOM dismantled its dedicated backbone. TheMFN contract used vendor infrastructure thus needed no state backbone to carry datacommunications. And the newly competitive voice long distance market offered prices thatovercame the advantages of internal infrastructure. The dedicated backbone was completelyretired by June 2008 leaving SUNCOM largely reliant upon vendor infrastructure and thecompetitively open market.SUNCOM’s Thriving Contribution With rededicated focus on SUNCOM’s core mission it reemerged from the STO era as aneffective enterprise provider. Despite a series of rate reductions3 that included $14 million inannual savings from MFN, SUNCOM realized additional unexpected savings fromimplementation of MFN and elimination of the backbone.4 The SUNCOM trust fund accruedbalances that led to a $10.2 million reduction through rebates and further rate reductions tocustomers over calendar year 2010.Printed 2/4/2011 9:39 AM  Page 9 
  • 10. DivTel Business Model and Value 2.0 Diminished School Support In August of 2008, the Department of Education attempted to reprocure the Florida InformationResource Network (FIRN) without SUNCOM involvement. 5 Prior to that, FIRN was aSUNCOM service.As the data communications network for Florida’s schools, FIRN was almost exclusively fundedthrough federal grants known as “E-rate” (averaging 70%) and a state match (averaging 30%).In October 2008, vendor bids were submitted to DOE with the lowest being 39.5% higher thanexisting SUNCOM services. DOE abandoned the effort and SUNCOM was compelled toquickly develop a replacement service.Less than a year later, DOE discontinued providing assistance to schools to help them obtainthese complicated grants and the 2010 General Appropriations Act eliminated direct funding ofFIRN with its state E-rate match in favor of giving those funds directly to schools.SUNCOM continues to provide E-rated services to schools and libraries that now seek E-rategrants without DOE assistance. But the assistance must come from billing and engineering staffthat are not experts and have competing duties.Florida Schools and libraries have applied for over $1.4 billion in funding since inception of theprogram. Over half of the funding requests were rejected. In comparison, the state of New Yorkwith a similar student population, received twice the amount of Florida’s E-rate funding in 2009.Since the beginning of E-rate New York has averaged 13.4% of the national E-rate funding whileFlorida has averaged 3.25%.Order Processing, Billing and Inventory Innovation SUNCOM’s centralized order processing, billing and inventory systems have been powerfultools for controlling telecommunications costs from almost the beginning of SUNCOM.Customers have been able to obtain detail billing information and place orders electronicallysince 1998 and 2000 respectively.But in 2006 it became clear that, after years of ad hoc development to accommodate the everchanging SUNCOM portfolio of services, SUNCOM had two choices; 1) implement a wholesalereplacement of these systems with one comprehensive integrated system (commonly called anEnterprise Resource Planning system or ERP) or 2) reengineer SUNCOM’s foundationalcomponents (“backend”) gradually and implement new user interfaces along the way.ERPs cost tens of millions of dollars, are very complex, require years to design and develop,require a risky “flash-cut” implementation (i.e. on a given day, old systems are turned-off whenthe ERP is turned-on), and often result in failure.6 SUNCOM chose the other approach bycreating the SUNCOM Open and Shared Information System (OaSIS) using a small team at lowcost and with periodic low-risk release of enhancements.After two years of reengineering, the first OaSIS user enhancement of SUNCOM bills wasreleased in April of 2010. A second inventory component was released in Beta in October 2010.Printed 2/4/2011 9:39 AM  Page 10 
  • 11. DivTel Business Model and Value 2.0 OaSIS has already achieved widespread popularity among agencies with its innovative featuressuch as the customer ability to permanently tag charges with plain language labels. It willultimately empower customers to control charges to an extent that is uncommon to both thetelecommunications industry and ERPs.A Complete Mobile Telecommunications Offering Near the end of the STO era, DMS management decided to offer mobile telecommunicationsservices through two different DMS divisions. SUNCOM provided smart phones and air cardswhile the Division of Purchasing established a State Term Contract for standard cell phones.This diluted enterprise purchasing leverage and economies of scale, and gave the state no centralrepository of mobile services usage and costs. 7 Worse yet, the distinction between smart phonesand cell phones became increasingly difficult thus obscuring the assignment of these servicesbetween the two divisions.In 2009, DMS decided to consolidate these services under SUNCOM under its existing authorityto provide enterprise telecommunications. This led to the release of SUNCOM’s MobileTelecommunications Services Invitation to Negotiate in September of 2010. Through thisprocurement and use of OaSIS, SUNCOM expects to implement a contract akin to a “familyplan” for all enterprise mobile charges in which call minutes are cheap, few of them are wastedand all of them are accountable.Federal Support for Expanding Broadband In 2008, a new Federal program was established to expand consumer and institutional access tobroadband. This program was initially funded for a nationwide inventory of broadband to befollowed with grants to expand it. States were to coordinate their respective efforts and DMSwas chosen to do so during the 2009 Legislative Session through establishment of Section364.0135 F.S.8In December of 2009, DMS was awarded $2,568,458 to establish a statewide inventory ofbroadband services. The funding has provided for an online mapping system that is accessible tothe public at www.connect-florida.org.In September, 2010 DMS was awarded another $6,308,570 to establish the “Broadband Florida”initiative to be managed by a “Broadband Program Office” (BPO). The BPO will  Continue the broadband inventory and mapping project through the year 2014.  Manage the development and implementation of Regional Broadband Planning project in partnership with Florida’s 11 Regional Planning Councils (RPCs). Using regional planning processes, toolkits and training, the project will inventory local and regional broadband assets and demand. The process will be inclusive of residents and businesses, and local, regional and state institutions.Printed 2/4/2011 9:39 AM  Page 11 
  • 12. DivTel Business Model and Value 2.0   Establish a Florida E-Rate Team to assist and coordinate support to schools, libraries and health care entities that seek Federal grants provided through Universal Service Fund programs such as E-rate.  Establish a Broadband Grant Team that will coordinate and support Florida anchor institutions seeking to identify and apply for grant opportunities to expand the availability and use of broadband services at lower costs.  Assess the 180 Florida public libraries in rural and underserved communities to identify gaps where support is lacking for libraries in their grant funding applications.Printed 2/4/2011 9:39 AM  Page 12 
  • 13. DivTel Business Model and Value 2.0 FIGURE 1Printed 2/4/2011 9:39 AM  Page 13 
  • 14. DivTel Business Model and Value 2.0 Services Abbreviated Service List Voice  Local Phone Service (Centrex)  Long Distance Phone Services  Toll-Free Phone Services  STEPSData  MyFloridaNet (MFN)  Metropolitan Area Network (GMAN)  Remote Broadband Services (RBS)  Florida Internet Resource Network (FIRN)  Southwood Shared Resource Center (SSRC) Ports  Other Data ServicesConferencing  Reservationless Voice Conference Services  Video Conference Services  Web Conference ServicesInfrastructure  Telecommunications Infrastructure Project Services (TIPS)Mobile  Wireless Data Services  Smart PhonesDetailed Service List Voice Local Phone Service (Centrex) SUNCOM provides local phone access primarily through a service known as “CENTREX”. Inaddition to providing toll free local calling within each Local Access Transport Area (LATA),CENTREX provides features and options like access to SUNCOM’s long distance service, callerID, voice mail, call forwarding, etc. Incumbent Local Exchange Carriers (ILECs) such asAT&T, CenturyLink and Verizon provide this SUNCOM Local Service within their designatedLATAs.SUNCOM’s local service also provides alternatives to CENTREX for customers that own andmaintain switching equipment on site known as Private Branch Exchanges (PBXs; see “STEPS”on page 15) move some of the functions and features from telephone company facilities to thecustomer’s site. This allows customers to use fewer access lines, or “trunk” lines that sharePrinted 2/4/2011 9:39 AM  Page 14 
  • 15. DivTel Business Model and Value 2.0 access among their staff. PBXs also give customers more direct control over features such asvoice mail and call routing within their organization.Long Distance Phone Services SUNCOM Long Distance Service allows local service customers to place calls outside a localarea (known as a Local Access and Transport Area or LATA) throughout the United States andInternationally. For large customers, SUNCOM can provide “Dedicated” circuits to make longdistance calls. Smaller customers use SUNCOM’s “Switched” Long Distance at a slightlyhigher price.Toll‐Free Phone Services SUNCOM offers customers the ability to establish in-bound toll free services with available"vanity" phone numbers. Customers can establish toll free numbers for in-state, national and(limited) international toll free calls. Offered with many enhanced service feature options, thisSUNCOM service terminates on local telephone lines/trunks and handled like any otherincoming telephone call.STEPS The SUNCOM Telecommunications Equipment on-Premise Service (STEPS) offers telephoneswitching equipment known as Private Branch Exchanges (PBXs) at the customer’s site. PBXsmove some of the functions and features from telephone company facilities to the customer’ssite. This allows customers to use fewer access lines, or “trunk” lines that share access amongtheir staff. PBXs also give customers more direct control over features such as voice mail andcall routing within their organization. PBXs have been around from near the beginning oftelephone services but modern PBXs almost exclusively provide Voice over IP (see “Voice overIP (VoIP)” on page 51).STEPS partners include Avaya, Cisco and Siemens.Data MyFloridaNet (MFN) The technology at the core of MFN, known as Multi-Protocol Label Switching (MPLS,) isconsidered the current standard for the best enterprise data networks. When MFN wasimplemented through SUNCOM, it combined all of the best features of several SUNCOM’s dataservices into one, with more features, better security, and higher reliability at lower cost.Through MFN, customers can get equipment and local access to a dedicated enterprise networkfor one price with the independent ability design and manage their sub-networks, makeconnections, and monitor their security, regardless of their location within the state.Metropolitan Area Network (GMAN)  SUNCOM’s Metropolitan Area Network (GMAN) provides the Tallahassee area multi-site,high-speed networking/connectivity between user local area networks (LANs), with controlledgateways to common state applications and connects them to wider area networks such as MFN.Printed 2/4/2011 9:39 AM  Page 15 
  • 16. DivTel Business Model and Value 2.0 The GMAN service is currently available in the Tallahassee area only through CenturyLink,where the majority of SUNCOM customers are headquartered.Remote Broadband Services (RBS) SUNCOM’s Remote Broadband Service (RBS) provides customers access to the Internet fromlocations outside large customer offices. RBS utilizes the latest broadband “best-effort”transport technologies common to the consumer (rather than the business) market. RBS providescost-effective remote broadband access via Digital Subscriber Lines (DSLs), which is digitaldata transmission over the wires of a local telephone network. Eligible SUNCOM customersworking from small offices and homes will be able to connect via the Internet to work-relatedresources.Florida Internet Resource Network (FIRN) FIRN provides a data communications to K-12 schools. Schools pay for FIRN services almostexclusively through federal subsidies known as “E-rate” (averaging 70%) and a state match(averaging 30%).E-Rate subsidies come from the Universal Service Fund (USF) which is financed through feescharged to every user of telecommunications services throughout the USA. Erate is one of foursupport programs funded through a USF fees charged through companies that provide interstateand/or international telecommunications services.FIRN uses the MFN infrastructure provided by AT&T but includes some E-Rate qualifiedfeatures, like email and special filtering, that are not a part of MFN.Southwood Shared Resource Center (SSRC) Ports Because the SSRC and DivTel were a part of one organization in the past and collaborated toprovide some integrated services (e.g. the SSRC housed the hub of the State SNA backbone andthe State Internet firewall), SUNCOM provided data communications services to the SSRC andits customers within the SSRC facility. This relationship is unique because SUNCOM’sstatutory authority and business model do not include services beyond the point (the router)where a building or campus connect to the State Network. This SUNCOM service was codifiedin the 2010 General Appropriations Act and SUNCOM is now required to meter usage (ratherthan charge flat fees).9Other Data Services SUNCOM also provides a small quantity of other services that are small and/or near end-of-lifelike centralized Fax, Router (a legacy service known as Routed Transport Service, State ofFlorida Internet Access (SOFIA) and Local Area Network port management at the CapitalCenter Office Complex (where DMS is housed).Printed 2/4/2011 9:39 AM  Page 16 
  • 17. DivTel Business Model and Value 2.0 Conferencing Reservationless Voice Conference Services SUNCOM Reservationless Voice Conference Services gives on-demand conferencing, 24 hoursa day, 7 days a week for up to 125 participants without the need to make a reservation.Video Conference Services SUNCOM provides video bridging and gateway services which enable real time audio and videointeraction between three or more locations equipped with video conference equipment.Web Conference services  Web Conferencing is used to conduct live meetings, training, or presentations via the Internet.This enables customers to share projects, data, presentations, and ideas from and to any computerconnected to the Internet and a telephone.Infrastructure Telecommunications Infrastructure Project Services (TIPS) TIPS assists customers in procuring, installing and project managing telecommunicationsinfrastructure (e.g., cabling and wires) for communication services, including voice, data, video,Close Circuit TV, imaging, and wireless LAN within a building or campus. TIPS establishescontracts and monitors performance of installation vendors, and simplifies contracting andproject management with a single point of contact from start to finish.Mobile Wireless Data Services SUNCOM’s Aircard service enables laptop computers to mobile access the Internet or the StateNetwork through SUNCOM’s secure and encrypted Virtual Private Network service.SUNCOM’s mobile services partners include AT&T, Sprint and Verizon.Smart Phones SUNCOM’s Smartphone contracts provide more robust SUNCOM sanctioned alternatives to theState Term contract for cell phones. SUNCOM’s mobile services partners include AT&T, Sprintand Verizon.Printed 2/4/2011 9:39 AM  Page 17 
  • 18. DivTel Business Model and Value 2.0 SUNCOM Revenue by Services FIGURE 2Customers Sections 282.703-707 F.S., authorize SUNCOM to serve state agencies, universities, privatecolleges, the judiciary, cities, counties, schools, libraries and private-not-for-profit entities thatare primarily funded by the state.In accordance with 282.703 F.S., state agencies are required to use SUNCOM fortelecommunications services unless they obtain an exemption from DMS verifying thatSUNCOM cannot meet their needs.The inclusion of other Florida public sector customers in DivTel’s customer base creates theopportunity for them to get SUNCOM discounts and maximizes SUNCOM’s bulk purchasingleverage and economies of scale.Printed 2/4/2011 9:39 AM  Page 18 
  • 19. DivTel Business Model and Value 2.0 SUNCOM Revenue by Customer Type FIGURE 3SUNCOM Revenue from State Agency Customers  FIGURE 4Printed 2/4/2011 9:39 AM  Page 19 
  • 20. DivTel Business Model and Value 2.0 Standards SUNCOM establishes state telecommunications standards both explicitly and implicitly.Explicit standards are established in Florida Administrative Code per SUNCOM’s rule writingauthority under p. 282.702(2) and (9) F.S. Those rules cover the security and compatibilityrequirement of the state network, customer ordering and billing, and vendor relationships.Additional explicit standards can be found through operating guides for SUNCOM services andcontract terms with vendors.SUNCOM’s implicit standards come from the mere existence of SUNCOM’stelecommunications services and the statutory requirement that state agencies use them. The factthat vendor services delivered through SUNCOM are centrally designed, delivered andconfigured in routine ways leads agencies to buy services that are compatible and meet the costand security requirements of the state.Unbillable Support of the Florida Government Enterprise Among DivTel’s obligations is support for some ongoing public services and periodic projectsfor which there is no specific billable customer or direct appropriations. DivTel must recoverthese costs from customers through payments for SUNCOM services. While these activities areimportant and valued, the associated subsidies inflate SUNCOM charges.State Directory Information Starting in 1986 when the dedicated backbone for voice services was established, SUNCOMpublished lists of state telephone numbers and staffed an information line (866-693-6748 toll freeor 850-488-1234 from within Tallahassee) to help callers contact state offices and employees.SUNCOM is also the source of Florida government listings to all local telephone bookpublishers.The printed SUNCOM telephone book was replaced in 1996 by a Web site(http://411.myflorida.com/apps/411/tel411.public_411) but SUNCOM continues to answercallers to State Information and provide local listings in accordance with statutory requirements10at a cost of approximately $327,000 annually.State Emergency Services Telecommunications (ESF‐2) DivTel is assigned responsibility for Emergency Support Function-2 (ESF-2) by the Division ofEmergency Management’s Comprehensive Emergency Plan11,12). This means that any and all ofDivTel’s staff, services and assets are available to help during disaster and DivTel must sustaindisaster preparedness. When declared disasters occur however, DivTel is often able to obtainsome compensation through federal disaster grants.Southwood Shared Resource Center Support Until 2007, DivTel and Southwood Shared Resource Center (data center; SSRC) were a part ofthe same department (Management Services) and collaborated to offer joint services. Forexample, the SSRC was used as a central hub of state networks dating from the early 1990s.13Because these resources were so tightly intertwined, it was not possible to distinguish betweenPrinted 2/4/2011 9:39 AM  Page 20 
  • 21. DivTel Business Model and Value 2.0 the State Network and SSRC customer data traffic that moved through these circuits. SUNCOMwas able to only partially recover these costs by charging SSRC customers small flat fees.Technology changes have eliminated the need for SSRC to act as a central State Network hub.14This means that the data communications hardware inside the SSRC and the associated circuitsnow serve the SSRC and its customers exclusively. Therefore, SUNCOM has sought todiscontinue subsidizing maintenance of the SSRC’s internal hardware since 2006 but has beenunable to do so. The ongoing cost of this subsidy is $365,000 annually.SUNCOM recently developed a state-of-the-art method for metering SSRC customer’s usage ofthis equipment and circuits. Because this approach will attribute charges precisely in proportionto customer resource usage (as opposed to flat fees that over-charge minimal users and under-charge heavy users), it is more equitable and provides customers clear economic incentives (see“CAREIVA Principles of Product Design and Chargeback” on page 33). SUNCOM hopes toimplement these charges to fully recover the associated costs in the future and turn responsibilityfor doing so to the SSRC as is the standard for all other SUNCOM data center customers.School District Grant Assistance All K-12 schools in America are eligible for federal grant subsidies for their telecommunicationsservices. The program known as E-rate can cover as much as 90% based upon the poverty levelof students (the average for Florida is 70%). Prior to the 2010 Legislative Session, Florida’sstate government paid the other 30% for school’s data communications through an appropriationto the Department of Education (DOE). DOE used these funds to pay SUNCOM for use of theFlorida Information Resource Network (FIRN the K-12 data network) while schools paid the restwith E-rate funds or E-rate credits.By federal rule, SUNCOM is ineligible to receive e-rate funds even to cover its administrativecosts to serve schools. Thus SUNCOM administrative fees were covered by the State match(which also covered related DOE administrative costs). But because the law limited thosepayments to only 7% of the state match was provided (or approximately 2% of total K-12charges) SUNCOM was compelled to subsidize the rest of its administrative support of schoolcustomers.SUNCOM’s subsidy of this effort increased in 2010/11 when the state discontinued funding theDOE E-rate office which helped schools wade through the complicated E-rate grant process.Because all schools use E-rate to pay for SUNCOM services, SUNCOM must replace theassistance that DOE provided.15 SUNCOM has federal approval to use its broadband grants forthis purpose and, as of this writing, is seeking legislative approval to do so (see “E-rateAssistance to Schools and Libraries” on page 63).Expanding Broadband Access The 2009 Legislature enacted section 364.0135 F.S., designating DMS as the lead Agency topromote broadband deployment. This legislation was written in conjunction of Federal programsand grants to foster wider availability to broadband in “unserved and underservered regions”.Among its duties, DMS is to “Encourage the use of broadband Internet service … through grantprograms”. DivTel is meeting its statutory obligation and has obtained Federal grants butPrinted 2/4/2011 9:39 AM  Page 21 
  • 22. DivTel Business Model and Value 2.0 without any initial funding for the effort. See “Enhancing Florida’ Economic Competitivenesswith Broadband” on page 61. DivTel’s ongoing efforts will be funded mostly from Federalgrants but DivTel must satisfy the State’s in-kind contributions to be eligible.Data Center Consolidation Project In 2007, the State of Florida began to consolidate computing services. In most instances thisrequires moving servers and mainframes from office buildings where computer users are locatedto one of three Primary Data Centers within Tallahassee.When users are collocated with this equipment, communicating with them is fast and does notrequire use of circuits outside of the building. After the equipment is moved across town,SUNCOM circuits must then carry these communications and these circuits must be substantialto meet the daily demand of users.16SUNCOM has engaged in a substantial effort during data center consolidation to design,implement and test the new IT environment for each affected customer. No funding wasprovided to SUNCOM for this costly effort.Data Center Circuit Consolidation Project Twenty SSRC customers had established separate SUNCOM connections from within the SSRCto the outside. After DivTel mangers described this condition to legislative staff, a requirementwas added to proviso language in the 2010 General Appropriations Act9 compelling these SSRCcustomers to move onto a common SUNCOM circuit. See “Pooling” on page 24 for adescription of the savings. No funding was provided to SUNCOM to implement this project.Printed 2/4/2011 9:39 AM  Page 22 
  • 23. DivTel Business Model and Value 2.0 SUNCOM’s Purpose This section describes the reasons SUNCOM does the things described in the previous section.In essence, it confirms why SUNCOM was created through the benefits it brings to Floridagovernment.Enterprise Cost Savings Internal service providers, like SUNCOM, have business models that are very similar to theprivate sector, but they differ from vendors in its key purpose: Success for Vendors comes when customers pay as much as possible, SUNCOM’s success comes when customers pay as little as possible.17SUNCOM’s business model is designed to save money for Florida government in four generalways: 1. Getting services at the best price. 2. Achieving enterprise economies of scale. 3. Helping consumers get the right service. 4. Helping consumers get the right amount of service.Cost Reductions verses Cost Avoidance Cost savings come in two forms; cost reductions and cost avoidance.Cost Reductions Cost reductions occur periodically when there is a change to SUNCOM services that enableslowering prices to SUNCOM customers. Derived from technological advancements,marketplace changes, new or amended contracts and redesigning services, they are realized onetime; then become unseen perpetual cost avoidance thereafter. Achieving cost reductionsrequires vigilant study, innovation and a constant stream of new and/or amended contracts.Cost Avoidance The daily cost avoidance delivered by SUNCOM is more subtle, yet far greater. Conservativelyestimated to be over seven times the annual SUNCOM administrative costs, these savings arederived from the costs that would be incurred if SUNCOM did not exist. Without SUNCOM, allof the services it provides would be purchased individually by separate government entitieswithout the expertise, negotiating leverage and economies of scale SUNCOM delivers.18Because cost avoidance is an estimate of what was not spent, it is intangible. The question,“what would it have cost if it had been bought another way?” is impossible to answer withoutactually duplicating the purchase. Since such duplication is contrary to the enterprise purchasingpolicies set forth in Florida Statutes (for state agencies)91 the lack of comparative examples maylead some to the mistaken assumption that cost avoidance is not real, thus devaluing the largestbenefit of the enterprise model. In spite of the policy however, there actually is one salientexample.Printed 2/4/2011 9:39 AM  Page 23 
  • 24. DivTel Business Model and Value 2.0 In October of 2009, the Florida Department of Education (DOE) alone sought to replace thestatewide education network known as the Florida Information Resource Network (FIRN).FIRN is used primarily by K-12 schools which are subsidized by a Federal grant program knownas E-rate. Prior to DOE’s attempt to replace FIRN, it was a SUNCOM service. Because the bidsto DOE were significantly higher than existing SUNCOM services, DOE ultimately came backto SUNCOM for those services.At DOE’s request, SUNCOM established a new FIRN contract to meet specific DOErequirements rather than use existing SUNCOM services.19 The resulting SUNCOM prices are39% lower than the best offer to DOE20 even when SUNCOM’s mark-ups to recoveradministrative costs are included.21 Extrapolating these 39% savings to all of SUNCOM’sservices suggests savings of approximately $71.8 million annually. This is over seven timesSUNCOM’s administrative costs meaning the state receives at least a 700% return on its annualinvestment in SUNCOM.22Cost Savings Mechanisms SUNCOM cost savings come from a variety mechanisms listed below. Almost all of them arecost avoidance.Volume Discounts Volume discounts are achieved simply from the bulk size of SUNCOM’s contracts. Throughone procurement, vendors provide standardized services to all SUNCOM customers. They arewilling to discount heavily to secure bulk sales that would otherwise go to competitors and toachieve efficiencies in doing so that would otherwise be impossible. This leverage can only beachieved through an entity that can aggregate the buying power of the state like SUNCOM.Pooling Volume discounts can be increased when SUNCOM commits to buy23 large blocks ofhomogenous services and resells them incrementally.With these pools, the excess capacity customers must normally buy becomes unnecessary. Theyonly pay for what they use thus giving them clear incentives to use less. SUNCOM alone takesthe risk that too many or too few services have been bought in the pool and uses the Law ofLarge Numbers24 to minimize that risk.25Vendors are willing to give the greatest discounts for pooled services because of thepredictability and efficiencies derived from fixed quantities of homogenous services.26 And thestate enterprise achieves a high degree of cost saving by rendering large blocks of services intosmall units to be used exclusively where they are needed. See how pooling compares to otherenterprise purchases in Figure 6.An example of this is now being implemented at the Southwood Shared Resource Center(SSRC). Several customers maintained 20 separate connections to the SSRC. Through a jointeffort between SUNCOM and SSRC staff, these were combined into one for an enterprisePrinted 2/4/2011 9:39 AM  Page 24 
  • 25. DivTel Business Model and Value 2.0 savings of 50% ($512,544 annually). To achieve this, SUNCOM must make a considerableinvestment to develop metered billing so each customer pays their fair share of the consolidatedconnection. But once in place, this new approach can be ultimately replicated at other datacenters and foster incentives for further savings through peak-load pricing (see “Peak LoadPricing” on page 34).Economies of Scale  State Enterprise Economies of ScaleSUNCOM’s consolidated procurement of telecommunications services eliminates the need forprocurements among state agencies. Simply allowing agencies to order services throughSUNCOM’s existing contracts prevents duplication of effort throughout the enterprise.27The standardization SUNCOM provides also brings technical economies of scale. Without it,the technical approach of every state agency would be unique. Interconnecting agencies into acommon network would drain effort and resources. And when problems arise, diagnosis andresolution would be more difficult and lengthier without a consistent technical approach.Finally, as staff move between agencies and agencies reorganize, the standardized knowledge ofSUNCOM telecommunications is transferred as well thus avoiding costly relearning anddowntime.Partner Economies of ScaleVendors save as well from SUNCOM economies of scale. The processes for ordering, installing,invoicing, collecting payment and trouble management are standardized under SUNCOM. Forsome services, SUNCOM assumes many of these responsibilities because it is in a better positionto do so.28 For the rest, there is savings from uniformity of the processes. In this sense,SUNCOM acts as a partner to vendors, achieving mutual efficiencies that translate into vendordiscounts.Vendor Risk Mitigation Without SUNCOM acting as a single customer for the enterprise, vendors must bill and collectfrom all Florida government customers directly. Some customer payments would trickle in,others require extra collection efforts and dispute resolution, and still others might not evercome.SUNCOM audits and pays these consolidated invoices timely, in one lump-sum; before beingpaid by SUNCOM customers.29 And when there is a problem (e.g. disputable charges),SUNCOM staff stands between the end user and the vendor as a consistent experiencednegotiator with the leverage of SUNCOM’s bulk contract.By reducing thousands of vendor invoices into one, running standard audits, ensuring timelypayment with float, eliminating the risk of nonpayment, abolishing vendor collection efforts andacting as a good faith partner, SUNCOM provides saving to vendors that translate into lowerprices to the enterprise.Printed 2/4/2011 9:39 AM  Page 25 
  • 26. DivTel Business Model and Value 2.0 Specialization and Expertise Without SUNCOM, each state agency would need to design, procure and managetelecommunications services from the ground up. For most, this would be a part time job andeach effort would come in periodic cycles. And for all, the prerequisite knowledge would belimited by agency needs at a specific time.SUNCOM has a team of telecommunications engineers with careers dedicated to studying,designing, procuring and supporting telecommunications. They are engaged in such projectsevery day for a variety of customers giving them knowledge they use to the benefit of allcustomers and the enterprise as a whole.Interoperability Telecommunications by definition requires compatibility between sender and receiver. The bestway to ensure this is to set standards that all adhere to. To some extent the industry does thisnaturally when standards do not impede profits.SUNCOM is statutorily charged30 to foster interoperability so Florida can realize savings fromstandardization and prevent wasteful extra efforts to overcome incompatibilities between Floridaagencies.Security SUNCOM implements network security at an enterprise level for Florida government. Thisallows the state to have a common network on which agencies can communicate with eachothers with reasonable freedom from the chaos and predation of the Internet. But SUNCOM’ssecurity also provides a level of security for each customer and opportunities for them to useSUNCOM tools to monitor their security conditions.31, 32Accountability, Customer Empowerment and Stakeholder Transparency SUNCOM’s business model includes the collection and centralization of detailed invoicing datafrom vendors. This enables verifying vendor charges and rebilling of SUNCOM customers.But the way SUNCOM presents invoicing data also gives customers the opportunity to view,manipulate and report this data in ways that are uncommon to consumer billing. This givesFlorida agencies extra ability to scrutinize charges.Because this data is comprehensive of telecommunications charges and usage, SUNCOM and itsstakeholders can also use it in strategic planning, negotiations and policy setting. Without thisdata, the state would be disadvantaged during negotiations in which vendors are better informedof than the state about enterprise requirements, trends and opportunities. Policy makers wouldalso be unable to get comprehensive and accurate reports on the state’s telecommunicationsneeds. 33Printed 2/4/2011 9:39 AM  Page 26 
  • 27. DivTel Business Model and Value 2.0 Catalyst for Technological Transition Telecommunications Strategic Planning No single state agency, focused upon its specific mission to serve citizens, would necessarilyadopt telecommunications strategies that are good for the whole state enterprise. And achievingconsensus through a consortium of part time participants with parochial priorities would be tooslow and ineffective to keep up with technological and market opportunities. This is whySUNCOM is statutorily charged with enterprise telecommunications planning and does so with abroad and long term perspective.34Self Funded Investments SUNCOM receives no direct General Revenue appropriations or other tax revenues.35 Rather, itis self funded through charges to customers for the telecommunications services SUNCOMprovides. This means the Legislature does not need to provide cash infusions to keep Floridagovernment current with telecommunications progress. Instead, SUNCOM establishes contractsthrough which vendors and SUNCOM float these investments with incremental payments fornew services. Vendors often accept pay-as-you go returns based upon SUNCOM’s enterprisevolume commitments.36 This allows the state to reap the rewards of new technology withminimal penalties from early adoption.Buffering Costs Outside the Mainstream Imposing premium costs on customers using technologies outside of the mainstream is commonto the marketplace.“Early adopter” prices are higher due to the lack of economies of scale and vendors are able touse their lead (temporary monopoly) over a technology to quickly recover Research andDevelopment costs. In spite of these premium costs, some of these technologies can producesignificant rewards from early adoption. Thus, with its ability to design and float new servicesthat leverage the latest technology on a large scale, and by acting as a partner to vendors makingotherwise risky investments, SUNCOM becomes a catalyst for these savings.36,37At the other extreme, some customers cannot afford to keep-up with mainstream technology.Once out of the mainstream, economies of scale are lost, many vendors stop supporting thetechnology and competitive pressures on pricing diminish. SUNCOM buffers these costs sothese customers can redirect resources to adopting current technologies rather remaining trappedin paying premiums for old technology.Printed 2/4/2011 9:39 AM  Page 27 
  • 28. DivTel Business Model and Value 2.0 SUNCOM’s Approach and Principles This section describes how SUNCOM performs it duties in a manner that achieves its purposes.Establishing Standards SUNCOM both implicitly and explicitly establishes standards for the enterprise to ensure:  Interoperability to mitigate costly incompatibility throughout the enterprise.  Quality to mitigate costly compensation for deficiencies and downtime.  Security to mitigate data breaches and malicious attacks.Service Normalization Telecommunications standards are established for Florida government from the mere fact thatbulk services are offered through SUNCOM. Broad use among agencies limits instances whennon-standard technology is used that could lead to incompatibility, and security and qualitydeficiencies.38Florida Statutes and Florida Administrative Code (“Rules”) Florida Statutes charge DMS with creating telecommunications standards for the enterprise andgives it rule writing authority through Florida Administrative Code.30 Through a nine monthprocess in 2007, SUNCOM engaged in a major rewrite of these rules to create 60FF, F.A.C.DMS went beyond the requirements for public hearings, the time it dedicated to the process andsolicitations for comment. The results were both detailed and extensive rules covering enterprisenetwork standards, security and associated business processes that have proven to be reliable andtransparent while granting customers and vendors the flexibility they need.Developing Services SUNCOM strategically plans for services long before developing them. But unlike the privatesector, strategies are not focused on a marketing perspective and profits. Rather, they are basedupon the value that emerging technologies will bring to Florida government.Two Ways for Internal Providers to Deliver Services Internal service providers like SUNCOM can 1) buy assets and pay staff to use those assets todeliver services, or 2) buy services from the private sector and make them available to internalcustomers. Today, SUNCOM chiefly uses the later approach thus rendering it 93% outsourced.Another 2% is paid to other government entities with the remaining 5% used to plan, design andprocure these services, and manage orders, inventory and billing for them.39 It should be notedthat the 93% that is outsourced is demand driven; i.e. SUNCOM customers determine how muchis paid to vendors based upon the services they order and use.Printed 2/4/2011 9:39 AM  Page 28 
  • 29. DivTel Business Model and Value 2.0 SUNCOM’S Cost Distribution  Paid to other  Internal  Government  Operations, 4.9% Entities, 1.8% Paid to Private  Sector, 93.3%FIGURE 5  Printed 2/4/2011 9:39 AM  Page 29 
  • 30. DivTel Business Model and Value 2.0 Service Development Criteria Here are the primary criteria SUNCOM uses during the strategic planning to develop newservices. 1) Is there likely to be sufficient demand for the service? SUNCOM customers ultimately determine what technologies will be used because their business needs drive demand. SUNCOM must be careful to avoid attractive technologies that have little practical value to its customers. 2) Is providing the service within SUNCOM’s statutory authority? SUNCOM draws a bright line between the telecommunications services it provides and other information technology based upon the confines of legal its authority. 3) Can SUNCOM do it better than the alternatives? There are opportunities where SUNCOM could establish services that comply with reasonable statutory interpretations of SUNCOM’s duties, but SUNCOM should not do so because it is unlikely to do it well and/or there are valid enterprise alternatives. SUNCOM defers to better alternatives after confirming that the integrity or security of the enterprise model will not be jeopardized. 4) Will the technology achieve critical mass in the broader market-place? If the technology is not widely adopted, economies of scale and wide-spread compatibility will not occur leaving SUNCOM to sell a nonstandard and expensive service. 5) How will the service fit with other SUNCOM technologies, services and infrastructure? Some new services may complement existing SUNCOM services. Others can become preferred substitutes. Many can leverage supporting SUNCOM services and infrastructure to save costs. These factors can make a service more or less viable for SUNCOM. 6) How will the service fit the SUNCOM business model? SUNCOM must be able to render technologies into billable services using the principles of CAREIVA (below). 7) Is investment in a new technology less than its returns? Services that appear attractive may actually be undesirable to SUNCOM customers because the cost of transition to it will be less than the benefits, or better replacement technologies are emerging, or substandard quality will create costly upheaval. SUNCOM must be cautious to avoid picking dead-end technologies that will undermine the value it brings to the state. 8) Is the underlying technology proven to be scalable and reliable? Regardless of how elegant a technology is designed, taking it outside of controlled conditions on a small scale into the real world can make it untenable as a business tool. 9) Are the claims regarding the benefits of the technology sound? The creators of new technologies often lay claim to lofty improvements in productivity and cost. But they sometimes fall short of the promise because the narrow conditions necessary to realize them.Cost Accounting Seven Ways to Buy Services There are at least six major ways to fund enterprise services using internal service providers likeSUNCOM. The below chart depicts the relative advantages of each with one additional optionfor a non-enterprise approach (i.e. the first one titled “Isolated Purchases”).Printed 2/4/2011 9:39 AM  Page 30 
  • 31. DivTel Business Model and Value 2.0 Cost Recovery Models for Enterprise Services        Enterprise Resources          Internal Billing              Metered Billing  Isolated Purchases  State Term Contract  Single Funder  Fixed Shares Distributed Blocks Proportional Shares  Pooled Services  Cost Recovery  Type            Each state agency buys  An enterprise contract is  All services are funded from a  Each customer pays a fixed  Each customer buys a block of  Each customer pays a share  Each customer pays for the  services on their own directly  established through which all  source other than customers.  share regardless of how much  services through an internal  proportional to the amount of  incremental units they use  from vendors.  agencies buy services.  For example; a shared  service they use from a pool  provider.  the resources they use from a  when they use them from the  Description  network is established under  based upon willingness or  pool.  internal provider’s shared  a single contract with no  ability to pay, or proxies.  pool.  charges to user agencies.  Charges are dependent upon  Agencies pay contract prices  A single entity pays a flat fee  Service prices are irrelevant  Customer charges are fixed,  Prices per unit and total  Prices per unit are fixed, total  vendor contracts with each  directly to the vendor.  or bulk prices that are  since total charges are fixed  unless the capacity of the  charges change every month  charges adjust with usage.  Prices/Charges  agency.  irrelevant to customers (since  until renegotiated.  customer’s block is upgraded  for every customer.  someone else pays).  or downgraded.  Bulk Purchasing Leverage              Economies of Scale              Economic Usage Incentives              Shared Excess Capacity              Vendor Costs Minimized              Equitable             Shortages & Rationing Unlikely             Enterprise Cost/Usage Reports              Simple Chargeback              Buffered Transition Cost               Compatible & Secure              Specialization & Expertise              True    Mostly true    Partially true    Mostly untrue    Untrue See the companion explanation to this figure in Attachment 7 on page 89.  Figure 6Printed 2/4/2011 9:39 AM  Page 31 
  • 32. DivTel Business Model and Value 2.0 The Simplicity/Savings Trade‐off  Single Funder Enterprise Resources Fixed Shares Internal Billing from Pool Distributed Blocks State Term Contract Metered Billing Proportional Shares from Pool Pooled Services Isolated Purchases Savings Enterprise Resources Internal Billing Metered BillingFIGURE 7The Limits on Imitating the Private Sector As mentioned above, SUNCOM’s purpose differs from the vendors because it is successful whencustomers pay as little as possible while vendor’s success comes when customers pay as much as 40possible. Thus, many common vendor practices are inappropriate for SUNCOM. For example:  Setting prices based upon what the market will bear, rather than costs, maximizes profits by taking more than necessary from customers.  Marketing designed to induce unwarranted enthusiasm distorts customer priorities.Printed 2/4/2011 9:39 AM  Page 32 
  • 33. DivTel Business Model and Value 2.0   Bundling services and offering loss-leaders to entice customers to pay for things they do not genuinely need enhances income by encouraging waste.  Creating perpetual dependency on imbedded technologies is a costly impediment to progress.  Price discrimination based upon the relative availability of alternatives or customer willingness to buy enhances profits at the expense of targeted customers.  Permitting customers to make unnecessary purchases increases profits at the customer’s expense.  Producing vague invoices and contracts diminishes the opportunity for true cost accounting and comparisons.CAREIVA Principles of Product Design and Chargeback SUNCOM services, pricing and marketing are designed to give customers the information, means andincentives to save money. To achieve this, SUNCOM follows the principles known by the acronymCAREIVA. C Resource usage must be discretely Countable: the number of units consumed can be measured. A Resource usage must be Attributable: the customer who uses them can be identified. R Counting and Attribution must be done Repeatedly: determining how much each customer uses is possible for every bill. E Prices must be Equitable: charges are proportional to cost of resources used or the enterprise value usage creates. 41 I Prices should give customers clear Incentives: customers are rewarded with savings when they consume fewer resources or foster benefits to the enterprise.41 V Charges must be Visible: customers can readily see the fiscal consequences of their purchases and consumption. A Saving money must be Actionable: customers can easily and quickly do something to reduce or eliminate unnecessary charges.There is cross-dependency between these principles. For example, it is pointless to count usage if theconsumer cannot be identified. And it must be done every month if the service is to be billable. If pricesare not proportional to the resources used, consumption will not be directed to save money, regardless ofhow effectively SUNCOM bills. And none of this is useful if the customer cannot see nor do anything toreduce costs.In most instances, the CAREIVA principles can best be applied when charges are attributed at the lowestlevel possible. Paying by the drink rather than the jug minimizes unused capacity and gives customers thegreatest visibility into the consequences of their demands and provides them the incentives and ability todo something about it.Printed 2/4/2011 9:39 AM  Page 33 
  • 34. DivTel Business Model and Value 2.0 Designing SUNCOM Services using CAREIVA SUNCOM services must consider CAREIVA principles from inception of a service in order to deriveCAREIVA benefits. Application of CAREIVA is universal for all SUNCOM services. But how they areapplied depends largely upon the mechanisms available for chargeback and whether the service is pooledor non-pooled.Redesigning Pooled Services  All customers need excess capacity for most services so they have enough during peak demand. This means they commit to a size larger than they typically need. When excess capacity is held at the enterprise level it can be shared and each customer need not make any volumecommitments.In a pool, at the moment one customer needs more, there is a likelihood others will not, and still otherswill need less than they normally do. The larger the pool, the more likely this is true by the Law of LargeNumbers.24 The extra capacity required for one customer can be obtained from the unused capacity ofothers. So every customer buys only what they need, when they need it from the pool. This sharedcapacity reduces costs for the whole enterprise.FIGURE 8Pools however, require a provider like SUNCOM to hold each customer accountable for usage from thepool. Otherwise, costs will escalate. So SUNCOM breaks pooled services into increments, counts(“meters”) and attributes to them to customers for billing. When these increments are repeatedlycountable and attributable, and equitably priced, they provide customers the clearest Incentives availableto save.Peak Load PricingMost customer activities occur during the regular business day. As a result, significant spikes in demandoccur daily and there is reduced usage at night. Naturally, infrastructure must cover peak capacity thuswastes excess capacity in off-peak hours.Pooling provides an additional opportunity to implement cost savings incentives that spread this usageacross 24 hours to reduce the peaks and therefore, the total capacity required. Known as “peak loadpricing”, discounts are offered during off-peak periods to inspire customers who have the flexibility toshift their activities.42 This is only possible for pooled services delivered through fixed assets when thecharges are metered rather than flat rated.43Printed 2/4/2011 9:39 AM  Page 34 
  • 35. DivTel Business Model and Value 2.0  Peak Peak 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 Noon Noon Same price is charged all day. The same usage spread throughout the day using peak load pricing incentives.FIGURE 9Design of Non‐pooled Services  When services cannot be disintegrated by SUNCOM to be resold in increments, they cannot be pooled (shared). In such cases, SUNCOM simply uses the vendor’s service definition and passes the charges through to customers. The savings from shared excess capacity are unattainable, butthe other savings from bulk purchasing leverage, economies of scale, etc. are still realized.Common Mistakes in Chargeback Design There are several common mistakes internal providers make that distort CAREIVA principles. Some areinspired by the desire to mimic successful marketing practices from the private sector; others by a desireto simplify cost recovery thus alleviate the complexity and work that comes with more effectiveapproaches. But marketplace imitation and shortcuts often undermine the cost saving purpose of havingenterprise providers like SUNCOM.Pitfalls of Selling Bundled PackagesBundled packages that are common to the private sector come in two forms; 1) combinations of differentservices and/or 2) blocks of one kind of shared service. Offering either is appropriate only whenSUNCOM can realize savings from selling such packages or the vendor realizes such savings that can bepassed through to SUNCOM customers. This only occurs when there are true technical economies frompackaging.Offering bundled packages because customers are familiar with them, or they are standard industrypractice, or for marketing purposes to entice sales, or because the flat fees for them are more predictable isimproper for an internal service provider charged with saving money.Bundled Variety Packs Combining different services is a common way for rewarding customers with discounts for buying something they normally would not buy. In such cases, a vendor is willing to accept a lower profit from customers with whom they have existing relationships to counter a lack ofenthusiasm for a particular service. Smaller profit is better than no profit for a vendor, but is of no interestto SUNCOM.Bundled Blocks of Shared ServicesPrinted 2/4/2011 9:39 AM  Page 35 
  • 36. DivTel Business Model and Value 2.0  Many services are only available from vendors in bundled blocks with flat fees. For example, local phone service provides unlimited local calling for a set monthly fee. This is essentially a bundled block of local calls.But when a pool of services can be shared among internal customers, SUNCOM will miss a bigopportunity for savings if it resells them in smaller bundled blocks. Breaking a large pool into smallerpools (blocks) dilutes enterprise savings because excess capacity cannot be shared among customers.Rather, selling the service at the lowest incremental level retains economic incentives and equity.Pitfalls of Proportional Allocation A common practice for internal service providers is to charge each customer a proportionate share of the total cost of a pooled resource rather than break those costs into fixed prices tied to increments of usage. For example, if four customers equally use a single resource costing a fixedcost of $100 monthly, proportional charges means each will pay $25 in a given month. If one customerdiscontinues, the remainder pay $33.33 each (if they continue using equal shares). This guarantees that100% of the resource will be recovered, results in no surplus revenue and is equitable if the proportionatecharges are based upon actual customer usage.But with the guarantee that all costs will be covered, the internal service provider is less likely to takesteps to reduce costs when customers reduce demand.Worse yet, proportionate charges impair customer Incentives to be frugal because they distort the clearfeedback customers get from fixed prices. When one customer is charged a different amount than themonth before because other customers changed how much they used, the message becomes diluted.Customers give-up on their efforts to control costs because their actions appear to have little direct impact.When prices are fixed however, the only variable altering monthly charges is usage. Increased usagemeans a higher bill thus showing the consequences to each customer from their demands.Finally, proportionate charges result in highly unreliable budget projections for customers. They havesome means of predicting their own usage, but no means of predicting usage of others and understandingthe implications to their costs.If an internal provider is capable of implementing a monthly proportional share approach equitably, it canimplement billing with fixed prices. The two approaches otherwise use the same data to apply charges.Setting prices rather than apportioning costs has the one additional requirement to make usage projections.This does create some risks of over/undercharging, but enterprise service providers, by definition, can usethe Law of Large Numbers24 to spread those risks. Therefore, internal providers should bill with fixedprices to maximize customer incentives and perceived equity.Pitfalls of Fixed Shares and Proxy Pricing Sometimes when it is difficult to count and attribute units of usage, internal service providers rely upon other measures in place of usage.For example, when the amount of bandwidth consumed cannot be attributed to customers from a pool, thenumber of customer employees or size of its budget might be used as a basis for charges. But the numberPrinted 2/4/2011 9:39 AM  Page 36 
  • 37. DivTel Business Model and Value 2.0 of staff at an agency would be a credible proxy for bandwidth consumption only if all staff in everyagency uses the same amount of bandwidth all of the time. Because staff duties and the tools available tothem vary, this is not true. Therefore, such proxies are not equitable, encourage waste and are notsustainable models.Cost Allocation and Price Setting The Cost‐Plus Model SUNCOM uses a “cost-plus” allocation method to determine the cost of providing each service. This ismost appropriate for internal providers that primarily buy (rather than build) services that are in turnresold to enterprise customers.44 Approximately 92% of SUNCOM’s costs are such payments to vendors.The remaining eight percent pays for the costs of designing, procuring, and managing these services andthe enterprise networking model.Administrative costs are added to vendor charges for SUNCOM services (“cost plus”). Some specificservices bear more than others based upon the share of administrative resources committed to offering theservice and other factors like the cross subsidies mentioned below.45Cross‐Subsidies Used to Fund Technological Change A major factor that leads to charging less than the full cost of a service is the need to accommodatetechnological change. Designing new services requires an investment of administrative costs and possiblycapital. And when the service first becomes available, not enough customers use it to achieve effectiveeconomies of scale. Given SUNCOM’s self funded model which requires no large investmentappropriation, new services are subsidized by the rest of the operation until they can achieve critical mass(and then become a supplier of subsides for the next change). Net Revenue Service A Service B Service C Service D Mature services Time $0 New & Old servicesFIGURE 10When a service reaches end-of-life, not all customers are able to discontinue use at the same time.Charging the true cost of the service without a critical mass of customers would impose higher costs oncustomers that are least able to afford them, and in greatest need of investment funds necessary to makethe change. Thus, such services are subsidized for a limited period.46 In this way, SUNCOM is a catalystfor enterprise technological changes.Printed 2/4/2011 9:39 AM  Page 37 
  • 38. DivTel Business Model and Value 2.0 Order Processing, Inventory and Billing The last two principles of CAREIVA require that telecommunications charges be viewable and actionable.If customers cannot see the consequences of their usage or clearly identify unnecessary charges and thendo something the reduce them, the incentives of CARIEVA are irrelevant. This means that the systemsthat customers use to order and pay for SUNCOM services should provide relevant information, are easyto understand and use.SUNCOM’s business model has centralized SUNCOM billing since 1975. SUNCOM obtains billingdetail from vendors in massive electronic files and uses it as a basis for calculating customer charges.This detail has been available to customers and policy makers electronically since 2000 throughSUNCOM. With the ability to download, search and sort this data, customers are able to create reports,audit routines and cost allocation distributions from SUNCOM bills.But SUNCOM is doing more to empower customers to reduce telecommunications charges. In April of2010, SUNCOM released a reengineered interface to its billing system known as the SUNCOM Open andShared Information System (OaSIS). OaSIS enables customers to tag all of their charges so they can moreeasily identify them on each bill. These tags can be plain language reminders of the purpose of eachphone number or circuit number, and are completely within the control of customers. They will become apermanent part of the SUNCOM database to appear on every customer bill and inventory list, and will beused by customers to sort, filter and subtotal charges.In October of 2010, SUNCOM released its OaSIS inventory module (in Beta) that provides directcustomer access to SUNCOM’s inventory of customer services for the first time in its 32 year history. Inits Beta form, customers are able to see all of their orders related to data communications services andcircuit locations, and search them using a variety of parameters. When it emerges from its Beta status,OaSIS Inventory will display more data on all SUNCOM services, include the same tags that customerscan create on invoices (and orders) and provide simple tools for making changes.Ultimately, OaSIS will include a user friendly ordering module to simplify establishing and eliminatingservices and a more robust data exchange with vendors to save effort for both partners.Printed 2/4/2011 9:39 AM  Page 38 
  • 39. DivTel Business Model and Value 2.0 Public Safety Telecommunications  Purpose of the Bureau of Public Safety Telecommunications  Statutory Obligations  Critical services such as law enforcement, fire rescue, emergency medical services and the means for citizens to call them demand the most reliable telecommunications that government and industry can provide. Such demands cannot be left to chance; rather careful coordination and oversight are essential. Therefore, Florida Statutes assigns the Bureau of Public Safety Telecommunications several duties to establish reliable telecommunications that protect lives and property. Regional and Local Emergency Radio Effectiveness and Coordination  Without central coordination of Florida’s public safety radio communications, local and regional authorities would choose radio spectrum without assurance that they will not interfere with, or be interfered by, their neighbors. They also would have no reliable common standard to communicate with other entities when they need help during a disaster. This is why the Bureau under the direction of DMS is “authorized and directed” under Florida Statutes “to develop and maintain a statewide system of regional law enforcement communications”47 and “emergency medical telecommunications”.48 The system is comprised of standards and frequency assignments to ensure reliable radio communications in every county and city. The Bureau is also charged with setting standards “to serve local law enforcement agencies through mutual aid channels”. 49 To achieve interoperability (the ability of these local systems to work together in a disaster)50 the Bureau has implemented and supports a statewide gateway solution (the Florida Interoperability Network; FIN) enhance communications between disparate radio systems of state and local government. FIN can quickly establish multiple communications links between almost all of the more than 200 different state and local emergency dispatch centers throughout the state. The Statewide Law Enforcement Radio System  Absent an enterprise approach to law enforcement communications, each state law enforcement agency could develop separate networks with unique standards. Not only would those networks duplicate significant infrastructure, they would likely be unable to effectively communicate with each other and would demand far more radio spectrum than is available. This is why the Bureau is also charged by Florida Statutes to “acquire and administer a statewide radio communications system to serve law enforcement units of state agencies. 51 The result is a shared system, known as the Statewide Law Enforcement Radio System (SLERS), used by all state agencies and some counties. SLERS is also connected to FIN (see above) thus give access to local public safety entities. SLERS also provides digital radios that can provide secure encrypted communications for over 7,500 state law enforcement officers. Printed 2/4/2011 9:39 AM  Page 39 
  • 40. DivTel Business Model and Value 2.0 911 Effectiveness and Reliability Without standards and coordination for emergency calls from citizen there would be tenuous expectationsof reliability and consistency throughout the state. This is why the Bureau is also charged to “develop,maintain, and implement…a statewide emergency communications E911 system plan”52 and, underauthority of the DMS Secretary, “coordinate the activities of the system with state, county, local, andprivate agencies”.53To help ensure the reliability and consistency of the state’s 911 system, the Bureau is also charged to“oversee the administration of” of the E911 fee54 through the E911 Board which is to “administer, thefee… including receiving revenues derived from the fee; distributing portions of the revenues to wirelessproviders, counties” and accounting for and reporting the fee’s revenue and distributions.55With a stable 911 system in place statewide, the recent focus of the Bureau and Board has been on theability to process new types of communications from citizens throughout the state.56 For example, theenhanced service for 911 allows the ability to automatically view telephone numbers and track cellulartelephone locations on a map.57The inability to receive and process emergency messages from citizens via text messages, images, andvideo presents new challenges and opportunities. The ability to process these messages is known as “NextGeneration 911” (NG911).58 The Bureau is developing strategies to implement a state routing networkthrough its SUNCOM MyFlorida Network to accommodate these NG911 media.State Emergency Operations –Support for Telecommunications In the event of a disaster, all of the services and assets of the Bureau and SUNCOM must be madeavailable to help. Thus, Florida Statutes assigns DivTel responsibility for Emergency Support Function-2(ESF-2 is “Emergency Communications” in accordance with the Division of Emergency Management’sComprehensive Emergency Plan59,60) and the Bureau supports61 the state’s response to large-scaleemergencies and disasters through the state Emergency Operations Center.62Bureau of Public Safety Telecommunications Functions History State Law Enforcement Communications Plan (LE Plan) The LE Plan was first published in 1973, “to develop and maintain a statewide system of regional lawenforcement communications”.63 With Federal funding, it enabled implementation of many lawenforcement radio systems throughout the state. The LE Plan is currently maintained to provide technicalguidelines for the implementation of new law enforcement radio communications systems by local lawenforcement agencies. The Bureau updates the LE Plan every two years.Printed 2/4/2011 9:39 AM  Page 40 
  • 41. DivTel Business Model and Value 2.0 Florida Emergency Communications Number E911 State Plan (State E911 Plan) The state 911 Plan was first published in 1976 as mandated by legislation in 1974. The state 911 Planimplemented 911 as the official statewide emergency telephone number. The state E911 Plan iscontinually updated to provide a cohesive statewide plan for enhanced 911 services which will providecitizens with rapid direct access to public safety agencies. Citizen access to 911 reduced response time forlaw enforcement, fire, medical, rescue, and other emergency services. The latest edition is now availableon the web.64National Public Safety Planning Advisory Committee This committee made recommendations that the FCC incorporated into rules governing assignment anduse of the 800 MHz National Plan channels for Public Safety communications. Each state has its ownplan and planning committee for allotments to local government agencies. The Regional Plan for radiospectrum usage by public safety agencies in the State of Florida was prepared by the Florida Region andSubregion Plan Committees, which represent a cross-section of public safety radio users throughout theState of Florida.EMS Communications Plan Under Part I of Chapter 401, DMS is assigned the duty of planning the “statewide system of regionalemergency medical telecommunications …whereby maximum use of existing radio channels is achieved inorder to more effectively and rapidly provide emergency medical service to the general population”. 65The first Emergency Medical Services (EMS) Communications Plan, published in 1975, established theapproval process needed to implement EMS radio systems throughout the state. Federal funds from theEMS Systems Act supported those implementations until 1981.State Joint Task Force (JTF) SLERS began as JTF in the late 1980s with project direction initially being provided by board membersfrom five state law enforcement agencies. A pilot project was first implemented in Monroe, Miami-Dade,and Broward counties. The JTF Board later expanded to include eight state law enforcement agencies andplanned to build out the system statewide.The initial pilot project was the first of five phases of implementation, with each phase covering a distinctgeographical portion of the state. Phases 1 and 2 covered the east coast of Florida up to St. Johns Countyand as far west as the border between Lake and Sumter County.These first two phases were completed with the original vendor, but the state changed direction byestablishing a new system contract that resulted an award in 2000.66 Under the new contract, phases 3, 4,and 5 were built with the new vendor’s platform. After completion of phases 3, 4, and 5, phases 1 and 2were then converted from the old vendor’s platform to the new vendor’s platform under a public/privatepartnership where the vendor was to receive existing JTF assets (primarily towers) and the bulk ofrevenues from $1 surcharge on license tags for vehicles67 and boats.68. Though the system was initiallyimplemented in separate geographical phases, all phases are united into a single working statewidesystem. The system now referred to as SLERS worked remarkably well through Florida’s hurricanes ofPrinted 2/4/2011 9:39 AM  Page 41 
  • 42. DivTel Business Model and Value 2.0 2004 and 2005 and provided radio communications to the state’s law enforcement and disaster responderswithout any loss of service.Project 25 The Bureau has actively participated in the development of this important standard for digital radiocommunications, serving on the Project 25 (P25) National Steering Committee for 10 years and chairingthe User Needs Subcommittee for 5 years. The goals of Project 25 are to establish a standard that willensure optimal interoperability across systems regardless of vendor, obtain maximum frequencyefficiency, provide user-friendly equipment that best fits the needs of our public safety users at acompetitive price, and provide a graceful path from analog to digital technologies. If SLERS achievecomplete implementation to this standard, it improved interoperability and enable some significant costavoidance.Public Safety National Coordination Committee From 1999 to 2003, the Public Safety National Coordination Committee (a Federal Advisory Committeechartered by the Federal Communications Commission) provided recommendations to the Commission onoperational and technical standards for use of the 700 MHz public safety band. Florida participated in thedevelopment of these standards through the Bureau.The Florida 700 MHz Public Safety Interoperability Channel Plan defines the method of administrationand oversight for the Interoperability channels designated for use by Public Safety entities within Florida.The state is responsible for the administration69 of the 700 MHz interoperability channels.Services The Bureau works to ensure that Florida’s residents and visitors can effectively call for emergencyassistance when needed and reliably get that assistance within minutes. To this end, the Bureau maintainsfive core services that support telecommunications for public safety.Local Government Services Consultation Historically, most local governments in the state have borne the responsibility of providing their ownpublic safety radio communications. Thus, there are a number of disparate local radio systems. TheBureau provides radio communications planning and technical services to assist the county and municipalpublic safety agencies, including police departments, sheriff’s offices, and fire departments, in makingdecisions for improvements and upgrades to their radio communications.Spectrum Approval The Bureau also supports the Florida Region Committee in administering the “Florida – Region 9 Planfor Public Safety Communications” (Region 9 Plan).70 This entails the use of specialized software toperform complex interference studies and maintenance of a database of channel allotments. Every requestfrom a public safety agency included in the list of eligible entities is reviewed for technical compliancewith this plan and coordinated with all existing allotments before the Florida Region Committee grantsthem.Printed 2/4/2011 9:39 AM  Page 42 
  • 43. DivTel Business Model and Value 2.0 Law Enforcement Communications Plan In support of county sheriffs, municipal police departments, and other local law enforcement agencies, theBureau maintains the Law Enforcement Communications Plan.71 This plan specifies the minimumperformance for systems and equipment of every local law enforcement agency in Florida. The Bureauapproves systems and equipment for law enforcement communications according to the latest edition ofthe plan.Intergovernmental Radio Communications program The Bureau also administers the Intergovernmental Radio Communications Program, which providesfunding from moving traffic violations ($12.50 per violation) to support individual county programs forradio communications between different government agencies.72 The amount of funding that each countyreceives depends on the number of ticketed violations. The Bureau approves or amends each programbased on the documents submitted by the county, but the Bureau does not manage the collection orexpenditure of funds for each county.Emergency Medical Services One of the critical services that the Bureau supports is Emergency Medical Services (EMS) radiocommunications.73 EMS is a public safety emergency responder usually called upon via 911. The Bureauprovides radio communications planning and coordination to county and private emergency medicalservice agencies and hospital emergency departments. This enhances patient care from the scene of theinjury to delivery into the hospital emergency department.Interoperability Services Local public safety emergency responders (law enforcement, fire, and emergency medical services)manage their own jurisdictional radio systems. However, when responding to a disaster that requiresresources of more than one government (mutual aid event) within or outside their jurisdiction, theircommunications are hampered by operating on disparate radio systems. The ability to operate betweensystems, or the ability for equipment from one system to operate with equipment in a different system,must be established. This is known as “interoperability.Florida Interoperability Network To address this challenge, the Bureau has implemented the Florida Interoperability Network (FIN), asystem that can link various disparate public safety communication systems whenever needed. Thisinnovative solution leverages the SUNCOM network to pass and translate messages using the widelyadopted Internet Protocol (IP).Mutual Aid Channels Additionally, when emergency responders need to communicate outside their jurisdictional area, theyneed access to a compatible radio channel. The Bureau has implemented a statewide system of sharedradio resources (mutual aid stations) to enable direct radio communications between agencies withincompatible radio equipment. The Bureau also manages these resources and maintains all associatedFederal Communications Commission (FCC) licenses.Printed 2/4/2011 9:39 AM  Page 43 
  • 44. DivTel Business Model and Value 2.0 New radio channels in the 700 MHz band have been allocated by the FCC for public safety from newlyvacated television channels. To use these new radio channels in Florida, the Bureau has drafted aninteroperability plan.74State Law Enforcement Radio System Services The Bureau provides critical contract and system management, oversight, performance monitoring, andplanning for the State Law Enforcement Radio System (SLERS), one of the first statewide public safetyradio systems in the nation.75The Joint Task Force on State Agency Law Enforcement Communications (JTF Board)76 communicatesthe needs of the JTF agency users, those agencies that are included in SLERS by statutory reference.Through SLERS partner arrangements, eleven counties now operate on SLERS as their primary lawenforcement communications system. The network is comprised of 196 towers with 99% network uptime.SLERS has been operational throughout the state since 2004 and performed well through the fourhurricanes in 2004 and 2005 affecting the Sunshine State. SLERS provides mobile communications tomore than 7,500 law enforcement officers77 across 23 state agencies and 27 federal and local jurisdictionswith 16,800 radios in patrol cars, boats, motorcycles, and aircraft and on foot with the ability to quicklyestablish multiple communications links between most of the more than 200 different state and localemergency dispatch centers.78 The service covers 98% of Florida’s 58,000 square miles, plus an estimated20,000 square miles of off-shore coverage.FIGURE 11The “portable” coverage map on the left (for handheld radios) and the “mobile” coverage map on the right (for vehicle and handheld radios)highlight the areas without coverage. Note that the concentration of no coverage is above the state border.SLERS Final Acceptance After many years of hard work leading to the development of a secure and reliable statewide radio systemfor public safety, SLERS final acceptance came in 2010. Though this system has been actively servingstate law enforcement for several years previously, final acceptance of the radio system verifiedcompletion and deliverables from the contractor.Printed 2/4/2011 9:39 AM  Page 44 
  • 45. DivTel Business Model and Value 2.0 E911 Special Support Services The ability to obtain emergency assistance statewide is a critical component of Public Safety. Enhanced911 (E911) services route and transfer 911 calls to answering centers for the appropriate respondingagency. The system automatically provides the caller’s telephone number for call back purposes andlocation to speed the response time.This enhanced service is now established throughout the state for both traditional non-wireless telephones(landline phones) and wireless telephones (cellular phones). E911 Phase II Statewide Compliance, was amajor milestone for the Bureau, with funding assistance from the E911 Board. It gave all counties inFlorida the ability to automatically locate someone calling 911 on a cellular telephone.The Bureau works with all 67 counties and the Florida E911 Board for effective delivery of enhanced 911services statewide. The Bureau oversees the administration79 of the Emergency Communications NumberE911 System Fund (E911 Trust Fund) which receives revenue from the E911 fee ($.50/month) for land-line and cell-phone subscribers. Net fee collections in 2009 totaled approximately $125 million.80The Bureau and the E911 Board provide unified leadership for E911 on state 911 issues through planningand coordination.81 To further improve E911 service statewide, the Bureau assists the E911 Board indeveloping, implementing and managing three grant programs for the counties. These programs assistcounties with needed funding for E911 system maintenance, upgrades, and replacements.E911 Grant Programs, Statewide The Bureau and the E911 Board developed three grant programs from the E911 Trust Fund:82 1) The E911 State Grant Program provided $50,000,000 to assist Florida’s counties in deploying new E911 systems that are leading the way for the next generation of IP based systems. 2) The Rural County Grant program provided funding to help resolve disparities in the statewide 911 system. Six cycles of the Rural County Grant Program provided over $9 million since 2007. 3) The E911 Board emergency grant program was established to assist in rebuilding E911 systems damaged by catastrophic events not covered by insurance or other assistance programs.Using a Federal ENHANCE 911 Act Grant, the Bureau is also developing contracts and assisting countiesthrough the development of long-range projects. These projects will initiate regional E911 mapping,statewide E911 call routing, and statewide training for 911 personnel. The grant provides 50% of thefunding, which is being matched by a combination of E911 Board funding, county funding and a softmatch (the Bureau’s time, effort and administration to help engineer solutions).How the Bureau of Public Safety Telecommunications Performs Its Mission Leveraging SUNCOM As part of DIVTEL, the Bureau is well positioned to use SUNCOM resources to avoid duplication andsave money. The most significant current example is the FIN network, which utilizes enhancedSUNCOM Voice over IP service to enable communications between disparate radio communicationsPrinted 2/4/2011 9:39 AM  Page 45 
  • 46. DivTel Business Model and Value 2.0 systems. There are many other future opportunities for such convergence addressed in the section belowtitled “Convergence Opportunities for Public Safety”.Planning Thorough planning is paramount to the implementation and maintenance of any statewide public safetysystem. The Bureau develops and maintains a number of statewide plans including:  the State E911 Plan  the EMS Communications Plan  the Law Enforcement Communications Plan  the Florida - Region 9 Plan for Public Safety Communications  the Florida 700 MHz Public Safety Interoperability Channel PlanGood planning requires careful consideration of the needs and impact on all of the affected parties, in boththe short term and long. Without these plans, Public Safety agencies would lack guidelines andsafeguards needed to establish reliable communications and public safety personnel would be exposed togreater risk and the emergency response for the safety of life and property would be compromised.Keeping in Touch The Bureau participates in a number of forums to keep abreast or participate in the development of rules,standards, policies, and to stay in touch with the most current issues. These include meetings of thefollowing:  EMS Advisory Council  EMS Communications Committee  Florida E911 Board  Florida E911 coordinators, NG-911 Committee  National Emergency Number Association (NENA)  NENA Florida Chapter  APCO Florida Chapter  National Association of State 911 Administrators (NASNA)  Florida-Region 9 Committee  Joint Task Force Board  Joint Task Force Technical and Special Operating Procedures Committee  SLERS Users Group  State Working Group – Interoperable Communications Committee.  Florida Executive Interoperability Technologies Committee (FEITC)Balancing Needs versus Cost  The Bureau considers the needs of state and local government agencies and the availability of technologyfrom the industry in the development of statewide plans. The needs of the users must be at the forefront;however, the industry must be able to provide practical solutions at reasonable cost.Printed 2/4/2011 9:39 AM  Page 46 
  • 47. DivTel Business Model and Value 2.0 Engineering for Reliability with Performance Standards Reliability is a priority in the design of systems for public safety communications. The Bureau keeps thispriority in the forefront at all times. Plans must keep pace with the latest mainstream technologies andkeep track of the existing state and local system implementations. Every plan published by the PublicSafety Bureau includes or cites high-tier standards for systems and equipment performance. Thesestandards form the basis for recommendations and approvals, ensuring reliable service.Specialized software and data management tools Florida – Region Interference Program (FRIP) The Bureau has developed this unique software to facilitate the requests for channel assignments based onthe technical requirements of the FCC rules and the Region 9 Plan. This software tracks all existingchannel assignments and ensures that the planned implementation of a new or upgraded radio system willnot degrade the performance of any existing public-safety system.83E911 Board ‐ Fee Remittance Database The Bureau assisted the E911 Board in the development of a secure relational database to accurately trackthe fee receipts that are under the E911 Board’s management. The Bureau now uses this database to assistthe E911 Board in making accurate disbursements to the counties every month.Coordination Effective coordination requires the continuous participation of government on multiple levels.E911 Coordination The Statewide 911 Coordinator works with every county 911 coordinator, which are single points ofcontact within each county for E911 service.84 Additionally, the Bureau regularly participates in biannual911 coordinator meetings.SLERS User Groups SLERS jointly hosts an internal monthly user group meeting for its 7,500 dispatchers and radio users tokeep its customers apprised of enhancements, problems, solutions and provide opportunities to proposenew products and features for the equipment.SLERS also participates in user group conferences hosted by the supporting industry. Beyondparticipation in the P25 standards development through their user group, SLERS attends vendor-hosteduser groups to determine technologies and capabilities being developed by vendors. These vendor-hostedmeetings also serve to share the experience of SLERS and learning details and resolutions for anydifficulties other users have experienced.Partnerships with Government and Industry Partnerships between the state, local governments, and private industry are critical to the success of theBureau and effective Florida government emergency response. These systems would not be possiblePrinted 2/4/2011 9:39 AM  Page 47 
  • 48. DivTel Business Model and Value 2.0 without the participation of these various players. The Bureau maintains partnerships with industry byestablishing mutually beneficial arrangements for services and fostering industry participation in thedecision-making process.Florida E911 Board The Florida E911 Board, by statute, consists of representatives from the industry that supports E911, localgovernments that manage 911 systems, and the state. The Florida E911 Board is required by statute tomeet at least once a month in a public forum and approves all disbursements and expenditures from theE911 Trust Fund, and addresses the latest issues confronting Florida’s E911 system.Government SLERS Partnerships SLERS has formed partnerships with a number of local, tribal, state, and federal government agencies.Currently eleven counties85 have joined SLERS and have committed to SLERS being their primary lawenforcement radio system for their county.86Committees The JTF Board is served by a Technical and a Standard Operating Procedure (SOP) Committee. Themakeup and voting rights mirrors the JTF Board. The committees meet regularly and are noticed in theFlorida Administrative Weekly. The committees review operational issues and SLERS partners requestand develops recommendations for the JTF Board for action or approval.Testing and Inspecting To continually ensure optimum performance in these important public safety systems throughout the state,the Bureau does:  Performance testing of the State Law Enforcement Radio System (SLERS) for system enhancements and new-site deployments,  Performance testing of the Florida Interoperability Network (FIN),  Enhanced 911 inspections of Public Safety Answering Points (PSAPs).Training The Bureau provides training for FIN work stations, county 911 coordination, and SLERS usage. TheBureau also has three field representatives working out of Tallahassee, Orlando and Miami who supportSLERS users. They provide recurrent user and duty officer-dispatcher training at the law enforcementacademy, user locations, and the seven regional communications centers serving SLERS.Printed 2/4/2011 9:39 AM  Page 48 
  • 49. DivTel Business Model and Value 2.0 Future of Telecommunications in Florida Government  This section describes future challenges for DivTel for both its SUNCOM and Public Safety components and potential strategies for meeting those challenges. In keeping with marketplace trends and its statutory mandate, DivTel’s approach is to achieve greater “convergence” in applied technology, business operations and public policy. Technology Convergence  Every technology offers the promise of improved effectiveness and efficiency. But when different technologies converge, the impact can go far beyond expectations. Since 1882 when Edison’s Illuminating Company first distributed electricity to power his famous invention, refrigerators, microwaves and TVs piled on unanticipated benefits from electrification. This phenomenon, where new technologies are invented that take advantage of another, is known as technology convergence. Internet technology was a Cold War invention to preserve military communications after a nuclear attack. By breaking messages into packets so they can take multiple routes and reassemble at their destination, the Internet Protocol (IP) provided robust capabilities for a broad range of purposes. When the Internet converged with the Personal Computer its capabilities exploded. New business software using IP browser standards proliferated with less effort and users gained access to near infinite information. Exclusive networks under proprietary control disappeared to be replaced by a few connections to a broader network at considerable savings. The IP revolution continues as more technologies converge with it. Voice over IP (VoIP) phone calls are now sharing local circuits with computers. IP video is being distributed outside conventional TV channels and cell phones use IP to browse the Web and send email. Continuing IP convergence means more devices will be connected and their functions will become more integrated; users will do more with less effort. From an enterprise cost perspective, convergence extends the ability to share excess capacity not only between various agencies (see “Redesigning Pooled Services” on page 34), but also between voice, video and data communications riding common circuits. Economies of scale (see “Economies of Scale” on page 25) are extended as well when the functions of narrow purpose systems become mere features of more versatile devices. Technology Convergence Opportunities for the Enterprise  Although the Internet is owned by no one, it is not free from conventions. For enterprise organizations like the State of Florida, deriving the value from technology convergence requires strategy and coordination. SUNCOM provides core IP services, standards setting and coordination to fulfill the promises of IP convergence for the State of Florida. Printed 2/4/2011 9:39 AM  Page 49 
  • 50. DivTel Business Model and Value 2.0 Managing Complexity through Convergence The average worker has a variety of methods for communicating and obtaining information using theInternet Protocol; Phone calls Broadcast video Data access Email Audio streaming Data exchange Texting Video conferencing Software distribution Live chat Audio conferencing Web access Still pictures Web conferencing Video streaming FaxAll of these communications can be performed over more than one type of device (PC, cell phone, deskphone) from several locations (office, home or on the move).Still lacking is true coordination and integration between these technologies. In fact, despite the promiseof simplifying communications with these new options, the sheer number of them actually addscomplexity as users must maintain each of them and keep track of more contact information for theirassociates.And despite their common use of IP, many types of telecommunications require separate sub-networkswithin the State Network (and the Internet) to support them. This is because the technologies they use,beyond IP itself, are so unique that transporting them requires special handling and software. At eitherend of many communications, specialized equipment is also still often needed.Finally, the promised capabilities and cost savings from these technologies often fall short because theinfrastructure is not in place to deliver all of them. Voice over IP (VoIP) in particular is oftenimplemented with the belief it will deliver local and long distance phone service savings. But becauseVoIP calls must often traverse traditional phone networks (known as the Public Switched TelephoneNetwork; PSTN) to complete a call, the savings are often less than expected.Convergence using SIP and IMS To fully derive the benefits of emerging IP telecommunications, SUNCOM is now planning to convergethem through new services using Session Initiation Protocol (SIP) and IP Multimedia Subsystems (IMS).Session Initiation Protocol (SIP) Unlike today’s networks which merely connect devices together (by phone number, Internet address, etc.),SIP enabled networks will know who has the devices, user locations, what the devices can do, whetherthey are active, and the user’s preferred and available methods (voice, text, video, etc.). Communicatingwill entail picking a person and a method without needing to know a phone number, address, location oreven which device is being used by the other party. The network will verify that the chosen method ispossible and make it happen.IP Multimedia Subsystems (IMS) SIP enabled networks can also talk, text, or display video using one technology; IP MultimediaSubsystems (IMS). This will eliminate the need for specialized sub-networks within the State NetworkPrinted 2/4/2011 9:39 AM  Page 50 
  • 51. DivTel Business Model and Value 2.0 (and ultimately the Internet) leading to greater efficiencies and more standardized support. It will alsoreduce proprietary characteristics of devices when they use this universal standard. And devices will beable to hand-off communication sessions on the fly, e.g. a phone call started on desk phone or PC can beswitched to a cell phone during the conversation without the other party being aware of the change.SIP/IMS from the User’s Perspective Basic software on every device will make this simple for users. After turning a device on for the firsttime, the network will ask who is using it. If that person is already known to the network, the device willbe registered as just one more that the user has. Simple menus on the device will allow picking preferredmethods of communicating and deactivating them at any time.When connecting to others, contact lists of users will appear with simple icons representing thecommunication methods they can and are willing to receive. User groups can also be chosen to receivebroadcasted messages. While it may be possible for a user to know phone numbers, addresses, types ofdevices, etc. of his/her associates, this information will become mostly irrelevant to users because thenetwork knows what is necessary to make the connection. This is why such networks are described as“people-centric” rather than “device-centric”.SIPS/IMS Convergence for the Enterprise and Beyond Implementing a SIP/IMS network cannot be effective if it is piecemeal. The servers that hold informationabout people, and their devices, preferences, locations and availability must be centralized and accessibleto everyone.87 This is particularly true given the growing mobility of users.But these benefits reach beyond the enterprise when connected to other SIP networks. Thus thetelecommunications industry is planning for standards of federation between enterprises that will extendthe SIP/IMS functionality to the broader Internet. Enterprise networks like SUNCOM will be a necessaryfor early access to the benefits of these technologies.Voice over IP (VoIP) VoIP is a means of placing telephone calls using IP. Aside from sharing circuits with computers toeliminate duplication, VoIP gives users more control and functionality while the cost of phone servicescan be reduced. It is widely expected to replace most traditional business telephony in the next five years.In recognition of the future value of VoIP, several state agencies independently invested in it. But to date,there has been little coordination to derive the greatest dividends. The only purchasing leverage agencieshad came through a common State Term Contract for a complex array of equipment. Some agencies paid“early adopter” prices and experienced costly instability from being on the edge. The savings on localphone service were reduced by the cost of equipment and software maintenance required with premiseVoIP systems. Promises of lower cost long distance have been largely unattainable without a numberingplan and enterprise coordination with providers.SUNCOM has implemented two other major VoIP initiatives to counter these conditions; STEPS andVoIP Centrex.Printed 2/4/2011 9:39 AM  Page 51 
  • 52. DivTel Business Model and Value 2.0 STEPS The “SUNCOM Telecommunications Equipment on-Premise Services” (STEPS) was a first-timeSUNCOM effort to offer a service that focused on telephone switching equipment known as PrivateBranch Exchanges (PBXs) at the customer’s site. PBXs have been around from near the beginning oftelephone services88 but modern PBXs almost exclusively provide VoIP.89 They move some functionsfrom the telephone company to the customer’s site thus allowing customers to share phone circuitsbetween multiple telephones (to reduce costs). PBXs also give customers more control and data related totelephone activity which is particularly useful in call-centers.Agencies’ PBX purchases have always been subject to SUNCOM review because they are a part of thestate network.90 When SUNCOM was asked to approve them in accordance with 60FF, F.A.C.,91 it had tobalance unique customer needs with its charges to ensure interoperability and economy. Clearly, somePBX purchases are warranted based upon unique requirements.But the analysis and deliberation cause some delays and tension between SUNCOM and its customers.SUNCOM was often pressured to approve these purchases without complete and transparent examination,a full understanding to the operational need, or opportunities to consider alternatives. As a result,agencies often do not get the best value due to technical complexity, inexperience and lack of effectivecompetition. Some communications standards were also lost and monitoring of service quality waslacking.SUNCOM’s solution was to make PBXs a part of its portfolio of services through partners such as Avaya,Cisco and Siemens. This made SUNCOM’s expertise, purchasing leverage, economies of scale andstandardization inherent parts of PBX purchases. SUNCOM has successfully brought more transparencyand competition, and more effectively steered customers to solutions that were optimized to their needswithout unnecessary spending.SUNCOM however, has several pending concerns about its STEPS service that should be addressedthrough budgetary and contractual improvements. SUNCOM concerns about STEPS include; 1) Because STEPS was SUNCOM’s first effort to offer services through premise hardware solutions and partnered with the Division of Purchasing (which has a different business model), negotiations and the contract itself became difficult, complex and ultimately lacked some optimal provisions for the state. The price sheet had to be significantly revamped and terms were not effectively geared towards the intended business model. 2) A related concern comes from government accounting restrictions associated with hardware. SUNCOM does not have the right spending authority to enter into agreements with vendors and customers for installment purchases, thus is seeking additional authority in the Consolidated Equipment Financing (CEFP) appropriation category which will allow SUNCOM to partner with the Department of Financial Services for financing. This would simplify the process for customers, vendors and SUNCOM, guide customers towards use of the state’s CEFP, and allow staff to focus on technical and cost savings priorities.Printed 2/4/2011 9:39 AM  Page 52 
  • 53. DivTel Business Model and Value 2.0 Despite these concerns about STEPS, it has been very successful at producing savings by creating newtransparent competition between PBX vendors and by involving SUNCOM staff earlier in the process ofagency PBX purchases to ensure the review of experts in the process.VoIP Centrex SUNCOM also now offers a VoIP alternative to traditional phone service through its telecommunicationscompany partners. AT&T, CenturyLink and Verizon each offer their versions of VoIP Centrex92, whichprovides standard features of traditional local phone service and some benefits from VoIP at lower cost.This is a VoIP alternative for customers that do not need PBX equipment on site and want to avoid termpurchase/rental commitments because VoIP Centrex is month-to-month.Convergence of Wireless Today, many state employees who use cell phones on the job also have desktop phones. As Office ofProgram Policy And Government Accountability (OPPAGA) pointed out in 2009, one of these twoservices is redundant for some employees. A common approach is to eliminate the cell phone since it isoften viewed as discretionary. DivTel suggests however, that the desk phone may be the better candidatefor elimination given the staff productivity power that cell phones provide. At a minimum, the twotechnologies should be integrated.As the SIP and IMS technologies described above mature, they will deliver the greatest dividends for amobile workforce using the most modern tools and better integrate land-line and mobile communications.The release of SUNCOM’s mobile services procurement in September of 2010 creates not only anopportunity for this kind of convergence, but considerable cost savings as well.Today, Florida government buys mobile services through several different contracts. SUNCOM providesa small portion through its smart phone and air card services. Non-SUNCOM government consumers usethe State Term Contract established by DMS’ Division of Purchasing or the Western States ContractingAlliance contract. As a result, Florida’s purchasing leverage is diluted, there is no central repository ofspending and usage information, and there is limited cost accounting.7Mobile telecommunications services also have unrealized potential to leverage the advantages of thePooled Services approach shown in Figure 6 on page 31. Today, mobile services are bought throughIsolated Purchases, the State Term Contract and Purchased Blocks as depicted in Figure 6.Using State Term Contract pricing as an example, customers who buy unlimited plans pay $45 monthly.This means that customers pay $45 per minute if they use only one minute in a month as shown in Figure12 below. As they use more minutes in a month, they pay less per minute until ultimately matching theState Term Contract piecemeal rate of ¢5.2. That breakeven point is 866 minutes monthly. This means inany month, if customers use less than the breakeven amount they are effectively wasting minutes becausethey could have paid less at the piecemeal rate. On average, State Term Contract customers use 200minutes.93 So, if they bought the unlimited plan, they paid 333% more ($34.60) than necessary to meettheir needs.If the State of Florida were to buy a large block for the whole enterprise and resell them internally from apool, the excess minutes normally wasted by each customer using a plan would be shared with customersPrinted 2/4/2011 9:39 AM  Page 53 
  • 54. DivTel Business Model and Value 2.0 needing more than usual. And by using the Law of Large Numbers24, the state could minimize unusedminutes at the enterprise level. $20.000 $1.000 $0.050 $0.003 1004 1063 1122 1181 1240 1299 1358 1417 1476 1535 1594 1653 1712 1771 1830 1889 1948 60 119 178 237 296 355 414 473 532 591 650 709 768 827 886 945 1 Piecemeal Unlimited PlanFIGURE 12Through this procurement and use of OaSIS, SUNCOM expects to implement a contract akin to a “familyplan” for all enterprise mobile charges whereby it will commit to buying blocks of minutes each monthand resell them incrementally within the enterprise to achieve significant savings and provide usageaccountability that is absent from the current environment.This contract will also facilitate the convergence offered through an enterprise network using SIP, IMS94,Global Positioning, software applications, data distribution, and integration with other state resourceswhich should bring significant improvements in the efficiency and effectiveness of Florida governmentemployees using mobile devices.  Printed 2/4/2011 9:39 AM  Page 54 
  • 55. DivTel Business Model and Value 2.0 911 Modernization DivTel is engaging in a series of 911 modernization initiatives in the coming years.  Next Generation 911 Grant Assistance – DivTel and the E911 Board have coordinated assistance for county implementation and funding of a Next Generation-911 (NG911) system migration. The advancements in E911 systems involve improving the 911 equipment, circuits and routing to deliver 911 calls or messages to answering centers for the appropriate responding agency.95  Enhance 911 Act Grant Initiatives96 - With funding from a federal matching grant, the Bureau is initiating four projects to improve and maintain enhanced 911 in the state.  Statewide Routing of Enhanced 911 Calls - This will enable the routing of enhanced 911 calls between different public safety answering points, throughout the state. This service will leverage the SUNCOM Network for secure and reliable connections.  Statewide e-Training Program for 911 Call Takers - This will provide call takers, throughout the state with web-based specialized training on 911 equipment, methods, techniques and related call taking functions.  Regional E911 Mapping Service for Central Florida - This will enable regional mapping services for central Florida counties, to accurately display a caller’s location.  Regional E911 Backup PSAP for Central Florida - This will provide equipment needed for a central Florida regional 911 backup center, for continuous operations of enhanced 911 services during a catastrophic event.SLERS Coverage Improvements Although the SLERS system meets the contracted 98% of mobile coverage, and the 98% portablecoverage in defined urban areas, SLERS does not meet our state law enforcement agency’s needs whenofficers leave their vehicles. In particular, there are many areas of the state where officers who leave theirpolice vehicles (mobile radios) have no portable (handheld or on foot) radio communications. Currently,SLERS coverage in Florida still leaves coverage gaps of approximately 1,160 square miles with no mobile(vehicle) radio coverage and 11,250 square miles with no portable (handheld) radio coverage. The areaswith no portable coverage are a serious officer and public safety concern.The Bureau plans to address this concern by adding sites (radio-tower facilities) and base stations tooperate on newly licensed channels where sufficient frequencies are available. The Bureau moved itsaircraft subsystem to a new technology platform in the 700 MHz band to free up the 800 MHz channelspreviously supporting the aircraft subsystem. This type of coverage enhancement only minimallyaddresses the coverage need, however, due to the limited number of frequencies made available. Amigration to the Project 25 open standards-based technology (see below) for the entire system wouldallow use of a reallocated set of 700 MHz frequencies reserved for state use and allow considerableprogress to improving portable coverage.Printed 2/4/2011 9:39 AM  Page 55 
  • 56. DivTel Business Model and Value 2.0 Need for Telecommunications Convergence for Public Safety Perhaps the one area of government telecommunications that has benefited the least from IP technologyconvergence has been public safety. Because public safety organizations must balance the need foruncluttered internal communications against the need to communicate with other organizations,interoperability has been a difficult challenge.The historical solution to providing interoperability between organizations came from the assignment ofdedicated frequencies for that purpose. These “mutual aid channels” use analog mode only to avoidproprietary limitations of current digital technologies.The special security and availability requirements of the sector, and the limited spectrum dedicated to it,also make it slow to adopt open standards like IP. Thus, the availability of features that are comparable tothe cell phone industry, like broadband data access, texting, video streaming, etc., are largely absent frompublic safety radios. And the solutions IP has developed to balance security with interoperability havehistorically been unavailable.A public safety standard known as P25 using IP has been developed over the past 30 years and is nowbecoming commonly adopted among local law enforcement agencies throughout Florida. P25 brings thepromise of greater transmission efficiency and effectiveness, interoperability for voice communicationsbetween organizations using the P25 standard, and the hope of multivendor competition.DivTel has actively participated in the development of the Project 25 standard by initiating a pilotmigration of SLERS to Project 25. DivTel had planned for eventual migration all of SLERS to the Project25 standard when a sufficient funding source is identified. This would give SLERS improvedinteroperability and enable significant cost avoidance in the future. But because P25 is a narrowbandtechnology thus primarily designed for voice; it will never be able to provide robust data access.Florida has an additional impediment to major changes like P25 because it is committed to ten more yearson a 20 year State Law Enforcement Radio System (SLERS) contract. The SLERS contractor providespublic safety radio communications services through its own infrastructure and receives the bulk ofrevenues from $1 surcharge on license tags for vehicles97 and boats.98 The state has funds to enhance thenetwork through a $3 fee added to fines for moving violations99 that it uses to expand geographiccoverage, improve reliability and administer SLERS. But there is currently no funding source largeenough or contractual leverage sufficient to upgrade the core of SLERS to P25 or meet the impendingnecessity to replace radio handsets.100Convergence Opportunities for Public Safety Simultaneously, the FCC is fostering significant changes by reserving new wireless spectrum for publicsafety telecommunications using Long Term Evolution (LTE) standards for public safety mobilecommunications. LTE consists of a series of strategies like SIP and IMS for mobile services broadband(see Convergence using SIP and IMS on page 50) developed by wireless providers for the consumermarket. This will render public safety telecommunications to be similar to consumer mobiletelecommunications, more competitive and feature rich.101Printed 2/4/2011 9:39 AM  Page 56 
  • 57. DivTel Business Model and Value 2.0 As of this writing, three bills are now being considered by Congress to put $10 billion in grants behinddevelopment of this technology for public safety.Support from land-line networks of the caliber of SUNCOM’s MFN102 will be a prerequisite toimplementation of LTE for public safety. This is another example of technology convergence. Today,few local governments that use public safety radio networks outside of SLERS have networks that arecomparable to MFN.Implementing such an approach could give public safety officials communications tools that are as goodas those now available to the average consumer, but with all the advantages of dedicated bandwidth,superior network reliability and hardened devices, etc. Bringing technologies like SIP and IMS to publicsafety will allow easily connecting to individuals and groups, inside or outside dedicated networks, usinga variety of media. With comparable changes to 911 systems, it will be possible with IMS to pass text,pictures and video from citizens to officers in the field. By leveraging the broader marketplacetechnology investments, public safety will be better equipped to save lives and prevent crimes.Combining this approach with the proposed model for mobile services (see “Convergence of Wireless” onpage 53) where clients manage access and payments, could also broaden the funding sources for publicsafety, extend participation to many more local governments and provide a means for better costallocation and accounting. Today, public safety networks are funded through the “Single Funder” modelas depicted in Figure 6 on page 31.103 By using SUNCOM and OaSIS mechanisms for providing services,DivTel will be able to move the model to better options like “Purchased Blocks”, “Proportional Shares”or “Metered Services”.Printed 2/4/2011 9:39 AM  Page 57 
  • 58. DivTel Business Model and Value 2.0 Network Convergence The State of Florida has three major statewide data communications networks; SUNCOM’s MyFloridaNetwork (MFN), Florida LambdaRail (FLR) and the Department of Transportation’s (DOT’s) IntelligentTransportation System (ITS). Many regional/local governments also have separate networks.So within the State of Florida, there are many distinct public sector networks with some overlap betweenthem. As such, they duplicate some infrastructure and operational expenditures.Intelligent Transportation System (ITS) The DOT ITS network primarily consists of fiber laid on highway right-of-ways throughout the state. ITSis designed to provide communications for “Computerized traffic systems and control devices… for thepurpose of motor vehicle traffic control and surveillance…”.104However, because ITS fiber was installed with a significant portion of Federal DOT funds (up to 90%) fortransportation purposes, it has historically been unavailable to SUNCOM or for other governmentpurposes.105 DOT’s ITS generally uses few strands of the 96 in the ground and little of the conduit. Inlight of available technologies to optimize fiber networks, this means the State of Florida might have106enormous unused backbone107 broadband capacity.108DMS saw DOT’s unused ITS capacity as a potentially inexpensive option to buying from the privatesector. Thus, DMS has made information requests to Florida DOT to further understand the potential ofthe ITS infrastructure and sought to collaborate. DMS has also sought relief from Federal DOT’s ITS userestrictions in a 2009 request to the Federal Highway Administration and the FCC.109DMS and Florida DOT also agreed to develop another joint proposal to the Federal HighwayAdministration for relief once the current Government Broadband Study being conducted by theUniversity of Florida concludes in first quarter of 2011 (see “Broadband Strategic Planning” on page 62).Finally, DMS has been advising the National Telecommunications and Information Administration(NTIA) to address the potential use of state DOT ITS networks nationwide. As of this writing, it appearsthat NTIA leaders are preparing to approach the Federal DOT about expanding the use of DOT fiber tomore general broadband purposes.Florida LambdaRail (FLR) FLR is a private not-for-profit organization providing a data communications network to Florida’sUniversity System. Its network is comprised of dedicated circuits. FLR was formed in 2005 as a researchnetwork with access to Internet 2110 and is governed by a board of university representatives. In additionfor paying to use FLR’s network, universities pay dues to the organization.When FLR was formed, state universities were subject to the statutory provisions of subsection282.103(3) F.S., which required all state agencies to use SUNCOM. That provision was changed111 in the2010 Legislative Session through a bill that gave universities increased autonomy in many areas.112Printed 2/4/2011 9:39 AM  Page 58 
  • 59. DivTel Business Model and Value 2.0 Despite being established to foster university research, FLR now provides operational day-to-day datacommunications for the universities as well. Without the same kind of statutory restrictions that guideSUNCOM, FLR has more flexibility to broker deals with public and private partners and can evencompete with the private sector. FLR has in fact expanded beyond serving universities by strikingagreements with local governments, approached some state agencies and have private sector customers.In order to effectively recover costs from this expanding base of customers, FLR is establishing billingand ordering systems much like SUNCOM’s.Given that the universities chose to develop FLR rather than use SUNCOM services, SUNCOM assumedthat FLR might be able provide services that are cheaper than SUNCOM vendors. SUNCOM also soughtInternet 2 access for its customers through FLR which is the only entity in Florida that can provide it.Thus, SUNCOM has reached out to FLR since FLR’s inception in 2007 to collaborate or establish apartnership. In December 2010, FLR contacted SUNCOM to discuss collaboration and offered to provideInternet 2 access to SUNCOM customers.How Florida’s Telecommunications Assets could be Optimized Clearly the existence of three major state telecommunications networks duplicate infrastructureinvestment and operational expenses, dilute aggregate state purchasing leverage and hamperscollaborative opportunities between universities and state agencies. SUNCOM for example pays for theuse of private sector fiber while public fiber goes unused and underutilized.SUNCOM will continue its efforts to foster collaboration and partnerships with DOT and FLR. Butfailing agreement, a broader public policy approach should be considered to combine these networkservices under a common business model.113 Such an aggregated model should apply principles like thosedescribed in this paper with particular consideration of three important SUNCOM characteristics: 1. SUNCOM provides a comprehensive line of telecommunications services. Given the convergence of these technologies, i.e. where voice, video, data, landline and wireless applications will become better integrated, a comprehensive approach to consolidation makes the most sense. 2. SUNCOM’s 30 year old processes for cost allocation, billing, order processing and inventory have been a staple for savings and accountability. Some aspects of those processes should change little; like cost allocation principles and cost recovery mechanisms. Aspects that should be modernized, like tools for billing, inventory and order processing are being upgraded today with OaSIS. 3. SUNCOM’s statutory mandate to achieve savings and culture of transparency and accountability should be extended to an aggregated approach. SUNCOM was created by the Legislature in 1975, its budget is appropriated through the GAA annually and its duties are periodically modified through law. SUNCOM staff have no competing mandates with a commitment to serving public entities with robust telecommunications at the lowest possible cost. And SUNCOM’s contracts and billing system have been reliable sources to policy makers for detailed information about the state’s telecommunications usage and costs that are within SUNCOM’s purview.The Florida Health Information Network (FHIN) is now a fourth major data network sponsored by a stateagency. The Agency for Health Care Administration (AHCA) included networking services as a part ofits procurement of FHIN’s centralized database and software for exchanging data with and between healthPrinted 2/4/2011 9:39 AM  Page 59 
  • 60. DivTel Business Model and Value 2.0 care providers. In anticipation of this, DivTel sought legislation for two years to give SUNCOM theauthority to sell services to rural health care providers so FHIN could be folded into MFN for greatereconomies of scale. DivTel did not succeed thus FHIN is emerging as a fourth separate large network.Local and Regional Governments Local governments are listed within the statutes defining SUNCOM’s potential customers. This was doneto both offer the savings SUNCOM can deliver to these public entities and to increase SUNCOM’seconomies of scale. SUNCOM has had limited success given that 16% of its revenue comes from localgovernments.Larger more metropolitan local governments can achieve some economies of scale on their own. Urbanareas also have a distinct advantage because dense populations are easier and cheaper to serve. Manylocal governments are also able to use their revenue sources and rights of way to lay circuits rather thanrely upon SUNCOM or private companies. Finally, with the broadband stimulus initiative, local andregional entities now have access to grants that they can directly use to build broadband infrastructure.This poses a dilemma for SUNCOM as its customer base is eroded by the independent ability of localgovernments to build networks. Thus, SUNCOM has initiated a new strategic approach to local andregional entities whereby the relationships will evolve away from provider/customer to becomepartnerships.The telecommunications assets that local governments hold are often incomplete with geographic gaps intheir networks where laying fiber is simply too expensive. They also often lack a broad support structurefor maintaining services. In some cases, they outsource services to “light” the fiber. In other cases, staffturnover can leave a local entity with deficient support.SUNCOM could bring its contracted service support from vendors to these partnerships in exchange foruse of local infrastructure to be a part of the SUNCOM network. Through SUNCOM’s cost allocation,billing and asset management processes, equitable exchanges and accountability can be assured. Bycombining SUNCOM’s management capabilities, economies of scale and vendor relations with localinfrastructure, the State of Florida may be able reduce costs while increasing the reliability andcapabilities of Florida’s public sector networks.Consistent with this approach, DivTel is exploring options to incorporate local government networks in itsmodel. An example of an emerging partnership is with the Regional Planning Councils that arecollaborating with DivTel to develop a grassroots based regional broadband planning capability.Extending Customer Empowerment In addition to the new user friendly and robust interfaces for SUNCOM invoicing, inventory and orderprocessing, another powerful and innovative feature of OASIS will come from the open and shared designfor which it was named.Historically, SUNCOM’s larger customers downloaded billing data for use in custom built audit andaccounting systems. Those systems are often duplicated at various agencies as each has similar businessneeds.Printed 2/4/2011 9:39 AM  Page 60 
  • 61. DivTel Business Model and Value 2.0 OaSIS will provide a library to house these systems where they will be shared. Customers will beencouraged to run them in the SUNCOM computing environment rather than download data. They willalso be able to also use standardized software modules (known as Application Program Interfaces; APIs)written by SUNCOM staff to simplify development.Through access to shared software in OaSIS, customers can leverage the work of the whole enterpriserather than their own limited staff. They can incrementally improve upon software written by others andturn those improvements back for use by the consortium. Small agencies that previously lacked theresources to build such audit and accounting software will attain immediate access to tools they couldnever build alone.Enhancing Florida’ Economic Competitiveness with Broadband DMS’s Broadband Statutory Mandate The 2009 Legislature enacted section 364.0135 F.S.,114 designating DMS as the lead Agency to carry outstatutory directives to promote broadband deployment based upon a finding that “…broadband Internetservice is critical to the economic development and is beneficial for libraries, schools, colleges anduniversities, health care providers, and community organizations.” Among its duties, DMS is to“Encourage the use of broadband Internet service … through grant programs”.Section 364.0135 F.S., included many provisions that correspond with the Broadband Data ImprovementAct (BDIA) passed by Congress in 2008. The Act emphasizes that; the Federal Government shouldencourage state efforts to improve the quality and usefulness of broadband data and support public/privatepartnerships. The Act also asserted that continued deployment of broadband technology is vital tomaintaining competitiveness and job growth. The Act establishes the State Broadband Data DevelopmentGrant Program (SBDD) which is the current funding source for DMS efforts directed by 364.0135 F.S.General Strategy Upon receiving the assignment as the lead broadband agency, DivTel began developing an approachdesigned to leverage the State of Florida as an anchor tenant for new broadband resources. This wouldimprove the viability of any effort to extend broadband to underserved areas by establishing a reliablerevenue stream to providers.Consensus Building and Partnerships In June of 2009, DMS established a Broadband Workgroup to include entities that were named in statuteand other interested parties to participate in development of broadband strategies for Florida. Themembership represented six state agencies115 and Enterprise Florida. The workgroup held weekly publicmeetings to identify broadband plans, projects and needs across the state. The workgroup focused onapproaches consistent with three federal broadband grant programs after they were announced.Printed 2/4/2011 9:39 AM  Page 61 
  • 62. DivTel Business Model and Value 2.0 Per its designation in section 364.0135 F.S., DMS applied to the State Broadband Data and Development(SBDD) program.116 DMS also provided support to the three Florida Rural Areas of Critical EconomicConcern (RACEC) who applied for and were awarded a total of $54 million through the BroadbandTechnology Opportunities Program (BTOP) program.117This led to promising partnerships for the whereby RACECs are collaborating with DMS to develop agrassroots based regional broadband planning capability. DMS is also working with the Department ofState to assess the connectivity capabilities and need for increased library participation in the federal E-rate program.DMS continues coordinating the consortium in broadband efforts.Mapping Among the requirements of the law, DMS was to “Conduct a needs assessment of broadband Internetservice … to develop geographical information system maps”. Consistent with this requirement, DMSobtained funding through a Federal grant designed for the purpose of national and broadband datacollection and state mapping and entered into a contract with Connected Nations to deliver and maintainthe map for two years. A second grant will continue maintenance of the map through three additionalyears.Broadband Strategic Planning In accordance with its statutory assignment, DivTel secured grant funds to assist in the development of thestate’s strategic broadband plan. Development of the plan was awarded to the Public Utilities ResearchCenter (PURC) at the University of Florida in June 2010.The plan will include comprehensive research and analysis of existing broadband resources and operationsat state and local levels, as well as current policy, legislation and contracts affecting optimal resourceusage.As Florida policymakers face a multi-billion dollar revenue shortfall, this study will providerecommendations on how Florida can get the most out of its broadband resources through adjustments topolicies, standards and broadband investment priorities.The planning study will: 1. Research government broadband services, infrastructure, assets and issues in Florida today 2. Research current and future government broadband needs for effective and efficient use of infrastructure and assets 3. Analyze and assess current government approaches to manage assets and results 4. Recommendations to address government needs, gaps and issuesThe Plan’s scope will consider:  Assessment of the various public sector broadband infrastructure and service offerings for opportunities to aggregate efficiency improvements.  Identification of current and future public sector broadband requirements and strategies for satisfying them in the most effective and efficient manner.Printed 2/4/2011 9:39 AM  Page 62 
  • 63. DivTel Business Model and Value 2.0   The blend of these public sector (anchor institutions) opportunities with private sector broadband infrastructure enhancements.  Current broadband network services, technologies and operations provided by government.  Future broadband requirements of government with focus on public safety, healthcare education.  Current broadband policy and legislation.  Current government broadband contracts and pricing.  Broadband mapping coordination and facilitation needs with Florida Geographic Information Systems.  Florida participation in federal funding programs such as the Universal Service Funded E-rate Program.  Current public private partnerships in Florida.  Current broadband availability and adoption by government in Florida.  Current government organization and governance of broadband services and technology.  Current disparities in broadband adoption and use by government.  Florida grassroots organizations needs that impact broadband availability and adoption.E‐rate Assistance to Schools and Libraries Consistent with the finding in the new law that “…broadband Internet service is beneficial for libraries,schools…” DMS sought, and was awarded through its second Federal award, to enhance Florida’s E-rateparticipation. E-rate is a program through which schools and libraries can obtain telecommunicationssubsidies covering as much as 90% of costs. Most of the K-12 schools and some libraries have been E-rated customers of DMS since the beginning of the program.Florida’s DOE historically provided assistance to Florida schools to help them apply and manage thesecomplex grants. But DOE discontinued doing so in the first quarter of FY 2010/11. DMS has attemptedfill this void using engineering and billing staff, neither of which are E-rate experts, and both of whichhave competing duties.DMS efforts to assist schools and libraries will be partially funded through the second grant and a DMSmatch. With the grant, DMS will be able to dedicate resources to the effort, as DOE did, so DMS canachieve the necessary level of expertise and have the time to give E-rate customers the help needed to besuccessful.Printed 2/4/2011 9:39 AM  Page 63 
  • 64. DivTel Business Model and Value 2.0 Table of Attachments  Attachment 1: What Changed from Previous Version ..................................................................65 Attachment 2: Supplemental Detailed Table of Contents..............................................................66 Attachment 3: Causes of 2009/2010 Refund/Rebate .....................................................................71 Attachment 4: Section 364.0135 F.S., - Promotion of Broadband Deployment ...........................76 Attachment 5: Agreement between DOT and Martin County .......................................................78 Attachment 6: Letter to FCC Seeking Access to ITS Fiber ...........................................................82 Attachment 7: Companion to Figure 6: Cost Recovery Models for Enterprise Services .............89 Attachment 8: Companion to Figure 7: The Simplicity/Savings Trade-off .................................94 Printed 2/4/2011 9:39 AM  Page 64 
  • 65. Attachment 1: What Changed from Previous Version  Attachment 1 What Changed from Previous VersionVersion 2.0 (Latest) 1. Attachment 1 (“What Changed from Previous Version”) was added to tell readers who have read previous versions what is new about the latest version. This will allow them to determine if the change is meaningful to them and, if so, quickly focus on the new material without having to reread the rest of the document. 2. A new section titled “Unbillable Support of the Florida Government Enterprise” (page 20) was added describing several DivTel activities that have no specific benefiting customer that can be billed and are not specifically funded by the General Appropriations Act. 3. Attachment 7, a “Companion to Figure 6: Cost Recovery Models for Enterprise Services was added. It explains the rationale behind the claims made in Figure 6. 4. A few adjustments were made to Figure 6. The most salient change was the replacement of the category “Self Funded Investment” with “Buffered Transition Costs”. Self-funding is primarily a function of buying from the private sector or making capital investments from cash reserves in a trust fund, thus not necessarily driven by the characteristics of the seven purchasing methods shown in the chart. The ability to buffer and/or foster change is a function of those methods however, given that an internal provider can use invoicing as a tool of transition and is better equipped to do so when billing is detailed. 5. Figure 7 was modified to better convey its messages by changing the y axis to “Simplicity” rather than “Complexity” (as it previously showed). This inversion of the y axis makes both axes consistent in meaning as outward movement on them conveys desirable characteristics of the purchasing method. Distinctions were also inserted for enterprise resource and billing characteristics that are indicative of simplicity and savings conditions. The figure also now distinguishes for broad the three categories; “Enterprise Resources”, “Internal Billing” and “Metered Billing” (and other). 6. Attachment 8, a “Companion to Figure 7: The Simplicity/Savings Trade-off ” was added. It explains the rationale behind the claims made in Figure 7. 7. Endnote 113 was added addressing suggestions that a rebid of MFN would provide significant savings. 8. Four simple ways that SUNCOM saves money were specified on page 23. 9. SLERS coverage maps were added in Figure 11 on page 44. 10. Grammar and readability corrections throughout the document.Version 1.1  Grammar and readability corrections throughout the document.Version 1.0  Release of the entire document.Printed 2/4/2011 9:39 AM  Page 65 
  • 66. Attachment 2: Supplemental Detailed Table of Contents Attachment 2 Supplemental Detailed Table of ContentsTable of Contents .......................................................................................................................................................... 2 Executive Summary....................................................................................................................................................... 4 General Document Layout ............................................................................................................................................ 6 SUNCOM Telecommunications Services ..................................................................................................................... 8  SUNCOM’s Functions .............................................................................................................................................. 8  History ................................................................................................................................................................... 8  Early Local Phone Service Consolidation and Establishment of SUNCOM .................................... 8  Establishment of the Dedicated Backbone ........................................................................................ 8  Data Communications are Added ...................................................................................................... 8  The Internet Revolution ..................................................................................................................... 8  State Technology Office Setback....................................................................................................... 9  MyFlorida Network: The MPLS Service........................................................................................... 9  Dedicated Backbone Retired.............................................................................................................. 9  SUNCOM’s Thriving Contribution ................................................................................................... 9  Diminished School Support ............................................................................................................. 10  Order Processing, Billing and Inventory Innovation ....................................................................... 10  A Complete Mobile Telecommunications Offering ........................................................................ 11  Federal Support for Expanding Broadband ..................................................................................... 11  Services ............................................................................................................................................................... 14  Abbreviated Service List.................................................................................................................. 14  Detailed Service List ........................................................................................................................ 14  Voice ................................................................................................................................................ 14  Local Phone Service (Centrex) .................................................................................................... 14  Long Distance Phone Services..................................................................................................... 15  Toll-Free Phone Services ............................................................................................................. 15  STEPS .......................................................................................................................................... 15  Data .................................................................................................................................................. 15  MyFloridaNet (MFN) .................................................................................................................. 15  Metropolitan Area Network (GMAN) ......................................................................................... 15  Remote Broadband Services (RBS) ............................................................................................. 16  Florida Internet Resource Network (FIRN) ................................................................................. 16  Southwood Shared Resource Center (SSRC) Ports ..................................................................... 16  Other Data Services ..................................................................................................................... 16  Conferencing .................................................................................................................................... 17  Reservationless Voice Conference Services ................................................................................ 17  Video Conference Services .......................................................................................................... 17  Web Conference services ............................................................................................................. 17  Infrastructure .................................................................................................................................... 17  Telecommunications Infrastructure Project Services (TIPS) ...................................................... 17  Mobile .............................................................................................................................................. 17  Wireless Data Services ................................................................................................................ 17 Printed 2/4/2011 9:39 AM  Page 66 
  • 67. Attachment 2: Supplemental Detailed Table of Contents Smart Phones ............................................................................................................................... 17  SUNCOM Revenue by Services ...................................................................................................... 18  Customers ............................................................................................................................................................ 18  SUNCOM Revenue by Customer Type........................................................................................... 19  SUNCOM Revenue from State Agency Customers ........................................................................ 19  Standards ............................................................................................................................................................. 20  Unbillable Support of the Florida Government Enterprise.................................................................................. 20  State Directory Information ............................................................................................................. 20  State Emergency Services Telecommunications (ESF-2) ............................................................... 20  Southwood Shared Resource Center Support .................................................................................. 20  School District Grant Assistance ..................................................................................................... 21  Expanding Broadband Access ......................................................................................................... 21  Data Center Consolidation Project................................................................................................... 22  Data Center Circuit Consolidation Project ...................................................................................... 22  SUNCOM’s Purpose ............................................................................................................................................... 23  Enterprise Cost Savings ....................................................................................................................................... 23  Cost Reductions verses Cost Avoidance.......................................................................................... 23  Cost Reductions ........................................................................................................................... 23  Cost Avoidance ............................................................................................................................ 23  Cost Savings Mechanisms ............................................................................................................... 24  Volume Discounts ........................................................................................................................ 24  Pooling ......................................................................................................................................... 24  Economies of Scale ...................................................................................................................... 25  Vendor Risk Mitigation ............................................................................................................... 25  Specialization and Expertise ........................................................................................................ 26  Interoperability .................................................................................................................................................... 26  Security ................................................................................................................................................................ 26  Accountability, Customer Empowerment and Stakeholder Transparency .......................................................... 26  Catalyst for Technological Transition ................................................................................................................. 27  Telecommunications Strategic Planning.......................................................................................... 27  Self Funded Investments .................................................................................................................. 27  Buffering Costs Outside the Mainstream ......................................................................................... 27  SUNCOM’s Approach and Principles..................................................................................................................... 28  Establishing Standards......................................................................................................................................... 28  Service Normalization ..................................................................................................................... 28  Florida Statutes and Florida Administrative Code (“Rules”) .......................................................... 28  Developing Services ............................................................................................................................................ 28  Two Ways for Internal Providers to Deliver Services ..................................................................... 28  SUNCOM’S Cost Distribution .................................................................................................... 29  Service Development Criteria .......................................................................................................... 30  Cost Accounting .................................................................................................................................................. 30 Printed 2/4/2011 9:39 AM  Page 67 
  • 68. Attachment 2: Supplemental Detailed Table of Contents Seven Ways to Buy Services ........................................................................................................... 30  Cost Recovery Models for Enterprise Services ........................................................................... 31  The Simplicity/Savings Trade-off.................................................................................................... 32  The Limits on Imitating the Private Sector ...................................................................................... 32  CAREIVA Principles of Product Design and Chargeback .............................................................. 33  Designing SUNCOM Services using CAREIVA ............................................................................ 34  Redesigning Pooled Services ....................................................................................................... 34  Design of Non-pooled Services ................................................................................................... 35  Common Mistakes in Chargeback Design ................................................................................... 35  Cost Allocation and Price Setting .................................................................................................... 37  The Cost-Plus Model ................................................................................................................... 37  Cross-Subsidies Used to Fund Technological Change ................................................................ 37  Order Processing, Inventory and Billing ............................................................................................................. 38 Public Safety Telecommunications ............................................................................................................................. 39  Purpose of the Bureau of Public Safety Telecommunications ................................................................................ 39  Statutory Obligations ........................................................................................................................................... 39  Regional and Local Emergency Radio Effectiveness and Coordination ......................................... 39  The Statewide Law Enforcement Radio System ............................................................................. 39  911 Effectiveness and Reliability .................................................................................................... 40  State Emergency Operations –Support for Telecommunications .................................................... 40  Bureau of Public Safety Telecommunications Functions ........................................................................................ 40  History ................................................................................................................................................................. 40  State Law Enforcement Communications Plan (LE Plan) ............................................................... 40  Florida Emergency Communications Number E911 State Plan (State E911 Plan)......................... 41  National Public Safety Planning Advisory Committee ................................................................... 41  EMS Communications Plan ............................................................................................................. 41  State Joint Task Force (JTF) ............................................................................................................ 41  Project 25 ......................................................................................................................................... 42  Public Safety National Coordination Committee ............................................................................ 42  Services ............................................................................................................................................................... 42  Local Government Services ............................................................................................................. 42  Consultation ................................................................................................................................. 42  Spectrum Approval ...................................................................................................................... 42  Law Enforcement Communications Plan .................................................................................... 43  Intergovernmental Radio Communications program................................................................... 43  Emergency Medical Services ........................................................................................................... 43  Interoperability Services .................................................................................................................. 43  Florida Interoperability Network ................................................................................................. 43  Mutual Aid Channels ................................................................................................................... 43  State Law Enforcement Radio System Services .............................................................................. 44  SLERS Final Acceptance ............................................................................................................. 44  E911 Special Support Services ........................................................................................................ 45  E911 Grant Programs, Statewide ................................................................................................. 45  How the Bureau of Public Safety Telecommunications Performs Its Mission .......................................................45 Printed 2/4/2011 9:39 AM  Page 68 
  • 69. Attachment 2: Supplemental Detailed Table of Contents Leveraging SUNCOM ......................................................................................................................................... 45  Planning ............................................................................................................................................................... 46  Keeping in Touch ................................................................................................................................................ 46  Balancing Needs versus Cost .............................................................................................................................. 46  Engineering for Reliability with Performance Standards .................................................................................... 47  Specialized software and data management tools ............................................................................................... 47  Florida – Region Interference Program (FRIP) ............................................................................... 47  E911 Board - Fee Remittance Database .......................................................................................... 47  Coordination ........................................................................................................................................................ 47  E911 Coordination ........................................................................................................................... 47  SLERS User Groups ........................................................................................................................ 47  Partnerships with Government and Industry ....................................................................................................... 47  Florida E911 Board .......................................................................................................................... 48  Government SLERS Partnerships .................................................................................................... 48  Committees .......................................................................................................................................................... 48  Testing and Inspecting ......................................................................................................................................... 48  Training ............................................................................................................................................................... 48 Future of Telecommunications in Florida Government .............................................................................................. 49  Technology Convergence ........................................................................................................................................ 49  Technology Convergence Opportunities for the Enterprise ................................................................................ 49  Managing Complexity through Convergence .................................................................................. 50  Convergence using SIP and IMS ..................................................................................................... 50  Session Initiation Protocol (SIP) .................................................................................................. 50  IP Multimedia Subsystems (IMS)................................................................................................ 50  SIP/IMS from the User’s Perspective .......................................................................................... 51  SIPS/IMS Convergence for the Enterprise and Beyond .................................................................. 51  Voice over IP (VoIP) ....................................................................................................................... 51  STEPS .......................................................................................................................................... 52  VoIP Centrex ............................................................................................................................... 53  Convergence of Wireless ......................................................................................................................................... 53  911 Modernization................................................................................................................................................... 55  SLERS Coverage Improvements ......................................................................................................................... 55  Need for Telecommunications Convergence for Public Safety .......................................................................... 56  Convergence Opportunities for Public Safety ................................................................................. 56  Network Convergence ............................................................................................................................................. 58  Intelligent Transportation System (ITS) .............................................................................................................. 58  Florida LambdaRail (FLR) .................................................................................................................................. 58  How Florida’s Telecommunications Assets could be Optimized........................................................................ 59 Printed 2/4/2011 9:39 AM  Page 69 
  • 70. Attachment 2: Supplemental Detailed Table of Contents Local and Regional Governments ....................................................................................................................... 60  Extending Customer Empowerment ........................................................................................................................ 60  Enhancing Florida’ Economic Competitiveness with Broadband ........................................................................... 61  DMS’s Broadband Statutory Mandate ................................................................................................................ 61  General Strategy .................................................................................................................................................. 61  Consensus Building and Partnerships.................................................................................................................. 61  Mapping............................................................................................................................................................... 62  Broadband Strategic Planning ............................................................................................................................. 62  E-rate Assistance to Schools and Libraries ......................................................................................................... 63 Table of Attachments .................................................................................................................................................. 64 Endnotes ...................................................................................................................................................................... 96 Printed 2/4/2011 9:39 AM  Page 70 
  • 71. Attachment 3: Causes of 2009/2010 Refund/Rebate Attachment 3 Causes of 2009/2010 Refund/RebateAuthored January, 2010SummaryOver the last two fiscal years, the Division of Telecommunications (DivTel) at the Department ofManagement Services (DMS) has spent less with telecommunications vendors and on operating costs thanit has charged customers. This has resulted in a surplus in the Communications Working Capital TrustFund (CWCTF).None of the surplus was derived from rate increases.1 Rather, during the last three years, DMSimplemented several telecommunications services price reductions.2The CWCTF has accrued a surplus for several reasons.  Two SUNCOM services went through wholesale changes simultaneously; the replacement of the State Network backbone with open market services, and replacement of four SUNCOM Internet Protocol (IP) services with one IP service. Both changes required migrations of all customers, maintenance of legacy infrastructure during the migration, and major cost allocation shifts. This caused short term cost and revenue unpredictability. Although DMS cut prices immediately after the migrations, it did so conservatively due to some uncertainty of the ultimate outcome.  The above mentioned migrations and new policies (described below) led to tighter fiscal controls.  Settlement of a revenue sharing dispute with one vendor led to a major one-time revenue surge and recurring increases.1 The only SUNCOM services subject to rate increases over the last three years were antiquated, targeted for elimination and subsidized through income fromother SUNCOM services. Higher rates were used to encourage migration away from Dedicated Data and Dial-up services to more modern, less costly services.The effort was successful as both of these services were eliminated.2 • Long Distance minutes were reduced from ¢3.9 to ¢2.9 in January 2009. • Toll-Free minutes were reduced from ¢2.9 to ¢2.5 in July 1, 2009. • Wireless AirCard rates were reduced $1 per month November 2007. • Smart Phone rates were reduced $2.17 per month in August, 2007 • Premise router equipment rateswere reduced 4% in March 2007 • All Internet Protocol (IP) services were replaced with one that is 16% cheaper in April 2008. • Florida Information ResourceNetwork (FIRN serving K-12 schools) rates were reduced an average of 44% with the rebid in 2008.Printed 2/4/2011 9:39 AM  Page 71 
  • 72. Attachment 3: Causes of 2009/2010 Refund/Rebate  Significant increases in use of SUNCOM’s Toll Free service led to an unexpected short-term surge in revenue.  Changing technology and market conditions has allowed shifting more of the administrative support cost away from voice onto new services.  Finally, DivTel’s historical experiences with trust fund depletion fostered policies of fiscal prudence and solvency protection.To deplete the surplus, the Department of Management Services (DMS) will refund customersapproximately $7.7 million. To prevent recurrence of the surplus, DMS will implement permanent ratereductions with a first year impact of approximately $5 million. Both of these will be rendered inproportion to the sources of the surplus (i.e. granted to customers of services who paid more than theallocated cost of the service) and consistent with sound future State Network strategies.Details on the Sources of the SurplusThe Communications Working Capital Trust Fund has achieved a surplus primarily due to the factorsbelow.Elimination of the Statewide BackboneSUNCOM’s 35 year business model depended upon leasing a network that was dedicated to the state.This backbone carried large volumes of phone calls and data at much lower rates than could be had fromthe regulated market. The advent of competition in the long distance market however, brought rates thatwere comparable, and ultimately lower, than SUNCOM could achieve with a dedicated backbone.DMS has spent the last three years dismantling the SUNCOM backbone and shifting its long distance anddata services to open-market bulk purchases. But because the backbone and its replacement services hadto be available simultaneously during the transition, and DMS sought no additional cash to fund it, theCommunications Working Capital Trust Fund incurred redundant costs, i.e. DMS had to maintainbackbone infrastructure that became increasingly less cost effective as customers migrated off of it.DMS cautiously avoided premature rate reductions to ensure solvency through the transition. Thecompletion of the migration also brought greater savings than expected.Replacement of Several Data Communications Services with MyFloridaNetSince the beginning of DMS’ Internet Protocol (IP) offerings in 1994, SUNCOM established four primaryIP services. They were: o Routed Transport Service (RTS) – a service that allowed customers to access the State IP network (Intranet) in the same way the Internet is accessed. Customers could exchange data with any site on the protected State Network, access the Internet through a common firewall and add a layer of protection with a local firewall. o Frame Relay – a service that allowed customers to designate the sites on the State Network and Internet to which they connected.Printed 2/4/2011 9:39 AM  Page 72 
  • 73. Attachment 3: Causes of 2009/2010 Refund/Rebate o State of Florida Internet Access (SoFIA) – a service that allowed customers to directly connect to the Internet using State Network security provisions. o Asynchronous Transport Mode (ATM) - a service that allowed customers to use ATM technology to create their own networks and manage the service with a high level of independence.The development of MyFloridaNet, using new technology known as Multi Protocol Label Switching(MPLS), brought the best features of all these services into one SUNCOM offering at lower prices. But aswith the backbone migration, DMS had to maintain the legacy IP services while migrating all customersto MyFloridaNet without any additional funds. DMS cautiously avoided premature rate reductions toensure solvency through the transition.In spite of the fact that the administrative charges from the entire legacy IP services are now borne byMyFloridaNet and applied to a smaller base of charges (i.e. since MyFloridaNet is cheaper), thecompletion of the migration brought greater savings than expected.Tightened Cost Accountability o Discovery of unneeded services – Both of the above mentioned migrations resulted in discovery of some previously unbilled services and unnecessary infrastructure. This led to some permanent cost reductions. Several of these also resulted in unexpected credits from vendors that increased the trust fund balance. DMS is developing better invoicing and inventory monitoring tools that will prevent these types of unnecessary charges in the future. o Reduction of pure pass-through services – Not all services have been marked-up by SUNCOM. This means that the administrative costs associated with delivering them are recovered through mark-ups on other services. By implementing a policy that all new services will contribute to administrative support, the general mark-up can be reduced. o Proactive elimination of antiquated services – When a communications technology becomes antiquated, most customers abandon it. With few users, economies-of-scale are lost thus rendering net losses for the service and subsidies from other services. Carrying these subsidized services can therefore affect the competitive viability of the entire SUNCOM portfolio.DivTel now implements a three-part strategy for accelerating the elimination of these services. Letters arefirst sent to customers informing them of the need to migrate off of the service with a notice of animpending price increase. The letter includes information on alternative services and contact informationto get help. DivTel then reaches out to customers to encourage and help them move. Finally, the priceincreases are implemented in stages that provide increasing incentives to make the change.3Verizon Wireless SettlementA settlement of a dispute regarding revenue sharing between DMS and Verizon Wireless resulted in theDMS receiving a one-time payment of $771,340 and ongoing increases of $41,775 monthly.3 See footnote 1 for examples.Printed 2/4/2011 9:39 AM  Page 73 
  • 74. Attachment 3: Causes of 2009/2010 Refund/RebateToll Free Services Volume IncreaseUsage of toll-free services is counter-cyclical to macro-economic business cycles, i.e. many more citizensuse toll-free to obtain government assistance during recessions. Toll Free services have experienced afour-fold increase since the beginning of the current recession. As a result of this unexpected revenue,DMS has implemented one Toll-Free price reduction and expects to implement another along with a one-time rebate. DMS also rebid the service to establish a new technology known as “menu in the cloud” thathas already reduced wait-times and therefore, toll-free minutes.Local Service and Long DistanceLocal phone and Long Distance voice services have historically been the mainstays of SUNCOM’sservices. Since inception of voice services, many other products and service have been added. The costof administration is now spread over more services with adequate revenues to offset the administrativecosts historically borne by Local Service.4Focused PrioritiesAfter DivTel was absorbed into the State Technology Office (STO) in 2000, its management prioritiesexpanded to include enterprise information technology (IT) initiatives like aggregation of all state IT staff,data center consolidation, establishment of an enterprise IT help desk, etc. SUNCOM revenues were usedto help fund these initiatives without replacement. Trust Fund Cash Balance 32,000,000 In July of 2005, the Working Capital Trust Fund 28,809,159 27,000,000 balance, from which approximately $12 million was 22,000,000  25,355,906expended monthly, sank to $15,512. DivTel’s solvency 17,000,000  21,717,835became dependent upon accelerated collections and 12,000,000  4,846,746delayed payments. 7,000,000  2,000,000  15,512 7/1/04The experience of the last decade has fostered a more 7/1/05 7/1/06 7/1/07 7/1/08 7/1/09 8/1/09 9/1/09 10/1/09conservative management approach. This has resulted 11/1/09in improvements to almost every aspect of DivTel’soperation and more effective cost savings to the state.SUNCOM Revenue and Cost Trends Annual Revenue 137,642,494 139,474,335 138,385,400 Annual Expenditures 140,000,000 131,679,486 140,000,000 138,000,000 135,000,000 132,098,806 126,314,477 136,000,000 130,000,000 134,000,000 132,000,000 125,000,000 130,000,000 120,000,000 128,000,000 FY 06/07 FY 06/07 FY 07/08 FY 07/08 FY 08/09 FY 08/094 In the coming five years, traditional voice services will decline precipitously with the growth of Voice over IP (VoIP) and expansion of wireless services.This will compel SUNCOM to further shift to other sources for administrative support revenues.Printed 2/4/2011 9:39 AM  Page 74 
  • 75. Attachment 3: Causes of 2009/2010 Refund/RebateDuring the periods depicted in the graphs above, declines in both revenues and expenditures wereexpected as lower cost services were offered and customers migrated to new technologies. But theconsistency of the decline in expenditures in 07/08, while revenues peaked, was not predicted.Note however, that the steeper decline in revenues over 08/09 raises a caution against drastic permanentrate reductions. If that trend were to continue, rate reductions would make the decline steeper still whileexpenditures remain steady or decline slower; ultimately jeopardizing SUNCOM solvency. A morecautious strategy would grant one-time rebates to deplete trust fund balances while maintaining steadyrevenues if needed.Strategies for Depleting the Surplus and Preventing RecurrenceTo address the surplus, the Department of Management Services (DMS) will refund its customers usingthe following guidelines:  One time rebates will be issued to deplete the existing surplus of approximately $7.7 million.  Permanent rate decreases of approximately $5 million will be implemented to prevent recurrence of the surplus. Most of these rate reductions will be applied retroactively to July 1, 2009 which will require some one-time refunds.  All of the rate reductions, refunds and rebates will be provided to customers of services that were the source of the surplus (i.e. services that provided revenues in excess of the service costs).5, 6  The one-time refunds and rebates will be calculated based upon recent customer usage of the targeted service.  All of the refunds and rebates will come in the form of credits that SUNCOM customers can apply to future charges.5 With one exception; Fax Services are new and have not yet achieved the critical mass of usage necessary to break-even (i.e. revenues equal to or greater thancosts for the service). A rate reduction is expected to attract enough customers to achieve that critical mass. Thus, the Fax rate will be reduced but noretroactive refunds will be granted for the service.6 No services that are near end-of-life will receive rate reductions if customers are expected to be migrated from the service in the next two years per theapproach outlined under the heading “Proactive elimination of antiquated services”. Prices are used as incentives to migrate customers. Rate reductions forend-of-life services will incentivize usage that is counter to technological trends and make migrations more difficult and lengthy, thus ultimately costing thestate more.Printed 2/4/2011 9:39 AM  Page 75 
  • 76. Attachment 4: Section 364.0135 F.S., - Promotion of Broadband Deployment Attachment 4 Section 364.0135 F.S., - Promotion of Broadband Deployment  (1)  The Legislature finds that broadband Internet service is critical to the economic development of the state and is beneficial for libraries, schools, colleges and universities, health care providers, and community organizations. The Legislature further finds that barriers exist to the statewide deployment of broadband Internet service, especially in rural, un‐served, or underserved communities. The Legislature therefore intends to promote the efficient and effective deployment of broadband Internet service throughout the state through a coordinated statewide effort.  (2)  The Department of Management Services is authorized to work collaboratively with, and to receive staffing support and other resources from, Enterprise Florida, Inc., state agencies, local governments, private businesses, and community organizations to:  (a)  Conduct a needs assessment of broadband Internet service in collaboration with communications service providers, including, but not limited to, wireless and wireline Internet service providers, to develop geographical information system maps at the census tract level that will:  1.  Identify geographic gaps in broadband services, including areas un‐served by any broadband provider and areas served by a single broadband provider;  2.  Identify the download and upload transmission speeds made available to businesses and individuals in the state, at the census tract level of detail, using data rate benchmarks for broadband service used by the Federal Communications Commission to reflect different speed tiers; and  3.  Provide a baseline assessment of statewide broadband deployment in terms of percentage of households with broadband availability.  (b)  Create a strategic plan that has goals and strategies for increasing the use of broadband Internet service in the state.  (c)  Build and facilitate local technology planning teams or partnerships with members representing cross‐sections of the community, which may include, but are not limited to, representatives from the following organizations and industries: libraries, K‐12 education, colleges and universities, local health care providers, private businesses, community organizations, economic development organizations, local governments, tourism, parks and recreation, and agriculture.  (d)  Encourage the use of broadband Internet service, especially in the rural, un‐served, and underserved communities of the state through grant programs having effective strategies to facilitate the statewide deployment of broadband Internet service. For any grants to be awarded, priority must be given to projects that:  1.  Provide access to broadband education, awareness, training, access, equipment, and support to libraries, schools, colleges and universities, health care providers, and community support organizations.  2.  Encourage investments in primarily un‐served areas to give consumers a choice of more than one broadband Internet service provider.  3.  Work toward establishing affordable and sustainable broadband Internet service in un‐served areas of the state.  4.  Facilitate the development of applications, programs, and services, including, but not limited to, telework, telemedicine, and e‐learning to increase the usage of, and demand for, broadband Internet service in the state.  (3)  The department may apply for and accept federal funds for purposes of this section, as well as gifts and donations from individuals, foundations, and private organizations. Printed 2/4/2011 9:39 AM  Page 76 
  • 77. Attachment 4: Section 364.0135 F.S., - Promotion of Broadband Deployment (4)  The department is authorized to enter into contracts necessary or useful to carry out the purposes of this section.  (5)  The department is authorized to establish any committee or workgroup to administer and carry out the purposes of this section.  (6)  The department is authorized to adopt rules necessary to carry out the purposes of this section, including, without limitation, the authority to establish definitions of terms pertinent to this section.   History  s.2, ch. 2009‐226.Printed 2/4/2011 9:39 AM  Page 77 
  • 78. Attachment 5: Agreement between DOT and Martin County Attachment 5 Agreement between DOT and Martin County MEMORANDUM OF AGREEMENT BETWEEN FLORIDA’S TURNPIKE ENTERPRISE AND MARTIN COUNTY THIS AGREEMENT is made and entered into this _______ day for ________________, 2008, byand between Florida’s Turnpike Enterprise, a part of the Florida Department of Transportation,(hereinafter, “TURNPIKE”) with principal place of business located at Turnpike Headquarters, Mile Post263, Building 5315, Post Office Box 613069, Ocoee, Florida 34761, and Martin County, a politicalsubdivision of the State of Florida with principal place of business located at 100 Ocean Boulevard,Stuart, Florida 34994, hereinafter referred to as, “COUNTY”. WITNESSETH: WHEREAS, TURNPIKE and the COUNTY have installed or may install conduit and fiber opticcable for their respective use within their rights of way; and if such conduit or cable is not fully utilized orreserved for future use at the present time, the unused conduit and/or fiber optic cable (hereinafter,“Excess”) may be made available for utilization by the other party; and WHEREAS, TURNPIKE and the COUNTY have and will continue to construct noncontiguousroadway segments; and both recognize the benefit of utilizing each other’s rights-of-way to connectnoncontiguous sections of its fiber network; and WHEREAS, the TURNPIKE and the COUNTY acknowledge each to the other that the utilization ofExcess in the right-of-way of the other is a great value which cannot be calculated in dollars; and WHEREAS, the TURNPIKE has determined that it will allow the COUNTY the free use of certainportions of TURNPIKE’s Excess in exchange for the COUNTY allowing the TURNPIKE free use ofcertain portions of the COUNTY Excess. NOW, THEREFORE, in consideration of the promises contained herein and for good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged, the TURNPIKE and theCOUNTY agree as follows:A. PROCESS. TURNPIKE and the COUNTY agree to abide by the following process for obtainingthe use of the other party’s Excess. 1. Request for Use. a. TURNPIKE. The TURNPIKE Enterprise Director of Operations, or designee, shall makea request in writing to the COUNTY, County Administrator, or his designee, for the use of the COUNTYPrinted 2/4/2011 9:39 AM  Page 78 
  • 79. Attachment 5: Agreement between DOT and Martin CountyExcess. This request shall contain specific details about the number of fibers needed and the specificlocation where fibers are needed. If, at the discretion of the COUNTY, it is determined that Excess isavailable, the COUNTY, County Administrator, or his designee will approve the request in writing andprovide information detailing the fibers or conduit to be designated for TURNPIKE use. b. COUNTY. The COUNTY shall make a request in writing to the TURNPIKE EnterpriseDirector of Highway Operations for the use of TURNPIKE Excess. This request shall contain specificdetails about the number of fibers needed and the specific location where fibers are needed. If, at thediscretion of TURNPIKE, it determines the Excess is available, the TURNPIKE Enterprise Director ofOperations, or designee, will approve the request in writing and provide information detailing the fibers orconduit to be designated for the COUNTY use. 2. Revocation. If the use of Excess is granted by either party and that Excess is needed by thegranting party in the future for any reason, the requesting party will be notified in writing and requested tovacate the Excess within one (1) year. A preliminary notification shall be submitted in writing six (6)months prior to the request to vacate thereby providing eighteen (18) months’ notice. This time to vacateis anticipated to be sufficient to enable the vacating agency to budget, design, and build an alternate route.B. Compensation. TURNPIKE agrees that it will not charge the COUNTY for the use of Excess. TheCOUNTY agrees that it will not charge TURNPIKE for the use of Excess.C. Maintenance and Limitation of Damages. TURNPIKE and the COUNTY will be responsible formaintaining their own facilities. TURNPIKE and the COUNTY will be responsible for performing utilitylocates for their own Facilities. TURNPIKE and the COUNTY will be responsible for performing utilityrelocation for their own Facilities as necessary. TURNPIKE and the COUNTY understand and agree thataccidental cuts and dig-ups may occur, causing damage to TURNPIKE and/or the COUNTY Facilities.TURNPIKE and the COUNTY shall be responsible for repairing or for the cost of repairing their ownfacilities due to accidental cuts or dig-ups unless it can be determined that another party is responsible.Neither party shall be liable for incidental or consequential damages due to information loss arising fromaccidental cuts or dig-ups.D. Relocation. TURNPIKE and the COUNTY shall be responsible for all costs of relocation and forperforming such relocation activities of their own fiber optic systems, CCTV cameras, vehicle detectionstations and travel time systems. TURNPIKE and the COUNTY agree to use their best efforts to avoidthe need for relocation if and where possible.E. Sovereign Immunity. Each party hereto agrees that it shall be solely responsible for the wrongfulacts of its employees, contractors and agents, committed within the lawful scope of employment.However, nothing contained herein shall constitute a waiver by either party of its sovereign immunityunder Section 768.28, Florida Statutes.F. Term. The term of this Memorandum of Agreement shall continue for as long as TURNPIKE andCOUNTY continue to use the other agency’s Excess.G. Amendments. Any revision to this Memorandum of Agreement shall require the written approvalof both parties.Printed 2/4/2011 9:39 AM  Page 79 
  • 80. Attachment 5: Agreement between DOT and Martin CountyH. Assignment. This Memorandum of Agreement is intended for the exclusive privilege and benefitof the parties; any assignment to another agency, department, entity, or person, is strictly prohibited andshall vest in the non-assigning party the immediate right to termination, unless approved, in advance, bywritten instrument executed by both parties.I. Utilization. The utilization of the Excess shall meet the rules and standards set forth by theDepartment of Management Services (DMS) including but not limited to Chapter 60FF: Division ofTelecommunications.J. No Third-Party Beneficiary. It is specifically agreed between the COUNTY and TURNPIKE thatthis Agreement is not intended by any of the provisions of any part of this Agreement to establish in favorof any other party, the public or any member thereof, the rights of a third-party beneficiary hereunder, orto create or authorize any private right of action by any person or entity not a signatory party to thisAgreement to enforce this Agreement or otherwise arising out of the terms of this Agreement. The duties,obligations and responsibility of the COUNTY and TURNPIKE with respect to third parties shall remainas imposed by law. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed theday and year written.FLORIDA’S TURNPIKEENTERPRISEBy: _____________________________ Jennifer Olson Deputy Executive Director/Chief Operating OfficerAttest:Executive Secretary (Seal)Legal ApprovalPrinted 2/4/2011 9:39 AM  Page 80 
  • 81. Attachment 5: Agreement between DOT and Martin CountyMARTIN COUNTY, FLORIDABOARD OF COUNTY COMMISSIONERSATTEST: BOARD OF COUNTY COMMISSIONERS MARTIN COUNTY, FLORIDABY: _______________________ BY: ________________________________MARSHA EWING, CLERK DOUG SMITH, CHAIR APPROVED AS TO FORM AND CORRECTNESS: BY: ________________________________ STEPHEN FRY, COUNTY ATTORNEYPrinted 2/4/2011 9:39 AM  Page 81 
  • 82. Attachment 6 Letter to FCC Seeking Access to ITS Fiber NATIONAL BROADBAND AND THE NATIONAL INTELLIGENT TRANSPORTATION SYSTEMS  PROGRAM (ITS)    To achieve the goals of the Recovery Act in creation of a national broadband plan and broadband network that provides greater broadband capacity, availability and benefit to the country, we propose an opportunity for the FCC’s consideration during development of the National Broadband Plan for Congress.    There are idle fiber network assets in each state funded by Federal programs in support of the Intelligent Transportation Systems (ITS).  These assets can accelerate and lower the costs of broadband services.  There are barriers in federal ITS rules that prohibit the use of these assets beyond ITS.  We suggest that the FCC, through Inter‐Agency cooperation, amend rules to allow state DOT’s the ability to work with designated state authorities charged to provide broadband services to anchor institutions to utilize idle fiber or microwave network capacity that is available in state DOT ITS networks.  The federally funded ITS program since 1991 has provided states with funding for broadband telecommunications infrastructure as well as other technology in support of ITS applications that are critical to efficient operation of the highway system in the country.  Through this paper using Florida as an example, we try to illustrate the idle capacity that we believe should be leveraged as part of the National Broadband Plan to provide broadband to anchor institutions.  In our role as the provider of broadband services to anchor institutions in Florida, the Department of Management Services has researched the USDOT ITS program and Florida’s DOT ITS implementation to determine the extent of idle telecommunications capacity of fiber optic communication systems in Florida.   From our research we have found that Florida DOT ITS has deployed up to 96 fiber strands when implementing the network.  The Florida DOT ITS office has informed us that this idle network capacity cannot be used for any purposes outside of ITS applications due to Federal Highway Administration (FHWA) rules.  And to do so would jeopardize funding or require the state to pay the funding back if they were.  The result is that while we seek to create broadband capacity with Stimulus funding, the state appears to have idle capacity already in place.  Thus we may not be able to leverage all potential economies of scale benefits for the advancement of broadband service to anchor institutions in Florida.    Federal and state DOTs have worked together enabling right of way access through resource sharing agreements.  These efforts stop short of addressing the idle capacity in the ITS Telecommunications infrastructure as another asset that could be leveraged to meet the broadband goals of the country.  In this paper we are providing supporting information that we believe will be useful to the FCC to pursue this opportunity.  We welcome the opportunity to work with the FCC as you evaluate the options.  Below we have provided an email from a Local Federal Highway Safety Administration representative regarding our request for ITS asset use, ITS history, ITS documentation, ITS reference links as well as Florida ITS specific information.  We would welcome the opportunity to work with you to further this effort.   We serve those who serve Florida.
  • 83. Attachment 6: Letter to FCC Seeking Access to ITS Fiber SUPPORTING REASEARCH INFORMATION Interpretation of FHWA rules regarding use of ITS infrastructure:   If Federal money is used to implement a facility (e.g. a communications network) then FHWA regulations require that the facility usage should be limited to transportation purposes. The basis for this is drawn from Title 23; which states in essence that the Highway Trust Funds are for Transportation Purposes.  This means if there is excess capacity in the infrastructure installed, the non‐highway use would have to be paid back.   History of the Federal ITS ProgramThe Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) established a Federal program to research, develop, and operationally test Intelligent Transportation Systems (ITS) and to promote their implementation. The program was designed to facilitate deployment of technology to enhance the efficiency, safety, and convenience of surface transportation, resulting in improved access, saved lives and time, and increased productivity. ISTEA originally authorized $659 million for ITS in fiscal years (FY) 1992–1997, with additional funds appropriated by Congress to the states, for a total of approximately $1.2 billion. The Transportation Efficiency Act for the 21st Century (TEA‐21) confirmed the direction of the ITS Program and authorized and appropriated a similar amount through FY 2003: $603 million for research and development and $679 million for deployment activities, for a total of $1.282 billion. Because SAFETEA‐LU was enacted in late FY 2005 (two years after the end of TEA‐21) Congress provided a continuing budget for the ITS Program, appropriating $220 million for continued research and development and $244 million for deployment activities. Table ES.1 summarizes the allocation of financial resources over the course of the three authorizations.  Table ES.1: Allocation of Congressional ITS Appropriations    ISTEA TEA‐21 Continuing Funding SAFETEA‐LU  Total ITS Program Activity  1991‐1997 1998‐2005 2004‐2005 2006‐2008    Research and Development  $659M $603M $220M $330M  $1.812B Deployment  $564M $679M $244M Discontinued  $1.487B Total  $1.223B $1.282B $464M $330M  $3.299BThe ITS program carries out its goals through research and development, operational testing, technology transfer, training and technical guidance in the areas of intelligent vehicles, advanced traffic and transit management, commercial vehicle operations, public safety, traveler information, and intermodal freight. US Department of Transportation ITS Telecommunications page: http://www.its.dot.gov/telecom/index.htm  US Department of Transportation ITS Resource sharing page: http://www.its.dot.gov/telecom/tele_srguide.htm  In 1991, ISTEA launched a program of research and testing of intelligent transportation systems, with a charge to U.S. DOT to investigate their effectiveness in solving congestion and safety problems, in addressing operating inefficiencies, and in reducing the environmental impact of growing travel demand.    In January of 1996, former Secretary of Transportation Peña set a 10‐year national goal of building an ITS infrastructure that would support metropolitan travel management and safety needs. U.S. DOT set similar objectives for rural and commercial vehicle ITS applications.  legislation launched an era of ITS infrastructure deployment by mainstreaming ITS Printed 2/4/2011 9:39 AM  Page 83 
  • 84. Attachment 6: Letter to FCC Seeking Access to ITS Fiber funding eligibility under the National Highway System, Surface Transportation, and Congestion Mitigation and Air Quality programs, and by creating the ITS integration and commercial vehicle ITS infrastructure incentive programs.  TEA‐21 provides funding incentives for ITS deployment through two specific components: the ITS integration incentive program and the commercial vehicle ITS infrastructure incentive program. Together, these two programs help facilitate the integration of legacy systems, and hasten the mainstream deployment of integrated ITS technologies.  During the 6 years of TEA‐21 authorization, a total of $679 million is devoted to incentive funding. The National Highway System (NHS) comprises of approximately 163,000 miles (262,000 kilometers) of roadway, including the Interstate Highway System (46,837 miles) and significant rural and urban roads serving major population centers, international border crossings, intermodal travel facilities, and major travel destinations  Nearly 90 percent of the U.S. population lives within 5 miles (8 km) of an NHS roadway, as does nearly all of the urban areas with a population of more than 50,000 and 93 percent of urban areas with a population of between 5,000 and 50,000  Federal highway regulations already strongly encourage the accommodation of utility facilities along the existing right‐of‐way of highway projects.  Additionally, current highway funding can be utilized to offset the cost of accommodating a utility, including the cost of buried "utility tunnels" to accommodate telecommunication lines.[xi] The Federal Highway Administration (FHA) estimates that 90 percent of the cost of deploying fiber in public rights of way along roadways is associated with digging up and repairing the road to install the buried fiber.[xii] Thus, it is both expedient and significantly cheaper to install conduit and fiber while a roadway is already being substantially repaired, reconstructed or built. Installing conduit and fiber in open trenches during road construction, costs between $10,000 and $30,000 per mile. Low‐end construction costs for highways are around $3 million per lane, per mile, although they can be substantially higher depending upon the area.  Thus, adding fiber would increase highway construction costs by as little as 1 percent on average.    Printed 2/4/2011 9:39 AM  Page 84 
  • 85. Attachment 6: Letter to FCC Seeking Access to ITS Fiber  Florida DOT ITS Network       Printed 2/4/2011 9:39 AM  Page 85 
  • 86. Florida DOT ITS Microwave Network     We serve those who serve Florida.
  • 87. Florida DOT ITS Video Monitoring Network     We serve those who serve Florida.
  • 88. Additional ITS Reference Documents and Links: The first document is the Rural Interstate Corridor Communications Study: Report to Congress.   http://www.ops.fhwa.dot.gov/int_its_deployment/rural/congrpt0807/index.htm  This report provides a summary of study resources available to the Corridor states to begin the process for possible deployment of high‐speed telecommunications (HST) “broadband” in the corridors in question.  The study reveals several insights into the issue of how rural Interstates enable greater penetration of high‐speed telecommunications infrastructure in rural America.  This report presents the findings of the investigation and a discussion of the potential benefits and costs associated with the introduction of a high speed telecommunications backbone facility in each corridor.Rural Interstate Corridor Communications Study: Report to States http://www.ops.fhwa.dot.gov/publications/fhwahop09021/index.htm.  This document is the second of two reports that explore the potential for the use of rural Interstate Highway corridor rights‐of‐way for the deployment of fiber optic cable and/or wireless communication infrastructure, across multiple states linked by the Interstate Highway system. Links  ITS America   ITS JPO   ITS Standards   National ITS Architecture Version 6.1   Electronic Document Library   Facilitating Integrated ITS Deployment   ITS Cost Benefit Analysis 2003: http://www.itsdocs.fhwa.dot.gov/jpodocs/repts_te/13772_files/13772.pdf   IFlorida Model Evaluation Report 2009: http://ntl.bts.gov/lib/31000/31000/31051/14480_files/iflorida.pdf   ITS Program Plan 2008: http://www.its.dot.gov/its_plan/es.htm#tabES‐1   ITS Operations Resource Guide 2009  : http://www.resourceguide.its.dot.gov/default.asp?SID=6&SSID=41   ITS Document Search: http://ntlsearch.bts.gov/tris/ntlc/itsjpo/index.shtm   Regards,   Bill Price Department of Management Services 4030 Esplanade Way Tallahassee Florida 850.410.0709 bill.price@dms.myflorida.com Printed 2/4/2011 9:39 AM  Page 88 
  • 89. Attachment 7: Companion to Figure 6: Cost Recovery Models for Enterprise Services   Attachment 7 Companion to Figure 6: Cost Recovery Models for Enterprise Services Concept  Definition  Bulk Purchasing Leverage  The ability to get volume discounts from vendors by aggregating purchases.  The efficiencies achieved through consolidation and standardization of  Economies of Scale  processes like inventory, billing, ordering, maintenance and systems design  and development.  The ability to motivate internal customers to be frugal by designing  Economic Usage Incentives  services and chargeback methods to clearly show cost consequences and  empowering customers to make changes to their demand where possible.  The ability to give resources to one customer when another customer is not  Shared Excess Capacity  using them.  Reducing vendor costs by simplifying processes, restraining unnecessary  Vendor Costs Minimized  demands upon them and offsetting their risks.  Equitable  Each customer pays in proportion to their use of a resource.  The ability to prevent customers from going without a resource when they Shortages & Rationing Unlikely  need it.  The ability to provide accountability data about how much of a resource is Enterprise Cost/Usage Reports  used by customers and the consequential costs.  Simple Chargeback  The ease with which payments are made for use of a resource.  The ability accelerate moves and/or mitigate the impact of the transition on  Buffered Transition Costs  customers when deploying new or improved services.  The likelihood that various systems within the enterprise will work  Compatible & Secure  together securely and with little effort.  The likelihood that knowledgeable staff will be able to focus on a service to  Specialization & Expertise  get the most value from it and make sure the right one is used. Printed 2/4/2011 9:39 AM  Page 89 
  • 90. Attachment 7: Companion to Figure 6: Cost Recovery Models for Enterprise Services   Isolated Purchases Description:  Each state customer buys services on their own directly from vendors. Prices & Charges: Charges are dependent upon vendor contracts with each customer. Bulk Purchasing Leverage    There is no enterprise level purchasing leverage when each customer buys services on their own.  Economies of Scale    There are no enterprise level economies of scale when each customer buys services on their own.  There are incentives for customers to be frugal when purchasing on their own, but other  Economic Usage Incentives    priorities can motivate purchases as well and there is no means for an internal service provider  to apply techniques and accountability to inspire savings.  There is no means of sharing resources between customers when they are bought independently  Shared Excess Capacity    (note that customers forming a consortium of shared usage no longer meet the definition of  Isolated Purchases).  Vendors must strike separate deals with customers that buy independently without  Vendor Costs Minimized    standardization on the customer’s side.  The vendor must also bill each of customer and bear the  risk that they will not be paid (in a timely manner).  Each customer pays for (the block of) services they have chosen and use and is unaffected by the  Equitable    usage of other customers (since prices are stable).  Customers can buy all they need to meet daily demand. But without the ability to share excess Shortages & Rationing Unlikely    capacity with others and have enterprise redundancy available, customers may be restricted  during peeks.  Collecting usage and cost data for every customer, when each customer must self‐report, is an Enterprise Cost/Usage Reports    enormous task and likely to produce unreliable results.  There is no internal provider that must collect and process charges. But each customer must still  Simple Chargeback    process billing and payments.  Tools to manage technological transition costs by offsetting premium charges for new and old  Buffered Transition Costs    services are unavailable to the state at an enterprise level when vendors charge customers  directly.  When customers design, build or buy services without the standardization of an internal service  Compatible & Secure    provider, they are less likely to implement systems that work together seamlessly or use  common security standards.  Because of the periodic nature of the need, customers are unlikely to have staff dedicated to  Specialization & Expertise    telecommunications design and procurement.    True    Mostly true    Partially true    Mostly untrue    Untrue   Printed 2/4/2011 9:39 AM  Page 90 
  • 91. Attachment 7: Companion to Figure 6: Cost Recovery Models for Enterprise Services   State Term Contract Description:  An enterprise contract is established through which all customers buy services. Prices & Charges: Customers pay contract prices directly to the vendor. Authorizing vendors to sell in large volumes to the state will bring discounts. But since ordering  and billing are decentralized, sales are still disaggregated and the state retains little information  Bulk Purchasing Leverage    about them. Thus contract enforcement is less effective and detailed historical demand data is  largely unavailable to the state during negotiations.  Negotiating one contract for all customers brings efficiency, but ordering, activating, inventory  Economies of Scale    and invoicing are repeated by and for each customer. Both the state and vendor could gain  efficiencies from centralizing these processes.  There are incentives for customers to be frugal when purchasing on their own, but other  Economic Usage Incentives    priorities can motivate purchases as well and there is no means for an internal service provider  to apply techniques and accountability to inspire savings.  Shared Excess Capacity    There is no means of sharing resources between customers when they are bought independently.  One contract is efficient for vendors, but they could gain further efficiencies from centralizing  Vendor Costs Minimized    order processing, activation and billing. The vendor also absorbs more risk when payments come  from many customers.  Each customer pays for the block they have chosen and/or use and is unaffected by changes in  Equitable    usage by other customers.  Customers can buy all they need to meet daily demand. But without the ability to share excess Shortages & Rationing Unlikely    capacity with others and have enterprise redundancy available, customers may be restricted  during peeks.  The state can track spending with State Term Contract vendors but without centralized ordering Enterprise Cost/Usage Reports    and billing, details on what is bought is unavailable.  There is no internal provider that must collect and process charges. But each customer must still  Simple Chargeback    process billing and payments.  Tools to manage technological transition costs by offsetting premium charges for new and old  Buffered Transition Costs    services are unavailable to the state at an enterprise level when vendors charge customers  directly.  The State Term Contract can specify standards for compatibility and security, but without central  Compatible & Secure    administration, enforcement is almost impossible.  Experts can establish the State Term Contract but will have little involvement in delivering  Specialization & Expertise    services and limited understanding how the services are implemented.  Single Funder Description:  All services are funded from a source other than customers. For example; a shared network under a  single contract is established with no charges to user customers. Prices & Charges: A single entity pays a flat fee or bulk prices that are irrelevant to customers (since someone else pays). Bulk Purchasing Leverage    A single purchase for one large block of services gives the state significant bargaining leverage.  Negotiating one contract for all customers, and centralizing orders, activation, inventory and  Economies of Scale    invoicing brings efficiency.  Economic Usage Incentives    When third party pays for usage, there is little incentive to use less.  Shared Excess Capacity    With a pool, high usage by one customer can be offset by diminished usage of another.  With one contract, centralized order processing, activation and billing, the vendor achieves  Vendor Costs Minimized    significant efficiencies with minimal risks.  Equitable    No customer subsidizes others, but the enterprise subsidizes any excessive usage.  By offsetting peak usage of one customer with diminished usage of another, the pool can Shortages & Rationing Unlikely    accommodate some demand surges. But, because third party payers give no incentives to be  frugal, there is risk that demand will exceed supply. Enterprise Cost/Usage Reports    Since utilization is irrelevant to cost recovery, it is not likely to be collected.  Simple Chargeback    With one entity paying for all usage and no recovery from users, chargeback is simple.  Tools to manage technological transition costs by offsetting premium charges for new and old  Buffered Transition Costs    services are unavailable to the state at an enterprise level when customers pay nothing.  Compatible & Secure    With a single internal provider, compatibility and security can be standardized and managed.  Specialization & Expertise    With a single internal provider, dedicated experts will be involved in procurement and delivery.  True    Mostly true    Partially true    Mostly untrue    UntruePrinted 2/4/2011 9:39 AM  Page 91 
  • 92. Attachment 7: Companion to Figure 6: Cost Recovery Models for Enterprise Services   Fixed Shares Description:  Each customer pays a fixed share regardless of how much service they use from a pool based upon  willingness or ability to pay, or proxies. Prices & Charges: Service prices are irrelevant since total charges are fixed until renegotiated. Bulk Purchasing Leverage    A single purchase for one large pool of services gives the state significant bargaining leverage.  Negotiating one contract for all customers, and centralizing orders, activation, inventory and  Economies of Scale    invoicing brings efficiency.  With customers paying fixed amounts that are unrelated to usage, they have no incentives to be  Economic Usage Incentives    frugal.  With usage from a pool, high usage by one customer can be offset by diminished usage of  Shared Excess Capacity    another.  With one contract, centralized order processing, activation and billing, the vendor achieves  Vendor Costs Minimized    significant efficiencies with minimal risks.  Because charges have no relationship to usage, some customers pay more than they should while  Equitable    others are subsidized.  By offsetting peak usage of one customer with diminished usage of another, the pool can Shortages & Rationing Unlikely    accommodate some demand surges.  But, because fixed payments give no incentives to be frugal,  there is risk that demand will exceed supply. Enterprise Cost/Usage Reports    Since utilization is irrelevant to chargeback, it is not likely to be collected.  Charges require no utilization measures and attribution but they do require negotiation of flat  Simple Chargeback    fees.  Without incentives, the impact of the tools is largely negated to manage technological transition  Buffered Transition Costs    costs by offsetting premium charges for new and old services are available to the state at an  enterprise level since customers pay an internal provider.  Compatible & Secure    With a single internal provider, compatibility and security can be standardized and managed.  Specialization & Expertise    With a single internal provider, dedicated experts will be involved in procurement and delivery.   Distributed Blocks Description:  Each customer buys a block of services through an internal provider. Prices & Charges: Customer charges are fixed, unless the capacity of the customer’s block is upgraded or downgraded. A single contract for services gives the state bargaining leverage, but the state cannot guarantee a  Bulk Purchasing Leverage    commitment to a pool.  Negotiating one contract for all customers, and centralizing orders, activation, inventory and  Economies of Scale    invoicing brings efficiency.  There are incentives for customers to be frugal when purchasing blocks, but the means for an  Economic Usage Incentives    internal service provider to apply techniques and accountability to inspire savings at the detailed  utilization level are unavailable.  Shared Excess Capacity    There is no means of sharing resources between customers when they are bought in blocks.  With one contract, centralized order processing, activation and billing, the vendor achieves  Vendor Costs Minimized    significant efficiencies with minimal risks.  Each customer pays for the block they have chosen and is unaffected by changes in usage by  Equitable    other customers.  Customers can buy all they need to meet daily demand. But without the ability to share excess Shortages & Rationing Unlikely    capacity with others and have enterprise redundancy available, customers may be restricted  during peeks.  Since each customer is charged by an internal provider, costs and block size can be reported, but Enterprise Cost/Usage Reports    detailed cost and utilization is unlikely to be available.  The internal provider must count and attribute purchases of each customer, but detailed  Simple Chargeback    utilization data is not required.  Tools to manage technological transition costs by offsetting premium charges for new and old  Buffered Transition Costs    services are available to the state at an enterprise level since customers pay an internal provider  and can be incentivized by the chargeback method.  Compatible & Secure    With a single internal provider, compatibility and security can be standardized and managed.  Specialization & Expertise    With a single internal provider, dedicated experts will be involved in procurement and delivery.   True    Mostly true    Partially true    Mostly untrue    Untrue   Printed 2/4/2011 9:39 AM  Page 92 
  • 93. Attachment 7: Companion to Figure 6: Cost Recovery Models for Enterprise Services   Proportional Shares Description:  Each customer pays a share proportional to the amount of the resources they use from a pool. Prices & Charges: Prices per unit and total charges change every month for every customer. Bulk Purchasing Leverage    A single purchase for one large pool of services gives the state significant bargaining leverage.  Negotiating one contract for all customers, and centralizing orders, activation, inventory and  Economies of Scale    invoicing brings efficiency.  Despite steady usage, charges for a given customer can increase or decrease since usage by other  Economic Usage Incentives    customers affect per unit price. Unstable prices do not give customers clear signals about the  consequences of usage.  Shared Excess Capacity    With a pool, high usage by one customer can be offset by diminished usage of another.  With one contract, centralized order processing, activation and billing, the vendor achieves  Vendor Costs Minimized    significant efficiencies with minimal risks.  Each customer pays in proportion to their usage but is affected by changes in usage by other  Equitable    customers (since prices adjust to cover total costs). While essentially equitable, this is perceived  as inequitable when customers pay more because other customers used less.  By offsetting peak usage of one customer with diminished usage of another, the pool can Shortages & Rationing Unlikely    accommodate some demand surges. But, diluted economic incentives create some risk that  demand will exceed supply.  Since each customer is charged by an internal provider for incremental usage, detailed cost and Enterprise Cost/Usage Reports    utilization will be collected and attributable to customers.  Because incremental usage must be counted and attributed to each customer, chargeback is  Simple Chargeback    detailed and complicated.  Tools to manage technological transition costs by offsetting premium charges for new and old  services are available to the state at an enterprise level since customers pay an internal provider  Buffered Transition Costs    and can be incentivized by the chargeback method. But these tools are impaired by diluted  economic incentives.  Compatible & Secure    With a single internal provider, compatibility and security can be standardized and managed.  Specialization & Expertise    With a single internal provider, dedicated experts will be involved in procurement and delivery.   Pooled Services Description:  Each customer pays for the incremental units they use when they use them from the internal  provider’s shared pool. Prices & Charges: Prices per unit are fixed, total charges adjust with usage. Bulk Purchasing Leverage    A single purchase for one large pool of services gives the state significant bargaining leverage.  Negotiating one contract for all customers, and centralizing orders, activation, inventory and  Economies of Scale    invoicing brings efficiency.  With customers paying stable prices for incremental usage, they are give clear signals about the  Economic Usage Incentives    consequences. Tools like peak‐load pricing can also be implemented.  Shared Excess Capacity    With a pool, high usage by one customer can be offset by diminished usage of another.  With one contract, centralized order processing, activation and billing the vendor achieves  Vendor Costs Minimized    significant efficiencies with minimal risks.  Each customer pays directly in proportion to their usage and is unaffected by changes in usage by  Equitable    other customers (since prices are stable) which is equitable in appearance and reality.  By offsetting peak usage of one customer with diminished usage of another, the pool can Shortages & Rationing Unlikely    accommodate demand surges and customers have no incentive to over‐use.  Since each customer is charged by an internal provider for incremental usage, detailed cost and Enterprise Cost/Usage Reports    utilization will be collected and attributable to customers.  Because incremental usage must be counted and attributed to each customer, chargeback is  Simple Chargeback    detailed and complicated. Setting prices based upon forecasted usage and ongoing monitoring is  also required.  Tools to manage technological transition costs by offsetting premium charges for new and old  Buffered Transition Costs    services are available to the state at an enterprise level since customers pay an internal provider  and are fully incentivized by the chargeback method.  Compatible & Secure    With a single internal provider, compatibility and security can be standardized and managed.  Specialization & Expertise    With a single internal provider, dedicated experts will be involved in procurement and delivery.   True    Mostly true    Partially true    Mostly untrue    Untrue Printed 2/4/2011 9:39 AM  Page 93 
  • 94. Attachment 8: Companion to Figure 7: The Simplicity/Savings Trade-off   Attachment 8 Companion to Figure 7: The Simplicity/Savings Trade-off Single Funder Enterprise Resources Fixed Shares Internal Billing from Pool Distributed Blocks State Term Contract Metered Billing Proportional Shares from Pool Pooled Services Isolated Purchases Savings Enterprise Resources Internal Billing Metered Billing The state cannot leverage enterprise purchasing volume or economies of scale with Independent Purchases and shared excess capacity is unavailable. Duplication of design, procurement, contracting and payment for each customer is costly and complex. While thereare some economic incentives with Isolated Purchases, there are no centralized tools for reporting andaccountability (even at the aggregate level) and creating billing tools to enhance incentives is not possible.Focused expertise is absent when establishing services, and achieving compatibility with common securitystandards between customers is difficult and costly. The state can leverage broad enterprise purchasing volume and economies of scale with State Term Contracts but shared excess capacity is unavailable. Procurement and contracting of the master contract is done once, but design, ordering and payment for each customer’sPrinted 2/4/2011 9:39 AM  Page 94 
  • 95. Attachment 8: Companion to Figure 7: The Simplicity/Savings Trade-off  unique implementation are duplicated. While there are some economic incentives when customers buythrough State Term Contracts, there are no centralized tools for reporting, accountability and enhancingincentives through centralized billing. Focused expertise, and achieving compatibility with commonsecurity standards between customers is considered in the master contract, but largely absent whenimplementing services. The state leverages enterprise purchasing volume and economies of scale with Single Funder models and shared excess capacity is an inherent feature. Design, procurement, contracting, ordering and payment are consolidated. There are no economic incentives with third party payers however, and the centralized tools for accountability will not be detailed withoutrebilling customers. Focused expertise and achieving compatibility with common security standardsbetween customers is a benefit to the Single Funder model. The state can leverage enterprise purchasing volume and economies of scale with Fixed Shares from a pool and shared excess capacity is an inherent feature. Design, procurement, contracting, ordering and payment are centralized. There are almost no economic incentives however when charges are fixed without regard to usage and the centralized tools foraccountability will not be detailed without proportional rebilling of customers. Focused expertise, andachieving compatibility with common security standards between customers is a benefit of Fixed Sharesfrom a pool. The state can leverage enterprise purchasing volume and economies of scale with blocks purchased from an internal provider, but shared excess capacity is unavailable. Design, procurement, contracting, ordering and payment are centralized with Purchased Blocks. There are economic incentives and centralized tools for reporting and accountability and billing tools can to enhance incentives (but those incentive tools are not as robust as they arewith metered services). Focused expertise, and achieving compatibility with common security standardsbetween customers is a benefit to Purchased Blocks from in internal provider. The state can leverage enterprise purchasing volume and economies of scale with Proportional Shares from a pool and shared excess capacity is an inherent feature. Design, procurement, contracting, ordering and payment are centralized. There are economic incentives and centralized tools for reporting and accountability with Proportional Shares but billing tools to enhance incentives are significantly diluted by themixed messages from price instability. Focused expertise, and achieving compatibility with commonsecurity standards between customers is a benefit from Proportional Shares of a pool. The state can leverage enterprise purchasing volume and economies of scale with Pooled Services and shared excess capacity is the salient feature. Design, procurement, contracting, ordering and payment are centralized. There are economic incentives and centralized tools for reporting and accountability and billing tools to enhance incentives are more effective with Pooled Services than with any other model. Focused expertise, andachieving compatibility with common security standards between customers is a benefit to PooledServices.Printed 2/4/2011 9:39 AM  Page 95 
  • 96. DivTel Business Model and Value 2.0 Endnotes  1 An example of the savings from the SNA backbone came from the elimination of many “dumb terminals”. Before the backbone, many users of the state accounting, budgeting and purchasing systems had three dumb terminals. After the backbone was created, they could use one terminal to access all three systems. 2 Even IBM replaced its proprietary SNA protocol in the late 90s. Despite fact that the SNA backbone represented over 90% of SUNCOM’s data communications services at its peak, it was completely gone by 2005. 3 • Long Distance minutes were reduced from ¢3.9 to ¢2.9 in January 2009. • Toll-Free minutes were reduced from ¢2.9 to ¢2.5 in July 1, 2009. • Wireless Air Card rates were reduced $1 per month November 2007. • Smart Phone rates were reduced $2.17 per month in August, 2007 • Premise router equipment rates were reduced 4% in March 2007 • All Internet Protocol (IP) services were replaced with one that is 16% cheaper in April 2008. • Florida Information Resource Network (FIRN serving K-12 schools) rates were reduced an average of 44% with the rebid in 2008. 4 See Attachment 3 for a more detailed explanation regarding the reasons SUNCOM accrued the surplus that was returned through rebates and refunds. 5 DOE’s procurement of FIRN without SUNCOM was actually was not in compliance with Section 282.703 F.S., but DMS leadership authorized DOE to make the purchase. 6 Three ERP projects in Florida over the last decade are evidence of risk. A new state accounting system was a failure despite expenditures of almost $100 million. Two other ERPs, PeopleFirst and MyFlorida Marketplace, have been widely criticized for deficiencies and onerous ongoing costs. 7 The most obvious frustration with the lack of centralized mobile services came during the 2009 Office of Program Policy And Government Accountability (OPPAGA) audit of cell phone usage. Because agencies use a variety of contracts (the largest being the State Term Contract) and none of them centralize ordering and billing, OPAGGA was unable to get accurate counts. This led to the passing of HB 5611 in the 2010 Session, (later vetoed for unrelated Constitutional issues) directing SUNCOM to centralize cell phone procurement and requiring agencies to use SUCNOM. Despite the veto, SUNCOM is using its existing statutory authority to consolidate cell phone purchases for the state. When SUNCOM does so, all of the related data OPAGGA sought will be available instantaneously. 8 See Attachment 4. 9 Line Item 2936, 2010 General Appropriations Act “From the funds provided in Specific Appropriation 2936, the Division of Telecommunications shall work with the Southwood Shared Resource Center (SSRC) to ensure that no later than October 1, 2010, all SSRC customers are utilizing the shared SUNCOM telecommunication services connecting the SSRC to the SUNCOM Network for all telecommunications needs. The division shall work with the SSRC and its customers to implement a transition plan for migrating all SSRC customers to shared SUNCOM telecommunication services. Additionally, the division shall provide to each SSRC customer its associated costs and projected reductions for migrating and utilizing shared SUNCOM telecommunication services connecting the SSRC to the SUNCOM Network. For the first quarter of Fiscal year 2010-2011, the division shall utilize its Fiscal Year 2009-2010 cost allocation method for billing the SSRC customers for their network connection and port access charges. Beginning with the second quarter of Fiscal Year 2010-2011, the division shall implement a revised cost allocation method based upon the anticipated reductions resulting from the migration to the shared SUNCOM telecommunication services for the SSRC customers. The division shall work with the SSRC to track utilization of the network during the 2009-2010 fiscal year for the purpose of developing a utilization based cost allocation model for implementation by July 1, 2011.” 10 Section 282.703 (4) F.S. “The department shall maintain a directory of information and services which provides the names, phone numbers, and e-mail addresses for employees, agencies, and network devices that are served, in whole or in part, by the SUNCOM Network. State agencies and political subdivisions of the state shall cooperate with the department by providing timely and accurate directory information in the manner established by the department.” 11 Section 252.35 F.S., Emergency management powers; Division of Emergency Management Printed 2/4/2011 9:39 AM  Page 96 
  • 97. DivTel Business Model and Value 2.0  “(1) The division (of Emergency Management) is responsible for maintaining a comprehensive statewide program of emergency management. The division is responsible for coordination with efforts of the Federal Government with other departments and agencies of state government, with county and municipal governments and school boards, and with private agencies that have a role in emergency management. (2) The division is responsible for carrying out the provisions of ss. 252.31-252.90. In performing its duties under ss. 252.31- 252.90, the division shall: (a) Prepare a state comprehensive emergency management plan, which shall be integrated into and coordinated with the emergency management plans and programs of the Federal Government. The division must adopt the plan as a rule in accordance with chapter 120. The plan shall be implemented by a continuous, integrated comprehensive emergency management program. The plan must contain provisions to ensure that the state is prepared for emergencies and minor, major, and catastrophic disasters, and the division shall work closely with local governments and agencies and organizations with emergency management responsibilities in preparing and maintaining the plan. The state comprehensive emergency management plan shall be operations oriented and: (8) Assign lead and support responsibilities to state agencies and personnel for emergency support functions and other support activities.”12 The state comprehensive emergency plan appendix II is found at http://www.floridadisaster.org/documents/CEMP/2010/ESF%202.pdf13 The SNA backbone, through the SSRC (and its mainframe), facilitated communications between State IBM mainframes and dumb terminals. This allowed for example, terminals used for the purchasing system (SPURS) to access the state accounting system (SAMAS) rather than buy another dedicated terminal. When SUNCOM established the State Intranet (dedicated network using Internet technology) a single State firewall was established at the SSRC for all connections to the Internet. This meant that all users of SUNCOM’s Frame Relay and Routed Transport Services securely passed through the SSRC to get to the Internet.14 MyFlorida Network (MFN), SUNCOM’s current data communications service is able to provide premise firewalls a low prices (i.e. place firewalls on customer sites under strict security and quality contract provisions with shared monitoring rather than rely upon a central firewall).15 Serving schools without understanding or being able to process erate is analogous to practicing geriatric medicine without accepting Medicare payments because erate is part-and-parcel to K-12 telecommunications and is complicated.16 Because circuits outside of a given office building must be used, the savings from consolidating equipment and data centers are diminished by the increased telecommunications costs after the move. By coincidence however, SUNCOM was renegotiating the MFN contract during these moves and was able to achieve a savings that prevented a net cost increase from the move.17 A dilemma inherent to SUNCOM’s purpose of fostering customer savings comes with SUNCOM’s self-funded model. As SUNCOM assists customers with reducing costs, SUNCOM’s opportunity to recover administrative costs diminishes. This tends to push SUNCOM’s mark-up percentage higher. To counter this, SUNCOM seeks to expand its customer base to include more discretionary users and broaden its base of services.18 Figure 6 on page 28 compares isolated purchases to a list of benefits from other approaches to enterprise procurement.19 DOE’s request that SUNCOM establish another FIRN service rather than use existing services (MyFlorida Network; MFN) was a result of DOE claims that MFN services were not compliant with E-rate grant restrictions. This was strongly disputed by the MFN vendor’s E-rate experts at the time. However, it was clear at the time of DOE’s failed bid that its mere failure (due to its higher comparative prices) qualified MFN as a sanctioned E-rate alternative in accordance with E-rate rules.20 This estimate does not however, consider the cost savings from preventing duplicate design, procurement, maintenance, and cost allocation projects and interoperability costs incurred by 28 state agencies (which could be as much as 28 times SUNCOM’s administrative costs).21 The best bid to DOE for FIRN was from Education Networks of American using Florida LambdaRail infrastructure. At DOE’s subsequent request, SUNCOM established a new contract that was 39.5% less expensive on average than the best bidPrinted 2/4/2011 9:39 AM  Page 97 
  • 98. DivTel Business Model and Value 2.0  DOE received. However, MyFlorida Network was actually less expensive at the time by 52.7% and is now 62% less expensive than the DOE bid since renewal of the MFN contract in December of 2010. SUNCOM FIRN Best Service w/ Offer to Admin. Bandwidth DOE Costs DSL $300 $96.52 T1 $700 $586.24 3 Mbps $1,025 $920.97 6 Mbps $2,050 $1,695.88 9 Mbps $2,575 $2,491.89 12 Mbps $3,000 $2,722.80 15 Mbps $3,225 $2,867.12 21 Mbps $3,675 $3,463.27 33 Mbps $4,725 $3,919.54 45 Mbps $6,625 $4,579.23 75 Mbps $8,875 $5,372.62 90 Mbps $10,000 $6,208.31 100 Mbps $10,750 $6,208.31 155 Mbps $16,500 $7,069.02 200Mbps $18,900 $8,007.65 Average $6,195 $3,747 Savings 39.5%22 The below calculation uses the example described in Endnote 21 to determine savings from the lower prices SUNCOM can achieve. SUNCOM Avoided Costs Savings over SUNCOM of All Isolated DOE FIRN Payments to Agency Proposals Vendors Purchases* 40% $109,949,588 $181,767,998 Costs of independent purchases Less $109,949,588 SUNCOM current payments to vendors Savings $71,818,410 Divided by $10,074,056 SUNCOM Administrative costs Savings is 7.129046101 times administrative costs * This assumes that all agencies procured telecommunications services independently as DOE attempted to do and got similar results. Few would likely have done as well as DOE because its procurement was so large.23 Sometimes pooled services are not actually bought from vendors, but instead created by internal service providers (like SUNCOM). In such cases, pooling is a necessity because investments in infrastructure, staffing, etc. cannot be recovered from simply marking-up charges from vendors (since there are no charges from vendors). Virtually all effective data centers take this approach. SUNCOM has done this in the past with a dedicated backbone that carried all long distance and data telecommunications, i.e. SUNCOM bought large circuits rather than merely services from vendors. The cost of that backbone was recovered in the form of services bought by customers served through the backbone. SUNCOM is using this approach today with data center ports and may increase use of this model as it considers leveraging telecommunications infrastructure held by partners rather than buying services offered by vendors (see “Local and Regional Governments” on page 41).24 From Wikipedia, “… the results obtained from a large number of trials should be close to the expected value, and will tend to become closer (to the expected value) as more trials are performed.” Many industries use this principle in which they rely upon the activities of a large number of average customers to compensate for outliers; e.g. a large number of accident free drivers paying premiums offset a few insurance payouts for accidents, etc. But with pooling and incremental charges in the SUNCOM model, the outliers will pay their fair share. SUNCOM uses this principle to make commitments to vendors for large purchases (with savings) knowing that the inconsistencies of customer demand will be evened-out in the aggregate.Printed 2/4/2011 9:39 AM  Page 98 
  • 99. DivTel Business Model and Value 2.0 25 However, SUNCOM also uses its negotiating leverage to include contract provisions that further mitigate risk; e.g. periodic commitment adjustments, no overage penalties, etc.26 Perhaps the best current pool example is a “family plan” for cellular minutes. When individuals buy blocks of minutes (like 1,000 minutes monthly), they frequently pay for minutes that they do not use or risk paying charges for exceeding the limit. Family plans allow groups to buy shared blocks (i.e. to make commitment to a pool) thus are more likely to optimize their minutes. This is because the risk that one family member will use more than normal is offset by the possibility that another will use less. SUNCOM intends to establish a “family plan” for the entire state (more on this below under “SUNCOM Consolidated Wireless Contract” on page 53).27 Although SUNCOM’s procurements are more strategic, complicated and sometimes lengthier than independent agency procurements, they are also less susceptible to defects since they are managed by specialized experts. And the appropriateness of the design for the enterprise and sustainability over time is better assured through SUNCOM.28 Using the state accounting system, FLAIR, and internal policies and accountability, SUNCOM is better equipped than vendors to collect payments. SUNCOM also achieves greater efficiencies by managing orders because doing so also provides a centralized inventory to be used in audits of vendor charges and reporting to policy makers.29 SUNCOM pays these invoices after verifying that they contain verifiable charges by actually generating SUNCOM customer invoices. SUNCOM has an elaborate process for verifying that the vendor has provided accurate supporting information through SUNCOM’s billing and inventory systems. Credits are commonly exchanged with vendors to compensate for vendor billing errors.30 Section 282.702 F.S., - Powers and duties, “(2) To adopt technical standards by rule for the state telecommunications network which ensure the interconnection and operational security of computer networks, telecommunications, and information systems of agencies.”31 Because SUNCOM’s security is limited to the enterprise network however, customers are still obliged to maintain security within their distinct local and wide area networks.32 An example of a security breach SUNCOM cannot prevent is a virus that comes from a thumb drive inserted in a PC connected to a LAN within the state network. If that virus propagates unusual data traffic however, from customer’s LAN onto the state network, SUNCOM will likely discover it, notify the customer and take steps to protect the state network and other customers.33 Perhaps the best example where the Legislature was frustrated by lack of data was during the 2009 OPAGGA audit of cell phone usage. Because agencies use a variety of contracts (the largest being the State Term Contract) and none of them centralize ordering and billing, OPAGGA was unable to get accurate counts. This led to the passing of HB 5611 in the 2010 Session, (later vetoed for unrelated Constitutional issues) directing SUNCOM to centralize cell phone procurement and requiring agencies to use SUCNOM. Despite the veto, SUNCOM is using its existing statutory authority to consolidate cell phone purchases for the state. When SUNCOM replaces the current contracts with the SUNCOM model, all of the related data OPAGGA sought will be available instantaneously.34 Section 282.702 (1) and (13) F.S., Powers and duties. “To publish electronically the portfolio of services available from the department, including pricing information; the policies and procedures governing usage of available services; and a forecast of the department’s priorities for each telecommunications service.”35 However, SUNCOM does receive tax proceeds indirectly through state agency customers. And the General Appropriations Act is the exclusive authorizer for SUNCOM trust fund expenditures.36 Perhaps the best recent example of a self funded investment came from establishment of the MyFlorida Network now used by all state agencies. Through a contract with AT&T, SUNCOM transitioned all state agencies in one year to cutting edge technology known as Multi Protocol Label Switching under a robust service at considerable savings over the preceding technology. All this was done without any additional appropriation. MFN has saved an estimated $14 million annually for the state. But it could not have been made available at lower costs so early without SUNCOM’s design, development and large scale contract with AT&T.Printed 2/4/2011 9:39 AM  Page 99 
  • 100. DivTel Business Model and Value 2.0 37 It should be noted that some customers insist on using the latest technology before it is ready. VoIP has been the most common recent example. When SUNCOM is unable to postpone customer demand, it can at least use its leverage, standards and technical knowhow to mitigate these costs.38 Naturally, SUNCOM must balance the needs of the enterprise against the specific requests of individual state agencies. This is why SUNCOM’s Portfolio of Services gives customers various options to achieve a given purpose. And when SUNCOM’s portfolio does not accommodate very unique needs, customers are given the leeway to develop their own telecommunications solutions through SUNCOM’s exemption process established in S. 60FF-1, F.A.C.39 The following is based on projected FY 2011/10 and includes non-operating expenditures. Paid to other Total Paid to Government Internal Expenditures Private Sector Entities Operations $120,023,644 $112,004,433 $2,172,794 $5,846,417 100.0% 93.3% 1.8% 4.9%40 It should be noted that a dilemma is inherent to SUNCOM’s purpose of fostering customer savings comes with SUNCOM’s self-funded model. As SUNCOM assists customers in reducing costs, SUNCOM’s opportunity to recover administrative costs diminishes. This tends to push SUNCOM’s mark-up percentage higher. To combat this, SUNCOM seeks to expand its customer base to include more discretionary customers and broaden its base of services.41 Of note is the common dilemma of balancing the narrow savings that can be achieved for a specific customer with the need to keep that customer within the enterprise model. Customers in urban areas for example, are cheaper to serve. If they break from the consortium they can sometimes get better prices. But the consortium is left with the more expensive rural areas and with fewer participants, thus has diminished bargaining leverage. This causes greater enterprise costs that are almost always greater than the parochial savings of the single customer that broke away from the consortium.42 A standard requirement of Information Technology services is to periodically exchange large files to update databases. The updates are often not urgent so they happen once a day or less frequently. They are often automated, i.e. require no staff to launch them. With no incentive to do otherwise, users often exchange them in the middle of the day despite no pressing need to do so. By financially deterring exchange of such files when many users are on the network, peak load pricing encourages users to reduce congestion, capacity and therefore, costs with no direct impact on their business requirements.43 SUNCOM does not now implement Peak-Load Pricing but intends to do so for the connections through the SSRC data center after complete implementation of metered charges for pools connections where customers running large file transfers might be able to shift them to off-peak hours.44 When the internal service provider builds services using assets it owns rather than buying pass-through services, a double- step-down allocation is more appropriate. This more complicated method is necessary because the internal provider’s expenditures do not directly support customer services; rather they support assets and internal activities that support customer services. The indirect relationship between spending and customer services requires determining internal resource costs first, then a second step to determine the value each resource contributes to customer services.45 SUNCOM is compelled to subsidize some services as a result of start-up and service retirement costs, broader public policy decisions, aggregate enterprise concerns, leadership and political directives.46 There are opportunities with an enterprise model to use the law, rules and strong leadership to accelerate technological change thus minimize subsidies associated with new and old services.47 Subsection 282.7101, F. S. - Statewide system of regional law enforcement communications48 Section 401.015 F.S., - Statewide regional emergency medical telecommunication system49 Subsection 282.709 (1) F.S., - State agency law enforcement radio system and interoperability network50 US Department of Homeland Security, SAFECOM, http://www.safecomprogram.gov/SAFECOM/interoperability/default.htm “In general, interoperability refers to the ability of emergency responders to work seamlessly with other systems or products without any special effort. Wireless communications interoperability specifically refers to the ability of emergency response officials to share information viaPrinted 2/4/2011 9:39 AM  Page 100 
  • 101. DivTel Business Model and Value 2.0  voice and data signals on demand, in real time, when needed, and as authorized. For example, when communications systems are interoperable, police and firefighters responding to a routine incident can talk to each other to coordinate efforts. Communications interoperability also makes it possible for emergency response agencies responding to catastrophic accidents or disasters to work effectively together. Finally, it allows emergency response personnel to maximize resources in planning for major predictable events such as the Super Bowl or an inauguration, or for disaster relief and recovery efforts.”51 Subsection 282.709 (1) F.S., - State agency law enforcement radio system and interoperability network52 Subsection 365.171 (4) F.S., - Emergency communications number E911 state plan53 Subsection 365.171 (5) F.S.54 Subsection 365.172 (8) F.S.55 Paragraph 365.172 (5) (a) F.S.56 See the State E911 Plan for details on each of the county systems. The latest edition of the State E911 Plan is available on the web at: http://dms.myflorida.com/suncom/public_safety_bureau/florida_e911/florida_e911_plan57 See the E911 Board 2009 Annual Report, Section E, Status of Enhanced 911 Services, Subsections 1 and 2, Phase 1 and Phase 2 Wireless Service, respectively.58 See the E911 Board 2009 Annual Report, Section E, Status of Enhanced 911 Services, Subsection 4, Next Generation 911 (NG911). This document is available in its entirety, on the web at: http://dms.myflorida.com/media/cits_media/florida_e911_files/e911_board_meeting_schedules/e911_board_meetings_2010/ e911_board_reports59 Section 252.35 F.S., Emergency management powers; Division of Emergency Management “(1) The division (of Emergency Management) is responsible for maintaining a comprehensive statewide program of emergency management. The division is responsible for coordination with efforts of the Federal Government with other departments and agencies of state government, with county and municipal governments and school boards, and with private agencies that have a role in emergency management. (2) The division is responsible for carrying out the provisions of ss. 252.31-252.90. In performing its duties under ss. 252.31- 252.90, the division shall: (a) Prepare a state comprehensive emergency management plan, which shall be integrated into and coordinated with the emergency management plans and programs of the Federal Government. The division must adopt the plan as a rule in accordance with chapter 120. The plan shall be implemented by a continuous, integrated comprehensive emergency management program. The plan must contain provisions to ensure that the state is prepared for emergencies and minor, major, and catastrophic disasters, and the division shall work closely with local governments and agencies and organizations with emergency management responsibilities in preparing and maintaining the plan. The state comprehensive emergency management plan shall be operations oriented and: (8) Assign lead and support responsibilities to state agencies and personnel for emergency support functions and other support activities.”60 The state comprehensive emergency plan appendix II is found at http://www.floridadisaster.org/documents/CEMP/2010/ESF%202.pdf61 Section 252.365 F.S., Emergency coordination officers; disaster-preparedness plans “(1) The head of each executive department, the executive director of each water management district, the Public Service Commission, the Fish and Wildlife Conservation Commission, and the Department of Military Affairs shall select from within such agency a person to be designated as the emergency coordination officer for the agency and an alternate. (2) The emergency coordination officer is responsible for coordinating with the division on emergency preparedness issues, preparing and maintaining emergency preparedness and post-disaster response and recovery plans for such agency, maintaining rosters of personnel to assist in disaster operations, and coordinating appropriate training for agency personnel.”Printed 2/4/2011 9:39 AM  Page 101 
  • 102. DivTel Business Model and Value 2.0 62 The State of Florida must be prepared to respond quickly and effectively on a 24-hour basis to developing events. When an event or potential event if first detected, the state Emergency Operations Center is activated to a level appropriate to the magnitude of the threat. The states response effort is then initiated through the State Emergency Response Team (SERT), which is comprised of Governor-appointed Emergency Coordination Officers (ECO) from state agencies and volunteer organizations. These Emergency Coordination Officers are authorized to use the resources of their respective agency or organization to carry out response and recovery missions that are assigned by functions. All state agencies and volunteer organizations, that comprise the State Emergency Response Team, are grouped into 18 Emergency Support Functions (ESF) to carry out coordination and completion of assigned missions. These functions represent specific response activities that are common to all disasters. Each Emergency Support Function is comprised of one or more Primary agency (ies) serving as the lead and several other agencies and organizations providing support. The ESF is a mechanism that consolidates multiple agencies that perform similar or like functions into a single, cohesive unit to allow for the better management of emergency response functions (for example, many different state and local agencies have sworn law enforcement officers. Under the ESF concept, these law enforcement agencies all function as one under ESF 16). The ESF concept was developed by the Federal Emergency Management Agency (FEMA) in the late 1980s to address the potential management concerns that would be necessary to coordinate a federal response to a catastrophic earthquake in California. FEMA subsequently implemented the ESF concept in the development of its Federal Response Plan. In Florida, 15 of the 18 ESFs fall under one of four branches in the Operations Section: Emergency Services, Human Services, Infrastructure Support and Operations Support.63 Florida Statutes, Chapter 282.7101, Statewide system of regional law enforcement communications.64 The latest edition of the State E911 Plan is under rule development. See the new Emergency Communication E911 State Plan on the web at: http://dms.myflorida.com/suncom/public_safety_bureau/florida_e911/florida_e911_plan65 Section 401.013 F.S., - Statewide regional emergency medical telecommunication system66 In 2000, the DMS entered into a unique public-private partnership (via a competitive procurement) with Com-Net Ericsson Critical Radio Systems, Inc. to establish a statewide law enforcement radio system (SLERS). Under the resulting 20-year contract, using the “shared risk/shared reward” concept, Com-Net agreed to assume responsibility for building, operating and maintaining the SLERS. The state in turn provides sustainable funding, project management, contract oversight, engineering, frequency licensing, and regulatory management. As the result of a 2009 corporate acquisition, the current vendor under the contract is Harris Corporation, based in Melbourne, Florida.67 Section 320.0802 F.S., Surcharge on license tax “There is hereby levied and imposed on each license tax imposed under s. 320.08, except those set forth in s. 320.08(11), a surcharge in the amount of $1, which shall be collected in the same manner as the license tax and deposited into the State Agency Law Enforcement Radio System Trust Fund of the Department of Management Services.”68 Section 328.72 F.S., Classification; registration; fees and charges; surcharge; disposition of fees; fines; marine turtle stickers (9)SURCHARGE.—In addition, there is hereby levied and imposed on each vessel registration fee imposed under subsection (1) a surcharge in the amount of $1 for each 12-month period of registration, which shall be collected in the same manner as the fee and deposited into the State Agency Law ENFORCEMENT RADIO System Trust Fund of the Department of Management Services.69 The Bureau lays out the strategy for the implementation and use of each 700 MHz interoperability channel, and grants approval for those agencies requesting to license channels.70 See the Florida – Region 9 Plan for Public Safety Radio Communications at: http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/radio_communication_plans71 See the Law Enforcement Communications Plan at: http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/radio_communication_plans72 FS 318.21 (9) Twelve dollars and fifty cents from each moving traffic violation must be used by the county to fund that county’s participation in an intergovernmental radio communication program approved by the Department of Management Services. If the county is not participating in such a program, funds collected must be used to fund local law enforcementPrinted 2/4/2011 9:39 AM  Page 102 
  • 103. DivTel Business Model and Value 2.0  automation and must be distributed to the municipality or special improvement district in which the violation occurred or to the county if the violation occurred within the unincorporated area of the county.73 See more on EMS at: http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/emergency_medical_services_ems74 See the Florida 700 MHz Public Safety Interoperability Channel Plan, on the web at: http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/radio_communication_plans75 Under Section 282.709, Florida Statutes, the Department of Management Services was tasked to: "...acquire and implement a statewide radio communications system to serve law enforcement units of state agencies, and to serve local law enforcement agencies through mutual aid channels." Additionally, by the same Statute, the Joint Task Force on State Agency Law Enforcement Communications was created by in the Department of Management Services ..."to advise the office of member- agency needs for the planning, designing and establishment of the joint system."76 The Joint Task Force on State Agency Law Enforcement Communications (JTF Board) was established in DMS by Section 282.709 Florida Statutes, adjunct to the department "to advise the department of member-agency needs relating to the planning, designing, and establishment of the statewide communication system." Additionally, the State Law Enforcement Trust Fund is established in DMS. This trust fund is funded from surcharges collected under ss.320.0802 and 328.72, Florida Statues. The JTF Board, according to statute, consists of eight (8) members. Agencies are included in SLERS by statutory reference (Section 282.709, FS) or by acceptance into the Governors Enterprise- wide Sharing of Resources Model (see below). Each member category receives equipment and services as provided by the contract with Harris Corporation (formerly Tyco Electronics). The Statutory Agencies are:  Department of Business and Professional Regulation / Division of Alcoholic Beverages and Tobacco;  Department of Highway Safety and Motor Vehicles / Division of Florida Highway Patrol;  Department of Law Enforcement/Criminal Investigations & Florida Capitol Police;  Fish & Wildlife Conservation Commission;  Department of Environmental Protection / Division of Law Enforcement  Department of Corrections;  Department of Financial Services/Insurance Fraud & State Fire Marshal;  Department of Transportation/Motor Carrier Compliance, Road Rangers.77 See the Report on the State Law Enforcement Radio System (SLERS), Planning Report to the Legislature (12/1/2009). This document is available in its entirety, on the web at: http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/statewide_law_enforcement_radio_system_sl ers78 See status report on the web at: http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/florida_interoperability_network_fin/implem entation_status79 The Bureau assists the E911 Board with E911 fee revenue collection by tracking remittances to the E911 Trust Fund and researching any significant variances from previous months. The Bureau assists in processing the disbursement of funds to the counties and to the wireless service providers for cost recovery, which are used to support E911 service in the state.80 E911 Board 2009 Annual Report, Section B, Executive Summary, Financial Highlights, page 3.81 The E911 Board, established by the Legislature in 2007, is composed of nine members. The secretary of the Department of Management Services designates the chair of the board. The governor appoints four members who are county 911 coordinators and four members from the telecommunications industry. The E911 Board meets monthly with the goal of making Florida a national leader in E911 services. The E911 Board provides unified leadership for all E911 issues through planning and coordination. The E911 Board advocates E911 issues related to system functions, features, and operations to enhance 911 services in this state and considers emerging technology and related cost savings for the benefit and safety of our residents and visitors.82 The E911 Board provides three grant programs to assist Counties with funding of the County E911 Systems. These include the Rural County Grant Program, E911 State Grant Program, and the E911 Emergency Grant Program.Printed 2/4/2011 9:39 AM  Page 103 
  • 104. DivTel Business Model and Value 2.0  o The Rural County Grant Program is a biannual grant program utilizing two percent of the E911 fee revenue collected for equipment and maintenance of E911 systems. The State of Florida E911 Board assists eligible counties through the Rural County Grant Program. o The State Grant Program is a grant program provided for the purpose of assisting State of Florida counties with the installation of Enhanced 911 (E911) systems and to provide seamless E911 throughout the State of Florida. The State of Florida E911 Board assists eligible counties through the E911 State Grant Program utilizing E911 trust funds. o The State of Florida E911 Board, utilizing E911 trust funds, established the E911 Emergency Grant Program, a grant program establishing an expedited schedule for approval of grants, provided to assist counties with the emergency restoration of Enhanced 911 throughout the State of Florida resulting from natural and man-made disasters or events.83 The Florida Region Interference Program is available, online at: http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/radio_communication_plans/florida_region_ 9_plan_for_public_safety_radio_communications84 The Department of Management Services has the following responsibilities for statewide coordination of 911 and enhanced 911 (E911) services: Statewide Emergency Communications Number E911 State Plan Coordinating effective delivery of 911 services statewide Assisting counties on technical standards and operational capabilities Assisting counties with designing and implementing new systems Inspecting and issuing certificates to all Public Service Answering Point (PSAP) in compliance with the 911 Plan Assisting with county 911 coordinator training Monitoring the Florida Public Service Commission (FPSC); Federal Communications Commission (FCC) and other regulatory entities on 911/E911 issues. A 911 call is answered at a Public Service Answering Point (PSAP), the first point of contact for a person needing law enforcement, fire, and emergency medical services response. Enhanced 911 provides the 911 PSAP with the callers location. All Florida counties reported achieving enhanced 911 (E911) for landline telephone service in September 2005.85 The following counties are currently SLERS partners: Baker, Bradford, Franklin, Glades, Hendry, Levy, Okaloosa, Okeechobee, Taylor, Union and Walton.86 Current SLERS Partners:  Baker County;  Bradford County - Sheriffs Office;  Corrections Corporation of America;  Dept. of Health – Radiation Control;  Dept. of Health – State Medical Response Team;  Franklin County;  Glades County;  GeoGroup, Inc.;  Levy County;  Okaloosa County;  Okeechobee County;  Seminole Tribe of Florida;  Social Security Administration - Investigations;  SOF - Division of Emergency Management;  Tampa General Hospital, AeroMed Service;  Union County - SO Emergency Management;  Walton County - Fire.SLERS Interoperability Partners:  Amtrak Railroad PD;  Broward Emergency Management;  Clearwater PD;  CSX Railroad PD;  Eglin AFB Fire;Printed 2/4/2011 9:39 AM  Page 104 
  • 105. DivTel Business Model and Value 2.0   Hillsborough Co SO;  Jupiter PD;  Leon Co SO;  North Miami Beach PD;  Orange Co SO;  Pinellas Co SO;  Regional Domestic Security Task Force - Region 1;  St. Johns Co SO;  Sumter Co SO;  U.S. Department of Justice - ATFE;  US Forestry Service LE (Baker Co. Area);  U.S. Navy - Kings Bay and Jax NAS Fusion Center.SLERS Affiliate Users: (Affiliate Users - working in conjunction with an authorized State Law Enforcement Agency)  Florida Department of Transportation-Road Rangers  National Oceanic Atmospheric Administration  SOF – Division of Emergency Management – Mobile CP  U. S. Fish & Wildlife Services  U. S. Forestry Service  U. S. Marshals Service, Violent Fugitive Task Force87 However, SIP will provide the ability to render some users anonymous, invisible or allow them to use aliases for security reasons.88 Operators employed by telephone service customers and located in the customer’s office building who plugged wires into a switchboard to connect callers together were effectively the first type of PBX.89 Virtually all PBXs sold today that accommodate traditional telephony (as opposed to VoIP) do so to maintain backward compatibility with equipment that is not being replaced. SUNCOM offers these “Hybrid” systems under STEPS.90 The premise PBX switches are directly linked to the telephone company through SUNCOM’s State Network. As such, integration of PBXs with the State Network creates consequences on the State Network from failure to implement or maintain PBXs properly. DivTel’s recent migration of the state voice network to eliminate the dedicated backbone was delayed and savings opportunities lost because some customer PBXs had not been kept up-to-date.91 Section 282.703 F.S., SUNCOM Network; exemptions from the required use. “(5) (a) If a SUNCOM Network service does not meet the telecommunications requirements of an agency, the agency must notify the department in writing and detail the requirements for that service. If the department is unable to meet an agency’s requirements by enhancing SUNCOM Network service, the department may grant the agency an exemption from the required use of specified SUNCOM Network services.”92 Central office exchange services (Centrex) is a local phone company offering that uses centrally housed equipment to provide customers with communications switching and other features (such as voice mail). VoIP Centrex is such a centralized service using Voice over IP.93 Two hundred minutes was the average usage of State Term Contract users between November of 2009 and May of 2010. Verizon was unable to provide data on the plans these users paid for.94 SIP and IMS were actually first designed for mobile services because of their mobility and the multifaceted functionality of such devices.95 State of Florida, 2009 E911 Board Annual Report, Executive Summary, page 2. See this document on the web at: http://dms.myflorida.com/media/cits_media/florida_e911_files/florida_e911_board_information_files/e911_board_reports96 For information on the ENHANCE 911 Act Grant award to Florida, go to: http://dms.myflorida.com/suncom/public_safety_bureau/florida_e911/e911_grant_information97 Section 320.0802 F.S., Surcharge on license taxPrinted 2/4/2011 9:39 AM  Page 105 
  • 106. DivTel Business Model and Value 2.0  “There is hereby levied and imposed on each license tax imposed under s. 320.08, except those set forth in s. 320.08(11), a surcharge in the amount of $1, which shall be collected in the same manner as the license tax and deposited into the State Agency Law Enforcement Radio System Trust Fund of the Department of Management Services.”98 Section 328.72 F.S., Classification; registration; fees and charges; surcharge; disposition of fees; fines; marine turtle stickers (9)SURCHARGE.—In addition, there is hereby levied and imposed on each vessel registration fee imposed under subsection (1) a surcharge in the amount of $1 for each 12-month period of registration, which shall be collected in the same manner as the fee and deposited into the State Agency Law ENFORCEMENT RADIO System Trust Fund of the Department of Management Services.99 Section 318.18 F.S., Amount of penalties“(17)In addition to any penalties imposed, a surcharge of $3 must be paid for all criminal offenses listed in s. 318.17 and for all noncriminal moving traffic violations under chapter 316. Revenue from the surcharge shall be remitted to the Department of Revenue and deposited quarterly into the State Agency Law ENFORCEMENT RADIO System Trust Fund of the Department of Management Services for the state agency law ENFORCEMENT RADIO system, as described in s. 282.709, and to provide technical assistance to state agencies and local law ENFORCEMENT agencies with their statewide systems of regional law ENFORCEMENT communications, as described in s. 282.7101. This subsection expires July 1, 2012. The Department of Management Services may retain funds sufficient to recover the costs and expenses incurred for managing, administering, and overseeing the Statewide Law ENFORCEMENT RADIO System, and providing technical assistance to state agencies and local law ENFORCEMENT agencies with their statewide systems of regional law ENFORCEMENT communications. The Department of Management Services working in conjunction with the Joint Task Force on State Agency Law ENFORCEMENT Communications shall determine and direct the purposes for which these funds are used to enhance and improve the RADIO system.100 When SLERS handsets are upgraded, they will be P25 compatible. But without upgrading the SLERS core infrastructure, they will not be able to use P25 during normal day-to-day operations.101 See more on wireless broadband data for public safety at:http://www.fcc.gov/pshs/public-safety-spectrum/700-MHz/safetyband.html102 MFN technologies that are critical to LTE for public safety include Multi Protocol Label Switching (MPLS), ability to discriminate between users with Quality of Service (QoS) and high levels of reliability and up-time. SIP/IMS services must also be supported by the network which are planned features of MFN.103 In concert with State Purchasing, DivTel has drafted technical specifications for Project 25 radio equipment for purchase by state and local agencies. This contract will assist with the migration from a disparate radio system to a standard-based radio system. Using the SUNCOM business model for mobile communications services will add more transparency, accountability and possibly more competition to the process since ordering and billing for these purchases will be centralized.104 Subsection 335.14 (2) F.S., narrows the purpose of ITS per this full subsection excerpt, “Computerized traffic systems and control devices which are used solely for the purpose of motor vehicle traffic control and surveillance shall be exempted from the provisions of chapter 282.” The relevant chapter 282 F.S., reference pertains more specifically to section 282.703 that requires all state agencies to use SUNCOM.105 In spite of the federal and state restrictions however, FDOT has drafted agreements with counties to share ITS fiber. See Attachment 5.106 The usability of the ITS fiber will not be fully understood without further DMS access to ITS information, study and/or inclusion of the fiber in an Invitation to Negotiate through which vendors can tell the state if and how the fiber can be used to offset state costs. DOT itself did this in May, 2010 with an ITN-DOT-09/10-9030-LG for a Vidoe Aggregation Subsystem Phase II (VAS II) IP video multicast service. The prevailing vendor’s selected proposal from the IBI Group and subcontractor Qwest, chose to use the Qwest network and the Internet rather than the DOT ITS network. This suggests some deficiencies in the ITS that may make it unsuitable as a network that SUNCOM can depend upon. However, it might also be indicative of a disjointed implementation of the ITS network that could be resolved under an enterprise model.107 Note that ITS fiber could only be useful for backbone purposes, i.e. carrying communications between major hubs thus not useful for the “last mile” to the customer’s premise.Printed 2/4/2011 9:39 AM  Page 106 
  • 107. DivTel Business Model and Value 2.0 108 For example, a single fiber strand using Dense Wavelength-Division Multiplexing (DWDM) can carry up to 400 gigabits/second.109 See Attachment 6.110 Internet 2 was formally organized in 1997 as a not-for-profit corporation under the name of the University Corporation for Advanced Internet Development (UCAID), and subsequently changed its name to Internet2. In partnership with Qwest, UCAID built in 1998 Internet2, a fiber-optic backbone network known as Abilene that links member networks for purposes of education and research. Today Internet2 reports having as members more than 200 U.S. universities; 70 corporations; 45 government agencies, laboratories and other institutions of higher learning; as well as over 50 international organizations. Internet2. Thirty-three research and education network members support Internet2 through annual membership fees. Members of Internet2 include, among others, the following research and education networks: Florida LambdaRail, NYSERNet in New York, and OARnet in Ohio. Internet2. “About Us.” http://www.internet2.edu/about/.111 Excerpt from SB 2020 from the 2010 Legislative Session (showing underlines and strikethroughs showing changes to Florida Statutes): 282.703 SUNCOM Network; exemptions from the required use.— (1) There is created within the department the SUNCOM Network, which shall be developed to serve as the state communications system for providing local and long-distance communications services to state agencies, political 218 subdivisions of the state, municipalities, state universities, and nonprofit corporations pursuant to this part. The SUNCOM Network shall be developed to transmit all types of communications signals, including, but not limited to, voice, data, video, image, and radio. State agencies shall cooperate and assist in the development and joint use of communications systems and services. (3) All state agencies and state universities shall use the SUNCOM Network for agency and state university communications services as the services become available; however, no agency or university is relieved of responsibility for maintaining communications services necessary for effective management of its programs and functions. The department may provide such communications services to a state university if requested by the university. If a SUNCOM Network service does not meet the communications requirements of an agency or university, the agency or university shall notify the department in writing and detail the requirements for that communications service. If the department is unable to meet an agency’s or university’s requirements by enhancing SUNCOM Network service, the department may grant the agency or university an exemption from the required use of specified SUNCOM Network services. (4) This section may not be construed to require a state university to use SUNCOM Network communication services. Section 7. Section 282.706, Florida Statutes, is amended to read: 282.706 Use of SUNCOM Network by libraries.—The department may provide SUNCOM Network services to any library in the state, including libraries in public schools, community colleges, state universities, and nonprofit private postsecondary educational institutions, and libraries owned and operated by municipalities and political subdivisions. This section may not be construed to require a state university library to use SUNCOM Network services.112 The provisions in SB 2020 exempting universities from required use of SUNCOM were the result of an agreement between the University System, Legislature and Governor’s Office to grant universities more autonomy in several areas. The University System subsequently dropped a lawsuit that had challenged certain Legislative and Executive Branch control. 113 Leading up to the five year renewal of MyFloridaNet, there had been six months of unprecedented scrutiny over the contract from the Legislative branch. Among options that were considered was rebidding MFN to bring more savings. If such savings were to occur however, they would be far less than the $14 million in annual MFN savings achieved when it was first bid for two primary reasons. 1. MFN was a technological leap forward as Florida’s first Multi Protocol Label Switching network. MPLS significantly improved the efficiency and robustness of data communications. Its replacement would be another MPLS network, with a few additional features, given that the technology continues to be the state of the art. Therefore, a rebid would not reap significant cost savings from technology improvements as it did last time.Printed 2/4/2011 9:39 AM  Page 107 
  • 108. DivTel Business Model and Value 2.0  2. MFN was a large-scale replacement of the state data backbone and four services provided by several vendors. This increased SUNCOM’s buying leverage and economies of scale. A rebid MPLS network would essentially replace nothing more than the existing MPLS network thus bring no new economies of scale and buying leverage. A rebid of this magnitude will however require a significant investment and opportunity costs. Though simpler than the large- scale replacement and migration last time, the $39 million contract will still contain complex technical and performance provisions for a comprehensive enterprise network used by a wide variety of customers. It will also entail high stakes for the vendors which commonly lead to lengthy and complex legal entanglements (like the unsuccessful vendor bid protest last time). Meanwhile:  The State of Florida has no consolidated, transparent and accountable source for mobile communications services.  SUNCOM voice contracts for local phone service and long distance must be rebid soon and must use nontraditional approaches to leverage significant changes to the technologies and industry.  Achieving transparent competition in state purchases of telephone switching equipment (PBXs) and associated hardware and software continues to be problematic.  There is no single enterprise contract for satellite services.  Schools and libraries continue to fall short of the opportunities to optimize federal assistance with their telecommunications services.  The Statewide Law Enforcement Radio System (SLERS) in its tenth year of a twenty year contract faces enormous challenges in maintaining devices and migrating to modern technologies.  DivTel has been given several assignments related to data center consolidation and improving data center efficiencies. All of these issues require significant time, work and talent of DivTel’s best staff. If there is a significant change to the stakes in a data communications rebid however, like consolidation of more state assets and services from duplicate state networks (like DOT’s Intelligent Transportation System and Florida LambdaRail), then the returns on an MFN rebid are likely to overcome these opportunity costs. But as of today, there appears to be no policy movement towards making an MFN rebid immediately more worthwhile than other pressing SUNCOM challenges (e.g. in fact, the 2010 statutory changes did the opposite by excluding universities from SUNCOM required usage, see endnote 111).114 See Attachment 4.115 The Agency for Health Care Administration, the Public Service Commission the Departments of Law Enforcement, State, Education, Management Services and Enterprise Florida participated in the Broadband Steering Committee.116 DMS also applied for a broadband adoption grant to the Broadband Technology Opportunities (BTOP) program that was not funded.117 The Department of State Division of Libraries applied for a computer center Broadband Technology Opportunities Program (BTOP) grant that was also not funded.Printed 2/4/2011 9:39 AM  Page 108 

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