Transforming Government

1. Transforming Government Phil Manfredi, Chief Strategy Officer Michael Golden, Director of Broadband Planning February 17, 2012

2. Topics • Introductions • Digital Arizona Project • Arizona Strategic IT Plan • Q&A

3. Digital Arizona Project Michael Golden, Director of Broadband Planning

4. Project began: with $6.3M federal stimulus grant Challenge Now is:How do we not end up with another three ring binder with a great policy sitting on the shelf after a four years and having spent $6 million on mapping and planning with nothing to show for it.

5. Mission now is: Implement a sustainable, leveraged broadband plan for accelerating transformation of economic growth, education, healthcare, and business in Arizona.

6. Primary Approach: Deploy conduit along frontage roads and state highways to be leased to providers at cost to facilitate availability of fiber Internet middle-mile capacity to support providers’ investments in more and faster services for rural Arizona. Two Highways for (nearly) the price of one!

7. Why does it matter… JOBS and GDP Impact (new hard data) 2007 MIT Study • In Counties with Broadband Deployment the Sales Per Capita Grew Almost Twice as Fast as Counties Without • Broadband Deployment Increased Employment by Over 5 Percent • Larger Impact in Smaller, Rural Communities

8. Why does it matter… 2011 Chalmer University Study • Every Doubling of Broadband Speed Increased GDP By 0.3% • If applied to Rural Arizona could potentially have the following impact: AZ Annual GDP $277 Billion X 15% (Rural Portion of AZ GDP) X .6% (4x Increase in Rural Broadband – 1mb to 4mb) = $249 million potential AZ Rural Increase / Year 2011 McKinsey Global Institute • The Internet Accounts for 21% of all GDP Growth Over the Last 5 Years in Developed Countries

9. Accelerate Capacity with Lean GovernmentHarness Existing Taxpayer Owned Assets • Leverage Public Rights-of-way • Two Highways for (nearly) the cost of one • Canals • Power-lines • Railroads • Recommend Permitting and Easement Best Practices • Leverage Existing $6.3 Million Federal Grant Into Sustainably Funded Mechanism For Acceleration of Digital Capacity Build-out • Provide Long-range State-wide Planning

10. Highways Water Hi Capacity Digital Communication Is The New “Essential Infrastructure” Electricty

11. Digital Arizona Council • Council has Twenty Members • Representation from: • ADOT • ADE • Large Providers • Small Providers • Rural & Urban Communities • Healthcare • Education • Rural Economic Development (COGs) • Business Entities via ATIC and AZTEC • Six Task Groups—67 participants 22 four-hour meetings to date. Detailed input from Providers, ADOT, ADE, ACC Communities, Health Providers/Payers, Economic Developers Visit:azbroadband.gov

12. Council Task Groups 22 meetings 67 participants to date • Public Policy Recommendations • State Broadband Strategic Plan & Map Use • Best Policy Practices • Implement Independent Rights-of-Way Study Recommendations • Tax Policy • Sustainable Funding Model • Sustainability of Broadband Capacity Growth by private sector • Rural Community Engagement • Demand Aggregation • Middle Mile Solutions • Provider ROI Enhancement • Community Technical Assistance • Economic Development via Broadband • Technical Assistance To Communities • Application Demonstrations • eLearning—Distance Learning • eHealth • eCommerce • eGovernment • eQuality-of-life • Broadband Application Demonstration Projects are being planned and will justify funding and investment models and strategies

13. ASET Success Measures • Non-Metro Broadband Capacity Increased By 20% by 2014 over current baseline • Non-Metro Broadband Adoption Increased By 20% over current baseline by 2014 • Increased Middle Mile Capacity (Both Gigabits/Sec Per Mile & Actual route miles) Increased by 100% against current baseline by 2015. • Increase miles of public rights-of-way re-use by 200% by 2014 • Minimum of 1 Gbps To Every School In Arizona by 2015 • Sustainable Funding Model Established by 2012

14. Digital Arizona Tactical Model Fiber Conduits On Tax-Payer Owned Rights-of-Way Internet Service Providers Businesses Schools Up to 25 miles at up to 1.5 Gbps P2P Connection Frontage Roads & State Highways Libraries “Two Highways For “Nearly the Cost Of One”

15. Conduit and Low Cost High Capacity Wireless

16. 5 Year Estimate • $25K per rural conduit trench mile • ~2500 to 3000 rural trench miles • $10M to $15M per year • Whole State covered in 5 to 7 years • Program can then be “sunset” to maintenance only mode

17. Conduit trenches have essentially infinite incremental capacity: (Up to 43 Million Gbps along any single highway) (or 21 million potential 1.5 Gigabit Radio Beams) Single Cell Tower- Ten 1.5- Gpbs Wireless Beams (15 Gbps) Translates to: • One Hundred and Fifty – 100 megabit simultaneous Internet connections • Six Hundred – 25 megabit simultaneous Internet connections • 1800 simultaneous different high-def TV streams • 5400 Internet Hi Definition IPTV subscribers

18. Digital Highway Bill Has Wide Support • Broadens the definition of "transportation" to include the transportation of information • Directs the ADOT Director to consider the construction of trenches with multiple fiber conduits and cell tower sites along rural ADOT managed highways rights-of-way • Conduits will be made available to qualified carrier-class providers on a cost-recovery lease basis • Lease pricing will be non-discriminatory • Funding for conduit construction must come from sources other than existing ADOT funding • ADOT will manage all engineering and physical construction and traffic safety issues around the construction • One conduit will be made available for ADOT "Smart Highway" use • All other conduits will be available only for private sector provider use

19. Digital Arizona Infrastructure Office Bill • Companion Bill creates a Digital Arizona Infrastructure Office within ADOA • Digital Arizona Infrastructure Office will have the authority to receive funding and distribute funding in support of broadband infrastructure projects • Create voluntary permitting guidelines for accelerating permitting processes for broadband. • The Office will manage the pricing for and access to Digital Highway conduits by providers • The office will coordinate with ADOT, the Digital Arizona Council and the providers in the determination of when and where conduit construction will occur • Office will provide long range broadband strategic planning

20. Funding • No funding in the legislation • Have some seed funding from existing grants • Additional capital needed to start development – ongoing revenue from leased conduit can be recycled to pay for additional capacity • Carriers may potentially invest in some upfront development • Seeking additional federal funding

21. Community Support • Arizona Telecommunications & Information Council (ATIC) voted on 1.10.12 to Champion Both Bills • Supporters • ATIC is sponsoring the bills ATIC and AZ Tech Council unanimous support • Superintendent Huppenthal & Educational establishment will champion both Bills • Former Senator Bob Burns Acting as Legislative Liaison • Senator Driggs is primary Senate sponsor. Have 16 co-sponsors in Senate • Representative Gray is primary House sponsor

22. Community Support • Supporters cont… • ADOT has contributed significantly to the language in both bills • League of Cities and Towns supportive • Intel • CenturyLink & Cox contributed significantly to the language in both bills • Rural COGs are supportive • Universities (Regents) • Hopis are supportive (Representing many tribes) • Rural Communities’ Council members • No Opposition from Urban cities (Tempe contributed to language)

23. Arizona Strategic IT Plan Phil Manfredi, Chief Strategy Officer

24. Environmental Scan Arizona Snapshot State Summary • Became a state in 1912 • 6.6 Million People (29% Increase In Past 10 Years) • 15 Counties – 45 People per Square Mile • Three of the top 50 most populous cities in U.S. • Maricopa + Pima counties account for 73% of total state population • 175 State Agencies, Boards, Commissions, Councils, Divisions and Offices Including Legislature and Courts • 31,000 Employees • $26.9 Billion Budget in FY2013 • Budget Surplus in 2013 • $600-$900M Deficit in 2014

25. Who is ASET?

26. Who is ASET? • Strategic Planning, Services and Capabilities, Data Center, Network Infrastructure, Security • 137 employees • $48M in State/Federal programs • 141 customers • 30,000 checks printed monthly • $95M in transactions weekly

27. ASET Mission Ensure continuity of mission critical & essential systems!

28. Big Hairy Audacious Goal (BHAG) Every service, available anywhere and at anytime to every Arizonan!

29. Governor’s Reform Agenda • Economic Competitiveness • Education Reform • State Government • Renewed Federalism

30. Alignment to Governor’s Reform Agenda • Economic Competitiveness • Education Reform • State Government • Renewed Federalism Deliver Enterprise Business Capabilities Model Fiscal Responsibility and Quality Commitment Mature the IT Community

31. MBO Approach (3-10-37-200+) Deliver Enterprise Business Capabilities 1.1 Accelerate Statewide Enterprise Architecture Adoption 1.2 Champion Governance, Transparency and Communication 1.3 Invest in Core Enterprise Capabilities 1.4 Proactively Manage Enterprise Risk Model Fiscal Responsibility and Quality Commitment 2.1 Implement a Continuous Improvement Culture 2.2 Adopt Innovative Sustainability Models 2.3 Reduce Total Cost of Ownership Mature the IT Community 3.1 Improve Quality, Capacity and Velocity of Business Services 3.2 Strengthen Statewide Program and Project Management 3.3 Build Innovative and Engaged Teams

32. Key Transformation Initiatives (8) • Implement New Statewide Infrastructure and Communications Network • Implement New Statewide ERP Solution • Implement Government Transformation Office • Accelerate Statewide Enterprise Architecture Adoption and Asset Management • Expand E-Government and Mobility Capabilities • Enhance Statewide Security / Privacy Capabilities and Training • Implement Critical Business Continuity Improvements at the State Data Center • Streamline Project Oversight, Improve Transparency and Strengthen Project Management

33. Questions?