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Q & A – Clarification from Lovejoy ISD

Dated: August 31, 2020

Q: Can the City confirm any information related to Lovejoy ISD’s interest as a potential anchor subscriber, their current dark fiber lease and internet service?

A:  An early informal discussion was held via Zoom on April 28, 2020, to discuss potential aspects of the broadband feasibility study. Dr. Dennis Womack, Assistant Superintendent of Operations at Lovejoy ISD, indicated that Lovejoy ISD has a contract with UPN (United Private Networks) to lease dark fiber. The dark fiber is owned and maintained by UPN which connects all of Lovejoy ISD’s buildings and schools. It was estimated that Lovejoy ISD is currently 5 years into their 10-year contract with UPN and currently receives up to 10 GB of internet speed. Dr. Womack indicated that Lovejoy ISD would be highly interested in partnering with Lucas if the City were to pursue a fiber network and provide internet service. It was mentioned that many students were experiencing issues with virtual learning due to inadequate Internet service during the Coronavirus Pandemic.

In the broadband feasibility study (refer to page 73), Magellan Advisors indicates that potential schools begin connecting in year 6 of the pro forma based on the dark fiber lease information communicated by Dr. Womack. Magellan Advisors conducted further research and verified that Lovejoy ISD participates in the E-Rate program administered by the Universal Service Administrative Company (USAC) under the direction of the Federal Communications Commission (FCC). The program provides discounts to assist schools and libraries in the United States to obtain affordable telecommunications and internet access. Magellan Advisors verified funding numbers with E-Rate that Lovejoy ISD received a 40% discount and pays 60% for internet-related services.

The below table is the E-Rate funding information related to the Lovejoy ISD dark fiber lease:

Category One Discount Rate40%
Type of ProductDark Fiber (No Special Construction)
Purpose10 Gigabit ethernet bandwidth capability over fiber optic cable to Lovejoy Administration bldg (HUB), Puster Elem, Hart Elem, Sloan Creek IS, Willow Springs MS, Lovejoy HS, and Lovejoy Operations. To connect campuses to Administration (NOC)
Upload Speed10 Gbps
Download Speed10 Gbps
Total Monthly Eligible Recurring Costs$11,449.00
Total Annual Eligible Recurring Costs$137,388.00
Total Funding Year Pre-Discount Eligible Amount$137,388.00
40% E-Rate Funding Commitment$54,955.20
60% Lovejoy ISD Share$82,432.80

On August 27, 2020, Dr. Womack confirmed the E-Rate funding numbers are correct for the District’s fiber Wide Area Network (WAN). Magellan Advisors used the E-Rate funding information as part of their research and analysis of anchor rates and services. Dr. Womack confirmed the E-Rate funding information shows the District’s cost for their dark fiber lease. E-Rate shows there is 1 Internet Circuit, while the financial model projects 2 Internet Circuits with one as a backup.

Dr. Womack also confirmed the District has a 10 GB connection between the District’s Network Operations Center (NOC) to each campus. There are a total of seven point-to-point 10 GB connections plus the NOC. Because of E-Rate, the District only pays 60% of the cost for the fiber. This does not include internet services, only fiber connections between district facilities. The District transports all network services (authentication, file, print, etc.) phone service, security cameras, access controls, application services, internet, etc. over these point-to-point connections.

Dr. Womack confirmed that the E-Rate funding information does not list the District’s Internet Service Provider (ISP) through Education Service Center Region 10. This too is a 10 GB fiber connection to the District’s NOC. Region 10 is responsible for E-Rate funding for this connection. Lovejoy ISD pays Region 10 a flat fee of $1,500 per month for three years and then $1,000 per month thereafter.

Magellan Advisors indicated that the anchor revenues in the financial model consist of the District’s full revenue opportunity, which includes the local funds they budgeted (60% of the cost), as well as the 40% subsidy which is paid through the federal E-Rate program.

Should the voters decide to move forward with this endeavor, it would be up to Lovejoy ISD to make decisions regarding their internet provider.

(Reference: Broadband Feasibility Study Page 73; Dennis Womack, Lovejoy ISD; Courtney Violette and Scott Moehnke, Magellan Advisors)

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