1. technology and computing

Division of Telecommunications
Business Model and Value
1st Edition,
Version 2.4
DivTel Business Model and Value 2.4 Table of Contents Table of Contents .......................................................................................................................................................... 2 Executive Summary ...................................................................................................................................................... 7 General Document Layout ............................................................................................................................................ 9 SUNCOM Telecommunications Services .................................................................................................................. 11 SUNCOM’s Functions ............................................................................................................................ 11 History ................................................................................................................................................ 11 Early Local Phone Service Consolidation and Establishment of SUNCOM ................... 11 Establishment of the Dedicated Backbone ....................................................................... 11 Data Communications are Added ..................................................................................... 11 The Internet Revolution .................................................................................................... 11 State Technology Office Setback...................................................................................... 12 MyFlorida Network: The MPLS Service.......................................................................... 12 Dedicated Backbone Retired............................................................................................. 12 SUNCOM’s Thriving Contribution .................................................................................. 12 Diminished School Support .............................................................................................. 13 Order Processing, Billing and Inventory Innovation ........................................................ 13 A Complete Mobile Telecommunications Offering ......................................................... 14 Federal Support for Expanding Broadband ...................................................................... 14 Telecommunications Services: Abbreviated List................................................................................ 17 Telecommunications Services: Detailed List ...................................................................................... 17 Voice Services .................................................................................................................. 17 Local Phone Service (Centrex) ..................................................................................... 17 Long Distance Phone Services...................................................................................... 18 Toll-Free Phone Services .............................................................................................. 18 STEPS ........................................................................................................................... 18 Data Transport Services .................................................................................................... 18 MyFloridaNet (MFN) ................................................................................................... 18 Remote Broadband Services (RBS) .............................................................................. 19 Florida Internet Resource Network (FIRN) .................................................................. 19 Southwood Shared Resource Center (SSRC) Ports .......Error! Bookmark not defined. Other Data Services ...................................................................................................... 19 Conferencing Services ...................................................................................................... 19 Reservationless Voice Conference Services ................................................................. 19 Video Conference Services ........................................................................................... 19 Web Conference services .............................................................................................. 20 Telecommunications Infrastructure Services .................................................................... 20 Telecommunications Infrastructure Project Services (TIPS) ....................................... 20 Mobile Telecommunications Services .............................................................................. 20 Wireless Data Services ................................................................................................. 20 Printed 3/6/2012 9:24 AM Kyvik
Page 2 DivTel Business Model and Value 2.4 Smart Phones ................................................................................................................ 20 SUNCOM Revenue by Services ......................................................................................................... 21 SUNCOM Customers ......................................................................................................................... 21 SUNCOM Revenue by Customer Type............................................................................ 22 SUNCOM Revenue from State Agency Customers ......................................................... 22 Standards ............................................................................................................................................. 23 Unbillable Support of the Florida Government Enterprise ................................................................. 23 State Directory Information .............................................................................................. 23 State Emergency Services Telecommunications (ESF-2) ................................................ 23 School District Grant Assistance ...................................................................................... 23 Expanding Broadband Access .......................................................................................... 24 Data Center Consolidation Project.................................................................................... 24 Data Center Circuit Consolidation Project ....................................................................... 24 State Web Portal: MyFlorida.com .................................................................................... 25 SUNCOM’s Purpose ............................................................................................................................... 26 Enterprise Cost Savings ...................................................................................................................... 26 Cost Reductions verses Cost Avoidance........................................................................... 26 Cost Reductions ............................................................................................................ 26 Cost Avoidance ............................................................................................................. 26 Cost Savings Mechanisms ................................................................................................ 27 Volume Discounts ......................................................................................................... 27 Pooling .......................................................................................................................... 27 Economies of Scale ....................................................................................................... 28 Vendor Risk Mitigation ................................................................................................ 28 Specialization and Expertise ......................................................................................... 28 Accountability, Customer Empowerment and Stakeholder Transparency ................... 29 Interoperability .................................................................................................................................... 29 Security ............................................................................................................................................... 29 Catalyst for Technological Transition................................................................................................. 29 Telecommunications Strategic Planning........................................................................... 29 Self Funded Investments ................................................................................................... 30 SUNCOM’s Approach and Principles .................................................................................................... 31 Establishing Standards ........................................................................................................................ 31 Service Normalization to Achieve Implicit Standardization ............................................ 31 Florida Statutes and Florida Administrative Code (“Rules”) ........................................... 31 Cost Accounting.................................................................................................................................. 31 SUNCOM’s Level of Outsourcing ................................................................................... 31 SUNCOM’S Cost Distribution ..................................................................................... 32 The Cost-Plus Pricing Method .......................................................................................... 32 The SUNCOM Cost Allocation ........................................................................................ 33 Cost Allocation Basics Explained ................................................................................. 34 Buffering the Cost of Technological Change using Cross Subsidies ............................... 35 Printed 3/6/2012 9:24 AM Kyvik
Page 3 DivTel Business Model and Value 2.4 Developing Services ........................................................................................................................... 35 Seven Ways to Buy Services ............................................................................................ 35 Cost Recovery Models for Enterprise Services ............................................................ 36 The Simplicity/Savings Trade-off..................................................................................... 37 The Limits on Imitating the Private Sector ....................................................................... 38 Service Development Criteria ........................................................................................... 38 CAREIVA Principles of Product Design and Chargeback ............................................... 39 Designing SUNCOM Services using CAREIVA ............................................................. 40 Redesigning Pooled Services ........................................................................................ 40 Design of Non-pooled Services .................................................................................... 41 Common Mistakes in Chargeback Design .................................................................... 41 Order Processing, Inventory and Billing............................................................................................. 43 Public Safety Telecommunications ............................................................................................................................. 44 Purpose of the Bureau of Public Safety Telecommunications ................................................................ 44 Statutory Obligations .......................................................................................................................... 44 Regional and Local Emergency Radio Effectiveness and Coordination .......................... 44 The Statewide Law Enforcement Radio System .............................................................. 44 911 Effectiveness and Reliability ..................................................................................... 45 State Emergency Operations –Support for Telecommunications ..................................... 45 Bureau of Public Safety Telecommunications Functions ....................................................................... 45 History ................................................................................................................................................ 45 State Law Enforcement Communications Plan (LE Plan) ................................................ 45 Florida Emergency Communications Number E911 State Plan (State E911 Plan).......... 46 National Public Safety Planning Advisory Committee .................................................... 46 EMS Communications Plan .............................................................................................. 46 State Joint Task Force (JTF) ............................................................................................. 46 Project 25 .......................................................................................................................... 47 Public Safety National Coordination Committee ............................................................. 47 Public Safety Telecommunications Services ...................................................................................... 47 Local Government Services .............................................................................................. 47 Consultation .................................................................................................................. 47 Spectrum Approval ....................................................................................................... 47 Law Enforcement Communications Plan ..................................................................... 48 Intergovernmental Radio Communications program.................................................... 48 Emergency Medical Services ............................................................................................ 48 Interoperability Services ................................................................................................... 48 Florida Interoperability Network .................................................................................. 48 Mutual Aid Channels .................................................................................................... 48 State Law Enforcement Radio System Services ............................................................... 49 SLERS Final Acceptance .............................................................................................. 49 E911 Special Support Services ......................................................................................... 50 E911 Grant Programs, Statewide .................................................................................. 50 How the Bureau of Public Safety Telecommunications Performs Its Mission ....................................... 50 Printed 3/6/2012 9:24 AM Kyvik
Page 4 DivTel Business Model and Value 2.4 Leveraging SUNCOM ........................................................................................................................ 50 Planning .............................................................................................................................................. 51 Keeping in Touch ................................................................................................................................ 51 Balancing Needs versus Cost .............................................................................................................. 51 Engineering for Reliability with Performance Standards ................................................................... 52 Specialized software and data management tools ............................................................................... 52 Florida – Region Interference Program (FRIP) ................................................................ 52 E911 Board - Fee Remittance Database ........................................................................... 52 Coordination ....................................................................................................................................... 52 E911 Coordination ............................................................................................................ 52 SLERS User Groups ......................................................................................................... 52 Partnerships with Government and Industry ....................................................................................... 52 Florida E911 Board ........................................................................................................... 53 Government SLERS Partnerships ..................................................................................... 53 Committees ......................................................................................................................................... 53 Testing and Inspecting ........................................................................................................................ 53 Training ............................................................................................................................................... 53 Future of Telecommunications in Florida Government .............................................................................................. 54 Technology Convergence ....................................................................................................................... 54 Realizing Convergence Opportunities through Discipline ................................................................. 54 Voice over IP (VoIP) ........................................................................................................ 55 STEPS ........................................................................................................................... 55 VoIP Centrex ................................................................................................................ 56 Managing Complexity through Emerging IP Convergence.............................................. 56 Session Initiation Protocol (SIP) ................................................................................... 57 IP Multimedia Subsystems (IMS)................................................................................. 57 SIP/IMS from the User’s Perspective ........................................................................... 57 SIPS/IMS Convergence for the Enterprise and Beyond ............................................... 58 Convergence of Wireless ........................................................................................................................ 58 911 Modernization .................................................................................................................................. 60 SLERS Coverage Improvements ........................................................................................................ 60 Need for Telecommunications Convergence for Public Safety .......................................................... 61 Convergence Opportunities for Public Safety .................................................................. 61 Network Convergence ............................................................................................................................ 63 Intelligent Transportation System (ITS) ............................................................................................. 63 Florida LambdaRail (FLR) ................................................................................................................. 63 How Florida’s Telecommunications Assets could be Optimized ....................................................... 64 Local and Regional Governments ....................................................................................................... 65 Printed 3/6/2012 9:24 AM Kyvik
Page 5 DivTel Business Model and Value 2.4 Extending Customer Empowerment ....................................................................................................... 65 Enhancing Florida’ Economic Competitiveness with Broadband .......................................................... 66 DMS’s Broadband Statutory Mandate ................................................................................................ 66 General Strategy.................................................................................................................................. 66 Consensus Building and Partnerships ................................................................................................. 66 Mapping .............................................................................................................................................. 67 Broadband Strategic Planning ............................................................................................................. 67 E-rate Assistance to Schools and Libraries ......................................................................................... 68 Table of Attachments .................................................................................................................................................. 69 Endnotes.................................................................................................................................................................... 102 Printed 3/6/2012 9:24 AM Kyvik
Page 6 DivTel Business Model and Value 2.4 Executive Summary The Division of Telecommunications within the Department of Management Services serves
Florida government at the enterprise level in two broad categories:
1) Voice, data and conferencing telecommunications 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, 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, and
many 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 selffunded 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.
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Page 7 DivTel Business Model and Value 2.4 
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 enterprise
telecommunications infrastructure, necessary innovation in public safety telecommunications
and the requirement to extend the reach of broadband throughout the state. But with the support
of effective public policies, DivTel has the right strategic approach, resource management
methods and business culture to meet those challenges.
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Page 8 DivTel Business Model and Value 2.4 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
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Page 9 DivTel Business Model and Value 2.4 allow readers to skip around or use it as a reference. The above Table of Contents will help
readers find topics of interest.
Finally, this document makes extensive use of endnotes that elaborate, give additional
explanations, refer to detailed sources or cite legal authorization. Because such supplemental
information can be a distraction, endnotes rather than footnotes were used and the document is
informative even if they are never read. However, reading endnotes that expand on a given point
(rather than provide a support reference of data) is necessary to achieve a more complete
understanding of DivTel. The best way to do so is to separate those pages to use as a companion
document while reading the body.
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Page 10 DivTel Business Model and Value 2.4 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. 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 SUNCOM’s
customers only.
Data Communications are Added The next major SUNCOM milestone that 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 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
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Page 11 DivTel Business Model and Value 2.4 State Intranet using TCP/IP in 1993. It ultimately served all state agencies as a viable business
tool. 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 achieving
enterprise efficiencies for state computing. It was initially comprised of the Division of
Communications (SUNCOM’s parent organization) and the Technology Resource Center. STO
was slated to aggregate all Florida government information technology, but was widely viewed
as hastily planned and poorly executed. Hence it was dissolved between 2005 and 2007 through
a series of budgetary and statutory actions.
During the STO era, much of SUNCOM’s funds normally used to design, develop and manage
telecommunications services were repurposed to STO enterprise information technology
consulting and projects. This depleted SUNCOM’s trust fund, from which approximately $12
million was disbursed monthly, to a balance of $15,500 by July 1, 2005. Since that low-point,
the SUNCOM trust fund has recovered through shedding many subsidies of activities unrelated
to telecommunications3, staff focus on optimizing core services and substantial innovation to
produce cost savings4.
MyFlorida Network: The MPLS Service Despite the loss of some focus in of the STO era, SUNCOM engineers were able to design a
network to use innovative Internet Protocol (IP) technology known as Multi Protocol Label
Switching (MPLS). MPLS held the promise of bringing all of the best features of existing
SUNCOM IP services into one at considerable savings, faster speeds with more capabilities.
Under the SUNCOM brand known as “MyFloridaNet” (MFN), the MPLS contract was awarded
to AT&T in September 2006 and all customers were migrated by April 2008. MFN has
delivered approximately $14 million in annual cost savings ever since.
In January of 2011, DivTel and AT&T signed a renewal of the MFN contract which included
price reductions averaging another 6%.
Dedicated Backbone Retired Simultaneous to implementation of MFN, SUNCOM dismantled its dedicated backbone. The
MFN contract used vendor infrastructure thus needed no state backbone to carry data
communications. And the newly competitive voice long distance market offered prices that
overcame the advantages of internal infrastructure. The dedicated backbone was completely
retired by June 2008 leaving SUNCOM largely reliant upon vendor infrastructure and the
competitively open market.
SUNCOM’s Thriving Contribution With rededicated focus on SUNCOM’s core mission, it reemerged from the STO era as an
effective enterprise provider. Despite a series of rate reductions5 that included $14 million in
annual savings from MFN, SUNCOM realized additional unexpected savings from
implementation of MFN and elimination of the backbone.6 The SUNCOM trust fund accrued
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Page 12 DivTel Business Model and Value 2.4 balances that led to a $10.2 million “cash shedding” through rebates and further rate reductions
to customers over calendar year 2010.
Diminished School Support In August of 2008, the Department of Education attempted to reprocure the Florida Information
Resource Network (FIRN) without SUNCOM involvement. 7 Prior to that, FIRN was a
SUNCOM service.
As the data communications network for Florida’s schools, FIRN was almost exclusively funded
through 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 than
existing SUNCOM services. DOE abandoned the effort and SUNCOM was compelled to
quickly develop a replacement service.
Less than a year later, DOE discontinued providing assistance to schools to help them obtain
these complicated grants and the 2010 General Appropriations Act eliminated direct funding of
FIRN 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-rate
grants without DOE assistance. But the assistance must come from billing and engineering staff
that are not experts and have competing duties.
Florida Schools and libraries have applied for over $1.4 billion in funding since inception of the
program. Over half of the funding requests were rejected. In comparison, the state of New York
with 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 while
Florida has averaged 3.25%.
Order Processing, Billing and Inventory Innovation SUNCOM’s centralized order processing, billing and inventory systems have been powerful
tools for controlling telecommunications costs from almost the beginning of SUNCOM.
Customers have been able to obtain detail billing information and place orders electronically
since 1998 and 2000 respectively.
But in 2006 it became clear that, after years of ad hoc development to accommodate the ever
changing SUNCOM portfolio of services, SUNCOM had two choices; 1) implement a wholesale
replacement of these systems with one comprehensive integrated system (commonly called an
Enterprise Resource Planning system or ERP) or 2) reengineer SUNCOM’s foundational
components (“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 when
the ERP is turned-on), and often result in failure.8 SUNCOM chose the other approach by
creating the SUNCOM Open and Shared Information System (OaSIS) using a small team at low
cost and with periodic low-risk release of enhancements.
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Page 13 DivTel Business Model and Value 2.4 After two years of reengineering, the first OaSIS user enhancement of SUNCOM bills was
released in April of 2010. A second inventory component was released in Beta in October 2010.
OaSIS has already achieved widespread popularity among agencies with its innovative features
such as the customer ability to permanently tag charges with plain language labels. It will
ultimately empower customers to control charges to an extent that is uncommon to both the
telecommunications industry and ERPs.
A Complete Mobile Telecommunications Offering Near the end of the STO era, DMS management decided to offer mobile telecommunications
services through two different DMS divisions. SUNCOM provided smart phones and air cards
while 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 central
repository of mobile services usage and costs. 9 Worse yet, the distinction between smart phones
and cell phones became increasingly difficult thus obscuring the assignment of these services
between the two divisions.
In 2009, DMS decided to consolidate these services under SUNCOM using its existing authority
to provide enterprise telecommunications. This led to the release of SUNCOM’s Mobile
Telecommunications Services Invitation to Negotiate in September of 2010. Through this
procurement and use of OaSIS, SUNCOM expects to implement a contract akin to a “family
plan” for all enterprise mobile charges in which call minutes are cheap, few of them are wasted
and all of them are accountable.
Federal Support for Expanding Broadband In 2008, a new Federal program was established to expand consumer and institutional access to
broadband. This program was initially funded for a nationwide inventory of broadband to be
followed with grants to expand it. States were to coordinate their respective efforts and DMS
was chosen to do so during the 2009 Legislative Session through establishment of Section
364.0135 F.S.10
In December of 2009, DMS was awarded $2,568,458 to establish a statewide inventory of
broadband services. The funding has provided for an online mapping system that is accessible to
the 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.
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Page 14 DivTel Business Model and Value 2.4 
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.
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Page 15 DivTel Business Model and Value 2.4 FIGURE 1
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Page 16 DivTel Business Model and Value 2.4 Telecommunications Services: Abbreviated List Voice
 Local Phone Service (Centrex)
 Long Distance Phone Services
 Toll-Free Phone Services
 STEPS
Data
 MyFloridaNet (MFN)
 Metropolitan Area Network (GMAN)
 Remote Broadband Services (RBS)
 Florida Internet Resource Network (FIRN)
 Southwood Shared Resource Center (SSRC) Ports
 Other Data Services
Conferencing
 Reservationless Voice Conference Services
 Video Conference Services
 Web Conference Services
Infrastructure
 Telecommunications Infrastructure Project Services (TIPS)
Mobile
 Wireless Data Services
 Smart Phones
Telecommunications Services: Detailed List Voice Services Local Phone Service (Centrex) SUNCOM provides local phone access primarily through a service known as “CENTREX”. In
addition to providing toll free local calling within a region known as Local Access Transport
Area (LATA), CENTREX provides features and options like access to SUNCOM’s long
distance service, caller ID, voice mail, call forwarding, etc. Incumbent Local Exchange Carriers
(ILECs) such as AT&T, CenturyLink and Verizon provide this SUNCOM Local Service within
their designated LATAs.
SUNCOM’s local service also provides alternatives to CENTREX for customers that own and
maintain switching equipment on site known as Private Branch Exchanges (PBXs) which move
some of the functions and features from telephone company facilities to the customer’s site. This
allows customers to use shared access lines provided by SUNCOM.
Charges for each of these local phone services and features are fixed monthly fees invoiced
through SUNCOM.
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Page 17 DivTel Business Model and Value 2.4 Long Distance Phone Services SUNCOM Long Distance Service allows local service customers to place calls outside a local
area (known as a Local Access and Transport Area or LATA) throughout the United States and
Internationally. For large customers, SUNCOM can provide “Dedicated” circuits to make long
distance calls. Smaller customers use SUNCOM’s “Switched” Long Distance at a slightly
higher price.
Long distance telephone calls are charged incrementally (per minute) on monthly invoices
through SUNCOM.
Toll‐Free Phone Services SUNCOM offers customers the ability to establish in-bound toll free services with available
"vanity" phone numbers. Customers can designate toll free numbers for in-state, national and
(limited) international toll free calls. Offered with many enhanced service feature options, this
SUNCOM service terminates on local telephone lines/trunks where it is handled like any other
incoming telephone call.
Toll free telephone calls are charged incrementally (per minute) on monthly invoices through
SUNCOM.
STEPS The SUNCOM Telecommunications Equipment on-Premise Service (STEPS) offers telephone
switching equipment known as Private Branch Exchanges (PBXs) at the customer’s site. PBXs
move some of the functions and features from telephone company facilities to the customer’s
site. This allows customers to use fewer access lines, or “trunk” lines that share access among
their staff. PBXs also give customers more direct control over features such as voice mail and
call routing within their organization. PBXs have been around from near the beginning of
telephone services but modern PBXs almost exclusively provide Voice over IP (VoIP).
STEPS equipment is purchased through State Term Contracts thus not invoiced through
SUNCOM. Ongoing support and rental of STEPS equipment however, are invoiced through
SUNCOM. Associated trunk lines and data circuits are also invoiced through SUNCOM for
many customers.
Data Transport Services MyFloridaNet (MFN) The technology at the core of MFN, known as Multi-Protocol Label Switching (MPLS,) is
considered the current standard for the best enterprise data networks. When MFN was
implemented through SUNCOM, it combined all of the best features of several SUNCOM’s
existing data services 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
network and the Internet with the independent ability to design and manage their sub-networks,
make connections, and monitor their security, regardless of their location within the state.
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Page 18 DivTel Business Model and Value 2.4 Charges for data communications circuits and features are fixed monthly fees invoiced through
SUNCOM.
Remote Broadband Services (RBS) SUNCOM’s Remote Broadband Service (RBS) provides customers with access to the Internet
from locations outside large customer offices. RBS uses the latest broadband “best-effort”
transport technologies common to the consumer (rather than the business) market. RBS provides
cost-effective remote broadband access via Digital Subscriber Lines (DSLs), which is digital
data transmission over a local telephone wires.
Charges for RBS circuits are fixed monthly fees invoiced through SUNCOM.
Florida Internet Resource Network (FIRN) FIRN provides a data communications to K-12 schools. Schools pay for FIRN services almost
exclusively through federal subsidies known as “E-rate” (averaging 70%). E-Rate subsidies
come from the Universal Service Fund (USF) which is financed through fixed fees charged to
every user of telecommunications services throughout the USA.
FIRN also includes some E-Rate qualified features, like email and special filtering.
Charges for FIRN services are fixed monthly fees invoiced through SUNCOM.
Other Data Services SUNCOM also provides other services that are small and/or near end-of-life such as; Hosted
Fax, Router (a legacy service known as Routed Transport Service), State of Florida Internet
Access (SOFIA) and Local Area Network port management at the Capital Center Office
Complex (where DMS is housed). All of these are invoiced through SUNCOM fixed monthly
fees.
Conferencing Services Reservationless Voice Conference Services SUNCOM Reservationless Voice Conference Services give on-demand voice conferencing, 24
hours a day, 7 days a week for up to 125 participants without the need to make a reservation.
Reservationless sessions are charged incrementally (per user/per minute) on monthly invoices
through SUNCOM.
Video Conference Services SUNCOM provides video bridging and gateway services which enable real time audio and video
interaction between three or more locations equipped with video conference equipment. The few
customers using this service today are invoiced per hourly session through SUNCOM. Many
customers pay fixed monthly fees to SUNCOM for this service rather than pay per minute.
However, many state agencies video teleconference using SUNCOM (MFN) data circuits and
their own equipment.
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Page 19 DivTel Business Model and Value 2.4 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 computer
connected to the Internet and a telephone.
Charges for Web Conferencing are fixed monthly fees to conferences sponsors invoiced through
SUNCOM.
Telecommunications Infrastructure Services Telecommunications Infrastructure Project Services (TIPS) TIPS assists customers in procuring, installing and project managing telecommunications
infrastructure (e.g., cabling and wires) for telecommunication services, including voice, data,
video, close circuit TV, imaging, and wireless LAN within a building or campus. TIPS
establishes contracts and monitors performance of vendor installations, and simplifies
contracting and project management with a single point of contact from start to finish.
SUNCOM invoices customers for the time and material for the entire job.
Mobile Telecommunications Services Wireless Data Services SUNCOM’s Aircard service gives laptop computers mobile access the Internet or the State
Network through SUNCOM’s secure and encrypted Virtual Private Network service. Charges
consist of fixed monthly fees through SUNCOM.
Smart Phones SUNCOM’s Smartphone contracts provide more robust SUNCOM sanctioned alternatives to the
State Term contract for cell phones. SUNCOM’s vendors invoice SUNCOM customers directly
with monthly flat fees.
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Page 20 DivTel Business Model and Value 2.4 SUNCOM Revenue by Services FIGURE 2
SUNCOM Customers Sections 282.703-707 F.S., authorize SUNCOM to serve state agencies, universities, private
colleges, the judiciary, cities, counties, schools, libraries and private-not-for-profit entities that
are primarily funded by the state.
In accordance with 282.703 F.S., state agencies are required to use SUNCOM for
telecommunications services unless they obtain an exemption from DMS verifying that
SUNCOM cannot meet their needs.
The inclusion of other Florida public sector customers in DivTel’s customer base creates the
opportunity for them to get SUNCOM discounts and maximizes SUNCOM’s bulk purchasing
leverage and economies of scale.
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Page 21 DivTel Business Model and Value 2.4 SUNCOM Revenue by Customer Type FIGURE 3
SUNCOM Revenue from State Agency Customers FIGURE 4
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Page 22 DivTel Business Model and Value 2.4 Standards SUNCOM establishes state telecommunications standards both explicitly and implicitly.
Explicit standards are established in Florida Administrative Code per SUNCOM’s rule writing
authority under p. 282.702(2) and (9) F.S.11 SUNCOM’s implicit standards come from the mere
existence of SUNCOM’s telecommunications services and the statutory requirement that state
agencies use them. For more details on how these standards are established see “Establishing
Standards” on page 31.
Unbillable Support of the Florida Government Enterprise Among DivTel’s obligations is support for some ongoing public services and periodic projects
for which there is no specific billable customer or direct appropriations. DivTel must recover
these costs from customers through payments for SUNCOM services. While these activities are
important and valued, the associated subsidies inflate SUNCOM charges.
State Directory Information Starting in 1986 when the dedicated backbone for voice services was established, SUNCOM
published lists of state telephone numbers and staffed an information line (866-693-6748 toll free
or 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 book
publishers.
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 answer
callers to State Information and provide local listings in accordance with statutory requirements12
at 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 of
Emergency Management’s Comprehensive Emergency Plan13,14). This means that any and all of
DivTel’s staff, services and assets are available to help during disaster and DivTel must sustain
disaster preparedness. When declared disasters occur however, DivTel is often able to obtain
some compensation through federal disaster grants.
School District Grant Assistance All K-12 schools in America are eligible for federal grant subsidies for their telecommunications
services. The program known as E-rate can cover as much as 90% based upon the poverty level
of students (the average for Florida is 70%). Prior to the 2010 Legislative Session, Florida’s
state government paid the other 30% for school’s data communications through an appropriation
to the Department of Education (DOE). DOE used these funds to pay SUNCOM for use of the
Florida Information Resource Network (FIRN the K-12 data network) while schools paid the rest
with E-rate funds or E-rate credits.
By federal rule, SUNCOM is ineligible to receive e-rate funds even to cover its administrative
costs to serve schools. Thus SUNCOM administrative fees were covered by the State match
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Page 23 DivTel Business Model and Value 2.4 (which also covered related DOE administrative costs). But because the law limited those
payments to only 7% of the state match was provided (or approximately 2% of total K-12
charges) SUNCOM was compelled to subsidize the rest of its administrative support of school
customers.
SUNCOM’s subsidy of this effort increased in 2010/11 when the state discontinued funding the
DOE 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 the
assistance that DOE provided.15 SUNCOM has federal approval to use its broadband grants for
this purpose and, as of this writing, is seeking legislative approval to do so (see “E-rate
Assistance to Schools and Libraries” on page 68).
Expanding Broadband Access The 2009 Legislature enacted section 364.0135 F.S., designating DMS as the lead Agency to
promote broadband deployment. This legislation was written in conjunction of Federal programs
and 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 grant
programs”. DivTel is meeting its statutory obligation and has obtained Federal grants but
without any initial funding for the effort. See “Enhancing Florida’ Economic Competitiveness
with Broadband” on page 66. DivTel’s ongoing efforts will be funded mostly from Federal
grants 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 this
requires moving servers and mainframes from office buildings where computer users are located
to one of three Primary Data Centers within Tallahassee.
When users are collocated with this equipment, communicating with them is fast and does not
require 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 substantial
to meet the daily demand of users.16
SUNCOM 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 was
provided to SUNCOM for this costly effort.
Data Center Circuit Consolidation Project Twenty SSRC customers had established separate SUNCOM connections from within the SSRC
to the outside. After DivTel mangers described this condition to legislative staff, a requirement
was added to proviso language in the 2010 General Appropriations Act1 compelling these SSRC
customers to move onto a common SUNCOM circuit. See “Pooling” on page 27 for a
description of the savings. No funding was provided to SUNCOM to implement this project.
1
2010 GAA, line item 2936, “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.”
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Page 24 DivTel Business Model and Value 2.4 State Web Portal: MyFlorida.com The State of Florida provides a single website to all state government services and information.
Because this “portal” known as MyFlorida.com (http://www.myflorida.com/) provides general
access to all Florida government, it has historically been funded through Florida’s General
Revenue. However, during the 2011 Legislative Session, SUNCOM’s trust fund (the
Communications Working Capital Trust Fund) was designated to pay for the Portal and the two
staff that support it at a cost of $319,519 annually.17 Unlike all of the other above listed
subsidies, this one has no relationship to DivTel’s operational or statutory duties.
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Page 25 DivTel Business Model and Value 2.4 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 Florida
government.
Enterprise Cost Savings Internal service providers, like SUNCOM, have business models that are very similar to the
private 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.18
SUNCOM’s business model is designed to save money for Florida government in four general
ways:
1. Getting services at the best price.
2. Achieving enterprise economies of scale.
3. Helping agencies get the right service.
4. Helping agencies 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 enables
lowering prices to SUNCOM customers. Derived from technological advancements,
marketplace changes, new or amended contracts and redesigning services, they are realized one
time; then become unseen perpetual cost avoidance thereafter. Achieving cost reductions
requires 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. Conservatively
estimated to be over seven times the annual SUNCOM administrative costs, these savings are
derived from the costs that would be incurred if SUNCOM did not exist.23 Without SUNCOM,
all of the services it provides would be purchased individually by separate government entities
without the expertise, negotiating leverage and economies of scale SUNCOM delivers.19
Because 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 without
actually duplicating the purchase. Since such duplication is contrary to the enterprise purchasing
policies set forth in Florida Statutes (for state agencies)88 the lack of comparative examples may
lead some to the mistaken assumption that cost avoidance is not real, thus devaluing the largest
benefit of the enterprise model. In spite of the policy however, there actually is one salient
example.
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Page 26 DivTel Business Model and Value 2.4 In October of 2009, the Florida Department of Education (DOE) alone sought to replace the
statewide 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 known
as E-rate. Prior to DOE’s attempt to replace FIRN, it was a SUNCOM service. Because the bids
to DOE were significantly higher than existing SUNCOM services, DOE ultimately came back
to SUNCOM for those services.
At DOE’s request, SUNCOM established a new FIRN contract to meet specific DOE
requirements rather than use existing SUNCOM services.20 The resulting SUNCOM prices are
39% lower than the best offer to DOE21 even when SUNCOM’s mark-ups to recover
administrative costs are included.22 Extrapolating these 39% savings to all of SUNCOM’s
services suggests savings of approximately $71.8 million annually. This is over seven times
SUNCOM’s administrative costs meaning the state receives at least a 700% return on its annual
investment in SUNCOM.23
Cost Savings Mechanisms SUNCOM cost savings come from a variety mechanisms listed below. Almost all of them are
cost avoidance.
Volume Discounts Volume discounts are achieved simply from the bulk size of SUNCOM’s contracts. Through
one procurement, vendors provide standardized services to all SUNCOM customers. They are
willing to discount heavily to secure bulk sales that would otherwise go to competitors and to
achieve efficiencies in doing so that would otherwise be impossible. This leverage can only be
achieved through an entity that can aggregate the buying power of the state like SUNCOM.
Pooling Volume discounts can be increased when SUNCOM commits to buy24 large blocks of
homogenous services and resells them incrementally.
With these pools, the excess capacity customers must normally buy becomes unnecessary. They
only pay for what they use thus giving them clear incentives to use less. SUNCOM alone takes
the risk that too many or too few services have been bought in the pool and uses the Law of
Large Numbers25 to minimize that risk.26
Vendors are willing to give the greatest discounts for pooled services because of the
predictability and efficiencies derived from fixed quantities of homogenous services.27 And the
state enterprise achieves a high degree of cost saving by rendering large blocks of services into
small units to be used exclusively where they are needed. See how pooling compares to other
enterprise purchases in Figure 11.
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 joint
effort between SUNCOM and SSRC staff, these were combined into one for an enterprise
savings of 50% ($512,544 annually). To achieve this, SUNCOM must make a considerable
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Page 27 DivTel Business Model and Value 2.4 investment to develop metered billing so each customer pays their fair share of the consolidated
connection. But once in place, this new approach can be ultimately replicated at other data
centers and foster incentives for further savings through peak-load pricing (see “Peak Load
Pricing” on page 40).
Economies of Scale State Enterprise Economies of Scale
SUNCOM’s consolidated procurement of telecommunications services eliminates the need for
procurements among state agencies. Simply allowing agencies to order services through
SUNCOM’s existing contracts prevents duplication of effort throughout the enterprise.28
The standardization SUNCOM provides also brings technical economies of scale. Without it,
the technical approach of every state agency would be unique. Interconnecting agencies into a
common network would drain effort and resources. And when problems arise, diagnosis and
resolution would be more difficult and lengthier without a consistent technical approach.
Finally, as staff move between agencies and agencies reorganize, the standardized knowledge of
SUNCOM telecommunications is transferred as well thus avoiding costly relearning and
downtime.
Partner Economies of Scale
Vendors save as well from SUNCOM economies of scale. The processes for ordering, installing,
invoicing, collecting payment and trouble management are standardized under SUNCOM. For
some services, SUNCOM assumes many of these responsibilities because it is in a better position
to do so.29 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 vendor
discounts.
Vendor Risk Mitigation Without SUNCOM acting as a single customer for the enterprise, vendors must bill and collect
from all Florida government customers directly. Some customer payments would trickle in,
others require extra collection efforts and dispute resolution, and still others might not ever
come.
SUNCOM audits and pays these consolidated invoices timely, in one lump-sum; before being
paid by SUNCOM customers.30 And when there is a problem (e.g. disputable charges),
SUNCOM staff stands between the end user and the vendor as a consistent experienced
negotiator with the leverage of SUNCOM’s bulk contract.
By reducing thousands of vendor invoices into one, running standard audits, ensuring timely
payment with float, eliminating the risk of nonpayment, abolishing vendor collection efforts and
acting as a good faith partner, SUNCOM provides saving to vendors that translate into lower
prices to the enterprise.
Specialization and Expertise Without SUNCOM, each state agency would need to design, procure and manage
telecommunications services from the ground up. For most, this would be a part time job and
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Page 28 DivTel Business Model and Value 2.4 each effort would come in periodic cycles. And for all, the prerequisite knowledge would be
limited 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 projects
every day for a variety of customers giving them knowledge they use to the benefit of all
customers and the enterprise as a whole.
Accountability, Customer Empowerment and Stakeholder Transparency SUNCOM’s business model includes the collection and centralization of detailed invoicing data
from vendors. This enables an extra layer of 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 gives Florida agencies extra ability to scrutinize charges.
Because this data is comprehensive of telecommunications charges and usage, SUNCOM and its
stakeholders can also use it in strategic planning, negotiations and policy setting. Without this
data, the state would be disadvantaged during negotiations in which vendors are better informed
than the state about enterprise requirements, trends and opportunities. Policy makers would also
be unable to get comprehensive and accurate reports on the state’s telecommunications needs. 31
Interoperability Telecommunications by definition requires compatibility between sender and receiver. The best
way to ensure this is to set standards that all adhere to. To some extent the industry does this
naturally when standards do not impede profits.
SUNCOM is statutorily charged32 to foster interoperability so Florida can realize savings from
standardization and prevent wasteful extra efforts to overcome incompatibilities between Florida
agencies.
Security SUNCOM implements network security at an enterprise level for Florida government. This
allows the state to have a common network on which agencies can communicate with each other
with reasonable freedom from the chaos and predation of the Internet. But SUNCOM’s security
also provides a level of security for each customer and opportunities for them to use SUNCOM
tools to monitor their security conditions.33,34
Catalyst for Technological Transition Telecommunications Strategic Planning No single state agency, focused upon its specific mission to serve citizens, would necessarily
adopt telecommunications strategies that are good for the whole state enterprise. And achieving
consensus through a consortium of part time participants with parochial priorities would be too
slow and ineffective to keep up with technological and market opportunities. This is why
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Page 29 DivTel Business Model and Value 2.4 SUNCOM is statutorily charged with enterprise telecommunications planning and does so with a
broad and long term perspective.35
Self Funded Investments SUNCOM receives no direct General Revenue appropriations or other tax revenues. Rather, it is
self funded through charges to customers for the telecommunications services SUNCOM
provides. But cost of transitioning from a given service to a successor technology is not onerous
on customers since SUNCOM cross subsidizes to offset them (for more details on how this is
done see “Buffering the Cost of Technological Change using Cross Subsidies” on page 35).
SUNCOM makes enterprise contractual commitments to pay for services over time. Vendors
often accept pay-as-you go returns based upon SUNCOM’s enterprise volume commitments.36
This offsets vendor investment risks while allowing the state to reap the rewards of new
technology with minimal penalties from early adoption.
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Page 30 DivTel Business Model and Value 2.4 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 to Achieve Implicit Standardization Telecommunications standards are established for Florida government from the mere fact that
bulk services are offered through SUNCOM. Because SUNCOM services offered through
vendors are centrally designed, delivered and configured in routine ways, agencies are able to
buy services that are compatible and meet the cost and security requirements of the state. Broad
use among agencies limits instances when non-standard technology is used that could lead to
incompatibility, and security and quality deficiencies.37
Florida Statutes and Florida Administrative Code (“Rules”) Florida Statutes charge DMS with creating telecommunications standards for the enterprise and
gives it rule writing authority through Florida Administrative Code.32
Through a nine month process 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 and solicitations for comment. The results were both detailed and
extensive rules covering enterprise network standards, security and associated business processes
that have proven to be reliable and transparent while granting customers and vendors the
flexibility they need.
Detailed standards not covered by rules can be found through operating guides for SUNCOM
services and contract terms with vendors.
Cost Accounting SUNCOM’s Level of Outsourcing Internal service providers like SUNCOM can 1) buy assets and pay staff to use those assets to
deliver services, or 2) buy services from the private sector and make them available to internal
customers. 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 and
procure these services, and manage orders, inventory and billing for them.38 It should be noted
that the 93% that is outsourced is demand driven; i.e. SUNCOM customers determine how much
is paid to vendors based upon the services they order and use.
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Page 31 DivTel Business Model and Value 2.4 SUNCOM’S Cost Distribution Paid to other Government Entities, 1.8%
Internal Operations, 4.9%
Paid to Private Sector, 93.3%
FIGURE 5
The Cost‐Plus Pricing Method Because SUNCOM is 93% outsourced it uses a “cost-plus” pricing method for each service.
This is most appropriate for internal providers that primarily buy (rather than build) services that
are in turn resold to enterprise customers.39
Administrative costs are added to vendor charges for SUNCOM services (“cost plus”). Some
specific services bear more than others based upon the share of administrative resources
committed to offering the service and other factors like the cross subsidies mentioned below.40
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Page 32 DivTel Business Model and Value 2.4 The SUNCOM Cost Allocation All costs must be attributable directly to a service, an employee, or a group of employees. But
employee time is the primary driver of cost in the SUNCOM model. On a quarterly basis, each
employee submits the percentage of his or her time that will be spent on each SUNCOM service
or unbillable activity. These numbers are approved by their respective supervisors. Any time
allocated to a revenue-generating SUNCOM service is categorized as direct time.
Since the only mechanisms for recovering costs are SUNCOM services, any time allocated to an
unbillable activity must ultimately be reallocated to a SUNCOM service using a secondary
process. Time reallocated in this manner is subsequently categorized as indirect time. The
Figure 6 is a description of how this is done. The numbers in the table are also used in the
graphical explanation that follows.
Category ==>
Billable Services
Unbillable Activities
All
All
Total
SUNCOM SUNCOM SUNCOM
Unbillable Unbillable
Billable
Unbillable
Service A Service B Service C
Activity 1 Activity 2
Services
Activities
Employee 1
6%
24%
55%
8%
7%
85%
15%
100%
Employee 2
30%
30%
25%
6%
9%
85%
15%
100%
Average of All Employees' Time
18%
27%
40%
85%
7%
8%
15%
100%
Indirect Time Allocated To Billable Service
3%
5%
7%
15%
Unbillable activity cost distributed
Percentage of Total Allocated
21%
32%
47%
100%
across billable services.
Directly to a Billable Service
FIGURE 6
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Page 33 DivTel Business Model and Value 2.4 Cost Allocation Basics Explained In Figure 7, costs are attributable to three
revenue generating activities (Services A, B and
C).
But there are also costs attributed to “unbillable
activities” that are not directly related to
services or designated customers. They include
SUNCOM administrative and operating costs
and the “Unbillable Support of the Florida
Government Enterprise” described on page 23.
Without redistributing these unbillable costs to
billable services, DivTel will be unable to
attribute 100% of its costs.
Unbillable Activities, 7%
Unbillable Activities, 3%
SUNCOM Service A, 18%
SUNCOM Service C, 40%
All Unbillable Activities, 15%
SUNCOM Service A, 18%
SUNCOM Service B, 27%
SUNCOM Service C, 40%
FIGURE 7 As shown in Figure 8, the costs of unbillable
activities are broken into shares which are
proportional to the cost shares that have already
been attributed to each service.
SUNCOM Service B, 27%
Unbillable Activities, 5%
FIGURE 8
The unbillable activity costs are then
combined in Figure 9 with the services’
costs so that 100% of SUNCOM’s costs
will be attributed to billable services. These
total service costs are the primary factors in
determining the price of these services.
SUNCOM Service C, 47%
SUNCOM Service A, 21%
SUNCOM Service B, 32%
FIGURE 9
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Page 34 DivTel Business Model and Value 2.4 Buffering the Cost of Technological Change using Cross Subsidies New and obsolete technologies incur premium costs. “Early adopter” prices are higher due to
the lack of economies of scale and the need to recover development costs. At the other extreme,
when a technology becomes obsolete, economies of scale are lost again, many vendors stop
supporting them and competitive pressures diminish.
However, adopting new technologies can produce cost savings that far exceed these premium
costs both in long term pricing and productivity gains. Adopting new technologies is also the
only way to avoid the costs of obsolescence. So SUNCOM buffers the transition with subsidies
from mainstream service revenues so customers can adopt new technologies at affordable prices
and avoid the trap of paying premiums for old technologies.
Net
Revenue
Service A
Service B
$0
Service C
Service D
Mature
services
Time
New & Old
services
FIGURE 10
Figure 10 is a conceptual model of how SUNCOM pricing is affordable so agencies can adopt
emerging technologies and use limited resources to make the next transition at end-of-life. In
both cases, prices are below costs. This is only possible if other revenues are above costs thus
high enough to subsidize these transitions.
Developing Services SUNCOM strategically plans for services long before developing them. But unlike the private
sector, strategies are not focused on a marketing perspective and profits. Rather, they are based
upon the value that emerging technologies will bring to Florida government.
Seven Ways to Buy Services In addition to simply allowing each agency to buy services independently, there are at least six
major ways to fund enterprise services using internal service providers like SUNCOM. The
below chart depicts the relative advantages of each with one additional option for a nonenterprise approach (i.e. the first one titled “Isolated Purchases”).
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Page 35 DivTel Business Model and Value 2.4 Cost Recovery Models for Enterprise Services Isolated Purchases Enterprise Resources Internal Billing State Term Contract Single Funder Fixed Shares
Distributed Blocks
Metered Billing 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 services on their own directly established through which all source other than customers. share regardless of how much services through an internal from vendors. agencies buy services. For example; a shared service they use from a pool provider. Description network is established under based upon willingness or a single contract with no ability to pay, or proxies. 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, vendor contracts with each directly to the vendor. or bulk prices that are since total charges are fixed unless the capacity of the Prices/Charges agency. irrelevant to customers (since until renegotiated. customer’s block is upgraded someone else pays). or downgraded. Each customer pays a share proportional to the amount of the resources they use from a pool. Each customer pays for the incremental units they use when they use them from the internal provider’s shared pool. Prices per unit and total charges change every month for every customer. Prices per unit are fixed, total charges adjust with usage. 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 6 on page 90. Figure 11
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Page 36 DivTel Business Model and Value 2.4 The Simplicity/Savings Trade‐off Single Funder
Enterprise
Resources
Internal Billing
Fixed Shares
from Pool
Distributed Blocks
State Term
Contract
Metered Billing
Proportional Shares
from Pool
Pooled
Services
Isolated
Purchases
Savings
Enterprise Resources
Internal Billing
Metered Billing
FIGURE 12
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Page 37 DivTel Business Model and Value 2.4 The Limits on Imitating the Private Sector As mentioned above, SUNCOM’s purpose differs from vendors because it is successful when customers
41
pay as little as possible while vendor’s success comes when customers pay as much as possible. 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.
 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.
Service Development Criteria Here are the primary criteria SUNCOM uses during the strategic planning to develop new services.
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.
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Page 38 DivTel Business Model and Value 2.4 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.
CAREIVA Principles of Product Design and Chargeback SUNCOM services, pricing and marketing are designed to give customers the information, means and
incentives to save money. To achieve this, SUNCOM follows the principles known by the acronym
CAREIVA.
C
A
R
E
I
V
A
Resource usage must be discretely Countable: the number of units consumed can be measured.
Resource usage must be Attributable: the customer who uses them can be identified.
Counting and Attribution must be done Repeatedly: determining how much each customer uses is
possible for every bill.
Prices must be Equitable: charges are proportional to cost of resources used or the enterprise value
usage creates. 42
Prices should give customers clear Incentives: customers are rewarded with savings when they
consume fewer resources or foster benefits to the enterprise.42
Charges must be Visible: customers can readily see the fiscal consequences of their purchases and
consumption.
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 the
consumer cannot be identified. And it must be done every month if the service is to be billable. If prices
are not proportional to the resources used, consumption will not be directed to save money, regardless of
how effectively SUNCOM bills. And none of this is useful if the customer cannot see nor do anything to
reduce costs.
In most instances, the CAREIVA principles can best be applied when charges are attributed at the lowest
level possible. Paying by the drink rather than the jug minimizes unused capacity and gives customers the
greatest visibility into the consequences of their demands and provides them the incentives and ability to
do something about it.
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Page 39 DivTel Business Model and Value 2.4 Designing SUNCOM Services using CAREIVA SUNCOM services must consider CAREIVA principles from inception of a service in order to derive
CAREIVA benefits. Application of CAREIVA is universal for all SUNCOM services. But how they are
applied depends largely upon the mechanisms available for chargeback and whether the service is pooled
or 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 volume
commitments.
In a pool, at the moment one customer needs more, there is a likelihood others will not, and still others
will need less than they normally do. The larger the pool, the more likely this is true by the Law of Large
Numbers.25 The extra capacity required for one customer can be obtained from the unused capacity of
others. So every customer buys only what they need, when they need it from the pool. This shared
capacity reduces costs for the whole enterprise.
FIGURE 13
Pools however, require a provider like SUNCOM to hold each customer accountable for usage from the
pool. 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 repeatedly
countable and attributable, and equitably priced, they provide customers the clearest Incentives available
to save.
Peak Load Pricing
Most customer activities occur during the regular business day. As a result, significant spikes in demand
occur daily and there is reduced usage at night. Naturally, infrastructure must cover peak capacity thus
wastes excess capacity in off-peak hours.
Pooling provides an additional opportunity to implement cost savings incentives that spread this usage
across 24 hours to reduce the peaks and therefore, the total capacity required. Known as “peak load
pricing”, discounts are offered during off-peak periods to inspire customers who have the flexibility to
shift their activities.43 This is only possible for pooled services delivered through fixed assets when the
charges are metered rather than flat rated.44
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Page 40 DivTel Business Model and Value 2.4 Peak
Peak
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Noon
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Same price is charged all day.
10
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Noon
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The same usage spread throughout the day using peak load pricing incentives.
FIGURE 14
Design 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, but
the 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 are
inspired by the desire to mimic successful marketing practices from the private sector; others by a desire
to simplify cost recovery thus alleviate the complexity and work that comes with more effective
approaches. But marketplace imitation and shortcuts often undermine the cost saving purpose of having
enterprise providers like SUNCOM.
Pitfalls of Selling Bundled Packages
Bundled packages that are common to the private sector come in two forms; 1) combinations of different
services and/or 2) blocks of one kind of shared service. Offering either is appropriate only when
SUNCOM can realize savings from selling such packages or the vendor realizes such savings that can be
passed through to SUNCOM customers. This only occurs when there are true technical economies from
packaging.
Offering bundled packages because customers are familiar with them, or they are standard industry
practice, or for marketing purposes to entice sales, or because the flat fees for them are more predictable is
improper 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 of
enthusiasm for a particular service. Smaller profit is better than no profit for a vendor, but is of no interest
to SUNCOM.
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Page 41 DivTel Business Model and Value 2.4 Bundled Blocks of Shared Services
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 big
opportunity for savings if it resells them in smaller bundled blocks. Breaking a large pool into smaller
pools (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 fixed
cost of $100 monthly, proportional charges means each will pay $25 in a given month. If one customer
discontinues, the remainder pay $33.33 each (if they continue using equal shares). This guarantees that
100% of the resource will be recovered, results in no surplus revenue and is equitable if the proportionate
charges are based upon actual customer usage.
But with the guarantee that all costs will be covered, the internal service provider is less likely to take
steps to reduce costs when customers reduce demand.
Worse yet, proportionate charges impair customer Incentives to be frugal because they distort the clear
feedback customers get from fixed prices. When one customer is charged a different amount than the
month 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 usage
means 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 have
some means of predicting their own usage, but no means of predicting usage of others and understanding
the implications to their costs.
If an internal provider is capable of implementing a monthly proportional share approach equitably, it can
implement 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 use
the Law of Large Numbers25 to spread those risks. Therefore, internal providers should bill with fixed
prices 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.
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Page 42 DivTel Business Model and Value 2.4 For example, when the amount of bandwidth consumed cannot be attributed to customers from a pool, the
number of customer employees or size of its budget might be used as a basis for charges. But the number
of staff at an agency would be a credible proxy for bandwidth consumption only if all staff in every
agency uses the same amount of bandwidth all of the time. Because staff duties and the tools available to
them vary, this is not true. Therefore, such proxies are not equitable, encourage waste and are not
sustainable models.
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 then
do something the reduce them, the incentives of CARIEVA are irrelevant. This means that the systems
that customers use to order and pay for SUNCOM services should provide relevant information, are easy
to understand and use.
SUNCOM’s business model has centralized SUNCOM billing since 1975. SUNCOM obtains billing
detail 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 through
SUNCOM. 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 of
2010, SUNCOM released a reengineered interface to its billing system known as the SUNCOM Open and
Shared Information System (OaSIS). OaSIS enables customers to tag all of their charges so they can more
easily identify them on each bill. These tags can be plain language reminders of the purpose of each
phone number or circuit number, and are completely within the control of customers. They will become a
permanent part of the SUNCOM database to appear on every customer bill and inventory list, and will be
used by customers to sort, filter and subtotal charges.
In October of 2010, SUNCOM released its OaSIS inventory module (in Beta) that provides direct
customer access to SUNCOM’s inventory of customer services for the first time in its 32 year history. In
its Beta form, customers are able to see all of their orders related to data communications services and
circuit 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 customers
can 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 eliminating
services and a more robust data exchange with vendors to save effort for both partners.
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Page 43 DivTel Business Model and Value 2.4 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”45 and “emergency medical telecommunications”.46 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”. 47 To achieve interoperability (the ability of these local systems to work together in
a disaster)48 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. 49 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.
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Page 44 DivTel Business Model and Value 2.4 911 Effectiveness and Reliability Without standards and coordination for emergency calls from citizen there would be tenuous expectations
of 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”50 and, under
authority of the DMS Secretary, “coordinate the activities of the system with state, county, local, and
private agencies”.51
To 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 fee52 through the E911 Board which is to “administer, the
fee… including receiving revenues derived from the fee; distributing portions of the revenues to wireless
providers, counties” and accounting for and reporting the fee’s revenue and distributions.53
With a stable 911 system in place statewide, the recent focus of the Bureau and Board has been on the
ability to process new types of communications from citizens throughout the state.54 For example, the
enhanced service for 911 allows the ability to automatically view telephone numbers and track cellular
telephone locations on a map.55
The inability to receive and process emergency messages from citizens via text messages, images, and
video presents new challenges and opportunities. The ability to process these messages is known as “Next
Generation 911” (NG911).56 The Bureau is developing strategies to implement a state routing network
through 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 made
available 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’s
Comprehensive Emergency Plan57,58) and the Bureau supports59 the state’s response to large-scale
emergencies and disasters through the state Emergency Operations Center.60
Bureau 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 law
enforcement communications”.61 With Federal funding, it enabled implementation of many law
enforcement radio systems throughout the state. The LE Plan is currently maintained to provide technical
guidelines for the implementation of new law enforcement radio communications systems by local law
enforcement agencies. The Bureau updates the LE Plan every two years.
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Page 45 DivTel Business Model and Value 2.4 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 Plan
implemented 911 as the official statewide emergency telephone number. The state E911 Plan is
continually updated to provide a cohesive statewide plan for enhanced 911 services which will provide
citizens with rapid direct access to public safety agencies. Citizen access to 911 reduced response time for
law enforcement, fire, medical, rescue, and other emergency services. The latest edition is now available
on the web.62
National Public Safety Planning Advisory Committee This committee made recommendations that the FCC incorporated into rules governing assignment and
use of the 800 MHz National Plan channels for Public Safety communications. Each state has its own
plan and planning committee for allotments to local government agencies. The Regional Plan for radio
spectrum usage by public safety agencies in the State of Florida was prepared by the Florida Region and
Subregion Plan Committees, which represent a cross-section of public safety radio users throughout the
State of Florida.
EMS Communications Plan Under Part I of Chapter 401, DMS is assigned the duty of planning the “statewide system of regional
emergency medical telecommunications …whereby maximum use of existing radio channels is achieved in
order to more effectively and rapidly provide emergency medical service to the general population”. 63
The first Emergency Medical Services (EMS) Communications Plan, published in 1975, established the
approval process needed to implement EMS radio systems throughout the state. Federal funds from the
EMS 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 members
from 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 and
planned to build out the system statewide.
The initial pilot project was the first of five phases of implementation, with each phase covering a distinct
geographical portion of the state. Phases 1 and 2 covered the east coast of Florida up to St. Johns County
and 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 by
establishing a new system contract that resulted an award in 2000.64 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 2
were then converted from the old vendor’s platform to the new vendor’s platform under a public/private
partnership where the vendor was to receive existing JTF assets (primarily towers) and the bulk of
revenues from $1 surcharge on license tags for vehicles65 and boats.66. Though the system was initially
implemented in separate geographical phases, all phases are united into a single working statewide
system. The system now referred to as SLERS worked remarkably well through Florida’s hurricanes of
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Page 46 DivTel Business Model and Value 2.4 2004 and 2005 and provided radio communications to the state’s law enforcement and disaster responders
without any loss of service.
Project 25 The Bureau has actively participated in the development of this important standard for digital radio
communications, serving on the Project 25 (P25) National Steering Committee for 10 years and chairing
the User Needs Subcommittee for 5 years. The goals of Project 25 are to establish a standard that will
ensure optimal interoperability across systems regardless of vendor, obtain maximum frequency
efficiency, provide user-friendly equipment that best fits the needs of our public safety users at a
competitive price, and provide a graceful path from analog to digital technologies. If SLERS achieve
complete implementation to this standard, it improved interoperability and enable some significant cost
avoidance.
Public Safety National Coordination Committee From 1999 to 2003, the Public Safety National Coordination Committee (a Federal Advisory Committee
chartered by the Federal Communications Commission) provided recommendations to the Commission on
operational and technical standards for use of the 700 MHz public safety band. Florida participated in the
development of these standards through the Bureau.
The Florida 700 MHz Public Safety Interoperability Channel Plan defines the method of administration
and oversight for the Interoperability channels designated for use by Public Safety entities within Florida.
The state is responsible for the administration67 of the 700 MHz interoperability channels.
Public Safety Telecommunications Services The Bureau works to ensure that Florida’s residents and visitors can effectively call for emergency
assistance when needed and reliably get that assistance within minutes. To this end, the Bureau maintains
five 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 own
public safety radio communications. Thus, there are a number of disparate local radio systems. The
Bureau provides radio communications planning and technical services to assist the county and municipal
public safety agencies, including police departments, sheriff’s offices, and fire departments, in making
decisions for improvements and upgrades to their radio communications.
Spectrum Approval The Bureau also supports the Florida Region Committee in administering the “Florida – Region 9 Plan
for Public Safety Communications” (Region 9 Plan).68 This entails the use of specialized software to
perform complex interference studies and maintenance of a database of channel allotments. Every request
from a public safety agency included in the list of eligible entities is reviewed for technical compliance
with this plan and coordinated with all existing allotments before the Florida Region Committee grants
them.
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Page 47 DivTel Business Model and Value 2.4 Law Enforcement Communications Plan In support of county sheriffs, municipal police departments, and other local law enforcement agencies, the
Bureau maintains the Law Enforcement Communications Plan.69 This plan specifies the minimum
performance for systems and equipment of every local law enforcement agency in Florida. The Bureau
approves systems and equipment for law enforcement communications according to the latest edition of
the plan.
Intergovernmental Radio Communications program The Bureau also administers the Intergovernmental Radio Communications Program, which provides
funding from moving traffic violations ($12.50 per violation) to support individual county programs for
radio communications between different government agencies.70 The amount of funding that each county
receives depends on the number of ticketed violations. The Bureau approves or amends each program
based on the documents submitted by the county, but the Bureau does not manage the collection or
expenditure of funds for each county.
Emergency Medical Services One of the critical services that the Bureau supports is Emergency Medical Services (EMS) radio
communications.71 EMS is a public safety emergency responder usually called upon via 911. The Bureau
provides radio communications planning and coordination to county and private emergency medical
service agencies and hospital emergency departments. This enhances patient care from the scene of the
injury 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 requires
resources of more than one government (mutual aid event) within or outside their jurisdiction, their
communications are hampered by operating on disparate radio systems. The ability to operate between
systems, 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), a
system that can link various disparate public safety communication systems whenever needed. This
innovative solution leverages the SUNCOM network to pass and translate messages using the widely
adopted Internet Protocol (IP).
Mutual Aid Channels Additionally, when emergency responders need to communicate outside their jurisdictional area, they
need access to a compatible radio channel. The Bureau has implemented a statewide system of shared
radio resources (mutual aid stations) to enable direct radio communications between agencies with
incompatible radio equipment. The Bureau also manages these resources and maintains all associated
Federal Communications Commission (FCC) licenses.
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Page 48 DivTel Business Model and Value 2.4 New radio channels in the 700 MHz band have been allocated by the FCC for public safety from newly
vacated television channels. To use these new radio channels in Florida, the Bureau has drafted an
interoperability plan.72
State Law Enforcement Radio System Services The Bureau provides critical contract and system management, oversight, performance monitoring, and
planning for the State Law Enforcement Radio System (SLERS), one of the first statewide public safety
radio systems in the nation.73
The Joint Task Force on State Agency Law Enforcement Communications (JTF Board)74 communicates
the 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 law
enforcement 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 four
hurricanes in 2004 and 2005 affecting the Sunshine State. SLERS provides mobile communications to
more than 7,500 law enforcement officers75 across 23 state agencies and 27 federal and local jurisdictions
with 16,800 radios in patrol cars, boats, motorcycles, and aircraft and on foot with the ability to quickly
establish multiple communications links between most of the more than 200 different state and local
emergency dispatch centers.76 The service covers 98% of Florida’s 58,000 square miles, plus an estimated
20,000 square miles of off-shore coverage.
FIGURE 15
The “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 system
for public safety, SLERS final acceptance came in 2010. Though this system has been actively serving
state law enforcement for several years previously, final acceptance of the radio system verified
completion and deliverables from the contractor.
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Page 49 DivTel Business Model and Value 2.4 E911 Special Support Services The ability to obtain emergency assistance statewide is a critical component of Public Safety. Enhanced
911 (E911) services route and transfer 911 calls to answering centers for the appropriate responding
agency. The system automatically provides the caller’s telephone number for call back purposes and
location 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 a
major milestone for the Bureau, with funding assistance from the E911 Board. It gave all counties in
Florida 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 911
services statewide. The Bureau oversees the administration77 of the Emergency Communications Number
E911 System Fund (E911 Trust Fund) which receives revenue from the E911 fee ($.50/month) for landline and cell-phone subscribers. Net fee collections in 2009 totaled approximately $125 million.78
The Bureau and the E911 Board provide unified leadership for E911 on state 911 issues through planning
and coordination.79 To further improve E911 service statewide, the Bureau assists the E911 Board in
developing, implementing and managing three grant programs for the counties. These programs assist
counties 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:80
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 counties
through 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 the
funding, which is being matched by a combination of E911 Board funding, county funding and a soft
match (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 and
save money. The most significant current example is the FIN network, which utilizes enhanced
SUNCOM Voice over IP service to enable communications between disparate radio communications
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Page 50 DivTel Business Model and Value 2.4 systems. There are many other future opportunities for such convergence addressed in the section below
titled “Convergence Opportunities for Public Safety”.
Planning Thorough planning is paramount to the implementation and maintenance of any statewide public safety
system. 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 Plan
Good planning requires careful consideration of the needs and impact on all of the affected parties, in both
the short term and long. Without these plans, Public Safety agencies would lack guidelines and
safeguards needed to establish reliable communications and public safety personnel would be exposed to
greater 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 the
following:
 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 technology
from 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.
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Page 51 DivTel Business Model and Value 2.4 Engineering for Reliability with Performance Standards Reliability is a priority in the design of systems for public safety communications. The Bureau keeps this
priority in the forefront at all times. Plans must keep pace with the latest mainstream technologies and
keep track of the existing state and local system implementations. Every plan published by the Public
Safety Bureau includes or cites high-tier standards for systems and equipment performance. These
standards 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 on
the technical requirements of the FCC rules and the Region 9 Plan. This software tracks all existing
channel assignments and ensures that the planned implementation of a new or upgraded radio system will
not degrade the performance of any existing public-safety system.81
E911 Board ‐ Fee Remittance Database The Bureau assisted the E911 Board in the development of a secure relational database to accurately track
the fee receipts that are under the E911 Board’s management. The Bureau now uses this database to assist
the 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 of
contact within each county for E911 service.82 Additionally, the Bureau regularly participates in biannual
911 coordinator meetings.
SLERS User Groups SLERS jointly hosts an internal monthly user group meeting for its 7,500 dispatchers and radio users to
keep its customers apprised of enhancements, problems, solutions and provide opportunities to propose
new products and features for the equipment.
SLERS also participates in user group conferences hosted by the supporting industry. Beyond
participation in the P25 standards development through their user group, SLERS attends vendor-hosted
user groups to determine technologies and capabilities being developed by vendors. These vendor-hosted
meetings also serve to share the experience of SLERS and learning details and resolutions for any
difficulties other users have experienced.
Partnerships with Government and Industry Partnerships between the state, local governments, and private industry are critical to the success of the
Bureau and effective Florida government emergency response. These systems would not be possible
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Page 52 DivTel Business Model and Value 2.4 without the participation of these various players. The Bureau maintains partnerships with industry by
establishing mutually beneficial arrangements for services and fostering industry participation in the
decision-making process.
Florida E911 Board The Florida E911 Board, by statute, consists of representatives from the industry that supports E911, local
governments that manage 911 systems, and the state. The Florida E911 Board is required by statute to
meet at least once a month in a public forum and approves all disbursements and expenditures from the
E911 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 counties83 have joined SLERS and have committed to SLERS being their primary law
enforcement radio system for their county.84
Committees The JTF Board is served by a Technical and a Standard Operating Procedure (SOP) Committee. The
makeup and voting rights mirrors the JTF Board. The committees meet regularly and are noticed in the
Florida Administrative Weekly. The committees review operational issues and SLERS partners request
and 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. The
Bureau also has three field representatives working out of Tallahassee, Orlando and Miami who support
SLERS users. They provide recurrent user and duty officer-dispatcher training at the law enforcement
academy, user locations, and the seven regional communications centers serving SLERS.
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Page 53 DivTel Business Model and Value 2.4 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 40), but also between voice, video
and data communications riding common circuits. Economies of scale (see “Economies of Scale” on page
28) are extended as well when the functions of narrow purpose systems become mere features of more
versatile devices.
Realizing Convergence Opportunities through Discipline 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.
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Page 54 DivTel Business Model and Value 2.4 Voice over IP (VoIP) VoIP is a means of placing telephone calls using IP. Aside from sharing circuits with computers to
eliminate duplication, VoIP gives users more control and functionality while the cost of phone services
can 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 have independently invested in it. But to
date, there has been little coordination to derive the greatest dividends. The only purchasing leverage
agencies had 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 local phone service were reduced by the cost of equipment and software maintenance required
with premise VoIP systems. Promises of lower cost long distance have been largely unattainable without
a numbering plan and enterprise coordination with providers.
SUNCOM has implemented two other major VoIP initiatives to counter these conditions; STEPS and
VoIP Centrex.
STEPS The “SUNCOM Telecommunications Equipment on-Premise Services” (STEPS) was a first-time
SUNCOM effort to offer a service that focused on telephone switching equipment known as Private
Branch Exchanges (PBXs) at the customer’s site. PBXs have been around from near the beginning of
telephone services85 but modern PBXs almost exclusively provide VoIP.86 They move some functions
from the telephone company to the customer’s site thus allowing customers to share phone circuits
between multiple telephones (to reduce costs). PBXs also give customers more control and data related to
telephone activity which is particularly useful in call-centers.
Agencies’ PBX purchases have always been subject to SUNCOM review because they are a part of the
state network.87 When SUNCOM was asked to approve them in accordance with 60FF, F.A.C.,88 it had to
balance unique customer needs with its charges to ensure interoperability and economy. Clearly, some
PBX 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 effective
competition. Some communications standards were also lost and monitoring of service quality was
lacking.
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 and
standardization inherent parts of PBX purchases. SUNCOM has successfully brought more transparency
and competition, and more effectively steered customers to solutions that were optimized to their needs
without unnecessary spending.
SUNCOM however, has several pending concerns about its STEPS service that should be addressed
through budgetary and contractual improvements. SUNCOM concerns about STEPS include;
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Page 55 DivTel Business Model and Value 2.4 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.
Despite these concerns about STEPS, it has been very successful at producing savings by creating new
transparent competition between PBX vendors and by involving SUNCOM staff earlier in the process of
agency 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 telecommunications
company partners. AT&T, CenturyLink and Verizon each offer their versions of VoIP Centrex89, which
provides 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 term
purchase/rental commitments because VoIP Centrex is month-to-month.
Managing Complexity through Emerging IP Convergence The average worker has a variety of methods for communicating and obtaining information using the
Internet Protocol;
Phone calls
Email
Texting
Live chat
Still pictures
Fax
Broadcast video
Audio streaming
Video conferencing
Audio conferencing
Web conferencing
Data access
Data exchange
Software distribution
Web access
Video streaming
All of these communications can be performed over more than one type of device (PC, cell phone, desk
phone) from several locations (office, home or on the move).
Still lacking is true coordination and integration between these technologies. In fact, despite the promise
of simplifying communications with these new options, the sheer number of them actually adds
complexity as users must maintain each of them and keep track of more contact information for their
associates.
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Page 56 DivTel Business Model and Value 2.4 And despite their common use of IP, many types of telecommunications require separate sub-networks
within 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 either
end of many communications, specialized equipment is also still often needed.
Finally, the promised capabilities and cost savings from these technologies often fall short because the
infrastructure is not in place to deliver all of them. Voice over IP (VoIP) in particular is often
implemented with the belief it will deliver local and long distance phone service savings. But because
VoIP calls must often traverse traditional phone networks (known as the Public Switched Telephone
Network; PSTN) to complete a call, the savings are often less than expected.
To fully derive the benefits of emerging IP telecommunications, SUNCOM is now planning to converge
them 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, whether
they are active, and the user’s preferred and available methods (voice, text, video, etc.). Communicating
will entail picking a person and a method without needing to know a phone number, address, location or
even which device is being used by the other party. The network will verify that the chosen method is
possible and make it happen.
IP Multimedia Subsystems (IMS) SIP enabled networks can also talk, text, or display video using one technology; IP Multimedia
Subsystems (IMS). This will eliminate the need for specialized sub-networks within the State Network
(and ultimately the Internet) leading to greater efficiencies and more standardized support. It will also
reduce proprietary characteristics of devices when they use this universal standard. And devices will be
able to hand-off communication sessions on the fly, e.g. a phone call started on desk phone or PC can be
switched 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 first
time, the network will ask who is using it. If that person is already known to the network, the device will
be registered as just one more that the user has. Simple menus on the device will allow picking preferred
methods of communicating and deactivating them at any time.
When connecting to others, contact lists of users will appear with simple icons representing the
communication methods they can and are willing to receive. User groups can also be chosen to receive
broadcasted messages. While it may be possible for a user to know phone numbers, addresses, types of
devices, etc. of his/her associates, this information will become mostly irrelevant to users because the
network knows what is necessary to make the connection. This is why such networks are described as
“people-centric” rather than “device-centric”.
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Page 57 DivTel Business Model and Value 2.4 SIPS/IMS Convergence for the Enterprise and Beyond Implementing a SIP/IMS network cannot be effective if it is piecemeal. The servers that hold information
about people, and their devices, preferences, locations and availability must be centralized and accessible
to everyone.90 This is particularly true given the growing mobility of users.
But these benefits reach beyond the enterprise when connected to other SIP networks. Thus the
telecommunications industry is planning for standards of federation between enterprises that will extend
the SIP/IMS functionality to the broader Internet. Enterprise networks like SUNCOM will be a necessary
for early access to the benefits of these technologies.
Convergence of Wireless Today, many state employees who use cell phones on the job also have desktop phones. As Office of
Program Policy And Government Accountability (OPPAGA) pointed out in 2009, one of these two
services is redundant for some employees. A common approach is to eliminate the cell phone since it is
often viewed as discretionary. DivTel suggests however, that the desk phone may be the better candidate
for elimination given the staff productivity power that cell phones provide. At a minimum, the two
technologies should be integrated.
As the SIP and IMS technologies described above mature, they will deliver the greatest dividends for a
mobile 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 an
opportunity for this kind of convergence, but considerable cost savings as well.
Today, Florida government buys mobile services through several different contracts. SUNCOM provides
a small portion through its smart phone and air card services. Non-SUNCOM government consumers use
the State Term Contract established by DMS’ Division of Purchasing or the Western States Contracting
Alliance contract. As a result, Florida’s purchasing leverage is diluted, there is no central repository of
spending and usage information, and there is limited cost accounting.9
Mobile telecommunications services also have unrealized potential to leverage the advantages of the
Pooled Services approach shown in Figure 11 on page 36. Today, mobile services are bought through
Isolated Purchases, the State Term Contract and Purchased Blocks as depicted in Figure 11.
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 Figure
16 below. As they use more minutes in a month, they pay less per minute until ultimately matching the
State Term Contract piecemeal rate of ¢5.2. That breakeven point is 866 minutes monthly. This means in
any month, if customers use less than the breakeven amount they are effectively wasting minutes because
they could have paid less at the piecemeal rate. On average, State Term Contract customers use 200
minutes.91 So, if they bought the unlimited plan, they paid 333% more ($34.60) than necessary to meet
their needs.
If the State of Florida were to buy a large block for the whole enterprise and resell them internally from a
pool, the excess minutes normally wasted by each customer using a plan would be shared with customers
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Page 58 DivTel Business Model and Value 2.4 needing more than usual. And by using the Law of Large Numbers25, the state could minimize unused
minutes at the enterprise level.
$20.000
$1.000
$0.050
1
60
119
178
237
296
355
414
473
532
591
650
709
768
827
886
945
1004
1063
1122
1181
1240
1299
1358
1417
1476
1535
1594
1653
1712
1771
1830
1889
1948
$0.003
Piecemeal
Unlimited Plan
FIGURE 16
Through this procurement and use of OaSIS, SUNCOM expects to implement a contract akin to a “family
plan” for all enterprise mobile charges whereby it will commit to buying blocks of minutes each month
and resell them incrementally within the enterprise to achieve significant savings and provide usage
accountability that is absent from the current environment.
This contract will also facilitate the convergence offered through an enterprise network using SIP, IMS92,
Global Positioning, software applications, data distribution, and integration with other state resources
which should bring significant improvements in the efficiency and effectiveness of Florida government
employees using mobile devices.
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Page 59 DivTel Business Model and Value 2.4 911 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.93

Enhance 911 Act Grant Initiatives94 - 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% portable
coverage in defined urban areas, SLERS does not meet our state law enforcement agency’s needs when
officers leave their vehicles. In particular, there are many areas of the state where officers who leave their
police 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 areas
with 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 to
operate on newly licensed channels where sufficient frequencies are available. The Bureau moved its
aircraft subsystem to a new technology platform in the 700 MHz band to free up the 800 MHz channels
previously supporting the aircraft subsystem. This type of coverage enhancement only minimally
addresses the coverage need, however, due to the limited number of frequencies made available. A
migration to the Project 25 open standards-based technology (see below) for the entire system would
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Page 60 DivTel Business Model and Value 2.4 allow use of a reallocated set of 700 MHz frequencies reserved for state use and allow considerable
progress to improving portable coverage.
Need for Telecommunications Convergence for Public Safety Perhaps the one area of government telecommunications that has benefited the least from IP technology
convergence has been public safety. Because public safety organizations must balance the need for
uncluttered 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 of
dedicated frequencies for that purpose. These “mutual aid channels” use analog mode only to avoid
proprietary 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 to
the cell phone industry, like broadband data access, texting, video streaming, etc., are largely absent from
public safety radios. And the solutions IP has developed to balance security with interoperability have
historically been unavailable.
A public safety standard known as P25 using IP has been developed over the past 30 years and is now
becoming commonly adopted among local law enforcement agencies throughout Florida. P25 brings the
promise of greater transmission efficiency and effectiveness, interoperability for voice communications
between 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 pilot
migration of SLERS to Project 25. DivTel had planned for eventual migration all of SLERS to the Project
25 standard when a sufficient funding source is identified. This would give SLERS improved
interoperability and enable significant cost avoidance in the future. But because P25 is a narrowband
technology 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 years
on a 20 year State Law Enforcement Radio System (SLERS) contract. The SLERS contractor provides
public safety radio communications services through its own infrastructure and receives the bulk of
revenues from $1 surcharge on license tags for vehicles95 and boats.96 The state has funds to enhance the
network through a $3 fee added to fines for moving violations97 that it uses to expand geographic
coverage, improve reliability and administer SLERS. But there is currently no funding source large
enough or contractual leverage sufficient to upgrade the core of SLERS to P25 or meet the impending
necessity to replace radio handsets.98
Convergence Opportunities for Public Safety Simultaneously, the FCC is fostering significant changes by reserving new wireless spectrum for public
safety telecommunications using Long Term Evolution (LTE) standards for public safety mobile
communications. LTE consists of a series of strategies like SIP and IMS for mobile services broadband
(see “Managing Complexity through Emerging IP Convergence” on page 56) developed by wireless
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Page 61 DivTel Business Model and Value 2.4 providers for the consumer market. This will render public safety telecommunications to be similar to
consumer mobile telecommunications, more competitive and feature rich.99
As of this writing, three bills are now being considered by Congress to put $10 billion in grants behind
development of this technology for public safety.
Support from land-line networks of the caliber of SUNCOM’s MFN100 will be a prerequisite to
implementation 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 are
comparable to MFN.
Implementing such an approach could give public safety officials communications tools that are as good
as 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 public
safety will allow easily connecting to individuals and groups, inside or outside dedicated networks, using
a 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 marketplace
technology 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” on
page 58) where clients manage access and payments, could also broaden the funding sources for public
safety, extend participation to many more local governments and provide a means for better cost
allocation and accounting. Today, public safety networks are funded through the “Single Funder” model
as depicted in Figure 11 on page 36.101 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”.
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Page 62 DivTel Business Model and Value 2.4 Network Convergence The State of Florida has three major statewide data communications networks; SUNCOM’s MyFlorida
Network (MFN), Florida LambdaRail (FLR) and the Department of Transportation’s (DOT’s) Intelligent
Transportation 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 between
them. 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. ITS
is designed to provide communications for “Computerized traffic systems and control devices… for the
purpose of motor vehicle traffic control and surveillance…”.102
However, because ITS fiber was installed with a significant portion of Federal DOT funds (up to 90%) for
transportation purposes, it has historically been unavailable to SUNCOM or for other government
purposes.103 DOT’s ITS generally uses few strands of the 96 in the ground and little of the conduit. In
light of available technologies to optimize fiber networks, this means the State of Florida might have104
enormous unused backbone105 broadband capacity.106
DMS saw DOT’s unused ITS capacity as a potentially inexpensive option to buying from the private
sector. Thus, DMS has made information requests to Florida DOT to further understand the potential of
the ITS infrastructure and sought to collaborate. DMS has also sought relief from Federal DOT’s ITS use
restrictions in a 2009 request to the Federal Highway Administration and the FCC.107
DMS and Florida DOT also agreed to develop another joint proposal to the Federal Highway
Administration for relief once the current Government Broadband Study being conducted by the
University of Florida concludes in first quarter of 2011 (see “Broadband Strategic Planning” on page 67).
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 appears
that NTIA leaders are preparing to approach the Federal DOT about expanding the use of DOT fiber to
more general broadband purposes.
Florida LambdaRail (FLR) FLR is a private not-for-profit organization providing a data communications network to Florida’s
University System. Its network is comprised of dedicated circuits. FLR was formed in 2005 as a research
network with access to Internet 2108 and is governed by a board of university representatives. In addition
for 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 subsection
282.103(3) F.S., which required all state agencies to use SUNCOM. That provision was changed109 in the
2010 Legislative Session through a bill that gave universities increased autonomy in many areas.110
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Page 63 DivTel Business Model and Value 2.4 Despite being established to foster university research, FLR now provides operational day-to-day data
communications for the universities as well. Without the same kind of statutory restrictions that guide
SUNCOM, FLR has more flexibility to broker deals with public and private partners and can even
compete with the private sector. FLR has in fact expanded beyond serving universities by striking
agreements 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 billing
and ordering systems much like SUNCOM’s.
Given that the universities chose to develop FLR rather than use SUNCOM services, SUNCOM assumed
that FLR might be able provide services that are cheaper than SUNCOM vendors. SUNCOM also sought
Internet 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 2007 to collaborate or establish a partnership. In
December 2010, FLR contacted SUNCOM to discuss collaboration and offered to provide Internet 2
access to SUNCOM customers.
How Florida’s Telecommunications Assets could be Optimized Clearly the existence of three major state telecommunications networks duplicate infrastructure
investment and operational expenses, dilute aggregate state purchasing leverage and hampers
collaborative opportunities between universities and state agencies. SUNCOM for example pays for the
use 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. But
failing agreement, a broader public policy approach should be considered to combine these network
services under a common business model.111 Such an aggregated model should apply principles like those
described 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 delivers the greatest savings.
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 create a 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 General Appropriations Act (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 state
agency. The Agency for Health Care Administration (AHCA) included networking services as a part of
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Page 64 DivTel Business Model and Value 2.4 its procurement of FHIN’s centralized database and software for exchanging data with and between health
care providers. In anticipation of this, DivTel sought legislation for two years to give SUNCOM the
authority to sell services to rural health care providers so FHIN could be folded into MFN for greater
economies 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 done
to both offer the savings SUNCOM can deliver to these public entities and to increase SUNCOM’s
economies of scale. SUNCOM has had limited success given that 16% of its revenue comes from local
governments.
Larger more metropolitan local governments can achieve some economies of scale on their own. Urban
areas also have a distinct advantage because dense populations are easier and cheaper to serve. Many
local governments are also able to use their revenue sources and rights of way to lay circuits rather than
rely upon SUNCOM or private companies. Finally, with the broadband stimulus initiative, local and
regional 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 local
governments to build networks. Thus, SUNCOM has initiated a new strategic approach to local and
regional entities whereby the relationships will evolve away from provider/customer to become
partnerships.
The telecommunications assets that local governments hold are often incomplete with geographic gaps in
their networks where laying fiber is simply too expensive. They also often lack a broad support structure
for maintaining services. In some cases, they outsource services to “light” the fiber. In other cases, staff
turnover can leave a local entity with deficient support.
SUNCOM could bring its contracted service support from vendors to these partnerships in exchange for
use 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. By
combining SUNCOM’s management capabilities, economies of scale and vendor relations with local
infrastructure, the State of Florida may be able reduce costs while increasing the reliability and
capabilities of Florida’s public sector networks.
Consistent with this approach, DivTel is exploring options to incorporate local government networks in its
model. An example of an emerging partnership is with the Regional Planning Councils that are
collaborating 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 order
processing, another powerful and innovative feature of OASIS will come from the open and shared design
for which it was named.
Printed 3/6/2012 9:24 AM Kyvik
Page 65 DivTel Business Model and Value 2.4 Historically, SUNCOM’s larger customers downloaded billing data for use in custom built audit and
accounting systems. Those systems are often duplicated at various agencies as each has similar business
needs.
OaSIS will provide a library to house these systems where they will be shared. Customers will be
encouraged to run them in the SUNCOM computing environment rather than download data. They will
also 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 enterprise
rather than their own limited staff. They can incrementally improve upon software written by others and
turn those improvements back for use by the consortium. Small agencies that previously lacked the
resources to build such audit and accounting software will attain immediate access to tools they could
never build alone.
Enhancing Florida’ Economic Competitiveness with Broadband DMS’s Broadband Statutory Mandate The 2009 Legislature enacted section 364.0135 F.S.,112 designating DMS as the lead Agency to carry out
statutory directives to promote broadband deployment based upon a finding that “…broadband Internet
service is critical to the economic development and is beneficial for libraries, schools, colleges and
universities, 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 Improvement
Act (BDIA) passed by Congress in 2008. The Act emphasizes that; the Federal Government should
encourage state efforts to improve the quality and usefulness of broadband data and support public/private
partnerships. The Act also asserted that continued deployment of broadband technology is vital to
maintaining competitiveness and job growth. The Act establishes the State Broadband Data Development
Grant 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 approach
designed to leverage the State of Florida as an anchor tenant for new broadband resources. This would
improve the viability of any effort to extend broadband to underserved areas by establishing a reliable
revenue stream to providers.
Consensus Building and Partnerships In June of 2009, DMS established a Broadband Workgroup to include entities that were named in statute
and other interested parties to participate in development of broadband strategies for Florida. The
membership represented six state agencies113 and Enterprise Florida. The workgroup held weekly public
Printed 3/6/2012 9:24 AM Kyvik
Page 66 DivTel Business Model and Value 2.4 meetings to identify broadband plans, projects and needs across the state. The workgroup focused on
approaches consistent with three federal broadband grant programs after they were announced.
Per its designation in section 364.0135 F.S., DMS applied to the State Broadband Data and Development
(SBDD) program.114 DMS also provided support to the three Florida Rural Areas of Critical Economic
Concern (RACEC) who applied for and were awarded a total of $54 million through the Broadband
Technology Opportunities Program (BTOP) program.115
This led to promising partnerships for the whereby RACECs are collaborating with DMS to develop a
grassroots based regional broadband planning capability. DMS is also working with the Department of
State to assess the connectivity capabilities and need for increased library participation in the federal Erate 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 Internet
service … to develop geographical information system maps”. Consistent with this requirement, DMS
obtained funding through a Federal grant designed for the purpose of national and broadband data
collection and state mapping and entered into a contract with Connected Nations to deliver and maintain
the map for two years. A second grant will continue maintenance of the map through three additional
years.
Broadband Strategic Planning In accordance with its statutory assignment, DivTel secured grant funds to assist in the development of the
state’s strategic broadband plan. Development of the plan was awarded to the Public Utilities Research
Center (PURC) at the University of Florida in June 2010.
The plan will include comprehensive research and analysis of existing broadband resources and operations
at state and local levels, as well as current policy, legislation and contracts affecting optimal resource
usage.
As Florida policymakers face a multi-billion dollar revenue shortfall, this study will provide
recommendations on how Florida can get the most out of its broadband resources through adjustments to
policies, 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 issues
The Plan’s scope will consider:
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Page 67 DivTel Business Model and Value 2.4 
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











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.
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-rate
participation. E-rate is a program through which schools and libraries can obtain telecommunications
subsidies covering as much as 90% of costs. Most of the K-12 schools and some libraries have been Erated customers of DMS since the beginning of the program.
Florida’s DOE historically provided assistance to Florida schools to help them apply and manage these
complex grants. But DOE discontinued doing so in the first quarter of FY 2010/11. DMS has attempted
fill this void using engineering and billing staff, neither of which are E-rate experts, and both of which
have competing duties.
DMS efforts to assist schools and libraries will be partially funded through the second grant and a DMS
match. With the grant, DMS will be able to dedicate resources to the effort, as DOE did, so DMS can
achieve the necessary level of expertise and have the time to give E-rate customers the help needed to be
successful.
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Page 68 DivTel Business Model and Value 2.4 Table of Attachments Attachment 1: What Changed from Previous Version ..................................................................70
Attachment 2: Causes of 2009/2010 Refund/Rebate .....................................................................72
Attachment 3: Section 364.0135 F.S., - Promotion of Broadband Deployment ...........................77
Attachment 4: Agreement between DOT and Martin County .......................................................79
Attachment 5: Letter to FCC Seeking Access to ITS Fiber ...........................................................83
Attachment 6: Companion to Figure 11: Cost Recovery Models for Enterprise Services ...........90
Attachment 7: Companion to Figure 12: The Simplicity/Savings Trade-off ...............................95
Attachment 8: DivTel’s Model for Telecommunications Procurement in Brief ...........................98
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Page 69 Attachment 1: What Changed from Previous Version Attachment 1 What Changed from Previous Version
Version 2.2 (latest, 6/1/2011)
1. Additional explanations were inserted under the Cost Accounting section regarding how costs are
allocated to SUNCOM services.
2. Some headings were reworded.
3. Some redundancy was removed and sections rearranged to improve readability.
4. Metropolitan Area Network (MAN) services were displaced with variants of MyFloridaNet (MFN)
services with the renegotiation of the MFN contract. Therefore, MAN services were eliminated from the
description of services in the document.
5. With the additional legislative requirement to fund the state portal (MyFlorida.com) from
SUNCOM revenues, it is now included among the list of activities that are “Unbillable Support of
the Florida Government Enterprise”.
6. Staff author and editor attributions were inserted into the footers.
7. A few grammar and readability corrections.
Version 2.1 (3/2/2011)
8. Figure 12 was modified to exclude “State Term Contracts” from “Enterprise Resources” because
those services are not provided through enterprise resources.
Version 2.0
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 23) 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 6, a “Companion to Figure 11: Cost Recovery Models for Enterprise Services was
added. It explains the rationale behind the claims made in Figure 11.
4. A few adjustments were made to Figure 11. 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 12 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 7, a “Companion to Figure 12: The Simplicity/Savings Trade-off ” was added. It
explains the rationale behind the claims made in Figure 12.
Printed 3/6/2012 9:24 AM Kyvik
Page 70 Attachment 1: What Changed from Previous Version 7. Endnote 111 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 26.
9. SLERS coverage maps were added in Figure 15 on page 49.
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 3/6/2012 9:24 AM Kyvik
Page 71 Attachment 2: Causes of 2009/2010 Refund/Rebate
Attachment 2 Causes of 2009/2010 Refund/Rebate
Authored January, 2010
Summary
Over the last two fiscal years, the Division of Telecommunications (DivTel) at the Department of
Management Services (DMS) has spent less with telecommunications vendors and on operating costs than
it has charged customers. This has resulted in a surplus in the Communications Working Capital Trust
Fund (CWCTF).
None of the surplus was derived from rate increases.2 Rather, during the last three years, DMS
implemented several telecommunications services price reductions.3
The 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.
2
The only SUNCOM services subject to rate increases over the last three years were antiquated, targeted for elimination and subsidized through income from
other 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.
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.
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Page 72 Attachment 2: 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 customers
approximately $7.7 million. To prevent recurrence of the surplus, DMS will implement permanent rate
reductions with a first year impact of approximately $5 million. Both of these will be rendered in
proportion to the sources of the surplus (i.e. granted to customers of services who paid more than the
allocated cost of the service) and consistent with sound future State Network strategies.
Details on the Sources of the Surplus
The Communications Working Capital Trust Fund has achieved a surplus primarily due to the factors
below.
Elimination of the Statewide Backbone
SUNCOM’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 from
the regulated market. The advent of competition in the long distance market however, brought rates that
were 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 and
data services to open-market bulk purchases. But because the backbone and its replacement services had
to be available simultaneously during the transition, and DMS sought no additional cash to fund it, the
Communications Working Capital Trust Fund incurred redundant costs, i.e. DMS had to maintain
backbone 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. The
completion of the migration also brought greater savings than expected.
Replacement of Several Data Communications Services with MyFloridaNet
Since the beginning of DMS’ Internet Protocol (IP) offerings in 1994, SUNCOM established four primary
IP 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.
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Page 73 Attachment 2: 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 as
with the backbone migration, DMS had to maintain the legacy IP services while migrating all customers
to MyFloridaNet without any additional funds. DMS cautiously avoided premature rate reductions to
ensure solvency through the transition.
In spite of the fact that the administrative charges from the entire legacy IP services are now borne by
MyFloridaNet and applied to a smaller base of charges (i.e. since MyFloridaNet is cheaper), the
completion 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 are
first sent to customers informing them of the need to migrate off of the service with a notice of an
impending price increase. The letter includes information on alternative services and contact information
to get help. DivTel then reaches out to customers to encourage and help them move. Finally, the price
increases are implemented in stages that provide increasing incentives to make the change.4
Verizon Wireless Settlement
A settlement of a dispute regarding revenue sharing between DMS and Verizon Wireless resulted in the
DMS receiving a one-time payment of $771,340 and ongoing increases of $41,775 monthly.
4
See footnote 2 for examples.
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Page 74 Attachment 2: Causes of 2009/2010 Refund/Rebate
Toll Free Services Volume Increase
Usage of toll-free services is counter-cyclical to macro-economic business cycles, i.e. many more citizens
use toll-free to obtain government assistance during recessions. Toll Free services have experienced a
four-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 onetime rebate. DMS also rebid the service to establish a new technology known as “menu in the cloud” that
has already reduced wait-times and therefore, toll-free minutes.
Local Service and Long Distance
Local phone and Long Distance voice services have historically been the mainstays of SUNCOM’s
services. Since inception of voice services, many other products and service have been added. The cost
of administration is now spread over more services with adequate revenues to offset the administrative
costs historically borne by Local Service.5
Focused Priorities
After DivTel was absorbed into the State Technology Office (STO) in 2000, its management priorities
expanded 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 used
to help fund these initiatives without replacement.
Trust Fund Cash Balance
32,000,000 In July of 2005, the Working Capital Trust Fund
balance, from which approximately $12 million was
expended monthly, sank to $15,512. DivTel’s solvency
became dependent upon accelerated collections and
delayed payments.
28,809,159
27,000,000 25,355,906
22,000,000 17,000,000 21,717,835
12,000,000 4,846,746
7,000,000 2,000,000 15,512
7/1/047/1/05
7/1/067/1/07
7/1/087/1/09
8/1/099/1/09
10/1/09
11/1/09
The experience of the last decade has fostered a more
conservative management approach. This has resulted
in improvements to almost every aspect of DivTel’s
operation and more effective cost savings to the state.
SUNCOM Revenue and Cost Trends
Annual Revenue
137,642,494
140,000,000
138,000,000
136,000,000
134,000,000
132,000,000
130,000,000
128,000,000
FY 06/07
Annual Expenditures
138,385,400
139,474,335
140,000,000
132,098,806
131,679,486
135,000,000
126,314,477
130,000,000
125,000,000
120,000,000
FY 06/07
FY 07/08
FY 07/08
FY 08/09
FY 08/09
5
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.
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Page 75 Attachment 2: Causes of 2009/2010 Refund/Rebate
During the periods depicted in the graphs above, declines in both revenues and expenditures were
expected as lower cost services were offered and customers migrated to new technologies. But the
consistency 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 permanent
rate reductions. If that trend were to continue, rate reductions would make the decline steeper still while
expenditures remain steady or decline slower; ultimately jeopardizing SUNCOM solvency. A more
cautious strategy would grant one-time rebates to deplete trust fund balances while maintaining steady
revenues if needed.
Strategies for Depleting the Surplus and Preventing Recurrence
To address the surplus, the Department of Management Services (DMS) will refund its customers using
the 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).6, 7

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.
6
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 than
costs 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 no
retroactive refunds will be granted for the service.
7
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 the
approach outlined under the heading “Proactive elimination of antiquated services”. Prices are used as incentives to migrate customers. Rate reductions for
end-of-life services will incentivize usage that is counter to technological trends and make migrations more difficult and lengthy, thus ultimately costing the
state more.
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Page 76 Attachment 3: Section 364.0135 F.S., - Promotion of Broadband Deployment
Attachment 3 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 3/6/2012 9:24 AM Page 77 Attachment 3: 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 3/6/2012 9:24 AM Page 78 Attachment 4: Agreement between DOT and Martin County
Attachment 4 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, by
and 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 Post
263, Building 5315, Post Office Box 613069, Ocoee, Florida 34761, and Martin County, a political
subdivision 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 optic
cable for their respective use within their rights of way; and if such conduit or cable is not fully utilized or
reserved 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 noncontiguous
roadway segments; and both recognize the benefit of utilizing each other’s rights-of-way to connect
noncontiguous sections of its fiber network; and
WHEREAS, the TURNPIKE and the COUNTY acknowledge each to the other that the utilization of
Excess 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 certain
portions of TURNPIKE’s Excess in exchange for the COUNTY allowing the TURNPIKE free use of
certain portions of the COUNTY Excess.
NOW, THEREFORE, in consideration of the promises contained herein and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the TURNPIKE and the
COUNTY agree as follows:
A.
PROCESS. TURNPIKE and the COUNTY agree to abide by the following process for obtaining
the use of the other party’s Excess.
1.
Request for Use.
a. TURNPIKE. The TURNPIKE Enterprise Director of Operations, or designee, shall make
a request in writing to the COUNTY, County Administrator, or his designee, for the use of the COUNTY
Printed 3/6/2012 9:24 AM Page 79 Attachment 4: Agreement between DOT and Martin County
Excess. This request shall contain specific details about the number of fibers needed and the specific
location where fibers are needed. If, at the discretion of the COUNTY, it is determined that Excess is
available, the COUNTY, County Administrator, or his designee will approve the request in writing and
provide 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 Enterprise
Director of Highway Operations for the use of TURNPIKE Excess. This request shall contain specific
details about the number of fibers needed and the specific location where fibers are needed. If, at the
discretion of TURNPIKE, it determines the Excess is available, the TURNPIKE Enterprise Director of
Operations, or designee, will approve the request in writing and provide information detailing the fibers or
conduit 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 the
granting party in the future for any reason, the requesting party will be notified in writing and requested to
vacate 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 vacate
is 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. The
COUNTY 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 for
maintaining their own facilities. TURNPIKE and the COUNTY will be responsible for performing utility
locates for their own Facilities. TURNPIKE and the COUNTY will be responsible for performing utility
relocation for their own Facilities as necessary. TURNPIKE and the COUNTY understand and agree that
accidental 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 own
facilities 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 from
accidental cuts or dig-ups.
D.
Relocation. TURNPIKE and the COUNTY shall be responsible for all costs of relocation and for
performing such relocation activities of their own fiber optic systems, CCTV cameras, vehicle detection
stations and travel time systems. TURNPIKE and the COUNTY agree to use their best efforts to avoid
the need for relocation if and where possible.
E.
Sovereign Immunity. Each party hereto agrees that it shall be solely responsible for the wrongful
acts 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 immunity
under Section 768.28, Florida Statutes.
F.
Term. The term of this Memorandum of Agreement shall continue for as long as TURNPIKE and
COUNTY continue to use the other agency’s Excess.
G.
Amendments. Any revision to this Memorandum of Agreement shall require the written approval
of both parties.
Printed 3/6/2012 9:24 AM Page 80 Attachment 4: Agreement between DOT and Martin County
H.
Assignment. This Memorandum of Agreement is intended for the exclusive privilege and benefit
of the parties; any assignment to another agency, department, entity, or person, is strictly prohibited and
shall vest in the non-assigning party the immediate right to termination, unless approved, in advance, by
written instrument executed by both parties.
I.
Utilization. The utilization of the Excess shall meet the rules and standards set forth by the
Department of Management Services (DMS) including but not limited to Chapter 60FF: Division of
Telecommunications.
J.
No Third-Party Beneficiary. It is specifically agreed between the COUNTY and TURNPIKE that
this Agreement is not intended by any of the provisions of any part of this Agreement to establish in favor
of any other party, the public or any member thereof, the rights of a third-party beneficiary hereunder, or
to create or authorize any private right of action by any person or entity not a signatory party to this
Agreement 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 remain
as imposed by law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed the
day and year written.
FLORIDA’S TURNPIKE
ENTERPRISE
By:
_____________________________
Jennifer Olson
Deputy Executive Director/Chief Operating Officer
Attest:
Executive Secretary (Seal)
Legal Approval
Printed 3/6/2012 9:24 AM Page 81 Attachment 4: Agreement between DOT and Martin County
MARTIN COUNTY, FLORIDA
BOARD OF COUNTY COMMISSIONERS
ATTEST:
BY: _______________________
MARSHA EWING, CLERK
BOARD OF COUNTY COMMISSIONERS
MARTIN COUNTY, FLORIDA
BY: ________________________________
DOUG SMITH, CHAIR
APPROVED AS TO FORM AND CORRECTNESS:
BY: ________________________________
STEPHEN FRY, COUNTY ATTORNEY
Printed 3/6/2012 9:24 AM Page 82 Attachment 5 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.
Attachment 5: 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 Program
The 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
ITS Program Activity ISTEA
TEA‐21
1991‐1997 1998‐2005
Continuing Funding SAFETEA‐LU Total
2004‐2005
2006‐2008 $330M $1.812B
Research and Development $659M
$603M
$220M
Deployment $564M
$679M
$244M
Total $1.223B
$1.282B
$464M
Discontinued $1.487B
$330M $3.299B
The 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 3/6/2012 9:24 AM Price
Page 84 Attachment 5: 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 3/6/2012 9:24 AM Price
Page 85 Attachment 5: Letter to FCC Seeking Access to ITS Fiber Florida DOT ITS Network Printed 3/6/2012 9:24 AM Price
Page 86 Florida DOT ITS Microwave Network We serve those who serve Florida.
Florida DOT ITS Video Monitoring Network We serve those who serve Florida.
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 [email protected] Printed 3/6/2012 9:24 AM Price
Page 89 Attachment 6: Companion to Figure 11: Cost Recovery Models for Enterprise Services Attachment 6 Companion to Figure 11: 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 3/6/2012 9:24 AM Kyvik
Page 90 Attachment 6: Companion to Figure 11: Cost Recovery Models for Enterprise Services Description: Isolated Purchases
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 Economies of Scale Economic Usage Incentives Shared Excess Capacity Vendor Costs Minimized Equitable Shortages & Rationing Unlikely Enterprise Cost/Usage Reports Simple Chargeback Buffered Transition Costs Compatible & Secure Specialization & Expertise True Mostly true There is no enterprise level purchasing leverage when each customer buys services on their own. 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 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 (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 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 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 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 enormous task and likely to produce unreliable results. There is no internal provider that must collect and process charges. But each customer must still process billing and payments. Tools to manage technological transition costs by offsetting premium charges for new and old 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 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 telecommunications design and procurement. Partially true Printed 3/6/2012 9:24 AM Kyvik
Mostly untrue Untrue Page 91 Attachment 6: Companion to Figure 11: 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.
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 Costs Compatible & Secure Specialization & Expertise Single Funder
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 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 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 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. One contract is efficient for vendors, but they could gain further efficiencies from centralizing 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 usage by other customers. Customers can buy all they need to meet daily demand. But without the ability to share excess 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 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 process billing and payments. Tools to manage technological transition costs by offsetting premium charges for new and old 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 administration, enforcement is almost impossible. Experts can establish the State Term Contract but will have little involvement in delivering services and limited understanding how the services are implemented. 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 Economies of Scale Economic Usage Incentives Shared Excess Capacity Vendor Costs Minimized Equitable Shortages & Rationing Unlikely Enterprise Cost/Usage Reports Simple Chargeback Buffered Transition Costs Compatible & Secure Specialization & Expertise True Mostly true 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 invoicing brings efficiency. When third party pays for usage, there is little incentive to use less. 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 significant efficiencies with minimal risks. 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 accommodate some demand surges. But, because third party payers give no incentives to be frugal, there is risk that demand will exceed supply. Since utilization is irrelevant to cost recovery, it is not likely to be collected. 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 services are unavailable to the state at an enterprise level when customers pay nothing. With a single internal provider, compatibility and security can be standardized and managed. With a single internal provider, dedicated experts will be involved in procurement and delivery. Partially true Printed 3/6/2012 9:24 AM Kyvik
Mostly untrue Untrue
Page 92 Attachment 6: Companion to Figure 11: Cost Recovery Models for Enterprise Services Description: Fixed Shares
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 Economies of Scale Economic Usage Incentives Shared Excess Capacity Vendor Costs Minimized Equitable Shortages & Rationing Unlikely Enterprise Cost/Usage Reports Simple Chargeback Buffered Transition Costs Compatible & Secure Specialization & Expertise 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 invoicing brings efficiency. With customers paying fixed amounts that are unrelated to usage, they have no incentives to be frugal. With usage from 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 significant efficiencies with minimal risks. Because charges have no relationship to usage, some customers pay more than they should while others are subsidized. By offsetting peak usage of one customer with diminished usage of another, the pool can accommodate some demand surges. But, because fixed payments give no incentives to be frugal, there is risk that demand will exceed supply. 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 fees. Without incentives, the impact of the tools is largely negated 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. With a single internal provider, compatibility and security can be standardized and managed. With a single internal provider, dedicated experts will be involved in procurement and delivery. Description: Distributed Blocks
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.
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 Costs Compatible & Secure Specialization & Expertise True Mostly true A single contract for services gives the state bargaining leverage, but the state cannot guarantee a commitment to a pool. Negotiating one contract for all customers, and centralizing orders, activation, inventory and invoicing brings efficiency. There are incentives for customers to be frugal when purchasing blocks, but the means for an internal service provider to apply techniques and accountability to inspire savings at the detailed utilization level are unavailable. 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 significant efficiencies with minimal risks. Each customer pays for the block they have chosen and is unaffected by changes in usage by other customers. Customers can buy all they need to meet daily demand. But without the ability to share excess 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 detailed cost and utilization is unlikely to be available. The internal provider must count and attribute purchases of each customer, but detailed utilization data is not required. 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 and can be incentivized by the chargeback method. With a single internal provider, compatibility and security can be standardized and managed. With a single internal provider, dedicated experts will be involved in procurement and delivery. Partially true Printed 3/6/2012 9:24 AM Kyvik
Mostly untrue Untrue Page 93 Attachment 6: Companion to Figure 11: Cost Recovery Models for Enterprise Services Description: Proportional Shares
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 Economies of Scale Economic Usage Incentives Shared Excess Capacity Vendor Costs Minimized Equitable Shortages & Rationing Unlikely Enterprise Cost/Usage Reports Simple Chargeback Buffered Transition Costs Compatible & Secure Specialization & Expertise 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 invoicing brings efficiency. Despite steady usage, charges for a given customer can increase or decrease since usage by other customers affect per unit price. Unstable prices do not give customers clear signals about the consequences of usage. 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 significant efficiencies with minimal risks. Each customer pays in proportion to their usage but is affected by changes in usage by other 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 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 utilization will be collected and attributable to customers. Because incremental usage must be counted and attributed to each customer, chargeback is 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 and can be incentivized by the chargeback method. But these tools are impaired by diluted economic incentives. With a single internal provider, compatibility and security can be standardized and managed. With a single internal provider, dedicated experts will be involved in procurement and delivery. Description: Pooled Services
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 Economies of Scale Economic Usage Incentives Shared Excess Capacity Vendor Costs Minimized Equitable Shortages & Rationing Unlikely Enterprise Cost/Usage Reports Simple Chargeback Buffered Transition Costs Compatible & Secure Specialization & Expertise True Mostly true 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 invoicing brings efficiency. With customers paying stable prices for incremental usage, they are give clear signals about the consequences. Tools like peak‐load pricing can also be implemented. 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 significant efficiencies with minimal risks. Each customer pays directly in proportion to their usage and is unaffected by changes in usage by 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 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 utilization will be collected and attributable to customers. Because incremental usage must be counted and attributed to each customer, chargeback is 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 services are available to the state at an enterprise level since customers pay an internal provider and are fully incentivized by the chargeback method. With a single internal provider, compatibility and security can be standardized and managed. With a single internal provider, dedicated experts will be involved in procurement and delivery. Partially true Printed 3/6/2012 9:24 AM Kyvik
Mostly untrue Untrue Page 94 Attachment 7Companion to Figure 12: The Simplicity/Savings Trade‐off Attachment 7 Companion to Figure 12: The Simplicity/Savings Trade-off
Single Funder
Enterprise
Resources
Internal Billing
Fixed Shares
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 there
are some economic incentives with Isolated Purchases, there are no centralized tools for reporting and
accountability (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 security
standards between customers is difficult and costly.
Printed 3/6/2012 9:24 AM Kyvik
Page 95 Attachment 7Companion to Figure 12: The Simplicity/Savings Trade‐off 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’s
unique implementation are duplicated. While there are some economic incentives when
customers buy through State Term Contracts, there are no centralized tools for reporting, accountability
and enhancing incentives through centralized billing. Focused expertise, and achieving compatibility with
common security standards between customers is considered in the master contract, but largely absent
when implementing 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 without
rebilling customers. Focused expertise and achieving compatibility with common security standards
between 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 for
accountability will not be detailed without proportional rebilling of customers. Focused expertise, and
achieving compatibility with common security standards between customers is a benefit of Fixed Shares
from 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 are
with metered services). Focused expertise, and achieving compatibility with common security standards
between 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 the
mixed messages from price instability. Focused expertise, and achieving compatibility with common
security standards between customers is a benefit from Proportional Shares of a pool.
Printed 3/6/2012 9:24 AM Kyvik
Page 96 Attachment 7Companion to Figure 12: The Simplicity/Savings Trade‐off 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, and
achieving compatibility with common security standards between customers is a benefit to Pooled
Services.
Printed 3/6/2012 9:24 AM Kyvik
Page 97 Attachment 8: DivTel’s Model for Telecommunications Procurement in Brief Attachment 8 DivTel’s Model for Telecommunications Procurement in Brief
The State of Florida’s Department of Management Services (DMS) provides enterprise
telecommunications through a statutorily established brand name known as SUNCOM. The business
process described here has evolved over 40 years of SUNCOM service.
Planks to SUNCOM’s Business Model
1. Telecommunications are bought as services from private providers.
2. Services are offered through enterprise contracts.
3. Services are designed to establish shared virtual networks that are interoperable with common
security provisions, and user management and reporting features.
4. Service orders from all agencies are placed through a central system managed by DMS.
5. All orders become entries in a central inventory system managed by DMS.
6. Private providers issue consolidated monthly invoices to DMS as the single payer for the entire
state enterprise.
7. DMS rebills agencies for the services they use.
Telecommunications are bought as services from private providers
Most State of Florida telecommunications are delivered by private telecommunications companies8,9
resulting in approximately 93% of SUNCOM’s costs paid to vendors. This allows the state to take
advantage of technology market innovations with little investment. Because procurement is at the service
level, costs come in small increments rather than large fixed capital investments. The state is thus also
able to use a variety of funding sources held by every agency. User agencies also have incentives to be
frugal in their demands since charges are a direct consequence of usage.
Vendors are willing to make significant capital investments because the state makes enterprise level
commitments, vendors are able to share resources among all customers and the economies of scale and
risk mitigation realized from other aspects of the model.
8
The common alternative is to build, operate and manage network services.
This includes all intranet and Internet (through an IP/MPLS network), Centrex and trunk voice lines, long distance and toll
free minutes, many wireless and conferencing services. These services comprise approximately $110 million in payments to
vendors annually.
9
Local Area Networks within buildings and contiguous campuses are primarily owned and managed by user agencies. Premise
data routers connecting to the Wide Area Network are managed under enterprise contracts and voice switches (PBXs) are
regulated by a central authority.
Florida’s Statewide Law Enforcement Radio System (SLERS) is owned and managed by a private provider that is paid by
DMS for the SLERS network. However, other model provisions, like centralized order processing, inventory and rebilling of
user agencies based upon usage are not implemented for SLERS.
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Page 98 Attachment 8: DivTel’s Model for Telecommunications Procurement in Brief Services are offered through enterprise contracts
Enterprise telecommunications contracts are established by DMS.10 This provides significant bulk
purchasing leverage for the state and economies-of-scale for both the state and vendors. Costly
duplication of procurement and bid development activities are eliminated, services are standardized across
the enterprise, and consistent security and quality is assured.11,12 The state’s enterprise level commitment
to buy services for a contracted period of time means user agencies need not make commitments beyond
one month.
Services are designed to establish shared networks that are interoperable with
common security provisions with user management and reporting features
Service specifications are contractually established by certified state engineers. Those specifications
include establishment of dedicated virtual (rather than physical) networks at the enterprise and subnetwork
levels with prerequisite security configurations. This means that any state agency can easily connect to
another or, at the other extreme, protect itself from common network traffic. Operational and reporting
requirements are also specified. Independent enterprise and user access to expensive network monitoring
tools for security and traffic management are also included.
Service orders from all agencies are placed through a central system managed by the
state
All orders for specific telecommunications services pass through a single order processing system
maintained by DMS. The system is shared with vendors so they can update records with fulfillment data.
This gives enterprise telecommunications engineers the opportunity to provide assistance to the agencies
that are placing the orders. State engineers can also add special instructions, verify applicability and
compatibility, and hold vendors accountable for the results.
All orders become entries in a central inventory system managed by the state
Each entry in the central order system becomes a record in a state managed central inventory of services.
Details are added with each event; like installation dates, phone numbers, circuit IDs, device serial
numbers, locations, billing accounts, as well as customized user tags, etc. This “inventory in the cloud” is
available to all stakeholders.
Private providers issue a single monthly invoice to DMS as the single payer for the
entire state enterprise
Each month, vendors send a single invoice, along with electronic files detailing the charges, for all
telecommunications services to DMS for payment.13 This allows the state to use its inventory to audit
10
Contracts are established with one or more vendors for a given service depending upon market conditions, regional coverage
and the likelihood that a multi-award will foster perpetual competition.
11
In order to ensure that the most demanding agencies get what they need, the enterprise contract often calls for a level of
quality that is higher than some agencies require. But because of the significant bulk purchasing leverage and economies of
scale, service prices are very competitive.
12
Note that DMS maintains flexibility to minimize proprietary restrictions by using multiple vendors where practical.
13
Detail charge files are distinct by service, Local Access Telecommunications Areas (LATAs), etc. depending upon vendor
limitations.
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Page 99 Attachment 8: DivTel’s Model for Telecommunications Procurement in Brief charges. The state also uses its statewide accounting system and common management structure to ensure
internal collections and continuity of services when a particular agency is slow to pay.
This also eliminates vendor costs and risks from issuing and collecting on thousands of invoices for a
variety of state entities. Timely recievables are ensured because the state pays before all collections are
received from agencies.
DMS rebills agencies for the services they use
Using the invoicing detail provided by vendors, DMS rebills its customers. This allows adding
administrative charges and presenting invoices with tools that enable user auditing.14 This also allows for
invoking cost saving pricing incentives.15 Reporting telecommunications costs to policy makers is
centralized and simple. DMS also acts as an informed, experienced, and rational mediator for billing
disputes by using its enterprise status to make sure both parties are treated fairly.
Summary of the Benefits from the Model
This model is designed to attain the benefits of both leveraging private sector capabilities and centralizing
management and operations.16,17 Telecommunications by definition are conducive to this model since
services are aggregated to form interoperable networks thus bought through enterprise contracts. While
such contracts are common, adding provisions for centralized ordering, inventory, and invoicing are
natural enhancements that bring uncommon accountability. Comprehensive information on
telecommunications usage is automatically and perpetually tracked. This allows the state to tell how
many services of any given type are active and how much they cost for the entire state or at any given
location for any given agency. This information is useful in developing policies and budgets and during
negotiations with vendors.
Vendors realize extensive commitments and achieve significant economies of scale and risk reductions
that translate into lower prices to the state.
Meanwhile, user agencies are actually empowered by centralization. The services that they buy are
automatically compatible with a common network. Their “inventory in the cloud” is always available,
and far more accurate and robust than they could keep on their own. The internal enterprise partner,
DMS, uses this data to help make sure they are not overcharged and represent agencies in billing disputes.
Invoices and payment processing are standardized. Finally, the software for these purposes is designed to
enable savings with custom tagging, account management, and reporting.18
14
Tagging is one example of a tool that enables users to audit. Through the central inventory and/or invoices, agencies can tag
all recurring charges to easily identify their purpose (e.g. “John Doe’s desk phone”) rather than strictly rely upon circuit
number, phone numbers, etc.
15
Examples of cost saving pricing incentives include; peak-load-pricing where discounts are offered to move customers off of
heavy use periods; pricing to motivate migrations off of costly antiquated services.
16
Note that Florida’s model is highly reliant upon software system known as the SUNCOM Open and Shared Information
System (OaSIS). OaSIS is subject to ongoing development. Not all characteristics of the model described here are currently
applicable for every service due to software limitations, vendor and contract restrictions. However, 100% compliance with
every aspect of the model for every service is expected to be achieved within two years.
17
The best example of Florida’s implementation of this model will come with its impending mobile services contract. Software
and the contract are being developed to meet these requirements.
18
For a complete description of Florida’s telecommunications business model, see
http://www.dms.myflorida.com/suncom/divtel_business_model_value
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Page 100 Attachment 8: DivTel’s Model for Telecommunications Procurement in Brief Printed 3/6/2012 9:24 AM Kyvik
Page 101 DivTel Business Model and Value 2.4 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
However, some subsidies persist. See “Unbillable Support of the Florida Government Enterprise” on page 23 for a list.
See “Causes of 2009/2010 Refund/Rebate” on page 72 for a description of major changes that led to restoration of
SUNCOM’s fiscal health.
5
• 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
6
See Attachment 2 for a more detailed explanation regarding the reasons SUNCOM accrued the surplus that was returned
through rebates and refunds.
7
DOE’s procurement of FIRN without SUNCOM was actually not in compliance with Section 282.703 F.S., but DMS
leadership authorized DOE to make the purchase.
8
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.
9
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.
10
See Attachment 3.
11
Section 282.702 F.S.
(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.”
(9) “To adopt rules pursuant to ss. 120.536(1) and 120.54 relating to telecommunications and to administer the provisions of
this part.”
12
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.”
13
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.
Printed 3/6/2012 9:24 AM Kyvik
Page 102 DivTel Business Model and Value 2.4 (2) The division is responsible for carrying out the provisions of ss. 252.31-252.90. In performing its duties under ss. 252.31252.90, 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.”
14
The state comprehensive emergency plan appendix II is found at
http://www.floridadisaster.org/documents/CEMP/2010/ESF%202.pdf
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
This change to use SUNCOM funds to subsidize MyFlorida.com was sanctioned by DMS’s budget office but opposed by
DivTel.
18
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.
19
Figure 6 on page 28 compares isolated purchases to a list of benefits from other approaches to enterprise procurement.
20
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.
21
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).
22
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 bid
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.
Printed 3/6/2012 9:24 AM Kyvik
Page 103 DivTel Business Model and Value 2.4 Bandwidth
DSL
T1
3 Mbps
6 Mbps
9 Mbps
12 Mbps
15 Mbps
21 Mbps
33 Mbps
45 Mbps
75 Mbps
90 Mbps
100 Mbps
155 Mbps
200Mbps
Average
Savings
23
Best
Offer to
DOE
$300
$700
$1,025
$2,050
$2,575
$3,000
$3,225
$3,675
$4,725
$6,625
$8,875
$10,000
$10,750
$16,500
$18,900
$6,195
SUNCOM
FIRN
Service w/
Admin.
Costs
$96.52
$586.24
$920.97
$1,695.88
$2,491.89
$2,722.80
$2,867.12
$3,463.27
$3,919.54
$4,579.23
$5,372.62
$6,208.31
$6,208.31
$7,069.02
$8,007.65
$3,747
39.5%
The below calculation uses the example described in Endnote 22 to determine savings from the lower prices SUNCOM can
achieve.
SUNCOM
Savings over
DOE FIRN
Proposals
40%
SUNCOM
Payments to
Vendors
Avoided Costs
of All Isolated
Agency
Purchases*
$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.
24
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).
25
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.
26
However, SUNCOM also uses its negotiating leverage to include contract provisions that further mitigate risk; e.g. periodic
commitment adjustments, no overage penalties, etc.
Printed 3/6/2012 9:24 AM Kyvik
Page 104 DivTel Business Model and Value 2.4 27
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).
28
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.
29
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.
30
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.
31
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.
32
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.”
33
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.
34
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 a 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.
35
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.”
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.
37
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.
38
The following is based on projected FY 2011/10 and includes non-operating expenditures.
Printed 3/6/2012 9:24 AM Kyvik
Page 105 DivTel Business Model and Value 2.4 Total
Expenditures
Paid to
Private Sector
Paid to other
Government
Entities
Internal
Operations
$120,023,644
$112,004,433
$2,172,794
$5,846,417
100.0%
93.3%
1.8%
4.9%
39
When the internal service provider builds services using assets it owns rather than buying pass-through services, a doublestep-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.
40
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.
41
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.
42
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.
43
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.
44
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.
45
Subsection 282.7101, F. S. - Statewide system of regional law enforcement communications
46
Section 401.015 F.S., - Statewide regional emergency medical telecommunication system
47
Subsection 282.709 (1) F.S., - State agency law enforcement radio system and interoperability network
48
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 via
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.”
49
Subsection 282.709 (1) F.S., - State agency law enforcement radio system and interoperability network
50
Subsection 365.171 (4) F.S., - Emergency communications number E911 state plan
51
Subsection 365.171 (5) F.S.
52
Subsection 365.172 (8) F.S.
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Page 106 DivTel Business Model and Value 2.4 53
Paragraph 365.172 (5) (a) F.S.
54
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_plan
55
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.
56
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_reports
57
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. 252.31252.90, 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.”
58
The state comprehensive emergency plan appendix II is found at
http://www.floridadisaster.org/documents/CEMP/2010/ESF%202.pdf
59
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.”
60
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 state's 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
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Page 107 DivTel Business Model and Value 2.4 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.
61
Florida Statutes, Chapter 282.7101, Statewide system of regional law enforcement communications.
62
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_plan
63
Section 401.013 F.S., - Statewide regional emergency medical telecommunication system
64
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.
65
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.”
66
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.
67
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.
68
See the Florida – Region 9 Plan for Public Safety Radio Communications at:
http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/radio_communication_plans
69
See the Law Enforcement Communications Plan at:
http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/radio_communication_plans
70
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 enforcement
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.
71
See more on EMS at:
http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/emergency_medical_services_ems
72
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_plans
73
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 memberagency needs for the planning, designing and establishment of the joint system."
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Page 108 DivTel Business Model and Value 2.4 74
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 Governor's Enterprisewide 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.
75
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
ers
76
See status report on the web at:
http://dms.myflorida.com/suncom/public_safety_bureau/radio_communications/florida_interoperability_network_fin/implem
entation_status
77
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.
78
E911 Board 2009 Annual Report, Section B, Executive Summary, Financial Highlights, page 3.
79
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.
80
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.
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.
81
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_communications
o
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Page 109 DivTel Business Model and Value 2.4 82
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 caller's location.
All Florida counties reported achieving enhanced 911 (E911) for landline telephone service in September 2005.
83
The following counties are currently SLERS partners: Baker, Bradford, Franklin, Glades, Hendry, Levy, Okaloosa,
Okeechobee, Taylor, Union and Walton.
84
Current SLERS Partners:
 Baker County;
 Bradford County - Sheriff's 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;
 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 - King's Bay and Jax NAS Fusion Center.
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Page 110 DivTel Business Model and Value 2.4 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. Marshal's Service, Violent Fugitive Task Force
85
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.
86
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.
87
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.
88
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.”
89
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.
90
However, SIP will provide the ability to render some users anonymous, invisible or allow them to use aliases for security
reasons.
91
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.
92
SIP and IMS were actually first designed for mobile services because of their mobility and the multifaceted functionality of
such devices.
93
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_reports
94
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_information
95
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.”
96
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.
97
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
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Page 111 DivTel Business Model and Value 2.4 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.
98
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.
99
See more on wireless broadband data for public safety at:
http://www.fcc.gov/pshs/public-safety-spectrum/700-MHz/safetyband.html
100
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.
101
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.
102
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.
103
In spite of the federal and state restrictions however, FDOT has drafted agreements with counties to share ITS fiber. See
Attachment 4.
104
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.
105
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.
106
For example, a single fiber strand using Dense Wavelength-Division Multiplexing (DWDM) can carry up to 400
gigabits/second.
107
See Attachment 5.
108
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/.
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Page 112 DivTel Business Model and Value 2.4 109
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.
110
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.
111
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.
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 largescale 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.
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Page 113 DivTel Business Model and Value 2.4 
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 substantial 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 109).
112
See Attachment 3.
113
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.
114
DMS also applied for a broadband adoption grant to the Broadband Technology Opportunities (BTOP) program that was not
funded.
115
The Department of State Division of Libraries applied for a computer center Broadband Technology Opportunities Program
(BTOP) grant that was also not funded.
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