Business Plan - December 14, 1995
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Blue Sky Community Networks of Manitoba Inc. Business Plan - December 14, 1995 |
| Executive Summary | Background | Activities to Date | Province Wide Network Plan |
| Who Benefits ? | Funds Development | Capital Requirements |
Financial Projections |
Executive Summary
Blue Sky Community Networks of Manitoba Inc. is applying to the Economic Innovation and Technology Council for a grant of $600,000 to be paid in three instalments of $300,000 in 1996, $200,000 in 1997 and $100,000 in 1998. These funds will be used as seed money to establish a core community network in the City of Winnipeg and local community networks throughout Manitoba. Blue Sky Community Networks has also applied for capital funding to the Canada-Manitoba Infrastructure works program. It expects to become self-sustaining over a period of three years through a combination of membership and corporate donations, revenue from local community networks and strategic partnerships with government agencies.Background
The Blue Sky Community Networks of Manitoba Inc. is a provincially incorporated not-for-profit umbrella organization established to facilitate the creation and operation of community Networks throughout the province of Manitoba. Blue Sky Community Networks was founded in January 1994 by a group of ordinary Manitobans who shared a vision which would increase the literacy and prosperity of all Manitobans. It is the first Community Network to embrace a geographic area beyond the boundaries of the municipality within which it is principally operating.The goal of Blue Sky Community Networks is to provide free or low cost access to the Internet throughout Manitoba. The Internet is an international network of computers operated by universities, governments and businesses which share information through a series of standard protocols. There are millions of users across the world. Once a computer is connected to the Internet it is possible to share information with any other computer on the Internet anywhere in the world.
Blue Sky FreeNet of Manitoba Inc. was incorporated as a corporation without share capital in March, 1994. A General Meeting of members held in June elected a Board of Directors and ratified a general by-law. In June, 1995 it changed its name to Blue Sky Community Networks of Manitoba Inc. The corporation has several thousand members and is growing every day.
Blue Sky will, as a subset of its operation, establish and operate a core-level community Networks directly serving the needs of the City of Winnipeg and the surrounding areas, in addition to providing services and assistance to additional Community Networks groups throughout the Province.
Activities to Date
Blue Sky Community Networks began operations in the City Winnipeg in November, 1994 using borrowed and donated equipment. Telephone line costs were paid by a grant from the Manitoba telephone system. There are now 25 modem lines available in Winnipeg. A minimum of 100 will be needed to provide adequate service to the Winnipeg area.Blue Sky Community Networks has also been active in promoting community networks throughout Manitoba. During the summer of 1994, meetings were organized in various communities in Manitoba to promote the community network concept. A number of active organizing committees resulted.
Blue Sky Community Networks has undertaken a concept test of a province wide network involving five separate community networks which are now functioning.
1. Eastman Community Network is a autonomous community network operating out of Pinawa. It received substantial assistance from Blue Sky volunteers.
2. Central Plains Community Network serves Portage La Prairie and its surrounding community.
3. Evergreen Community Network serves the Arborg and Riverton area.
4. Westman Community Network serves the Brandon area.
5. Greenstone Community Network serves the Flin Flon area.
Telephone line costs for the last four community networks are being funded for a period of three months by Blue Sky Community Networks out of its grant from the Manitoba Telephone System.
In September, 1995 Blue Sky Community Networks received a grant of $100,000 from the Department of Industry Trade and Technology to cover staff costs for its concept test project. These funds have been used to hire three full time staff positions: a General Manager, a Project Manager and a System Administrator. These people have been hired under contracts which will expire at the end of February, 1996 unless further funding is obtained. A number of temporary and part-time workers were also engaged to provide support.
In the fall of 1995 Blue Sky Community Networks received a contract from Industry Canada to act as a facilitator to obtain applications for the Community Access program. Industry Canada provided travel costs and the work was done by Blue Sky staff and volunteers.
This business plan is based on the assumption that 23 of these Community Access Program applications will be approved and that the 23 communities will pay Blue Sky Community Networks a fee for providing internet access and training.
A Plan for a Province Wide Network
The Community Networks
As the mandate of Blue Sky Community Networks is province-wide, a variety of options are being explored to provide free, high quality access to users in as many areas of Manitoba as possible. The Blue Sky Community Networks system is being developed to provide for access by dial up telephone to a local number anywhere within Manitoba and, ultimately, by satellite and cable.At present, Internet access points are available only in Winnipeg and a few other large centres in Manitoba. People who do not have an Internet service provider within their calling area must pay long distance or datapac charges to call the nearest service provider.
Blue Sky Community Networks has worked in close cooperation with the Manitoba Telephone system to develop a strategy for providing least cost access to the Internet based on the existing MTS calling areas. There are currently approximately 50 calling areas in Manitoba. The plan developed by Blue Sky would see a community network established in each calling area. The network server would be located in the community where the maximum number of people could call toll free.
The structure of each community network will depend on the needs and resources of each cluster of communities. Each community network will be self governing. Costs will be shared among individual members, schools, local governments, business and First Nations communities.
The Core System
All of the local community networks will be connected to a core system located in Winnipeg. This system will serve a dual role.It will provide certain basic services for all community networks. A central membership database will enable community network members to access their local system throughout Manitoba. For example, someone from Thompson who was visiting Brandon could access their personal account by calling the Brandon community network number. It will act as for major province wide information bases. For some small communities the core system equipment will host the entire local community network.
Second, it will act as the host system for the Winnipeg community network. The situation in Winnipeg differs from the rest of the province. There are many local fee for service internet providers available but their fees still put Internet access beyond the reach of many people. The existence of a strong community network in Winnipeg will provide resources and economies of scale which will help make community networks in other parts of the province viable.
Who Benefits?
1. Citizens - First and foremost, Community Networks provide information services to a very large population that would otherwise not be able to afford it. All that is required is a modest computer, modem and telephone line, or through a public access terminal.2. Students - Using Community Networks, school systems have a cost-effective way of graduating a new generation of computer-literate citizens into the work-force. It is absolutely imperative that all students, from elementary school up, be comfortable with computers and the power they provide in accessing needed information through a mix of worldwide email and documentation.
3. Politicians - Community Networks offer a fine, incredibly convenient and efficient way for citizens to make contact with their elected representatives at all levels of Government. It is of critical importance that all elected representatives have effective communication links with their constituents, else they will be unable to provide effective representation.
4. Government Officials - A huge amount of information needed by the general public is produced by and obtained from some level of Government. Tax dollars made it possible for that information to be created in the first place, and access to it should be by the least costly method. Community Networks offer a fine low cost method of accessing that vast amount of information. Some of that information is of course confidential and should not be openly accessible, but the fundamental rules under Freedom of Information legislation provide appropriate guidelines for economical dissemination of the available information.
5. Businesses - The world-wide email and documentation capabilities of all Community Networks make it possible to substantially improve the business, commercial, and industrial infrastructure of any community.
6. First Nations - Community Networks provide widely dispersed First Nations bands with a useful means of communications between the bands and with other related groups worldwide.
7. The Agricultural Community - Among the first segments of our society to embrace computers were our farmers, for they are first and foremost business people, but with the impediment of dispersal over wide geographic areas. A centrally located Community Network makes it possible for the agricultural community to access common information databases, current crop/price information, and worldwide email connection with their peers, all without leaving their home.
8. Community Organizations and Institutions - In varying degrees, very element of society has a need to inform the public about itself and share its knowledge. Artistic and cultural organizations, societies and associations, medical institutions to esoteric avocations; all can find their place on the community computer, a community that is truly worldwide.
Funds Development
The Funds Development Team has been working on a variety of methods for obtaining individual and corporate contributions. Most of these techniques are drawn from the experience of other community networks in Canada. The basic list is constantly being revised.1. Cascading Opening Menus
In this concept, Basic Users (no fee, no donation), pass through a succession of cascading menus containing a variety of repetitive information, before arriving at Home Page. Those providing a voluntary annual donation on a sliding scale would pass through progressively fewer of the cascading menus.
2. Custom User Identification This has been the main member fundraising tool to date. A basic membership includes a standard indentifcation such as "xyz123." Members who donate $100 or more are allowed to select their own eight letter indentification.
3. Tiered Service Members could be offered higher levels of service in return for donations. A basic membership would be free but for a fee members could obtain special privileges such as a graphical user interface, or access to a special modem pool with a higher lines to users ratio.
4. Strategic Alliances School districts, or a variety of interest groups, might enter into a strategic alliance with Blue Sky for student access to World Wide Web for information searching capability, aimed at all levels of students needing access to information for assignments, term papers, research, etc. Such alliances could be forged that generate substantial gateway revenues, but may carry with them contractual liabilities.
5. GUI Interface Those wishing to connect to Blue Sky with graphic oriented Web browsers such as Mosaic, Netscape, IBox, through a SLIP/PPP connection may do so by means of a voluntary annual donation.
6. Telephone Line Donors The cost of a single telephone line into Blue Sky is about $1,000 per year. Certain benefactors could be encouraged to consider a sponsorship of a line or more for a year or more. In return, the initial logon screen could randomly display a public statement, "This line sponsored by ABC Company. Please visit us!" The "Please Visit Us" statement would be a link to that benefactor's Home Page.
7. Equipment Donations A community network can make use of computer equipment which is still functional but is no longer state of the art. For example, Blue Sky has received a donation of a ten station network which it can use for training. It may also be possible to get donations of equipment for public access terminals.
8. Friends Recognition Public recognition of various levels of donations cab be established quite simply by a "Friends of BlueSky" display, not unlike that published in a Winnipeg Symphony Concert program. Could, for example, take the form of:
Designation Support Level Platinum $ 25,000+ Gold 10,000+ Silver 5,000+ Patron 2,000+ Sustaining 500+ Friend 100+ remium 50+ Basic User ---These values may be determined by cash or in-kind donation. They may be published on-line, in our promotional brochure/application, and most any other published documentation.
9. Boutique An on-line Boutique Shop, supplemented by a Boutique Table at various Blue Sky functions, could make available such things as a Blue Sky Survival Guide (handbook) (with advertising?), T-Shirts, baseball caps, propeller-head beanie caps, key chains, greeting cards, ash trays, greeting cards, note paper, ash trays, and most any other form of conventional goodwill builders uniquely identified in some way with Blue Sky.
10. Training Courses Blue Sky is currently providing basic orientation sessions without charge but donations are requested. Plans are underway to develop an advanced training program for a fee.
11. Events Fund raising events could include speakers, specialized training sessions, dinners and the annual general meeting.
12. Auctions Auctions of donated items have been a sucessful fund raising event for other community networks and free-nets. A silent auction can be conducted on-line. Chinese Auctions can be conducted at meetings and other events. People bid on various items by purchasing strips of tickets and depositing them in sealed boxes beside the item. The successful bidder is chosen by a draw.
13. List Servers Most every one of the 6,000+ members of Blue Sky are members of other associations, societies, special interest groups, etc., often with world wide membership. Blue Sky has the ability to knit together such groups via email using 'Major Domo' a list server utility that can provide an automatic daily digest of email messages in for the past 24 hours, back out to all subscribed members.
14. Home Pages Seeing such a huge membership of 6,000+, many suppliers of goods and services may well be attracted to having a 'Home Page' on the Blue Sky, as a means of exposing their products and services to a very large number of people for a very modest fee. Using HTML language, it is a relatively simple matter to custom 'Home Pages' on demand, for a reasonable fee.
15. Bequests The concept of a Community Network has become an explosively evolutionary event of such magnitude in our society that it should be seen as worthy of substantial support. One such avenue of future support is 'bequests' from among the ranks of living members, particularly if Blue Sky can be designated as a 'charitable' agency of some kind.
Target Revenues
The Funds Development Team has no history upon which to accurately estimate needed revenues and thereby its target revenues. However, using the Budget out of the Blue Sky Business Plan and applying best judgement against the experience of other Community networks, the team has developed some revenue targets which it believes are attainable.
Revenue Item Formula Annual Amt. Member Donations 1,000 new members monthly $ 96,000 voluntarily donating an average of $8.00 annually Rural Sponsorships 52,200 ITT Grant application (once) 100,000 EITC Grant application (yr 1) 300,000 (yr 2) 200,000 (yr 3) 100,000 MTS Trial (once) 18,000 MBNet In-Kind 101,600 Gateway 1200 hrs/mo @ $1.00/hr 27,300 List Server $50/yr/list x 78 lists 3,900 Home Pages $50/HomePage 4,500 x 90 Home Pages Special Events $2,500/event x 6 events 15,000 Endowments $10,000 x 1 bequest 10,000 /Bequests Boutique Revenue $100 first mon. 2,138 + 10%/mo more Publications Survival Guide, 1,069 Yellow Pages, Search Engines (How to) Tiered Service (PPP) $10/mo for 115,167 10% of members Office Space In-Kind 10,000 Line Sponsorship 2/mo new for year 24,000 x $1,000/yr Modem Sponsorship 1/mo new for year 12,000 x $1,000/yr Corporate Sponsor 3/yr x $50,000 150,000 Community Equipment $30,000/mo 90,000 for 3 months Training Revenue $9,000 for 2 months, 21,500 1/4 of members, thereafter 1/4 of new members x $13 Chinese Auction $2,000/event 12,000 x 6 events annually Silent Auction $5,000/on-line auction 20,000 x 4 auctions annually Core Equipment Canada Manitoba Infrastructure Works Program grant 350,000Capital Requirements
Core System
The following is a capital budget for the core system. It assumes there will be 100 lines for public dial in access, 6 touch screen kiosk in public places and 25 terminals in public libraries.
Qty. Item Unit Total 100 Rack mount v. 34 modem $1,000 $100,000 7 Cisco Access Server 5,000 35,000 1 Cisco 7000 Router (Base Unit) 40,000 40,000 2 Sun Sparc 20 Main Login Servers 30,000 60,000 1 Network Management System 30,000 30,000 1 NIS+ Server 10,000 10,000 1 Tape Backup System 40,000 40,000 1 Data Storage System 60,000 60,000 100 Trunk line install 100 10,000 1 T1 Frame Relay Install 1,600 1,600 3 Channelized T1 Line Install 125 375 6 Touch Screen Kiosk Unit 6,500 39,000 6 56KB DCS Line install 400 2,400 25 VT-102 Terminal Units 500 12,500 25 Desk Top v 34 Modem 500 12,500 25 1B line install 80 2,000 SUBTOTAL $457,075 P.S.T. 31,995 G.S.T. 31,995 TOTAL $521,065Community Networks
The following is a capital budget for a "typical" community network. In fact, the budget for each network will vary substantially with the needs and resources available in the community. In many cases the community network will share its resources with a school or commercial internet provider.Qty. Item Unit Total
10 Modems $1,000 $10,000 10 Trunk line installs 80 800 1 Kiosk Unit 6,500 6,500 1 Kiosk Line Install 200 200 5 Public access terminals 1,000 5,000 5 Terminal line installs 80 400 1 Login computer 8,000 8,000 11 User host software 100 1,100 1 Terminal server / router 4,000 4,000 1 Frame relay install 900 900
TOTAL $35,800
Financial Projections
Financial projections for the three years of the project are attached. The following is a summary of the various assumptions which have been used to create these projections.
Revenues
Membership Donations: Blue Sky has received an average donation of $8.00 per new member. The projection for the first and second years is based on 1,000 new members per month. In the third and fourth years 500 new members a month with an average donation of $16 per member is assumed.Other fund raising: See the section on Funds Development for comments. This includes all forms of corporate fund raising and donations in kind of equipment, office services and professional services.
Access Port Charges: Each Community Network will contribute $200 per month for access to the core system. The projections assume 23 new community networks in Year 1 and 24 additional networks in Year 2.
Training Charges: Each Community Network will pay a one time fee $1,500 for training and consulting services. In Year 4 is is assumed that the community networks will cover the cost of the community facilitator.
MBnet: MBnet is donating an internet link.
EITC: EITC has been asked to contribute a total of $600,000 to operating expenses in the start up period.
Core Equipment: Blue Sky has applied to the Canada Manitoba Infrastructure Works program for funding for its core equipment.
Community Equipment: Each of the three concept test sites will be responsible for raising funds for its own equipment.
Expenses
General Manager: The General Manager will provide overall co-ordination of the non-technical aspects of Blue Sky's operation including fund raising, financial reporting and volunteer coordination.Project Manager: The Project Manager will be required during the first two years of operations to supervise the implementation of the province wide network.
System Administrator: The System Administrator will be responsible for the operations of the core system and the ongoing maintenance of the province wide network.
Community Facilitator: The Community Facilitator will assist the Project Manager in implementing the province wide network and provide training and technical support services to the Community Networks.
Rent and Utilities: The EITC has provided a lab for a training facility. An attempt will be made to obtain any additional office space as a donation in kind.
Telco Lines: This includes the cost of the modem lines for Winnipeg and also for the three concept test sites.
The following is a break down of telephone costs beginning in May, 1996:
Concept Test Sites
Unit cost Cost per month 10 modem lines $70 $700 56 K kiosk line 240 240 5 public access terminals 35 175 TOTAL $1,115The Winnipeg modem pool will increase in increments of 50 lines as membership grows. In Year 4 the three concept test sites will be responsible for their own line costs.Cost for per month for three sites $3,345
Winnipeg Network Costs
Unit cost Cost per month 100 modem lines $75 $7,500 6 kiosk lines 320 1,920 25 public access terminals 35 875 TOTAL WINNIPEG 10,295 10,295
TOTAL $13,640
Frame Relay: Frame relay lines are needed to connect the various community networks to the core system. Each of the three concept test sites will need a 56kb frame relay connection at a cost of approximately $700 per month. The core system will need an incoming T1 frame relay line to serve the twenty three community networks. The cost of this line is estimated at $2,500 per month. A second T1 line will be needed in Year 2 when more community networks join the system. The basic charge for a frame relay connection is $460 per mont for a 56K line and $1,750 per month for a T1 line. There are also usage charges of $0.05 per megabyte for distances under 40 miles and $0.12 per megabyte for distances between 40 and 1000 miles.
T1 Line: A T1 line would be required to connect the main server to the Internet at a cost of approximately $1,800 per month. However, this line is not required because the main computer is located in the University of Manitoba Computer Centre where it has direct access to the Internet. The cost of $1,800 per month is offset by a donation in kind from MBnet.
Internet Access: MBnet is currently providing Blue Sky with free access to the Internet.