HomeMy WebLinkAboutM-84-0273U
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20 COMM G."ATION SO�E.� E S
485 Poute 1 • Iselin, Ierse� Ccc3C • 1120 750 � 3G
November 15, 1983
C. E. Cox
Director
Building S Vehicle
City of Miami
Maintenance Department
1390 N.W. 20th Street
Miami, Florida 33142
Dear Mr. Cox:
Attached is our Report to the City of Miami titled "City -Wide Master
Telecommunications Plan, Phase I - Feasibility". We have determined
that it is both feasible and desirable to coordinate the City's
procurement and management of telecommunications to take advantage
of changing technology and to efficiently and effectively navigate
the volatile regulatory and Bell divestiture environment. We
recommend that the Commissioners of the City of Miami require the
completion and implementation of a citywide master telecommunications
plan so that the City can evolve from the current state of
telecommunications to a more cost effective utilization of available
facilities and state-of-the-art technology.
Communication Sciences anticipates a plan that would govern the
migration of telecommunications from the current Southern Bell
Centrex system to an enhanced Centrex offering known as ESSX and
then to a distributed digital switching system (voice and data)
using facilities such as cable television (CTV), microwave and/or
fiber optics to provide extremely high capacity transmission links
between the distributed switching devices which would be located in
the most populated building complexes.
It should be possible early in 1985 for the City to request bids for
a distributed telecommunications system that will meet the voice and
data needs of the City. In the interim. supporting activities would
include:
- monitoring the regulatory and legislative actions that will
affect the operational and financial aspects of any
telecommunications decision made by the City.
- determining the precise affect of the Bell divestiture on the
City's revenues from the Excise Tax and the Franchise Fee. The
current legislative and regulatory action pertaining to "access
charges" will have a significant affect.
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CENti'OMIGATION SCaF -111, GIs
- pilot tests of the Miami CableVision (CTV) system to carry voice
and data communications as well as certain other special circuit
traffic.
determining precise cost trade-offs to eliminate some of the
very expensive interexchange channel (IXC) mileage by replacing
it with channel capacity derived from the Miami CableVision
system (in accordance with the License Ordinance).
monitoring the maturing of the sophisticated, new
telecommunications switching machines and Local Area Network
(LAN) technologies as well as the vendors that supply them.
monitoring the City's introduction of new applications and
technologies that require data communications within the City.
The Department of Computers will complete the replacement of its
processing equipment early in 1984 . Throughout the year the
new capabilities of the equipment will stimulate new
applications or the expanded use of existing applications.
Our report is tutorial in nature. I hope that its readers will gain
additional -insight into the technical matters that need to be
understood in order to make informed decisions in the area of
telecommunications. It has been a pleasure to work with you and
your staff. I hope we can continue to assist the City of Miami meet
the challenges of the future.
SMT:sb
05005
Very truly yours.
COMMUNICATION SCIENCES INCORPORATED
Stuart Tuchband
President & Chief Executiv Officer
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COMMUNICATION SCENCES
485 Route 1 • Iselin. New Jersey 08830 • (201) 750 0030
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CITY-WIDE MASTER TELECOMMUNICATIONS PLAN
PHASE I- FEASIBILITY
AUGUST. 1983
COMMUNICATION SGENCFS
TABLE OF CONTENTS
Page
Purpose.......................................................1
Summary.......................................................3
Investigation and study results...............................5
A. Problem areas discovered and recommended short
termsolutions........................................5
B. Switching Technology..................................9
C. Feasibility of Centrex replacement for Dinner Key .... 13
D. Transmission alternatives ............................16
CableTV.........................................16
Microwave........................................19
Digital Cellular Radio ...........................20
FiberOptics.....................................21
E. Divestiture as it relates to the City of Miami ....... 23
F. The effect of divestiture upon the Franchise Fee
andExcise Tax.......................................31
Conceptualapproach to master plan ...........................34
Staffingrequirements........................................38
Figure 1 Combined Cost of Southern Bell Centrex
Facilities at Dinner Key
Figure
2
Centrex Mileage Charges
Figure
3
Cash Flow Analysis For The
Centrex System
Figure
4
Cash Flow Analysis For The
Dimension PBX System
Figure
5
Cash Flow Analysis For The
2nd Generation
Private PBX System
Figure
6
Cash Flow Analysis For The
3rd Generation
Private PBX System
Figure
7
The Bell System - During the 1983 transitional
year
Figure
8
The Bell System - After divestiture in 1984
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GDWUNICATION SGENCES
0440S/31031
PURPOSE
The purpose of this report is to document the study made by
Communication Sciences into the communications requirements of the
City of Miami and the way or ways those requirements might be
satisfied in the current and foreseeable communications environment.
This study is Phase 1 of a multi -phase approach to achieving a
citywide master telecommunications plan. Such a plan would be used
to coordinate the City's procurement of telecommunications assets so
as to provide high quality service at minimum reasonable expense.
Such coordination would allow for economies of scale, proper
utilization of available telecommunications facilities, taking
advantage of technological advances, the flexibility required to
allow the City to navigate the quickly changing regulatory
environment and prevent waste due a disorganized or fragmented
approach to meeting the City's requirements.
Phase 1 is limited to determining the feasibility of making certain
telecommunications decisions that would constitute a Citywide master
plan. Subsequent efforts by the City Building 6 Vehicle Maintenance
Department, Communication Services Division. with or without the
assistance of consultants will be required to achieve the master
plan itself or to implement any of its specific directives. Based
upon the current telecommunications requirements and its foreseeable
growth and the introduction of new services requiring
telecommunications, the particular areas of concern that are
addressed in Phase 1 are as follows:
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COMMUNICATION SCIENCES
The changing regulated utility environment brought about
by the divestiture of Southern Bell by the American
Telephone & Telegraph Company.
The effect of divestiture upon the City's revenues from
the Franchise Fee and the Utility Tax.
The feasibility of replacing some or all of the existing
Southern Bell Centrex service with Southern Bells ESSX
offering or with "non -Bell" offerings that can be used to
serve the City.
The feasibility of combining Southern Bell offerings with
those of other qualified vendors.
The availability, usefulness and need for the City to
consider "third generation" telecommunications equipment
that operate near the leading edge of technology.
The ability to utilize the available facilities of Miami
CableVision as provided for in the License Ordinance
*9332. as well as the utility of microwave links and fiber
optics transmission facilities.
City staffing requirements for the centralized control and
management of telecommunications plans and assets.
During the course of this study certain current communications
problems were investigated and proposed resolutions of these
problems are included in this report.
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SUMMARY
CY\WUNICATION SCIENCES
Based upon the investigation conducted by Communication Sciences
into the needs of the City and the current and foreseeable ability
of telecommunications vendors to satisfy these needs, the following
course of action is recommended:
The Commissioners of the City of Miami should require the completion
and implementation of a Citywide master telecommunications plan that
will allow the City to evolve from the current state of
telecommunications to a cost effective utilization of available
facilities and state-of-the-art technology in several fields. In
brief, the anticipated plan would govern the migration of
telecommunications from the existing Southern Bell Centrex system as
follows:
Utilize the enhanced Centrex offering known as ESSX and
resolve the existing local operational problems.
Continue to rent telephone station equipment. Do not
exercise any option to purchase unless such a purchase
proves in financially over the interval ending December.
1985.
Establish pilot tests of the Miami CableVision (CTV)
system to carry voice communications. Upon successful
completion of such tests, determine precise cost
trade-offs to eliminate some of the very expensive voice
interexchange channel (IXC) mileage by replacing it with
channel capacity derived from the Miami CableVision system
(in accordance with the License Ordinance). Replace
existing non -critical circuits with CTV circuits and
consider utilizing additional CTV circuits as back-up for
any critical circuits that should be redundant.
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CO WVIUNICATION SGENCES
Establish pilot tests of the CTV system to carry the data
and certain other special circuit traffic. Upon
successful -completion of such tests, replace existing
non -critical circuits with CTV circuits and utilize the
CTV circuits as back-up for those critical circuits that
should be redundant.
Monitor the maturing of the sophisticated, new ("third
generation") telecommunications switching machines and the
vendors that supply them (Southern Bell included).
Monitor the maturing of Local Area Network (LAN)
technology and the vendors that supply such services
(Southern Bell included).
Monitor the introduction of new applications and
technologies that require data communications within the
City. Early in 1984 the Department of Computers will be
completing the replacement of its processing equipment.
Throughout the year the new capabilities of the equipment
will stimulate new applications or the expanded use of
existing applications.
Early in 1985, prepare a request for bid for a distributed
telecommunications system that will meet the voice and
data needs of the City.
Implement a distributed digital switching system
(integrated voice/data or interconnected voice and data)
using CTV, microwave and/or fiber optics to provide
extremely high capacity transmission links between the
distributed switching devices which will be located in the
three or four most populated buildings or building
complexes.
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INVESTIGATION & STUDY RESULTS
C WUNICATION SCIENCES
A. Problem areas discovered and recommended short term solutions.
The major current problems noted by the telephone system users were
found to be procedural or operational and unrelated to the Centrex
system itself.
1. Today. the Mayors office and the Commissioners offices are
listed in the telephone directory as 579-6666. This number is
associated with the Centrex operators console positions
located at the Fire Department. This puts the burden of call
screening and directing of the call on the Centrex attendant.
An alternative that should be considered is to establish a new
number to be listed in the directory and associated with a call
= director located at the reception desk in City Hall. This will
provide more direct control of the screening of these calls and
their final disposition.
2. It appears that within some areas calls either go unanswered or
become lost when being transferred.
These are relatively minor problems and can be addressed on an
individual departmental basis. In most cases. simple changes
in numbers and reconfiguration of existing key systems will be
sufficient. We recommend that a request be issued to Southern
Bell to perform this review. The two primary departments that
need to be addressed are the City Managers office and the
Mayors office.
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INVESTIGATION & STUDY RESULTS
COWUNICATION SGENcES
A. Problem areas discovered and recommended short term solutions.
The major current problems noted by the telephone system users were
found to be procedural or operational and unrelated to the Centrex
system itself.
1. Today. the Mayor's office and the Commissioner's offices are
listed in the telephone directory as 579-6666. This number is
associated with the Centrex operator's console positions
located at the Fire Department. This puts the burden of call
screening and directing of the call on the Centrex attendant.
An alternative that should be considered is to establish a new
number to be listed in the directory and associated with a call
director located at the reception desk in City Hall. This will
provide more direct control of the screening of these calls and
their final disposition.
2. It appears that within some areas calls either go unanswered or
become lost when being transferred.
These are relatively minor problems and can be addressed on an
individual departmental basis. In most cases. simple changes
in numbers and reconfiguration of existing key systems will be
sufficient. We recommend that a request be issued to Southern
Bell to perform this review. The two primary departments that
need to be addressed are the City Manager's office and the
Mayor's office.
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3. An almost universal complaint relates to noise on the lines.
This is a result of the quality of the outside cable facilities
serving Dinner Key. It should be noted that a new stand-alone
system would also use this same cable plant and would
experience the same problem on all incoming and outgoing calls.
It is our understanding that over the past eighteen months
Southern Bell has replaced all but the "entry way" portion of
this cable. Here too we recommend that Southern Bell be
informed of the problem and asked to survey the situation to
determine what impact would be made on service by replacing the
entry way portion of the cable. The cost of replacement would
probably be borne by the City.
4. Police and Fire Dispatch - At the present time there are 15.
911 trunks terminated at police dispatch and 5 overflow trunks
at fire dispatch. These trunks. along with non -emergency
(579-6111) trunks, ring down circuits and lines for Spanish
speaking people are terminated in Southern Bell provided
multi -line key strips (PBTs). The PBTs are associated with
Motorola Centracom consoles working with a DEC 1170 computer.
The primary problems in the current configuration follow:
There is no distribution of incoming calls. Calls
appear at each position simultaneously. There is a
feeling that some operators are carrying a
disproportionate share of the load.
Calls placed on hold do not automatically recall the
operator. There is no way to determine how long a
particular call has been held.
Reports are limited to a manual tabulation of calls
answered at 911 and bill -_and the number -of calls
dispatched.
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CONWUNICATION SGENJ_ 5
There are no means of evaluating or analyzing the
effectiveness of the trunk groups or operators.
The problems that have been noted could all be eliminated by
installing an Automatic Call Distributor (ACD). This type of
equipment can be installed as a separate, stand-alone system or
as part of a software enhancement within a switching system.
On a stand-alone basis, this equipment is very expensive. An
ACD of sufficient size to accommodate the present configuration
would range in cost from $100.000 to $125.000. When ACD
software is included as part of a telephone system. the
additional cost is significantly lower. typically in the range
of $20,000 to $50.000 depending on the sophistication of the
output reports that are required.
Although an ACD and the capability it will provide will be very
helpful, it cannot be cost justified on a stand-alone basis.
When considered in the context of a new system, the additional
cost of the ACD is very reasonable. However, the ACD
capability, in itself, is not sufficient cause to consider
replacement of the Centrex.
The most recent tariff change (July 14, 1983) includes, for the
first time, many ACD capabilities with Centrex service. Our
recommendation is that the City pursue this alternative with
Southern Bell to determine if it will be cost effective to
provide the capabilities that are required. Whenever a
citywide RFP is developed (recommended for early 1985) the ACD
requirements should be clearly defined and included.
5. The move of the Computer Center to a new location near Dinner
Key will necessitate the installation of facilities to carry
the large volume of data traffic that currently flows to the
Police headquarters location.- This.will increase the
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requirement for leased transmission facilities such as Southern
Bell's Dataphone Digital Service (DDS) or other private line
services or private dedicated facilities such as coaxial cable,
microwave radio or fiber optics.
6. There is some indication that Centrex number assignments are
currently becoming scarce. Certain one and two-line locations
can be separated from the Centrex and put on business lines.
This is already being done for one fire station and should be
considered for fire stations, parks. pumping stations, etc.
especially where. depending upon their mileage charges as shown
in Figure 2. the cost of the Centrex service can be more
expensive than the cost of the independent business line.
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B. Switching Technology
GDWUNICATION SCIENCES
Significant changes have occurred during the past ten years in
the area of telecommunication switching. In order to allow the
reader to serve the City better when participating in decisions
about on -premises switches a brief discussion of switching
systems follows.
Centrex service, such as that utilized by the City of Miami, is
provided by Southern Bell from a large. shared central office
switching vehicle known as an Electronic Switching System
(ESS). PBX systems perform functions similar to those
performed by Centrex switching systems. The basic tasks
performed by on -premise PBX systems are: recognizing a request
for service. routing the request through the switches internal
network. and maintaining the connection until it is terminated.
Automatic switching systems were introduced in the 1890's. The
method of switching utilized then, and up to the mid-1970's,
was exclusively space division. This means that a distinct
physical path was established through the system which remained
in existence for the entire duration of the call. Improvements
were, of course, made in the type of switching mechanisms
utilized and the method of system common control. A major
breakthrough was the integration of computerized control
techniques into space division switches.
From the mid-1970's until the present time. major changes have
occurred in PBX systems. Among the most significant changes
has been the use of Time Division Multiplexing (TDM)
techniques. instead of space division switching techniques. to
route calls through the PBX. With TDM, calls share a common
pathway or "bus" and the PBX assigns periodic slots in time to
the connections made via the bus. Scanners and controllers
keep track of the time slots so that service requests,
connections and disconnections are attended to properly.
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The use of TDM techniques does not, however, imply that a PBX
is digital. The initial process of TDM involves sampling the
analog speech signal at a fast enough rate for sufficient
information to be gathered to reconstruct the speech. This
process is called Pulse Amplitude Modulation (PAM). Since the
pulse heights vary in a manner corresponding to the analog
signal and can therefore take on any value, PAM is considered
to be an analog technique. The best known system using PAM is
Western Electric's Dimension series of PBX's.
A digital PBX carries the PAM process further and encodes the
PAM signal into a binary -encoded equivalent signal. The most
popular analog -to -digital conversion process utilized in
systems today is Pulse Code Modulation (PCM). In PCM systems
the PAM pulse is examined for its amplitude value by an encoder
and one of a discrete set of values is assigned that most
closely approaches the value of the amplitude. The most common
scheme utilizes 256 discrete values (8 bits) to encode a PAM
pulse. Major manufacturers of large digital PBX's include
Northern Telecom, GTE, Rolm, Nippon Electric Corp., Ericsson,
InteCom and Western Electric (with its new °System/8511).
Although some smaller PBX systems may continue to be based on
analog technology, the trend in large PBX systems is clearly
toward digital technology.
The latest generation of switching systems are being designed
to support much more than the basic voice applications that
PBX's addressed in the past. These involve enhanced
voice -related features such as store -and -forward and message
center, added capabilities such as electronic mail, energy
control and directory functions and, most significantly,
evolution into a system that can handle data as well as voice
communication. This evolution is being fostered by the growing
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number of information accessing/processing terminals that are
appearing on the desks of both corporate as well as municipal
users. These terminals are used for a wide variety of tasks
including order entry, word processing, budgeting, forecasting.
modeling, computer -aided design, project control, time
management and numerous specialized workstation functions. In
many situations, there is a need for these terminals to
communicate with each other or with one or more host
computers. Given this need for a variety of connections. as
opposed to direct fixed connections, the PBX becomes an
excellent candidate to carry the data traffic. This is the
most significant new capability of switching systems, the
ability to integrate voice and data communications.
The ability to simultaneously switch voice and data via the PBX
system can be very advantageous when there are a substantial
number of terminals (minicomputers, personal computers. word
processors) that must communicate. In this respect, the PBX
acts as a Local Area Network (LAN), being a central controller
to all attached devices. Devices are connected via PBX wiring.
which, in many cases, is already in place. The latest systems
utilize integrated electronic terminal equipment that
simultaneously handle voice and data over two -pair telephone
wire. Electronic terminal equipment ranges from basic voice
type terminals with provision for attaching peripheral data
terminals. to sophisticated workstations with CRT displays and
keyboards in addition to telephone capabilities. Such
workstations can be suitable for electronic mail, word
processing. data base access and numerous other functions.
on a very general basis, the most important characteristics
that constitute an integrated voice/data PBX are:
Digital transmission medium that does not differentiate
between voice and data, yet supports digital transmissions
at acceptable error rates.
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- Ability to handle voice and data transmissions
simultaneously from a single service point (such as an
integrated terminal that digitizes voice).
- Ability to interface directly with digital transmission
facilities.
Sufficient switch traffic capacity to support the voice
and data traffic.
Sufficient real-time processor capacity to handle the
maximum expected voice and data call volumes.
It is important to note that even with the increased importance
of and emphasis being placed on data communications within the
office. voice will continue to be the primary method for the
transfer of business information. It is. of course. essential
to consider data switching capabilities when selecting a new
system.
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C. Feasibility of Centrex replacement for Dinner Key._
There are 140 Centrex lines serving the Dinner Key complex that
includes City Hall. Parks/Recreation, the Marina, and the
Auditorium. The expense of these lines ($3,010/month) and the
concentrated need for telephone service at Dinner Key make it a
candidate for considering the replacement of the Centrex service
with a separate, stand-alone PBX. Figure 1 presents the Southern
Bell charges for the Centrex service and equipment at Dinner Key.
Figure 2 presents the circuit mileage charges for all of the City's
locations that incur mileage charges.
We have performed four discounted cash flow analyses to assist in
determining the economic feasibility of Centrex replacement.
1. Centrex - Costs are based on the City's current charges.
The Cash Flow Analysis for the Centrex System is attached as
Figure 3
2. Dimension PBX - (Dimension is a 2nd generation PBX) Costs
are based on a proposal done by Southern Bell prior to
deregulation. Our experience indicates that, for the
purpose of this study, these costs are sufficiently
representative. The Cash Flow Analysis for the Dimension
PBX System is attached as Figure 4
3. Private PBX System / 2nd Generation - (Typical systems
currently being installed by municipalities and commercial
companies) Costs shown for these systems are based on our
experience with systems of this size. The Cash Flow
Analysis for the 2nd Generation Private PBX System is
attached as Figure 5
4. Private PBX System / 3rd Generation - This fourth run was
done to present, within the set of comparisons. the cost of
a third generation system. These systems would be
represented by the IBX manufactured by InteCom or the
NEAX-24 manufactured by Nippon Electric Co. The primary
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advantages of these systems as compared to any other
premises switch is their data switching capability and
their non -blocking architecture. The Cash Flow Analysis
for the 3rd Generation Private PBX System is attached as
Figure 6
The following parameters and assumptions were used in the analysis:
Both private system cases are based on a 5 year lease
purchase. The interest rate is 16.5%.
The ongoing Southern Bell charges for trunks and DID
numbers have been included and are assumed to increase at
8% per year to cover future tariff increases.
Ongoing maintenance has been estimated and included for
both private systems. These charges are also assumed to
increase at 8% per year.
The present value calculations are based on a 10% annual
interest rate.
The expense of the FCC surcharge plan is not included.
This plan will increase the cost of*Centrex as compared to
any of the other alternatives.
Cumulative
Cost In Year
(Present Value Calculations
at 10%)
Year 1
Year 3
Year 5
Year 10
Centrex
$124.000
$363,800
$593.000
$1.222.600
Dimension
147,800
345,600
535.000
973.500
2nd Generation
Private System
120,500
329.100
514,000
741.600
3rd Generation
Private System
131.600
359,400
560,100
787.600
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This analysis indicates that in the 3 year term the costs for
each alternative are relatively equal. For either the Dimension
or another system to provide substantial savings, its in place
life expectancy must be a minimum of 7 years. There are two
other points that must be considered in the financial analysis
that would favor Centrex. First, the Centrex can be converted
to ESSX. This conversion is an administrative change with no
associated installation charges. In fact, the ongoing monthly
charges would be reduced slightly and a major portion of the
cost would be fixed over the next three years. Second, if it
were possible to totally eliminate the circuit mileage charges.
the cost of Centrex would be reduced by $36,100 per year. Any
reduction of this expense will tend to favor the retention of
Centrex service for Dinner Key.
Our study indicates that the Centrex should not be replaced at this
time for the following reasons:
By installing a stand-alone system at Dinner Key the 4 digit
departmental dialing that is universal today would be lost. All
calls to the Centrex from Dinner Key and vice versa will require
dialing a tie line access code prior to dialing the 4 digits of
the station.
Each main Centrex station at Dinner Key is subject to a monthly
charge of $21.50 (subject to rate changes) for mileage. The
cost of mileage accounts for 27.8% of all your charges for
telephone service at Dinner Key. We are recommending a study
and test to determine how this mileage charge might be reduced
by using the facilities of Miami CableVision. Details of this
alternative are discussed in Transmission Alternatives section
of this report.
Our conclusion, that Dinner Key should remain as part of the
City of Miami Centrex, leaves unanswered the question of whether
the entire Centrex be replaced. This question is addressed in
the section entitled Conceptual Approach to A Master Plan.
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D. Transmission alternatives
Currently the transmission facilities for the City are obtained
primarily from Southern Bell. The mileage charges paid to link the
existing Centrex locations and to provide other point-to-point
circuits are a substantial portion of the ongoing expense. Leased
voice grade lines provided by Southern Bell can support data
operations at speeds up to 9.6 kbps. With more sophisticated
arrangements (diplexers or short haul Local Area Data Sets)
19.2 kbps can be achieved. Dataphone Digital Service (DDS) is
currently available in Miami and DDS can serve the City at standard
data rates from 2.4 kbps through 1.544 mbps. Voice communications
requirements are generally carried over analog facilities but
digitized voice can be handled in a fashion similar to any other
data stream. Current trends in the Bell System divestiture
proceedings indicate that Southern Bell will continue to offer these
tariffed services and that the cost for relatively short private
line facilities such as those used by the City will increase
substantially.
During the course of this study alternative means of transmission
were considered in order to minimize the expense. provide higher
data capacities. or both.
1. Coaxial Cable Transmission Systems For Cable Television (CTV)
Coaxial cable (Coax) systems operate using a very broad
spectrum that can support wideband or high data rate
transmissions. Perhaps the two most significant operational
considerations to the City might be:
1. Signals on coax do not generally radiate and therefore
no antennas or FCC licenses are required. and:
2. Coax is unaffected by rainfall and, if underground. is
virtually invulnerable to harm.
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A single coaxial cable (one "tube") system can support
simultaneous transmission in both directions by using frequency
division multiplexing (FDM) and bidirectional amplifiers. The
most common current application of coax as a medium for
transmission is to use FDM to derive dedicated frequency bands
for different dedicated uses. One band might be subdivided for
point-to-point (or multipoint) voice or data service while
another band is used for packet switching. Transmission bands
derived by FDM technology can be further multiplexed using Time
Division Multiplexing (TDM) techniques. These services coexist
on the cable. The current office systems terminology for such
systems is "broadband". Cable television distribution systems
such as Miami CableVision are an example of broadband
technology.
Cable television license ordinance #9332 defines a system that
provides exceptional benefits to the City. Miami CableVision
is currently implementing the citywide CTV system using three
cables. Each cable has a bandwidth of approximately 400 MHz.
Two of them are called Subscriber Cables (A and B) and the
third is called an Institutional Cable. The Subscriber Cables
are each bidirectional. In each cable the spectrum from 54 to
400 MHz is used to carry 52 broadcast channels "downstream" to
the subscribers. and the spectrum from 5 to 50 MHz is used to
provide "return" channels. The Institutional Cable is split
more evenly with 174 to 400 MHz serving downstream and 5 to 174
MHz serving the return function.
The license provides for the entire Institutional Cable to be
under the control of the City Manager with respect to channel
management and utilization. In addition. 20 channels are
reserved for City use in the Subscriber Cables. The license
requires that all public buildings be connected to the system
without charge and that one outlet on each floor of each public
building be provided free of charge for basic subscriber
service. No distinction is made between the Subscriber and
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A single coaxial cable (one "tube") system can support
simultaneous transmission in both directions by using frequency
division multiplexing (FDM) and bidirectional amplifiers. The
most common current application of coax as a medium for
transmission is to use FDM to derive dedicated frequency bands
for different dedicated uses. One band might be subdivided for
point-to-point (or multipoint) voice or data service while
another band is used for packet switching. Transmission bands
derived by FDM technology can be further multiplexed using Time
Division Multiplexing (TDM) techniques. These services coexist
on the cable. The current office systems terminology for such
systems is "broadband". Cable television distribution systems
such as Miami CableVision are an example of broadband
technology.
Cable television license ordinance #9332 defines a system that
provides exceptional benefits to the City. Miami CableVision
is currently implementing the citywide CTV system using three
cables. Each cable has a bandwidth of approximately 400 MHz.
Two of them are called Subscriber Cables (A and B) and the
third is called an Institutional Cable. The Subscriber Cables
are each bidirectional. In each cable the spectrum from 54 to
400 MHz is used to carry 52 broadcast channels "downstream" to
the subscribers. and the spectrum from 5 to 50 MHz is used to
provide "return" channels. The Institutional Cable is split
more evenly with 174 to 400 MHz serving downstream and 5 to 174
MHz serving the return function.
The license provides for the entire institutional Cable to be
under the control of the City Manager with respect to channel
management and utilization. In addition. 20 channels are
reserved for City use in the Subscriber Cables. The license
requires that all public buildings be connected to the system
without charge and that one outlet on each floor of each public
building be provided free of charge for basic subscriber
service. No distinction is made between the Subscriber and
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Institutional Cable with respect to providing connections at
public buildings.
The 20 Subscriber Cable channels and all of the Institutional
Cable channels may be allocated by the City between municipal
and non -municipal use for any lawful purpose. These channels
are provided at no charge to the City, and clearly one of the
lawful purposes that is being anticipated is the use of those
channels or subdividing those channels to provide
communications among and between City facilities. These
communications can be alarm signals, voice channels, data,
computer -to -computer communications, etc. The allocation of
these channels is at the discretion of the City Manager.
In order to use these CTV transmission facilities effectively.
channelizing and other electronic communications equipment must
be added to the system. For the purposes of this feasibility
study, the cost of this equipment was determined in accordance
with published prices by Scientific Atlanta, the company that
provides the basic channelizing equipment for Miami
CableVision. This equipment is digital communications
equipment that is expensive and therefore is most cost
effective when used for large cross sections of traffic or high
rates of data communications. In groups of 24 channels, the
equipment is approximately $935/channel. Such a channel can
serve a single voice circuit (44 month payback for Dinner Key
circuits). For $1,035 the channel will support digital data
communications at 56 kbs. Alternate sources of equipment are
available at reduced costs. In addition, frequency division
multiplexing (FDM) equipment is available at substantially less
expense.
It should be noted that within the cable television license
ordinance., .Miami-._Cablevision.--is required to make -annual -
contributions to the City in the amount of 3 percent of their
gross revenues or $600,000, whichever is greater. These funds
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Institutional Cable with respect to providing connections at
public buildings.
The 20 Subscriber Cable channels and all of the Institutional
Cable channels may be allocated by the City between municipal
and non -municipal use for any lawful purpose. These channels
are provided at no charge to the City, and clearly one of the
lawful purposes that is being anticipated is the use of those
channels or subdividing those channels to provide
communications among and between City facilities. These
communications can be alarm signals. voice channels, data,
computer -to -computer communications, etc. The allocation of
these channels is at the discretion of the City Manager.
In order to use these CTV transmission facilities effectively.
channelizing and other electronic communications equipment must
be added to the system. For the purposes of this feasibility
study, the cost of this equipment was determined in accordance
with published prices by Scientific Atlanta, the company that
provides the basic channelizing equipment for Miami
CableVision. This equipment is digital communications
equipment that is expensive and therefore is most cost
effective when used for large cross sections of traffic or high
rates of data communications. In groups of 24 channels, the
equipment is approximately $935/channel. Such a channel can
serve a single voice circuit (44 month payback for Dinner Key
circuits). For $1,035 the channel will support digital data
communications at 56 kbs. Alternate sources of equipment are'
available at reduced costs. In addition, frequency division
multiplexing (FDM) equipment is available at substantially less
expense.
It should be noted that within the cable television license
ordinance, Miami-.CableVision_is required to make --annual --
contributions to the City in the amount of 3 percent of their
gross revenues or $600,000, whichever is greater. These funds
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CONWIUNICATION SGENCES
Institutional Cable with respect to providing connections at
public buildings.
The 20 Subscriber Cable channels and all of the Institutional
Cable channels may be allocated by the City between municipal
and non -municipal use for any lawful purpose. These channels
are provided at no charge to the City, and clearly one of the
lawful purposes that is being anticipated is the use of those
channels or subdividing those channels to provide
communications among and between City facilities. These
communications can be alarm signals, voice channels, data,
computer -to -computer communications, etc. The allocation of
these channels is at the discretion of the City Manager.
In order to use these CTV transmission facilities effectively,
channelizing and other electronic communications equipment must
be added to the system. For the purposes of this feasibility
study, the cost of this equipment was determined in accordance
with published prices by Scientific Atlanta, the company that
provides the basic channelizing equipment for Miami
CableVision. This equipment is digital communications
equipment that is expensive and therefore is most cost
effective when used for large cross sections of traffic or high
rates of data communications. In groups of 24 channels, the
equipment is approximately $935/channel. Such a channel can
serve a single voice circuit (44 month payback for Dinner Key
circuits). For $1,035 the channel will support digital data
communications at 56 kbs. Alternate sources of equipment are*
available at reduced costs. In addition, frequency division
multiplexing (FDM) equipment is available at substantially less
expense.
It should be noted that within the cable television license
ordinance, Miami-CableVision--is required to make -annual -
contributions to the City in the amount of 3 percent of their
gross revenues or $600,000. whichever is greater. These funds
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can be used by the City to implement uses and develop the plans
for the uses of cable television as an integral part of the
City's operations and for other public purposes that the City
deems appropriate.
Clearly. the use of the CTV system for voice communications
between and amongst the City facilities is an integral part of
the City operation. The cost of channelizing equipment
required to divide a channel or in order to make it generally
useful to the City could be taken from that 3 percent charge or
allocation. Thus, it is possible that the City might not even
have to endure the capital expense of channelizing equipment
since that expense can be derived in accordance with the
license ordinance from Miami CableVision's annual
contribution. This annual contribution of at least 3 percent
is entirely separate from the license fee of 5 percent on the
annual gross revenues of the system that is due and payable to
the City.
2. Microwave Radio
Conventional microwave radio facilities can be established by
the City for its own use. Two modes of transmission are
available, analog and digital. Analog systems are less
expensive for small channel capacities and can be installed so
that the incremental cost of growth is small. Digital systems
have greater capacities but have higher start-up costs since
their basic increments are larger. With digital microwave,
operation at the 1.544 mbps speed using the standard T1
protocol is fairly standard. This facilitates voice and data
transmission and positions the user to be able to connect PBX s
or distributed switching modules that are designed to be linked
by T1 carrier. The user is also in a position to directly
interface common carriers that offer service under the Ti
protocol.
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COWUNICATION SGENCI:S
Microwave systems require the same type of channelizing
equipment mentioned in the preceding cable television
discussion. In addition, microwave systems require radio
transmitters and receivers as well as antenna systems that
require line -of -sight clearances. This additional equipment
(approximately $75,000 per fully backed up radio link)
substantially increases the cost above the $935 and $1,035 per
channel for voice and 56 kbs data, respectively. Here too, FDM
equipment can be obtained at a lower cost.
Microwave radio system transmission characteristics are
susceptible to degradation during periods of rainfall. This
degradation is a function of transmission frequency. For
applications within the City of Miami. it appears that
frequencies up to 11 gHz would be usable.
3. Digital Cellular Radio
Digital cellular radio is a concept that will become
commercially available very soon through various common
carriers. Only as recently as mid -July, 1982 did the FCC
authorize the construction and operation of the first five
Digital Termination Systems (DTS) proposed by SBS, MCI, Tymnet,
Contemporary Communications and ISACOMM. AT&T is currently
organizing to provide cellular service but its exact plans have
not been made public.
Digital cellular radio will operate in the 10 gHz band using
line -of -sight communications similar to all other microwave
systems. The antenna size is a nominal two foot diameter
parabolic reflector (dish). As with other microwave radio links
operating in this region of the spectrum, the quality. or error
rate performance, of the channel is degraded in conditions of
rainfall. While this is a significant consideration for the
City because of potential hurricane emergencies. the systems
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CONNUNICATION SGENCFS
have been designed to provide a reasonable grade of service
(1 x 10-4 bit error rate) at rainfall rates up to two inches
per hour. They normally function at bit error rates of
1 x 10-e and are subject to graceful degradation as the
rainfall rate increases.
Digital Cellular Radio will normally operate as a packet
switching system. It has the ability to establish "dedicated"
facilities (comparable to leased lines) between two points by
means of a dedicated assignment of Time Division Multiplexing
(TDM) slots. Digital Cellular Radio is primarily configured for
users with data requirements at speeds of 56 kbps and higher.
The consensus of opinion is that data circuits operating at
speeds of 19.2 kbps and below will be more economically
implemented on DDS. Digital Cellular Radio. tariffed as a
Digital Termination Service (DTS). may prove to be useful for
specific data applications that can be cost effectively
implemented. Digitized voice can be carried, but for general
purposes, it will probably not be economic to do so.
4. Fiber Optics Systems
Fiber optics systems are similar in structure to Coaxial Cable
systems in that a cable must be installed to every location
being served. The primary advantages of fiber optics over Coax
and microwave systems are:
Substantially greater bandwidth (data rate)
Does not radiate energy at any critical frequency
Invulnerability to electromagnetically induced noise
Unaffected by rainfall
To date, the primary disadvantage has been high cost. This is
changing as more and more optical cable -is being put into
service. Fiber optics systems can be privately owned and
dedicated to the City's use. In the future, common carriers
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will offer their services over fiber optics facilities.
Southern Bell has already interconnected more than 25 buildings
in Miami's financial district with fiber optical systems.
BellSouth expects its operating companies to install a combined
total of over 10,000 miles of optical fiber cable within the
next 12 months. Microtel. Incorporated is planning a switched
communications network in Florida linking such cities as Miami,
Fort Lauderdale. Jacksonville. Titusville, Orlando, and Tampa.
MCI as well as other Bell regional companies are implementing
hundreds of thousands of miles of fiber optics cable.
Most of the fiber optics facilities are being used for intercity
communications and their use is not directly applicable to the
needs of the City of Miami. The Southern Bell facilities in the
financial district are. however. a possible glimpse of the
future for the City. The time will come when the major City
locations can be linked over fiber optics facilities. Under
what tariffs they will be offered are, of course, unknown.
It is important to note that each of the transmission methods
mentioned above can interact with the other transmission methods.
Leased lines are commonly used to provide access to or extensions of
circuits derived from other systems. Digital Cellular Radio systems
can operate with compatible packet switching systems that function
on coax. Leased lines, microwave. and coaxial cable systems
operating together are an everyday occurrence as voice and data
messages are routed on the nationwide long haul networks of the Bell
System and Other Common Carriers.
it is anticipated that a citywide communications transmission system
will be a mixture of existing and developing technologies. As the
freedom of choice expands, the specific technology used to fulfill
any particular requirement will be a function of the economics of
the specific application involved. Whatever the choice of overall
citywide transmission system. there will -doubtless be a mix of
twisted paris. coax, and radio facilities. As fiber optics prove to
be economic for the City, that will be part of the mix too.
CONNUNICATION S ENC,ES
E. DIVESTITURE AS IT RELATES TO THE CITY OF MIAMI.
The primary governmental rulings that bear on the subject of
divestiture are:
FCC - Computer Inquiry - II
Consent Decree between Justice & AT&T
Judge Greene's Modified (Aug. 1982) Final Judgement
FCC Line and Trunk "Surcharge" Plan
Judge Greene's Modified (July 1983) Reorganization Plan
All of these things affect the Bell System and its relationship to
the City of Miami.
Computer Inquiry II states that all new Customer Premises Equipment
(CPE) and enhanced services will be detariffed and offered only
through a fully separate subsidiary. This came to be known as
American Bell Incorporated (ABI) and now under Judge Greene's
Modified (July 1983) Reorganization Plan as AT&T Information
Systems. Inc. (ATTIS). The decision also decreed that revenues from
the regulated activities of the Bell System could not be used to
subsidize ATTIS. This is the primary reason why the PBXs and
station equipment currently billed by Southern Bell and other Bell
Operating Companies (BOC's) were not transferred to ATTIS. In
addition to that, CI -II decrees that ATTIS must operate at arms
length from the Bell Operating Companies. They can't do any joint
marketing; they can't share proprietary information between the
regulated business and the fully separated subsidiary: and they
can't own or construct any transmission facilities for local or long
distance calling, or for private line usage.
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The Bell System fought against the implications of the FCC CI -II
They also fought against a Congressional attempt to rewrite the
entire Communications Act. AT&T "won" these fights by entering into
a consent decree with the Justice Department. This consent decree
was later modified by Judge Greene in Federal Court in August. 1982
and it became known as the Modified Final Judgement (MFJ).
The FCC's Computer Inquiry II only required the complete separation
of entities in competitive and regulated businesses: the Modified
Final Judgement required the DIVESTITURE by AT&T of its regulated
operating companies. and that the divested operating companies could
not provide Customer Premise Equipment that they owned prior to
divestiture. This equipment is the "Embedded Base" and it includes
all of the existing terminal equipment in all the Operating
Companies. That is. all of the PBXs. and all of the key equipment.
and all of the station equipment, and every other piece of customer
premise equipment. The Embedded Base must be transferred to AT&T
where it will be maintained by a separate AT&T subsidiary known as
the Embedded Base Organization (EBO). The EBO might not be
necessary if all of the embedded base is somehow transferred to
ATTIS before the end of 1983.
ATTIS is the fully -separated subsidiary that will operate without
tariff regulation. ATTIS was established with two divisions:
Advanced Information Systems (AIS) the people who bring you Net-1000
and who are marketing switching systems for the business community
and. the Consumer Products Division (CPD). On June 7. 1983. ATTIS
announced that it was being reorganized. CPD is being functionally
removed from ATTIS and being relocated to Western Electric. The
Consumer Products Division will market to the non -business consumer
handling telecommunication product management, marketing. sales and
service including the Phone Centers and all retail marketing
arrangements
Because of the confusion that still surrounds the latest ATTIS
reorganization. for the balance of this report CPE may be taken to
mean business CPE.
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Within the AIS Division there are three primary areas of marketing:
(1) National Business Systems - handling medium and large
accounts.
(2) General Business Systems - handling customers with
approximately 90 or less phones.
(3) Lines Of Business - A product/marketplace development
group.
Unless a Governmental marketing group is established, the City
should fall within the responsibilities of the National Business
Systems group.
The regional holding company for the BOC serving the the City of
Miami is called "BellSouth" and it will be headquartered in
Atlanta. The 22 Bell Operating Companies, one of which is Southern
Bell, will continue to be regulated and provide local telephone
network services during 1983. These services include:
- Exchange and Access Service
- Message Toll Telephone Service
- WATS, 800 Service and Software Defined Network Services such as
expanded 800
- Private Lines, (tie, OPX, FX, etc.)
- Centrex including new systems, additions, and upgrades of
service and feature enhancements
- Radio Service, Cellular Technology
- International Calling
- Custom Calling Features such as Remote Call Forwarding
- Picturephone Meeting Service
- Dataphone Digital Service (DDS)
- Voice and Data Teleconferencing
Access to any interstate long distance carrier is also being
provided. In addition, Southern Bell is expected to provide most of
the installation and maintenance for all of the new ATTIS equipment
that,s obtained under contract with ATTIS.
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CONV"UNICATION SGENCFS
During 1983 the Southern Bell will continue to provide customer
premise equipment as well as upgrades and enhancements to that
equipment. BUT, and this is a very big but, Southern Bell is
limited to using only that equipment that was in their inventory on
December 31, 1982. This is the same equipment that is described as
the embedded base.
In 1984 Southern Bell will be allowed (but not compelled) to offer
Customer Premise Equipment. This means that Southern Bell may, in
January of 1984. begin marketing, for sale or lease, new Customer
Premise Equipment but may not manufacture the new equipment.
Southern Bell has indicated that they will enter this marketplace.
Figure 7 shows the organization of the Bell System during the 1983
transition year. Figure 8 presents what the AT&T Organization will
look like after Divestiture in 1984. and beyond.
At the bottom of the organization chart in Figure 8 the BOC's are
fully divested and gone. Instead we have the Embedded Base
Organization (EBO) which is currently planned to be formed by 1984
in order to manage the embedded base (remember. that was the
customer premises equipment that was in service or in inventory on
December 31, 1982). The FCC's Computer Inquiry II order requires
that this embedded equipment be'transferred and managed by this
regulated entity rather than the unregulated subsidiary, ATTIS.
AT&T does not want to go through the formation of EBO. They have
requested that:
(1) All embedded CPE be deregulated no later than January 1,
1984.
(2) More modern. stored program CPE (e.g. Dimension, Horizon)
be deregulated beginning August 1. 1983.
Judge Greene indicated that he saw nothing wrong with this concept
and told AT&T to submit a formal plan for comment.
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COMMUNICATION SCIENCES
Upon deregulation, the business CPE will be transferred directly
from the Operating Companies to ATTIS without having to go through
anything like EBO. At that time, ATTIS can:
(1) Continue to lease CPE at the same prices
(2) Change the lease prices
(3) Offer the CPE for sale.
It has been announced (but there is no requirement) that ATTIS will
honor variable term pricing plans and two-tier contracts for at
least a two year period after transfer.
Recapping the situation with respect to new CPE:
As of January 1, 1983. AT&T can only offer new CPE on an
unregulated basis through the fully -separated subsidiary named
AT&T Information Systems. Inc. (ATTIS).
ATTIS is free to lease or sell CPE. as can any other
interconnect firm that is engaged in the competitive market.
Likewise, they can introduce and discontinue products as they
see fit (without regulatory interference).
Relationships will be controlled by the marketplace and the
terms and conditions in -sales -contracts and leases between---
ATTIS and the end user.
ATTIS has contracted with Southern Bell (in addition to
non -Bell companies) for the installation and maintenance of new
CPE. After divestiture in January 1984, ATTIS will have its
own personnel for installation and maintenance.
In the steady state, the only change will be the elimination of the
Embedded Base Organization by a detariffing of their equipment which
equipment would then be sold to or or somehow folded into the ATTIS
organization.
In the interval from 1984 through September, 1987. AT&T, Western
Electric, and the Bell Telephone Laboratories will provide the seven
regional BOCIS priority support in such areas as research.
development. manufacturing. and other support services.
MAFM
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The following paragraphs summarize how the City will deal with
telecommunication suppliers for access lines, CENTREX lines. PBX
equipment, station equipment, etc.. throughout the three phases of
divestiture.
ACCESS LINES (PBX TRUNKS) have been, and will continue to be.
provided by Southern Bell.
CENTREX (ESSX) LINES have been, and will continue to be, ordered
from Southern Bell. As Southern Bell's inventory of other equipment
is depleted during 1983. Centrex service is becoming the only viable
offering to their prospects.
Last year anyone needing a PBX or STATION EQUIPMENT (including
CENTREX STATIONS) who didn't get it from an interconnect company
-- ordered from Southern Bell. This year the same is true. but
Southern Bell can only provide this equipment if it's available in
its inventory. If it's not available, users have to go to ATTIS or
any other vendor to meet their requirements. Next year, 1984. the
City can order station equipment from AT&T's Embedded Base
Organization, BUT. they can only supply users with the equipment if
it's in their inventory. If it is not available in the EBO
inventory. the City has the option of going to ATTIS or any other
vendor for the particular station equipment required. In 1984
Southern Bell is another optional supplier.
Southern Bell is promoting the service's unparalleled reliability.
The claim is that the reliability of the ESSX system is unmatched.
For instance. in 1980 the ESS outage objectives called for a maximum
of only two hours outage in 40 years. and in fact, were achieving an
average of less than one outage per year of less than two minutes.
They say, and it is certainly true. that no other vendor can make
that statement and that no premise based telephone system can come
near that reliability.
Serious attention has to be paid to the Centrex or ESSX enhancements
planned for the next 12 to 24 months. Some of these enhancements
include:
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Electronic Custom Key Systems
High Speed Data Switching (56KBPS)
Fiber Optics
Voice Storage Services
And many other features
COMMUNICATION SGENCFS
At this point in the report it is necessary to introduce the LATA.
A LATA is a Local Access and Transport Area. LATA's are used to
define the regulated Bell Operating Company Service Areas. It was
proposed by AT&T that there be 161 LATA's throughout the country.
The exact LATA configuration is currently being reviewed and
slightly modified by Judge Greene. On April 28. 1983 Judge Greene
approved most of the LATA boundaries. He found that 138 were
acceptable as specified, 8 were merged into 4. 6 were split to
become 12. 3 were adjusted somewhat and decisions were deferred on 6
others. Currently. therefor. there are 163 LATA's. The number of
LATA's within a state will vary from one (in Maine) to nine (in
California). Florida will have seven and the City of Miami is in
the one called the "Southeast LATA".
There is trouble being stirred up by the definition of the LATA's
themselves. In the Florida, for example, Miami. Fort Lauderdale and
West Palm Beach are proposed to be in the same Southeast LATA.
Other Common Carriers see potentially lucrative markets being
threatened. Interested parties are intervening with the Court to
have this LATA redefined.
In general, LATA's will be patterned after Standard Metropolitan
Statistical Areas (SMSA) and numbering plan areas. Each LATA will
include within its boundaries a number of communities and
exchanges. Many will include communities in more than one state.
The divested BOC's will not be allowed to provide service between or
among LATA's. They were, however, expected to have the exclusive
franchise to provide telephone exchange services within the LATA.
On April 21, 1983 Judge Greene indicated that he would allow
competition for "toll" calls beyond the "local" area but within the
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LATA, as long as State regulation didn't bar it. Thus, non -local
intra-LATA calls will be subject to rules that might change from
State to State. Florida has yet to address this subject with
respect to intra-LATA calls such as from Key West to West Palm Beach.
For the City, local calls initiated and completed within the LATA
will be handled by Southern Bell. Such is not the case for calls
that go from the Southeast LATA to another LATA. These calls cannot
be handled by Southern Bell because Southern Bell won't be allowed
to provide service between or among LATA's.. Instead, these calls
will be handled by other long distance carriers such as MCI. SPCC.
or AT&T Communications (currently AT&T's Long Lines Department.
previously expected to be called ATTIR and currently called ATTCOM)
which will become a separate subsidiary of AT&T after divestiture.
For inter-LATA calls and private lines. billing could come from
three different suppliers. Some examples of how the LATA affects
the handling of calls are as follows:
1. A call from Miami to Hialeah will be handled just as its
handled today. This call would be provided totally by Southern
Bell and would be billed by Southern Bell. This is an
Intra-LATA call. (A call from Miami to West Palm Beach.
however, might be a different story based on Judge Greene's
April 21. 1983 comments.)
2. A call from Miami to Orlando is an Inter-LATA call. This call
will be handled by both Southern Bell and an inter -exchange
carrier such as AT&T Communications, or whatever other common
carrier the customer chooses. The method of billing customers
for calls between LATA's could be a drastic change from today's
simple billing procedure. Billing procedures will be
determined by the competing long distance carriers. However,
Southern Bell, for example, will probably be allowed to supply
billing and service order support for AT&T Communications and
the other long distance carriers on a contractual basis. So.
there might be very little change as seen by the end user.
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F. THE EFFECT OF DIVESTITURE UPON THE FRANCHISE FEE AND EXCISE TAX
The divestiture of Southern Bell by AT&T will directly affect the
revenues derived by the City of Miami from the 3% Franchise Fee and
the 10% Excise Tax paid by Southern Bell. These fees and taxes are
based upon the local recurring revenue which can be thought of as
having two components:
Equipment charges (telephones. Key equipment, terminals,
etc.)
Service charges (trunk charges. Centrex lines. mileage.
etc.)
On (or before according to a current AT&T request) January 1. 1984
all of the equipment (the embedded base) will be transferred to
ATTIS, thereby removing it from Miami's Franchise Fee and Excise Tax
base. A request was made to Southern Bell to provide information
that could be used to determine the effect of divestiture on this
important source of revenue. To date, we have not received
sufficient documentation to obtain a precise answer. The reason for
this is that the recurring revenue base is -quite complex.. It
includes income from both business and residential users. from
Centrex, PBX, Key system, and straight line accounts. The breakdown
of equipment versus service charges for such users is quite varied.
However, based upon a sampling of business clients with various
types of services. and estimating the relative frequency of each
type of service within the City, we were able to determine a bound
on the range of dollars that we anticipate will be eliminated from
the City's revenue.
In 1982 the Franchise Fee revenue (3%) was $2,590,915 and, on a
month to month basis, was found to be fairly uniform. Since
Southern Bell cannot bid additional equipment (beyond its current
inventory) into service in 1983, this amount should be
representative of the 1983 Franchise Fee income. Similarly, the
Excise Tax (10%) revenue for 1983 should not be very different from
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the $7,797,120 derived in 1982. We estimate that between 30 and 40
percent of the relevant rate base will be transferred to ATTIS.
This reduces the City's aggregate revenue from the Franchise Fee and
Excise Tax by $3.100.000 to $4.200.000 per year.
BellSouth has announced their plan to reenter the Customer Premise
Equipment marketplace after divestiture. Beginning January, 1984 we
expect Southern Bell to begin selling new customer premise
equipment. Any such sales will be subject to the Franchise Fee and
Excise Tax as they are now enacted. In our opinion, however, this
combined 13% charge for telephone equipment obtained from Southern
Bell will have a very negative affect upon their ability to compete
with vendors not subject to such fees and taxes. It is not
unreasonable to expect that Southern Bell will petition the City to
waive or repeal the Franchise Fee and Excise Tax on equipment that
is offered.in.a competitive marketplace.
The divestiture also presents an increase in the basic monthly
charges on which the Franchise Fee and Excise Tax are levied. The
FCC Access Line and Trunk Surcharge plan will have a positive effect
on the revenues of the City. This plan will tend to reduce the
usage sensitive long distance charges paid by subscribers and
increase their fixed monthly charges. As currently (August, 1983)
proposed, residential subscribers are expected to pay $2.00 per line
per month beginning in January, 1984. $3.00 per line per month
beginning in January, 1985. and $4.00 per line per month beginning
in January, 1986. After this time the access charge can increase.
Each business line subscriber is expected to pay,$6.00 per line per
month beginning in January, 1984 and continuing through December.
1986. After this time the access charge can increase. Centrex
customers. such as the City of Miami. will pay for Centrex lines in
service or on order as of July 27, 1983, an access charge equal to
the residential access charge. In addition, for the closed end (or
ends) of each private line that can bypass the long distance
telephone network. (such as inter -PBX tie trunks that can access the
outside world through the distant PBX) there will be a monthly
surcharge of $25.00.
-32-
84_273
84--274
0 4"o
COMMUNICATION SGENCFS
The FCC surcharge plan will clearly increase the revenue base upon
which the Franchise Fee and Excise Tax are levied. The size of this
increase is as yet unknown.
The FCC surcharge plan is intended to have a zero net affect on the
aggregate of all consumers. The increased fixed monthly surcharge
is supposed to be offset by reduced long distance charges,of the
order of 10% to 15%. The consumer who has little or no long
distance bill will, however, experience a net increase in cost. The
City of Miami, and all municipalities subscribing to Suncom, will
also experience a net increase because Suncom has already reduced
the basic long distance expense and any additional long distance
savings will not offset the increased monthly surcharge expense.
The surcharge plan is very controversial. The FCC has delayed the
starting date from January 1. 1984 to April 3, 1984. On their own
initiative they can delay it up to a total of five months to June 1.
1984. Both AT&T and the Justice Department are trying to convince
the FCC to rescind its delay and we anticipate that the Judiciary.
through Judge Greene, will do likewise. Relevant congressional
committees have taken actions to introduce legislation that is
intended to affect both the timing of the implementation of the
surcharge plan and the amount of the surcharge to be paid by various
segments of the telephone using universe. The House has passed its
bill and the Senate has scheduled debate early in 1984. The
President is opposed to such legislation and a veto is possible.
Progress toward the enactment of any proposed legislation must be
closely watched because'of its potentially significant affect upon
both revenues and costs as seen by the City.
-33-
84-273
84-2'74
0
CU"UNICATION SGENCES
CONCEPTUAL APPROACH TO A MASTER PLAN
Traditionally, the Bell System has provided all of the necessary
telecommunication equipment and services required by commerce,
industry and government. Their dedication to service, especially in
times of emergency, has been exemplary. All voice
telecommunications for the City of Miami are currently provided by
Southern Bell. All lines needed for data communications, signaling
and radio control are also leased from Southern Bell. Competition
in recent years, the divestiture of the operating companies,
regulatory decisions and financial trends make it imperative that
the City of Miami consider the adoption of a City-wide Master
Telecommunications Plan in order to provide direction to the City's
departments with respect to the acquisition and implementation of
telecommunications equipment and services.
The City of Miami has become dependent on Southern Bell, not only
for service, but in many instances for recommendations as to which
services are most appropriate. Certain Southern Bell
recommendations in -the past -have -been dictated by AT&T's -marketing
strategy and were not necessarily in the best interest of the City.
We strongly recommend that a Master Telecommunications Plan be
generated on a city-wide basis in order to provide for the
optimization of the City's increasingly interactive communications
needs. If the alternative approach of looking at Miami's
telecommunications requirements on an individual location or
department basis were attempted, it is likely that a number of
smaller PBX's would be recommended for installation. These
individual locations or departments are currently served by Centrex
lines. Because of the bidding restrictions placed on the City of
Miami, this individual location approach would fragment the service
and very likely result in various city departments having different
systems. This would not only eliminate any economies of scale, but
also fail to provide compatible features or services.
-34-
84-2 73
84"'2T4
0 P
COMMUNICATION SQEWJ5
our feasibility study for Dinner Key resulted in our recommendation
that these facilities remain as part of the Centrex. This
recommendation is, however, qualified in that it is based on a near
term view (the next three years). Any potential replacement for the
Centrex must be capable of functioning in a manner similar to the
Centrex from both the users point of view and from the citizen's
perception. A fragmented telecommunications system would sacrifice
such features and benefits as a uniform 4 digit dialing plan and the
ability to easily transfer incoming calls from location to location.
The evolution of switching technology is currently proceeding at a
very rapid pace. This, coupled with the City's emerging data
communication requirements and the likelihood of any plans for a
proposed new administration building being firmed up in the next
year to two indicate that the City should stay with the existing
Centrex (ESSX) system while a city-wide master telecommunications
plan is established.
It is our opinion that any consideration of a telecommunications
system must account for both the voice and data requirements. The
majority•of-telephone systems being installed today -are primarily
voice switching vehicles. Most of these systems are capable of
supporting some data transmission within limitations. However, the
newest generation of switching systems offers opportunities and
capabilities, particularly in data communications, that greatly
exceed those being installed today. Some of these are:
integration of voice and data in a single system using
common hardware.
Non -blocking system architecture. This means that as long
as the facilities exist for connection, no blocking will
occur. While a controlled amount of blocking is typical
in a system intended for voice only, it -becomes highly
undesirable when switching data. As the requirements for
data increase. the non -blocking switch design prevents
degradation of the voice system.
-35-
0
CONWUNICATION SGENCFS
Our feasibility study for Dinner Key resulted in our recommendation
that these facilities remain as part of the Centrex. This
recommendation is, however, qualified in that it is based on a near
term view (the next three years). Any potential replacement for the
Centrex must be capable of functioning in a manner similar to the
Centrex from both the users point of view and from the citizen's
perception. A fragmented telecommunications system would sacrifice
such features and benefits as a uniform 4 digit dialing plan and the
ability to easily transfer incoming calls from location to location.
The evolution of switching technology is currently proceeding at a
very rapid pace. This, coupled with the City's emerging data
communication requirements and the likelihood of any plans for a
proposed new administration building being firmed up in the next
year to two indicate that the City should stay with the existing
Centrex (ESSX) system while a city-wide master telecommunications
plan is established.
It is our opinion that any consideration of a telecommunications
system must account for both the voice and data requirements. The
majority -of telephone systems being installed today -are primarily
voice switching vehicles. Most of these systems are capable of
supporting some data transmission within limitations. However, the
newest generation of switching systems offers opportunities and
capabilities. particularly in data communications, that greatly
exceed those being installed today. Some of these are:
Integration of voice and data in a single system using
common hardware.
Non -blocking system architecture. This means that as long
as the facilities exist for connection. no blocking will
occur. While a controlled amount of blocking is typical
in a system intended for voice only, it -becomes highly
undesirable when switching data. As the requirements for
data increase. the non -blocking switch design prevents
degradation of the voice system.
-35-
•
0
COMMUNICATION SGENCF5
Integral Local Area Network (LAN) capability utilizing
existing twisted pair telephone cable instead of more
expensive media such as coaxial or fiber optics cable.
More capability in supporting a multi -vendor environment
by using advanced features such as protocol conversion in
conjunction with the LAN capability.
At the present time the cost of these third generation systems is
substantially higher than the late second generation systems.
Perhaps more significant than price is their relative newness. Very
few third generation systems have been installed and many of their
announced capabilities are still being tested.
The Commissioners of the City of Miami should require the completion
and implementation of a Citywide master telecommunications plan that
will allow the City to evolve from the current state of
telecommunications to a cost effective utilization of available
facilities and state-of-the-art technology in several fields. In
brief, the anticipated plan would govern the migration of
telecommunications from the existing Southern Bell Centrex system as
follows:
Utilize the enhanced Centrex offering known as ESSX and
resolve the existing local operational problems.
Continue to rent telephone station equipment. Do not
exercise any option to purchase unless such a purchase
proves in financially over the interval ending December.
1985.
Establish pilot tests of the Miami CableVision (CTV)
system to carry voice communications. Upon successful
completion of such tests. determine precise cost
trade-offs to eliminate some of the very expensive voice
interexchange channel (IXC) mileage by replacing it with
channel capacity derived from the Miami CableVision system
(in accordance with the License Ordinance).
-36-
84-2 73
84-2►74
P
C N MUNICATION SGENCF.S
Replace existing non -critical circuits with CTV circuits
and consider utilizing additional CTV circuits as back-up
for any critical circuits that should be redundant.
Establish pilot tests of the CTV system to carry the data
and certain other special circuit traffic. Upon
successful completion of such tests. replace existing
non -critical circuits with CTV circuits and utilize the
CTV circuits as back-up for those critical circuits that
should be redundant.
Monitor the maturing of the sophisticated, new ("third
generationl�) telecommunications switching machines and the
vendors that supply them.
Monitor the maturing of Local Area Network (LAN)
technology and the vendors that supply such services.
Monitor the introduction of new applications and
technologies that require data communications within the
City. Early in 1984 the Department of Computers -will be
completing the replacement of its processing equipment.
Throughout the year the new capabilities of the equipment
will stimulate new applications or the expanded use of
existing applications.
Early in 1985, prepare a request for bid for a distributed
telecommunications system that will meet the voice and
data needs of the City.
implement a distributed digital switching system
(integrated voice/data or interconnected voice and data)
using CTV, microwave and/or fiber optics to provide
extremely high capacity transmission links between the
distributed switching devices which will be located in the
three or four most populated buildings or building
complexes.
-37-
84-2'73
84-274
�J
�F
STAFFING REQUIREMENTS
COWUNICATION SGENCES
The City of Miami has numerous communication assets that are
currently administered by only two people. The annual budget for
the Centrex alone is in excess of $850.000. Beyond the dollar
amounts that are involved. consideration must also be given to the
wide range of technical areas that must be addressed. from radio
microwave to telephone bills and special projects. It should also
be noted that the administration of the Centrex system the size of
the City's (1100 Lines) is a full time job by itself.
To maximize the efficiency of the City's present communications
assets and adequately plan to take advantage of a rapidly changing
technology and regulatory environment. we recommend that the City
consider adding a telecommunications specialist immediately to
assist the existing staff in this department.
There are three basic equipment options for the City of Miami over
the next five years:
1. Stay with existing Centrex (ESSX).
2. Obtain a premises switch from Southern Bell after
divestiture in 1984.
3. Obtain a premises switch from a vendor other than Southern
Bell.
Within each of these options there are varying degrees of
involvement that can be anticipated that will affect personnel
requirements. These are system maintenance. station maintenance and
normal moves. changes and re -arrangements.
-38-
84-2 73
84-2'74
CCMMUNICATION 5GENCFS
Presently, with Southern Bell, maintenance for both the system and
stations is paid for as part of your monthly rental. Moves, changes
and re -arrangements are paid separately and appear as other Charges
and Credits (OCC) on your telephone bill. Until recently (July 14.
1983) the cost for various changes and re -arrangements was fixed.
The most recent tariff change added a variable component called
"Premises Work Charges". These charges are in addition to other
service charges incurred for the work done and are billed in quarter
hour increments at $12.50 per quarter hour plus the list price of
material used.
Maintenance on privately owned systems is typically offered under
two plans. First. on an "as required" basis where the client is
billed for time and material. In the Miami area, the hourly rates
quoted by vendors range from $35 to $42 per hour. Second.
maintenance can be provided under contract and is .known as a "full
service,, agreement. Rates for this service usually are based on the
number of phones installed and approximates $3.50 per station per
month. Moves, changes and re -arrangements are additional and are
handled on a time and materials basis.
All systems being installed today are maintained, either locally or
remotely, via a keyboard terminal. All are equipped with self
diagnostic software to assist technical personnel. All of the major
equipment manufacturers offer factory training for their clients.
Training to make simple changes through the terminal are provided by
the local installation company. Based on the above it is easy to
see that a client can elect to do all. some or none of the ongoing
system maintenance.
-39-
9VER,
F
CON MUNICATION SGENCE_5
our past experience with large system users indicates that most
prefer to take an active part in the ongoing maintenance and
administration of their systems. The primary reasons for this are
financial and control. In a study recently completed we learned
that a client spent $90.000 in 1982 on OC&C charges with Southern
Bell. If the client's personnel provided the same services the cost
would have been approximately $60.000. In addition, by performing
your own maintenance, priorities can be established so that the
timing of moves and changes can coincide with the City's needs. We
estimate that the City can accomplish this with the addition of one
person, an installer/repairman. Existing staff can be trained for
the programming and maintenance functions. The vendor would be used
only in a support role thus substantially reducing this ongoing cost.
In the event a microwave or fiber optics system is installed, an
additional suitably trained technician (with a vehicle) would be
desirable in order to perform testing. preventive and remedial
maintenance. A one or two link microwave system or a small fiber
optics installation will not occupy this technician's full time and
consideration should be given to combining these responsibilities
with other needs such as maintenance of an 800mHz radio system.
-40-
84-273
84 -274
f F
COMMUNICATION SGENC5
Equipment/Service
Monthly Cost
140
Centrex Lines & Features
$ 4.052
140
Line Mileage
3.012
93
Extension Stations
140
247
Station Touch Tone
161
1
Elevator Telephone
9
8
Trimline
30
1
Princess
3
it
Single Line Set
Included
114
Six Button Set
410
67
Ten Button Set
365
7
Twenty Button
56
1
Thirty Button
18
37
Teledialer
741
18
Dial Intercom
340
8
Speakerphone
80
1
Automatic Answering Machine
40
Miscellaneous (Key Service Units, etc.)
1,357
$10,814
Centrex Lines by Entity
City Hall 93
Marina 3
Auditorium 9
Parks/Recreation 35
140
FIGURE 1
Combined costofSouthern Bell Centrex
Facilities at Dinner Key
(Southern Bell 9145 Dated January 11, 1983)
84-274
84-273
Loc. # Address
CONWIUNICATION SCJENCE-S
Number of
Circuits
6
1701
N.W.
1st Avenue
8
900
S.W. 1st Avenue
11
1500
N.W.
3rd Street
14
N.W.
36th
Street
17
Orange
Bowl
18
1145
N.W.
llth Street
23
1290
N.W.
20th Street
24
Orange
Bowl
25
1151
N.W.
7th Street
28
3700
N.W.
7th Avenue
29
4101
N.W.
7th Street
30
1000
N.W.
20th Street
31
2301
N.W.
loth Avenue (Miami Stad.)
32
100
S.W. llth
Street
36
Miami
Riv.
12th Avenue
40
1975
12th
Avenue
42
1805
S.W.
22nd Avenue
44
1105
B.W.
2nd Avenue
51
55 S.W.
17
Rd.
54
1390
N.W.
20th Street
56
1060
N.W.
20th Street
57
1080
N.W.
20th Street
58
1901
N.W.
12th Avenue
59
1800
S.W.
21st Avenue
66
2301
N.W.
23rd Street
69
1415
S.W.
32nd Avenue
70
101 N.W. 34th
Street
71
1650
N.W.
37th Avenue
72
2755
S.W.
37th Avenue
73
314 Beacom
Blvd.
74
1455
N.W.
46th Street
FIGURE 2
CITY OF MIAMI
CENTREX MILEAGE CHARGES
1
4
6
3
3
93
23
1
3
3
2
5
1
1
1
5
1
1
1
11
3
4
9
1
3
I
1
1
1
3
1
MonthlY
Cost
$ 15.05
68.80
116.10
90.30
58.05
1,599.60
395.60
19.35
51.60
90.30
38.70
86.00
30.10
21.50
17.20
86.00
21.50
21.50
21.50
189.20
51.60
68.80
154.80
21.50
90.30
36.55
15.05
30.10
36.55
58.05
30.10
84--2'73
84-274.
CONW1UNICATION SGENCES
Number of
Monthly
Loc.
# Address
Circuits
Cost
75
455 N.W. 47th Ave.
3
$ 109.65
77
1950 N.W. 12 Ave.
3
51.60
80
1200 N.W. 20 St.
2
34.40
90
69 N.E. 62 Ave.
2
86.00
96
5920 W. Flagler
2
120.40
99
2820 McFarlane
1
36.55
100
1950 N.W. 12 Ave.
5
86.00
103
3870 Washington Ave.
1
19.35
107
236 Grand Ave.
1
36.55
108
3255 Plaza St.
1
36.55
109
2975 Oak Ave.
3
109.65
110
3580 Day Ave.
1
36.55
123
2666 Halisee
2
43.00
124
3230 Hibiscus
1
36.55
125
1349 W. Flagler
1
19.35
128
1717 N.W. 5 Ave.
2
30.10
137
1103 N.W. 7 St.
1
17.20
140
2901 Brickell Ave.
1
21.50
179
1351 N.W. 12 St.
4
68.80
200
Oak and Matida
1
36.55
202
970 S.W. 1 St.
4
68.80
220
1466 N.W. 62 St.
3
141.90
136
2600 Bayshore Dr. (Dinner Key)
35
752.50
116
3400 Pan Am Dr. (Dinner Key)
3
64.50
224
3360 Pan Am Dr. (Dinner Key)
9
193.50
79
City Hall (Dinner Key)
93
1,999.50
TOTAL
382
$7.888.35
FIGURE 2 (Continued)
CITY OF MIAMI
CENTREX MILEAGE CHARGES
84-2'73
8 -2'74
AUGUST 1983
08t72215
SCIENCES SERVING CITY OF MIAMI
COMMUNICATION
P R E S E N T V A L U E C A S H
F L O W
A N A L
Y S I S
CIN(.ER KEY CENTREX
START
END
GROWTH
STATE L LOCAL FEDERAL
TAX STATUS
_
A MCUNT YEAR
YEAR
RATE
TAX RATE TAX
ITEM
t0
1.080
0.0% NO
NCN DEDUCTIBLE
� STAY ION EQUIPMENT
45.000.00 1
t
t0
1.060
0.0% NO
NON DEDUCTIBLE
NI LE AGE AND TERM 1NA45
3E.144.00
NO
NON DEDUCTIBLE
4E.624.00 /
t0
t.080
0.0%
CENTREX LtHES/FEATURES
LOST ANALYSIS (PRE—TAX)
'
CUMULATIVE
PRESENT
CUMULATIVE
YEAR
COST
COST
VALUE
PRESE%T VALUE
YEAR
0
.00
.00
.00
.00
0
t
129.768.00
129.766.00
124.028.97
124.028.97
I
2
140.149.44
269.917.44
121.254.37
245.293.34
2
3
151.361.39
421.278.83
/18.541.83
363.825.17
3
4
163.470.31
504.149.94
115.869.L9
479.715.16
5
176.547.93
761.297.07
tt3.297.47
593.012.63
5
6
190.67t.76
S51.968.63
120.762.93
703.775.56
6
7
205.925.51
1.157.694.34
toe.28_.11
812.C60.67
7
222.399.55
19380.293.89
105.862.71
9t7.923.38
P
9
240.191.51
1#620,485.40
1039494.49
1.021.417.87
9
W10
2S9.406.83
1.879.892.23
101.179.26
1.122.597.13
t0
INTEREST
RATE APPLIED TO
PRESENT VALUE CALCULATICHS
10.0%
DEPRECIATION PARAMETERS --
NOT APPLICABLE
COST ANALYSIS (AFTER SPECIFtEO [AXES)
CUMULATIVE PRESENT CUMULATIVE
LOST COST VALUE PRESENT VALUE YEAR
.00 .00 .00 .00 0
129.768.00 t29.768.00 124.C28.97 124.C28.97 1
140.149.44 269.917.44 121.2!4.37 245.253.34 2
151.361.39 421,276.03 118.541.83 363.825.t7 3
163.470.31 584.749.14 115.889.99 47S.715.16 •
176.547.93 761.297.07 113.291.47 593.012.63 5
19o.671.76 95t.968.63 110.762.93 703.775.56 6
205.925.St t.157.894.34 108.295.11 812.060.67 7
222.399.55 1.360.293.89 105.862.7t 917.923.38 8
240.191.St 1.620.465.40 903.494.49 t.021.417.87 9
259.406.83 1.879.892.23 101.179.26 1.122.597.13 t0
TAX BRACKET .0%
Figure 3
COMMUNICATION
SCIENCES SERVING CITY OF
MIAMI
AUGUST
1983
olt722IS
P R
E S E N T V A L U E C
A S H
F L O W
A N A L
Y S I S
OIMENSIOF 48 "CATH
VTPP
START
ENO
GROWTH
STATE G LOCAL
FEDERAL
TAX STATUS
ITEM
AMCLNT
YEAR
YEAR
RATE
TAX RATE
TAX
c
e TELCO INSTALLATION
40.24t.00
1
O
1.000
0.0%
NO
NCN
OEDUCTIBLE
CENTRAL OFFICE TRUNKS
36.6C3.00
1
l0
1.080
O.Ox
NO
NON
DEDUCTIBLE
DIRECT INWARD DIAL NUMBERS
9.000.00
l
10
1.000
O.Ox
NO
NON
OEOUCTIPLE
COMMON EQUIPMENT — VTPP
!0.294.00
1
•
1.000
O.Ox
NO
NON
DEDUCTIBLE
COMMON EQUIPMENT — VTPP
6!•560.48
5
B
1.000
O.Ox
NO
NON
OFOUCTIBLE
COMMON EQUIPMENT — VTPP
93.2T5.7!
9
10
1.000
O.Ox
NO
NCN
DEDUCTIBLE
STATION ECUIPMENT
139!30•CO
1
t0
1.080
O.Ox
NO
NCN
DEDUCTIBLE
MILEAGE AND TERMINALS
2.964.00
1
10
1.080
0.02
NO.
NON
OEDUC TIBLE
i
i
COST ANALYSIS (PRE—TAX)
i
CUMULATIVE
PRESENT
CUMULATIVE
YEAR
COST
COST
VALUE
PRESENT VALUE
YEAR
0
40.246.00
40.246.00
40.24!•CO
40.246•CO
0
' 1
s-
112.491.00
152.737.00
107.516.C5
147.762.05
1
r 2
117.458.76
270./9S.76
101.622.EG
249.364.91
2
3
12291!23.94
393.019.70
96.192.13
345.577.04
3
' 4
128.61S.34
521.6301.04
919182.18
436.7Sv.22
4
' 5
153.042.77
674.680.61
98.213.31
f349572.13
5
i
6
159.801•35
8349482.16
92.830.03
627•!02•S6
6
7
1679100.62
l•0019582.78
87.869./!
71tk•671.74
7
' 8
1749983.83
1.176.566.61
83.292.71
798.964.45
e
i 9
209.213.00
to384,779.61
E9.7I!.49
!f!9679•S4
9
' 10
i
2179407.97
1.t02.187.S8
!4.797.98
973.477.92
10
INTEREST
RATE APPLIED TO
PRESENT VALUE
CALCLLATICNS
10.0%
DEPRECIATIn% PARAMETERS --
NOT APPLICABLE
COST
ANALYSIS (AFTER
SPECIFIED TAXESI
CUMULATIVE
PRESENT
CUMULATIVE
COST
COST
VALUE
PRESENT VALUE
YEAR
409246.00
40.246.00
40.246.00
400246.00
0
112,491.00
152.737.00
107.516.05
147.762.05
1
1t7.458.76
270.195.76
101.l22.86
249.384.91
2
l2e'.823.94
393.019.70
96.192.13
345.577.04
3
128,618.34
S21.638.04
91.182.t8
436.759.22
4
153.042.77
674.660.81
98.213.31
534.972.53
5
159@601.35
834.462.16
92•l30.03
6279802.56
6
167,100.62
1.001.582.78
87.869olS
715.671.74
7
174.983.A 3
1.17E•566.61
e3,292.71
798.964.45
e
208.213.00
193P4.779.61
!9.715.49
888.679.94
9
217.407.97
1.602.187.58
!4.797.98
973.477.92
to
TAX BRACKET .0%
F figure 4
�I
COMMUNICATION SCIENCES SE RYIfG CITY OF MIAMI
AUGUST 19E3 08/72215
P R E S E N T V A L U E C A S N F L O W A N A L Y S I S
PRIVATE SYSTEM SYR LEASE
'
START
ENO
GPOWTN
STATE 5 LOCAL
FEDERAL
TAX STATUS
AMCUNT
YEAR
YEAR
RATE
TAX RATE
TAX
ITEM
O
1.000
O.Ox
NO
NON
DEDUCTIBLE
TELCO INSTALLATION
6.COtl.04
t
1
to
1.080
O.OY
NO
NCN
DEDUCTIBLE
CENTRAL OFFICE TRUNKS
36+Eo3.00
t
t0
NO
NON
DEDUCTIBLE
�- DIRECT INWARD DIAL NUMBERS
9.000.00
I
t0
1.060
O.Ox
NO
NONDEDUCTIBLE
MILEAGE AND TERMINALS
2.Sl4.00
a
S
1.000
0.0%
NO
NCH
DEDUCTIBLE
LEASE
64.020.00
0.0%
NO
NON
OEOUCTIBLE
7.2P0.00
1
t0
1.080
MAINTENANCE
COST ANALYSIS (PRE—TAX)
CUMULATIVE
PRESENT
CUMULATIVE
YEAR
COST
COST
VALUE
PRESENT VALUE
YEAP
' 0
6.000.00
6.000.00
6,000.00
E.000.00
O
t
119.787.00
125.787.00
196.485.38
120. 4l9. 36
2
t24.24l.36
250.035.36
107.497.C8
227.986.46
2
' 3
129.066.63
379.t01.99
t0t.09t.22
329.067.68
3
4
134.270.37
513.372.36
9S•189.I0
424.236. TB
4
S
939.090.39
653.262.75
69.772.93
514.025.71
5
6
6t.940.02
735.202.77
47.599.69
561,629.40
6
7
86,495.23
E23.698.00
46.534.ES
608.164.25
7
a
950574.85
919.272.85
45.493.l5
6!3.CS9.10
6
9
103.220.R3
1.022.493.66
44,476.12
658.134.22
9
N`�ly
1
10
111.478.49
t+133.1;72.I7
43.481.16
741.1/5.38
t0
I%TEPEST
RATE APPLtEO TO
PRESENT VALUE CALCULATICNS
10.0%
DEPRECIATION PARAMETERS ---
NOT APPLICABLE
COST ANALYSIS (AFTER SPECIFIED TAXES)
CUMULATIVE PRESENT CUMULATIVE
COST COST VALUE PRESENT VALUE YEAR
6.000.00 6.000.00 6.000.00 6.000.00 0
119.787.00 125.767.00 114.489.38 120.489.38 1
124.248.36 250.035.36 t07.497.08 227.986.46 2
129.066.63 379.101.99 101.081.22 329.067.68 3
134.270.37 513a 372. 36 95.189.10 424.256.7R 4
139.890.39 653.262.75 89.772.93 !14.029.71
61.940.02 135.202.77 47+599.69 56t.629.40 6
88.495.23 623.658.00 46.1!34.l5 608.164.25 7
95.574.85 919.272.85 45.493.65 E53.658.10 8
102.220.83 1.022.493.68 44.476.12 698.134.22 S
11I.478.49 1.133.972.17 43.481.16 74t,61S.38 10
TAX BRACKET .0%
Figure 5
COMMUNICATION
SCIENCES SE PVlKG CITY DF M/ANC
AUGUST t9E3
I S
08172215
P g
E S E N T
V A L U E C A
S H
F L O W A N A L Y S
THIRD
GEN PRIVATE SYSTEM
5
YR LEASE
START
EHO GROWTH STATE 6 LOCAL FEDERAL TAX STATUS
AMCLNT
YEAR
YEAR RATE TAX RATE TAX
ITEM
6•CC0.00
1
0 1.000 0.0% NO
s
NCH OEDUCTIPLE
TELCO INSTALLATION
_
36.603.00
t
to 1.060 0.0% Np
NON OEDUCTIPLE
CENTRAL
OFFICE TRUNKS
9.000.00
1
0 1.060 0.0% NO
NCN DEDUCTIBLE
DIRECT INWARD DIAL NUMBERS
2.564.00
1
10 1.080 0.0% NO
NCN DEDUCTIBLE
:�
MILEAGE
1
AND TERMINALS
1.000 O.0% NO
NON DEDUCTIBLE �'l
75.E60.00
1
5
'LEASE
10 1.080 0.0% NO
NON OEDUCTIPLE
MAINTENANCE
7.2C0.00
1
+I
COST ANALYSIS (AFTER SPECIFIED TAXES)
COST ANALYSIS (PRE —TAXI
CUMULATIVE PRESENT CUMULATIVE
+
CUMULATIVE
PP£SEAT
CUMULATIVE
CCST COST VALUE PRESENT
VALUE YEAR
YEAR
COST
COST
VALUE
PRESENT VALUE
YEAR
6.000.00
6.000.00
6.000.00
O
4.000.00 6.000.00 6•C00.00
6.000.00 0
0
6.000.00
125.614.60
t3t.E14.E0
1
131.427.00 137.427.00 125.614.4s0
!31.6l 4.b0 f
1
'
131.427.00
135.888.36
137.427.00
273.315.36
117.567.76
24g.182.26
2
136.686.36 273.315.3E it7.5E7.76
249.182.36 2
2
414.021.99
110.197.33
355.379.69
3
140.706.63 414.021.99 1t0.197.]]
359.379.69
3
r
140.706.63
559.932.36
103.461.12
462.820.Et
4
142.910.37 559.932.36 103.441.12
462.820.61
a
i
r
145.910.37
711.462.75
97.242.75
560•C62.56
5
151.530.39 T1t.462.75 97.242. 75
560.063.56 5
5
i
+
151.53C•39
81•940.02
793.402s77
47.549.69
607•E6:!.25
6
6t.940.02 793.402.77 47.599.69
607.663.25
8
+
46.534•E5
6!t.149•t0
7
et.495.23 88/•848.00 46 .5J4.85
654+198.10
7
86.495.23
EHt.8g8.00
i
45.493.95
659.691.55
8
95.574.85 9T7.472.85 ♦Ss443+A'4
699•d4t .95 t
M�
B
95.574.85
977 .472.85
744.168.t7
4
t0'_•220.83 t•060•E93.66 44.476.12
744.168.07
4
103.220.63
1.080.693.68
04.47E•12
43.481.16
717.64S.23
t0
111.478.49 1.192.t72.17 43.481+16
7B7.644.21 10
to
111.478.49
1.192.172.17
W
INTEREST RATE
APPLIED TO
PRESENT VALUE CALCULATICNS
10+0%
TAX BRACKET .0%
DEPRECIATION PARAMETERS
---
KCT AFFLICABLE
19,5
BROADWAY
CORPORATION
WESTERN
ELECTRIC
LONG
LINES
BELL
TELEPHONE
LABORATORIES
The Bell System -
AT&T
ATT
INTERNATIONAL
BELL
OPERATING
COMPANIES
GENERAL
DEPARTMENTS
ATT
INFORMATION
SYSTEMS
Figs
1.,rine The 1983 Transitional Year
ADVANCED
MOBILE
PHONE
SYSTEM
195
BROADWAY*
CORPORATION
WESTERN
ELECTRIC
AT&T
COMMUNICATIONS
(ATTCOM)
BELL
TELEPHONE
LABORATORIES
AT&T
EMBEDDED
BASE
ORGANIZATION
Figure 8
ATT
INTERNATIONAL
CORPORATE
STAFF
ATT
INFORMATION
SYSTEMS
(ATTIS)
The Bell System - After Divestiture In 1984