1. Municipal Broadband Projects
The Changing Profile
For Funding
Municipal Broadband Projects
Steve Peloso, SVP, Enterprise Markets
Landmark Dividend LLC
CONFIDENTIAL

2. The Premise: Broadband as the 4th Utility
No longer optional
Approaching parity with with water, electricity, sanitation
Its absence poses multiple gates to growth
Most US municipalities now understand: Access to high speed broadband services is a necessity:
Enables and drives economic growth
Enhances quality of life
Supports and improves educational services at all levels
Facilitates Public Safety
Delivers new/enhanced public services
Necessary for the adoption of IOT (both publicly and in-home)
US Households are expected to average ~50 “connected” devices by 2021
Unprecedented growth in the corresponding desire to build Muni-owned networks
To support expense reduction/cut costs
Create new revenue streams
Enable long term “Smart” initiatives
To take control and ownership
CONFIDENTIAL

3. Where “Build” vs. “Buy” is the Desired Path…Funding remains the challenge
Options for Ownership:
Self-fund
Public-Private Partnerships (P3)
Hybrids- with 3rd party provider/operators
“Typical” Options for Muni Capital (Actual capital stack will vary)
General Obligation Bonds
Availability and timing
Revenue Bonds
Availability, timing and risk
General Funds
Availability
Grants
Availability (no guarantees)
3rd Party Debt
Cost, capacity to incur, Impact on credit
Impacted by appetite and capacity for debt, affects on credit rating, political environment
Landmark seeks to “Fill the Gap” to complement Muni-available funding sources and conditions:
To fill a gap in the capital stack
Whole or in part
Where access or time is an issue
Where debt is unavailable or undesired
Where leasing vs owning may offer benefits

4. Landmark-Capital via Operating Leases
As a Funding Tool
Capital is provided in exchange for a long term operating lease and a real property interest
Requires easement, fee, licence, etc.
Provided without the typical lender covenants
Not typically considered as debt for credit and other borrowing capacity purposes
Triple Net
Payback Term-25, 40 Years+
No operational oversight or upside participation required
Fundable project elements can include:
All labor costs including design, engineering and installation
All passive material costs (IE: No electronics, optical equipment, etc.
Capital via existing sources
Two options:
1. Monetizing existing revenue streams to bring near term capital to bear
Cell tower leases
Digital advertising leases (new development, upgrades)
Existing infrastructure lease streams
2. Capitalizing existing infrastructure assets
Sale/leaseback of current infrastructure assets
Existing broadband
Water transport
Power transmission
CONFIDENTIAL

5. Other potential benefits to developing broadband infrastructure:
Dark fiber leasing and vertical asset nodes (Smart Poles)
Wi/Fi, LTE, 5G, DAS, Small Cell Site Nodes
Cost (capital) avoidance for carriers
Improved city service capabilities
Smart parking, traffic control, digital kiosks, etc.
Public safety, security, response
CCTV
Success Criteria: Significant Internal Elements for Considerations
Identifying existing expense reductions (costs eliminated/reduced by virtue of the build)
Operational and Maintenance Elements
Cost and internal capabilities
Need for 3rd party support
Existing capability to Market/Sell
Where upside revenue is available
Where revenue generation is critical to the financial success
“Lit” vs “Dark” Services delivery
Conduit provisioning only
CONFIDENTIAL

6. Less: Revenue Bond Issuance
Example:
CA municipality has plans to continue its expansion of a city-owned “Dark Fiber” strategy.
Phase I completed in a cost of $4.5M
Phase II Q deployment. Development costs
Revenue Bonds Issued for Phase II delivering $8M
Carrier equipment located on City-owned assets (tanks and towers) generate lease revenues of $144K/Year.
Elements
Values
Phase II Deployment
$15.5M
Less: Revenue Bond Issuance
$8M
Funds Required
$7.5M

7. Conclusion: @$23K/month lease payment
Landmark Solution:
Step One-Landmark capitalizes the Phase I build at $3.75M in exchange for a 25 year NNN lease payment
Step Two-Monetization of existing 20 year carrier leases on 2 of 4 city assets provides a
Step Three- Landmark provides development funding of $2.95M via 25 year NNN lease
lease payment
A combination of new development funding, combined with capitalizing existing infrastructure and lease buyout reduced capital requirements by
Opportunity Elements
Values
Phase II Requirement (Less: Rev. Bonds)
$7.5M
Less: Phase I Capitalization
$3.75M
Subtotal
Less: Carrier Lease Payouts
$800K
Remaining Funds required
$2.95M

8. For Additional Information Please Contact: Steven Peloso
Senior Vice President | Enterprise Markets
| Direct & Smart Fax Line
| Mobile
2141 Rosecrans Avenue, Ste. 2100
El Segundo, CA