CLYDE TAKAHASHI
 FOC.HI (FiberOptics Communication Hawaii)

FEASIBILITY STUDY

Feasibility Study Prepared By
 CLYDE TAKAHASHI
Sole Proprietorship
134 KUULA STREET
KAHULUI MAUI HI 96732
 Best Ways To Reach Me
[email protected]
http://members.tripod.com/~ClydeTakahashi/foc_home.htm
(808) 244-7458 office
(808) 871-4726 home

March 31, 1999

FOC.HI (FiberOptics Communication, Hawaii) is a proposed Internet Access Provider business on Maui. I propose to provide Internet access, Telco, and CATV integration.

We will provide $37.00/month G.Lite ADSL Internet, $9/month v.90 modem Internet, $8.00/month Cable TV and $7.00/month Telephony integrated access connection stubouts, eventually, for all of Maui's homes and businesses. These connections will always be the fastest and least expensive way to communicate from Maui to the rest of the world. It will also provide gateways to both, the legacy PSTN twin-lead copper Telco lines (ie: GTE, AT&T, and MCI), and legacy copper coax-cable CATV (i.e. TCI and Oceanic) infrastructures.

I have access to one pretty well protected office space at 1124 B Lower Main Street. I have access to a couple of x86 architecture PCs. This is where I work as a partner w/ Howard Fukunaga. We sell & repair PCs here. I also have another office space available at home.

All I do is assemble and repair PCs all day long. This is boring and I want to connect all of Maui's computers together to transfer information among all of them on Maui and through the World Wide Internet backbone through multiple OC-3 and ATM fiber-optic connections.

Please give me money to purchase our hardware and service connections. I need a minimum of $2,760,000+ to start this business at its maximum growth rate. We already have 40,000+ proprietary clients eagerly waiting.

Thank you,
Clyde Takahashi

Table Of Contents

Executive Summary
Product/Service
Purpose Of The Product/Service
Stage Of Development
Product Limitations
Proprietary Rights
Governmental Approvals
Product Liability
Related Services And Spin-Offs
Production
The Market
Current Market Size
Growth Potential of the Market
Industry Trends
Competition Profile
Customer Profile
Customer Benefits
Target Markets
Market Penetration
Price and Profitability
Price List
Sales Estimate
Cost of Product/Service
Gross Margin
Three Year Operating Expenses
Three Year Operating Statement
Start-up Costs
Start-up Expenses
Capital Expenditures
Plan for Further Action
Pitfalls
Positives
Needed Capital
Entrepreneur's Role
Business Plan
License Potential
Corporate Partners
Proprietary Rights
Infrastructure Members

Purpose of the service:

To provide both the fastest and cheapest tethered computer to computer WAN access with the lowest downtime.

Stage of Development:

I have some PCs and two of the three minimum office locations for the first pieces of hardware.

Product Limitations:

It will work for Maui's customers' benefit.

Proprietary Rights:

Clyde Takahashi; Howard Fukunaga; State of Hawaii, Division of Vocational Rehabilitation; and Maui Economic Opportunity.

Government approvals:

The business will need to acquire approval of the FCC, GTE, and TCI.

Product Liability:

99.9% service availability, except for natural disasters (i.e.: hurricanes, earthquakes, floods, and tsunamis) and human caused disasters (i.e.: airplanes severing cables, vehicles crashing into poles, etc.).

Related Services and Spin-offs:

AudioVisual Telephony and High-Definition Cable TV. We will setup and repair our customers' PCs with the fastest and lowest labor costs.

Production:

All work is to be done by me and my partners, including the burstable Frame Relay, T-1 and/or T-3 connection cables to the World Wide Internet backbone providers. Multiple OC-3 and ATM fiber connections will be installed at a later phase, as customer connections rapidly increases.

Executive Summary
 March 31, 1999

Clyde Takahashi
sole proprietor
134 Kuula Street
kahului HI 86732-2909

Dear Interested Party,

My business venture is in the Internet Access Provider (ISP). Telco, and CATV integration arena. I am currently prospecting for customers by way of my computer assembly and repairing business. I am gathering information regarding the best Internet backbone access providers, ie UUNet, PSINet, GTEInternet, ...

This service will be the cheapest, and at the same time the fastest, connection to the Internet. It will also provide a gateway to the legacy PSTN copper Telco lines (ie GTE), and also to the local Cable TV coax-cable infrastructure (ie TCI and Oceanic). I already have lots of proprietary clients waitng to get their Internet connections.

I know that the Internet is the biggest thing to happen, so far, in the communications age (as evidence, see the NASDAQ Internet stock prices). When I get a foothold on all of the offices and residences of Maui, I can advertise anything to them.

I need $276,000 minimum in startup costs.

My company will need both handicap grants and loans from Banks and Lokahi Pacific.

Visit our company's website at: http://members.tripod.com/~ClydeTakahashi/foc_home.htm.
Email me at: [email protected].

Respectfully submitted,

Clyde Takahashi
sole proprietor


Product/Service

Purpose Of The Product/Service
 To provide Maui's customers with the fastest access, cheapest price, and lowest downtime.

Stage Of Development
 I have some of the PCs and two of the three office locations for the first pieces of hardware.

Product Limitations
 This service will work only for Maui's customers (for the first phase).

Proprietary Rights
 I'll reserve the rights to our customers' PCs setup information, and for their dedication to my PC service plan.

Governmental Approvals
 I will need to acquire the approval with the FCC, GTE, and TCI. I will need to acquire the approval to access and/or install fiber-optics trunk lines from all of the above, in addition to, maybe, Maui Electric Company.

Product Liability
 Quality of Service (QoS) and disconnection of communication links. To prevent this I need lots of redundant hardwares. I may also require some type of insurance coverage.

Related Services And Spin-Offs
 I will add Telco and Cable TV (Video On Demand) gateways and integration.

Production
 All work will be done by me and my friends, including the burstable Frame Relay, T-1,and or T-3 connection cables to the Internet backbone providers.


The Market

Current Market Size
 40,000+ potential connections at the local level.
Growth Potential of the Market
 It is excellent for SOHOs, that are increasing on Maui and the world.
Industry Trends
 Internet access will be very ubiquitous and CATV and telephony services will be merged into one fiber-optic/wireless infrastructure.
Competition Profile
 Internet connections will be very much faster and at the same time cheaper than the next cheapest ISP. CATV and telephony services will be integrated into basic ISP service.
Customer Profile
 Initially, the intended customers will be everyone with a computer.
Customer Benefits

  • Fastest Internet access speed
  • Cheapest Telco service
  • Cheapest CATV service
    Target Markets
     Eventually, everyone with a television, telephone, and/or computer.
    Market Penetration
     Mostly, by word of mouth.


    Price and Profitability

    Price List
     Product/Service Price
    G.Lite ADSL service$37/month
    v.90 dial-up service $9/month
    CATV service $8/month
    Telco service $7/month

    Price Assumptions:
     Users will choose between G.Lite ADSL and v.90 dial-up service. CATV and Telco services are options to G.Lite ADSL service only.

    Sales Estimate
    Product/ServiceYear One Year Two Year Three
    G.Lite ADSL service $35,964 $2,913,084 $17,760,000
    v.90 dial-up service$540,000 $35,964 $10,800
    CATV service $0 $314,880 $3,840,000
    Telco service $0 $276,787 $3,360,000
    Total Sales$575,964$3,540,715 $24,970,800

    Sales Assumptions:
     Squared the prior year, for number of G.Lite customers.
    Third year assumes 25% of Maui's total population.
    Cost of Product/Service
    Product/ServiceYear One Year Two Year Three
    G.Lite ADSL service $52,000 $2,704,000 $8,112,000
    v.90 dial-up service $20,800 $4,000 $800
    CATV service $0 $140,000 $1,205,000
    Telco service $0 $123,000 $1,106,000
    Total Cost of Goods Sold $72,800 $2,963,000 $10,423,800

    Cost of Goods Sold Assumptions:
     Includes FCC approved OC-3 connections for G.Lite.
    Includes FCC approved burstable T-1 connections for v.90/G.Lite load balancing/backups.

    Gross Margin
     Product/ServiceYear One Year Two Year Three
    G.Lite ADSL service
    v.90 dial-up service
    CATV service
    Telco service
    Gross Margin

    Gross Margin Assumptions:
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    Three Year Operating Expenses
     Marketing ExpensesYear One Year Two Year Three
    Salaries & Wages - Marketing
    Benefits & Taxes - Marketing
    Commissions, Reps & Contractors
    Advertising - Broadcast
    Advertising - Brochures/Posters
    Advertising - Direct Mail
    Advertising - Other
    Marketing - Print
    Marketing - Samples/Trade Shows
    Other Marketing Expenses
    Total Marketing Expenses

    Marketing Expense Assumptions:
    InsertTextHere

    Administrative Expenses
     Administrative ExpensesYear One Year Two Year Three
    Salaries & Wages
    Benefits & Taxes
    Meals & Entertainment
    Dues & Subscriptions
    Professional Fees
    Accounting/Bookkeeping
    Travel/Automotive
    Other Administrative Expenses
    Total Administrative Expenses

    Administrative Expense Assumptions:
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    General Expenses
     General ExpensesYear One Year Two Year Three
    Bank Charges
    Credit Card Fees
    Interest
    Insurance
    Office Supplies
    Other Supplies
    Postage
    Telephone
    Utilities
    Rent
    Repairs & Maintenance
    Taxes & Licenses
    Other General Expenses
    Total General Expenses

    General Expense Assumptions:
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    Three Year Operating Statement
     Product/ServiceYear One Year Two Year Three
    Sales
    Cost of Goods Sold
    Gross Margin
    Marketing Expenses
    Administrative Expenses
    General Expenses
    Gross Profit*
    *Before taxes, amortization, and depreciation
    Start-up Costs
     Start-up CostYear One
    Petty Cash
    Register Cash
    Opening Inventory
    Rent (Last Month's)
    Security Deposit
    Telephone Deposit
    Utilities Deposit
    Other Deposits and Start-up Costs
    Total Start-up Costs

    Start-up Costs Assumptions:
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    Start-up Expenses
     Start-up ExpenseYear One
    Fictitious Name Costs
    Corporation Filing Fee
    Corporate Tax Prepayment
    Activation Fee
    Legal & Consulting Fees
    Accounting Fees
    Federal Tax ID
    Sales Tax Permit
    Salaries & Wages -Training/Setup
    Benefits & Taxes - Training/Setup
    Office Supplies
    Business Supplies
    Printing-Cards, Stationery, Brochures
    Pre-opening Advertising
    Other Start-up Expenses
    Total Start-up Expenses

    Start-up Expense Assumptions:
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    Capital Expenditures
     Capital ExpendituresYear One Year Two Year Three
    Equipment
    Furniture
    Leasehold Improvements
    Vehicles
    Buildings
    Land
    Total Capital Expenditures

    Capital Expense Assumptions:
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    Plan for Further Action

    Pitfalls
     I will need to work on setting up a low-cost, higher freedom (but slower speed), broadband wireless communication infrastructure, for my mobile clients.

    Positives
     My customers will be utterly satisfied with my services. They will also save more money, and have their PCs and networks running in top condition.

    Needed Capital
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    Entrepreneur's Role
     I will do everything possible.
    Business Plan
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    License Potential
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    Corporate Partners
     GTEI.com, AOL.com, Maui.net, Shaka.com, and Mauigateway.com.

    Proprietary Rights
     Starting a local G.Lite ADSL ISP on Maui, then switching to fiber-optics/broadband wireless communication infrastructure.

    Infrastructure Members
     Clyde Takahashi; Howard M. Fukunaga; State of Hawaii, Division of Vocational Rehabilitation; Maui Economic Opportunity; and Alfred L. Ulat (accountant).