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Risk Management Plan

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Project Name: DAS Network Build-out

Project Description Summary: This project is to provide a build out of the DAS Network in Chicago. It requires new building infrastructure,

negotiations with the City of Chicago, and coordination with various suppliers and vendors.

Project Manager: DeVry Faculty

Date: May 22 nd

, 2005 Revision Number: 1

a. Risk Identification

I have made a list of all areas that might cause project delays or failure with their respective outcomes (see numerical list below). The five risks I have chosen as key risks

are bolded below and appear in the Risk Assessment Table in question “b” 1) Delay or denial of final franchise agreement with the city – this could

cause the project to stop or require negotiation with another entity (e.g., ComEd).

2) City site permitting process to cumbersome and requires longer than 72 hours per submission for standard configurations – this could expand the commercial

launch date significantly.

3) Carrier/Customer Delay in License Agreement – This could delay or prevent the capital funding required to begin construction and significantly impact the

entire timeline. 4) Lack of Infrastructure Availability – This is the lack of connectivity and

transport points within the city owned infrastructure which will require the identification of a new path or the installation of new infrastructure. This will

increase cost and project completion time. 5) Delays in construction due to city operational events – City operations,

construction, road repair and maintenance, water main breaks, parades, sports

events, conventions. These can all cause changes in the construction and installation schedule.

6) Labor Unions – Chicago is a union labor intensive environment. We will be utilizing both skilled and unskilled labor to perform the construction and

installation tasks. There may be an issue on tasks that are scheduled to be performed by specialized labor that utilizes non-union employees.

7) OEM Equipment availability – the DAS equipment that we utilize is specialized fiber-optic repeater equipment that is manufactured and shipped from Sweden.

Any delays due to customs or manufacturer inventory shortfalls will delay the

project timeline. 8) Power plant installation issues – commercial power to all network elements is

provided by ComEd. This entity is notorious for introducing delays in fulfilling orders for commercial power connections in the outside plant network.

9) Coverage Shortfalls – Once the equipment is installed and commissioned for operations coverage testing is completed. If the coverage does not meet the

design specification ClearLinx will be required to correct and rectify at it’s cost and there are potential time delay risks.

10) Fiber Optic Network installation quality failures – the fiber cable network must be

optimized and tested following installation to meet a specific signal level. If the level is not met ClearLinx will be required to re-splice new fiber points to ensure

they achieve the proper quality level.

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11) Base Station Hotel Tandem Connectivity issues – this risk is realized if the local

LEC (SBC) has any capacity or interconnect shortfalls between their service wire center and the Base Station Hotel.

12) Carrier interoperability and compatibility issues – performance problems that result during the integration of the WSP’s equipment to the DAS network.

13) Weather issues – could cause construction delays.

b. Risk Assessment The following is an assessment of these risks in terms of the probability of project

occurrence and the negative cost impact of project outcomes. Risk analysis attempts to

quantify the severity of the impact of an identified risk event, sometimes its probability, and its sensitivity to change.

RISK SCORING MATRIX

Defined Conditions for Risk Management Analysis

Project Objective

Relative or Numerical Scales

Very Low - 1 Low - 2 Moderate - 3 High - 4 Very High - 5

Cost Insignificant Cost Increase

< 5% Cost Increase 5-10% Cost Increase

10-20% Cost Increase

> 20% Cost Increase

Time Insignificant Schedule Slippage

Schedule Slippage <5%

Overall Project Slippage 5-10%

Overall Project Slippage 10-20%

Overall Project Slippage >20%

Scope

Scope Decrease Barely Noticable

Minor Areas of Scope Affected

Major Areas of Scope Affected

Scope Reduction Unacceptable to Client

Project End Item is Effectively Useless

Quality

Quality Degradation Barely Noticable

Only Very Demanding Applications Are Affected

Quality Reduction Requires Client Approval

Quality Reduction Unacceptable to Client

Project End Item is Effectively Unusable

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RISK ASSESSMENT TABLE (using the above scoring matrix)

RISK EVALUATION

Risk Probability Cost Schedule Scope Quality Risk Score

Delay or denial of final franchise

agreement with the city 90% 2 5 5 4 14.4

Carrier/Customer Delay in License Agreement

60% 2 5 3 1 6.6

City site permitting process to cumbersome and requires longer than 72 hours per submission for standard configurations

20% 3 4 5 1 2.6

Lack of Infrastructure Availability 20% 5 5 2 1 2.6

Labor Unions 20% 5 5 1 1 2.4

Coverage Shortfalls 20% 4 4 2 1 2.2

Delays in construction due to city operational events

15% 2 4 1 1 1.2

Power plant installation issues 10% 1 5 2 2 1.0

OEM Equipment availability 10% 1 4 2 1 0.8

Fiber Optic Network installation quality failures

5% 2 2 1 5 0.5

Carrier interoperability and compatibility issues

5% 2 2 2 2 0.4

Weather issues 5% 1 4 1 1 0.4

Base Station Hotel Tandem Connectivity issues

5% 1 2 2 1 0.3

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c. Risk Response

For each risk we have determined the action to be taken if the risk should occur: accept, shape, reduce, or transfer the risk. The following risk response table identifies a brief

contingency plan for these risks. That is followed by a detailed delineation of the two risks with the highest expected values.

RISK RESPONSE TABLE

Risk event

Response: Accept, Reduce, Share,

Transfer

Contingency plan Trigger

Who is

Responsible

Franchise Agreement Delay from the City Accept Redo Schedule reduce all slack

Agreement incomplete by Nov 1, 2003

Name

Carrier/Customer Delay in License Agreement

Reduce Offer customer incentives

Agreement incomplete by January 1 2004

Name

Lack of Infrastructure Availability Transfer Identify replacement street furniture

Failed interconnect inspection walks

Name

Labor Unions Reduce Negotiate terms with local

Stop work on construction labor

Name

Coverage Shortfalls Share Cluster re-designs and Node placement

Failed Drive Tests

Name

Contingency Plans for the Two Highest Risks

First Highest Risk - Franchise Agreement Delay from the City

The first highest risk to the project is the delay or denial of the final Franchise Agreement from the City to use the City owned infrastructure to complete the build-

out of the DAS network. I feel the best contingency plan is to immediately finalize the negotiation of a Joint Use agreement with ComEd to share available

infrastructure in the City public Rights-of-Way (ROW). This has already been investigated as an available resource. This appears to be the only apparent available

contingency plan. The issue with using the ComEd ROW is each network node

location will still need city permit approval. This approval will subject to ClearLinx using the standards already determined in joint use provisions associated with

developing telecommunications within the city owned public ROW. These provisions will require additional standards and costs that were not required in dealing directly

with the city as in the original infrastructure deal. This contingency plan will require the overall project plan to be expanded by at least 6 months. This 6 month period

will allow the time required to complete the Joint Use agreements with ComEd. It will also allow ClearLinx to develop a work flow process to support a “fast track” method

to getting network node and elements approved and permitted through the city

permitting process. We feel that this is possible given the city cannot politically support anything other than a swift handling of the ClearLinx permit submissions

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given they were not able to provide approval directly. The additional cost associated

with this contingency plan will be based on the tariff rates associated with the Joint Use Agreement for the use of ComEd poles, conduit and other infrastructure. These

additional costs will be as follows:

1) The sum of all the infrastructure lease costs from ComEd. 2) The additional costs associated with the per node construction permit approval

process from the city. 3) Any additional materials and installation costs associated with moving the

network elements from the proposed City infrastructure to the ComEd owned infrastructure.

4) The additional costs associated with ComEd “make ready” fees and ROW fees based on PUC defined “Joint Use” costs.

5) The additional insurance and bonding requirements of ComEd as the utility as

opposed to the original City insurance and bonding levels. 6) The premium costs incurred by virtue that all work on utility infrastructure must

be done by the utility or it’s subcontractors at ClearLinx’s cost.

Second Highest Risk - Carrier/Customer Delay in License Agreement The second highest risk to the project is the delay in the License Agreement between

ClearLinx and the Customer (or the WSP). This delay in negotiations can be the results of price, feature functionality options or terms and conditions in the contract.

If ClearLinx experiences these delays it will use its ability to offer incentives to the customer in order to complete and execute this agreement. The ClearLinx DAS

network is a shared network and ClearLinx acts as a Neutral Host Provider. This means that ClearLinx will make this network available to multiple service providers

on a shared cost basis. The incentive for the “first mover” is a lower lease rate than

its competitors. ClearLinx require at least one executed agreement with a WSP in order to obtain access to its capital that funds the construction build-out. ClearLinx,

as part of its contingency plan, will offer the first signing WSP free rent for a negotiated number of months in order to close the License Agreement contract. This

agreement is critical to the project. Without at least one WSP license agreement executed prior to start of construction the project is in jeopardy of failure. The

additional costs associated with this contingency plan are as follows:

1) The additional time and lost revenue as part of the expanded negotiation process. This should include additional legal fees and any free services provided as part of

the offering to the WSP. 2) Any additional network features or infrastructure cost incentives that are

provided as part of the offering.

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d. Risk Assessment Matrix

Each and all of the identified risks have been explained at the beginning of this report. The following Risk Assessment Matrix should support my choice of “Franchise

Agreement Delay from the City” as the first highest risk factor.

5 Franchise

delay

4

Likelihood 3

Carrier

delay

2

Lack of

Infrastructure

Coverage

short

Labor

union

1

1 2 3 4 5

Impact