Financing high speed Broadband – what do you think?

Challenge – we seek to engage with you and gather a broad range of opinion from a range of contributors across Europe, in relation to these 5 broadband investment models described here.Braodband Investment Models

We have provided some examples in each of the discussions to kick things off but bear in mind the context of this consultation is limited to the role that public authorities of EU funds can have in the funding of broadband and high speed infrastructure.

We do not wish to describe these models in any “greater” detail as this would add significant complexity and result in the definition of multiple “alternatives”.

We do seek to capture your comments, suggestions, alternatives, issues, ideas and insights – that are generally attributable to a source (in order to give “context” to the opinion)

You can add your comments here and / or join the discussions over on EBPII

Background

The Digital Agenda for Europe has set up ambitious targets on the deployment and use of high speed broadband infrastructure and services. It is obvious that these are ambitious objectives which will require a substantial amount of investment and efforts both from private and public domains. Although amounts are difficult to calculate, in the broadband communication the Commission gave a rough estimate of the investment required, based on recent studies.

The estimate indicates that between € 38bn and € 58bn would be needed to achieve the 30 Mbps coverage for all by 2020 (using a mix of VDSL and next generation wireless) and between € 181bn and € 268bn to provide sufficient coverage so that 50% of households are on 100 Mbps services[1].

The size of the investment represents a real challenge. This is because the benefits for society as a whole appear to be much greater than the private incentives to invest in faster networks. 

Private investment is currently targeting mainly urban areas. However, there are vast parts of Europe which are rural, remote or sparsely populated. To satisfy the needs of these communities, new models of investment in high speed networks are arising particularly at local and regional level.  This is particularly relevant within the context of rural and regional development as the availability of open, competitive, affordable and good quality broadband networks is a key element for the long term sustainability and competitiveness of less advanced regions and rural areas.

…”the benefits for society as a whole appear to be much greater than the private incentives to invest in faster networks”

The sentence above captures the essence of the dilemma that surrounds the issues at stake in the investment in broadband and most importantly in high speed networks in areas affected by market failure.

These issues are particularly important in for public authorities in charge of areas (mostly rural, less advanced and remote) where the market does not provide these networks at a sufficient speed, to an adequate quality and at an affordable cost. When deciding about their intervention, public authorities need to make a choice among those investment models that most further the interests of the communities: households, enterprises, public entities and the territory as a whole.  Their aim is to provide their territory with access to suitable ICT infrastructure and services that would allow them to prevent de-location and depopulation (particularly the departure of young population), but to also to attract investment (foreign and national) and sustain their long term competitiveness and attractiveness with respect to their competitors across the globe.

The European Broadband Portal is hosting an on-line consultation of the blogosphere on the basis of a very preliminary description of the models of broadband investment. This consultation will take place between the 1st  and the 31 of May and will involve a very wide range of different stakeholders and in particular public authorities involved in the management of EU funds.

NB: The context of this consultation is limited to the role that public authorities of EU funds can have in the funding of broadband and high speed infrastructure in areas where these infrastructure are not provided by market players at a sufficient speed, quality of service or at an affordable price to sustain services that are crucial to achieve the aims of regional and rural development.


[1] Differences are mainly due to varying distributions of household density and the mix of technologies.

The sources are Plum/Cave – Broadband Stakeholder Group, JP Morgan and Analysis Mason (UK).

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53 responses to “Financing high speed Broadband – what do you think?

  1. 1. I do not believe in any single model to fit all situations in EU; rather a combination of various models seems to be feasible.
    2. My personal preferences are (1) Public DBO or (2) Public Outsourced
    3. EU should focus on (1) small (micro) enterprises and (2) rural regions
    4. The goal “30 Mbps coverage for all by 2020″ is unrealizable in Central Europe in my opinion.

  2. WiFi-based solutions offer inexpensive and sufficiently fast for currently prevailing services such as data, VoIP, radio, and TV. It should be promoted in rural regions together with community networks together with free-software applications. That technology will be sufficient for most rural users for the next few years, after which one can focus on 100Mbps technologies.

  3. I agree with Ryszard on a wireless issue,
    We have developed , used and tested for the last 3 years great wireless solutions in mountain rural areas, and succeeded in providing all the necessary services as on xDSL networks. We have based our networks on Cisco, Mikrotik, Ubiquty, Wavearena, Pacific Wireless equipment manufactures. We started as a groups of end users formed a private companies for building and maintaining networks, and now we seek public support for continuing our efforts. From our experience only joint efforts of public sector and government with the interest groups and private held companies can give us a crossover the digital divide gap in rural areas.
    An average real life link for a small town of 2500-3000 inhabitants should suffice 35-70 MB/s. For recent basic broadband needs will suffice 12-16 MB/s –
    I have read anything available regarding the broadband in rural areas and must say – this is just the beginning .

    Do not make a mistake and leave some part of technology behind :
    Using a fine and refined combination of wireless, optical, cable and future Satellite EU broadband network we can achieve the goals setup in EU digital agenda.

    Indeed “EU should focus on small dispersed enterprises and rural areas. “

  4. Independently of the financing system, the key issue is the cost of deployment and of the operation of the network, and two technologies deserve special attention in rural regions of EU:
    1) wireless systems using open (free) spectrum bands (WiFi-based & WiMax)
    2) Broadband Power Line Communications using existing wires of electric (power) network.
    Both eliminate the necessity of cable deployment.
    The Marconi Laboratory at International Centre for Theoretical Physics (ICTP) in Trieste, Italy, in cooperation with other organizations, has gained experience in practical deployment of cheap, long-distance wireless networks based on of-the shelf components (see http://wireless.ictp.it; http://www.ictp.it; http://academy.itu.int/index.php/component/k2/item/462).
    One way to lower the cost of wireless communications is to allocate additional frequency bands for use free of charge and free of individual licence obligations. The change from analog TV to digital TV creates an unique opportunity to do so without major problems. For details on open spectrum see http://www.openspectrum.eu/drupal6/.

  5. I see that we have a lot in common dear Ryszard,
    please can you give us some more information about
    ” 2) Broadband Power Line Communications using existing wires of electric (power) network. ”

    I have seen wireless (cheap) links deployed and functional but never worked in an power line network environment.

  6. Information on cheap broadband communications via existing power lines and future High Altitude Platforms can be found in many places; below are only three introductory text & presentations:
    1) http://www.google.pl/search?sourceid=chrome&ie=UTF-8&q=struzak+powerline+communications
    2) http://wireless.ictp.it/school_2003/lectures/struzak/Alternative_In ternet_Technologies/PLCforum_Bucharest.pdf
    3) http://www.intercomms.net/AUG03/content/struzak1.php

  7. In the UK, Openreach have looked to other European and International operators where similar services are already available and suggests that its price proposal is approximately 15% less than the average in France, Spain, Portugal and Germany. Openreach are looking at £0.95 per per metre of spine duct on a 10 year term, or £1.16 on 5 year term. A lead-in duct on a 5 year term would be £2.12 per metre. Cables run on poles would be subject to a £21 fee per attachment. Other charges are applicable for splicing or cable coiling within ducts as well as various fees for work to be carried out by Openreach staff.

    A key point that Openreach are looking to impose on other network operators who want to use BT ducts or poles is that they will also need to open up their own infrastructure in a similar way. This could therefore allow BT to perhaps find cost efficiencies through using other ducts where either its own are full or it only has over-head cables in areas. Whether Ofcom will allow this condition to be in place will be interesting to see.

  8. This is a very timely discussion as more local initiatives are trying to find ways to ensure that the networks that they want to see developed are fully open access networks and maximise the diversity of investment and participation. In Manchester, through our Living Lab initiative, we are soon to launch a fully open access test-bed Fibre to the Premises (FttP) network, which aims to test the market by aggregating demand from small businesses, public sector users and the wider community. More info on our website (www.manchesterdda.com) and we will ensure that info is also fed through to this discussion, as well as through the UK’s new Independent Networks Cooperative Association (INCA) website (www.inca.coop) and the new EU ‘Digital Agenda Goes Local’ “Local2020″ website (www.local202.eu).

  9. @Ryszard Please tell me how can I contact Trieste scientists and can they participate in one SEE IPA project .

    @Dave we are trying to achieve the same thing .

  10. ” Broadband in unlicensed band ( 5,4 or 5,8 GHz ) is possible: WiMAX 802.16 2009 is the solution ”

    There are available technology in the market that is able to provide high speed broadband, is WiMAX 802.16 2009. This standard is already using in large rural projects in Spain and others. Is the only standard one that works on unlicensed bands ( 5GHz ), provides quality of service and is able to provides different services to same user ( CPE´s ) as VoIP, internet access, video surveillance, etc…

    The European funds that are financing Broadband projects must consider the use of inter operable vendors that compliant worldwide recognized standard. This is mandatory to avoid the use of proprietary solutions that provides limits in the capacity of terminal units.

    For sample, our company ALBENTIA SYSTEMS ( http://www.albentia.com ), located in Madrid ( Spain ) is a manufacturer of WiMAX 802.16 2009 equipment ( base stations, point to point radio links and repeaters ) and we are using terminal units ( CPE´s ) of third vendors that are inter operable in WiMAX 802.16 2009. This is the only guaranteed for the future. Every terminal unit has not any limitation of capacity. The only point is that currently one WiMAX BTS is able to provides 35Mbps of capacity, but the technology is able to use several base stations to increasing the capacity.

    The WiMAX broadband operators can compete with the monopolies of fiber optic, mobile and cable operators, in areas where there is no plan for the deployment of Internet access. The average time of return on investment of a WiMAX network recovers in a year. More info: jhidalgo@albentia.com

  11. Leonard Raphael

    PowerLine Communications PLC/BPL was the technology that was supposed to replace ISDN instead ADSL, pilot test was conducted in the UK, Germany, Finland etc… As I understood there was on interference in frequencies in the UK and so the model was discontinued. Have all the issues been resolved as at yet? Why did ADSL win the day?

  12. Have a look at the Local2020 discussion on http://www.local2020.eu ; contribute to debate from a city/regional perspective

  13. Pingback: Financing Broadband | Local2020

  14. Nisse Husberg

    Wireless is just bullshit as fixed connection. Just take a look at Shannon’s theorem which states that there is no possibility to send more than a certain amount of information through a channel with a certain width no matter what technology is used. And there is a terrible shortage of frequency bands – they should be saved for vehicles which cannot have cable connections. We have experience with both wireless and fiber optic cable and there are mostly just problems with wireless.

    Our village built a fiber net eight years ago when the municipality was digging water pipes. It was a very cheap net and we have been running 100 Mbits connections since and are now upgrading to Gigabit slowly. Nobody knew what it was about in the start but now the traffic is increasing rapidly and people are working from home and the net is really important for them.

    It is stupid to put any money and energy at anything else than optic fiber (except where wireless is absolutely necessary – I’m using it in my tractors).

    We did not receive any funding at all but paid everything from the begin to the end – and now our finances are just fine. I am a former professor in computer science from the University of Technology and now working as consultant for several network builders in Finland. Our government has decided (4.12 2008) that the whole of Finland shall have 100 Mbits connections by 2015. That is a good idea but I doubt the implementation style – the “market” should build 95 % and the big operators openly state that they are not building any network except in the big cities.

    Those who want a good connection to Internet must build by themselves. The experience of funding by the state and/or EU is extremely negative because of the bureaucracy. In fact the net is going to cost at least twice as much as soon as those funds are involved – probably much more.

    The problem for small bottom-up projects is that all the money must be paid before they get any income. State guarantees should be the perfect solution but the idiots in EU are forbidding that. The operators are completely against building fast nets and are using the competition rules to stop others from building. As I see it the only working way is the one used in Australia where a state owned company is building the net (using about 40 billion dollars and 97 % fiber) after which the service providers can rent it. That is the only way to achieve fair competition. If one operator owns the net all others have big troubles to get access to it.

    Europe is well behind South Korea, Japan and others because EU hasn’t realised the importance of the net. In some speeches the importance is stated but when it comes to doing something it seems that everything else is more important.

    • Spot on Nisse. I agree with every word. JFDI is the best way. And the best way the EU can help (in the UK at any rate) is to keep the incumbent off our backs and help by levelling the playing field. Currently it is very bumpy due to VOA tax having to be paid by anyone laying new fibre but the incumbent doesn’t have to, and also any public money that is made available doesn’t get where its needed because the big boys grab it to patch up their obsolete copper crap. Funding and procurement has become a standing joke in so called digital britain. When public money goes to a phone company to bond two copper pairs at great expense to deliver ‘up to 2meg’ over 12 km then you know that something has gone sadly wrong.
      The secret of Next Generation Access is to get fibre pumps to every community and let them build their own networks to it. I am glad there are groups like yours showing the way. keep up the good work. The future is fibre. End of.
      chris

      • @cyberdoyle
        IT is everywhere , This is the contra effect of digitalization
        We just generally have small brain politicians across Europe who do not realize that the world has changed – with the internet, they dont pay so much attention to that white box, yes is fancy to pose for local newspapers with new laptop or ipod, but that`s about it …

        I was delighted to see announcement of the EU Digital agenda by mrs. Neelie Kroes … I just doubt it is possible .And this is me speaking as a optimist

    • Nisse Husberg , I dont agree, wireless is a pain when we are talking about QoS
      but you can not stretch fiber trough the mountain solid rock canyon for a 100 households, mind the urban population, our organization is strongly convinced that if we loose classic rural inhabitants, we risk to lose more than just old way of living… so we are advocating for the faster and broader developing of ICT broadband in rural areas …some ideas were presented on linked-in some on forums but we have got a general idea of using wireless 802,11a and 802,11n for such remote areas.

      Our idea for financing would be public financing for combining fiber and quality wireless backhaul and lastmile links, independent ventures, companies or gov. agencies for controlling and maintaining the network and local, regional ISP-s who will pay for renting the part of the network. For dense populated urban areas whole calculation is reduced to time of investment returning … with respect,

  15. Nisse Husberg

    There are two big problems for the network builders:
    1) initial financing
    2) getting a decent and cheap connection to Internet

    It is no problem to get a bank loan for 30 years to finance the fibre net because they realise that the buried fibre cable is just getting more valuable each year. Those few who have put cables or pipes in the ground – especially in the city centres – can get a lot of money these days when demand is booming. But state guarantees would help very much to keep the interest down. We do not ask anybody to give us money but a little help in initial financing could do a lot of good. And – PLEASE – do not attach a lot of bureaucracy to it ! That would put the balance on the negative side.

    The connections to Internet are priced (by the operators) so high that it in fact is a way of saying: No. They have a lot of fibre cables here in Finland but you cannot get a decent connection to it. Those cables could as well be on the moon for all practical purposes. We had a stroke of luck because our municipality put down six fibres at the roadwork on Highway six and we could rent one for a very modest price. That made it possible to come to a bigger city where Internet connection prices were 20 times cheaper. But it is a general problem which also have been adressed by the government plan for year 2015. The problem is that the practical implementation of the decisions is lacking. As I wrote I think the problem is going to persist until we get a state owned net. The decision from 4.12 2008 is very good because it states that the net (in reality fibre) should not be further away than 2 kilometres from (almost) any household. That would solve the second big problem – but decisions are cheap. The real problem is to get them implemented.

  16. Nisse, who maintains and routes the part of your municipality fiber network ?
    When they constructed / deployed fiber channels were they far-sighted or just wanted to put some fiber, or were obliged by some Finland law?

  17. Nisse Husberg

    In our village we started to build the fibre net ourselves in 2003 – it is really home made. I had some experience from working with data networks from my job at the University of Technology and I planned a very simple Ethernet structure which I completely constructed myself and of course I am maintaining it myself. But I have to say that there have been very little problems with the fibre net – in contrast to the wireless WLAN we had for a few years before the fibre net was completed. During all these years there has only been a couple of problems – except for equipment destroyed by lightning. In 97 % of all cases when people call me about “network problems” it turns out that their own computer or router is to blame.

    We have a simple gateway to Internet (Netgear SRX5308 Gigabit) which connects us directly to the line of a company selling us 100 Mbit/s average traffic to FICIX, the main Internet node in Finland. Everything inside the Netgear is our own local network with local static addresses. We recommend, however, that every household has its own router for security reasons. We use mostly cheap but fast routers costing only around 50 euros. It is a very simple and cheap structure. In the nodes we have switches on level 2 (partly 3) which have direct fibre connections costing only about 50 euros for each connection.

    Since year 2000 I have been fighting with the Ministery of Communications over fibre networks – which they opposed until the government made the decision 4.12 2008 to provide (almost) the whole of Finland with Internet connections with 100 Mbit/s. So, at 2003 almost nobody even knew what a fibre net was about. In fact we got influenced very much by the Swedish building of fibre networks in Norrbotten.

    Only last year there was a law that every citizen has the right to get Internet connection with a REAL speed of at least 1 Mbit/s. This is not directly related to the 100 Mbit/s in year 2015 but an extension of the telephone law. Everyone has the right to get a telephone connection also – never mind where you live.

    In year 2000 when our small group (quite unofficial) started to work with data networks it was pretty soon clear that the only technology which was future safe was fibre technology. There was never a doubt that our village network would use fibre cable.

    Our village was the second one using fibre net – the first one was in the western part of Finland called Ostrobothnia (where there are quite a lot of fibre networks already). They did only beat us by five days. If our welding equipment hadn’t gone broke we would have been the first :-). Yes, we do all the welding of fibres ourselves. In fact everything from digging to installing and managing the electronics. It is not very difficult.

  18. Does anyone have short videos of your issues concerning BB investment and successful rollouts?

    Making the Digital Agenda a reality is a collaborative effort of citizens, companies, NGOs, and governments. So why not share with us what you are actually doing to make it happen, and what you think you need to achieve a greater impact?
    Get your efforts highlighted and win recognition here. Deadline for posting videos is midnight CET on 31st May – update extended to June 10th!!

    Upload your video and then post a link here too to alert us.

  19. I think one of the most important things to take into account is to make the deployments useful, most of public administrations are deploying tubes and fibre when they deploy civil works, but not all of them create a marketplace to offer these infrastructures to the market.
    Right now Public Administrations have no money to invest because of financial crisis and we (I’m part of Catalan Government) have to be creative and is a must (from my point of view) to re-define the role of the public administrations and collaborate with private sector to get the target: NGN Services.
    We should focus in the common target of public administrations and private sector: Provide the services to the Citizens and to the enterprises, and find the way to collaborate, find the “win-win”. In our case we walk the difficult and long way of the State aid notification with European Commission, but this long and difficult way also teaches us a lot regarding how to plan economic and technically to be sure the project will success.
    Another lesson learned was that we would not provide the network (sorry! THE ACCESS TO THE NGN SERVICES! The focus is the access, not the infrastructure or the technology) to the whole Catalan country, just where the market would not deploy it in the near future. AND that we should collaborate with local initiatives. That’s why our solution was just to provide Level 2 of connectivity (transport) to make it easy to interconnect with public or private networks.
    We have a mixed business plan, self provisioning for the Government (Catalan Government has responsibility in health, education, justice, police, etc) and wholesale. The project (called Xarxa Oberta) was the first project approved under new guidelines, but I’m sure it will evolve next years because from theory to practice… will change for sure. But we continue with our aim, to collaborate with local initiatives where they exist, to collaborate with bottom-up initiatives where they are (i.e. Guifi Net) or with the private sector.
    I think it is not a problem of technology and even in just one network, you have to be “open mind” and adapt to the reality of each local case when it appear, include that in your global planning if it can add value and be flexible, because each local initiative is singular.
    So, I don’t believe in “one model”, we are a region, and we are signing agreements (different ones) depending on the interests of each singular case to add value and promote NGN Services. To help where we can.
    Carles Flamerich
    General Director
    Directorate General for Telecommunications and the Information Society
    Ministry of Enterprise and Labour
    Catalan Government

  20. Mr. Nisse Husberg is right on his statement that deploying networks, including fiber, is much simpler than often people thought. Over the time the technology improves in terms of usability, performance and reliability. There are many videos on how to merge fiber but are a bit boring: A machine does it all. The fun experience is the deployment, also in rural areas, better if fiber goes underground, but can go also aerial reusing the existing poles. In a couple of Saturdays, including a social meal, the appropriate machinery and professional help to work safely and do the things in the right way, a neighborhood can extend kilometers of network infrastructure. About that we do not have any videos, but some sympathetic pictures.
    But going to the serious part of the issue, this is on the last mile, to complete it should reach the rest of the internet. Mr. Husberg explains on connecting to the FICIX, in our case was about reaching the CATNIX in Barcelona. This requires a clearance of barriers like useless bureaucracy and regulatory uncertainties, and a close partnership between public and private sectors including citizens. That is what creates the “win-win” scenario that rightly mentions Mr. Carles Flamerich.
    Certainly is not about a choice of a “magic” technology. Technologies are not magic and trend to get obsoletes after a while, neither is about who will pay, citizens will, is about how to invest and ensure the maximum efficiency of all assets and promote alternatives. It’s important to realize that we are in a context that the industry is looking for a short term ROI and minimize competition. A setup of the public assets in a was that facilitate access to NGN networks to all in the way that Mr. Flamerich is suggesting including Bottom-up would be a powerful tool to stimulate new investments, by that competition and therefore speed-up all the process, which is what the Digital Agenda do require.
    Fortunately we already have examples of BuB. Mr. Nisse Husberg do mention in Finland, we would also like to contribute with ours, let’s review all experiences to improve and refine them in order to replicate at larger scale and up to the infinite. Regardless of how many iterations we do, is clear that by enabling alternatives like BuBs as investors will stimulate competition en help in succeeding the Digital Agenda ambitious objectives.

  21. Nisse Husberg

    Bureaucrazy is killing the small initiatives. It is always working in favour of the big and the conservatives.
    The worst thing is that competition regulations are used in order to stop competition – in fact to stop any development at all. Since year 2000 I have been following the building of data networks in Sweden (best in Europe) and in Finland. The big companies have put it into their strategy to pull anything through all possible instances of law just in order to slow down any changes. Telia is the worst (it also owns the former state telecom Sonera in Finland).
    I suppose EU is trying to boost competition but all the regulations are working exactly in the wrong way when you look at the practical level – as I do. The small organisations do not even take part in any bids because they know they do not have the juridical resources to battle with the big ones.
    This is a really big problem. The competition would be much better if EU did not interfere at all. All the rules are just slowing everything down, making it much more expensive and killing competition. Making up more regulations to mend the problems just make them worse.
    I’m usually suggesting to everyone to avoid any involvement of the state or EU. Even if they get a little money they loose much more because of these problems.
    Several projects are ready to start – but the bureaucrazy is postponing everything to next year (at least).

    I suggest that all competition rules are scrapped and everybody can do exactly what they want to. It could not make the situation worse – possibly it would be better. If EU and the governments want to help people building their own networks they could just build a backbone which is close enough for the small networks to connect and cheap enough so they can afford to do it.

    • In reply to Nisse, I would like to let you know that the EU state aid rules on broadband are due for update. If you have evidence that these rules, or specific aspects, should be changed, you may want to take the opportunity to reply to the public consultation that will be running up to the end of August 2011. (see http://ec.europa.eu/competition/consultations/2011_broadband_guidelines/index_en.html ). In doing so, you may wish to point out the specific way that public or private entities “misuse” the application of these rules to undermine or ease the deployment of broaband in rural areas. Making conrete examples that you know of will definitly help the case.

      • State aid rules are under consideration, but also common sense has to be applied. It is a reality that Public Administrations (Local, Regional, States) are not always facilitating bottom up initiatives (right Guifi?). But Also Public Administrations has to change the role. We (I’m talking as Catalan Government) have to accept that common objectives are to have the service, local and regional authorities, I think, have to align in objectives and collaborate being more efficient and not stopping initiatives. In our case we are trying to have a common repository of infraestructures to inform who needs to know where it exists infraestructure and who is the contact point, in order to help. Also we are working together with local administrations to have a common link (in Catalonia we have 947 municipalities, but just a few are active in NGN).
        But the most important think is that administrations have to change their why to do the things and facilitate, not include more burocrazy or stop private or bottom-up projects. We will try, the colleagues of Guifi.net will explain next years if we get it or not.

  22. Our contributions:
    1.- The models outlined in the discussion document are enough to cover all posible realistic projects in Europe. The problem of the lack of deployment of new networks it is not linked to the absence of models for public financing
    2.- The real problemas are:
    for wireless networks :
    2.1The UE is painfully slow allocating new spectrum for new entrants; in some countries, the allocating results in the reinforcement of national champions which continue to hold real investment and only purchase spectrum to block new entrants
    2.2 Rules to force “national coverage” from the beginning for new entrants are only designed to prevent the existence of new entrants
    2.3 much more spectrum should be allocated, as in the US; spectrum should not be expensive for new entrants and there should be abundance of bands to promote much more wireless competition
    2.4 There are not real audits for unused spectrum. The 2,1 band is allocated since 10 years ago and is used at 30%. Even worst for 3,5GHz. Sub 800Mhz band should be annunced and put to use quickly. Much spectrum is today unused by big operators who are going to grab even more in the current refarming and 2,6 GHz process
    2.5 We have to reduce the amount of spectrum for FTA broadcasters as compression technology advances. FTA have to pay for spectrum the same amount as mobile operators do.
    2.6 There must exist regulated wholesale prices for renting spectrum to MVNOs and rules to foce the renting of spectrum for unused bands

    For fixed networks:
    3.1 Europe has to promote the creation of new public services that put to use speeds of 30Mbps
    - Personal Telepresence should be regulated and stardandized and a interconnection charge should be created. The Voice business would had never been developed without those tasks
    3.2 NGA fixed networks should have an interconnection charge that favours them. The interconnection charge that today favours mobile networks should be scrapped IMMEDIATLY all across Europe
    -3.3 Any new roadwork , trainwork or waterwork in europe has to carry tubes for fiber-telecommunication uses. This should be mandatory. A global wholesale (empty tube) price should be created for europe. Councils an local authorities reforming roads without installing new telco tubes should be fined.

    These measures would contribute more to the development of new networks that the current policy of subsidies. New entrants have to begin small and scale up if succesfull. Competition has to be promoted. Big operators should be fined swiftly when amassing spectrum. Telco-fiber tubes in rural areas must exist alongside every pathway. We have to finish with obsolete FTA broadcasters. DTT is nonsense in the internet era; it must disappear in 10 years.

    Best regards

    R

    • Just a comment regarding point 3.3. Including ducts in new public work. We should been working inside the Catalan Government during more than 4 years to convince our colleagues of public work to do it. We did it (see: http://www.gencat.cat/governacio-ap/stsi/meitel.htm/ sorry, just in catalan). We get the official agreement in 2008. Since then our colleagues of Public Work Ministry are the ones who tell people: “We are providing you NGN”. And that’s fine! It is not important who gets the honours, the important think is to do it! Public Work is the solution for long term infraestructures, I believe, right now in Catalonia, with Public Work we have planned more than 500 Km of new ducts. Problem is how we offer it to the market (I think it is necessary one single point of contact with complete public infraestructure offered to the market) and how we manage, in the short term, to do not wait all these years to get it (how to mobilize private investment in the meanwhile).

  23. There is no general solution since the domain is very much dependent on the country regulatory aspects, scope, target, operation business case.
    The natural way will be joint venture: theoretically it can overpass easily bureaucracy; however, on the other hand, each time public sector is involved bureaucracy is greater than when we speak of full private investments:).

  24. Most economic way for reaching the Agenda goals would be investment in existing Telekom networks where we could re-use already established infrastructure which is anyway already unbundled. It would take investments mostly in shortening the local loop and minor reconstructions of copper network, which is far more economical than building new parallel network. It doesn’t mater that existing network is based on copper pairs, because customers are technological agnostic and all they want are services.

    • @Rok I could not agree more …

      It is a problem in developing countries (read as East of Europe) and specially remote or rural areas where copper laid infrastructure is bad quality or just laid bare in the ground (!!”@??!) and DSL modulation can not be easily achieved …
      Other problem are Dinosaur like Telecom companies, they still want to work in the old fashioned way … Bright examples like some small operators and Deutche Telecom are exception not the rule …

      From our experience the best way is to gain POP access to the main transnational fiber network and expand it by fiber, cable (docsis), and wireless …. Speaking on behalf the situation in All Areas except the Urban areas :)
      This all can be financed and monitored by government or some sort of special EU fond , maintained by dedicated and passionate teams of operators , and leased to third parties cheaper than Big companies
      because it can not be done without the help:
      The European Commission has set highly ambitious objectives for broadband development, because “smart investments into high and very high speed broadband infrastructures are crucial to create jobs, increase economic performance and to unlock the competitive potential of the EU in the long term”.

  25. Demand aggregation seems to be a common approach used by regional governments in their search to improve the financial attractiveness of an NGN business case.
    I would argue that it is just ¨moving deckchairs around¨.
    Since NGNs address new markets by their very definition two issues need to be addressed in the business case i.e. grow demand and attract competition. There are of course secondary issues such as ubiquity, quality of service (particularly addressing the issue of latency), symetric services, ownership of infrastructure etc but these can all be addressed if the two main points are implemented effectively.
    Aggregation occurs where local authorities and regional governments have combined contracts for sectors such as health, libraries and police in a region or municipality rather than separating these and awarding national sectoral contracts. On the face of it, this should attract a supplier to bid and service a local market and invest in new infrastructure and services; this might be the case but does it meet the basic needs of a new market?
    Does it grow demand? I would argue that it it only reorganises public sector and the total pie gets no bigger.
    Does it attract more competition (thus reduce prices, improve quality of service, improve choice etc). I argue that it does the opposite i.e. a local monopoly is created
    So what are the arguments for and against aggregation and should this approach be considered in a local NGN business case?

    • Charles We would just indeed got more monopoly and expansion of bureaucracy and it would not grow the demand,
      nor make new markets or attracts the more competition nor makes any important impact on local economy …

    • Let me disagree with just real experiences. You can be right if the project is not properly planned and executed. But just an example, Nort-Yorkshire experience (NYnet). In that case they are aggregating demand (schools, hospitals) and they are pushing the market to develop new access network to that public buildings with long term contracts but under one condition: That new distribution/access networks has to be managed in an Open Network model! So, other operators can access to that new infraestructure on right conditions.
      I think we can imagine other models, perhaps better, perhaps worsts. This is a good example of what I think is a good practice. That’s the fascinating new reality, you can model what you do with the resources of an aggregation demand action and decide which is the model you want to use to stimulate the market and create competition with the new infrastructures you are creating! Look at it as a new opportunity, I think.

  26. I am very much in favor of the Bottom Up Model, remembering from 2007 (Broadband Conference) many opinions voicing that the competition model does not work for rural areas. But this model needs to be connected to a dynamic of interlocking visions of local actors of a cooperative regional economy.

  27. Simon Simonsen

    In Midtsoenderjylland which is a rural area in Denmark three municipalities made a vision at the beginning of 2003: “Fibre to the Home (FTTH) to everybody”. Fibre was considered to be the only solution for distribution of triple play services (internet, ip-telephony, ip-TV) to everybody in rural areas.
    Now eight years later the project has widened (1500 km2 and 34000 possible points of termination). Access to fibre (100 Mbit/s symmetric or more) is offered in most of the region, and the vision will be fulfilled within few years from now.
    The project was initiated by the municipalities which made the vision and the first investments. Then two cooperative electricity companies, Syd Energi and TRE-FOR, took over. They have decided to offer FTTH to all their customers (= owners) within a few years from now, and South Jutland is now the leading region in Denmark when it comes to access to fibre.

    In a few headlines my recommendations based on our experience would be:
    - Make a vision for the best you can get which is point to point FTTH
    - Ask for an open network with different service providers in competition
    - Make a masterplan for a FTTH network to everybody in the region
    - When you have the masterplan you can build the network step by step
    - Make a joint venture with investors who can accept a long term ROI
    - Use the masterplan and coordinate digging projects to reduce costs
    - Tell case stories as good examples and deliver new digital services

    If somebody want more detailed information about our project please respond in this blog. I will also be present at the Digital Agenda Assembly and the workshop “Financing and facilitating broadband projects” in Brussels at June 16-17th

  28. In our quest to find a financial model that will meet all needs there is, in my opinion, one that is worthy of closer scrutiny; the public sector outsourced model

    In this model a special purpose vehicle (SPV) company is formed by (local) government. Attention is paid of course to current and future ownership so that no private company or consortium can gain control; although companies that look for long term yet predictable returns such as pension funds can invest.

    Funding is channelled through the SPV from the private and public (if required) sectors. The SPV also issues a tender for civil works to dig and lay duct and dark fibre. Maintenance and selling of capacity to service providers who light the fibre and deliver services to the end consumer can also be incorporated in this contract. Ownership of the infrastructure remains with the SPV

    Multiple SPVs can be formed depending on the topology of communities with each SPV responsible for a geographic area. When bidding for each tender civil works companies can either be paid for their services directly, take a share in the SPV or a mix.

    The SPV`s are run in effect like a utility company which has both a social conscience and a need to generate a fair return on investment for its shareholders.

    Each SPV area needs to look at its funding requirements but in many cases if a phased approach is taken revenues can quickly be generated which in turn can fund green field areas. The best case scenario is therefore to identify government or private funding to provide a guarantee or some seed funding.

    So how does this model stack up against the critical criteria?
    • It is scalable from communities to sub national regions
    • The model can apply to business parks, municipalities, remote and rural areas
    • It is legally acceptable particularly from a State Aid perspective as it deals in only dark fibre. (In effect these are the Barnier Guidelines and Modalities issued in 2003)
    • It is financially flexible depending on the viability of demand during early project phases; so it can survive on very little start up funding.
    • The open access model is critical for encouraging competition and subsequently lower prices, choice of service and quality of service.
    • If the governance is defined at set up the SPV can be closed to potential future monopoly practices.
    • It is flexibile from a political perspective in that it can be used as a vehicle for government to donate total funds required, loan or simply guarantee.

    So what else is needed of an NGN model?

  29. only way to finance the project is to regulate as much as possible the topic.
    to force private companies to start investing in ‘poorer areas’ first.
    France started it and forces private companies to first invest in 4G connections in areas where XDSL in not or poorly available.

    The amount is not a problem as, based on the experience, private companies will argue they have underestimate the cost of the infrastructure and the COM as well as the MS will pay the remaining fees after having discussed for years (dixit galileo)

    I am optimist but as someone as said earlier, the goal seems hard to achieve. So, let’s start with areas that don’t have access to increase the awareness, then invest in new technologies in ‘big cities’ that will de facto be the target of the private companies

  30. @ Simon Simonsen can you please send us further details regarding your experience and masterplan,
    Our network deployment is on the way …

    • Simon Simonsen

      Our first masterplan was created by CNP, Center for Network Planning at Aalborg University, Denmark. They are educating network planning engineers, and they have developed tools for network planning. By using those tools they are able to make and to optimize a masterplan for a network to every household, enterprice and public institution in a certain area. That means that capacity e.g. the number of ducts or cables at a certain route is predicted. Then the network can be established step by step in combination with other digging projects and civil works. As a result a (FTTH) network to everybody can be realized in the most cost effective way. It can also be combined with other technologies such as Wimax. I certainly can recommend the methods and tools from Aalborg University which have been used by the cooperative electricity companies as well.

      • I have lost this conversation for some time, Simon Simonsen, can you provide a link to those tools that has been developed at Denmark university? Are they commercial or they can bee used free for researching?

  31. In Kent, our strategy has been to adopt a gap-funded model, offering grants to encourage providers to address the market. There is an element of the bottom-up approach in this, as communities are closely engaged in deciding the technology to be used and in determining ownership of the assets. In nearly every case, they have opted to leave ownership with the provider.

    There are pros and cons in our approach. Small, local, providers have won a majority of the business leading to profits being reinvested in the local economy. It removes the risk for providers involved in entering new areas. It has driven innovation and made the providers more responsive to its subscribers.

    However, in most cases we have had to forgo open access, though we have seen recently that more providers are willing to accommodate it. This is something that has to be addressed. We have concentrated our investment in those areas of clear market failure where we believe the big providers cannot make a business case in the short-term. Longer term, if a national network provider does expand into the area there has to be a possibility that the local provider’s business will suffer; time will tell.

    Overall, there is no single solution. With a limited amount of money, we believe that communities should drive these projects, using the most suitable technology and ownership model for their situation. Public funding should be used to support this with an additional role for the local authority in ensuring that individual projects are feasible and provide best value.

  32. My organisation the Independent Networks Co-operative Association (INCA) has initiated the ‘Big Society Broadband Project’ in the UK and we are looking at different financing/investment models as part the broader ‘Knowledge Base’ on next generation initiatives. http://www.bigsocietybroadband.coop/kb/investment-business

    There is currently no single model for investing in next generation infrastructure, particularly ftth. We are particularly interested in models that create partnerships between public, private and community investment. One of our partners in the project is the Plunkett Foundation which has a wealth of experience in supporting rural social and community enterprise in the UK. A number of INCA members are public sector organisations including the North Yorkshire Network, one of four British pilot projects funded by Broadband Delivery UK.

    To test the appetite of the local community to get involved in financing such initiatives in the UK, Alston Cybermoor, another INCA member, based in rural Cumbria is launching a community shares issue to help finance its fibre roll out.

    Through the Big Society Broadband project we have also provided some seed funding to a small project in West Oxfordshire to test out their community-driven approach.

    I’d be very happy to discuss this work if you find it useful. skype/twitter: malcolmcorbett, malcolm.corbett@inca.coop

  33. Tõnu Otsason

    The work in voluntary network of Rural Telecottages Estonia has given me conviction- to build high speed communication is a task which needs participation of end-users. Information speed and quolity are possible when the end-user is capable to use well all means of ICT.
    It is not only ROI of funds but all resources, including people and their time. Investmens and funds alone, will take only much money but not guarantee results.
    I think that economy is possible using much more cooperation
    with NGO-s . Until now public sector is using a lot of means but with small result from the perspective of end-users.
    We need deep social and economical changes to settle rational models of broadband access to rural communities, firstly real participation these communities in close partnerships with public sector units

    • I must share with you my recent experience – We were deploying a wireless broadband link to one mountainous God forsaken village in East Serbia,
      app. 250 households, They all gathered, in unified effort to bring broadband internet in their village, from transportation, organization to labor work, they were willing to do it all, without any compensation. The only compensation they would take is a new wide broadband connection to the world .
      I was delighted and driven to do more for them …

  34. David Ostroff

    The Public Outsourced model best protects the long-term interests of the public, but provides enough incentive for private industry to earn a good ROI if it manages its properties well. There do need to be some parameters as to what the private operators can, cannot, or must do.

  35. Francesco Giuliani

    I work in an Italian city that unfortunately has no broadband connection to date. Nevertheless a project, sponsored by the local Regional government, to extend broadband to main public services is underway. Although there is no definitive response to the question of which is the best model, to my experience the public outsourced model is the one that guarantees an equilibrium between the need to consider broadband access as an important public (universal) right for EU citizens and the need to stimulate operators to develop services that best fit citizens’ needs.

  36. 1. Reflecting on the UK experience, it is very important that public aid to the development of rural broadband access not be used simply as a covert channel for keeping the incumbent fixed telephone network operator from going insolvent.

    2. The goal of 30 MBps bandwidth for end users means that rural projects based on xDSL should not be funded.

    3. Another business model not identified in the diagram which started this discussion: digital TV broadcasters must either accept Internet access provision in UHF “white space” spectrum, or be allowed to offer such access themselves, as an ancillary activity. There is much talk now in the EBU of “hybrid broadband broadcast” technology (DTV being somewhat similar to LTE in signal structure and multiplexes being able to support nonbroadcast services). Very soon no one will think of television as something separate from broadband, as over-the-air audiences continue migrating to streaming video on demand and “smart TVs” gain Wi-Fi connectivity. UHF has special advantages for covering dispersed populations and broadcasters need a way to evolve toward a more diverse and flexible service model.

  37. Nisse Husberg

    Plans are plans and targets are targets – they do not give us one single fast connection as such. The report I read last week shows the complete failure of the fine targets which the Finnish government decided about 4 December 2008: 100 Mbit/s for nearly everyone in Finland by year 2015.

    In short: The small cooperatives build cheap optical fiber nets but the big operators do not build anything except for a few buildings in the cities. Unfortunately, the cooperatives build small networks and most of the population gets no high-speed connection at all.

    The reason is clear: The big operators (Elisa, Sonera, DNA) have decided to build radio based networks (“mobile broadband”) and see the fiber networks as a competition which should be minimized. They set the prices so high that nobody can afford a connection. Elisa is the worst with a price of 52644 euro for a 2km connection ! Yes, more than fiftytwo thousand euros ! The normal price for the cooperatives is around 2000 euro per connection.

    The government is paying partly for some backbone networks in sparsely populated areas but not closer than 2 km to the end customer. However, the bureaucrazy is so bad that few cooperatives have persons who can handle it.

    Here EU is one of the big obstacles – especially the competition rules. They are so dogmatic about these rules that they do not care if the rules are beating the objectives. It is a well established practice that the big operators use these rules to get rid of any competition ! They do not want to build fast networks themselves but use the rules to stop anybody else from building. Thus half of the projects for building in sparsely populated areas did not get one single application.

    I do not blame the operators who are trying to maximize profits but I do blame the politicians who dogmatically try to have the “market” (big operators) to build 95 % of the fast networks shutting their eyes and ears even though the operators themselves clearly state that they are NOT going to build anything near that.

    Financing high speed networks is simply impossible as long as EU tries to implement these stupid rules. EU has forbidden Finland to pay for building (even give loans) networks where there are “connection points”. Funny enough the whole country is now full of black holes where the operators have “connection points” (where nobody can get a connection) or PLANS to establish a connection point (sometimes in the future maybe – or maybe not).

    As it is we should get rid of the EU competition rules first. Then we should adopt the Australian system NBN (state owned company builds everything efficiently and then rents it to operators). If not, the only possibility is to build small cooperative networks and lag behind the development in other parts of the world in all fields of the economy.

    Please, read the study by the Worldbank on the impact of high-speed networks at

    http://siteresources.worldbank.org/EXTINFORMATIONA NDCOMMUNICATIONANDTECHNOLOGIES/Resources/282822-12 08273252769/Building_broadband.pdf

    and try to decide if it is worth throwing away a bright future just because of some competition dogmatics. Asia and Australia do not care about dogmas – they just build the important high speed network as efficiently as possible.

    Nisse Husberg, Dr.Techn.

  38. @Nisse Husberg
    why don`t you simply try using 5 ghz wireless for the last mile solutions, I have worked with it and seen it evolve from the slow start in 2005, Now it is a serious equipment with the possibility of building links over 50km without any loss

  39. Unfortunately we have bad experience with wireless in Finland. There are several installations with different technology and they all are unreliable and slow. I do not know if the operators are so lousy or the equipment worthless but it is more or less becoming a swearword. Even if there is good field the data does not move as it should. I am busy installing optofiber to people who have used wireless – in some cases they can see the antenna mast but it does not work. Of course it is working in some cases but I do not know what is the reason for the difference as it is impossible to obtain any technical explanations from the operators. Now we are talkning about speeds over 30 Mbit/s – the optofibernet has 100 Mbit/s and is extremely reliable. For eight years we have had but a few problems (except for lightning which can cause considerable damage but then all other electronics is dead too). In our region people are getting used to high speed networks and 10-20 Mbit/s is considered way too slow. In fact I was upgrading our backbone to Gigabit last week. The traffic is growing rapidly and soon we have to upgrade at least part of the connections to Gigabit. So I did not consider wireless a seroius option for the future.
    The situation in other parts of Finland is, however, not so good. They have tried wireless but as one cooperative put it: “We have satisfied customers (fiber) and then wireless customers (who are complaining all the time)”.

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