0
Business Models for Wireless City Networks in the EU and the US   Leo Van Audenhove  IBBT-SMIT Pieter Ballon  IBBT-SMIT Ma...
Structure of the presentation <ul><li>Introduction </li></ul><ul><li>Selection and introduction of 15 cases </li></ul><ul>...
Introduction: about the project <ul><li>Assignor is the Brussels region </li></ul><ul><li>Wireless city networks in the EU...
Introduction: comparative case study analysis <ul><ul><li>Basic data, e.g. coverage, technological set up </li></ul></ul><...
Selection of 15 cases <ul><li>Initiatives in urban areas with government participation </li></ul><ul><li>Pragmatic: availa...
Introduction to the 15 cases City Short description Phase  Key driver Bologna (IT) Iperbole Wireless Network: Experimental...
Introduction to the 15 cases Portland (US) WiFi/WiMAX network providing wireless internet access to citizens, companies an...
State aid considerations:  wireless is ‘fibre revisited’ <ul><li>Criteria used by the European Commission </li></ul><ul><u...
Discourse on goals
Multiple goals <ul><li>Most cities pursue multiple goals </li></ul><ul><ul><li>Digital divide prominent (e.g. Philadelphia...
Goals Integration in broader policy <ul><li>Integration in broader policy </li></ul><ul><ul><li>Supporting attractiveness ...
Technology, topology and coverage
Technology, topology and coverage <ul><li>Technology </li></ul><ul><ul><li>Mostly based on WiFi </li></ul></ul><ul><ul><li...
Technology, topology and coverage <ul><li>Coverage </li></ul><ul><ul><li>Difficult to cover whole area </li></ul></ul><ul>...
Business models  <ul><li>The business model and “the deal” between public and private players are influenced by several fa...
Business model: roles / activities
Main factors to differentiate between business models Network ownership / operation Private concession:  one private playe...
Six business model configurations <ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Open ...
Six business model configurations <ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Open ...
Six business model configurations <ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Open ...
Six business model configurations <ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Open ...
P ublic inputs and returns   Public inputs Public returns Site provisioning / rental Influence on prices Number of ISPs Su...
Public inputs and returns City Input Description Influence  Description 1. Private-Private Model Bristol Low - Site provis...
Public inputs and returns City Input Description Influence  Description 2. Private-Wholesale Model  (two examples) Philade...
Public inputs and returns City Input Description Influence  Description 3. Public-Public model St Cloud Full - Fully publi...
Public inputs and returns City Input Description Influence  Description 5. Open site model Bologna Low - Site provision to...
Business Model Problems <ul><li>Recent evolutions </li></ul><ul><ul><li>San Francisco, Milwaukee: halting or delaying plan...
Conclusion <ul><li>Roll-out in large areas: private-private and public-public models may be effective, with public-wholesa...
Conclusions Importance of contextual factors <ul><li>US market fundamentally different </li></ul><ul><ul><li>Government mo...
Contact <ul><li>Leo Van Audenhove  IBBT-SMIT </li></ul><ul><ul><li>[email_address] be </li></ul></ul>
Upcoming SlideShare
Loading in...5
×

Leo Van Audenhove: Wireless city networks. Policy initiatives in Europe and the United States.

983

Published on

Published in: Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
983
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
16
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Leo Van Audenhove: Wireless city networks. Policy initiatives in Europe and the United States."

  1. 1. Business Models for Wireless City Networks in the EU and the US Leo Van Audenhove IBBT-SMIT Pieter Ballon IBBT-SMIT Martijn Poel TNO The Centre for Studies on Media, Information and Telecommunications (SMIT) is part of the Free University of Brussels (VUB) and the Interdisciplinary Institute for BroadBand Technology (IBBT)
  2. 2. Structure of the presentation <ul><li>Introduction </li></ul><ul><li>Selection and introduction of 15 cases </li></ul><ul><li>Goals </li></ul><ul><li>Technology, topology and coverage </li></ul><ul><li>Six business model configurations </li></ul><ul><li>Public inputs and returns </li></ul><ul><li>Conclusion </li></ul>
  3. 3. Introduction: about the project <ul><li>Assignor is the Brussels region </li></ul><ul><li>Wireless city networks in the EU and the US, in urban areas </li></ul><ul><li>Explorative study: </li></ul><ul><ul><li>What are the goals (objectives) of cities? </li></ul></ul><ul><ul><li>What business models (PPPs) are possible? </li></ul></ul><ul><ul><li>What is (can be) the role of government, with a focus on the public inputs and returns (“the deal”) </li></ul></ul><ul><ul><li>First indications of results and problems </li></ul></ul>
  4. 4. Introduction: comparative case study analysis <ul><ul><li>Basic data, e.g. coverage, technological set up </li></ul></ul><ul><ul><li>Goals / policy objectives </li></ul></ul><ul><ul><li>Relation to broader policy objectives </li></ul></ul><ul><ul><li>Target groups, prices, access services offered </li></ul></ul><ul><ul><li>Applications, for public and private use </li></ul></ul><ul><ul><li>Business model: public inputs and returns </li></ul></ul><ul><ul><li>Results and problems </li></ul></ul>
  5. 5. Selection of 15 cases <ul><li>Initiatives in urban areas with government participation </li></ul><ul><li>Pragmatic: availability of information (US cases were/are further in their development, with more information available) </li></ul><ul><li>Initiative must be in operation (7 cases) or in preparatory phase, with business models being announced (8 cases) </li></ul><ul><li>Nearly all initiatives were driven by the city (“public driven”) with the exception of Leiden, NL (community driven), Turku, FI (private / community driven) and Cardiff, UK (private) </li></ul>
  6. 6. Introduction to the 15 cases City Short description Phase Key driver Bologna (IT) Iperbole Wireless Network: Experimental WiFi network providing wireless internet access to selected groups Pilot Public: City of Bologna Boston (US) Gradual expansion of Boston Main Streets WiFi project providing wireless internet access to entire city Request for proposal Public: Boston Main Street Bristol (UK) Bristol Hot Zone: WiFi hotspot zone providing wireless internet access and walled garden services Operational Public: City of Bristol Cardiff (UK) BT Openzone: WiFi hotspots and zones providing wireless internet access Operational Private: British Telecom Leiden (NL) Wireless Leiden: community network of wireless nodes sharing internet connections Operational Local Community Paris a (FR) Establishment of 400 WiFi access points Information phase Public: City of Paris Paris b (FR) Site provisioning to private operators with the objective of full WiFi coverage of Paris Information phase Public: City of Paris Philadelphia (US) Wireless Philadelphia: large-scale WiFi network providing wireless internet access Roll-out Public: City of Philadelphia
  7. 7. Introduction to the 15 cases Portland (US) WiFi/WiMAX network providing wireless internet access to citizens, companies and city workers Tendering phase Public: City of Portland Sacramento (US) Large-scale WiFi network for wireless internet access and additional services Tendering phase Public: City of Sacramento San Francisco (US) WiFi network covering the entire city for wireless internet access Request for proposal Public: City of San Francisco Saint Cloud (US) Cyber Spot: Full coverage of city with WiFi/WiMAX network providing wireless internet access Operational Public: City of Saint Cloud Stockholm (SW) Stockholm Mobile Connect: WiMAX network providing wireless internet access Roll-out Public: City of Stockholm Turku (FI) OpenSpark: WiFi community network providing wireless internet access Operational Private / Local Community: Sparknet Westminster (UK) WiFi network for closed circuit television and other services Operational Public: City of Westminster City Short description Phase Key driver
  8. 8. State aid considerations: wireless is ‘fibre revisited’ <ul><li>Criteria used by the European Commission </li></ul><ul><ul><li>White or grey areas (rather than areas with no clear market failure) </li></ul></ul><ul><ul><li>Basic facilities and open infrastructures (rather than retail services) </li></ul></ul><ul><ul><li>Open tender </li></ul></ul><ul><ul><li>Technology neutrality </li></ul></ul><ul><ul><li>Open access </li></ul></ul><ul><ul><li>Use of existing infrastructure </li></ul></ul><ul><ul><li>Short duration, small aid amount and intensity </li></ul></ul><ul><ul><li>Reverse payment mechanism </li></ul></ul><ul><ul><li>Cost allocation transparency and monitoring </li></ul></ul><ul><ul><li>Minimization of price distortion </li></ul></ul><ul><li>Ook criteria voor alternatieven zoals “ invest on market terms” </li></ul>
  9. 9. Discourse on goals
  10. 10. Multiple goals <ul><li>Most cities pursue multiple goals </li></ul><ul><ul><li>Digital divide prominent (e.g. Philadelphia) </li></ul></ul><ul><ul><li>BUT other goals often underlying driver </li></ul></ul><ul><ul><ul><li>E-gov applications (security, metering, etc.) </li></ul></ul></ul><ul><ul><ul><li>Saving on government communication costs </li></ul></ul></ul><ul><ul><ul><li>Innovation and economic city development </li></ul></ul></ul>
  11. 11. Goals Integration in broader policy <ul><li>Integration in broader policy </li></ul><ul><ul><li>Supporting attractiveness of specific zones or whole city </li></ul></ul><ul><ul><li>Platform for developing new services/applications </li></ul></ul><ul><ul><li>Security policy </li></ul></ul><ul><ul><li>Modernisation of government service delivery </li></ul></ul><ul><ul><li>No specific connection to poverty reduction policies </li></ul></ul><ul><ul><ul><li>Bridging digital divide by giving people free access </li></ul></ul></ul><ul><ul><ul><li>NOT by specifically focusing on disadvantaged groups </li></ul></ul></ul><ul><ul><ul><li>Some cities introduced additional measures or programs </li></ul></ul></ul>
  12. 12. Technology, topology and coverage
  13. 13. Technology, topology and coverage <ul><li>Technology </li></ul><ul><ul><li>Mostly based on WiFi </li></ul></ul><ul><ul><li>Often in combination with WiMAX </li></ul></ul><ul><ul><ul><li>Backhaul and backbone, only seldom access </li></ul></ul></ul><ul><ul><ul><li>In certain cases upgrade to WiMAX access network foreseen </li></ul></ul></ul><ul><ul><ul><li>D üsseldorf case with WiMAX stopped </li></ul></ul></ul><ul><ul><ul><ul><li>Uncertainty about frequencies </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Other communication infrastructures available </li></ul></ul></ul></ul><ul><ul><ul><li>Most cases (especially those in early phases) use mesh </li></ul></ul></ul><ul><li>Coverage </li></ul><ul><ul><li>3 main types: Hotspots, Hotzones and Clouds </li></ul></ul><ul><ul><li>Often ambition to arrive at Wireless Clouds </li></ul></ul><ul><ul><li>In half of cases, indoor connectivity is one of the objectives </li></ul></ul>
  14. 14. Technology, topology and coverage <ul><li>Coverage </li></ul><ul><ul><li>Difficult to cover whole area </li></ul></ul><ul><ul><li>Difficulty with quality of service </li></ul></ul><ul><ul><ul><li>City centres with tall buildings and bad coverage </li></ul></ul></ul><ul><ul><ul><li>Remote areas bad coverage </li></ul></ul></ul><ul><ul><li>This questions Digital Divide goals </li></ul></ul><ul><li>Indoor coverage </li></ul><ul><ul><li>Indoor coverage not optimal (lowers speed considerably) </li></ul></ul><ul><ul><li>Individual investment in repeaters/antennas </li></ul></ul><ul><li>Roaming and VoIP </li></ul><ul><ul><li>Possible but not optimal </li></ul></ul>
  15. 15. Business models <ul><li>The business model and “the deal” between public and private players are influenced by several factors </li></ul><ul><ul><li>How the wireless city network fits the overall policy objectives of a city (e.g. business climate, social, eGov) </li></ul></ul><ul><ul><li>Fit with strategy of the firms and (research) organisations involved (e.g. type of sectors, location of R&D) </li></ul></ul><ul><ul><li>Coverage and quality of existing broadband infrastructures (fixed, mobile, wireless) </li></ul></ul><ul><ul><li>Tariffs of existing access services and applications </li></ul></ul><ul><ul><li>State aid considerations and case law </li></ul></ul>
  16. 16. Business model: roles / activities
  17. 17. Main factors to differentiate between business models Network ownership / operation Private concession: one private player Private concession: one private player Public / Non-profit: one or several public players Public / Non-profit: one public player, e.g. the city itself Wholesale: several private players build on a wholesale access offer Open site model: several players No specific ISP, e.g. “using” existing ISPs Community model: communities of individuals or organisations Service provisioning
  18. 18. Six business model configurations <ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Open site model </li></ul><ul><li>Community model </li></ul><ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Wholesale </li></ul><ul><li>No specific ISP </li></ul>Network ownership / operation Service provisioning 1: Private-Private model: Bristol, Cardiff, Paris (a) and Westminster: either small area or municipal employees, due to state-aid considerations 2: Private-Wholesale model: Philadelphia, Portland, Sacramento, SF: large areas 1 2
  19. 19. Six business model configurations <ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Open site model </li></ul><ul><li>Community model </li></ul><ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Wholesale </li></ul><ul><li>No specific ISP </li></ul>3: Public-Public model: St. Cloud: small city, full coverage, outdoors and indoors 4: Public-Wholesale model: Stockholm and Boston: large areas Network ownership / operation Service provisioning 3 4
  20. 20. Six business model configurations <ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Open site model </li></ul><ul><li>Community model </li></ul><ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Wholesale </li></ul><ul><li>No specific ISP </li></ul>5: Open site model: Paris (b) and Bologna, with one private service provider (possibly more) with a concession (e.g. with restrictions on tariffs). The service provider may decide to provide wholesale access services to resellers Network ownership / operation Service provisioning 5
  21. 21. Six business model configurations <ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Open site model </li></ul><ul><li>Community model </li></ul><ul><li>Private concession </li></ul><ul><li>Public / Non-profit </li></ul><ul><li>Wholesale </li></ul><ul><li>No specific ISP </li></ul>6: Community model: Leiden and Turku: often facilitated by cities, the model is possible with no specific ISP or with a community driven ISP (OpenSpark in Turku) Network ownership / operation Service provisioning 6
  22. 22. P ublic inputs and returns Public inputs Public returns Site provisioning / rental Influence on prices Number of ISPs Subsidies Coverage, e.g. specific areas Licenses, e.g. exclusive, special Financial return Public backbone (backhaul) Type of applications Procurement, city as anchor tenant Other Other
  23. 23. Public inputs and returns City Input Description Influence Description 1. Private-Private Model Bristol Low - Site provision - Co-financing of pilot Low / Medium - City has the right to offer municipal services within walled garden environment - Limited period of free Internet, financed by advert. Cardiff Low - Site rental Low / Medium - Limited number of free accounts for city employees - City collects rental fee Paris (a) Very High - Full network financing - Site provision - Outsourcing of network operation and service prov. Very high - Outsourcing contract - Free access to hotspots for all citizens Westminster Very High - Full network financing - Site provision - Outsourcing of network operation and site provision Very high - Outsourcing contract - Only dedicated services for municipality are offered
  24. 24. Public inputs and returns City Input Description Influence Description 2. Private-Wholesale Model (two examples) Philadelphia Low - Site rental - Exclusive license for 10 years - City as ‘anchor tenant’ Medium / High - Wholesale offering - License and rental fees - Limited coverage requirements - Price cap on wholesale tariff - Low subscription rate for socially disadvantaged - “Free hotspots” at limited number of strategic locations - Free accounts for city empl. Sacramento Low / Medium - Site provision - Access to City backbone network for backhaul - License for 5 years - City as ‘anchor tenant’ Medium / High - Initially, free subscriptions for all were demanded by city; this is being re-examined - Plans involve limited basic free service and subsidies for socially disadvantaged - Free access for schools - Preferential service for municipal services
  25. 25. Public inputs and returns City Input Description Influence Description 3. Public-Public model St Cloud Full - Fully public financing , ownership and operation of the network Full - Full control over coverage, services - Completely free access 4. Public-Wholesale model Boston Medium - Site provision - Set-up of Non-profit organization for building network and making wholesale offering to service providers - Limited co-financing by city Medium? - Not known as project is still in information phase Stockholm High - Site provision - Building network and making wholesale offering to service providers through non-profit organization Medium? - Not known as project is still in information phase
  26. 26. Public inputs and returns City Input Description Influence Description 5. Open site model Bologna Low - Site provision to multiple actors Low? - In the pilot phase, a limited free access service was demanded by the city. It is recognized that this requirement is probably ‘untenable’ after the pilot, within the open site model Paris (b) Low - Site provision to multiple actors Low - Stimulus for competition 6. Community model Leiden Low - Site provision - Subsidy of one specific application Low - Some influence on topology by integration of city’s own nodes Turku Low - Site provision - Provision of additional access points Low - Some influence on topology by integration of city’s own nodes and additional access points
  27. 27. Business Model Problems <ul><li>Recent evolutions </li></ul><ul><ul><li>San Francisco, Milwaukee: halting or delaying plans </li></ul></ul><ul><ul><li>Philadelphia: slower implementation </li></ul></ul><ul><ul><li>New initiatives cities: difficult to attract interest </li></ul></ul><ul><ul><li>Operators: MetroFi, Earthlink (withdrawel), AT&T stop bidding </li></ul></ul><ul><li>Reasons: flawed forecast </li></ul><ul><ul><li>Expected market penetration of 15-30% </li></ul></ul><ul><ul><li>Actual market penetration of 1-2% </li></ul></ul><ul><li>Reasons: </li></ul><ul><ul><li>Incumbents drop prices for fixed broadband </li></ul></ul><ul><ul><li>Fixed broadband often higher bandwidth </li></ul></ul><ul><ul><li>So Wifi often not a substitution for fixed </li></ul></ul><ul><li>Result: Cities become important as anchor tenant </li></ul>
  28. 28. Conclusion <ul><li>Roll-out in large areas: private-private and public-public models may be effective, with public-wholesale creating less state aid concerns </li></ul><ul><li>If other goals are leading (e.g. eGov, competition), and if financial resources are limited: open site or community model </li></ul><ul><li>Need to disentangle and prioritise the policy goals </li></ul><ul><li>One of the main inputs: city as anchor tenant </li></ul><ul><li>The assumptions and calculations had to be updated, e.g. take-up by users (access and services), interest by operators, commercial tariffs </li></ul><ul><li>State aid cases will influence the choice between support for roll-out and/or alternatives with a focus on innovation and services </li></ul>
  29. 29. Conclusions Importance of contextual factors <ul><li>US market fundamentally different </li></ul><ul><ul><li>Government mobile networks older </li></ul></ul><ul><ul><ul><li>After 9/11 drive to invest in networks for security </li></ul></ul></ul><ul><ul><li>Mobile networks in general weaker </li></ul></ul><ul><ul><ul><li>Limited coverage and problems of interoperability </li></ul></ul></ul><ul><ul><li>Broadband penetration relatively low </li></ul></ul><ul><ul><ul><li>Operators do not have full coverage </li></ul></ul></ul><ul><ul><ul><li>Do not provide BB in certain city areas </li></ul></ul></ul><ul><ul><li>Factors might explain why so many initiatives in US </li></ul></ul><ul><ul><ul><li>Focus on BOTH e-government, e-securty </li></ul></ul></ul><ul><ul><ul><li>AND bridging digital divide </li></ul></ul></ul>
  30. 30. Contact <ul><li>Leo Van Audenhove IBBT-SMIT </li></ul><ul><ul><li>[email_address] be </li></ul></ul>
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×