Broadband Access in Rural Areas (cont.)

Business models and deployment strategies

Municipalities must also determine a business model and a deployment strategy based on local dynamics. Three main business model criteria should be considered:

Sales strategy: Municipal entities must decide whether they intend to act as a retail service provider or a wholesale network provider. Both models, and combinations of the two models, have been implemented.Municipalities will find it easier to generate return on investment if networks are open to ISPs, cable companies and others interested in providing broadband. This model promotes competitive services and prices, and makes it more difficult for the private sector to debate the public involvement in telecommunications network buildouts.

Target end users: Prior to network buildout, municipal entities must determine which users they will serve. This is crucial for technology selection, and heavily influences the potential payback period.Municipalities often use a phased approach to service provision, bringing services first to public entities such as schools, hospitals, and public safety organizations, and then to homes and businesses.

Service selection: Once a municipality establishes which users it will serve for the initial rollout and for the long-term, it must select which services to provide. Although data services are often core to an offering, certain areas also need alternative voice and video services.Municipalities must also decide how many levels of bandwidth tiers to offer.

Case study: Allegany County, Maryland

ALLCONET coverage area. Click for larger image.

Although most municipal-driven networks remain small, a project such as the Allegany County ALLCONET initiative in western Maryland presents certain lessons about public-driven broadband network buildouts.

In 1994, the Allegany County Government, Board of Education, Public Library System and City of Cumberland searched for funding to build a broadband network because of a lack of other options.With its proximity to Washington, D.C., the county thought that a high-speed infrastructure could help spur back-office federal government operations to build facilities in the area.

ALLCONET 1, the first phase of the project, created a high-capacity wireless ring using microwave technology to connect large public facilities. The network used unlicensed multipoint technology for last-mile connectivity, eventually connecting 85 buildings, 4,000 workstations and 10,000 users (government, law enforcement, education and nonprofits). To avoid great capital investment, the network also leveraged two water towers, the roof of a high school, a local bell tower and three freestanding airport towers for transmitters.

Recognizing that the high-capacity backbone could be enhanced for higher bandwidth applications – while also expanding it to reach the private sector or underserved businesses and consumers – the entity launched ALLCONET 2. The ring now supports over 400 T1 lines and more unlicensed multipoint networks. To minimize regulatory battles with the incumbents, the municipal network is run by the government but is open to ISPs at a low fee to facilitate affordable commercial and residential broadband services.

The ALLCONET project, as well as other recent municipal- driven initiatives, presents a broad set of crucial lessons for future services:

• The easiest initial business case for municipal broadband network development is to fulfill the need for connectivity between government institutions, educational facilities, libraries and other public sector organizations.

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