Public authorities or utilities owned by the local, regional or national government may already own key infrastructure assets, like ducts, fibre cables, poles, premises to be used for equipment location and data centres, and sites to be used for radio base stations.
Moreover, internal funds for infrastructure development may be available, as well as financial resources previously earmarked for large IT or other costs (like elderly care or administrative services) that are expected to be significantly reduced once a local/regional broadband network becomes available. These physical and financial assets can be invested in the project or the company created to run the project and can represent a significant part of the equity needed to get the project started and to leverage other types of financing.
Communities can raise own financial resources to support the deployment of high-capacity broadband infrastructure in their region. Typically, this takes place in community support model, particularly in rural communities or clusters of such communities and smaller urban communities, usually with a strong urge for high-speed connectivity.
If the public authority chooses a direct investment model, it generally receives revenue from wholesale dark fibre lease and/or transmission services. It may also receive revenue from retail infrastructure leases or connectivity (or network) fees depending on the business model in place. This can become a major financing source once the network is complete and companies, public bodies and end users start using it.
This source of financing only materialises once the core of the infrastructure is in place and services are offered over the network. It is therefore suitable to recover public sector funds, to accelerate infrastructure deployment or lower costs. To start a project, other financial sources are needed.
Many projects have secured a large portion of their initial financing through loans with soft or commercial terms. Loans can be provided by EU or national government funds, a bank or other investors, for-profit or non-profit institutions, and private citizens. For this to be sustainable, a valid business plan must be presented in which medium- and long-term revenue exceeds the negotiated loans (principal + interest). Because a loan represents a debt, loans are often referred to as debt financing.
Equity financing means that a company gets investment without obligation to pay interest charges. However, the investor (private or public) gets a share of the company and takes part in the decision-making process. This is opposed to debt financing, which implies interest payment, but the investor has no control over the business, and when the debt is paid, the relationship with the investor is over.
European, national and regional public funds can generally be used to finance the project, subject to any specific conditions that may be attached to their use. Grants are focused on enabling economic and social improvement. The availability of public funds to finance broadband deployments may vary from Member State to Member State and from region to region. However, a number of European schemes exist which are available across the EU, even if in most cases the funds are administered by national or regional managing authorities.
For further details and examples please refer to the Broadband Investment Guide.
The Broadband planning section helps municipalities and other entities in their planning of successful broadband development projects.
Investment efforts to finance public-private and private-run networks are made in cooperation between private actors who own existing infrastructure, and public authorities.
The basic roles of Physical Infrastructure Provider (PIP), Network Provider (NP) and Service Provider (SP) can be taken by different actors.
Access to the broadband infrastructure is possible via different network nodes on the infrastructure and application level.
Key to successful regional broadband development is a politically-supported plan at local, regional or national level, that combines goals with specific needs and stakeholders.
The action plan details the costs, stakeholders, activities, coordination and monitoring involved in implementing the broadband strategy.
An overview of different wired, wireless and upcoming broadband technologies and a description of their advantages, disadvantages and sustainability.
Choosing the right business model depends on the roles of the market actors in the broadband value chain.
Investment models present interesting involvement opportunities for a public authority that engages in regional broadband development.
State aid for broadband may be necessary in some places where the market does not provide the necessary infrastructure investment.
A broadband network consists of geographical parts. The topology of a network describes how the different parts of a network are connected. The most relevant topologies for the backbone and area networks are tree topologies, ring topologies and meshed topologies. For the first...
In order to understand the roles that public administrations can take, it is useful to view the different layers that make up a broadband network as well as main business roles.
Broadband networks require different infrastructure types based on different logistic, economic or demographic conditions. Use the questions to help choose.
A comparison of broadband technologies presents features of each solution and helps decisions on the best solution for different regions.