The goal of the Broadband investment guide, available in 22 languages, is to assist public authorities in formulating the important questions and to provide the conceptual framework and the information needed to make the right decisions meeting their needs. The idea is not to provide ready-to-apply recipes but to present a tool box in all thematic fields to be considered when investing in broadband.
A sound broadband plan is a politically supported document containing an analysis of the current situation, the goals to be achieved, the financial support to be gained and a mechanism on how to implement it.
Four key strategic choices
The guide presents four key strategy choices that need to be made in order to achieve the goals defined in the broadband plan:
Choosing the right infrastructure type
Is it necessary to deploy a new future-proof broadband infrastructure or would it be sufficient to upgrade the existing infrastructure?
When planning a broadband project it is important to understand the different technical levels of infrastructure, technologies and network designs in order to make a choice over the right infrastructure type for your regional broadband network. The decision over infrastructure depends on a number of factors including:
- the implications concerning the physical fundamental properties of the infrastructure (i.e. the medium);
- the level of ambition in the region considering the types and number of services planned;
- considerations about effects on the attractiveness and competitiveness of the area;
- the topography, population density and future development plans.
Choosing the right investment model
What is the role of the public authority with respect to the implementation, operation, ownership and management of the infrastructure in order to choose the right investment model?
The choice made here will greatly affect the role of a municipality or a region and thus define the influence of the public authority on the broadband infrastructure project. Four major investment models are suitable for broadband investment:
- direct investment through a publicly-run municipal network model
- indirect investment through a privately-run municipal network model
- the community broadband model
- operator subsidy model (gap-funding)
Choosing the right business model
Should the public authority opt for a vertically integrated or an open-access network model? Which business model is most likely to maximise broadband coverage and penetration, the financial sustainability of the project, competition and the socio-economic development of the community?
The business model describes the roles of the different actors in a broadband infrastructure project that are active on different network layers: passive infrastructure, active infrastructure and services. Respective actors or carriers will be matched according to the needs of the municipality or region. This can result in different business models: open networks with public and private actors in different roles or in vertically integrated models with only one (mostly incumbent) actor for all three network layers. Sometimes the choice of the model is limited due to regulations.
Choosing the right financing tools
How can the public authority ensure an adequate financial coverage for building and operating the infrastructure with the right financial tools? What can it contribute in terms of capital, expenditure and assets?
The different financing tools and models available for public and private investment in a broadband project need to be considered for the fourth key strategic choice. A sustainable financing concept should ensure an adequate financial coverage for building and operating the infrastructure.
Revenue based financing for running projects, private capital, bank loans and bonds, public funds and community financing are amongst the main financing tools. Moreover, private investments can lead to financial stability and an improvement of credit rating of the project. In areas where the market fails to invest due to unprofitability, state aid can be used following the specific conditions set within the EU State Aid Guidelines.
Once these choices are made, an action plan needs to be defined and executed that specifies and checks on all the different activities. The process must be closely monitored to ensure the achievement of the previously defined goals.