Problems and challenges

In the Kortrijk region the broadband connections are privately owned. The lack of a (public) open network is one of the current bottlenecks in the further co-operation between public and semi-public organisations in Kortrijk and offering the next generation of services. Although this need is widely acknowledged, the cost/benefit of a possible regional open network is unknown, nor is there a valid business model.

In Kortrijk's major city-centres in recent years, initiatives were taken that led to partial open networks, using a combination of technologies. No similar initiatives were or could be taken in the rural areas. Extending this approach to the rural areas was not an option because of a lack of understanding of cost and benefits. However, the challenge is that there are many uncertainties about scope, model, finance, sustainability, risk aversion, consortium building and consolidation and even assessment of demand.

In order to make progress, the public debate needs to be brought to a higher level. This will allow the region to assess the scope for future investment: limited to connecting public and semi-public buildings or extending the reach to business terrains, public spaces and households.

The current model applied in the region is the so-called bottom-up, or local community model, which involves a group of end users organising themselves into a jointly owned and democratically controlled group (frequently a co-operative) capable of overseeing the contract to build and operate their own local network.

The de facto bottom-up approach has in the past led to the establishment of several small public-owned or private-leased broadband connections. Experience shows that these connections immediately trigger additional demand for services and the creation of new shared services. However, the disadvantages of this bottom-up model are that development is going slowly; that this approach appears not to be suited to providing widespread coverage; and that participating organisations have no specific telecoms network expertise, making them vulnerable to high-cost ‘turnkey’ solutions.

In Kortrijk however, there is the need to a) link these networks; b) extend them to more rural areas where no such initiatives exist; c) connect all public and semi-public locations and d) understand on a financial, technical, project managerial and policy level what is the best approach to create a region-wide network that is open, that does not generate cost when partners send data to each other, that is future-proof and that offers high bandwidth (both downloading and uploading).

Solutions

The first goal of the project is to create a shared ambition at the political and regional level to move forward. This must result in a regional business case and regional decision making. The focus of this project is less on technology but on business models, building support and partnerships and study visits. Sub goals are:

• Inventory of public services aimed at citizens and location-based services
• Shared vision on service-delivery
• Inventory of and understanding existing fibre optic network models and best practice in the Vital partnership and beyond
• Review business-cases for existing open networks
• Mind-set and triggering a public debate
• Political agreement
• Building a long-lasting consortium based on an economically viable model

The region's ambition is to get a Paradigm shift among public and semi-public organisations in dealing with broadband, a major re-thinking of the cost of service-delivery, new partnerships (public and semi-public) and the triggering of a debate.

The pilot demonstrated that a Regional Open Network would be used between the participating organisations for data-services, financial services, sharing databases and additional services. The end-user public applications are in the field of welfare, control, community services, social and welfare services, transport services and research facilities.

To that end, five different models were assessed. The models represent a range of options for combining public and private investment.

1.    The current model applied in the region is the so-called bottom-up, or local community, model which involves a group of end users organising themselves into a jointly owned and democratically controlled group (frequently a co-operative) capable of overseeing the contract to build and operate their own local network.

2.    Private design, build and operate (DBO) model.The private design, build and operate (DBO) model involves the so-called Managing Authority issuing funding (often in the form of a grant) to a private sector organisation to assist in its deployment of a new network. The public sector has no specific role in the ownership or running of the network, but may impose obligations in return for the funding.

3.    Public outsourcing model.Under a public outsourcing model a single contract is awarded for all aspects of the construction and operation of the network. The major characteristic of this model is that the network is run by the private sector, but the public sector retains ownership and some control of the network.

4.    Joint venture model.  A joint venture is an agreement under which ownership of the network is split between the public and private sector. Construction and operational functions are likely to be undertaken by the private sector.

5.    Public design, build and operate model. A public DBO model involves the public sector owning and operating a network without any private sector assistance. All aspects of network deployment are managed by the public sector. A public sector operating company may operate the entire network, or may operate the wholesale layer only (with private operators offering retail services).

The project is innovative as it combines three dimensions

1.    Specific expertise to assess the local situation on technical, financial and legal issues, including which is the most suitable and technically/financially/legally most sustainable scenario.

2.    Participation and engagement of local and regional stakeholders, as it will imply investment, change of working, new contracts, sufficient knowledge to make proper assessment etc. Before the individual go/no go decision is taken, these partners need to provide and share the specific terrain knowledge (opportunities, technical challenges) and a smart understanding of their needs. Both aspects require several skill sets.

3.    A shared vision and ambition where the region wants to stand in terms of high-broadband, and why a regional approach is preferable over a local and ad hoc approach, and why an open network is preferable compared with private and telcom-driven solutions. This vision and ambition needs to be communicated throughout the project and guarded by the decision makers

Barriers

• Financial crisis.
• Larger cities already moving forward and having ‘their problem’ solved  and less interested in the similar challenges of the rural areas.
• Local elections.
• Parallel initiatives from telecom companies leading to political pressure.
• Financial challenges: calculate a financial model based on realistic parameters and look at sound financial schemes to finance the project. If it is not affordable, stop.
• The major challenge is a poor understanding of the opportunities, risks, cost, scenarios etc and to make decisions and progress on poor foundations. Even when a political decision is to move forward fast, someone has to keep a clear head. Vice versa, even when partial political pressure demands to stop the initiative, keep a clear view.

Tools

• How to calculate costs and benefits
• How to make an inventory of needs
• How to assess the options
• How to make different scenarios tangible and comparable (from policy based evidence to evidence based policy)
• Testing and validating approach CEC and other partners
• Link to best practices