Good Practice Framework and Roadmap for the development of Broadband

1. Good Practice Framework and Roadmap for the development of Broadband Results from EU project BREATH Dr. Ioannis Tomkos Associate Dean & Research Group Head, AIT BReATH – Broadband e-Services and Access for the Home

2. Outline • Intro to project BREATH and AIT’s role • BREATH Good Practice Framework • Available at www.ist-breath.net • BREATH Broadband Roadmap • Available at www.ist-breath.net • Conclusions

3. EU project BReATH (initiated by AIT) Good Practice Framework Strategic Deployment Conferences, Seminars, Workshops, SIGs, RIGs Broadband Access Case Studies Successful Practices Techno-economic Analysis (AIT) Liaise with ICT Activities & Projects (VisionAIR, MUSE, BREAD, etc) Surveying Benchmarking Regulatory Issues

4. AIT as partner in strategic planning for broadband development/deployment • AIT’s strong know-how on techno-economic studies, policy/regulation issues, broadband market and technologies, has been utilized in a number of projects for the benefit of its customers/partners, including: • Participated in the EU project BREATH that assisted a number of stakeholders in new member states to develop broadband at a national or regional level • Performed and presented a study for EETT regarding the business case of WiMax in Greece • Assisted the high level management team of “Hellas on Line” in the development of their business plan and proposal to Information Society S.A. that resulted in over 43MEuros funding for HOL • Assists the ITC network operator in Saudi Arabia to plan their FTTH broadband network deployment

5. Lessons learned • The potential impact of broadband • ICT, via broadband, has the power to revitalize local industry and commerce, transform the economic well-being of communities, bring more jobs, raise GDP and drive inward investment. • Broadband supply • How to convince national/regional operators, municipalities and research networks to deploy networks • Broadband demand • How to convince the citizens to request and use broadband services. • Organizing for action • Before broadband networks are rolled out, whether through commercial channels or through an intervention scheme, there needs to be a viable business case that demonstrates the rollout is both viable and sustainable. • Local governments often lack the broad technical knowledge needed to enable them to put together acceptable and winning project proposals.

6. Supply side influences • Investment funds • Deploying broadband needs a substantial level of investment. That investment in general comes from two types of source: a) Legacy investment that has been made in the telecommunications infrastructure over many past decades and b) ‘new’ investment coming from commercial telecom operators and service providers or municipalities. • Public funds • The level of public funding is usually much smaller in comparison to those above and it tends to be applied in geographical areas that have no current broadband service and no near term prospect of receiving broadband service. • Regulation • The level of both deployment and take-up of broadband in each country is strongly influenced by the national regulatory position. • Infrastructures and technologies • Copper pairs and xDSL, coaxial cables and cable modems, wireless and fibre infrastructure

7. Demand side influences • Political drivers • Once politicians recognize the importance of ICT and broadband to economic and societal development the subject will enter into political debate, and the public awareness of its importance will grow. • Awareness of the knowledge society • As long as the population at large does not appreciate the benefits of the knowledge society, transformation is unlikely to happen. • Ability to use ICT • A pre-requisite for widespread use of ICT and broadband is education and training in using ICT • Level of demand • Since broadband is not yet considered a “universal service”, one of the factors affecting whether an operator will cover a particular area is knowing that there will be sufficient demand to justify the outlay. • Guaranteed customers • Agreement by a large organization to take up service on the network can help significantly to establish viability and sustainability. Corporations and public sector organizations (libraries, schools, municipal services and so on) can make a major contribution through monthly subscriptions if their service can be delivered through the planned initiative. • Affordability • Affordability is a major factor where salaries and purchasing power are significantly lower than in other areas

8. Good practice and best practice • The terms ‘good practice’ and ‘best practice’ are used quite commonly (sometimes interchangeably) • ‘Good practice’ • Measures that emphasize economic and societal objectives associated with the use of public funding to make broadband more widely available, in an efficient way • ‘Best practice’ • Those good practice measures that are best suited to a particular initiative or set of requirements. • The BREATH Good PracticeFramework therefore provides guidance on good practice measures, but the choice of best practice rests with those who carry responsibility for initiating and managing specific projects to increase the availability and use of broadband

9. BREATH good practice framework • The BREATH Good Practice Framework provides guidance to those concerned with the use of public funding either to promote the deployment of broadband infrastructure or to initiate broadband development projects to achieve these aims. • It identifies typical conditions under which public intervention may be appropriate and it discusses the main methods of applying intervention funding. • It gives a series of recommendations designed to assist those responsible for applying for and administering public funds so that they can build winning project proposals and can take decisions, which make the most efficient use of the available funding.

10. Conditions for government intervention • In general terms, these are as follows: • where regulation has not yet produced an open and competitive market, and where the strategy of an incumbent operator inhibits the opportunity of alternative network operators • where no broadband service exists, and where there is no prospect of service being provided in the foreseeable future • where a Service Provider is prepared to provide a service, but the prospects are not economically viable to do so • where the connection price is not at a level which is generally affordable by the population at large (e.g. satellite service may be available, but few could afford to pay for it). • where the population at large is unable to afford the facilities needed to use broadband, such as computers and basic training • where there is insufficient knowledge of how to use ICT and insufficient understanding of why it is important • where there is sufficient demand, which could convince operators to invest in an unserved area, but where there are no channels or procedures to advertise and demonstrate this demand

11. Intervention methods • There are a number of ways in which a public body can intervene to help make broadband available, or more widely available, in an area. • The principle ones fall under the following headings: • stimulating and advertising supply and demand • providing broadband infrastructure • providing broadband services • providing training and access facilities • aggregating public and private demand. • In practice an intervention campaign usually combines more than one of these approaches. The manner in which an intervention scheme is promoted is crucial to its success.

12. Stimulating and advertising supply and demand • Supply side • Promoting supply through direct negotiations with broadband infrastructure providers. • Demonstrating to suppliers that sufficient latent demand exists to support a viable market and that this can be stimulated through promotional activities. • In some cases where there has been no immediate prospect of a commercial broadband service in an area, plans for a publicly funded infrastructure have threatened to capture a market that later becomes commercially viable and this has had the effect of stimulating the initiation of a commercial service (infrastructure provision must be done in a way that does not contravene state Aid rules). • Demand side • Initiation of local community campaigns to raise awareness and interest and to demonstrate a willingness to subscribe to a broadband service (e.g. East of England ‘Demand Broadband’ campaign and BT local community campaigns). Campaigns can include newspaper/TV reports, leaflets, meetings involving senior political figures, promotions with Chambers of Commerce, community groups, etc. • A web facility to register interest in having a broadband connection (e.g. East of England ‘Demand Broadband’ campaign). • Broadband demonstration centres (e.g. Kenniswijk, The Netherlands). • Mobile exhibitions (e.g. broadband bus with wireless connection, Scottish Borders).

13. Community network projects • Community Network Projects are projects that have been initiated by a local community, rather than as part of a wider strategic initiative. • Generally they have received minimal or no public funding and have been delivered through ‘grassroots’ community action. • This approach is often used to provide an interim solution until a commercial service becomes available, or may be used by a community group to keep their connection costs low (e.g. Wireless Leiden in the Netherlands).

14. Providing broadband through municipalities • Municipal broadband networks, which may be provided through procurement or public-private partnerships is of great importance. • Network infrastructure provision may be a relevant method in those areas where competition and an open market are not yet established. • In Europe, special regard must be paid to the State Aid rules, which were designed to protect the free market by ensuring that the use of public funding does not distort competition or give an unfair advantage. Insufficient consideration of the State Aid rules could lead to legal challenges or the withdrawal of public funds (e.g. Appingedam, The Netherlands). • One step that can be taken is to ensure that the capacity provided by state funded infrastructure is available only on a wholesale basis to service providers and not directly to consumers. • A government department or agency planning a network infrastructure initiative should ensure that the scheme has a sufficient flexibility to cater for changes in the market. • In some of the case studies, infrastructure plans set out in good faith by municipalities have been overturned through changes in the market, for example by an operator choosing to deploy broadband after all (e.g. Wireless Philadelphia).

15. Providing municipal broadband services • In some cases broadband service has also been provided directly to the public on the grounds that • a free basic service should be available to the lower paid or • certain areas are not covered by existing schemes or • a pilot or trial is needed to evaluate impact and potential of new technology. • Clearly if there is also a commercial service in the area there is potential to distort competition through the use of the public funding. • The affected operator(s) would need to be in agreement with the scheme, otherwise legal challenge would be highly likely. • One way to avoid direct competition with an existing supplier is to ensure the public service is limited in its features, performance and availability. • For example, if the basic commercial offering was 512 kb/s, the bit rate might be limited to 256 kb/s. Or sessions might be limited to 1 hour at a time and contention ratios may be allowed to fall to a higher level than that provided commercially (say worse than 50:1).

16. Ensuring effective practices - I • National level actions • Set objectives for all Regional Development Agencies to stimulate the widespread deployment, take-up and exploitation of broadband and allocate budget to enable them to achieve the targets • Provide funding assistance to regional bodies to enable them to train and develop teams able to prepare strong applications for structural funding • Initiate a national campaign to raise awareness of the economic transformation potential of broadband • Set achievement objectives for Regional Development Agencies • Ensure that the EC Directives are enshrined in the national law and that the law effectively covers the scope intended by the EC • Ensure that the Regulator takes a strong and impartial line in implementing the EC Regulation and the legal practices arising from the Directives and that any actions are timely • Allocate wireless frequency bands in such a way as to ensure there will be coverage in rural as well as urban areas

17. Ensuring effective practices - II • Regional level actions • Ensure that appropriate expertise is in place to build proposals, to coordinate public and private interests and to apply for public funding • Identify the main needs for the area and the approach that should be taken to meet those • Develop a public-private partnership • Inform local groups of plans and opportunities and consult with them to identify appropriate regional actions • For a broadband infrastructure initiative, estimate the likely costs of the various components and develop a business case • Check that any infrastructure or service development proposal meets the State Aid rules • Initiate project activities • Lobby national government to take action to overcome regulatory barriers • Measure the impact of all initiatives on job creation and GDP

18. Ensuring effective practices - III • Local level actions • Local bodies should keep abreast of opportunities that may arise through their regional bodies and should make the regional bodies aware of their main needs so that regional plans can be structured to cater for local requirements. • Appropriate bids can be made for any regional project initiatives. • It is also vital that local groups and residents are kept informed of any developments and opinions sought on key issues. • Schemes enabling residents and businesses to register their interest in having a broadband service provide valuable information in preparing for a broadband service and are a key element of any business case for providing broadband. • The stronger the demonstrable commitment of local users to taking up broadband, the easier it will be to persuade service providers to provide a service in the area and the more likely it will be that the resulting service will be sustainable. • Such schemes can be operated either by a local entity or by an operator who is monitoring the growth of interest and assessing when is the right time to invest in broadband infrastructure in the area.

19. The aims of the BREATH Road Map • The aims of the roadmap is: • to provide a generic view of the future steps that should be considered in the planning, further deployment, promotion and take up of broadband • to present country specific views based on the experiences gained during the BReATH workshops and studies • to promote broadband as a means of supporting and encouraging economic development • to raise awareness of progressive actions

20. Audience for the Road Map • The Road Map report is designed with a broad range of stakeholders in mind who must take decisions about economic development and regeneration and who could benefit from a wider appreciation of the impacts and benefits of broadband for transforming economies. • Urban/rural government decision makers and planners • Representatives from government bodies • Operators/service providers • Regulators

21. Suggested BREATH roadmap

22. BREATH Roadmap • The BREATH roadmap shows a logical sequence of high level actions which represent a typical path of development for broadband. The timeline is not strict as different countries/actors are developing their infrastructure at different rates; rather it indicates a general pattern. • In the countries we have looked at, in the early stages of development governments have allocated ownership of the ICT responsibility to particular departments and given consideration to mechanisms for funding assistance. This has happened at both national and regional levels. • The NMS are now at about year 3 in this timeline while ACC countries may yet need to establish their national framework. • Greece is already in the beginning of the 5th year in this timeline

23. Conclusions • The BREATH Good Practice Framework & Roadmap takes account of the critical factors identified before and focuses on government, regulation, and supply and demand sides for both residential and business customers. • The BREATH Good Practice Framework provides guidance to those concerned with the use of public funding either to promote the deployment of broadband infrastructure or to initiate broadband development projects to achieve these aims. • The BReATH Road Map, suggests a generic way forward to ensure that conditions are right for the effective development of broadband infrastructure and e-services.

24. Acknowledgement • All BREATH partners • In particular GTEL Ltd., Mr. Goff Hill and Mr. Bob Goodfellow who are the lead partners for the corresponding deliverables

25. Q&A Thank you! itom@ait.gr