Local Broadband Plans

There has been a welcome shift in the debate about how to deliver better broadband away from an overarching national approach, towards a more local focus. This is reflected both in government policy as expressed in Britain's Superfast Broadband Future, in the statements of ministers and MPs, and by many of the industry players. The truth is that people in local communities, particularly those on the edge of the network in the so-called “Final Third”, have long had to campaign to ensure they got (a) at least some broadband and (b) broadband services that are adequate for their needs.

Success Strategies for Local Broadband Schemes

In the absence of national roll out plans to meet the basic 2Mbps broadband target, or far more ambitious targets for next generation broadband, funded either by the private or the public sectors, local action has moved centre stage in the thinking of policy makers. This is reflected by Broadband Delivery UK funding the four pilot projects in North Yorkshire, Cumbria, Highlands and Islands, and Herefordshire. It is also reflected in activities on the ground with a diverse range of local projects developing from the city-centre fibre project in Manchester, to the Fibrespeed project in North Wales, local fibre trials by Virgin Media, community-owned projects like Alston Cybermoor, Rutland Telecom’s village projects, NextGenus and a growing range of non-incumbent players. In guidance issued to local authorities bidding into the central government pot, BDUK explicitly recognises the role of community activity and local schemes, requiring bidders to prepare ‘Local Broadband Plans’ as both the bid document and business case for funding.

Developing credible county-level or district broadband plans is not easy. The overarching approach – and the challenge - was summarised at a conference on 9 May 2011 by city investment firm Jendens:

The UK Government’s rural broadband initiative, investing more than £500m of public funds, places a significant burden of responsibility on Councils and the new LEPs:

These assessment criteria represent significant challenges for Councils to match.

Arguably the only way to meet these challenges is to engage with local communities, seeking to maximise their involvement in the process.

The emphasis on local engagement is both welcome and striking, and is reflected at the political level in the speeches and comments of MPs and ministers. On 23rd March 2011, Rory Stewart MP initiated a Westminster debate on the topic of rural broadband. In laying out the challenges faced by many of his constituents and communities around the country he paid tribute to the work of local campaigners and leaders of community broadband schemes. The minister Ed Vaizey, MP responded by saying "I am extremely anxious to see community broadband solutions. It is easier for a county council, perhaps with its own money and additional money from Europe, to seek match funding from the Government, but its tender need not be a big company or big government solution and can include community broadband solutions." [Hansard]

This section of the Knowledge Base is designed to build on these ambitions for ‘localism’ in the development of broadband services with an emphasis on what can help a local scheme to be effective and succeed.

Primary author: 

Community Broadband

The first thing that we have to acknowledge is that not all communities will have the same appetite for getting involved in broadband issues.

Adrian Wooster summed this up very well in a blog posting ‘A framework for localism – from pump to home’ [http://wooster.org.uk/2011/03/pump-to-home/]. As Wooster puts it, many counties are aiming to leverage their public service networks to deliver ‘digital village pumps’ – essentially local access points providing backhaul connectivity – but that this requires the procurement exercise to include a community strategy to deliver the access network.

Some communities will be content to let others take on the responsibility and wait for services to be delivered. Others will want to take on a more active role, building local demand in schemes like BT’s ‘Race to Infinity’ or go further and raise money to develop their own local projects.

In other sectors of the economy it has been proven that many communities, particularly rural communities, will raise investment in order to keep or develop valued local services like pubs, shops and renewable energy schemes. One of the reasons that INCA partnered with the Plunkett Foundation, alongside ACRE, to develop the Big Society Broadband Project is that Plunkett has a wealth of experience in supporting rural community enterprises including 250 community-owned shops and many pubs.

In the broadband field projects like Alston Cybermoor, [link to case study] Great Asby Broadband, Next Genus [link to case study] and Rutland Telecom [link to case study] demonstrate that local investment can be generated to support broadband projects.

From a large supplier’s point of view whether it be BT, Fujitsu Telecom or an alternative player, the appetite of the local community to get more involved has important ramifications on the potential costs of a scheme and the nature of the investment. A community that raises investment is likely to be a patient investor, and indeed most community investment schemes through co-ops or community interest companies will encourage this. The community is likely to be more interested in getting a high quality, competitively priced service, than in a rapid return on the investment. For the public sector, communities that are prepared to make additional efforts will help make the business case for public investment stronger and get a bigger bang for the taxpayers’ buck.

However it is not all plain sailing. Support for community initiatives is currently patchy. The Big Society Broadband Project aims to build a partnership that can change this by trialling different approaches, raising funding and organising local support, but this will take time. Organisations like the Rural Broadband Partnership [http://www.ruralbroadband.com/] are aiming to provide further sources of support.

Another challenge for community broadband is to create the right structures that can allow national players to engage, whether they be third party ISPs delivering services, network builders and operators, or potential investors. Whilst the sector remains looking fragmented and sub-scale it is difficult for these players to get involved.

If these challenges can be overcome the prize is great: community ownership over the problem and investment in the solution can become a significant part of the funding pot, bringing forward the horizons for widespread, future-proofed, next generation broadband deployment.

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Community Broadband Models

A paper outlining community-ownership structures most suitable for community broadband scenarios

Introduction

The realisation that the need to bring Next Generation Access to all communities in the UK will not be met solely by private sector investment has unlocked a range of responses. For some this has been to create the expectation that the Public Sector will fund the Private Sector to fill in the gaps. For others, it opens up the possibility that community engagement will create solutions that neither the Public or the Private Sector could create by themselves.

This paper has been written to help stimulate debate on what form this community action might take. It does not claim to be the definitive answer, but it is the first contribution whose starting point is the need to engage communities in the solution. In other words, it is seeing community-owned broadband as being primarily a community challenge rather than a technological one.

We are grateful to Cliff Mills and Kevin Jaquiss from Cobbetts who have provided specialist legal advice (their firm is experienced in legal structures for community and co-operative initiatives and partners Plunkett on community-owned shop model rules).

We would also recognise that it draws on the experience of a wonderful range of people who have chosen to solve the challenges that they face through community-ownership. We have drawn on this learning from shops, pubs, churches, energy, food, transport and many other vital services where ordinary people, with limited technical knowledge, have chosen to deliver those services by coming together as a community.

The paper covers three broad and connected areas.

  1. Engaging communities
  2. Working with partners
  3. Finding the right legal models

Engaging Communities

Communities don’t want broadband, they want to solve the problems that broadband can solve for them. For many rural communities, having these problems solved for them is a long way off. The passive customer approach will leave them without a range of services that are increasingly shaping the modern world.

We suggest that there are four main relationships that communities can adopt. These are:

  1. DIY: Some communities have, literally, done it themselves. They have laid fibre by digging trenches, then have created the infrastructure themselves. Such an approach doesn’t just get the job done, it also lowers the cost of doing so.
  2. Commissioning: Under this relationship, the community decides that it wants the service, but doesn’t want to physically do it themselves. So it pays others to act on its behalf whilst retaining full control themselves. It should be noted that DIY and Commissioning are not mutually exclusive, both in terms of the approach (which could vary on different parts of the project) and in member relations (some may dig ditches whilst others just buy the service.)
  3. Partner: The third relationship recognises that a project is only viable with additional resources from the Private or Public Sectors and that this will be in a form which alters the ownership of the enterprise. This is considered in more detail.
  4. Customer: The sit back and wait approach will leave many communities without service. Communities can however work together to demonstrate demand to make it economically viable for others to take on or even operate services across a privately owned network.

Partners

The scale of the task, for many communities, will be such that they need to bring others onboard to create their network. We suggest that there are three dimensions to this:

  1. Private/Public Both the Public and the Private Sector are potential partners.
  2. Investments/Assets Both could bring with them either money invested into the network directly or through the provision of assets to the enterprise. There are a number of different scenarios here. Private investment could be from technology companies or investment vehicles. Public sector engagement could be financial or the use of existing infrastructure for community benefit. The exact nature of these is less important in this paper than being clear what each partner expects for the use of their assets by the enterprise.
  3. Investment/Oversight Broadly speaking, these assets could be supplied with a range of expectations:
    1. Passive – for instance a grant given without any expectation of return
    2. Influence – there is an expectation that the provider of the resource will be able to monitor the delivery of the network
    3. Return – the provider will be compensated for the use of the asset at a fixed rate determined at the time of investment
    4. At Risk – the level and timing of the compensation will be decided in the future based on the profitability of the network
    5. Control – the provider of the asset will be part of deciding the long term future of the network

From these flow three relationships that an asset provider might have:

  • Commissioned – the provider is recompensed for their asset but has no say in the operation of the network
  • Oversight – the provider has access to the workings of the network (e.g. seat on the Board), but the network is owned by the community
  • Ownership – the provider owns the network alongside others

Legal Models

Not all community broadband schemes are the same. We suggest that there are four main types.

  1. Individual-driven Social Enterprise: Where an individual or small group wants to demonstrate a strong social purpose to their work, but doesn't want community engagement or investment.
  2. Community-owned BroadbandWhere the engagement and investment of the local community is a vital part of the business plan.
  3. Profit distributing community owned enterprises
  4. Partnerships

Individual driven social enterprises are most likely to benefit from the Community Interest Company (CIC) model as this doesn’t require widespread community democratic control, but does enshrine social purpose. The main drawback it has as a model is that it was created after the current financial promotions legislation was drawn up, so doesn’t enjoy the exemptions that co-operatives and bencoms have regarding community investments. CICs limited by guarantee cannot issue shares, but can promote the sale of bonds and offer membership as a separate consideration. They cannot issue withdrawable shares.

Community-owned broadband

Where the engagement of the community is a vital part of a business plan, then the Society for the Benefit of Community (Bencom) model is the most suitable.

This allows a broad range of investors on a one member-one vote basis. It can use withdrawable shares as a community share model. It locks in a clear community benefit for the enterprise which will assist in establishing its relationship with public sector bodies. An asset lock can be applied to its assets.

Bona Fide Co-operatives

The main advantage of bona fide co-operatives is that they allow individual profit distribution. This comes at the cost of:

  • Enshrining community benefit as the main purpose of the enterprise
  • The ability to asset lock

Bona fide co-operatives are best for communities who have chosen to sacrifice protecting mission so as to enable personal profit. Our experience is that rural communities are wary of such approaches, but it should be presented as an option. Bona Fide Co-operative is a legal term and does not imply that Bencoms are not also a co-operative model.

Special Purpose Vehicle (SPV)

There has been much discussion on bringing external funding into community structures. The advice from Cobbetts is clear. Create a structure that meets the community needs and then connect it to an SPV to meet external investor needs. Do not dilute the community interest in the primary structure. This is the advice that we would give to Adrian’s recent note about the Bill Murphy meeting.

Community Ownership

As the remit for this project was to consider community owned broadband, we consider the best model for community-owned broadband to be a Society for the Benefit of the Community (Bencom) under the Industrial and Provident Societies Act. This co-operative model has a number of distinct advantages:

  1. It is based on the concept that broadband is a community asset and the interests of that community should be at the core of its provision.
  2. There is one member-one vote, so all members will have an equal say in the direction of the enterprise.
  3. It can provide a strong asset lock to ensure the long term protection of the network.
  4. It provides a range of finance options including being the easiest vehicle for community share investment, investment by other IPS societies, loan finance and bond finance.
  5. It also recognises the issue of people moving in and out of the community over time.

It is not profit distributing, although it can recompense people for investment. If a community wants profit distribution then a Bona Fide Co-operative is a more suitable model, although this would remove the option of having an asset lock. Community Interest Companies (CICs) are better suited to shareholder relationship based models, so would be better for the individual (or small group) social enterprise approach.

Within the Bencom model, there are a number of decisions to be made in relationship to broadband delivery which will need to be decided by each network.

If community shares are used - is the person investing in the scheme overall or in bringing broadband to their home? This will, in part be determined by the nature of the area served.

Do all users have to be members or will members receive a discounted service? Under the second, investors are, in essence, paying upfront for a discounted future service.

Given the long time scale, it is highly likely that people will move in and out of the network area and the model will need to decide how this is handled.

A highly sensitive area is that of service cost. Let us imagine a scenario where a town has a large number of dwellings that it will cost £300 per home to connect. It then reaches out to the neighbouring countryside including a remote house that will cost £3,000 to connect. What should that house be charged? Should there be one price for everyone, in which case the town dwellers are subsidising the rural, or should the network charge the extra cost to the remote house. Such a decision is for the democratic structure to the enterprise to decide.

Working with Partners

Earlier sections have flagged the range of partnerships which might be formed. Broadly, we would recommend the following:

Where the partners expect to share the profits from the Network then we would recommend the forming of a Special Purpose Vehicle (SPV) to handle this relationship. The Bencom would be one of the members, thus keeping the community interest intact, alongside the other partners. A number of models could be used including Company by Rule or Limited Liability Partnership. An SPV is useful to balance interests, but should not be seen as the default model for community-owned broadband as it weakens the community role.

 

Conclusion

This paper has aimed to stimulate thought and discussion. It will need to be updated as more communities add their own needs and experiences to it as new enterprises emerge.

What, however, will not change is the need for networks to avoid being enamoured by the technology or the possibility of external investment, vital though both may be. Instead they need to remain focused on how unlocking community engagement in tackling broadband access is a vital part of creating Next Generation Access.

Primary author: 
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The Seven Pillars of Wisdom – Lessons from Nuenen

In terms of consumer take up the most successful broadband project in the world is the OnsNet (OurNet) community broadband project that started in the small town of Nuenen in the Netherlands. There more than 80% of the community are signed up to the local FTTH network. This is an astonishing level of commitment, way in excess of demand profiles used by most telcos. Any community that can deliver anything approaching these levels of take up can pretty much guarantee a cast iron investment proposition. In project studies undertaken by the Community Broadband Network, take up levels of around 35% were gauged to be needed for long term viability.

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Onsnet is featured as a case study in this knowledge base. Here it is worth exploring the key features distilled from the project by its founder Kees Rovers (pictured left).

A traditional telecommunications provider faces a number of drawbacks in a niche market where the constraints of their core market predicates a “one size fits all” solution in which a lowest common denominator service is delivered to the widest possible audience. The existence of the ‘final third’ demonstrates that rural areas pose significant challenges to this approach due to population density, geography and topology. In urban areas whilst ADSL2.0 and FTTC offerings may suit many in the population, some areas are seeking to develop high speed, symmetric FTTH projects to provide a competitive telecommunications environment for digital and creative businesses. One size is struggling to fit all.

A community-led service may offer certain benefits over a traditional model; for example, there is a lower expectation for a return on capital, often restricted to technology renewal, and a longer term, utility-style finacing can be readily adopted. Internet operators increasingly adopt shorter term “technology” investment cycles, with expectations of a significant return on their investment in as little as 18-months. This is very different to the investment requirements of next generation broadband.

Kees Rovers sums up the core attributes of a successful community-owned broadband project in ‘seven pillars’

  1. A viable business model
  2. An 'us' feeling
  3. A set of basic services
  4. Additional local services
  5. Community communication
  6. Customer care
  7. A quality network

Only the last of these really focuses on the technology, and over half of the pillars are something which can only be delivered with local knowledge and involvement.

One characteristic of successful community led projects such as this is that internet access typically becomes less relevant as time progresses. While it can often provide the impetus to begin a project, once the project reaches maturity many people will cite local services or one of the other pillars as the key reason they continue to support the project; a pillar which can't be replicated by the “one size fits all” model. In this case, the seed demand comes from education and healthcare services, and not from generic internet services, further reinforcing this argument.

A Viable Business Model

Community broadband projects are businesses first and foremost. They have to generate income and profits to survive and prosper. The business model will vary - some projects will focus more on developing commercially attractive services, others on attracting funding for projects of public benefit. The critical factor is that the business model is robust and can generate profits for reinvestment and to reimburse the providers of capital.

Cooperation – the “us feeling”

The second tenet of community broadband is to develop an “us feeling”; one way to ensure this is through a co-operative structure, giving “customers”, or more accurately community members, a say in how the business is run, its future strategy, and the shape of the service set.

Many people in rural areas are familiar with this structure and should feel comfortable with it – self sufficiency, community effort and community enterprise have long been woven into the local fabric. Where a co-operative model is used, it is governed by a core set of agreed principles promoted internationally by the global International Co operative Alliance:

  • Voluntary and open membership;
  • Democratic member control;
  • Members’ economic participation – guaranteeing real commitment and returning a share of the profits;
  • Autonomy and independence;
  • Education, training and information;
  • Co-operation with other co-operative enterprises; and
  • Care for the community.

Thus a local community broadband project is likely to aim to reinvest surpluses in new services, make a return on investment, and support new ventures and projects in the community. This keeps the enterprise focused on the needs of its members in the short and longer term.

A Set of Basic Services

Unless the project has a set of basic services to offer it won’t last. In most cases projects will aim to operate on an ‘open access’ basis. However in the UK major service providers are reluctant to get involved in providing services to smaller scale networks. This problem is being addressed by INCA, the Broadband Stakeholder Group and others. However at this point in time in some projects there will be a role for a ‘Community ISP’ to guarantee a core set of services on the network from Day 1.

Additional Local Services

Successful community broadband projects have often focused on developing additional services beyond basic Internet / triple play for their members. Alston Cybermoor for instance has made significant progress piloting tele-health and care services on the network.

With the rise of social networking and a set of internet tools that can create local blogs, directories and newsfeeds, the opportunities to serve the community from within the community with new services such as car-sharing schemes, markets for voluntary time, touchdown points for homeworkers, upgraded community security platforms and a whole set of internet-based community services that were unthinkable ten years are now possible.  However, the key component is that the community develops and owns the solutions and does not depend on being told what the solution should be from National politicians, media barons or telecoms companies.

Community Communication

This is perhaps the single most significant factor in the success of OnsNet. Getting the community behind the project drove astonishing levels of demand and delivered significant profits to the investors and community from the second year onwards. It was achieved through a process of communication that focused on the needs and aspirations of the community and how these could be met with an FTTH project, not on the technology itself. The key factor was getting the right stakeholder groups on-board, engaging with members of different groups in the community and finding clever ways of encouraging demand.

Customer Care

Everybody hates call centres, but the national telcos find it impossible to abandon them. In contrast, OnsNet and every other community broadband project has someone locally you can turn to when there is a problem. Often community broadband projects will major on volunteer effort to help get people online and to help solve problems. Neighbours help other neighbours. Clearly, a robust, high quality network needs high quality maintenance and support, but from a customer’s perspective, nothing beats the human touch of local support.

A Quality Network

This is the one factor that the major telco should always be able to deliver. In the context of next generation broadband it means getting the balance right between what the community does for itself, and what it contracts others to do for it. With OnsNet, the whole FTTH network was engineered by a civil engineering firm that went on to form Reggefiber, the major Dutch fibre operator, which is now 40% owned by KPN (the Dutch incumbent). In Manchester the FTTH project is being delivered by Geo, a well respected fibre deployment company, capable of ensuring that the network is built to high quality and resilience.

DIY has its place, not least in encouraging farmers to dig trenches to reduce costs in very rural areas, but the overall project needs to be managed with the future in mind. A fibre network will last for upwards of 25 years and deliver vital services in the community. It has to be a high quality network.

In conclusion, the so-called “Seven Pillars” of Fibre Networks give us a very good framework on which to base the key components of a local broadband scheme, as well as stimulating the local community to become creative about solving their own particular needs at the local level with minimal support from national financing, politicians or telecoms companies.  All those with ambitions to create local schemes should think carefully about how to cover each of the seven points in order to ensure the success and sustainability of the local communities in the rapidly evolving Internet age.

Primary author: 

A Man, A Plan

Perhaps the question to remind ourselves of first is “Why create a broadband project in the first place?” The answer is that the market has struggled to deliver an adequate, universally available first-generation broadband service and will struggle even more with superfast broadband. Around 10% of homes and businesses cannot get a basic 2 Mbps service and, in terms of next-generation broadband coverage, our current best estimate is that around two-thirds of the population will be covered through commercial investment. That leaves a lot of people in the broadband slow lane. Hence there is a need to take action at local level – and probably the reason you are reading this booklet.

But where to start? There is more than one approach to deliver superfast broadband, and the requirements and resources of every community or region will be different. Nevertheless, it is possible to identify key stages in the lifetime of a broadband project – from the first decision to “do something” to a completed project with a sustainable business providing broadband in the target area.

In general the project stages will follow each other sequentially over time, although it is likely that some decisions may need to be revisited as new information comes to light. There are a number of different threads – such as community engagement, business models, technology options and funding requirements – that will run through all phases of the project, and which should be kept constantly under review.

Stage Description Example Actions
Stages in the lifetime of a broadband project
ONE Individual Mrs Jones

Check existing provision

Contact local authorities

Form community groups

TWO Group North Dorset

Identify area of problem – mapping

Collect evidence of demand

Partnerships

Technology options

Legal structures

THREE Company Angus Glens

Create a business plan

Consult potential suppliers

Service templates

Funding / investment

FOUR

Funded project

Cybermoor

Tender for the project build

Appoint suppliers

Take-up marketing

Stage 1: Form a group

As an individual frustrated with broadband provision, the obvious first step is to check whether your home can be expected to receive an upgrade to superfast broadband under the announced plans of the major service providers, or as part of the regional, county-led deployment. There may also be community projects underway in the local area that you could support. Demand aggregation is such an important element in next-generation broadband projects that you will usually have a greater chance of success by joining an existing scheme than by creating a new project group and dividing the support base.

However, should your search prove fruitless, then you will have to start from scratch, but don’t be deterred! A small but enthusiastic team of committed volunteers can make a huge difference. Therefore you will need to join forces with like-minded people, who recognise the importance of broadband and understand the potential benefits. Talk to local contacts and to people with influence locally such as major landowners, schools and local businesses (especially those in the IT industry), the parish or town council and others, to discover those like-minded people.

Parish or town councils can play a particularly useful role in broadband projects. As the first tier of local government, they have legal status in the administration of the community and certain powers to help them carry out their work. They generally have established communications channels with the relevant local authorities, and access to support and information through counties and national associations. Although parish councillors are elected, they are also community volunteers and often possess the experience, knowledge and skills to carry out local projects. Even if not directly involved with a project, endorsement from the parish council is likely to have a positive impact on discussions with other stakeholders.

In fact, local authorities and economic development organisations often do assume the project lead because they have a vested interest in the economic prosperity of the local area, and because they have the resources – both human and financial – to direct projects of this nature. But this is not the only way forward – community action groups often lead successful projects.

The campaigns that have the greatest chance of success are those with a champion, someone who is absolutely passionate about the project and will see it through to the end. The rest of the team will need a variety of skills: accountant, lawyer, technical, market research, communication, sales and marketing. If you don’t have those skills within the team, seek outside help as and when required.

Stage 2: Identify demand

Establishing the level of demand in a community will help to stimulate supplier interest and will provide evidence to support any fund-raising activities. There are a couple of ways to do this: do some mapping of existing provision, and carry out a survey.

Mapping exercises use empirial data about existing levels of broadband provision and the local geography to provide valuable insight into the level of potential demand and the challenges you may face in trying to improve the situation (see The importance of maps and Maps to support the business case).

A survey will create a more detailed, more subjective profile of your community and its communications needs. You can easily find examples of such surveys with an internet search. Questions usually start with the basics, such as the number and ages of people in the household. Who provides the existing broadband service (if any), and is the performance satisfactory? Surveys often include questions about how much time people spend using the internet and what they spend time doing. Do they run a business at home, for example? The survey should be clear and concise, and explain its purpose in non-technical terms that the average person can understand.

You can also ask questions about the interest in and willingness to pay for superfast broadband. Be careful how you ask such questions, however. If you make it too easy for people to say yes, then when it’s time to part with hard-earned cash, they are no longer interested and the business model falls apart. Also bear in mind that people may be reluctant to answer questions about their willingness to pay in case it gives suppliers a good excuse to charge high prices!

Don’t assume that an online survey will meet all your requirements. People lead busy lives. A knock on the door from a campaign representative, enquiring as to whether the survey has been completed, will often increase the response rate to the survey. And of course, an online-only survey will exclude those with the greatest need because they cannot get working broadband in the first place.

While demand is being assessed, the team should research other community projects to see what could be learned. Find out about and stay up to date on technologies, applications and legislation. The team will need to develop sufficient knowledge to be able to explain their vision to others, to evaluate business proposals and negotiate effectively with solutions providers. Suppliers are usually more than happy to engage with projects to discuss technical information.

Based on this research, the team should refine the vision and scope of the project. What are the goals in terms of the end-user experience? How do these goals align with the available funding? Identify likely synergies that will help to move the plan forward as well as possible obstacles.

This is also a good time to start to build partnerships. Identify which organisations in your community might take an active role in the project. It is vital that the stakeholders understand the benefits of broadband in the context of their own interests. The opportunities created by high-speed internet could be the incentive for a school or hospital to get involved, which creates income for the network and a stronger social argument for obtaining funding. Local businesses such as hotels, housing authorities or mobile phone networks may also be interested in becoming collaborators.

Stage 3: Business models

Not all communities will have the same appetite for getting involved in broadband issues. Some communities will be content to sit back and wait for services to be delivered. Others will want to take a more active role building local demand or go further and raise money to develop their own local project.

Aggregating demand may be all that is necessary to bring broadband to a community. BT’s “Race to Infinity” campaign, which took place in December 2010, is a high-profile example of a demand aggregation campaign in which individuals voted for their exchange to be added to its superfast broadband roll out. In the end 10 winning exchanges were named. There are also a number of alternative service providers who will, at their own expense, install broadband networks in a community when a sufficient number of pre-service contracts have been signed.

Local authorities are working hard to extend the coverage of superfast broadband to at least 90% of households with the help of government funds. For communities outside these plans, BDUK and DEFRA have identified five broad business models. These fall into two main groups depending on whether they are delivered by the local authority’s chosen broadband supplier or by the community organising itself such that is capable of engaging directly with a supplier.

GROUP 1: Facilitate local authority project

  • Demand registration: The community signs pre-service contracts to lower the risk for the local authorities chosen broadband supplier.
  • Build and benefit: The community formally offers to lower costs for the broadband supplier by, for example, digging trenches, arrranging wayleaves or paying higher installation charges.

GROUP 2: Community enterprise

  • Partnership: The community raises some of the finance, but engages a partner to bring in the rest of the investment, and to design, build and operate the network on its behalf. Gap funding is the most common approach.
  • Concession: The community is prepared to raise all of the finance, but brings in a partner to design, build and operate the network. The community retains ownership of the network but grants an exclusive right to the partner to run the network.
  • DIY design, build and operate: The community is prepared to raise the finance, design, build and operate the network themselves.

Whichever model is selected, you will need a business plan – a document that contains all the information to justify the project, along with the supporting information about how you will make it happen, including market analysis, current bandwidth needs and projections, and complete financial information.

The level of technical detail in the plan will depend on the chosen business model. The plan could be mainly a procurement exercise, inviting suppliers to design a cost-effective technical solution to deliver a specific outcome. This approach makes a lot of sense. OnsNet in the Netherlands, a municipal network with a strong community focus (OnsNet means “Our Network”), has the mantra “community owned, professionally run.”

At the opposite end of the spectrum, a community can design, build and operate its own network. The plan should then include complete technical information, and consider network reliability and customer support, as well as future expansion and upgrades. Don’t forget to include the marketing and operating costs in the equation as well as the capital costs of digging and equipment. The financial information should contain realistic revenue and cost projections that lead to sustainability – in other words the project should be able to support itself financially over the longer term.

The “DIY” option is potentially the most risky as it is highly dependent on the skill of the team members. This option also carries additional risk because small networks often have trouble attracting service providers. Lack of retail competiton can leave the project exposed to the possibility that the government could fund a competitive deployment in the same area. Creating a new ISP creates further business challenges, not least in terms of technical support.

However, solutions to these problems are emerging: in 2011 Hampshire County Council worked with Fluidata, NetAdmin and Magdalene to trial a wholesale aggregation platform that brings 40 service providers to the table. INCA is also developing the “Quality Marque”, which will specify a set of standards against which community networks can be developed.

Stage 4: Appoint a supplier

The final stage of the planning process is to approach suppliers and discuss your requirements. Keep everyone informed, especially your key stakeholders and collaborators. Report back to the community regularly, and keep your website updated.

Funding can come from a variety of sources, including government grant or investment, angel investors and banks, various charitable award schemes such as the National Lottery, and of course the community itself, through a community shares program (see box). In-kind payments are also worth considering. Instead of paying the landowner to cross his field, offer free installation of a high-speed internet connection.

If government funding is involved, then issues of state aid can arise, which can delay a project or, in the worst case scenario, require repayment of funding plus interest. Expert advice may be needed to choose the right financial structure and appropriate procurement process. In practice, however, there have been a number of precedents for public funding of broadband networks in the UK, both large and small.

Keep up the momentum! It takes time for a project to reach a successful conclusion. Prepare for setbacks and persevere. You may have to revise the plan several times before finding a solution that is acceptable to all parties and within your financial means. Remember: the long-term benefits will make it worthwhile.

This article originally appeared in Beyond Broadband.

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The importance of maps

Being in possession of all the facts before committing to any major business investment is critical and investing in broadband is no different as this cautionary tale shows.

A recent study of broadband services in a rural area of England, involving both a mapping study and a survey of businesses, threw up a fascinating insight into the problem of developing a clear understanding of demand and availability.  The name of the area will remain anonymous but it could have been of any number of communities.

The received wisdom in this area was that a number of small towns were poorly served by broadband and the survey of local businesses largely supported this view.  However it was strongly contradicted by the mapping exercise which suggested quite the opposite.  In an attempt to reconcile the difference it was much easier to check the cold, hard data than to suggest to businesses that they might be mistaken, so the logic of the data was re-evaluated.

For example, a specific town in the area that had raised the greatest concerns was a tight, nuclear market town and had its own telephone exchange located at its centre.  This seemed to further support the mapping exercise over the survey results as it was reasonable to assume that the existing copper lines to the business community were generally quite short

As further checks, line tests were carried out on each of the businesses lines, and a software speed checker was used to test the existing business broadband services.  Both of these checks further corroborated the data.  There remained little scope to support the business community’s belief that they were poorly served by broadband.

So what was going on? A theory was developed along these lines: Defined market towns tend to build up their own support structures which can lead to the community becoming reliant on a narrow and possibly isolated pool of expert advice; the more esoteric and scarce the skill, the greater the scope for that advice to be of less than the highest quality.  In this environment a respected opinion can become the received wisdom and a local mythology can easily develop.  This mythology can then be readily propagated and perpetuated in a tight-knit, well-structured community.

Contrast this with more sparsely populated areas where people tend to travel further to plug into support networks and different people may seek support in different directions. This is likely to create a richer, more diverse advice network where myths are more readily challenged.  More sparsely populated communities are perhaps also more accepting of poorer infrastructure, and may have less effective communication channels.  As a result, sparsely populated rural areas – relative to small towns – may under report their broadband problems.

As the shape of the digital divide hardens, with the most densely populated urban areas seeing some form of superfast broadband investment while other areas remain largely as they are, the debate is increasingly becoming emotive.  And this can make it harder to understand the business case for investing in broadband.

The lesson to take away from this case study is that, while the narrative of communities is important in developing a business case for broadband, it should mainly be used to add colour and to personalise cold, empirical data. The description of the problem should be based on facts, while the narrative gives voice to the kinds of services the community may demand.

By Adrian Wooster.

This article originally appeared in Beyond Broadband: Giving our Communities the Digital Networks They Need.

Maps to support the business case

The first mapping exercise has to be to understand what the broadband landscape looks like today.  It is critical to base this on data from primary resources – the incumbent operator, the cable companies, and so forth – and to seek or generate further data sets to validate the carrier’s data.  This is equally true for an organisation based within the community as it is for an external organisation considering an investment in an area they know little about.

In order to test the level of competition for a new broadband network it is necessary to plot existing broadband services and the number and type of operators.  In the UK that typically means mapping the ADSL performance for BT services; the extent of Virgin Media’s cable network; and the number of operators unbundling the local loop.

The provenance of the data is important. There have been many attempts to model broadband speeds based on ADSL performance curves from manufacturers and GIS (graphical information system) tools that calculate the radial, as-the-crow-flies distance from the telephone exchange.  Some of these have tried to build in factors for guessing the true cable length, quality and so on but at the end of the day they are just increasingly smart guesses – and this becomes very clear during a mapping exercise.  Estimating broadband speeds based on radial distance will create nice, uniform shapes on a map from which simply doesn’t match with reality.

Mapping quality empirical data provides a more organic image of broadband performance which starts to mould itself to the geography and topography of the area.  From this it’s possible to build a narrative to link the cold data with the tales of broadband woe.  (Samknows is the main source of such information in the UK).

A variety of mapping techniques can be useful in order to gain the fullest understanding.  As well as maps that blanket fill a postcode polygon with traffic light colours to represent poor, mean and good broadband speeds, it’s worth considering other techniques such as contoured heat maps – while it’s harder to say precisely what the speed is at a given location, it does provide a much richer picture from which the broadband landscape can be described.

It immediately becomes clear that the underlying data is not based on a simple model because it does not produce the neat conical contours of a radial guesstimate.  A closer inspection begins to show how the broadband landscape is affected by the contours of hills and valleys, and by man-made features like railways.  These can provide indicators of the problems past infrastructure builders have had to grapple with, and the potential opportunities an alternative approach might bring.

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Map A (above) was generated from broadband data in Oxfordshire. There had been long established rumours that broadband in parts of central Oxford were slow, and the reasons given seemed perfectly plausible but unproven. The story was that some phone lines had had to take a long, circuitous route skirting around the old Morris car plant, which made them too long to support a good broadband service, even though some of the homes and businesses affected were just a few hundred metres from the present-day telephone exchange.

A glance at the new map clearly shows a “ghost valley” of poorer broadband to the north east of Oxford.  While the now BMW car plant is much more compact, the data appears to support tales of the city’s industrial past, still haunting one of the world’s most important knowledge centres.

Slightly to the north of the city is Oxford Airport. Following the northern perimeter fence, the map predicts the existence of an “ox-bow lake” of poor broadband coverage which is perfectly reasonable – it’s unlikely that cables will take the short path across the runway.

Other supporting data sets

Technical broadband data is but one aspect, but other data sets can provide important contributions to the business case.  Another approach to consider is the impact that property density has on the cost of deployment.  Data from the Office of National Statistics can prove very useful here.

Map B (below) was generated from a combination of land use and population dataset from the ONS for the North West of England, and attempts to assess the “mean distance between neighbours” as a proxy for the cost of the civil works required for a fibre-optic network build.

In this case, blue indicates areas where premises are typically farther apart and will therefore cost more to deploy using fibre alone, while green areas indicate areas where homes are closer together and the cost of deploying fibre will typically be lower.

Maps could also provide clues about the kinds of services that might appeal to the community, and therefore drive take-up.  Only when combining such data with the previous technical mapping is it possible to properly understand the business case for investing in a new broadband infrastructure.

It is quite possible, for example, to find a community which is currently under-served by first-generation broadband, and which is sufficiently densely populated to suggest a lower cost of deploying fibre, but which has little interest in adopting new services.

There are a number of possible datasets available that can provide clues, such as the ONS output area classification system and perhaps more usefully the eSociety classification system from the Centre for Spatial Literacy.

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By Adrian Wooster

This article originally appeared in Beyond Broadband: Giving our Communities the Digital Networks They Need.