Towards a Regional Open Broadband Network by cooperative approach (B)

Project partners
Municipalities Kortrijk region, University College HOWEST, University College KATHO, University Leuven Department Kortrijk, Kortrijk Hospital, Business areas Kortrijk Region, various public and semi-public agencies

Contact data
Filip Meuris
e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Key words

Main problems to be solved (analysis)
In the Kortrijk region the broadband connections are privately owned. The lack of a (public) open network is identified as one of the current bottlenecks in the further cooperation between public and semi-public organizations in the Kortrijk region and offering the next generation of services. Although this need is widely acknowledged, the cost/benefit of a possible regional open network is not known, nor a valid business model.

Within the major city-centres of the Kortrijk region in the last years initiatives were taken that led to partial and partly 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 is currently no option solely because of a lack of understanding of costs 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 a future investment: limited to connecting public and semi-public buildings or extending the reach to business terrains, public spaces and households.

Due to the large investment required to deploy broadband networks, public investment of some kind will often be required (particularly in rural areas). When large amount of public funds are involved to deliver the socio-economic aims of EU policies, it is believed that the  long-term needs of a region should be prioritised over the commercial aims of specific private companies. For this reason, the Kortrijk region initially favours those models which provide long-term control over the operations of the project to ensure that the needs of the entire territory are met. It is expected that effective control of the project by a regional consortium will also help to ensure that access to the network infrastructure is made available on an open and non-discriminatory basis. Effective control of the project will also allow the regional consortium to ensure that the network is operated in a way that supports the delivery of long-term socio-economic benefits (e.g. by ensuring that service availability and performance meet minimum requirements, and also ensuring that the desire for commercial returns does not overtake the need to provide affordable services).  

Nevertheless, it is understood that the private sector can bring invaluable expertise to broadband projects, and commercial discipline that can ensure projects are delivered efficiently. The involvement of large-scale private operators can help to ensure the sustainability of the project, as their expertise and experience can help in adapting to changes in the market or embracing technological developments.

The EC has recognised that Member States will need to make significant investments in broadband infrastructure to meet the objectives set out in the Digital Agenda for Europe (DAE): by 2020, all Europeans should have access to the Internet at speeds above 30Mbit/s and 50% or more of European households should have subscriptions above 100Mbit/s. The Kortrijk region takes this as a minimum and wants to extent this to public and semi-public organisations, linking them and thus allowing a new generation of shared services. The development of a Regional and Open Broadband Network is listed as one of the key regional ambitions in the Kortrijk region.

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 kind of small public-owned or private-leased broadband connections. Examples are networks within town and city centres between municipal buildings, experiments on FttH (Flemish Living Lab experiment), radio connections between large buildings connecting two or mor cities and even linking networks were linked (for example between the administrative buildings of Leiedal, Kortrijk en Zwevegem). Experience learns that these connections immediately trigger additional demand for services and the creation of new shared services.

Advantages of bottom-up model
•    Usually future-proof high-bandwidth infrastructure is selected, such as fibre connections with the ambition of fibre to the home.
•    The nature of the cooperation has the effect of generating and aggregating demand in an area, which ensures that maximum social benefit is derived from the investment, even if only a small amount of funding is available.
•    The bottom-up model seems ideal for targeting localised areas and for gaining the most benefit from small amounts of funding.

Experienced disadvantages of the bottom-up model
•    It is going very slow
•    This approach appears not to be suited to providing widespread coverage, as individual projects can be very localised. This may mean that some areas are missed out and those networks that are built have differing technical standards, which may mean that competition from other operators is limited.  
•    The co-operative/partnership organisations are unlikely to have specific telecoms network expertise, and so high-cost ‘turnkey’ solutions may be required.

As the funding is to come from the end users themselves, producing this funding upfront creates a barrier. Looking for financial sources, apart from grants, requires a better understanding of financing schemes, payback schemes, requested partnership, estimate of demand and how to guarantee the demand, and assessment of risks and how to solve this.

Within the Kortrijk region however, there is the need to a) link these networks; b) extend it 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-covering 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).

5    Policy frameworks to be dealt with/fitting in
RESOC regional strategic plan.
Digital Agenda of Europe

6    Aim of the project
1.    Definition of a business case and business model for a region-wide open (public) network in the Kortrijk region. In addition a multi-organisational consortium will be defined between regional organisations with the support of national research organisations.
2.    The geographic area is the whole region, therefore including both urban and rural areas, both densely as well as lowly populated areas. The economic returns for investors or models therefore will differ according to the specific area, the pilot project wants to take the whole region into account.
3.    The focus is not on technology but on business models, building support and partnerships. The project therefore is a strategic project.

The project seeks close cooperation with a broad variety of public and semi-public partners (funding) and private organisations (model).The approaches and results Denmark and Friesland will be used to prepare the business case and trigger debate.

Horizontal mainstreaming:
•    All local government Kortrijk region
•    Universities and bachelor institutions
•    Local and regional welfare organisations
•    Local and regional cultural organisations
•    Chamber of Commerce and Industry
•    University Colleges such as HOWEST and KATHO
•    ICT-companies or regional ICT-organisations

Vertical mainstreaming
•    Kortrijk.IN
•    Regional welfare organisations
•    Regional policy organisations such as RESOC Zuid-West-Vlaanderen
•    Province of West-Vlaanderen
•    IBBT (Flemish Institute of Broadband: IBBT (Interdisciplinary Institute for Broadband Technology) is an independent research institute founded by the Flemish government to stimulate ICT innovation. The IBBT team offers companies and organizations active support in research and development. It brings together companies, authorities, and non-profit organizations to join forces on research projects. Both technical and non-technical issues are addressed within each of these projects.
•    Flemish government (CORVE)

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 a regional decision. The focus of this project is less on technology but on business models, building support and partnerships, 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 fiber optic networks models and best practices in the Vital partnership and beyond
•    Review business-cases existing open networks
•    Mind-setting and triggering a public debate
•    Political agreement
•    Building a long-lasting consortium based on an economic viable model

Implicitly, the region ambitioned to get a Paradigm shift amongst public and semi-public organisations in dealing with broadband, a major rethinking of the cost of service-delivery, new partnerships (public and semi-public) and triggering of a debat.

In preparing discussions it turns out that a Regional Open Network would be used between the participating organisations for data-services, financial services, shared 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 will be assessed. These models were based on desktop research of public data on broadband projects from around Europe, research done by DG REGIO and best practices within the Vital Rural Area partnership. 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).

7    (Expected) Results
1.    An assessment of the viability of different business and finance models
2.    An inventory of public services aimed at citizens and location-based services
3.    A shared vision on service-delivery
4.    Review business-cases existing open networks
5.    Mind-setting and triggering a public debate
6.    A Political agreement
7.    A long-lasting consortium based on an economic viable model
And in a later phase, the selection, financing and implementation of the most suitable scenario.
8    (Expected) outcome within the WP
1.    An assessment of the viability of different business and finance models
2.    An inventory of public services aimed at citizens and location-based services
3.    A shared vision on service-delivery
4.    Review business-cases existing open networks
5.    Impulse for awareness and developing public-owned and open high-bandwidth infrastructure and use
6.    Identification of desired shared services amongst the partners
7.    Development of expertise amongst the partners

9    (Expected) outcome for the region as a whole
(impact of the project; effects may be written in terms of the sustainability triangle = 3 P approach (people, planet, profit), i.e. benefits on the social, economical and physical part)

A Political agreement
A long-lasting consortium based on an economic viable model
And in a later phase, the selection, financing and implementation of the most suitable scenario.

The desired effects are
1.    Increased end efficient use of high-broadband services between the consortium partners
2.    Affordable and sustainable solution
3.    Economic stimulus
4.    More efficient governments
5.    More efficient businesses
6.    Smarter services to citizens and businesses

10    Planning
•    Agenda-setting. Introducing the target as one of the regional priorities for the period 2010-2014. This involves convincing policy panels and public panels.
•    Desktop research to valid regional business models.
•    Inventory potential regional services G2G, G2B and G2C that could validate this the model.
•    Analysis of valid technical solution (mix of technologies) and their cost
•    Regional-wide consultation (government, educational organisations, voluntary organisations, semi-public organisation)
•    Analysis of potential services on the open network and calculation cost-benefit (cost/savings)
•    Definition of draft business plans
•    Conference with stakeholders and policy translation
•    In the meantime: site visits, participation to events and conferences in order to build regional dialogue and mind-setting
The major planned activities are:
1.    Desk-research on proven concepts in EU, in WP3 partner regions and
2.    Analysis of these approaches using a common methodology
3.    Identification of potential services and interfaces and potential savings
4.    Inventory existing of region-wide technical solutions and opportunities
5.    Definition of a business model
6.    Organisation of a broad consultation in order to determine the needs and preferences of the organisations involved and their expected uses
7.    Organisation of an event
11    Costs
Business plan
•    Staff: 6 man months
•    External consultancy: 40.000 euro
•    Travel and accommodation: 4 travels
•    Meetings and seminars: 2 seminars

12    Financing
50% region (several partners), 50% ERDF

13    Additional costs

14    Implementation of the project (cf. CAA)
14.1    About the project
The project combines three dimensions:
1.    Specific expertise to assess local situation on technical, financial and legal issues, including expertise 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 investments, change of working, new contracts, sufficient knowledge to make proper assessments 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 skillsets.
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.

14.2    Which stakeholders were involved?
•    Civil servants involved in spatial planning and architecture
•    Politicians
•    Regional and national spatial planning civil servants
•    International team of experts
•    Civil societies
•    Neighbourhood initiatives
•    General public

14.3    What process did you run through to fit the project into local conditions?
•    Several meetings with the local governments, both individually as in group, both with the elected politicians as the administration
•    Workshops between residents, local government and the design teams
•    Exhibition of the first designs and solutions
•    Several articles and information on municipal websites
•    Regular contact with several stakeholders and the involved local people
•    Supporting movies published on Youtube


15.1    Which successes were achieved so far in the pilot project?

•    Political support at regional level
•    A growing understanding of the added value of a regional approach
•    A growing need for shared services
•    A clearer understanding of the complexity, risks, financial cost, technical issues and how to overcome

Thanks to the project there is a lot of interest in the necessity of a broadband infrastructure, not only for government, business and education, but also for care, housing quality and other sectors.
15.1.1    - what is the background / main reason for these successes?
•    Right timing
•    Smart selection of partners
•    Availability of  essential expertise within the consortium, at least to be able to steer external experts
•    Shared problem definition at policy level
•    An ambition for making the region attractive to invest in
•    The necessity for reducing costs for government by working together and using shared services
•    Initiatives in neighbouring regions (France)

15.1.2    - what set-backs or problems did you face and what were the reasons for this?
•    Financial crisis
•    Larger cities already moving forward and having ‘their problem’ solved apparently and were less interested in the similar challenges of the rural areas.
•    Local elections
•    Parallel initiatives from telcom companies leading to political pressure.

15.1.3    - are there any break-down patterns to be recognized in the project?
•    At the end it is an economic analysis, based on the well-calculated or well-defined advantages versus an assessment of cost and risk.
•    Telcom companies always will challenge this kind of initiatives. Cooperation with them (after procurement) always will be needed in some way.

15.1.4    - are these set-backs, problems or break-down patterns easy to solve? How?  
1.    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.
2.    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.

15.1.5    what are the DO’s and the DON’Ts of the project?
DO NOT minimize project in terms of cost of connection between location X and Y, as there a) seldom will be a business model supporting this and b) the overall connection is the real profit
DO valorise on (research) pilots together with telcom companies, provided there is real research and clear goals by all partners
DO maximize on the expertise of other regions within the EU. Although the spatial context is very different, and the context within which the partners have to work usually not comparable, the underlying element is the business model. In addition, most of the procurement has to abide to European legislation and therefore is comparable.
DO attempt to think outside the regional scope to solve the regional challenge. There are European financing schemes (outside of grants), and linking with other (cross-border) regions provides opportunities.
DO make use of technology future-proof standards (fiber optic)

15.1.6    - what are critical success factors in this project?
•    Facts and sound assessment of risks, costs, technical issues, legal possibilities, organisational requirements
•    Strong project management
•    Early involvement of partners in providing terrain knowledge, while making clear that this does not automatically imply that they eventually have to enter the investing partnership.
•    A regional political ambassador and policy support within the participation partners in the consortium
•    Specialist legal and technical support
•    Reaching out and access to successful region within Europe

15.2    What are the expected boundary conditions for the project to be implemented?
15.2.1    - in terms of policy frameworks
•    At (regional) policy level, have the ambition explicitly mentioned in all regional policy documents, including updates.
•    Find the most suitable model for investing in a broadband network, that fits into European regulations, that is financially sound and that is future-proof.
15.2.2    - in terms of physical circumstances
There is a  major difference between building an open network in rural and urban areas. Although the cost for urban areas is higher than rural areas, the economic basis is stronger and potential earn-back time lesser. The geographical boundary will eventually define the cost and financial sustainability.

15.2.3    - in terms of involvement of people / partnerships / entrepreneurs / public bodies
•    Early involvement of partners in providing terrain knowledge, while making clear that this does not automatically imply that they eventually have to enter the investing partnership.
•    Commitment amongst key partners to ‘really look into the matter’ and ‘have all parameters right’ in order to prepare a strong case. This involves bringing together a wide range of expertise only to be found in a cooperation of governments, universities/university colleges, entrepreneurs, technology-oriented business and politicians.
15.2.4    - in terms of budget and financial support
Think inside-the-box to identify the cost and risk and out-of-the box to identify financial schemes. Look at a combination of grant, own money, expected return, and investment loans (like the EIB).  

15.3    Which related projects can be studied or consulted (other innovative best practice examples) before starting to think on implementation?  
•    Provincie of Friesland and Groningen
•    Danish projects
•    Examples in other regions
15.4    What is the applicability / transferability of the project?
15.4.1    a) as derived from the project results
- in terms of critical mass (physical, social, budget)
•    Expertise in bringing together a wide range of expertise available amongst the regional partners
•    Expertise in
•    Involvement of a critical group of partners to make the chosen model ustainable
•    partners costs money
•    Expertise is available
•    Area not too big not too large
•    Differences within region not problem as part of one project

- in terms of the needs of the region or location
•    Basic understanding and trust between partners
•    Sufficient value in creating such an initiative, whether now or for future services
- in terms of the starting point for implementation
- in terms of participation and organization
Open but factual culture.
- in terms of time needed for implementation
Minimum 6 months, maximum 2 years
- in terms of expected outcome (spin off for other fields: physical, social, economical)
A clear and correct model, taking into account all relevant parameters.
15.4.2    b) as derived from testing or implementation the project or the project results elsewhere.
What were the results there?   
•    Project still underway
•    Transnational cooperation: The project will look in great extent at the work already done and planned in Denmark en Friesland. Also experience in the partnership like Norfolk County Council will be addressed. The project aims at tapping into best practice models available at Partners will be asked to offer methodologies, access to research done, peer-review approaches and offer clear insights

15.5    Tools in this project
•    How to calculate costs and benefits
•    How to make 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

15.6    Sustainability
15.6.1    a) How is/can the project be sustainably implemented? What is needed to reach this?
- in terms of organization
•    Depending the phase of the project, a different set of skills is needed.
•    The final organisation should reflect the chosen scenario but keep the partners on board in some form.
•    Both a strong project management as well as a (political) ambassador is needed.
-in terms of regional / local networks/partnerships / people  
•    An open but factual culture.
•    Evidence based policy rather than policy based evidence.
•    A balance between a correct representation of all participating organisations and sectors versus a representation of all needed skills.
- in terms of budget
•    Make available upfront sufficient resources for the project management, the events with partners and the involvement of expertise.
•    For investments, involve atypical partners like the EIB.
15.6.2    b) what are the benefits of the project seen from the Profit, Planet, and People side?  
•    Better services for citizens and companies
•    Better sharing of expertise
•    Sense of achievement which might be a starting point for new initiatives

•    Major savings at broadband costs
•    Smaller costs for setting up and giving access to shared services
•    Effective share of expertise amongst organisations
•    Development of of services

•    A more effective use of technology between public and semi-public  partners will lead to a changed transport needs
•    If shared services are used, larger and more energy-efficient infrastructure can be purchased that can be powered with locally produced energy.

16    Last update of this format
May 15th 2013