1 Successful municipal and regional projects in over- coming gaps in broadband provision. A RESE ARCH ON BEHALF OF THE MINISTRY OF ECONOMICS AND TECHNOLOGY. S uccessful municipal and regional projects in overcoming gaps in broadband provision. 2 Imprint Purchaser Ministry for Economics Scharnhorststraße 34-37 D-10115 Berlin Germany Text and Editing Agentur für Kommunikation und kommunales Management (atene KOM) GmbH Managing Director: Tim Brauckmüller Amtsgericht Berlin Charlottenburg HRB 111699 Editorial Deadline 23. Februar 2010 Authors Tim Brauckmüller Gordon Albrecht Eike Gutt Jörn Henrich-Matejka Contact atene KOM GmbH Georgenstraße 24 D-10117 Berlin Telefon: 030 6098990-0 Telefax: 030 6098990-99 E-Mail: [email protected] www.atenekom.eu 3 C ontent 1. Abstract ......................................................................................................................... 4 2. Method of research ..................................................................................................... 6 2.1 Outline of the problem ...................................................................................................6 2.2. Aims ...................................................................................................................................6 2.3. Data collection .................................................................................................................7 2.4. Subject of the study ........................................................................................................8 2.5. Sample of best practice examples ................................................................................8 3. Best practice examples .............................................................................................10 3.1. Examples from an economic perspective ................................................................11 3.2. Examples from an administrative point of view .....................................................19 3.3. Examples from a technological perspective ...........................................................28 3.4. Other best practice examples .....................................................................................35 4. Conclusions .................................................................................................................36 4.1. Challenges for project participants ..........................................................................37 4.2. Demand analysis, feasibility studies and information events ..............................38 4.3. Topographical conditions and choice of technology ............................................39 4.4. Financing: opening markets and funding ................................................................39 4.5. Solution partners of communes and regions ..........................................................40 4.6. Contracts and access prices for customers .............................................................40 5. Recommendations for action ..................................................................................42 5.1. Administrative approach .............................................................................................42 5.2. Economic perspective ..................................................................................................45 5.3. Technological approach ..............................................................................................47 6. Checklist for municipal broadband projects ........................................................50 S uccessful municipal and regional projects in overcoming gaps in broadband provision. 4 1A bstract In the past 15 years, the Internet has developed rapidly both technically and in content. Whereas at the beginning only few offers were available, mainly consisting of text do- cuments, there has been an increase in new multimedia content over the years. The technical development, known today as web 2.0, has contributed to the fundamental change not only in the technical conditions and standards but also in the way services and content are used today. The relevance of a fast internet connec- lability of qualified personnel.3 A decis- tion and the disadvantages of having ive factor for the location of households poor access are basically indisputable. and small businesses is the availability Not only in the telecommunications sec- of broadband internet and the access to tor broadband is a central growth fac- information and the communication pos- tor. Economic growth can be effected by sibilities that come with it. The unavaila- improved communication possibilities.1 bility of broadband can lead to structural Increased productivity and new areas of problems in the affected regions and can business are connected to that and can in the worst case lead to moving away of have a positive effect on employment in firms and young people. the long run.2 In the past years the telecommunication In questionnaires firms measure the same companies have invested huge amounts importance to broadband connection as in the modernization and expansion of to convenient traffic accessibility or avai- Germany’s broadband infrastructure. Even in the coming years, extensive in- 1 See: OECD – The role of communication inf- vestments are planned in the develop- rastructure investment in economic recovery ment of the network. (2009) p. 5 2 See: Katz et al (2009): Die Wirkung des Breitbandausbaus auf Arbeitsplätze und die 3 See: Breitbandzugang als Standortfaktor für deutsche Volkswirtschaft Unternehmen im ländlichen Raum Baden- Württembergs 2009 5 Today 22 million of the 24 million broad- the past years makes it possible to use band connections are DSL connections radio linked technology to provide cus- integrated in the classic telephone con- tomers with a high data speed. Internet nection.4 A pioneer in the expansion is connections are now being offered more “Deutsche Telekom AG” which as a priva- and more using radio networks which are tized company plays a huge role in the im- based on WLAN or WiMAX. Mobile com- provement of provision. With that Deut- munication systems have won in signifi- sche Telekom AG plays an important role cance as a medium of transfer for large in expansion of infrastructure especially data packages since the auction of UMTS in rural municipalities and regions in spite frequencies. With the further develop- of the steep competition which is carried ment of UMTS, HSPA, fast internet con- out in price. The economic pressure has nections can be used on the way. led to expansion being carried out only when profitable even for the former state The research „Successful regional pro- owned firm. jects in overcoming gaps in broadband provision“ should show how overcoming Competition in the telecommunica- broadband provision gaps can be achie- tion sector has led to a diversification of ved at local and regional level. This abs- technological approaches. Even if DSL is tract gives an overview on the results of the widest used connection technology, this research. alternative technologies are constantly taking ground in market participation.5 First firms have started laying glass fiber cables in areas with high population den- sity with which they directly connect their customers. These connections, known as „fiber to the home“ (FTTH) are consi- dered to be a secure investment because they provide almost unlimited band- width. Even cable network companies are beginning to upgrade their existing net- work in many towns and municipalities to facilitate use of telephone and internet in addition to digital television recepti- on. Thanks to this investment, 1.9 million users are online using the TV cable con- nection. With that, broadband using tele- vision cable has become the second most important connection technology. In recent times, radio technology has become increasingly important in es- tablishing broadband internet connec- tions. The technological development in 4 See: EU Commission COCOM09-29, p. 10 5 See:EU (2009): Broadband access in the EU (COCOM09-29) S uccessful municipal and regional projects in overcoming gaps in broadband provision. 6 2M ethod of Research 2.1 Outline of the problem The increasing diversity of connection easy to solve: In 2009 the overall pro- technology and the increasing bandwidth vision for households in Germany with on one hand is counteracted by regions the minimum requirement of 1Mbit/s in in which modernization of existing, or downstream was 96.7%. This figure how- establishment of new infrastructure is ever does not show that there is a pro- not possible or only possible at very high vision problem for small municipalities costs due to topographical issues or low in rural areas and that some regions are customer potential. In most of the areas completely unprovided for, these are the that are currently under-served, the di- so called white spots. stance between the multiplier and cus- tomer are so large that it is not possible, These regional disparities are a result of with the existing copper cables, to pro- a low number of potential customers in vide a broadband internet connection rural areas. Due to the sparse settlement based on prevalent DSL-technology. the investment costs are comparatively At first glance, the problem of poor pro- higher than in urban areas and the profi- vision of broadband internet seems tability is achieved a lot later. 2.2 Aims The German federal government wants blanket coverage of broadband connec- to