Business Models of Community Networks

Transcription

1 Seminar: Internet Economics, Talk No. 6 Business Models of Community Networks Alice Hong 24 November 2011

2 Agenda Community Networks Benefits & Key Challenges Public-Private Partnership Evaluation Criterion Business Model Structures Conclusion References Discussion

3 Community Networks (CNs) Created & deployed worldwide response to large costs & long RI period Providing broadband access to citizens, communities, public institutions and developing businesses Free & cheap internet access Large amount of initiatives in recent years Denmark: Bryggenet USA: Digital Communities program by Intel

4 Definition Community Networks is a proven approach to provide ubiquitous access, broadband connectivity, a range of important society related and business applications to citizens, institutions and companies in a given geographic area. Combination of telecommunication infrastructure, the services provided on it, and the specific business model to operate the infrastructure (Farkas, 2009) Also known as Municipal Networks

5 Digital Ecosystems (DE) Emerging field: Presence of an ubiquitous infrastructure Contributes to sustainability: CNs DE PAALS: Mainly for SMEs pen & Low-cost P2P Architecture New Aug 2010: EU concluded the pen Knowledge Space (KS) research project

6 verview of CNs Benefits Social Betterment (Bridging Digital Divide) Economic development Government efficiency Tourism and Marketing Challenges Economic Technology Legal & Regulatory (P.A Farkas, 2008)

7 Driving Applications of CNs Access to public information and services Public safety Traffic control and transportation Health care and telemedicine Business services Educational Utility companies (electricity, water, gas, etc.)

8 Public-Private Partnership Range of business models according to the structure of public-private cooperation 1 Publicly owned and operated 2 Privately owned and operated 3 Non-profit owned and operated 4 Publicly owned, privately operated 5 wned and operated by a public utility

9 Evaluation Criterion for accessing CNs a) Clear identification of needs b) Good public-private partnership with involvement of stakeholders in planning and strong commitment c)ngoing or ceased?

10 Business Models for CNs (Daggett, 2007) and (Josgrilberg, 2008) Examples 1. Franchise: Wireless Philadelphia 2. Anchor Tenant: Corpus Christi Trentino 3. New Grassroot: FN Broadband Tyrell Country SparkNet

11 1. Franchise Model Private corporate franchise Public administration grants private company the use of facilities & does not commit Third Party Provider pays for assets to public Category: Private/Public

12 Wireless Philadelphia USA Investment: 20 million USD Public Administration: Philadelphia city Third Party Provider: Earthlink Purpose: To subsidize internet access for low-income residents Result: Failed Reason for failure: (b) Lack of commitment by public to private (c) Discontinued in 2008 Reliance on advertisement as a source of revenue for financing free internet Internet access is not enough, business application are needed

13 Developments of Franchise Model ngoing uses: Expression of interest for Wireless Broadband, New South Wales, Australia Request for Proposal for Municipal Wireless Fresno, California, USA Profit generation: Advertisement can finance municipal WiFi deployment (Ad-supported Wi-Fi) Example: MSN sidebar & Google Map

14 2. Anchor Tenant Model Public administration R private entity commits to become major customer Existence of at least one key application and its users(s), the anchor tenant Category: Several PPP models Emphasis on who pays

15 T.Net Trentino, Italy Investment: 110 Million Euros Key application: Fibre optic & WiMax as backbone (hybrid architecture) Anchor Tenant: Province, city administrations and public sector institutions Purpose: To invest in a network infrastructure as part of esociety project in public administration. Result: Successful. Reason for Success (a) Clear identification of needs in the management model (b) Involvement of stakeholders in brainstorming application ideas (c) ngoing project Shared payment (70% by Cassa Trentina & 30% by Trentino Network) Savings of up to 150 K Euro yearly

16 Network Technology & Coverage Current Situation Fiber optic backbone & WiMax-based (HiperLAN-2) 78 nodes, over 750km New Infrastructure & Investment WiNet 92 nodes

17 Corpus Christi Texas, USA Example of Anchor Tenant Model Investment: 20 million USD Key application: Automated Meter Reading (AMR) Anchor Tenant: City administration Purpose: To implement a AMR system for utilities companies Result: Successful. Increased effectiveness, savings of energy, materials & time. The city sold the network to Earthlink Reason for Success Involving stakeholders in brainstorming application ideas Distinguished the question of who pays Clear financing (Earthlink pays 5% profit to city) Social benefits (increased job opportunities)

18 3. New Grassroot Model Sharing wireless access / Community / WiFI or Municipal WiFi / Communitarian (Community-based) Members serve as access points within FN router Category: Public/Public

19 Grassroot Service Providers Main Network Models WiFI Mesh WiMax Alternative Network Models FN WeFi Whisher CuWin NetEquality

20 Broadband Tyrell Country North Carolina, USA Key application: Transmission of voice and data traffic through Cable or DSL Satellite Purpose: To provide for unserved and underserved broadband in rural areas Result: Successful. Reason for Success (b) btained support for entire community & federal assistance (c) ngoing project Sharing all available infrastructure

21 FN Several countries Key Application: FN WiFi router & ASL or broadband Purpose: To share Internet connections among members of the community. Result: Successful. Reason for success (b) btained support for entire community & federal assistance (c) ngoing project with growing FN communities in many countries ver 4 million FN spots across the globe

22 SparkNet & penspark, Finland Key application: ADSL access points & schools, homes & offices as WiFi hotspots Purpose: To give seamless access to wireless internet everywhere users go Result: Successful Reason for success: (b) btained support for entire community & federal assistance (c) ngoing project ver 2000 wireless access points and 100,000 registered users

23 FN in Finland

24 FN in Finland

25 Meraki & CUWiN Mesh network using Meraki routers, Sans Francicso, USA Low-cost, fast installation, self-configured Build a network providing access to 165K users Multi-radio mesh routing and WAPs CUWiN (the Champaign-Urbana Community Wireless Network) Low-cost, D.I.Y., community controlled alternatives Relies on international & local partners Free open source, open architecture software for mesh wireless networking

26 Comparison Models Pros Cons 1. Franchise Private entities invest in public infrastructure More technical expertise & resources 2. Anchor Tenant 3. New Grassroots City do not have to finance infrastructure & assumes responsibility Easier to justify investment, generate additional applications & bring new tenants Bottoms-up approach: Communities initiate projects Leverage on existing access points & infrastructure Lack of commitment by public Relies on advertisement for revenue generation Does not overcome Digital Divide Risks of relying on network Intervention contradicts public interest Subject to legislation enforcement No assurance for availability Area coverage is an issue Sustainability

27 Linking to Public-Private Partnership Models New Grassroot Franchise Anchor Tenant

28 Conclusion Choose an appropriate business model Conduct detailed assessment study. a) Determine specific choices in deployment b) Maintain healthy public-private partnership c) Focus on long-term social development Importance of public/private networks

29 Looking Forward Future studies may examine emerging business models & new applications Applications New applications: geospatial information systems Enabling technologies are GPS and the emerging WPS (Wi-Fi based positioning) Wireless technologies Mobile WiMAX is coming Meet the expectations of Intel and others? B3G (Beyond 3G) cellular mobile systems such as LTE

30 Discussion

31 Discussion Topics What is meant by community exactly? What is involved in getting people in your community connected together? How to satisfy both the interests of public administration and the private sector? How relevant to use business models in approaching a predominantly socially-intended Community Network?

32 The End Thank you for listening.

33 References [1] I. Chlamtac, Gumaste and Cs. Szabó (Eds.), Broadband Services: Business Models and Technologies for Broadband Community Networks, Wiley, [2] "Municipal Wireless Business Models Report," Muniwireless.com, [3] PAALS - A Network of Excellence, [4] P. A. Farkas, "Alternative Municipal Wireless Network Models. Examination of Grassroots and Ad-based Initiatives", In Proc. 3rd Int'l Workshop on Wireless Community Networks, Hangzhou, China, August 28, [5] B. V. Daggett, "Municipal Wireless: Evaluating 'Public-Private Partnerships' and other Private Business Models," [6] K. Farkas, Cs. Szabó and Z. Horváth, "Planning of Wireless Community Networks," book chapter in Handbook of Research on Telecommunications Planning and Management for Business (edited by I. Lee), IGI Global, [7] K. Farkas, Cs. Szabó, Z. Horváth, "Motivations, Technologies, and Sustainability Models of Wireless Municipal Networks", In IEEE Communications Magazine, Vol. 47, No. 12, pp , December, [8] Cordell, A., & Romanow, P. A. (2005). Community networking and public benefits. The Journal of Community Informatics, 2(1).

34 References [9] Schauder, D., Stillman, L., & & Johanson, G. (2004). Sustaining and transforming a community network. the information continuum model and the case of VICNET. Paper presented at CIRN 2004: Sustainability and community technology, Monash University, Tuscany, Italy. [10] Vancouver Community Network. (2003). Vancouver Community Network.Unpublished manuscript. [11] Rideout, V. N., & Reddick, A. J. (2005). Sustaining community access to technology: Who should pay and why! The Journal of Community Informatics, 1(2), [12] Gurstein, M. (1999). Flexible networking, information and communications technology and community economic development. First Monday, 4(2). [13] Clement, A., & Shade, L. R. (2000). The access rainbow: Conceptualizing universal access to the Information/Communications infrastructure. In M. Gurstein (Ed.), Community informatics: Enabling community uses of information technology (pp ). Hershey PA: Idea Publishing. [14] Kubicek, H., & Wagner, R. M. (2002). Community networks in a generational perspective: The change of an electronic medium within three decades.information, Communication & Society, 5(3), [15 ] Lkarisny, January 1, MuniWirless, Year-end Review: Economic Recovery Through Municipal Wireless Networks.