Parallel Session 2 - Business Models & Return on Investment 5/29/2019

Parallel Session 2 – Business Models & Return on Investment This session will examine approaches for governments and local authorities to consider when calculating the "Return-on-Investment" of investing in High Speed Broadband. This includes social, as well as economic returns. The role that communities and public-private-public partnerships can play in developing and paying for broadband solutions will also be examined. Explain why public non-profit broadband companies, established at county or regional level can help to deliver sustainable high speed broadband. What role could the local communities (in towns or villages) in Donegal play in helping to deliver High Speed Broadband? Are there models in existence which can measure the social or community return on investment of deploying HSB networks in rural areas, especially in cases where the business case is not clear? Which financial models do you think better fit into the current scenario? Which are the assumptions or considerations to bear in mind under this approach?

Parallel Session - Format Session = 2 hours (start 10:20) 10 Minute Presentation by each Expert 4 X 10 mins. per Expert = 40 mins. (finish = 11:00) Answers from Audience to Gaps in Expert Knowledge Discussion between participants & audience = 50 mins. (finish =11:50) Agreement on Conclusions 30 mins (finish 12:20) Rapporteur will record main points for reporting conclusions Facilitator/rapporteur will make report after lunch Component 3 activities By Jose Manuel San Emeterio & Anne-Mari Leppinen 5/29/2019

Explain why public non-profit broadband companies, established at county or regional level can help to deliver sustainable high speed broadband. Answer 1 Public companies have a regulatory role and infrastructure provision expertise ex roads. Because public sector cares for society, not primarily interested in profit, should drive a quality of life agenda. Already utilise public funds to ensure services which are essential to quality of life in a region. They would be an enabler for bottom up provision. Answer 2 Could work as the infrastructure provider, it could act on commercial terms, develop well executed plans. Could be the lead partner in a Limited company to seek a longer term commercial return than a service provider would. They can develop and retain control of infrastructure and leverage public funds. They can ensure competition for customers if they are removed from service provision. 50% of broadband usage in a location can be by the public sector, by investing it can save public sector 30-50% on costs with greater socio economic efficiency and profits ex in the area of health.

Must elect an appropriate champion, co-ordinator and planner. Explain why public non-profit broadband companies, established at county or regional level can help to deliver sustainable high speed broadband. However there must be a comprehensive overview role somewhere in the model. Good planning must be followed with good management otherwise quality and control will suffer. Public sector as an enabler, not a service provider. Municipalities should not sell the infra, they should retain control to ensure a monopoly does not happen. Follow Up Action 1 Must elect an appropriate champion, co-ordinator and planner. Follow Up Action 2 Must be an entity with a complete understanding of the restrictions and legislation involved. Component 3 activities By Jose Manuel San Emeterio & Anne-Mari Leppinen 5/29/2019

What role could the local communities (in towns or villages) in Donegal play in helping to deliver High Speed Broadband? Answer 1 Local communities can act as an instigator. They can initiate local community companies, for example structured as a co-op, the local region/municipality could finance it with local communities delivering the local networks. Local communities are essential in determining, driving and fostering demand aggregation, providing data for a business case through local drives to assess needs and gain customers Answer 2 Local communities have latent skills and can be labour providers, for example Village Network Initiative - Sweden, ex farms come together put in own infrastructure, carry out own labour. Connect to main infrastructure. Local communities can be local delivery agents.

What role could the local communities (in towns or villages) in Donegal play in helping to deliver High Speed Broadband? Follow Up Action 1 Get the local community to push for action, be the demand element of the overall plan. Follow Up Action 2 Enable local communities to use their latent skills and free labour. Help them understand that this can work, Component 3 activities By Jose Manuel San Emeterio & Anne-Mari Leppinen 5/29/2019

FTTH costs and benefit calculation Un-captured values Roll-out cost Telco return Internet service revenue Telephony service revenue TV service revenue

Direct economic activity Very high access speed New infrastructure Direct economic activity FTTH deployment increased use of ICT services ICT competence HR pool Customers for new services ICT Maturity: digital natives lower prices for services Ease to do business Increased market value Functional separation new business model New/better services Sensor networks reduced traffic congestion Video surveillance Power grid efficiency learning curves Competition between SPs reduced environment impact lower barriers True cloud computing productivity Distance working low upfront investment for NP and SP Videoconf Telepresence Profitability of NP and SP Of PIP higher employment Virtual labour mobility Perceived quality of life e-learning HD and 3D TV VoD Network gaming reduced forced migration lower publ spending higher tax revenue E-health RoW revenues E-government Education quality and cost transparency in PA efficiency Democracy strengthened corruption discouraged lower burden of bureaucracy Logistics, prod, management GDP New ICT and traditional companies Dev. of new technologies entrepreneurship

Are there models in existence which can measure the social or community return on investment of deploying HSB networks in rural areas, especially in cases where the business case is not clear? Answer 1 Not yet modelled at EU level, dependant on legislative conditions of location. No papers for HSB. First comprehensive study at EU level is by Analysis Mason. Answer 2 Municipalities have developed their own infrastructure in Sweden, utilised tax payers money to keep business and socio demographically productive people in the area. Roll out cost vs revenue generation – will never happen. Uncaptured values are a means of measuring other benefits to society. Quality of life is also an important factor - society much happier as have a good quality service, efficient, a pleasure to use. Have measured higher employment, value for customers, public savings in communications, within 5 years

Are there models in existence which can measure the social or community return on investment of deploying HSB networks in rural areas, especially in cases where the business case is not clear? Follow Up Action 1 There is a need for greater modelling. There is a gap in modelling in this area, pilot could be developed in the county to feed into regional, national and EU decision making. Follow Up Action 2 Public sector should have a role in increasing quality of life, can pay for most of investment with societal connection and returns in terms of health, quality of life etc. Need an organisation to drive forward mapping, measurement and planning. Component 3 activities By Jose Manuel San Emeterio & Anne-Mari Leppinen 5/29/2019

For Donegal Bottom Up model as used in Sweden may be a good option. Which financial models do you think better fit into the current scenario? Which are the assumptions or considerations to bear in mind under this approach? Answer 1 For Donegal Bottom Up model as used in Sweden may be a good option. SF grants most likely solution where business case not clear, infrastructure sharing is crucial as such public involvement is necessary. Could use a Neutral network model, passive infrastructure provision provided by public sector, who already are infrastructure providers, road, Right of Way etc. Service providers work solely with customer, removed from provision of infrastructure and as such this ensures competition and greater savings for the consumer. Answer 2 Could wait for 4G roll out and then rely on fibre provision at Base Station.

State aid might be an issue in rolling out local schemes. Which financial models do you think better fit into the current scenario? Which are the assumptions or considerations to bear in mind under this approach? Follow Up Action 1 A Masterplan must be developed to connect everything involve operators, public sector provide infrastructure, operators will want to use, competition benefits customers. Follow Up Action 2 Government needs to remove all barriers, planning, local authority funding etc. Municipalities do not control essential service provision Ireland, ex electricity provision, this is a semi state function therefor the sharing of infrastructure would have to be a national decision. State aid might be an issue in rolling out local schemes. Long term lending will need substantial public support and intervention. Large scale roll out will present significant delivery and administration challenges. Component 3 activities By Jose Manuel San Emeterio & Anne-Mari Leppinen 5/29/2019