2. Why Open Access is the Right Choice for Communities
In Open Access Networks, Broadband is seen as a critical infrastructure and the community does not compete with the private sector
– but cooperates with it.

3. Why Open Access is the Right Choice for Communities
Introduction
Introduction to Open Access
Why is a Dark Fiber Lease Model NOT Open Access?
Open Access is the Foundation for Smart City Applications
Will the Community and the ISP’s be Able to Make Money?
Challenges with the Open Access Model …
Summary and Discussion

4. Broadband in Sweden and COS Systems
Introduction
Broadband in Sweden and COS Systems

5. © 2011-2017, COS Systems, All Rights Reserved
Broadband in Sweden
National goal: 95% access to 100 Mbps by 2020
Density: 63.5 / sq mile (USA 90.6)
Figures for 2016:
79% access to Fiber (45 yards)
99.99% access to 10 Mbps
73% access to 100 Mbps
42 cities/towns with more than 30,000 residents
Hundreds of City Networks – all of them Open Access
Broadband is an essential commodity with low prices
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6. © 2011-2017, COS Systems, All Rights Reserved
Founded 2011 in Umea, Sweden, as a spin-off.
Umea has (one of?) the first city-owned fiber networks built in 1994
Umea still has among the highest Internet speeds in the world
FTTH Software Experience
2002 first FTTH applications
2008 Open Access BSS/OSS COS Business Engine
2013 Demand Aggregation solution COS Service Zones
US Subsidiary in New York 2014
2002
2008
2011
2013
2014
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7. COS Business Engine Manage Your Entire Network in One System
- Step 1 -
COS Service Zones
Aggregate Demand
Before You Build
- Step 2 -
COS Business Engine Manage Your Entire Network in One System
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8. Introduction to Open Access
In the Open Access model the ISP will focus on billing and customer service. The network will be built maintained and managed by the operations company

9. What if every freight company had to build their own roads?
What would the price to get a package delivered be?
And who would build roads to remote locations?

10. Comparison between a municipality and a private company
What are their goals and skills?
Private companies’ goals with broadband
Maximizing profits
Dividend to Shareholders
High share price
Maximizing ROI on investments
Reach quarterly targets
Private companies’ skills
Contact with end customers
End customer billing
Sales & Marketing
Municipalities’ goals with broadband
Job creation
Innovation
New and current businesses
Quality of life - residents staying/moving in
= Secured or higher tax revenue
Municipalities’ skills
Maintaining municipality owned facilities and infrastructure
Who would build to the farmer?

11. The Open Access Business Model
Multiple ISPs on the same network compete for the end customers with quality and price of service
Subscribers
Service Providers
Network Operator (Owner)
Fast Fiber Inc
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Network Operator invoices the Service providers a base fee per service for providing fiber access to subscribers
No 1 Fiber Inc
Service Providers invoice the subscribers for the services they deliver to them and take care of customer support
NB! In the two-layer Open Access model the network owner operates the network. In the three-layer Open Access model there is a separate Operator that the Network Owner has contracted to operate the network.

12. Connected subscribers
Network
Owner
Service Providers
Connected subscribers
Builds infrastructure
Connects customer properties
Markets all service providers and services on an online marketplace
Activates/deactivates services
Provides ISP’s with deliverable addresses
Normally don’t sell services on the network
Don’t bill subscribers, but bill the ISP’s the wholesale price for each service
Market services on the network’s online marketplace
Sell Services to connected subscribers
Receive orders from the Operations system
take orders by phone and registers in the operator’s system
Give customer support
Bill subscribers
Search their address in the online marketplace to view available services and providers
Order services in the marketplace, or
Order services directly with ISP
Reach out to their ISP for all support questions
Can manage their services by logging into their “My pages” on the online marketplace
The Network Owner Builds and Operates the Network, ISP’s sell Internet Services and Take Care of Subscribers.
The Network Owner decides where to expand the network and takes the full investment of building all the way to the customer’s property and installing the ONT. The Service Provider has access to the database of connected customer properties and knows which addresses they can sell services at. If they get an order from the marketplace they know it’s deliverable and that as soon as the operations company has activated the service they can send the first bill.

13. Large Providers

14. Why is a Dark Fiber Lease Model NOT Open Access?
With a dark fiber lease model you don’t control the entire path to the end user, which means your future is in the hands of others

15. A Dark Fiber Lease Model Creates Local Monopolies
With infrastructure investments needed there will not likely be any competition
Who will build here, where there are few houses and far from backbone?
= City Owned Backbone
= ISP A’s Middle Mile & Last Mile Networks
= ISP B’s Middle Mile & Last Mile Networks
= ISP C’s Middle Mile & Last Mile Networks

16. Open Access is the Foundation for Smart City Applications
If you don’t control the infrastructure, how will the community or other entities deliver critical smart city applications of the future?

17. Who will invest in the infrastructure to reach these houses?
Let’s Say You Want to Install Smart Electricity Meters, Streetlights or Other Smart City Services the Future Holds
If you don’t control the middle and last mile you need agreements with multiple private companies who might not consider the community benefit
Who will invest in the infrastructure to reach these houses?
= City Owned Backbone
= ISP A’s Middle Mile & Last Mile Networks
= ISP B’s Middle Mile & Last Mile Networks
= ISP C’s Middle Mile & Last Mile Networks

18. Will the Community be Able to Make Money?$
Will the Community be Able to Make Money?
With an open access model the community is in control of their profitability and take-rates – but the real value doesn't come from service revenue

19. In 2009 SkeKraft.net was a Single Provider Network with many systems, no online marketplace and a lot of manual processes
2011 they decided on an Open Access model
Case Study
2009
In 2009 SkeKraft.net operations was to a big extent based on manual processes. Many systems with manual entry and no marketplace. Subscribers had to phone in to order services.
1 Service provider
3 services: Internet 10Mbps, 100Mbps och VOIP
18 employees
52% take rate
~ subscribers
2012
Two years after going live with COS Business Engine they have a Marketplace in which the customers and the service providers take care of 98% of all previous work done by them.
8 Service providers
16 internet services
5 VOIP services
2 TV services
14 employees
67% take rate
~ 15,000 subscribers
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20. © 2011-2017, COS Systems, All Rights Reserved
Case Study
A system tailored for Open Access ensures instant efficiency improvements
Avoiding the hassle with subscriber billing and support cuts costs, while Service Provider competition improves take-rates
Revenue
Costs
EBITDA
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21. Best City Network of 2017 Profitability continues to increase
Now they are investing $45 M USD over four years to connect an additional 4000 subscribers in remote villages – often with fewer than 100 houses
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22. Other values are probably more important!
Job creation, ability for businesses to stay in the town, quality of life, ability to work from home, environment, etc.
Save on Internet costs for city facitilities
Low price = higher adoption and realized benefits of usage

23. Other values are probably more important!
Job creation, ability for businesses to stay in the town, quality of life, ability to work from home, environment, etc.
New jobs created
Less traffic and pollution since Internet capacity is enough where you live or work

24. With the whole sale price and competition you’re in control
To reap the benefits of a muni network people and businesses have to use the fiber services!
If take-rates are low due to high prices you can’t affect it in a single provider environment.
With Open Access competition will bring the prices down if the wholesale price is lowered and then take-rates will go up

25. $ Will ISP’s be able to make money?
Sweden is the most mature open access market in the world.
After ten years of competition, are the ISP’s profitable?

26. Large Providers
$25

27. Large Providers
Turnover
Profit
Profit margin

28. Large Providers
Turnover
Profit
Profit margin

29. Large Providers
Turnover
Profit
Profit margin

30. Large Providers
Turnover
Profit
Profit margin

31. Large Providers
Turnover
Profit
Profit margin

32. The typical Revenue Split
Operator 70% - Internet Service Provider 30%
Subscribers
Service Providers
Network Operator (Owner)
70%
30%
100%
Billing data for ISP billing is aggregated by COS Business Engine
Fast Fiber Inc
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All data required for Subscriber billing is fed to Service Providers by COS Business Engine
No 1 Fiber Inc
Operator costs:
Capex investments in Fiber infrastructure and hardware
Daily operations of Network; service provisioning, monitoring, repairs and maintenance, 2nd line support, etc.
Service Provider costs:
Transport to Network
Bandwidth
1st line customer support
Billing

33. Cooperate with local ISP’s to create jobs in the community and strengthen the local economy
Example
Number of employees:

34. Challenges with the Open Access Model
What they are and how to overcome them

35. Challenges and Common Pitfalls with Open Access
Challenge: Complexity of the business model
How will you be able to share information with the providers on deliverable addresses?
How do you keep track of which provider is currently serving which customer?
How do you make sure every provider gets an accurate bill every month?
How do you enable efficient and fair competition between providers? It needs to be easy to change prices and terms of service on the online portal.
Solution: A System built for Open Access
Don’t think that you will be able to manage this with spread sheets or standard CRM solutions. You need a system tailored for open access – already from the start. Bad data is like a snowball. If it starts to get bad the problem will only grow bigger with time.

36. Challenges and Common Pitfalls with Open Access
Challenge: Will we get any customers and providers on our network?
This is a typical, which came first the chicken or the egg - problem. Will you be able to attract providers if there are no subscribers? And without providers, will you be able to attract any subscribers?
Solution: Demand Aggregation
In every network built in Sweden the starting point nowadays is a demand aggregation campaign, whick is also getting more common in the USA. “Build it and they will come” is a thing of the past. Set up a “fiberhood” campaign and let the subscribers prove to you and your providers that they want your services. With pre-signed up customers you will easily attract providers. Who would say no to paying customers with minimum capex investments?
Also, when you know your take-rates in different parts of your future service area you can do your build-out in the optimal order reducing time to break-even while making your providers profitable faster. You’re also avoiding the worst areas where no one is yet willing to sign up. Starting your deployment in such an area will risk the entire project and probably scare the providers away.

37. Challenges and Common Pitfalls with Open Access
Common pitfall: The community bills the subscriber
In some cases the muni has decided to send a bill to the end customer - typically a “base cost” for being connected to the network. This removes one of the biggest benefits of being the operator of an open access network which is to get away from the end customer and focus on the network itself. There is a high cost involved in the billing process itself, but the biggest drawback is that your support calls will increase dramatically. It’s unclear to the end customer who they should call when there is a problem with the internet since they get billed for it by multiple entities.
Solution: Just don’t
Just don’t do it! Send one monthly bill per provider and let them invoice the subscribers.

38. Summary

39. © 2011-2017, COS Systems, All Rights Reserved
What is Open Access: One entity builds and maintains the network. Multiple providers sell services and give support to subscribers. This will drive service quality up, prices down and thus utilization up.
Why is a Dark Fiber lease model NOT Open Access: When you don’t control the infrastructure all the way to the actual house you’re simply creating smaller local monopolies.
Open Access enables smart city services: To be able to control the roll-out of these services you need to be in full control of the network
Will the muni be able to make money: Yes! But the most important things are future proofing your city and staying competitive. Keeping residents and businesses and creating new jobs of the modern economy.
Will the ISP’s make money: Yes! They have hardly any investments. But you need to manage your network in a good way so you don’t create extra work for them. No spread sheets and manual processes!
Challenges and pitfalls:
Get proper systems from the start!
Demand aggregation – sell before you build!
Don’t bill the subscribers. Let the ISP’s do it!
Why
Open Access
is the
Right Choice
for Communities!
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40. Discussion on Open Access!