Your Challenge

• The organization has many of the disparate parts of constructing a fiber network, but no understanding as to where and how to start making one a reality.
• There is community/political pressure to address the digital divide through community-controlled solutions.
• Municipal fiber networks could mean anything from an internal fiber network to a comprehensive broadband solution. Where and how might such a network fit into your overall strategy?

Common Obstacles

• Building and maintaining a large-scale fiber network is not necessarily a core competency.
• The money to deploy fiber with a “big bang” approach is not readily available.
• The municipality doesn’t realize all the options that they have to participate in the traditionally telco-led, broader-connectivity landscape.

Info-Tech’s Approach

• Understand your drivers and target market in order to build a network vision.
• Define a high-level operating model for how a fiber network can be deployed and governed.
• Understand your current assets and how they could be leveraged to aid in the initiative.
• Map a path forward in achievable and realistic “work packages.”

What purpose does it serve?

• Connectivity among municipal buildings/office space.
• Connectivity for important anchor institutions/agencies such as education or health care facilities.
• Broadband internet access provided to the local community and businesses.

Challenges

• Funding the build and operations of a fiber network can be costly. Funding through grants is generally a one-time lift in money and may leave financial gaps later.
• Most municipalities are not structured or staffed to be internet service providers. (Sales, Marketing, Provisioning, Service Desk, etc.).

Benefits

• When a municipality directs the building of a local fiber project, it can ensure that factors other than profitability can play a part in decisions as to where to deploy.
• Municipalities are already experienced at funding and executing on large infrastructure projects (transit, roads, water, etc.). This experience can be translated to a fiber infrastructure build.

Why Do It?

• Addressing the digital divide
• Better connectivity/control for municipal offices
• Attracting business/economic benefit

Potential Project Triggers

Common reasons that may align with initiating a municipal fiber network project:

Grants
External money sources are currently available to initiate a broadband network build.

Large capital project initiating
A large portion of the cost of installing fiber is in opening and closing the ground. If this is already being done by a large infrastructure project like roads or water works, installing the fiber assets can be comparable to a rounding error.

Public demand
Frustration with the status quo in local broadband can cause the public to demand a municipal-led solution.

Long-term cost savings
Owning a municipal fiber network designed for internal use can potentially achieve cost savings over leasing the required connectivity.

Network Terminology

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Internet Exchange (IXP)
An Internet Exchange is a generally neutral common location where Internet Service Providers (ISPs) and other internet infrastructure companies exchange internet data.

Regional Point of Presence (PoP)
A Regional PoP is a location that a larger provider uses to aggregate data connections.

Backbone
A large connection used to connect core network components.

Middle Mile
The connection between the Last Mile and internet connectivity.

Last Mile
The connection from a local network to the end user’s location.

CREATE A VISION

• What are the reasons for building municipal fiber?
• Who are the intended end users?
• What areas of a solution can be best addressed by the municipality?

DEFINE A HIGH-LEVEL OPERATING MODEL

An operating model bridges vision/strategy and execution. A minimum viable product high-level operating model for a municipal fiber network must at least define the deployment model to be used and structure of governance.

UNDERSTAND YOUR CURRENT STATE

Most municipal fiber networks will not be built completely from scratch. Each municipality will bring a different mix of assets to the table in these projects. Relationships: Private partners/agencies Assets: Technology/facilities based Skills: In-house knowledge

MAP A PATH FORWARD

• Tactics: Ways to improve the chances of success
• Financials: Funding/Sustainability
• Milestones: Realistic work packages

Almost one third (28%) of respondents to the Project Managements Institute’s “Pulse of the Profession” survey highlight “Inadequate vision/goal for the project” as the primary reason for project failures. (Source: PMI)

What problem(s) are we looking to address? Is there local context to the problem(s) that must be understood?

Who are we looking to solve the problem(s) for? Where are they and how do we reach them?

What areas of a network can a municipality participate in to address the challenges of the target market?

• Use cases for the potential fiber network
• Need(s)/want(s) that the network could address
• Problems that the network would be solving

This can be approached with a team through brainstorming, or external to a team through surveys/interviews, etc.

Info-Tech Insight

An affinity diagram (also called the KJ Method) is an activity used to organize large amounts of data into meaningful categories based on themes or natural relationships while reducing social biases.

The 5 Whys explores cause and effect relationships by asking the question “Why” five times in order to discover the “root cause” of a problem.

• Better access for digital healthcare (Telehealth)
• Better access for digital education (distance learning)
• Addressing the digital divide
• Driving economic benefits (local business)

Defining the target market for a fiber network will help create a scope for the project. If the target market is too large, there is a higher risk of funding issues and longer timelines for delivery. If too many segments of the population are targeted there is risk of trying to be “everything to everyone” and losing project focus.

Understanding the defined target market will allow for better definition of local context for the drivers of the project. Using the target market as a lens to revisit the project drivers, local context for that specific market can be layered to add depth and nuance to the vision.

Info-Tech Insight

The Municipality
The municipality, its IT staff, and related agencies/departments.

Anchor Institutions
Large public or non-profit organizations in the community such as hospitals or universities.

Local Businesses
Local private businesses that provide economic value to the area.

The Public
Residential areas of the municipality.

Defining what will be provided is required to appropriately plan and cost the future network. The approach must align with the drivers (problem you are solving) and the target market (who you are solving the problem for) in order to generate a coherent vision.

The approach should explore why the municipality deploying a solution in this manner is the best placed entity to solve the issues raised by the drivers for the specified target market.

Info-Tech Insight

Private Network
A network targeted at servicing the needs of the municipality and its direct departments.

Middle Mile
Providing connectivity from local access to regional PoPs or an internet exchange.

Public Network
A network designed to service the needs of the local public (residential or business).

Partnership
Partnering with local provider(s) to supply services.

The vision should encompass the drivers, target market, and the approach to be taken. Ensure that your vision:

• Highlights the reason(s) for the project
• Outlines who the project targets to help
• Clearly defines the intended manner of deployment
• Explains why the municipality is in a position to enact the vision

“An operating model translates strategic intent into operational capabilities. It serves as the foundation for execution and provides a clear guide for enterprise leadership team, line managers and operational teams.” (Source: EY)

What type of network will be built? What are the constraints? Who will operate it?

Who makes the decisions? How is authority delegated? How do you balance stakeholder interest with risk mitigation?

The most common deployment models for municipalities building fiber networks can be summarized into three main groups:

1. Passive Networks
2. Wholesale Networks
3. Fully Integrated Networks

Each of these groupings has different characteristics as well as different value propositions and risk profiles.

Info-Tech Insight

In a passive network model, the municipality will facilitate investment in and deployment of passive fiber infrastructure such as ducts and dark fiber. This passive network will be run as a “neutral operator” or “open access” network. Higher-level services in this scenario are generally provided on top of this network by private sector service providers.

• Municipality has control over where the fiber is deployed.

• A passive fiber network is closest in alignment to other infrastructure services that most municipalities already build and deliver. In most cases there would be no to minimal additional staff and services required by a municipality beyond what is already in place.
• This model can be used as an internal-facing network as well. The fiber or conduit would be deployed by a central department, then the other departments/agencies would buy dark fiber or access to the conduit and run their own networks.

• The maintenance of the passive infrastructure is the responsibility of the municipality.

In a wholesale network model, the municipality will deploy and activate (light up) a fiber network. Private sector service providers will purchase connectivity to end users on this network and layer services such as internet connectivity on top. This wholesale network will be run as a “neutral operator” or “open access” network.

• Municipality has control over where the fiber is deployed.
• Municipality has more control over end-user pricing.

• Depending on the target of a municipality, having control over where fiber is deployed and the ability to strongly influence pricing without having to take on marketing or support functions can strike a nice balance.
• This model can be used as an internal-facing network as well. The services would be deployed by a central department, then the other departments/agencies would connect and run their own networks. The central services could be deployed as layer 2 connectivity or potentially a private MPLS network.

• The maintenance of the passive infrastructure as well as the equipment that lights the fiber is the responsibility of the municipality.

In a fully integrated model, the municipality (or a designated single entity) will deploy and operate a full-service network offering. This offering could consist of private (point to point) as well as public (internet) services. The entire value chain including all surrounding services that promote and support the offering are the responsibility of the municipality (marketing, sales, provisioning, support, etc.).

• Municipality has control over where the fiber is deployed.
• Municipality directly sets the prices to the end consumers.

• This model is most commonly referred to as municipal broadband.
• Though there can be the most value delivered in this model, it also holds the highest risk. The initial cost to deploy these networks is high and at least one study* shows that the financial performance (and therefore sustainability) of these networks is not yet proven as a completely successful formula.

• The maintenance of all infrastructure is the responsibility of the municipality.
• The direct contact with and support of the end users is the responsibility of the municipality.

A minimum viable product for a governance structure demands that you have the answers to the following questions:

1. Who will participate in the governance structure?
2. How will the governance structure be organized?

Three common structures for Municipal Fiber Networks are:

1. Participant governed
2. Lead organization governed
3. Administrative organization governed

Participant Governed

Participant governed networks are the simplest form of governance. In this form, the participants govern themselves with no unique governance entity. This can take place through regular meetings or simply loosely coordinated efforts.

Lead Org Governed

Lead-organization governed networks can be used when there is a dominant group among the participants. This group can assume the leadership position as it is either a core provider of the services or it controls the flow of key resources.

Administrative Org Governed

With a network administrative organization governance structure, a new entity is formed specifically to govern the network and its activities.

“By approving the creation of a city broadband network, ConnectTO will help ensure Torontonians are not being left behind ... The network will be created by using city assets, such as existing fibre assets, buildings, lights, sidewalks, and boulevards, and will be delivered to homes and businesses by a private sector partner.” (Source: City of Toronto)

Take an inventory of existing assets and see if any can be used by, or aid in, the current project.

Many municipalities already have an existing skillset in fiber and/or networking. Identify useful skills and what department they reside in.

You can’t always do it all yourself. What existing relationships or partnerships exist that can aid in the project?

Assets

Abstract

Greenfield deployments are expensive and Brownfield deployments are hard. When planning the build of a municipal fiber network, we must balance a clean implementation of new technology versus reusing and integrating existing assets.

Most municipal fiber networks aren’t built completely greenfield. Before starting down the path of having a cohesive fiber network, many municipalities and their agencies have already invested in some form of fiber deployment that has remaining useful lifespan and has not yet been fully depreciated.

Fiber in the ground is also not the only asset that could aid in the building of a cohesive network. Control of assets to route fiber through or on should also be considered (poles, rights of way, etc.).

• The original funding that purchased an asset can constrain its future use (if the asset was purchased with a grant, that grant might restrict what the asset can be used for).

Skills

Abstract

Every municipality has many skills internal to its structure that can be utilized in the design, deployment, and or operation of a fiber network. All the required skills that already exist in-house may not be readily apparent, which is why an inventory can be extremely helpful.

If we break the project down in a Plan, Build, Run paradigm, we can see areas of alignment between existing skill sets and those necessary for a fiber network.

Plan: Municipalities plan large infrastructure deployments on a regular basis (roads, water, transit, etc.). The planning and architecture skills relate here.

Build: Once planned, municipalities must deploy large infrastructure as well. Project management and construction skills relate here.

Run: All municipalities operate some form or network connectivity.

• Skills may be required to deploy or maintain a network that are not needed often. These skills may be expensive to maintain in-house.

Relationships

Abstract

It is hard to be everything to everyone. Not all skill sets necessarily belong or make sense to have in-house. Building relationships or partnerships to help fill these gaps can greatly accelerate standing up and running a municipal fiber network.

Relationships should be explored both to potentially take advantage of an existing skillset and also to gain access to assets that may aid in the deployment or operation of the network.

Skills like sales and marketing or end user support may be areas that a municipality does not want to invest in developing talent at scale for. Fiber installation and repair can require highly skilled people using specialized tools that the municipality may not want to invest in.

There is often value in specific locations or existing assets that the municipality may not want to acquire or duplicate.

• Some deployments of a municipal fiber network (like municipal broadband) require the existence of departments that are not usually in existence in a municipality. Relationships and partnerships can be used to fill that gap.

“There is a history of municipal networks that failed to meet their financial targets, forcing taxpayers and or municipal utility customers to shoulder large financial losses. Organizational skills and financial capabilities are needed to successfully manage complex municipal broadband network projects.” (Source: EM Compass)

How can we best approach constructing what has been designed? What are some tactics to create value quickly/consistently?

Nothing is free. The network has to have viable financials or it will be a drain on the municipality who will have to make up the difference.

Municipal fiber networks are generally large. It is important to set realistic and reasonable goals.

In its simplest form, a “Dig Once” policy states that whenever the ground is opened for any work or project, the opportunity must be examined for installing other (potentially unrelated) items. In this case the items would be conduit and / or fiber assets.

Understand the current regulatory environment surrounding fiber and networks in your particular locality. If there are restrictions or hurdles, be prepared to contribute to change by lobbying or joining with relevant groups to advance local interests.

Understand the local telecom landscape and which areas are over/under served. Building in an area that already has many existing providers can greatly impact the usefulness and financial viability of a build.

Work with private companies who provide these services in your area to understand the barriers to further investment. Build incentives to overcome the potential barriers or hurdles where possible. These companies may also be open to helping fund required changes to process.

Clearly define standards and guidelines for network buildouts. For fiber, these standards should define things such as conduit/ducting, vault placement, hand wells, etc. When the standards are clearly defined ahead of time, adding to an existing infrastructure project is greatly simplified.

Anchor institutions in the area such as health or educational-related facilities that are generally government related or adjacent agencies located in or near higher-population density areas. Using a “to and through” strategy can help bring connectivity to these key service providers as well as potentially be used as jump-off points to reach other areas.

Align with present and future large infrastructure projects. Large infrastructure projects may require the network as a foundational aspect (transit corridors, smart cities initiatives, etc.), or be opening the ground at an already allocated cost.

Define standards and requirements for fiber infrastructure to be installed in all new builds alongside other required services such as water or electricity.

Fully and appropriately funding a municipal network over its useful lifespan is often not explored as thoroughly as it should be. Different types of funding are more appropriate for different aspects of the network lifecycle, knowing which to use when is important in ensuring that the build is viewed as an appropriate investment.

Info-Tech Insight

In an independent study, a high percentage of municipal broadband networks were found to have issues with demonstrating their ability to pay off the asset within its useful lifespan.

• Must be applied for and awarded

• May come with restrictions as to what the asset built with the money may be used for
• Non-recurring money

• Must be able to show financial viability of a project

• There may be restrictions on how bonds are issued for telecommunications infrastructure in your area
• Ownership most often connotes control

• Must have strong local support for the project

• Money of the amount needed for most network deployments from tax solutions is spread over a significant period of time
• Tax revenues diverted for specific projects can cause issues with other services

• Will be gained as the project is deployed

• Only realized as a project is deployed, no initial money
• The new network is not free, some money has to be allocated for support and maintenance before reinvesting

Funding

Early Value

Project Momentum

Alignment