Presentation at the Workshop on Municipal Fiber Networks, October 24th 2011 in Ghent, Belgium. The workshop was organised by Ghent University - IBCN / IBBT. More information about this event can be found at http://http://events.ibbt.be/en/workshop-municipal-fiber-networks.

1. “Ducts, fibers, municipalities, barriers to
entry and effective competition: A case
study of successful public-private
partnership in the provision of neutral FTTX
infrastructure in Barcelona”
J. Infante, R. Sagarra, M. Oliver, C. Macián
Research Group on Networking Technology and Strategies
Universitat Pompeu Fabra, Barcelona (Spain)
Barcelona Council
Workshop on Municipal Fiber Networks
Ghent, 24 october 2011

2. Barcelona 22@ Case Study
2/18
PAPER OBJECTIVES
• Analysis of the framework for municipal active
participation on NGA deployment
• Case study for municipal active involvement: 22@ BCN
• Benefits analysis for the 22@ study case
• Situation as today and challenges
• Applicability to other contexts and comparison with
other initiatives.

3. Barcelona 22@ Case Study
PASSIVE INFRASTRUCTURE AS A BARRIER TO COMPETITION
• A key aspect for economic viability
• Long-term sunk investment
• High entry barrier for alternative
operators.
Source: OECD 08
Passive
infrastructure
sharing is needed
for implementing
effective
competition
Source:Amendola & Pupillo, 08

4. Barcelona 22@ Case Study
REGULATORY ISSUES (I)
•PASSIVE INFRASTRUCTURE SHARING:
• Obligations for the incumbent to share passive
infrastructure including ducts, dark fiber and technical
rooms on a cost-oriented basis
• Almost no reference offer in Europe: will need time and
adjustments to be operative.
• UNBUNDLING AND BITSTREAM ACCESS:
• Different for each context and not extrapolable from the
copper case. Less rungs on the ladder of investment

5. Barcelona 22@ Case Study
REGULATORY ISSUES (II)
•RIGHTS OF WAY
• Municipality manages RoWs. Different conditions for
each country/municipality. Ex.: street cabinets.
• IN-BUILDING WIRING
• Enforcement of in-building passive infrastructure for
new premises and incentives for deployment in old ones.
• Symmetric regulation for in-Building operator
deployments.

6. Barcelona 22@ Case Study
THE ROLE OF MUNICIPALITIES IN NGA DEPLOYMENTS (I)
• INTEREST OF LOCAL ADMINISTRATIONS
Long Term/Short Term
Compromise
Cheap and good
Urban ordering
TELECOMMUNICATION Telco Services
(Minimization of civil
ACCESS NETWORKS
(Promote competition/
works) Deploy when no private
Cost offer is available)
reduction
(RoWs incomes/Minimize
municipal spending/Agreggation
of public and private demand for
passive infrastructure)

7. Barcelona 22@ Case Study
THE ROLE OF MUNICIPALITIES IN NGA DEPLOYMENTS (I)
• CAPABILITIES OF LOCAL ADMINISTRATIONS
– Specific conditions for RoWs: Established and managed mostly by the
municipality (framework provided by national administration)
– Deployment of Passive infrastructure for internal use: Corporative
data/voice networks, control and monitoring networks, etc.
– Know-how on passive infrastructure (but not on sophisticated telco
services management) and acts as a “meeting point” for other passive
infrastructure needs (electricity, gas, water, etc.)
– Financial models and motivations better adapted for long-term
investment than alternative operators.

8. Barcelona 22@ Case Study
MODELS FOR PUBLIC/PRIVATE INTERPLAY IN THE NGA CONTEXT
• Different levels of involvement depending on the context
• Passive infrastructure is a well-known business for municipalities.
• Active networks and services need private involvement.
+ Retail
Telecommunication
• Complexity
services
• dynamic market Active networks Wholesale
Retail service
For residential
• Network Active
Network
And business
Dark Fiber segments
Technology and Passive Power &AC
providing
structured
telecommunication
Tubes
services infrastructure
Ducts & room
transmission
capacity
for equipments
Innovation and Municipal soil and Rights of Ways Trenches
buildings
Obsolescence -
Municipal involvement +

9. Barcelona 22@ Case Study
PRESENTATION OF THE 22@ CASE (I)
THE SCALE OF THE PROJECT:
· TERRITORY: 198,26 Ha (115 city blocks)
· NEW GROSS FLOOR SPACE : 4,000,000 m²
• Productive Activities: 3200,000 m²
• Housing, facilities and services: 800,000 m²
• HOUSING:
• Existing housing units: 4,614
• New social housing units: 4,000 (min. 25% rental)
· INCREASE IN GREEN SPACES: 114,000 m²
· INCREASE IN FACILITIES: 145,000 m²
· INCREASE IN JOB OPORTUNITIES : 130.000
· INVESTMENT IN INFRAESTRUCTURES: 180 million €

10. Barcelona 22@ Case Study
PRESENTATION OF THE 22@ CASE (II)
Total passive telco infrastructure investment: 10 M€
• Incumbent: 50% (5 M€)
• Municipality: 50% (5 M€)
• Rental use: 3,3 M€ (70%)
• Municipal use/future needs: 1,7 M€
Incumbent Incumbent Incumbent
•90% Trenching,
Rental use Rental use
Municipal use
& future needs
ducts and
technical rooms
•10% Fiber and
Duct
40 mm.
Up to 250 fibers (22@: 144 max)
equipment
120 mm.

11. Barcelona 22@ Case Study
PRESENTATION OF THE 22@ CASE (III)

12. Barcelona 22@ Case Study
PRESENTATION OF THE 22@ CASE (II)
- Dark Fiber from/to each block/building.
- Base price for each block connected (2 fibers): 6,500 €/pair/year
-Discounts reaching 50% depending on the contract periods and
number of blocks connected.
- Clients configure interconnected fibers rings connecting several
blocks.

13. Barcelona 22@ Case Study
THE EVIDENCE SO FAR
• 40% of the network deployed (32 of 105 blocks)
• 6 telco operators using dark fiber services and providing
retail business services as well as backhaul for internal
use.
• Also business clients for premises connections.
• Return of investments plan fulfilled better than expected.

14. Barcelona 22@ Case Study
BENEFITS FOR THE PARTICIPATING ACTORS
• Win-Win situation Incumbent
•New areas: Lower deployment
Municipalities
cost and compatible with strategic
• Better subsoil management
assets owning
• Economy of scope
•When already existing
• Increase telco competition
infrastructure: No benefits for
parallel municipal infrastructure
Alternative operators deployment
• Lower barrier for entry
• Fast services provision Quantitative analysis:
• Strategy not compromised Annual billing: 600.000 euros
by incumbent infrastructure Return on investment: 7 years

15. Barcelona 22@ Case Study
CHALLENGES TO THE 22@ MODEL
• Leverage of funds for municipal long term investment
(EFDR/National funds?).
• Incumbent involvement and alternative operators
compromise.
• Potential risk of distortion of private competition. Clear
business models and open non-discriminatory models.
• 22@ still to be tested on FTTH residential scenario.
• Finantial risk transferred to municipality.
• New regulation for incumbent passive infrastructure
sharing: the model for municipal involvement must be
adapted to the new context.

16. Barcelona 22@ Case Study
COMPARISON TO OTHER INITIATIVES
• StokAB (Sweden)
– Initial reference for 22@
– City dark fibler (1.200.000 km.) in Stockholm and near 30 more
cities. In-building deployment (100.000 social housings for 2012)
– Differences:
• 22@ strictely municipal and to be extended to other new areas of the
city, but on a case by case context.
• Private-owned housings: strategies for in-building infrastructure are
different. Regulation, enforcement and incentives for owners.
• The political consensus on public active involvement in the long term
is weaker in the spanish case.

17. Barcelona 22@ Case Study
COMPARISON TO OTHER INITIATIVES
• PAU-PYRÉNÉES (France)
– Rural focus. 14 communes (150.000 inhabitants)
– Municipal financing (35 M€) private operated (Axione). Neutral
network including active elements and IP services.
– Differences:
• Rural context is different to city context.
• Need of service availability. More municipal involvement needed in
the Pau case.

18. Barcelona 22@ Case Study
APPLICATION TO OTHER CONTEXTS
• 22@ model suitable for mixed business/residential new
areas of the city.
• Business model not as clear for less ICT intensive usage
new areas of the city, but still a strategic long-term
investment for municipal objectives.
• Already existing incumbent passive infrastructure: avoid
infrastructure duplication and promote private
infrastructure sharing among competitors.

19. Barcelona 22@ Case Study
CONCLUSIONS AND LESSONS LEARNT
• Passive infrastructure is an essential element for NGA competition
but competition should take place on upper more innovation-based
layers.
• Municipalities: key actor for passive infrastructure deployment,
enabling different infrastructure sharing models, demand aggregation
and facilitating long-term city competitiveness.
• 22@ shows feasibility of municipal active involvement in passive
infrastructure deployment for urban expansion/transformation in high
ICT usage areas.
• New regulation for incumbent passive infrastructure sharing: new
models for public/private interplay.