With the business case, the business model is often already defined. The business model is the way in which an organisation intends to serve its customers, and is generally described in terms of how it intends to generate revenues and profits.
 

There are essentially three types of business models that are currently in use.
 

Local Wholesale Network Model

In this model, the network operator provides a wholesale service where it leases access to the network to service providers that use the network to provide service to their retail customers.  In most instances, these open access networks have been financed and are owned by the local Government or as the case with Nuenen by a community co-operative. These open access networks are designed to stimulate competition by providing network access to all service providers and reducing the cost of this access.
 

This is the prevalent business model adopted in Europe, particularly with systems that have deployed fibre to the home.  It is a model that is less prevalent in the U.S., but open access models are starting to be adopted, as evidenced by Utopia, I-Provo and Chelan County.
 

Public-Private Partnership Retail Model

In this model, the local Government enters into an arrangement with a private sector firm to operate and manage the network and is the only supplier of services to the end user.  The local Government may own the network or has entered into an arrangement with a company that will also build and finance the network.  This latter arrangement is the one adopted in Manassas, where there is a revenue sharing arrangement with the city.
 

The major advantage to this approach is that there is usually less risk to the local Government, but it does not generally provide the same advantage to the consumers, as would a network with multiple suppliers.
 

Municipal Public Utility Model

In this model, the local Government builds and controls all aspects of the network and is the sole service provider operating it as a public utility.  To date, this has been the most common model in use in the United States, and is particularly prevalent in communities where there are existing municipal owned electric and power systems.  In some instances, this was the only option open to the communities, as they could not interest a private firm in becoming involved in the provision of services.

Although this model has certain advantages related to financing, it does not provide a competitive service environment.

The OPLAN Model

One final model which is emerging as a new form of Public Private Partnership is the OPLAN model (see diagram below). This business model requires the setting up of a new corporate vehicle which has a number of shareholders including the Local Authority and different funding institutions. The newly announced fibre to the home project in Amsterdam follows this model quite closely and involves a number of funding partners including the Local Municipality as shareholders.

The Company is managed by an independent facilitator/partner who will oversee the main design, build and then operational and maintenance activities which are tendered competitively and then outsourced by the company.

OPLAN structure and strategy

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