Ownership and operational models, in the absence of legislative and regulatory initiatives, have a marked influence on the approach taken to LOANs, as evidenced by the experience in the United States.  The U.S. has the largest number of local government owned and operated telecommunications networks providing services directly to the public. It is estimated that over 90% are operated using a monopoly public utility model, where services are provided directly to the customer and there is no competitive access to the network.  The majority of these networks are wireline and are owned and operated by a local government public utility that is engaged in the provision of other utility services, such as electrical services.  Telecommunications services are normally provided directly by the public utility, as one of its operating service divisions.  

Many of these municipal owned networks were originally established to provide cable television services, as there was no terrestrial coverage and no private sector cable operators prepared to wire the community.  In those cases, where the local government was the only supplier of cable television services, these networks operated as monopoly providers of service, similar to electric and other public utility services.  They were often operated as divisions of the local government owned public utility. A more recent factor in the growth of municipal networks in the U.S. has been the deployment of fibre-based telecommunications facilities by municipal owned electric utilities for the purpose of controlling their existing operations.  This has given these utilities, telecommunications capabilities and network capacity beyond their immediate requirements and afforded them the ability to provide services to the local government, businesses and the public. 

The ownership of established public utilities has made it much easier for local governments to enter the telecommunications business, as they had an existing operational structure with the capability to provide, not only all of the business requirements, but also the financial capability to establish these facilities.  The model of the parent company is to provide its utility services on a monopoly basis and most have tended to operate the telecommunications division in the same way, as a closed access model rather than as a LOAN.

With the introduction of new services and potential revenue opportunities, such as cable modem Internet access, cable television companies, including those owned by utilities under municipal control, began to compete with telephone companies for retail customers.  This competitive aspect represents a major difference between the operation of the telecommunications division and the rest of its operations where the utility is the monopoly provider of those services.  The business model is more challenging and the economics of network deployment are less certain in a competitive environment. 

This type of business model persists in the building of new facilities, such as FTTH systems by local utilities, where the intention is to serve retail customers directly rather than to develop a LOAN that can be used by any service provider.  Given the costs of these fibre systems, the utility has to have a strong business model to justify the expenditure.  Most utilities have opted to provide a triple play package of services to retail customers, but this inevitably brings them into competition with one or more existing service providers.  This is one of the main reasons why there has been so much opposition by the U.S. carrier and cable industry to direct local government participation in the provision of broadband services. 

In response to the complaints by the incumbent carriers and the experience that has emerged from Sweden with the deployment of LOAN-type networks, this model is receiving increased attention in the United States as a potential alternative to the existing closed access model. This is the approach that has been taken in the establishment of new FTTH local government initiatives in Utah (i.e. Provo and Utopia) and those operating in Washington State (e.g. Grant County), which would appear to be adopting LOAN principles.  Although wholesale access is legislated in these states, there does appear to be a fundamental belief in the open access principle.  The acceptance of an LOAN model appears to be more prevalent in U.S. cities and towns where there are no existing municipal owned utilities.

This acceptance of open access is also becoming a more widely accepted model in the deployment of new municipal wireless systems, as evidenced by a review of recent Requests for Information and Requests for Proposals issued by U.S. cities. It appears that open access is being driven, to an extent, by lobbying on the part of incumbent operators and state legislation prohibiting or restricting the entry of municipalities into retail provisioning of telecommunications services. This is the model that will be used by Wireless Philadelphia and is being proposed by Portland, Oregon for its wireless system.

In contrast, the approach taken from the beginning of the build out of local government owned networks in Sweden and the Netherlands has been LOAN oriented, which can be attributed to government policy at both the national level and by the European Community.