On Nov 3, the city of Amsterdam in Netherlands announced it is building its own fiber to the premise infrastructure, and will connect 40,000 homes (10% of the city) with fiber BBne.
Fiber BBned is a division of Telecom Italia and will act as a wholesale operator of the network which is open to all service providers who can purchase capacity and offer services on the network . Note in this model is that the city is not subsidizing the construction, but is merely acting as an investor
http://eurotelcoblog.blogspot.com/2005/11/and-answer-is.html
Phase 1 has been formally proposed (to be debated and voted on by the City Council later this month), and the funding structure has been finalized. The City of Amsterdam is to be a 1/3 shareholder, with a consortium of five housing companies (also 1/3) and other unnamed investors (1/3). Phase 1 consists of 40k premises, roughly 10% of Amsterdam, to begin in early 2006.
"This enables our city to compete with other European cities. The fiber network delivers to Amsterdam an innovative and freely accessible infrastructure, suitable to support growth in demand for the next 30 years or more. In this way we ensure a wide open marketplace for innovative service-providers and economic growth, as well as a fast track for the smarter and cheaper delivery of care, education and other public services."
Best offers by BAM/DRAKA and BBned, start first 40,000 connections in 2006 The Municipality of Amsterdam is to become one of the shareholders of Glasvezelnet Amsterdam BV (GNA). The municipality (1/3) plans to participate together with five housing corporations (1/3 of shares) and investors (1/3 of shares). GNA will deploy approximately 40,000 fiber-tothe- home connections in the boroughs Zeeburg, Oostwatergraafsmeer and Osdorp (10 % of Amsterdam). The Mayor and Alderman have agreed to put this decision to the City Council. The economically most favorable offer for the construction of the network has been made by the consortium Van den Berg Infrastructuren (BAM)/Draka Comteq Telecom. The economically most favorable offer for exploitation of the network as a wholesale provider has been made by BBned .
Deputy-Mayor Mark van der Horst (infrastructure, harbor, fiber): "With GNA and the offers by respectable companies we make a big step towards the deployment of a citywide fiber-to-the-home network. This enables our city to compete with other European cities. The fiber network delivers to Amsterdam an innovative and freely accessible infrastructure, suitable to support growth in demand for the next 30 years or more. In this way we ensure a wide open marketplace for innovative service-providers and economic growth, as well as a fast track for the smarter and cheaper delivery of care, education and other public services."
Three layers The network in Amsterdam is structured in three separate layers: - Infrastructure: GNA will commission the construction of the passive network and own the fiber infrastructure in the local loop. Van den Berg Infrastructuren (BAM)/Draka Comteq Telecom have submitted the economically most favorable offer for the construction. "Smart digging", like laying cables together with utilities will be used as much as possible.
History:
The City Council instigated in 2002 the construction of a fiber-to-the-home network, starting in the borough Zeeburg. An advisory committee chaired by former Minister of Economic Affairs Koos Andriessen has investigated how to realize this goal. The City Council has set the conditions for investment in 2004. With the results of the European tenders and the establishment of GNA these conditions are met.
Market Economy Investor, no state aid
The shareholders of Glasvezelnet Amsterdam BV invest under the same conditions in a profitable business with an acceptable risk/reward-relationship.
The investment of the Municipality is therefore according to the Market Economy Investors Principle (MEIP). There have been several informal contacts with the European Commission on the criteria and conditions regarding the MEIP. Deputy-mayor Van der Horst "I'm glad all signs read green. To be crystal-clear: the Municipality does not subsidize and gives no additional guarantees. We invest as local government in a promising innovation, on equal terms and conditions as our partners."
Housing corporations:
connecting homes The housing corporations invest in the local loop connecting their property through Glasvezelnet Amsterdam BV. Joint investments through this limited company are cheaper, easier and profitable. After consultation with the Minister of VROM (Housing, Spatial Planning and Environment) the structure of the investment by Woonstichting de Key, Algemene Woningbouwvereniging, Woningstichting Rochdale, Woningcorporatie Het Oosten and Stichting Ymere in Glasvezelnet Amsterdam has been determined. Anticipating the new "Besluit Beheer Sociale Huursector" (the regulatory framework for social housing corporations) they will invest this commercial activity through a separate entity with specific financing.
Planning and decisions The proposal of Mayor and Alderman to the City Council to agree to participate and invest in Glasvezelnet Amsterdam BV for approximately 1/3 of the share capital will be discussed in the Council Committee later this month and shortly after voted upon in the City Council. The other shareholders of Glasvezelnet Amsterdam BV will follow their individual formal decision procedures. It is expected that the shareholders agreement can be signed in December 2005. The construction of the network and the subsequent delivery of services will start in 2006, to be finished at the end of 2007. The test of the conditions for MEIP by the EC is expected to start after the signing of the shareholders agreement. Amsterdam, November 3 2005 Stefan Rutte, Public Relations, +31 20 5523409 +31 612 991 725 For more information, see www.citynet.nl (This is translation of the original Dutch press release. In case of inconsistencies or doubt the Dutch version prevails)
3 November 2005