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But operators can be reluctant to invest in areas list of the most common investment models. This
where commercial returns are uncertain. In these approach involves community-driven investment, Chapter 1
cases, governments have intervened, entering and it is described in more detail in Section 1.5,
into public-private partnerships (PPPs) to invest in where alternative investment approaches are
broadband infrastructure. This section describes discussed.
these PPP investment strategies, using case
studies to illustrate the key characteristics of each The four above-mentioned models involve
approach. variations of public- and private-sector
intervention. Each model’s approach varies based
on three main characteristics:
1.3.1 Overview of PPPs
– the funding source for the roll-out and
A European Commission and an ITU study have operation of the infrastructure;
broadly defined PPPs and identified investment
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models commonly used for broadband PPP – responsibility for deploying infrastructure and
projects . Most PPP projects in broadband running operations; and
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infrastructure tend to fall into one of the following
funding model categories: – ownership of the infrastructure (see Table 1.2).

• Private design, build and operate (DBO) – The most suitable investment approach for a
where a private operator retains ownership particular project can depend on a range of
and control of the broadband network. variables, including the market structure, the level
The private operator may benefit from of Internet maturity and the political landscape.
receiving state funds to invest in broadband The government’s experience in funding, owning
infrastructure in commercially unviable areas. and running broadband networks is also an
important consideration when deciding which
• Public outsourcing – where a private operator investment approach should be taken. The key
is responsible for running a network under a advantages and disadvantages of the investment
government-funded contract. The government approaches are summarized in Table 1.2. The
normally retains ownership of the network following sections provide as least one case study
after the contract expires. or example for each type of PPP investment
approach. They also discusss the role of the
• Joint venture (JV) – where a special-purpose regulator in attracting broadband infrastructure
vehicle (SPV) or separate legal entitiy is created investment and list key lessons to be taken from
by the private operator and the government each project.
to invest in broadband infrastructure in
commercially unviable areas. The private
operator and the government share the 1.3.2 Private DBOs
funding, network ownership and day-to-day
management responsibility. In this investment model, the private sector
(usually a network operator) designs, builds and
• Public DBO – where the government has full operates the broadband infrastructure on behalf
funding responsibility and full ownership of of the government. The infrastructure typically
the network assets. Elements of the day-to- is made available to other service providers and
day management may be allocated to private Internet service providers (ISPs) on a wholesale
contractors. and open-access basis. It should be noted,
however, that the infrastructure remains under
The EC and ITU reports also identified common the network operator’s ownership, which does not
funding sources for broadband projects. transfer to the government.
These included government grants, universal
service funding and external funding from In this approach, government intervention is
non-governmental organizations (NGOs) and limited to funding. The private operator retains
international development banks. Note that the control over the design of the network and retains
"bottom-up" model has been excluded from the the network assets. The government has limited

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