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<br /> 105 | P a g e <br />City of San Leandro, CA <br />Fiber Master Plan <br /> <br />BUSINESS MODELS <br /> <br />In determining whether and how to provide community fiber network services, the City <br />needs to consider the different business models that municipalities and regions use to <br />provide broadband access capabilities. The factors that define what business model fits <br />well within the current environment, organizational and operational capabilities of the City <br />include competitive and market factors as well as financial and risk factors that determine <br />what risks, rewards, and funding commitments San Leandro is willing to accept for a <br />broadband initiative. The commonly implemented business models fall on a continuum <br />that ranges from low risk, low investment options to higher risk, high investment options. <br /> <br />As the City evaluates the various business model options along the continuum, it will <br />encounter greater degrees of risk and reward; risk, in terms of financial, operational, and <br />regulatory risk; reward, in terms of community benefits, revenue generation, and overall <br />potential for profit. In addition, moving “up” the continuum also implies greater local <br />government participation in the delivery of broadband services. <br /> <br />These business models fall into three general types74 as show in Figure 60 below. <br /> <br />Hybrid Model <br />Public-Private Partnership <br />Privately-Owned <br />Managed Services Model City-Owned Model <br />The City owns the network <br />but outsources operation and <br />maintenance to a service <br />provider in return for a <br />revenue share or other value. <br />The fiber network is owned <br />and operated by a service <br />provider, but the City is an <br />“anchor tenant” for the <br />network. <br />The fiber network is owned <br />and operated by the City. <br /> <br />Lower Risk Higher Risk <br /> <br />Lit San Leandro’s business model falls into the far left side of this diagram. <br /> <br />Also, there are variations on the City-owned, or Public model around the extent of the <br />operation, as follows: <br /> <br />• Infrastructure Provider: Municipalities lease and/or sell physical infrastructure, <br />such as conduit, dark fiber, poles, tower space, and property to broadband service <br />providers that need access within the community. These providers are often <br /> <br />74 Further information and examples of successful municipal broadband implementations is provided in Appendix F: Municipal Broadband <br />Business Models. <br /> Figure 60. Business Model Options