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BUSINESS MODELS In determining whether and how to provide community fiber network services, the City needs to consider the different business models that municipalities and regions use to provide broadband access capabilities. The factors that define what business model fits well within the current environment, organizational and operational capabilities of the City include competitive and market factors as well as financial and risk factors that determine what risks, rewards, and funding commitments San Leandro is willing to accept for a broadband initiative. The commonly implemented business models fall on a continuum that ranges from low risk, low investment options to higher risk, high investment options. As the City evaluates the various business model options along the continuum, it will encounter greater degrees of risk and reward; risk, in terms of financial, operational, and regulatory risk; reward, in terms of community benefits, revenue generation, and overall potential for profit. In addition, moving "up" the continuum also implies greater local government participation in the delivery of broadband services. These business models fall into three general types 14 as show in Figure 60 below. Figure 60, Business Medal Options Lower Risk Higher Risk Lit San Leandro's business model falls into the far left side of this diagram. Also, there are variations on the City -owned, or Public model around the extent of the operation, as follows: • Infrastructure Provider: Municipalities lease and/or sell physical infrastructure, such as conduit, dark fiber, poles, tower space, and property to broadband service providers that need access within the community. These providers are often 74 Further information and examples of successful municipal broadband implementations is provided in Appendix F: Municipal Broadband Business Models. 106 1 P City of San Leandro, CA Fiber Master Plan