Business Plan
Digital Marin’s level of involvement will ultimately determine how much influence it has on the business model. Demographic, commercial, and cultural conditions may also play a role in business plan development. In general, a business plan that provides a win-win situation for all stakeholders will increase Digital Marin’s chances for success. While it is true that Digital Marin’s business plan cannot be finalized in advance of selecting an operational model, a basic understanding of expected costs and fees is possible. This information, combined with a market analysis, should be used to identify business plan development next steps designed to lead to a clear understanding of the potential solution’s economic model. Assuring that unbundled access and the associated costs are explicit in the final business plan will be a key requirement for overall success. This transparency will be necessary to help stakeholders see how they can benefit from participating in the solution.
The broadband capital funding currently available makes Digital Marin the perfect neutral host of the resulting infrastructure. A “neutral host infrastructure” in networking describes a network, or broadband, infrastructure that is owned and maintained by a third-party that does not offer any retail services (i.e., they do not offer service directly to end users for a fee) but instead provide open access to the infrastructure, without discrimination, to any party desiring to use the infrastructure to deliver their products or services. Open access, when used in networking, is a term to describe a business model that separates the physical ownership of the infrastructure from the delivery of services. Digital Marin is the perfect host for this business model for the following reasons.
- Digital Marin is eligible for federal and state broadband infrastructure funding as grants and loans, providing a path to own and manage these opportunities to ensure public funding results in public infrastructure.
- Digital Marin leadership has the diversity in local representation to properly balance private and public interests to achieve advantageous outcomes for all of Marin’s broadband stakeholders.
- Digital Marin’s natural incentives of providing affordable, reliable, high-speed access to everyone naturally align with the incentives of a neutral host in contrast with the incentives of retail internet service providers.
As the neutral host, Digital Marin will be well-positioned to define stakeholders’ roles and responsibilities and leverage the public infrastructure to create the incentives necessary to achieve desired outcomes.
Costs
Correctly separating roles and responsibilities will also extend to unbundling costs for users. Additional plan development is required before explicit costs can be identified. Model sustainability will require these costs to be recoverable by charging commensurate fees to users. The relational nature of these costs confirms the need for clear strategies by Digital Marin. For example, focusing on the least cost for infrastructure may result in choices that are subject to rapid technology change, incur higher operational costs, and require more frequent capital reinvestments, making their total cost of ownership higher when considered over long periods. This helps to underscore the importance of separating the underlying infrastructure from the services, as the life cycles are significantly different. Separating them economically, in principle and practice, provides the means to support different investment returns for infrastructure when compared to service, which is important.
Network Design
Infrastructure functionality is a direct result of the selected architecture and network design. For example, some network infrastructures closely couple the service with the infrastructure eliminating the ability to unbundle or provide open access, thereby forcing a vertically integrated business model. Digital Marin will need to provide the necessary architectural expertise to establish design standards or perform a procurement process to select a qualified consulting partner.