Open Service Provider Networks are a win-win-win

As Design Nine does more and more financial analysis of the benefits of Open Service Provider Networks (OSPN) for our clients, the news continues to be very good. In an OSPN network, the local government does not sell any services. Instead, local government builds a digital road system that any service provider can use. In return for access to the road system, service providers pay a portion of their revenue back to the network owner. This revenue pays for both the initial build out and ongoing maintenance, support, and operations.

Here are some of the things we are finding:

• OSPN networks are financially viable, and many of our analyses show that they can be cash positive in as little as two or three years.
• Because they become cash positive so quickly and because the revenue sharing approach does not cap income like the old-fashioned way of selling bandwidth (what everyone does now), it is easier to borrow money to fund an initial buildout. Lenders are more interested because they can see that they will get paid back, and how.
• Prices for telecom tend to go down in an OSPN system because service providers have to compete on a completely level playing field (everyone uses the same digital road system) and because they don't have to buy and operate their own infrastructure.

So who wins? Buyers of telecom services win (government saves tax dollars, businesses have more cash for new jobs and business expansion) because prices are lower. Service providers win because they can reach more customers at less cost. And the community wins because it now has a state of the art digital infrastructure to help fuel new jobs and attract new businesses. And the community wins because the revenue sharing can provide money for other community and economic development projects--even help pay for water and sewer repairs and extensions.