Providing incentives for private investment in municipal broadband networks: Evidence from the Netherlands

The paper examines the incentives provided by public-private partnerships (PPPs) to stimulate private market parties to participate in municipal fibre networks in the Netherlands. Although there has been a growing interest of Dutch municipalities in fibre technologies since the beginning of the 2000s, PPP models to implement these technologies developed rather slowly in response to changes in public policy, the legislative environment and experiences gained in early projects. In 2005, the viability of a cooperative PPP model called "Ons Net" Nuenen was tested in an experimental setting for the first time using government subsidies. In undertaking a techno-economic analysis of the PPP "Ons Net" in Nuenen, the paper examines its objectives, boundaries and viability. It shows that the experience of this PPP based on ubiquity, open fibre access and demand aggregation provided important incentives for companies to invest in (other) municipal fibre networks in the Netherlands. The paper concludes furthermore that mandating of open access will become a key task for (local) governments to foster competitive entry and to facilitate innovation in municipal fibre networks. (C) 2009 Elsevier Ltd. All rights reserved.