Description / Explanation

With this model, BLK (Breitband Landkreis Karlsruhe, Broadband District Karlsruhe) will build the fibre optic backbone and the municipalities will construct the passive infrastructure (point of presence (POP)) in the communities (access network). This infrastructure will then be provided to an operator which will be selected through a Europe-wide bidding process (currently Inexio GmbH). According to the network provider contract, Inexio is responsible for operations, marketing, and for providing the actual telecommunication services (internet, telephone, and television) to the consumers. Inexio also had the responsibility of facilitating OpenAccess mechanisms as part of its award. Therefore, it offers alternative telecommunication companies a mechanism by which they can deliver their customer products through the municipal broadband network.

Project submitted by

Name
Ragnar Watteroth
Organisation
Regional Council Karlsruhe
Function
Treasurer
Phone
0049 721 936 55000

Infrastructure & Service

Speed / performance
≥30 Mbps
Infrastructure, technology and architecture
This project involves expanding broadband cables up to the property boundary limit, i.e. in the form of a FTTC expansion. Any other desired cables can be laid at the same time as these fibre optic cables. No electromagnetic interference affects the cables, and due to their use of optical transmission those are also not affected by interference transmission or ground problems. Transmission rates can be increased essentially without limit. 98% of the connections affected by the expansion offer an asymmetrical speed of min. 50 Mbit/s. By 2025, the project expects to use fibre optics to create or provide the framework conditions for a full-coverage gigabit network (upload and download).

Financing

Cost structure and financing sources
The financing structure for district-wide broadband expansion is divided into two phase: During the first phase, BLK GmbH will receive subsidies from the state of Baden-Wuerttemberg for the construction of the backbone network. Any deficit in funding will be financed by way of cost allocation to the municipalities participating in the project. This cost allocation, capped at maximum of EUR 1.25 million per year, will be assessed against the municipalities based on the number of residents and remitted to BLK GmbH. For its part, BLK will endeavour to construct the backbone without additional credit financing. BLK GmbH will receive lease payments pursuant to a network operations agreement to be concluded with inexio for the lease of the network following completion. The access network expansion will be financed by the respective municipality. In this context, local financing will be provided via budgeted funds that will be financed either via equity capital or outside capital in the form of bank loans. In this case as well, preference will be given to public-sector funding from the state of Baden-Wuerttemberg with any remaining deficit to be covered by the municipalities. The subsidy will be based on the allowance per running metre as set in the subsidy guidelines. The lease payment per active end customer of the network operator starts at EUR 24/a for a 25 Mbit/s asymmetrical FTTC connection and ends at EUR 816/a for a 100 Mbit/s symmetrical FTTB/H connection.
Sources of EU funding
BLK is working to provide full, seamless fibre optic network expansion coverage to the entire district of Karlsruhe. The primary focus is on rural areas and peripheral areas surrounding urban centres, places where private companies may have little economic interest in expanding fibre optic networks in the near future.

Scalability

Actors involved and their roles
After extensive planning, 30 of the 32 cities and communities within the district of Karlsruhe and the city of Bad Herrenalb have joined the inter-municipal project. In addition, the company Inexio is involved in the expansion project as the network operator, as well as TelemaxX TelekommunikationsGmbH, Netze BW, Sparkassen IT and tkt teleconsult GmbH - consulting firm.
Unique characteristics
The establishment of BLK and the agreement on inter-municipal collaboration are based on a common strategy. These serve as an example of best practices, showing how synergies can be utilised to provide full coverage when expanding fibre optic networks. In founding BLK, the district of Karlsruhe transferred the rights and obligations of the IKZ to the company. This means that grants are collected by the district of Karlsruhe and passed on to BLK, which has been entrusted with building the backbone network by the district.
Success factors
BLK assembles professional expertise throughout the district. At the same time, the individual communities retain control of their own expansion projects, allowing them to continue making progress with this expansion while benefiting from experience drawn from all over the district. This creates positive synergy effects for community-based fibre optic network expansion.

Project review

Results
Construction work was concluded in Marxzell, Rheinstetten and in the commercial districts Unter Speyererfeld (Waghäusel) and Flehingen (Oberderdingen) in 2016. In addition, the backbone network was constructed and launched in the south in Marxzell, in the west in Neuburgweier Rheinstetten, in Waghäusel in the north, and in Flehingen in the east. Further projects were initiated in cities such as Karlsbad, Ettlingen, Walzbachtal, Ubstadt-Weiher, Oberderdingen, Waghäusel, Dettenheim, Linkenheim-Hochstetten, Forst, Kürnbach, Bad-Herrenalb, Bad Schönborn and Östringen, Zaisenhausen, and the plan is to launch operations by 2017. These projects were able to serve additional customers in 2017 through the established access networks, further utilising the capacity of the backbone network.
Technical potential for expansion, future proof infrastructure
This project involves expanding broadband cables up to the property boundary limit, i.e. in the form of a FTTC expansion. Any other desired cables can be laid at the same time as these fiber optic cables. No electromagnetic interference affects the cables, and due to their use of optical transmission they are also not affected by interference transmission or ground problems. Transmission rates can be increased essentially without limit.