1. Institute for Regional Development and Location Management
Optical fiber infrastructure as a location factor in
rural and mountain areas:
Realization models and socio-economic consequences in South Tyrol
and beyond
Mag. Michael Volgger
DANTE lecture 23/01/2013 – Ljubljana (Slovenia)

2. EUROPEAN ACADEMY OF BOZEN/BOLZANO (EURAC)
Volgger 23/01/2013

3. Volgger
4 RESEARCH AREAS – 11 RESEARCH INSTITUTES
23/01/2013

4. • Institute for Renewable Energy
Technologies
• Institute for Alpine Environment
Mountains • Institute for Applied Remote Sensing
• Institute for Regional Development and Location
Management
• Center for Biomedicine
Health • Institute for Mummies and the Iceman
• Institute of Mountain Emergency Medicine
• Institute for Minority Rights
Autonomies • Institute for Public Management
• Institute for Specialized Communication and
Multilingualism
• Institute for Studies on Federalism and Regionalism
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5. Bandwidth requirements
Narrowband Broadband Next-generation broadband
Tele-Medicine
Social networks Tele-Learning
E-Mail
Applications Video conferences
Browsing Multilocation collaboration
Online HD TV
Bandwidth 64-256 Kbit/s 2 Mbit/s >20 Mbit/s
Technology PSTN DSL, 3G FTTx, LTE
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6. Background of the study
Fiber optic initiative of South Tyrol
 Initiative of the Autonomous Province of Bolzano/Bozen-South Tyrol: Connect all 116 municipalities
to the backbone of the fiber optic network until the end of 2013 (FTTN) to prevent a so-called „digital
divide“ in South Tyrol
 Unresolved issue in South Tyrol: Realization of the so-called „last mile“, i.e. to realize the last part
of the telecommunication network that reaches the final customer in fiber
Sources: http://www.provinz.bz.it/breitband/suedtirol/breitband-in-suedtirol.asp
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7. Broadband initiative in South Tyrol
Historical overview
1) Until 2004: Development of broadband access left up to the market
2) 1st step: promotion of internet solutions via radio by an active involvement of
the regional government
3) 2nd step: Fiber optic strategy – connect all municipalities by the end of 2013,
provide a faster ADSL connection (7 Mbit/s upwards until the end of 2014)
4) 3rd and still largely unresolved step: Realization of the last mile
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8. Study objectives
1) Analyze socioeconomic consequences of connecting citizens and businesses
directly to the optical fiber network
2) Explore framework conditions and realization models for the roll-out of the
optical fiber network on the last mile
3) Reveal specific needs and wants of South Tyrolean telecommunication customers
Image source: http://web-de.digitalhub-frm.de/2012/03/neues-glasfaser-kabel-verbindet.html
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9. Study design and methods
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10. Qualitative study
11 case studies in South Tyrol and other Alpine and pre-Alpine regions:
Villnöss Taufers i.M. Vahrn Bruneck Pfalzen Tiers
Oberhausen a.d. Donau (D) Friedrichshafen (D) Pfyn (CH) Blons (A) Storo (TN)
Data collection:
3-5 qualitative interviews with political representatives & representatives from the business sector
Data analysis:
GABEK-analysis to reduce complexity of the collected information and to visually represent the
results (causal net graph) (see. Zelger, 1999; 2000)
Comparative analysis:
Qualitative comparative analysis to discover conditions under which specific effects can be
realized (see. Ragin, 1987; Ragin, 2000)
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11. Quantitative study
Data collection:
• Standardized online-survey among citizens and businesses in South Tyrol, about some aspects
of demand concerning optical fiber infrastructure
• Time period: 15.07.2012 until 19.10.2012
• Using web portals of some municipalities and professional associations
• N=840 utilizable answers
Data analysis:
Analysis with the statistics software SPSS
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12. Selected results
Qualitative study
Realization of the “last mile” of an optical fiber infrastructure may lead to
an increase in quality of life, service quality and networking quality
connection of
peripheral areas regional development
location factor possibilities
immigration
innovation
place of incentive
residence idea
tourism
exchange Development advertising
quality Innovation e-government
quality smart metering
information
comunication
e-health
cooperation projects
Networking retail
problem quality fiber optic netw ork access
solution mobile applications
security Service quality
speed
video
services
Quality of life Semantic network based
television
on qualitative interviews
packages in the 11 case study
makes a
Costs/risks telephone municipalities; each
difference connection is based on 2
internet to 3 mentions by
fantastic
quality enthusiasm complexity respondents.
comfort
added civil w orks Method GABEK (Holistic
value
facilitation connection fee competence & handling of complexity)
save money save time
responsibility (Zelger 1999; 2000)
start-up difficulties
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13. Selected results
Qualitative study
Realization of the “last mile” may lead to an increase of quality of life and
competitiveness of peripheral areas
 Degree of urbanization Perceived positive economic effects
seems to have an
effect on the perceived
economic effects of the
“last mile”
Legend:
0 … does (rather) not apply
0,33 … partly applies
0,66 … mostly applies
1 … (almost) completely applies
Low urbanization
Quantification based on qualitative interviews; method QCA (qualitative comparative analysis) (Ragin, 1987; 2000)
Points above the bisecting line (the points represent the case study
municipalities) suggest that the variable on the horizontal axis is a
“sufficient condition”
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14. Selected results
Quantitative study
Reliability is perceived to be the most important attribute of an optical
fiber connection
Online survey in South Tyrol 2012; n = 837, missing = 61
Parallels between physical and digital reachability: Reliability as most important factor
Basic quality is crucial
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15. Selected results
Quantitative study
The surveyed South Tyrolean citizens and firms show a substantial demand
for optical fiber connections
• no significant influence of:
- age
- sex
- monthly net income
- type of previous internet access
- industry sector (businesses)
- firm size measured in employees (businesses)
- firm size measured in sales (businesses)
Online survey in South Tyrol 2012; n = 818, missing = 19
Willingness to switch is consistently high and largely independent of several socio-economic variables
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16. Selected results
Quantitative study
The surveyed citizens and firms show willingness to pay for optical fiber
connections
Currently In future
Monthly costs for the current
internet connection (n = 837)
- Arithmetic mean: 34,57 €
- Median: 29 €
Willigness to pay a monthly extra charge (max)
(online survey in South Tyrol 2012; n = 812, missing = 25)
In absolut terms:
- Arithmetic mean: 9,0 € (Median: 5,0 €)
In relative terms:
- Arithmetic mean: 31% (Median: 14%)
South Tyrolean citizens and firms show a willingness to pay an extra charge from 15 to 30%: this willingness is mostly independent of
socioeconomic variables (however: men, businesses – especially in rural municipalities – show a higher willingness to pay)
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17. Selected results
Quantitative study
The surveyed citizens and firms consider public-sector investments in
optical fiber infrastructure as relatively important
Online survey in South Tyrol 2012; n = 837, missing = 76
Investments in the optical fiber infrastructure are considered as more important than investments in the mobile
phone network
Comparable importance of investments in physical and digital reachability
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18. Selected results
Qualitative study
Cooperation and finance as two crucial, critical elements for the
realization of the last mile
fiber optic netw ork access
External factors: Human factors:
thinking ahead
pressure
Time spirit Competences
vision and
necessity idea farsightedness
future
planning decision
today
younger contemporary Relational factors: Internal factors: expertise
lifestyle
people
Cooperation Finance
excavation
w ork
restructuring
involvement
investment
netw orking municipality electric supply
pow er station economy
laying the empty
discussions conduit
telecom district heating plant
support combination
providers
cooperation
Semantic network based on qualitative interviews in the 11 case study municipalities; each connection is based on at least 4 mentions by respondents.
Method GABEK (Holistic handling of complexity) (Zelger 1999; 2000)
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19. Selected results
Qualitative study
“South Tyrolean model”: Many pioneering municipalities in South Tyrol
have opted for a uniform approach on the last mile
REALIZATION MODEL LAST MILE
Local ownership of Separation
networks ownership-providing Specific civil works Hybrid technology
1 1 0 0,33
1 1 0 1
0,66 1 0 0,33 Municipalities in
1 0 0 0 South Tyrol
1 1 0 0,66
1 1 0 1
0 0 0,33 0,33
0,33 0 0,66 0,66 Municipalities outside
0,33 0,33 1 0 of South Tyrol
0,33 0,66 0,33 0
1 0 0 0
Legend:
0 … does (rather) not apply
Quantification based on qualitative interviews; method QCA (qualitative comparative analysis) (Ragin, 1987; 2000) 0,33 … partly applies
0,66 … mostly applies
1 … (almost) completely applies
 Elements of the “South Tyrolean model”:
• Local ownership of the network (fiber network owner tends to have also other network infrastructures)
• Separation of network ownership and providing
• Avoidance of specific civil works exclusively for the realization of the fiber infrastructure
• Recourse to hybrid technologies for particularly remote locations (combination radio – optical fiber cable)
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20. Selected results
Categorization
“South Tyrolean model” as middle course between internalized and
market-based realization models of the „last mile“
Association
Cooperative
South
Internalization Dual Tyrolean Model
model model model Friedrichshafen
Net- Market
Hierarchy
work
e.g. e.g. e.g. e.g.
Friedrichshafen
Blons Oberhausen Villnöss,
(association), a.d. Donau, Taufers i.M.
Storo Pfyn
(cooperative)
“South Tyrolean model”: inter-organizational collaboration (municipality, provider and in some cases local cooperatives)
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21. Selected results
Categorization
“South Tyrolean model” as middle course between public and private
realization models of the „last mile“
Association
Cooperative
South
Model Dual Tyrolean Internalization Model
Friedrichshafen
model model model
Friedrichshafen
Public Private
e.g. e.g. e.g. e.g. e.g.
Friedrichshafen Oberhausen Friedrichshafen
Villnöss, Blons
a.d. Donau,
Taufers i.M. (association),
Pfyn
Storo
(cooperative)
„South Tyrolean model“: often collective ownership of the network infrastructure (public or cooperatives) but private providing
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22. Selected results
Categorization
“South Tyrolean model” as middle course between local and
regional/supra-regional realization models of the „last mile“
Association Cooperatives South
Tyrolean Dual Model
Internalization model model model
Friedrichshafen
Local Supra-
regional
e.g. e.g. Storo e.g. e.g. e.g.
Oberhausen Friedrichshafen
Blons Villnöss,
Taufers i.M. a.d. Donau,
Pfyn
“South Tyrolean model”: often local ownership of the network and regional providing
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23. Selected results
Qualitative study
“South Tyrolean model” seems to be particularly suited for peripheral,
rural areas Perceived positive economic effects
Legend:
0 … does (rather) not apply
0,33 … partly applies
0,66 … mostly applies
1 … (almost) completely applies
Points above the bisecting line (the points represent the case study
municipalities) suggest that the variable on the horizontal axis is a
“sufficient condition”
Low urbanization and “South Tyrolean model”
Quantification based on qualitative interviews; method QCA (qualitative comparative analysis) (Ragin, 1987; 2000)
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24. Selected results
Qualitative study
To increase the value of the last mile for citizens and businesses, it is
necessary to expand the specific services offered
Specific services
offered
0,33
0,33
0 Municipalities in
0 South Tyrol
0
0
0,66
1
Municipalities outside Legend:
0,66 0 … does (rather) not apply
of South Tyrol 0,33 … partly applies
0,66 0,66 … mostly applies
1 … (almost) completely applies
0,66
Quantification based on qualitative interviews; method QCA (qualitative comparative analysis) (Ragin, 1987; 2000)
South Tyrol: still low number of services that exploit the potential of an optical fiber connection (e.g. telemedicine)
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25. Contact
European Academy of Bozen/Bolzano
Institute for Regional Development and Location Management
Viale Druso 1
39100 Bozen/Bolzano
www.eurac.edu
Mag. Michael Volgger
p 0471-055325
f 0471-055429
michael.volgger@eurac.edu
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