Building A Business Model? Here’s What To Think About

Perhaps no one in the muniwireless industry has more experience working on business models than Greg Richardson, managing partner of Civitium. Richardson advised Philadelphia in its groundbreaking negotiations, and has consulted with more than 50 cities.

This article originally appeared in the June 2007 issue of MuniWireless Magazine.

By Carol E. Ellison

Perhaps no one in the muniwireless industry has more experience working on business models than Greg Richardson, managing partner of Civitium. Richardson advised Philadelphia in its groundbreaking negotiations, and has consulted with more than 50 cities.
Rather than focusing on distinct business models, Richardson prefers to talk about characteristics. By focusing on the characteristics of the deployment, Richardson can address and create the framework for whichever model a city designs. He points to six characteristics that typically are addressed in all deployments:

• Financing ‚Äö?Ñ?¨ Who will pay to build the network and finance its operations? Will it be the city, a corporate vendor or service provider, or an intermediary such as a non-profit corporation than manages the relationship between the city and its vendors?
• Pricing ‚Äö?Ñ?¨ Who will control pricing? What pricing tiers will be set to help cities achieve their goals? Will the service be offered free to local residents, to all users or to a tier of qualified residents?
• Ownership and governance ‚Äö?Ñ?¨ Who will provide the oversight of the network and ensure contract compliance?
• Usage ‚Äö?Ñ?¨ Will the network be designed primarily for governmental use or use by the public? Will it be a multi-use network? If so, what services and applications will be delivered?
• Degree of regulation ‚Äö?Ñ?¨ If the network is owned by the city, will it function through an agency such as a public service commission, complete with service level agreements, standards for customer service and authority over issues like net neutrality? Or will the city take a hands-off approach?
• Local goals ‚Äö?Ñ?¨ What provisions will be made to address social and economic goals? How will the network be used to address the digital divide or spur development?

Focusing on the characteristics rather than the specific business model, Richardson says, opens a muni to a wide range of outcomes if you calculate all possible combinations that might result when you begin putting them together.