AMCIS2007

A Typology for Community Wireless Network Business Models

Abdelnasser M. Abdelaal and Hesham H. AliDepartment of Computer Science

College of Information Science and TechnologyUniversity of Nebraska at Omaha

Omaha, NE 68182{aabdelaal | hali}@mail.unomaha.edu

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Agenda

Introduction Literature review Proposed Typology for CWN business

models Implications for practice and future research Conclusion

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Introduction

CWNs are clusters of wireless networks developed and run by non-profit entities and they provide free or affordable Internet access.

Community Wireless Networks (CWNs) have been established for the purpose of: Bridging the digital divide; Improving the business environment; Improving the civic engagement and political participation; Improving the security in the area; Supporting municipal services and/or

Improving the well-being of the community at large.

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Interfaces and Services of Community Wireless Networks

Source : http://www.3g-generation.com

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Community Wireless Networks for Civic Engagement

Many-to-many engagement

M-democracy

Direct and unregulated democracy

Customized civic participation

Real-time participation

Advancements of wireless communications

Failure of mainstream media to bridge the political divide

SMS MobiTV

Moblogs

WAP

RSS

MMS

DABDVB

VoIP

Affordable political participation

Mobile Voting

A framework for civic-engagement using wireless communications

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Research Problem

What are CWNs? Are they viable and sustainable systems? What is the impact of CWNs on social and economic

development? Will they serve residents, local businesses, or

municipalities? What are their main stakeholders? What is the difference between CWNs, municipal

wireless networks, and public WiFi hotspots? We will use the concept of business models to

answer these questions

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Motivation

CWNs are confused with municipal wireless networks and commercial WiFi hotspots.

There are many concerns about the viability and sustainability of CWN projects.

CWNs is a young innovation whose implementation models are still in trial stages

CWNs literature has been influenced by scholars from different disciplines and advocates who lack the necessary theoretical background.

CWNs is a multidisciplinary topic that lies at the cross area between public, private, and nonprofit sectors

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Drivers of CWNs

Emerging wireless technologies 802.11, WiMax, antennas, routers, Open source software, etc

Open frequency The 2.4GHZ (for WiFi)

Community support Voluntary work, donations, open source software, location-hosting, etc

CWNs

Wireless Technology

Community support Open frequency

Figure 2: The drivers of CWNs

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CWNs Main Issues

Inputs

Volunteerism, donations, sponsorship, location hosting, open source software

CWNsFunding, pricing, management, ownership

QoS, security, reliability, node placement, coverage, spectrum regulation

Social and economic development

Tech IssuesOrg. Issues

Clustering, routing, antenna management, Social capital,

business models

Network theory

Outputs

Physical capital, social capital and human capital

Figure 3: A Framework for Research on CWNs

Education, municipal, health, commercial, social, personal, servicesOperation phase

Implementation phase

Mobility, flexibility, affordability, time-saving, effort-saving, resource sharing

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Research Approach

.

Collective actions Value proposition

Social networks Business partners

Embedded resources Resource management

Figure 4: the components of the social capital concept and their equivalent in the business model concept that we use to assess the social and economic impacts of CWNs

A business model outlines the contributions of different business partners in creating and distributing a specific value to

a particular segment of customers in order to generate sustainable revenue streams

Social capital is the social ties and norms in a specific social structure that facilitate collective actions

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The Role of Social Capital in the Creation of CWNs

The definition of social capital

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Agenda

Introduction Literature review Proposed typology for CWN business models Implications for practice and future research Conclusion

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Literature Review

Osterwalder and Pigneur (2004) developed a business model ontology that identifies the main elements of business models.

It outlines the contributions of different business partners in creating and distributing a specific value to a particular segment of customers in order to generate sustainable revenue streams

This ontology is conceived as a tool that helps managers to capture, understand, design, communicate, analyze, and change the business logic of the firm.

Camponovo et al. (2003) explored different business models for private, community, wide area, and WiFi hotspots in the Swiss market.

Meinrath (2007) classified CWN business models into the following categories: single-payer municipal model; free access and fee-for-services; free for residential and fee for commercial-government; off-peak versus peak; nonprofit ISP; educational purposes; and request for proposal (RFP)

Ohlhausen et al. (2006) classified CWN business models into six categories: nonprofit, cooperative, contracting out, public-private partnership, municipal, and government loan-grant.

Mandviwalla et al. (2006) classified the management and funding models of CWNs into the following categories: government-owned and operated, government-owned and privately operated, public utility, cooperative wholesale, and private consortium-owned and operated.

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Agenda

Introduction Literature review Proposed typology for CWN business models Implications for practice and future research Conclusion

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CWN Business Models

a) Public utility

b) Ad-supported

c) Education-centric

d) Public private

e) Community wireless network

f) Location-hosting

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(a) Public Utility

Description: A municipality build and run the project A company may be contacted to build or/and run the project Funded from bonds or tax money

Advantages: Stability of funding sources and low risk Better service quality and reliability Serving the entire city and bridging the digital divide Using the facilities for public services such as utility meter reading and emergency service (Cisco 2007; Vos

2005) Investing the generated money in the community Reducing service costs by having a tax-exempt status Using public buildings and venues with good visibility such as light poles, public libraries, schools, and parks

to install the system facilities.

Disadvantages: Some oppositions say that tax money should not fund such project Municipalities may not be qualified to run such business Governments in developing societies may not have enough fund for such projects It has less opportunity to engage the community and empower the civic society

Examples: Lebanon, OR; Dayton, OH; Chaska, MN

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(b) Ad-supported

Description: A content provider (e.g., Google) funds the project from advertisement revenue

Advantages: Content providers support a free WiFi service Suitable for metropolitan areas , large cities and commercial districts

Disadvantages: It needs economies of scale and enough demand to generate sufficient revenue It is suitable for big cities and business districts because

Examples: San Francisco, CA; Mountain View, CA

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( c) Education-centric

Description: A school is an anchor partner where student interns build and run the system as part of

the educational process

Advantages: Provide the service free in most cases Academic institutions possess the expertise needed to implement and manage the system The system may have a dual purpose of supporting the educational mission of the

sponsored institution as well as providing digital connectivity to the community The use of network resources may be optimized since their usage by universities (mostly

during the daytime) may be complemented by the needs of the community in the evenings

Students participating in these projects obtain valuable experience, The project could be used for research purposes Academic institutions have access to different financial resources This model may reduce any legal risks facing nonprofit entities that own it The school get engaged with the community

Examples: SparkNet ( University of Turku,, Finland) and Smart School (Bario, Malaysia),

OmahaWireless, U.S.

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(d) Public-private

Description: The city partners a private company for the project The city give this company access to public places to install the facilities The company provide free or subsidized service to public entities and needy individuals

Advantages: Cities have some control over deployment and service pricing. Communities and municipalities obtain some benefits for giving telecommunication

companies access to public places to install the system facilities. Usually provide free or subsidized service to needy individuals, public entities, and

nonprofit organizations. Disadvantages:

Does not engage the community The business partner shares the revenue

Examples: Philadelphia, PA, U.S.

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(e) Community Wireless Network

Description:

Community members donate and volunteer to build and run a wireless system for the community Advantages:

Providing the service free in most cases Using the social capital of volunteers and donors Engaging the community in public affairs, educating them about new technologies, and providing

them with experience Providing the service free of charge or at low cost Keeping generated revenue in the community

Disadvantages: Instable management structure and uncertain funds and revenues May face legal problems with telecommunication companies May not be used for municipal services May not cover the entire city

Examples: NYC Wireless, Austin Wireless (U.S.); Wireless Ghana;

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(f) Location-hosting

Description: an entity hosts the facilities in return for some incentives such as customer attraction,

free service, brand exposure, or for the purpose of improving community well-being.

Advantages: Providing the service free in most cases Obtaining benefits for the distinguished location of the property Its an application for the location theory in the digital domain

Disadvantages: May lack the necessary management support May not be used for municipal services May not cover the entire city

Examples: OzoneParis (Paris, France) , SkyFrames; U.S.

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Main Business Models for CWNs and their Components

Business model Value offering Financing Business partners Infrastructure management

Target customer

Public Utility Serves public services, bridges the digital divide, employs public resources

Public funds Municipalities A municipality or a contracted company

Any community

Community Employs social capital, achieves civic engagement

Donations, volunteerism Municipalities, local businesses, volunteers

Nonprofit entity Any community

Public-private Uses public venues to host the facilities, improves management efficiency

Private funds Service providers A private company Big communities

Ad-supported Content providers bridge the digital divide

From ad revenue Content providers, technology vendors

Content operators (Google, Yahoo), or ISP

Business districts and large cities

Education Provides students with expertise, guarantees long-term management structure

Public fund , donations, student expertise

Academic institutions, local businesses and governments, nonprofit organizations

Students of the academic institutions

Any community but more suitable for rural and underserved ones

Location-hosting Location is an important asset, uses public places and venues

An ISP, donations, sponsorship

Community members, local businesses, public entities, nonprofit organizations

An ISP, or a nonprofit organization

Rural and underserved communities, business districts

Table 1: The main components of CWN business models

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Agenda

Introduction Literature review Proposed typology for CWN business models Implications for practice and future research Conclusion

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Matching CWN Business Models with the Social Sittings

. Education Public

utility

Location-

hosting

Ad-

supported

Communit

y

Big cities and

business districtsUnderserved and

rural communities

Public-

private

The properties of the community and the social sittings determine the appropriate business model

CWN business models are not mutually exclusive

Practitioners can use a mix of these business models

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Implications for Practice

The typology helps practitioners to choose the best model for their community

Ad-supported and public-private models may be more appropriate for business districts and big cities The community, education-centric, and location-hosting models could suit any community

particularly underserved and rural ones. The success key is adopting the proper business model that fits the economic and social settings of

the designated community Regardless of the adopted business model, practitioners should collaborate with local communities,

businesses, municipalities, non profit entities, and academic institutions in a win-win partnership to fund, build and maintain the system.

Helps researchers to: Discipline the area of CWNs for development as a research stream; Choose the proper level and unit of analysis for future research in this area; and Assess the social and economic impacts of this innovation.

There is a need for a special instrument to validate and evaluate this business models typology

AMCIS2007

Agenda

Introduction Literature review Proposed typology for CWN business models Implications for practice and future research Conclusion

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Conclusion

We proposed a typology of CWNs business models that considers the social settings and the main issues of these emerging systems

The typology links the CWN business model concept to its impact on the society

It classifies them into six main models: public utility, ad-supported, education-centric, community, location-hosting, and

public-private partnership This groundwork is an important step towards a unified theory

that explains and predicts the CWN phenomenon and its social

and economic implications

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Acknowledgement

This research study was partially supported by NSF grant number EPS-0346476 and a grant from the Nebraska Research