Although Arrieta may be the smallest European community with top-class broadband connectivity, it can't claim to be the only one in the Basque Country. Thanks to the Basque government's policy to expose its people to the digital era, almost all its more than 2.1 million residents will have access to basic broadband connectivity by the end of 2006. By then, the second and final phase of the two-year project, called Konekta Zaitez@Banda Zabala -- or KZ@Banda Zabala -- will have extended broadband infrastructure throughout the Basque region, covering more than 4,500 miles.
When completed, KZ@Banda Zabala will be the first broadband project in rural Europe to offer broadband connectivity to match services now generally available only in larger cities. "There are several similar projects brewing throughout Europe, but most of them are pilot deployments, due to the absence of a network for providing commercial availability the same way as they do in the cities," said Naiara Goia, deputy manager of Itelazpi, S.A., the government-owned telecom company tasked with implementing the project.
Indeed KZ@Banda Zabala, started in 2004, is easily one of Europe's most interesting digital inclusion projects. It is a part of the Basque Country in the Information Society Plan -- PESI in Spanish -- an initiative started in 1999 with the objective of fostering cultural change in Basque society through the use of information and communications technology. The plan's goal is to fundamentally improve the quality of life and use information technology to further economic development. As part of this, the project will guarantee that all rural areas get access to broadband services, especially those that might be excluded due to the lack of commercial interest.
According to Goia, the main driver for this project was the Basque government's desire to develop its rural areas and bridge the region's widening digital divide. A study conducted by the Basque government in early 2004 to analyze current and planned coverage of private broadband networks in rural areas, revealed a lack of commercial interest to offer broadband services to the Basque Country.
The study found that 102 municipalities in the country would likely be excluded from a private-sector broadband rollout. These municipalities make up about half of Basque Country's territory but are home to only about 3 percent of the Spanish population.
To take matters in its own hands, the Basque government designed KZ@Banda Zabala based on the open network and neutral technology guidelines for public intervention formulated by the European Commission. It has two strategic objectives: to extend the broadband network to all villages and economic areas of Euskadi -- the Basque Country -- and guarantee that broadband services are provided to the users of these areas with quality levels and prices similar to urban areas. And since such objectives would be difficult to realize through private enterprise, the Basque Cabinet of Ministers chose Itelazpi to carry out the task.
Innovative Business Model
"Low population was the primary reason why broadband services by private operators were eluding the Basque region," said Goia. "Typically projects like these require high investments, but low population and lack of density that provide limited business development, make such areas unattractive for deployment of broadband infrastructure by private operators."
Still KZ@Banda Zabala is not simply a government venture. "The most interesting feature of the project," said Goia, is its "public-private partnership approach." Although Itelazpi is responsible for funding the project (with the help of the Basque government) and providing the necessary infrastructure -- the communications network, land space and the customer premise equipment -- the operational maintenance of the project was handed over to a private telecom company, Euskaltel, the leading cable TV service provider in the Basque region.
Itelazpi provided the investment needed to create the infrastructure while Euskaltel runs base stations at customer premises, data management and transfer service between base stations and the network, and covers all expenses associated with the base stations. For its services, the company charges the end-users/customers and pays Itelazpi a fee for using this infrastructure. The public ownership of the broadband network -- through Itelazpi -- thus guarantees that the rural areas don't depend on commercial interests for actual deployments. At the same time, Euskaltel can charge the end-users/customers for broadband services delivered on the public infrastructure to make a profit.
The actual deployment consists of a wireless network that uses a radio-based backhaul and a point-to-point pre-WiMAX access network capable of also providing voice services. Base stations and repeater stations are managed by Itelazpi and serve as access points for end-users. To connect, users generally require an exterior antenna and a wireless modem that connects to their computer or network.
Life-Changing Impact
KZ@Banda Zabala was designed in two phases with a total project outlay of 6.5 million euros. According to Goia, although much of this outlay is funded jointly by Itelazpi and the Basque government, there is also co-financing by the European Union, through its structural funds, DOCUP País Vasco. The first phase was completed at the end of 2005, and saw deployment in 102 municipalities. Currently 97 percent of phase two has been implemented, according to Itelazpi, and by the end of 2006, the network will reach 177 population centers.
The project has changed the life of Basque residents. "It is very important to have quality Internet access for schools located in rural areas," said Goia. "Thanks to this project, many schools have access to broadband. It is also aiding small and medium-sized companies to extend their businesses, and compete and deal better with companies and customers." Moreover, small town city halls have started participating in Basque Public Administration e-administration programs. The project also encouraged economic development and enabled several companies to start businesses in the region. But perhaps even more important for the region's prosperity, the Basque Country is now starting to draw more tourists. "There are more rural hotels now, which through their broadband connections, are attracting tourists from larger cities," Goia said.
As far as Goia is concerned, KZ@Banda Zabala has proved that geography and private-sector profitability need not be barriers to Internet broadband access. The proof is in the pudding as they say, and the residents of Arrieta find little need to go into the city these days.
