The whole debate on cost reduction is missing the point if we focus on the technical aspects of laying fibre. Sure they are relevant but if we look at the cost to the public purse with the right business model we can reduce the total cost to government to zero (or even better).
A separation of the civil works from the services elements should be undertaken where the market cannot meet the needs of the local community (services and infrastructure demand totally different business models and by doing this you separate 80% of the capital cost from the equation)). The role of civil works provider can be undertaken by a municipality or a region, outsourcing this element via an open competitive tender to a civil works company - not a service provider. Funding would be provided by the private sector, government or a mix of both via a Special Purpose Vehicle (SPV). Restrictions should apply on ownership of the SPV thus avoiding conflicts of interest and the argument that a monopoly provider is being established.
Any service provider, for a wholesale fee charged by the SPV, would then get access to the fibre. The service provider in turn charges a retail fee to the end consumer.
Benefits
There are numerous benefits in employing this strategy, for consumers, businesses and for the governments involved.
• Consumers
o Consumers will have a wider choice of supplier and applications, which will produce more competitive pricing.
o There will be more scope for high-end services such as HD-TV, 3D TV, video on demand and other applications which require larger bandwidths.
o Symetric services delivered at high speed will transform the way we interact as a society and within communities. Every person has the potential of becoming a service provider.
o It is likely that health and education services to the individual will be transformed
o Rural communities will survive and innovative lifestyle companies will be generated

• Service providers
o Providers will have access to nearly 100% of the market instead of the restricted market they have at the moment.
o A substantial proportion of their fixed costs would be removed and their business model would be based mainly on variable costs.
o Providers would be able to concentrate on the most profitable areas of their business, namely the high-end services that the new infrastructure can provide.
o More cash will be available to invest in service oriented businesses.
• Government
o By charging retailers a wholesale price the SPV gains revenue and therefore the projects should be self financing. Existing projects indicate a ROCE sufficient to attract private investors. The net cost to the public purse would therefore be zero or in some cases positive.
o Delivering key services such as health and education can benefit from lower costs and improved quality of service
o Applications that connect government to society will have a positive outcome for the environment, social well-being, security and citizenship.
o Risk can be shared with the private finance sector who are looking for long term predictable ROCE
This model is not only beneficial to the citizen, government and businesses, but it is scalable, tested and can be applied to municipalities, regions or even nations as a whole.While we get wrapped round the axle on cost, places such as Singapore are asking a different question i.e. what are the social and economic benefits or what would be the cost if we DONT roll out fibre!
Finally, in the current vertically integrated mindset, I keep asking the question - have you ever heard of a taxi company owning the road!?

Could someone please correct me.
My understanding is that the UK government is currently proposing to invest in fibre through a ´gap funding´mechanism. This was chosen on the basis that it reduced risk (over the PPP model). So a municipality lets say offers to invest ´x´million GBP and the winning supplier invests ´y´. Does the municipality get anything in return such as a share in the infrastructure or in the infrastructure company? If the answer is no surely this is a direct subsidy to the supplier, is contrary to State Aid and is the ultimate form of risk i.e. you are guaranteed to lose your investment. In a PPP model at least you have a chance of getting some of your investment back, it can attract private finance etc (see previous posting)

Government should only be involved in as much as there is market monopoly or shared natural resource (rights of way, spectrum, etc...). They should not be involved in projects that contain risk; even more so in the communications sector where all infrastructure depreciates rapidly and/or is made obsolete by new supply/demand paradigms. A new networking model which focuses on horizontal layers and scaling and an understanding of marginal cost is critical. A review of 30 broadband whitepapers (FCC, Harvard, Columbia, etc...) contains not one mention of marginal cost. And yet the latter is the key to true "digitization". See my comments elsewhere for an expansion of this theme.

Please resend or edit the ofcom link. Not able to access the cost study to see if they discuss marginal cost. Thanks.

We could commission a case study on the B4RN self build project in the UK, or one on Gigaclear who are rolling out a commercial service? I don't know of any that are available at the moment.