1. The Bulgarian Broadband Project Krassi Simonski Project Manager

2. TITLE: DEVELOPMENT OF HIGH-SPEED BROADBAND ACCESS IN BULGARIA BY BUILDING A CRITICAL, PROTECTED, SECURED, AND RELIABLE PUBLIC ICT INFRASTRUCTURE Operational Program “Regional Development” Priority 2: Regional and local access Operation 2.2: “Information and Communications Network” Call: BG161PO001/2.2-01/2011

3. Main Players Beneficiary: Executive Agency for ICT (a.k.a. as ECNIS) to the Ministry of Transport and ITC (MTITC) Managing Authority: Operational Program “Regional Development” (OPRD) of the Ministry of Regional Development and Public Works (MRDPW) Ministry of Agriculture and Food: OP “Rural Development” – Demand Analysis

4. Major steps 2009: National Broadband Strategy – adopted by the Council of Ministers 2012: Update of the Strategy –focus on NGA networks 2008-2011: Pre-strategy research 2011: Operational Program “Regional Development” – 20 mln. Euro End of 2011: Pre-investment research - MAF

5. Project parameters Budget: 20 mln. Euro (incl. VAT) Timeframe: 24 months 29 locations selected 927 (860+67) km new Fiber-optic cables planned Active equipment to connect government and public institutions to the state network - 10 gbs intercity, 1 gbs to institutions

6. Bulgarian Optical Backhaul Network Networks: ECNIS Optical Power Grid Optical Railroad Optical Railroad Copper

7. Contrasts Second to the last in the EU by broadband penetration However, Sofia is in the Top 10 capitals in the world by speed and quality of Internet The gap is due to the lack of aggregation layer! Only 24 of 264 municipal centers are connected to the core backhaul networks (+57 ready) High Investment Barrier!

8. Dual Mission– Catalonia case Connect municipalities and government institutions to the state network backbone Provide wholesale access to the extra capacity of the NGA infrastructure – passive and bitstream

9. Project Development Demand Analysis funded by the Ministry of Agriculture Selection of locations - criteria Additional study of the selected locations Project submission and approval State Aid notification submitted Project under implementation МИНИСТЕРСТВО НА ТРАНСПОРТА, ИНФОРМАЦИОННИТЕ ТЕХНОЛОГИИ И СЪОБЩЕНИЯТА

10. Locations Selection – Phase I Pre-research for the National BB Strategy – 2009 to develop first BB Map: NRA data Research on all Internet providers in Bulgaria related to schools Consultations within a working group established by MTITC : ICT Business: ASTEL, BAIT, ICT Cluster Related NGOs Research and Education: Bulgarian Academy of Sciences, Technical University – Sofia, Federation of the National Scientific Unions Result: selection of 19 regions including 92 municipalities for intervention Executive Agency for Electronic Communication Networks and Information Systems

12. Location selections – Phase II Pre-Investment study funded by the MAF Objectives: Review and analysis of existing coverage, both broadband and ICT, including broadband market analysis; Review and research of potential needs and projected use of the Internet and related services to the Internet in rural areas; Draw a map of the existing broadband infrastructure using GIS based information system for integration and visualization of the collected information; Developing a research and cost-benefit analysis based on the results of the market research Executive Agency for Electronic Communication Networks and Information Systems

14. Location Selections – Phase III Limited budget of € 20 mln. = 900 km Selection criteria: NGA “white” zones – 34 locations Internet penetration in households Population Distance to be covered Result: 26 “white” locations + 3 “grey” on the route to white locations Executive Agency for Electronic Communication Networks and Information Systems

15. ISP Survey Average of 3.14 ISP per location NGA speeds for the “last mile” access and shared limited radio links to the backhaul Result of the survey: 60% will order dark fiber, 20% - 1 gbs bitstream 94% will do it within a year 85% want to invest in NGA last mile Impact on the ICT development survey Executive Agency for Electronic Communication Networks and Information Systems

16. Demand Analysis Scope All Internet providers approached by the Consortium with a letter from the Minister of MTITC CRC (Bg NRA) data processed and analyzed Selected municipalities researched All ISPs from the selected locations surveyed Statement by the Incumbent about the NGA coverage МИНИСТЕРСТВО НА ТРАНСПОРТА, ИНФОРМАЦИОННИТЕ ТЕХНОЛОГИИ И СЪОБЩЕНИЯТА

19. Technology – network architecture

21. Indirect Beneficiaries – local ISPs Average of 2 to 5 ISPs BTC (the incumbent) – ADSL Mobiltel – HomeBox Other ISPs – LAN technologies with speeds up to 100 mbs Intercity links – 50 mbs radio links, shared among all local users NGA local speeds but inadequate Internet speeds!

22. Categorization for intervention CategoryDescriptionAcceptable measure 0 No infrastructure for broadband access („white area“ for BA) All local operators can connect to the established infrastructure. 1 There is only one broadband access operator („grey area“ for BA) All local operators can connect to the established infrastructure. 2 There is more than one broadband access operator, but nobody has NGA access to the district town („black area“ for BA, „white area“ for NGA) All local operators can connect to the established infrastructure, because the speed they offer in the access layer do not correspond to the speed up to the backbone network. 3 There is more than one broadband access operator And only the incumbent has NGA connectivity to the district town (Vivacom), but does not offer NGA last mile and has no capacity to share the long distance NGA infrastructure („black area“ for BA, „white area“ for NGA) All local operators can connect to the established infrastructure because the speed they offer in the access layer do not correspond to the speed up to the backbone network and BTC does not plan on constructing NGA last mile. 4 There is more than one broadband access operator and only one operator has NGA connectivity to the district town and offers NGA last mile („black area“ for BA, „grey area“ for NGA) Only local operators which offer NGA last mile can connect. 5 There is more than one broadband access operator And more than one operator also has NGA last mile („black area“ for BA, „black area“ for NGA) Only local operators which offer NGA access outside the settlement can connect.

23. State Aid No State Aid: Building the infrastructure State Aid: Selecting the operator of the infrastructure No State Aid: Operating the state network State Aid: Wholesale access to the optical infrastructure including bitstream

24. Roles IA ECNIS Owner of the infrastructure State Aid Administrator Beneficiary of the grant Selected operator Operator of the infrastructure Beneficiary of the state aid OPRD – Managing Authority of the grant Executive Agency for Electronic Communication Networks and Information Systems

25. Demands to the operator RestrictionsObligations  Selling only wholesale access to the local ISPs  Banned sales to individual customers  No maintenance or other fees to government and public institutions  No Internet services  Accumulated Profit less than 20%  Maintenance and operation of the new NGA infrastructure and equipment  Free maintenance and operation of the connectivity to state and public institutions  Assistance to local Internet providers

26. Claw-back mechanism Cost Revenue  Maintenance  Operations  Sales  Administration  Selling: Dark fiber pair Single dark fiber 1 Gbs bitstream access - Ethernet ports Profit Return Claw-back Competition

27. Risks Time frame – 24 months only with heavy tenders (project management, notification, construction, operations) No operator: along with the ownership, ECNIS should assume the maintenance and operation of the network

28. Priotities 2020: 1. Build the Aggregation Layer in all 264 municipal centers 2. Connect Public Institutions – State Administration, City Halls, Schools, … 3. Broadband in Rural Areas 4. Build Access Networks in towns – FTTH, FTTB, FTTC 5. Related Projects – Cybersecurity, Cloud Services, HotSpots, Investment €160 mln. € 70 mln. € 100 mln € 90 mln € 70 mln TOTAL: € 490 mln

29. Roadmap 1. Pilot phase: Current BB Project – 2012-2014 2. Phase One: 2015-2017 Aggregation Layer Public Administration Network Pilots in Satellite Projects 3. Phase Two: 2017-2020 Broadband in Rural Areas Access Network Related Projects Pilot Phase Phase OnePhase Two

30. Thank you! Any questions