A Fresh Look at Public-Private Partnership in Broadband

Business people shaking hands in the office after succesful meeting. Three persons

Private partnerships are a great option for municipalities without the recourse to build and manage their own infrastructure.

Lately, the phrase “public-private partnership” has been thrown around a lot in the context of improving and expanding broadband Internet access in Maine.  For many of the broadband projects that have used that terminology, the meaning of public-private partnership has been that the private entity provided the expertise and the public entity, such as a municipality, has provided the majority of the capital.

The presumption is that private companies are unwilling or unable to invest in expanding networks in rural areas, but what if that isn’t the case?  What if there is a private entity that is willing to pledge existing network assets and significant capital resources to expand broadband in a community?  What might a public-private partnership look like then?

Planning for Better Broadband

Before setting out on an initiative to improve broadband, it’s important to understand where you are and where you need to go. Without clear goals, you could end up with a network that is overkill for your needs, or worse, one that’s completely inadequate for the task – either way, not the best use of resources.

Every community is different, as are their goals.  As you develop yours, here are a few to consider:

  • Targeted fiber builds in Economic Development Zones are usually ideal projects for private investment. They offer the highest potential rate of return to the private sector.  In such cases, it’s probably more appropriate for towns to provide information and marketing assistance, and to try and get providers to build the necessary network at their own expense.
  • Connectivity to un-served and under-served areas can very often be funded with a combination of investment from state and federal sources and private matching funds. This can significantly limit the impact on local property taxes.
  • Public Wi-Fi can be deployed most economically by leveraging existing networks, limiting a municipality’s up-front investment to the actual Wi-Fi radios and related electronics.
  • Gigabit Internet service is really more marketing gimmick than necessity today. Most residential and business customers today would find themselves unable to use anything close to that much capacity. While a Gigabit might be overkill, it is important that providers plan and build networks capable of expanding to Gigabit delivery in the future.
  • Town wide fiber to the home will undoubtedly require a significant investment from taxpayers if your goal is to deploy in the next couple of years. If you choose a bond issuance to raise the money, your municipality may be required to own, operate, and maintain the network. For some communities with a heavy reliance on cottage industry and very limited connectivity options, this may be the optimal choice if there is no commercial partner that is willing to build.

What Does Your Public-Private Partnership Need to Accomplish?

Once you determine the goals of your community, it’s easier to determine what structure makes the most sense for your public-private partnership. There are no hard and fast rules for how communities should get the job done, but you should keep these guidelines in mind:

Simplifying this process down to its most basic elements, there are three things you need to consider before proceeding to the next step:

  1. What network assets and product offerings are currently available in your community?
  2. What network assets and service offerings will be required to meet the broadband goals you have set for your community?
  3. Identify the gaps in network assets where an investment in infrastructure may be required.

Once you’ve been through this process, the next step is to identify how the project will be funded. Please do not assume that your town must make these investments.  By collaborating with existing providers in your community, you may find that they are willing to work with you to invest in the infrastructure where you need it.

Independent Telephone Companies – A Case Study for Private Investment in Rural Communications Infrastructure

Independent TelephoneMany of our country’s most rural communities are served by small, independent telephone companies that were never part of the Bell System.  These companies were established as the 20th century was born to bring telephone service to rural communities that “Ma Bell” had little interest in serving.

In the 100-plus years since these companies were established, they’ve invested consistently in small communities around the country.  Each year, these companies bring more and more advanced services, including broadband Internet and fiber to the home to their host communities more quickly and more ubiquitously than their large company counterparts.

These independent telephone companies have capital budgets to invest in broadband infrastructure, and they are committed to rural communities. If your community is served by an independent telephone company, you may find that they are already investing in broadband infrastructure in your town. Moreover they’re probably ready to invest more and will welcome your input as to where investment is needed.

Even if you’re not served by one, independent telephone companies are proof that there is another way to approach building broadband infrastructure.