Broadband Communities

AUG-SEP 2014

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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24 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | AUGUST/SEPTEMBER 2014 COMMUNITY BROADBAND The Art of the Possible Communities trying to acquire high-speed networks have a variety of options for owning and operating such networks. Though there are trade-ofs among the options, many have proven successful. By Ben Lennett and Patrick Lucey / New America Foundation Open Technology Institute and Joanne Hovis and Andrew Aferbach / CTC Technology & Energy A community should consider three issues when considering a public broadband project: 1 Control: who owns the network and decides how it operates? 2 Risk: how do the costs associated with developing and running the network balance against the revenue it generates? 3 Reward: what benefts are achieved through successful implementation of the project? Achieving the desired level of control, minimum risk and maximum reward is difcult. Ofcials should consider carefully which components of these three items are important and be prepared to make sacrifces where appropriate. A community may or may not wish to control an entire network or even parts of a network. In some instances, it is benefcial for a municipality, county, or tribal government to become a service provider itself and to sell services over the infrastructure it has built. In other cases, a community has no interest in this level of control as long as it can guarantee that a private partner is meeting certain goals for the project, such as afordability, level of service or service to a specifc constituency. Achieving these goals does not necessarily require a local government to control or provide the service. However, ensuring sufcient accountability for private partners will require developing a strong governance model. A locality seeking partners should therefore fgure out the specifc goals of the project, determine what kinds of control or accountability measures these goals require and evaluate local risk tolerance. Tis analysis will help a community decide which ownership and governance models are most suited for a project. Some communities have no tolerance for fnancial risk; others can aford to spend signifcant resources for a potential long- term payof. If a community has a signifcant fnancial stake in a network, it will likely need strong assurances that it will be able to break even on the investment, that the network will pay for itself over time or, at minimum, that it will service debt from bonds or other fnancial instruments. Nonfnancial risks also exist, including the risk of falling short of stated goals. A local government can reduce fnancial risk with a good private partner, but, without the right arrangement, there can be a high risk of failing to achieve the goals that led the community Editor's note: Tis article was adapted from a report published by the New America Foundation. Te complete report is available at http://oti.newamerica.net/publications/policy/the_art_of_the_possible_ an_overview_of_public_broadband_options

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