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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AUGUST/SEPTEMBER 2014 | www.broadbandcommunities.com | BROADBAND COMMUNITIES | 25 to pursue a broadband project in the frst place. Achieving community- driven goals such as open access, increased competition, afordable pricing, universal service, economic development and service to public institutions may not be realistic without taking a fnancial risk. Communities should seriously consider that doing nothing is also a risk. Entering into a costly infrastructure project with or without private partners is certainly a risk but so is the prospect of citizens' and businesses' lacking sufcient access to high-speed Internet and the associated benefts it provides. Te most common measurement of success is fnancial. However, with due consideration to fnancial goals and constraints, communities can measure success based on other benefts, such as spurring economic development or improving educational and health care outcomes. After all, building a network that prioritizes these aspirations is often among the reasons for public sector involvement in broadband planning and provisioning. Yet these types of rewards for a community are not specifcally refected in the fnancial statements of the community broadband enterprise. It would be unusual for a municipality, county or tribe to enter the broadband market simply to generate income like a private company. Other community benefts can be more difcult to evaluate than revenues and profts, but they should not be ignored. PUBLIC OWNERSHIP In a public ownership model, a local government takes the lead in building and operating a broadband network. Generally speaking, publicly led projects use bond fnancing to pay for capital construction costs and revenue from subscribers or private providers' leases to pay for operational costs. As a result of taking on much of the fnancial risk, these communities enjoy high levels of control over their projects. Local governments design the networks, determine service oferings and prices, operate the networks and control future decisions, including when to expand networks or upgrade services. Municipal electric utility. In some of the most successful community broadband networks, a locally owned municipal electric utility plays a central role. Te networks in Chattanooga, Tenn., and Lafayette, La., are examples of this situation. Bristol Virginia Utilities (BVU) was among the nation's frst municipal utilities to build a fber-to-the-premises (FTTP) network to serve residents, local businesses and community institutions such as schools and libraries. BVU OptiNet, like many other networks built and operated by municipal electric utilities, ofers a full suite of retail services – including broadband, cable television and telephone – directly to the public. Part of the reason for the success of municipal electric utilities in deploying broadband services is that utilities already have experience in managing infrastructure. Tey own repair trucks and employ feld engineers who can perform installations and conduct maintenance. Utilities also have experience with customer service, managing individual accounts and stafng call centers to handle questions or complaints. With a local electric utility as a partner, a network automatically has an important anchor tenant. Finally, utilities have established institutional structures to provide for local oversight. Public utilities have boards of directors to guide their activities as well as mechanisms for oversight by a city council or other governing body. As local supervision is a natural component of public utilities, community control and input are likely to be built into the network. City department. Not every community has a locally owned electric utility to serve as the lead for its project. A network can be operated as a division of local government, perhaps within an information technology (IT) department, instead of as a branch of a power utility. Local utilities provide signifcant resources and experience that help lessen some of the fnancial and operational risks associated with broadband projects, and communities that wish to proceed without the possibility of a utility as a partner will have to address these risks in a diferent way. For example, communities may choose to build out networks slowly over time or choose not to issue large, project-specifc bonds. Tey may focus on serving the connectivity needs of local government and community anchor institutions before considering a full FTTP network to serve residents. Santa Monica City Net in Santa Monica, Calif., is an example of a successful community network operated by a municipality through an IT department. Santa Monica chose to implement a community network in a cautious manner. Buildout occurred gradually, focusing frst on serving communications needs of the local government and community anchor institutions such as libraries and a local university. Te network expanded over time by following a local "dig once" strategy, a process that took advantage of planned construction to install fber when road maintenance occurred. Te city further leveraged its fber network to support local businesses by working with commercial building owners and property managers to cover the up-front costs of buildout to those locations. Santa Monica City Net now ofers up to 10 Gbps broadband service to at least 19 commercial buildings. Businesses in these buildings can choose services, including IP transit, Building a community network through a municipal electric utility is one way to mitigate risk while retaining signifcant community control over the network.

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