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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26 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | AUGUST/SEPTEMBER 2014 COMMUNITY BROADBAND virtual private networks and cloud services, from more than 160 Internet service providers, all of which are interconnected to the Santa Monica network Internet exchange point in Los Angeles. Another example is Farmington, a city in northwestern New Mexico. Te city already has about 80 miles of fber in its possession. Currently, the municipality's electric utility, the Farmington Electric Utility System, is the only user of this fber, but the city is exploring expanding the use of the fber to provide service to residents and businesses. After studying possible business models, the city determined that leasing the municipally owned fber to existing ISPs is the best option. Te resulting partnership model is public ownership and private operation, which allows the city to ofer use of the fber at a low cost while guaranteeing an open-access network to private providers. Te city stands to beneft fnancially both from leasing the fber and from the economic development benefts of better broadband service. Leverett, a small town in rural western Massachusetts, is in the process of building its own FTTP network. Leverett received a support grant from the Massachusetts Broadband Institute to do initial feasibility planning for a local broadband network. When asked whether the town should move forward with the proposal, voters overwhelmingly supported a referendum to request bond funding fnanced by an increase in property taxes to pay for the network. Leverett then issued a request for proposals for network design and construction and selected a vendor. Te network is currently under construction, and the town's goal is to complete the network and begin providing service by the end of 2014. PUBLIC-PRIVATE PARTNERSHIP In some sense, every infrastructure project involves both public and private participation. In traditional business models used by incumbent providers, infrastructure must be built in public rights-of-way and often on publicly owned or regulated utility poles. In public ownership models, private entities are hired to build, operate or maintain the network (or some combination of the three). Terefore, even when infrastructure is owned, operated and maintained by a public entity, the private sector will play some role and will beneft from the public investment. However, not every community has to fnance or operate a local broadband network on its own. In some cases, it makes sense to share the risks, rewards and control of the project across several parties. Partners can include private for-proft companies, local nonprofts and even local residents. Te variety of public-private partnership models refects the diversity of interests, goals and resources among communities. In some cases, the locality plays only a limited role in the partnership and may only provide access to rights- of-way or other city infrastructure, such as light poles or local government buildings. In other cases, a local government may agree to become an anchor tenant and pay for service on the network for an extended period, providing business case stability for the network project partner. In more extensive partnerships, the locality can play a larger role, such as paying for part or all of the network construction and leaving the operation of the network to the project partner. When public and private partners share the capital or operational costs of a local network, the public entity is in a better position to drive its policy goals, and the private partner is able to address its business goals. Sharing the risks and benefts allows communities to pursue projects that might otherwise be unattainable. For a local jurisdiction to conduct a costly buildout to unserved areas can be a formidable challenge, and the same can be true for private providers; a public-private partnership can help control costs for all parties. Public-private partnership models for broadband are relatively new and are in a constant state of change, largely driven by the business needs and interests of companies that are willing to partner with local communities. For that reason, communities should approach them with a certain amount of caution and apply a critical lens to partnership models as well as to claims that any fnancial or other risks to the community can be removed entirely. Te most talked about example of a public-private partnership is the Google Fiber project in the Kansas City area. After a public search and application process, Google chose Kansas City, Kan., and Kansas City, Mo., as partners for a public-private broadband project because of their commitment to facilitate access to local infrastructure and rights-of-way. Kansas City, Mo., also committed to waive local permitting fees and even provided Google with dedicated city staf to support the project. Some commenters point out that these terms amount to public subsidies for Google Fiber. In return, Google agreed to build and operate the network and provide Internet access service with 1 Gbps speeds. Google Fiber will not serve all households in the Kansas City metropolitan area; Google will build only in neighborhoods (called "fberhoods") where enough residents (between 5 and 25 percent of households, depending on the estimated cost of construction in the Some cities choose to share the risks, rewards and control over a broadband network with private partners, whether those are for-proft companies, nonprofts or individuals.

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