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 | 27 fberhood) preregister for service. At the end of the registration period in the Kansas City area, 90 percent of neighborhoods qualifed. Google has indicated a willingness to ofer fberhoods another opportunity to qualify for service but only recently provided details for such a process. An emerging, smaller-scale example of a public-private partnership for a local broadband network is Westminster, Md. In 2013, the Westminster City Council voted to fund two FTTP pilot projects, one in a business area and the other in a large residential senior community. Te city is building fber optics to all premises in the pilot areas and is in the process of seeking private providers who are interested in selling competing services to residents and businesses over that fber. Te council left open the possibility of expanding the network to other areas of the city at a later point. Westminster and Kansas City are both examples of a municipal partner that facilitates access to local infrastructure in return for varying levels of commitment from private partners to build a fber network and/ or ofer next-generation broadband service. Tis approach refects the reality that municipalities and other local governments control local rights-of-way and conduit and private frms have more experience providing telecommunications services to customers. In the Kansas City model, local governments do not commit funds to build networks; as a result, they face limited fnancial risks associated primarily with transaction costs and forgone revenues. However, it is important to note the relative uniqueness of Google Fiber's projects in Kansas City and other locations. In many examples, despite favorable rights-of-way policies, most incumbent broadband providers have not been willing to provide levels of service on par with Google's commitments. In contrast, by owning the fber itself, Westminster is able to ensure that fber- based services are extended to all areas it selects. Tere is another trade-of: In the Kansas City‚Äďarea arrangement, the communities ceded control over the projects to their partners. Google leads the projects and makes all current and future operational decisions. Local leaders cannot determine how the network is designed, which services are ofered or what customers are charged. Nor do they control whether the network will be built out to all residents, whether it will be upgraded in the future or even whether it will operate at all over the long term. Tose decisions ultimately will rest with the private partner. In contrast, Westminster took more fnancial risk but secured more control over the network. Te community determined that it can better ensure meeting its goals by funding part of the infrastructure. In a related model, a community can provide an alternative form of funding by agreeing to provide a private operator with a steady revenue stream through a long-term agreement to use the network. A local government could agree to share some portion of capital or operating costs with a private partner to incent the private partner to ofer next-generation service. It is up to the community to negotiate any service-level requirements or other conditions on the local investment. Tis type of partnership makes sense in communities in which the subsidy for a private provider is relatively modest compared with the economic benefts for small businesses, institutions or residents. COOPERATIVE MODEL In many rural parts of the country, electric cooperatives provide electricity. Several of these member-owned organizations can trace their histories to the push for rural electrifcation in the 1930s. At that time, the newly formed cooperatives received targeted loans and technical support from the federal government to build out electric transmission lines to unserved areas. Some communities also formed cooperatives to operate local telephone networks. Today, some cooperative electric utilities and cooperative phone companies are constructing broadband networks within their existing service areas. Similar to municipally owned electric utilities, cooperative utilities are in many way natural partners for public broadband projects. Working with a co-op enables benefts such as access to utility poles, existing maintenance crews and experience with customer support. Many of the cooperatives building these broadband networks have received, or are eligible for, federal loan and grant support from programs targeted to broadband deployment and other rural development initiatives. Kit Carson Electric Cooperative, a cooperative electric utility in New Mexico that serves nearly 30,000 members, applied for and received $63.7 million in combined grant and loan funding from the USDA Broadband Initiative Program to build a 2,400-mile FTTP network. Prior to receiving the funding, Kit Carson ofered dial-up and limited DSL service to its members. Te fber project will connect thousands of households as well as businesses and nearly 200 community anchor institutions located in the cooperative's service area. Co-Mo Electric Cooperative is a 25,000-member cooperative utility located in central Missouri. Co-Mo attempted to secure federal funding for a FTTP network but was denied on By limiting their risk, municipal governments in the Kansas City area ceded control over broadband deployment to Google, which makes all operational decisions.

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