Broadband Communities

MAR-APR 2013

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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Page 64 of 98

FINANCING FIBER The Business Case For Government Fiber Networks Yes, there is life after I-Nets and the stimulus program. Funding sources come and go, rules may change, but fber is still a winning proposition. By Joanne Hovis / CTC Technology and Energy W ith the lucky few recipients of federal broadband stimulus grants now hard at work building their networks, localities that did not win funding or were not in a position to apply could be forgiven for thinking they missed the opportunity to operate a government-owned, fber optic broadband network. Tis is especially true for any community in danger of losing its institutional network (I-Net) – that hard-won concession of cable contracts from an earlier franchising environment – because of regulatory or technical changes. However, despite the closing of the $7 billion broadband stimulus window and the ongoing shift from franchise-funded I-Nets, viable options remain for communities to build next-generation networks to serve governmental and institutional needs. Rather than government grants or cable-company funding, new federal E-Rate regulations and new ways to analyze the benefts of municipal fber networks will be the keys to a successful business case. OppORTUNITIES pAST AND FUTURE Communities nationwide have reaped the benefts of a bygone cable franchising environment. In the early and mid-1990s, efective county and municipal negotiators signed contracts that secured fber optic I-Nets for their jurisdictions. Tese were either partially funded by cable operators 60 | BROADBAND COMMUNITIES | as compensation for use of public rights-ofway or built alongside the cable companies' construction paths to beneft from the enormous efciencies of shared construction. However, many franchise agreements from that era are expiring or have been abrogated by regulatory change, and even the best negotiators cannot surmount regulatory changes that give franchisees the power to reclaim I-Net infrastructure. As a result, the functionality of many broadband networks that have costefectively supported governmental needs for the past 15 years will need to be replaced. More recently, the Broadband Technology Opportunities Program (BTOP) – which commenced with the passage of the American Recovery and Reinvestment Act of 2009 (ARRA) and culminated with the awarding, in September 2010, of the program's fnal infrastructure grants – held out the tantalizing prospect of up to 80 percent federal funding for open-access government networks. Even taking into account the program's required matching contributions, many cash-strapped communities were able to demonstrate viable business models with reasonable cash fow and solid sustainability. Te surest way for communities to replace the bandwidth they are losing from I-Nets targeted for extinction is to build their own capacity. As with any major capital investment, a new communications network requires a solid | March/april 2013

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