Over the past few years, the U.S. government has allocated billions of dollars for broadband, most recently setting aside $65 billion in an infrastructure bill passed in late 2021. While that’s a lot of cash, it might not stretch as far as one would think when it comes to covering rural and underserved areas. That’s where private equity comes in, GTCR managing director Stephen Jeschke told Fierce.
The way Jeschke sees it, delivering broadband to every American is an all-hands-on-deck kind of task. “The way that the government dollars work well is they’re trying to allocate capital to where there’s a need...[but] they’re not subsidizing 100% of the build, so there needs to be capital to go in alongside that capital to complete those builds, and, two, there needs to be somebody kind of overseeing the allocation of that capital at a more micro level once they’ve allocated it at a macro level,” he said.
Adding to the latter point, Jeschke noted that while deploying fiber isn’t terribly complicated it is quite hard. “There’s a massive amount of capital that we and others are deploying and there’s a massive amount of focus that goes into how you oversee that capital and that investment,” he explained. “You layer on top of that the supply chain complexities that exist and the labor complexities that exist and that is to say…it is not easy by any means.”
Jeschke also noted private equity has a role to play in helping bring more competition and better service to areas that are technically already considered served and thus aren’t eligible to receive deployment subsidies.
Founded in 1980, GTCR primarily invests in four areas: Financial services and technology; healthcare; business and consumer services; and technology, media and telecom. As far as the latter is concerned, the company is primarily focused on connecting rural markets. Its telecom holdings today include Clearwave Fiber (a joint venture with Cable One), Point Broadband and Vyve Broadband. Through these assets, Jeschke said GTCR has its hand in fiber builds across 20 or so states. And it’s actively looking for additional opportunities.
According to Jeschke, GTCR is primarily pursuing these through two avenues. First, it’s got its eye out for potential acquisitions within its existing footprint that can be rolled into the assets it already has. It’s also looking for potential partners outside its territory. The firm’s top priorities in both cases are finding companies with a stellar management team that are also actively involved in their local communities.
“This is a very, very, very local approach to investing in these communities,” he stated. “We’re not looking to do a bunch of investment in the top 5 metros in the country. We are focused on the 25,000-person towns and smaller.”