It’s no secret the U.S. is in the midst of a broadband land grab. But as operators scramble to snag their piece of the pie, it seems they are warming up to the idea of public-private partnerships as a way to boost fiber deployments.
Fiber Broadband Association (FBA) President and CEO Gary Bolton highlighted the trend in an interview with Fierce. “It feels like the tide has changed where experienced providers are now realizing there’s a role for them to help, whether it’s a utility or a municipality or any community effort to put broadband in,” he said.
Bolton noted the topic of public-private partnerships emerged unexpectedly as a key theme of FBA's Fiber Connect conference in July. But operators have recently been vocal about pursuing such arrangements even outside of conference halls.
In April, Consolidated Communications CEO Bob Udell pitched public-private partnerships as a key enabler of rural broadband deployments. A month later, Windstream hailed public-private partnerships as a way to accelerate fiber rollouts and said it was “actively looking for communities as well as electric cooperatives that want to join us in this vital effort.” And earlier this month, AT&T landed a $39.6 million public-private partnership deal to expand fiber in Indiana, telling Fierce that “by working together, AT&T and municipalities can connect even more people.”
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Bolton said he’s been surprised by what he characterized as a dramatic change in posture on the subject. “I was just shocked about how flexible – especially incumbents – are, where they’ve kind of changed their positioning and that they’re being much more flexible working with communities,” he said.
“It’s encouraging,” Bolton continued. “Everybody’s kind of locking arms together to really make a difference, to put the infrastructure in place that’s going to have a transformative impact on the generations to come.”
Municipalities and models
Interest in public-private partnerships from municipalities has also picked up. Udell said in April cities were increasingly asking Consolidated for help rather than the other way around. Monica Webb, senior director of market development and strategic relationships at Tucows (which owns Ting Internet), told Fierce the pandemic really drove home the importance of broadband to local officials.
“I do see many more municipalities looking at the different options today,” she said. “Prior to the pandemic I would say that there was inconsistent awareness around the need for anything more than what was already being provided by, for example, cable broadband…I think cities are now saying ‘if we don’t have it, we need to take a proactive role in making it happen.’”
Bolton noted there’s not really a single type of arrangement operators and municipalities are pursuing, stating “we’re seeing a lot of different models emerge.”
Webb detailed three different public-private partnership models Tucows has encountered. In the first, the city builds its own fiber infrastructure and recruits an ISP to come in and serve as an anchor tenant. The second model involves a city which has built its own metro fiber ring leasing excess fiber strands to an ISP, which can then expand off that to serve more of the community. And in the third case, the city wants to have conduit or fiber infrastructure built at the same time an ISP is deploying, so they agree to share some routes and costs.
As municipalities move forward, Webb said it’s important for those which tackle their own infrastructure projects to ensure they build enough capacity, are careful about how much they spend and manage expectations around cost recovery.
“Generally when we look at if we want to lease fiber from a city or even a private provider, our measure is could we build it for the same price or less or would it cost us more. So there needs to be at least a financial equivalent for us of leasing their fiber,” she explained. She added municipalities should also factor in the “incalculable benefit to the community” that a fiber network brings in terms of job creation and tax revenues which may not directly contribute to cost recovery for a particular project.