Public-private broadband partnerships can be a win-win for under and unserved communities and for incumbent providers wishing to extend their service beyond their existing footprint. This is one of the conclusions from the above interview with Dave Fridley of FARR Technologies.
This conversation builds on his recent presentation at the MTA’s 2022 Convention and Conference, where he spoke about the opportunities for incumbents to partner with municipal entities. Fridley has seen a shift in attitude over the last 5-years, whereby incumbent operators are much more willing to work with cities, counties, and other government agencies.
Successful partnerships require a level of trust. In his description of what it takes, it seems like his role is as a consultant in helping design the business case is akin to that of a marriage counselor getting two parties with different views on the same page.
- 00:54 – In the last 5 years, Fridley has seen a change in how ILECs view partnerships with municipal entities. They are now much more open to different kinds of business arrangements to expand their business in concert with government entities. He points out that small towns are often ignored by incumbents and are yearning for better broadband.
- 04:05 – Of course, some municipal entities decide to build their own broadband infrastructure. For those on that path, the challenges will vary to some extent depending upon their starting point. For instance, having an existing entity, such as a municipal electric utility, simplifies the process of borrowing money for the build. Cross-training of personnel and reuse of common resources are other advantages to those with existing municipal departments that complement broadband.
- 10:19 – In addition to providing a relatively simple upgrade path, all-fiber networks simplify the operations, relative to copper and coaxial-based networks. Fridley touts a benefit to the all-fiber network is that equipment can be centralized and monitored anywhere.
- 11:10 – Fridley explains that a municipal starting from scratch, without the benefit of service providing entity, has numerous hurdles, such as State laws, bidding requirements, bonding requirements, to overcome. Partnering with an established entity allows the municipal entity to bring broadband to its citizens faster and with less risk than building a network from scratch. 14:07 – Fridley has seen how it is a win-win for the incumbent provider to partner with the municipal entity. Because of the operational efficiencies of fiber, the marginal number of resources required of the incumbent is less than a municipal building their own entity. Fridley suggests when both entities have “skin in the game” and are actively promoting the service, it is possible to go beyond the typical 40% cashflow breakeven and get to penetrations of 60% of homes passed. Time-to-market is critical for the long-term success of a new broadband provider, Fridley emphasizes.
- 21:46 – Building a network, particularly in this era of high demand, has its own challenges. Another important part of a municipal-private partnership is determining the ownership of the various elements, whether it is the outside plant or optoelectronics.
- 23:53 – Building fiber to the home within previously unserved or underserved towns means offers the potential to connect the surrounding rural areas. There is even more opportunity to increase fiber connectivity when multiple municipal entities work as a group, according to Fridley.
- 25:50 – The conversation shifts to the recent MTA Convention and Conference. Like most conferences, often the most valuable part is the serendipitous face-to-face meetings one has in the convention hallway. In Fridley’s case, he relates a conversation he had with an operator about their experience working with a municipal utility.
- 27:22 – Fridley’s role might better be described as more that of a marriage counselor than as a consultant who helps formulate a business plan. Successful public-private broadband partnerships are about bringing the entities together and helping them agree on their respective roles and determining ownership of the various elements. Finally, Fridley praises the federal government for its funding efforts and pushing the conversation in a positive direction.