Thursday, February 11, 2010

Careful planning important to sort out competing goals in public-private broadband partnerships

Public-private partnerships for rural broadband development will be favored in the second round of stimulus broadband funding, but they may not be right for all communities, Craig Settles writes for the Daily Yonder. "Communities that are responding with plans for public-private technology partnerships should not take such efforts lightly or pursue them in haste," Settles writes. "This promising approach is also fraught with challenges great enough to knock you off track."

Understanding the forecasts for return on investment under both best and worst case scenarios is key to financial sustainability of the projects, Settles writes. He says the "business of broadband is as much about managing growth as curtailing losses." Michael Johnston, vice president of Internet technology and broadband at Jackson Energy Authority, a public utility in Tennessee, encountered some of the public-private challenges with a telephone company during the rocky start of what eventually became a 16,000-subscriber fiber-optic network in Jackson.

"Partnering with a telco does help because you have to be ready for the different world of telecom operations," Johnston told Settles. "You can have completely different goals that are at cross purposes. The town or county wants to deliver services in places where it’s currently not offered. The partner needs to make money." Settles advocates that community leaders and private investors spend a lot of early time in "frank conversation so that both parties thoroughly understand how the other’s business works." These discussions can identify trouble spots as well as potential irreconcilable differences, and can help "construct and evaluate a business model with clear knowledge of how it affects all partners," Settles writes. (Read more)

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