Financing Community Broadband

By Cathy Swirlbul

Municipal utilities are expanding into offering broadband service for a variety of reasons. Some communities have a history of providing utility services through public ownership. Other areas pursue community broadband when the incumbent cable and telecommunications companies fail to provide the service. What these projects have in common is the need for financing. The reality of financing in today’s market, though, may be different from commonly held perceptions.

Why towns have built their own broadband

By Jeffrey R. Lee, Medill News Service

Two years ago Princeton, a town of about 7,500 two hours west of Chicago, was staring at a potentially grim future. One of the community’s largest employers had just moved its manufacturing facilities to Chattanooga, Tenn.

LCN, a division of Ingersoll Rand Co. Ltd., had just hired a new plant manager for its Princeton factory, and he had a wake-up call for the town’s industrial board.

“He said that if Ingersoll Rand was looking to relocate a new facility, Princeton would not be on the list,” recalled Jason Bird, superintendent of the town’s electric and telecommunications utility. The town simply did not have the communications capacity that modern companies need.

That conversation was enough to scare the town council and the mayor into action. Last October, the town started construction of a $400,000, 12-mile fiber optic network, and on Dec. 15, it announced it would take the fiber optic cable to any customer that wanted it.

Carol Wilson: “Munis Hit Back at Heartland”

A Heartland Institute study challenging the financial viability of municipal broadband networks is rife with “mistakes, misinterpretations, unsupported and insupportable claims, irrelevancies, innuendos, key omissions and obvious untruths,” according to Jim Baller of The Baller Herbst Law Group, the attorney for both of the municipal networks profiled in the study.