The merging world of broadband PPPs a business strategy and legal guide

Local governments increasingly see before them exciting new opportunities to develop next-generation broadband in their communities—and to reap the many benefits that broadband will deliver to their residents and businesses. The goal of most of these communities is to get optical fiber connections to every home and business. Once the fiber is available, the sky is the limit in terms of offering gigabit-and-beyond speeds today and well into the future.

Fiber can support high-bandwidth services to the home and business, and also serves as the key platform for wireless broadband; it is fiber “backhaul” that enables wireless networks to offer high speeds. Fiber also offers symmetrical speeds—a key differentiator for next-generation service providers compared to incumbent telephone and cable companies whose upload speeds typically lag far behind download speeds.

Many localities are likely aware of new private sector investments in fiber and of municipal fiber success stories such as Chattanooga, Tennessee; Wilson, North Carolina; and Lafayette, Louisiana. In addition, emerging public–private partnership models are being developed and implemented by communities that lack the capital or expertise to deploy and operate fiber networks, or to act as Internet service providers (ISPs), on their own. These models include:

• Localities encourage new private investment through economic development incentives and other measures to reduce costs for private sector infrastructure deployment;

• Localities negotiate formal public–private partnerships that resemble transit and toll-road construction projects, with public funding and private execution; and

• Localities create hybrid models where a locality and private partner find a creative way to share the capital and operating risk related to a broadband network.

This primer is organized in two sections. In the first part, we provide a strategic overview of broadband public–private partnerships, examples of three models, and a framework for public sector entities to consider as they evaluate potential models, assess potential partners, and set goals for a partnership. In the second section, we address the key legal issues that arise in each of the three major stages of the development of a public–private partnership deal: confirmation of authority, pre-negotiation project planning, and negotiation of the agreement.