Regional open access fiber as the telecom regional airports of the 21st century

As the U.S. continues to debate the role of public and private ownership and operation of advanced telecommunications infrastructure, a California local government official offers simple aeronautical analogy to progress beyond the debate and bring ubiquitous connectivity to nearly every American doorstep.

Just as local governments own and operate regional airports, regional open access fiber infrastructure can serve as the airports for internet service providers operating as the airlines. Like airlines that rent terminal space at airports, the ISPs would rent access to the infrastructure to deliver service to their customers.

Calaveras County, California Supervisor Jack Garamendi’s concept makes a lot of sense. Investor owned vertically integrated providers cannot afford to bring fiber connections serve all homes, businesses and institutions in their nominal service areas. That’s because their investors expect relatively short term returns on capital investments incompatible with the long term investment horizon for infrastructure. Hence, the nation is handicapped with partially deployed infrastructure with only about a third of all homes having access to fiber connections that should have reached nearly all of them by 2010 with better policy and planning.

Now Garamendi is working to build what amounts to a regional airport system serving 38 California counties as president of the Golden State Connect Authority (GSCA). As a joint powers authority and governmental entity, the GSCA plans to access the public bond markets to finance the fiber. That’s more patient capital that’s compatible with fiber infrastructure serviceable for decades – much like airports. California legislation enacted in 2021 appropriates continuous funding to help secure the bond debt.

The GSCA is modeling itself on and working with the State of Utah’s Telecommunication Open Infrastructure Agency (UTOPIA), a group of 11 Utah cities that joined together in 2004 to build, deploy, and operate fiber infrastructure connecting all homes and businesses.

According to Garamendi, the GSCA plans to ramp up deployment of fiber rapidly, starting with more densely settled areas. “We’ll go fast and we’ll pick up speed,” he said at an Electronic Frontier Foundation event this week.

Let’s hope so. The GSCA must avoid only partially deploying like the large corporate investor-owned telephone companies that serve limited, more densely developed areas. Great numbers of residents and small businesses in GSCA counties have coped with lack of landline connections for many years – even in not so thinly populated exurban areas at the outlying edges of metro counties, forced to rely on high cost, low value wireless services.

The GSCA won’t be able to bring fiber to every location, Garamendi noted, given some are in very remote rural areas of the Golden State. But access to patient capital will allow it to go much farther than the far less patient capital of investor-owned providers that naturally cherry pick areas conforming to their stringent rate of return and profitability standards. 

State and regional public telecom entities like UTOPIA and the GSCA offer the nation a badly needed self sustaining model to build and operate fiber networks to provide near universal service and affordable access. Such self sustaining business structures are particularly needed in the absence of coordinated, sustained federal policy and funding designed to ensure fiber connections reach all American homes and small businesses.

Regionalism isn't new for telecom infrastructure. Telephone companies were structured as interstate regional bell operating companies formed upon the divestiture of AT&T in 1982.

San Francisco eyes municipal telecom infrastructure project to bring fiber to every doorstep

San Francisco Municipal Broadband Targets $26 Monthly Base Price - Telecompetitor: City officials have recommended construction of a San Francisco municipal broadband network based on a public-private partnership. The recommendations came in a 103-page report issued by the office of Supervisor Mark Farrell on March 15.
According to the San Francisco Municipal Fiber Advisory Panel’s report – Financial Analysis of Options for a Municipal Fiber Optic Network for Citywide Internet Access – a publicly funded broadband utility network would cost the city an estimated $867.3 million in construction costs plus $231.7 million a year in maintenance costs. Projected subscriber revenue would result in an annual deficit of $145 million. Given this, as well as the desire to build in some market competition, the authors recommended the city launch a public-private partnership model that calls for all San Francisco homes and businesses to pay an average $26 per month utility fee for baseline Internet access. Introducing tiered pricing models based on type of service or bandwidth use could offset operating costs and lower baseline fees.

The Utah Telecommunication Open Infrastructure Agency (UTOPIA) had planned to expand its services using a similar financing mechanism with a private finance partner, Macquarie Capital Group. It pulled the plug on the partnership last month amid resistance to the utility fee. However, the model could fare better in the city by the bay due to multiple factors including its relative affluence, more liberal political leanings and its well established place in the information technology industry. Unlike UTOPIA, a regional network involving several municipalities, San Francisco is also a much more compact service area of just 14 square miles with pre-existing municipal infrastructure that would facilitate construction. That likely made it easier for San Francisco to reject the model used by legacy telephone and cable companies and Google Fiber that builds infrastructure serving some but not all neighborhoods.

UTOPIA reconnoiters as resistance to local parcel fee halts PPP with Macquarie

Macquarie is probably dead, and that’s probably okay – Free UTOPIA!: While I wasn’t able to attend the latest UTOPIA board meeting (bit of a drive from Cedar City), I did get a summary of what was discussed during that meeting. One of the things that came up was the long-delayed Macquarie deal. For all intents and purposes, it’s most likely not going to happen. There appears to be slow action on a binding public vote and the utility fee was very unpopular (and wasn’t coming down). The board has voted to pay Macquarie what they are due and take those reports as valuable information to plan for the future with no further action.

As this blog reported last March, resistance to a utility parcel fee stalled progress on a public-private partnership between the Utah Telecommunication Open Infrastructure Agency (UTOPIA) and an Australian firm that invests in public infrastructure projects, Macquarie Capital Group. That resistance created a massive stumbling block to the expansion and financial future of the UTOPIA regional fiber to the premise (FTTP) that serves 11 Utah municipalities.

Now nearly a year later as the blog cited above reports, that resistance has proven fatal to the partnership. In order for it to work under the long term financial plan prepared by Macquarie, the parcel fee was a necessary component of the partnership given that a public-private partnership by definition requires the contribution of public financial resources. No public contribution means no partnership, leaving the private partner like a single hand clapping.

This development is yet another example of the lack of adequate funding mechanisms at the state and local government level to ensure the construction of FTTP telecom infrastructure serving all American homes, businesses, and public institutions. The situation calls for an aggressive federal public works program to construct this needed infrastructure for the 21st century as I propose in my recently issued eBook Service Unavailable: America’s Telecommunications Infrastructure Crisis.

UTOPIA holdout cities should adopt broader view of economic benefit of UTOPIA-Macquarie PPP

Orem, Utah and four other cities that have opted out of a public-private partnership between the Utah Telecommunication Open Infrastructure Agency (UTOPIA) and Macquarie Capital Group are now grappling with a fundamental question as to how to finance the future operation of fiber to the premise (FTTP) telecommunications infrastructure to serve their residents. The question: support the partnership’s public works approach to the increasingly essential infrastructure or default to legacy incumbent telephone and cable companies and the poor value and customer service and disparate access they typically offer as monopoly providers.

Six of the 11 cities comprising UTOPIA agreed in concept in 2014 to assess a parcel utility fee to help offset the cost and mitigate the business risk associated the pure subscription-based model used by incumbent providers. They mitigate their business risk by cherry picking neighborhoods believed to have the greatest profit potential for their proprietary network investments while redlining those that don’t.

The utility parcel fee is a key sticking point in negotiations between UTOPIA and the five hold out cities including Orem. A Daily Herald dispatch cites from a memorandum to the Orem mayor and council from Orem City Manager Jamie Davidson:

"There is a concern that Orem is unpredictable and not easy to work with," Davidson said. "It's concerning to me to see new options entering the market [UTOPIA] with a stranded investment for the future."

“However, bottom line, the proposal remains a utility fee-based model,” Davidson said. “If, as a council, you cannot wrap your arms around the assessment of a monthly utility fee to all customers (with potentially a few exceptions, for example, the indigent), nothing else matters.”

Davidson’s right. The parcel fee is essential to making the UTOPIA partnership with Macquarie pencil out by mitigating the business risk of relying solely on customer subscription revenues. UTOPIA operates an open access fiber network, enabling competition among ISPs that want to offer customer premises services delivered over the network. In that regard, the UTOPIA network is like a road or other public works project that benefits and enhances the value of the properties it passes. The UTOPIA cities benefit because these properties can support higher levels of economic activity as well as boosting their market value and, by extension, their ad valorem property tax revenue potential to fund other municipal services.

UTOPIA’S “fiber highway” offers roadmap to greater competition for premise telecommunications services

A major complaint about Internet service in the United States is legacy incumbent telephone and cable companies lack incentive to provide better value and customer service and to build out their networks to fully serve communities and neighborhoods and not just selected segments. Many believe the solution is introducing more competition.

But given that telecommunications infrastructure costs a lot to build and maintain, that circumstance creates high economic barriers to potential competitors. That leaves the incumbent telephone and cable companies firmly entrenched in a market that naturally tends to be monopolistic. It puts them in the dominant position and consumers in the weaker role, forced to be what economists call “price takers,” meaning they must pay whatever their ISP charges or go without service. 

Summed up, a market that’s naturally monopolistic can’t easily be transformed into a competitive one without a radical reordering. One such example is the Utah Telecommunication Open Infrastructure Agency (UTOPIA), which operates its regional fiber telecom infrastructure as public works -- like a road or highway. That introduces competition by giving consumers the choice of what Internet services they want to purchase and from which ISPs. “The value to users is generated through greater choice of providers that generates a shift in the balance of power from the ISPs to the user and the superior service that the new network will provide,” notes this recent update by Macquarie Capital on its public-private partnership venture with UTOPIA.

As the report notes, there has been some resistance to a key financing element: a proposed monthly utility fee. But as it also points out, the estimated $22.60 monthly utility fee is offset by better value consumers would receive than as price takers of the incumbent telephone and cable companies.

As the maxim holds, there’s no free lunch. But some lunch deals are better than others, particularly when they help fund fiber to all and not just some premises as with Google Fiber’s “fiberhoods.” UTOPIA’s open access model provides the additional advantage of ensuring everyone is connected regardless of where they live or operate their business. Applied on a regional basis as UTOPIA plans, the utility fee model is a particularly important financing mechanism in places like Bettendorf, Iowa and Danbury, New Hampshire -- small localities that would be challenged to fund Internet infrastructure construction without new revenue streams.

The Obama administration and the Federal Communications Commission – looking for ways to increase competition for premise telecommunications service amid a growing tide of consumer dissatisfaction – would be wise to look to UTOPIA’s open “fiber highway” model. And consider tax incentives such as making utility fees tax deductible for all taxpayers to make them more palatable.

The FCC is moving to preempt state broadband limits - The Washington Post

The FCC is moving to preempt state broadband limits - The Washington Post: Under Section 706 of the Communications Act, the FCC is authorized to promote the deployment of broadband in the United States. By ruling that the anti-municipal state laws constitute barriers to that mission, the FCC's draft order invokes Section 706 in preempting the laws.

But that theory has already been questioned by Republicans who believe private investment is a more effective tool for rolling out high-speed broadband. 

Private investment in theory might be effective -- if there was a lot more of it. The legacy, shareholder owned incumbent providers are constrained in their capital investment capacity by the demand for short term profits and high dividend obligations and debt loads. Witness Verizon, for example. The company stopped new build outs of its FiOS fiber to the premise infrastructure in response to shareholder concerns.

Private pension money might be brought into play as is the case with Australia-based Macquarie Capital, the financial partner of the Utah Telecommunication Open Infrastructure Agency (UTOPIA). But so far no other similar financiers with the billions that are needed have emerged.

In summary, there really isn't any point in debating what's the best source of U.S. fiber to the premise telecommunications infrastructure funding. What's truly important is that there be an adequate and viable funding source -- something the nation is currently lacking.

Incumbent telcos, cablecos should reconsider shunning wholesale open access fiber networks

Incumbent telephone and cable companies that enjoy a natural monopoly over last mile Internet infrastructure connecting customer premises have been loath to offer services over open access, wholesale fiber to the premise (FTTP) networks like the Utah Telecommunications Open Infrastructure Agency (UTOPIA) system. In some states, they’ve even successfully supported legislation outlawing or making the creation of publicly operated open access networks difficult. As monopolies, they want control over both the “pipe” serving customer premises and the services provided over it. Having control over the premise connection is essential to this business model since it puts the incumbents in the dominant position with regard to selling their proprietary services.

But with a growing chorus of calls for competition for Internet service from the White House, members of Congress, the U.S. Federal Communications Commission and consumer advocates, the threat of federal antitrust litigation to break up the incumbents’ last mile monopolies has increased. 

Given that possibility, incumbents might want to reconsider their flat refusal to do business with wholesale open access fiber networks. If they chose to purchase access to wholesale networks to sell retail services to customer premises, they’d likely appear to be far less insular and monopolistic in the eyes of the government. Doing business with wholesale, open access fiber networks would also spare the incumbents –largely reliant on metal wire and cable last mile infrastructure – from the expense of having to upgrade their last mile plants to fiber in areas where these networks exist and allow them to reach customer premises outside their limited footprints.

Despite more favorable market conditions, incumbent telephone and cable companies unlikely to expand limited Internet infrastructure footprints

Over the past 15 years, the market dynamics for incumbent legacy telephone and cable Internet service providers have improved from a risk standpoint. Early on, there was substantial uncertainty as to how many customers would subscribe to premise Internet connections. Telcos marketed advanced “broadband” services as an add on to their voice telephone service as did cable companies as an adjunct to their pay TV offerings.

They calculated only a fraction of customers would choose to receive these services -- and pay extra for them. Hence, they deployed the infrastructure to deliver them to a select set of homes and small businesses -- favoring higher density and income levels -- to reduce the risk that there would not be sufficient revenues to cover the cost of deployment and ongoing maintenance.
 
Some developed formulaic approaches to utilize large numbers to spread their risk. For example, Comcast adopted a hard rule that it would build infrastructure only in areas where there were 16 occupied premises per linear road or street mile. That mitigated risk because it could be reasonably predicted that with that many premises, enough would take Internet services to help defray the cost of building out and upgrading the network in order to serve them.

Now with premise Internet service increasingly regarded as essential as landline telephone service was before it was succeeded by the Internet, the risk picture has changed. The likelihood of residential and small business customers subscribing to the incumbents’ Internet service is significantly higher, even than it was just five years ago.

One might think given the improved commercial risk picture, the legacy incumbent telephone and cable companies would be undertaking an aggressive effort to construct infrastructure to serve nearly all and not limited “footprints” within their service territories. Not likely. The reason is the large, shareholder- owned incumbents that dominate in much of the United States lack business models that allow them to make the significant capital expenditures that would be required. That would divert dollars that could boost earnings, pay generous shareholder dividends and fund stock repurchases.

Consequently, the nation continues to need alternative approaches to ensure all premises have Internet service to meet their current and future telecommunications needs such as community operated networks or public-private partnerships that tap into sources of patient investment capital such as Utah’s UTOPIA.

Broadband and the future of learning | Computerworld

Broadband and the future of learning | Computerworld: Since learning may take place anywhere and anytime, connected learners also need broadband access outside of school. Although 70% of U.S. households now have broadband, millions of households still do not. Private-sector initiatives are helping to expand access. For example, Comcast’s Internet Essentials program offers low-income families broadband service for $9.95 a month, along with the option to purchase an Internet-ready computer for under $150 and free digital literacy training. In its first three years of operation, the program has provided affordable broadband service to more than 350,000 households.

It should be noted that Comcast and other incumbent legacy providers redline many neighborhoods, leaving them without access to modern landline Internet connectivity at any price.

There are also promising public-private partnerships to increase access. In Forsyth County, Georgia, the local school district worked with the Chamber of Commerce to create a directory of free Wi-Fi locations in the community and to provide participating businesses with signs indicating where free Wi-Fi is available. And a middle school in Manchester, Tenn., that has equipped all sixth-graders with iPads had convinced local businesses to open their Wi-Fi hotspots to students to maximize the benefits of their technology tools.

Public-private partnerships need to go far beyond Wi-Fi and help construct fiber to the premise infrastructure to make blended learning possible since it heavily relies on students having adequate access in their homes. A good example is in Utah, where an investment firm, MacQuarie Capital, is partnering with the Utah Telecommunications Open Infrastructure Agency (UTOPIA) to finance and complete the construction of open access fiber to the premise infrastructure.

U.S. FTTP infrastructure projects falling into 2 categories

The construction of fiber to the premise (FTTP) Internet infrastructure in the United States is falling into two main categories:

1. Projects in large and midsize metro centers such as those started or planned by Google Fiber, AT&T and Century Link as well as some cable companies. An article in the July 2014 issue of Broadband Communities magazine lists these deployments.
2. Community or regional projects by local governments, utility cooperatives and public-private partnerships serving less densely populated areas not containing large cities such as those tracked by the Institute for Local Self Reliance.

The bifurcation of these infrastructure projects is distinguished by the economic health of their respective markets. Those in the first category undertaken by investor-owned providers that need a rapid return on investment are targeted to markets undergoing rapid economic growth, Broadband Communities editor Masha Zager writes in her article on large metro projects, citing the FTTP deployment strategy of Cox Communications:

Cox explicitly named rapid growth as one of its criteria for selecting cities for gigabit deployments. In contrast to municipalities, which often deploy fiber in an effort to jump-start lagging economies, large players favor localities that are healthier to begin with.

For the second category of projects, FTTP is clearly an economic development strategy to a far greater extent than the first. Unlike those in the first category financed by the impatient capital of telcos and cablecos burdened with high debt loads and large shareholder dividend obligations, community or regional projects will rely on patient capital. Sources include long term public bonds and creative public-private partnerships that blend public and private funding such as the Utah Telecommunications Open Infrastructure Agency (UTOPIA).

The second category is also distinguished from the first by the ownership and business models of the network infrastructure. In the first category of investor-owned projects, the network is a proprietary, closed access property. The telcos and cablecos that own the networks charge a retail monthly subscription fee to connecting premises.

By contrast, the second category is more likely to utilize an open access business model (such as UTOPIA) where fiber infrastructure is like a public works project such as a road or highway. Instead of selling individual subscriptions to customer premises, an open access model operates as a wholesaler selling network access to Internet service providers who provide services to customer premises. This model is a better option for the second category of projects because it removes the business risk of getting sufficient numbers of premises to sign up for service in order for the network deployment to be economically viable.

Open access fiber telecom infrastructure funded in West Virginia over telco's objections

Competition in telecommunications infrastructure isn't really among major telcos and cable companies. They operate in market that due to the high cost barriers to entry functions as a natural monopoly or at best, a duopoly where service is available from just two landline providers: the phone company or the cable company. In much of the United States, the choice is only one of the two or sadly, neither because they have redlined parts of their service territories.

The real competition is between the business models for premise Internet connectivity: open access Internet infrastructure such as employed by the Utah Telecommunication Open Infrastructure Agency that regards it as a public asset like roads and highways or the proprietary, closed access infrastructure model of investor-owned telephone and cable companies.

This week in West Virginia, the debate tipped in favor of open access after the West Virginia Broadband Deployment Council voted 3-2 to provide $690,000 in funding to the West Virginia Network, a state agency that provides Internet service to schools, universities and other public facilities. The deciding factor was the state wanting more control over the infrastructure and not being subject to the whims of a monopoly provider.

“Frontier is the only provider in the region, and there is no open access to that infrastructure,” one of the council members noted. “You can’t really connect any of the dots [communities] together . . . . We can hopefully connect those rings and enable broadband expansion in the area.”

This is a notable development because it signals that public policy is shifting towards viewing Internet infrastructure as essential as public thoroughfares and thus not best controlled and operated as a hodge podge of private toll roads with high tolls and serving only some areas while leaving others disconnected from the Internet.

Click here for the story.

West Virginia Broadband Deployment Council voted 3-2 to award the money to West Virginia Network, or WVNET, a state agency that provides Internet service to schools, universities and other public facilities. WVNET would own the three-segment fiber network that would connect Snowshoe to Cass, Valley Head to Mill Creek, and Durbin to Green Bank. - See more at: http://www.wvgazette.com/article/20140723/GZ01/140729675/1419#sthash.ldOg1t7a.dpuf

West Virginia Broadband Deployment Council voted 3-2 to award the money to West Virginia Network, or WVNET, a state agency that provides Internet service to schools, universities and other public facilities. WVNET would own the three-segment fiber network that would connect Snowshoe to Cass, Valley Head to Mill Creek, and Durbin to Green Bank. - See more at: http://www.wvgazette.com/article/20140723/GZ01/140729675/1419#sthash.ldOg1t7a.dpuf

West Virginia Broadband Deployment Council voted 3-2 to award the money to West Virginia Network, or WVNET, a state agency that provides Internet service to schools, universities and other public facilities. WVNET would own the three-segment fiber network that would connect Snowshoe to Cass, Valley Head to Mill Creek, and Durbin to Green Bank. - See more at: http://www.wvgazette.com/article/20140723/GZ01/140729675/1419#sthash.ldOg1t7a.dpuf

West Virginia Broadband Deployment Council voted 3-2 to award the money to West Virginia Network, or WVNET, a state agency that provides Internet service to schools, universities and other public facilities. WVNET would own the three-segment fiber network that would connect Snowshoe to Cass, Valley Head to Mill Creek, and Durbin to Green Bank. - See more at: http://www.wvgazette.com/article/20140723/GZ01/140729675/1419#sthash.ldOg1t7a.dpuf

Two sharply divergent alternative business models for Internet infrastructure play out in Utah

For the past decade, much of the United States has been plagued by telecommunications infrastructure market failure. Many residences and small businesses need fast, reliable landline premise Internet connections but are unable to obtain them because legacy telephone and cable companies have opted not to upgrade and build out their networks to reach them. Alternative business models are thus urgently needed to ensure they don’t remain isolated from the Internet grid and effectively cut off from the many services it provides.

In Utah, two alternatives to construct and operate fiber to the premise (FTTP) infrastructure -- which is also being referred to as “gigabit broadband” in reference to fiber’s substantial carrying capacity that eliminates sluggishness and latency -- are playing out in close proximity.

One model is quasi-public, the other private. The first is the Utah Telecommunication Open Infrastructure Agency (UTOPIA), of which 6 of 11 member municipalities are moving forward with diligence on a partnership to bring in private investment capital. (Story here) UTOPIA’s model treats its fiber infrastructure as a public asset similar to roads and highways. 

By contrast in nearby Provo, Google’s Google Fiber unit is utilizing the subscription-based business model used by legacy telephone and cable companies to sign up residential (but not business) customers living in selected “fiberhoods.” Google Fiber is open only to Google whereas the UTOPIA model allows Internet Service Providers access to the network on a wholesale basis.

Since Google Fiber sells subscriptions like a magazine, it has to sell enough subscriptions to be economically viable. Being part of online advertising giant Google means Google Fiber is also motivated to get as many subscribers as possible in order to maximize eyeballs on Google-delivered content and ads. With the bill and keep subscription model, teaser and special rates are utilized to goose subscriptions such as Google Fiber’s announcement it is cutting its $300 flat rate, low cost subscription rate to only $30 for a limited time in Provo fiberhoods – similar to limited time magazine offers for new subscribers. (See this item from Google Fiber blog)

Of these two models, the UTOPIA model despite initial resistance to a modest public utility fee is best able to scale quickly enough to address America’s significant telecommunications infrastructure gaps short of a massive federal infrastructure program on the scale of the Federal Highway Act of 1956. The public-private partnership model being utilized by UTOPIA relieves network operators of the risk burden and uncertainly associated with having to sell subscriptions and avoid customer churn. It can also more easily attract the many billions of dollars necessary to build out fiber to nearly all Americans regardless of where they make their homes and businesses.

New telecom infrastructure financing model struggles to emerge in Utah

A new public-private model to finance the construction and operation of modern fiber to the premise (FTTP) telecommunications infrastructure is struggling to emerge in Utah. Of 11 Utah cities that would be part of a public-private partnership to build out an existing FTTP network serving their region, only half have agreed to participate in the partnership as of this week’s deadline to decide. (See story here)

The sticking point is on the public side of the proposed partnership that entails a $20 monthly utility fee to finance construction and operating costs over a 30-year period. Since the Utah Telecommunications Open Infrastructure Agency (UTOPIA) network is an open access network that will build a fiber telecommunications highway to about 160,000 premises, the utility fee is based on the principle that like paved roads, all properties benefit from its presence directly or indirectly, both in the present and the future.

Those cities that have declined to participate in the UTOPIA partnership should revisit their decision. For four reasons:

1. FTTP telecommunications infrastructure is needed to serve burgeoning demand for Internet connectivity and high capacity performance both now and in the future. Premise Internet service is shifting into a new phase where it is an essential telecommunications service like telephone service was in the 20^th century and not an add-on feature to telephone or cable service in those limited areas where it is offered.
2. Like roads, telecommunications infrastructure is expensive to build and maintain. That prevents the formation of a healthy competitive market since these high costs make it a natural monopoly. The existing private telephone and cable companies thus have no competitive incentive to upgrade and build out FTTP infrastructure. Private investor-owned providers are also highly risk averse when it comes to expansion since they owe a primary duty to their shareholders to generate profits and dividends with customer needs subordinate to that duty.
3. Given high construction and operating costs, neither the private sector nor state and local government can shoulder the burden alone. Both must pool their financial resources into a public-private partnership to generate the large sums of necessary capital.
4. The $240 annual utility fee needed to make the deal pencil out is a modest amount that approximates what many households are already paying every two months for telecommunications services.