West Des Moines, Iowa offers model for states, regions to scale up open access fiber telecom infrastructure

To ensure the timely modernization of legacy metallic telecommunications delivery infrastructure to fiber to the premise (FTTP) infrastructure at significant scale, new models for its construction and operation are needed. Investor-owned providers using vertically integrated, closed access networks tend to restrict capital investment to densely populated areas compatible with their business models that demand a rapid return on investment.

Subsidies of up to 75 percent of construction costs may be available in the near term through the federal Infrastructure Investment and Jobs Act (IIJA) of 2021. But eligibility restrictions on the funding will likely result in it being allocated only in the most remote and insular parts of the country since those restrictions are designed to protect the markets of incumbent providers that have a presence outside of those areas. That will leave it to the states to come up with new approaches.

One promising appearing model is emerging in West Des Moines, Iowa. The municipality finances and builds the basic supporting infrastructure – in this case buried conduit. But it could also be aerial fiber on metal half height poles placed in existing rights of way, for example. A private sector network operator – here Google Fiber – installs the telecommunications infrastructure: the fiber, network electronics and premise connections. It shares part of its end user revenues with the local government to finance bond debt incurred by the government to construct the supporting infrastructure. Since it is operated as an open access network, other providers can pay a fee to access it and the end users it serves.

This model for the construction and operation is particularly well suited to exurban and small town America that like West Des Moines are only partially served by legacy providers using metallic infrastructure.

To make it rapidly scale to meet burgeoning demand for connectivity, this model provides a framework for a statewide or regional scope – for example local governments forming a regional telecommunications authority like California’s Golden State Connect Authority. Like roads and highways and airports -- the Golden State Connect Authority regards advanced telecommunications infrastructure similar to regional airports – very substantial financing capacity is needed beyond that which individual local governments can provide. In addition, the limited, one off grant subsidies that have been the predominant financing model don’t provide funding sufficient for the task at hand.