Relative advantages, disadvantages of public and private capital investment in FTTP

As the long running battle between public and private capital continues in the advanced telecommunications space amid what have described as a private capital “gold rush” to capture and own customers, here are the relative advantages and disadvantages of each. 

PUBLIC CAPITAL ADVANTAGES	PUBLIC CAPITAL DISADVANTAGES
Access to lower cost, more patient capital in public bond markets.	Lack of coherent, committed public policy and strategy for getting FTTP to most all doorsteps.
No need to earn profit or pay shareholder dividends.	Goal dilution; focus on ancillary benefits vs. universal FTTP connectivity.
Longer term commitment.	Slower capital allocation due to political decision-making process and tax & fee resistance/exhaustion. Private capital deals can be made within months vs. years.
Accountable to public interest and not just investor shareholders.	Subject to disinformation campaigns by private capital owners exercising First Amendment rights.

 

PRIVATE CAPITAL ADVANTAGES	PRIVATE CAPITAL DISADVANTAGES
Current dominance as legacy (telephone and cable company) providers. First mover advantage in natural (utility) monopoly that can slow end user acceptance of public owned open access FTTP.	Business model constraints that limit capex for deployment, misalignment between capex and ROI needs.
Unregulated “wild west” spawns “gold rush” for cherry picked FTTP archipelagos offering relative rapid ROI; no universal service mandate, rate regulation.	Negative public perception due to deployment of FTTP only in select neighborhoods and not most; poor customer support.
Established control of public narrative based on “broadband” as market commodity vs. FTTP as utility infrastructure.	High debt and shareholder dividend obligations.
Public policy path dependency recognizing private sector dominance of policymaking process.
Relatively rapid access to private capital markets, private equity.