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December 13, 2009 10:12 PM

How Public Broadband Projects Create Private Opportunities

Too often in broadband policy circles we allow personal biases to cloud our thinking. We let preconceived assumptions get in the way of the truth of what really matters.

One area where this habit is especially egregious is in our perception of so-called municipal or public broadband as being anti-competitive, as being unfair to private enterprise, as government intervening when the market should be left to work alone.

But what this outlook fundamentally misses is the basic reality that whenever a community invests in building public broadband infrastructure it creates numerous opportunities for private enterprise to partner with people and work with government to get these networks built.

This isn't about public networks unfairly competing with private enterprise. Instead we must recognize that public broadband can be a boon for private companies.

It starts with the feasibility studies, design and engineering of the network, which are typically handled by outside private firms.

The project's funds then come from bonds sold to private capital, allowing them to earn guaranteed interest on their money.

That money's used to purchase a wide variety of equipment from a vibrant marketplace of private manufacturers and suppliers.

The actual build-out, operation, and maintenance of the network can be handled by public or private means, but even if the government handles a lot in-house that still means they're going to be hiring private consultants to help them as they learn the ropes of being broadband providers.

The best example of how public projects can create private opportunities, especially for private service providers, is an open fiber network.

In this model, the public pays for and owns the fiber. Some public or private entity builds and manages the network infrastructure. And then you've enabled a dynamic marketplace of private providers offering services on the network.

For incumbents it means getting a brand new state-of-the-art fiber network without having to invest any capital, and it simultaneously lowers the barrier to entry for new service providers thereby increasing competition and encouraging innovation.

It's also worth noting that public broadband can create tremendous opportunities for local private businesses to gain access to services that previously may have been unavailable. With this capacity they can grow their businesses and compete in the global economy.

What I'm trying to highlight here is that it's misguided to assume that public broadband projects hurt private enterprise. The reality is that no matter how involved any level of government gets in spurring the deployment of new broadband infrastructure, by being proactive advocates for their communities' futures government can create many opportunities for private enterprise to turn a profit.

So let's not limit our thinking that public or municipal broadband is inherently flawed because it involves government playing a hands-on role. Because no matter how involved government may be, by investing in our future we're creating opportunities in the present for private enterprise.

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Comments (1)

This is confirmed in our experience here in the southwestern Virginia area. Bristol Virginia invested in fiber and expanded it across the region and a a number of corporations moved here to take advantage of it. Bristol was named the 2009 Community Broadband Fiber Network of the Year by the National Association of Telecommunications Officers and Advisors.

Posted by Ernie on December 16, 2009 12:17 PM

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