Municipal Broadband Facing Incumbent Backlash and Financing Challenges

DigitalC CEO Joshua Edmonds said the Cleveland nonprofit faced sizable permitting delays due to “incredible” lobbying efforts by incumbents on local governments. “Understand the power of lobbying that will go against you,” he said, noting that DigitalC signs up roughly 400 households a month. Roger Timmerman, CEO of Utah-based Utopia Fiber, said local advocacy is a must to galvanize community support and counter the lobbying.

Municipal broadband experts listed an array of challenges to such networks, from financing to elected leaders who are intimidated by the threat of opposition to a project. Government funding programs can't be counted on for public broadband projects, said RuCon Consulting's Matt Farr.

Farr also said permitting is typically a huge issue on federal land, a big issue in large communities though generally not for rural and small communities.

Some speakers said local regulatory issues with throttling and net neutrality are coming up less often. Noss said Ting "led with those things [when pitching networks], and nobody cared."

Connect Humanity Chief Investment Officer Brian Vo said cash flow of utility-like operations, with low volatility and steady growth, "sounds like a pretty damn good investment.” Despite that, he said, public broadband projects can face difficulty securing credit.

Beyond policy issues, community broadband operators also discussed the practical challenges that public broadband faces. Timmerman said a big one Utopia saw early was using bad contractors for services like construction and operations. He said the municipal broadband industry is more mature today, with bad contractors and consultants having been weeded out by greater competition. Vo said community broadband operations need to think broadly about potential revenue sources -- for example, health care provider reimbursements due to the cost savings from patients being moved to remote monitoring and telehealth.

Panelists also talked at length about the value of -- and challenges surrounding -- open-access networks. Noss said Ting isn't finding ISPs interested in such networks, making it difficult for municipalities to launch them. Bonfire Infrastructure Group CEO Brian Hollister countered that finding ISPs isn't difficult, and financing is a bigger hurdle.

Curtis Dean, Community Broadband Action Network executive director, said there are efforts to turn Iowa’s statewide fiber network -- built for schools and libraries and touching every county -- into an open-source network. But the resistance includes incumbent ISPs, he said.

Broadband affordability was another topic discussed, with Noss saying it has become a greater challenge with the end of the Affordable Connectivity Program. He said sufficient profits from middle- and upper-income subscribers can give some leeway to ask the ISP on the municipal network to offer a low-income plan. Christa Shute, executive director of Vermont provider NEKCV, said a community's control of the infrastructure is an important lever to getting the ISP to cut its profits for a low-income offering.

Asked about competition, Timmerman said Utopia's fiber has proven to be resilient to competition from 4G to 5G, satellite and fixed wireless. He said Utopia had been successful with just 20% take rates and now typically gets 40%-50%. Starlink and fixed wireless have their niches but aren't good competition to fiber due to costs and capacity limits, he added.

Edmonds said the competition from incumbents has largely come as they lower prices. But incumbents aren’t likely to go as low as DigitalC's service, which costs $18 a month, he said.

Ting's Noss said the number of municipal networks is “disappointing,” with a low “say/do” ratio of plans coming to fruition. But communities have legitimate concerns about how funding such a project could affect bond ratings, he said. Municipal broadband means the ability to set service standards, he added: “Nobody is happy” with the typical private provider.