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4 Proven Ways to Fund Your Next Big Fiber Infrastructure Project

When COVID-19 restrictions shuttered schools throughout the St. Vrain Valley School District in Longmont, Colorado, the municipality took an extra step to make sure more of its students had high-speed connectivity to access their remote, distant-learning classrooms.
 
The city expanded its home connections access program for income-eligible families, ensuring students didn’t get stranded on the wrong side of the digital learning divide, the Longmont Times-Call reported.
 
Examples like this are endless—and they aren’t limited to municipal fiber-optic networks either. Headlines of internet services providers (ISPs) offering affordable packages to such families are sprinkled all over the news.
 
These feel-good headlines highlight one of the many reasons why the urgency to build or extend fiber networks is swelling in a hurry.
 
Thanks to fiber networks, millions worldwide worked and learned safely from the socially distant confines of their homes, saving countless jobs and who knows how many lives.
 
Yet, in many corners of the country, from sparse rural regions to built-up urban environments with exceedingly outdated infrastructures, internet services remain, for far too many, utterly unreliable, moving at a snail’s pace.
 
Or in pockets where there is little to no service or infrastructure, not at all.
 
Expanding fiber optic networks offers municipalities a range of advantages aside from more robust connectivity. The investment also spurs economic growth, jobs, and innovation. Also, add promotes education opportunities to the list.
 
Still, many communities are hesitant about making such an investment, fearful of its labor- and capital-intensive weight.
 
They ask the same question many others do: How do we fund this thing?
 
According to the Fiber Broadband Association, there are now a variety of well-known funding channels available. Private investment is one. Public leasing is another, plus federal and municipal funding.
 
We look at each option below and how each presents a compelling case to invest in the fiber optic network your community sorely needs.
 
Three Reasons Why Private Equity Might Be Right For You
 
Not only are fiber-based services attractive to the public market, but they’re equally appealing to private equity investors, the Fiber Broadband Association says.
 
The reason is evident: Private investors see the market as a steppingstone into a sector—IP traffic and bandwidth—whose demand will only continue to grow. Fiber operators feel likewise, seeing how the revenue streams have high margins, with debt capital more plentiful and cost-effective than ever.
 
If the fiber project has a low projected churn rate, a healthy business plan, and a growing market, inventors will be interested.
 
Why Public Leasing Might Be The Right Fit
 
A recent report from Benton Institute for Broadband & Society claims that more support is needed for open-access, middle-mile (OAMM) networks, which allow any ISP to connect to it and provide last-mile solutions to homes and businesses.
 
Such a network encourages private investment and competition in last-mile services via lower capital expenditures needed to build last-mile connections, the analysis said.
 
Per the Fiber Broadband Association, OAMM networks have helped connect previously disconnected parts of the country. Examples, it says, include the Massachusetts Broadband Institute, which has helped Leverett, Mass., construct a gigabit fiber service.
 
There’s also dark fiber, a fiber-optic infrastructure that a service provider has not yet put into use.
 
Leasing dark fiber requires the customer, not the service provider, to maintain and operate the equipment to power the fiber for Internet and telecommunications usage.
 
Simply put: Dark fiber provides cost savings and greater flexibility for private entities by reducing capital and operational expenses and gaining far greater control, scalability, and growth of the network.
 
Millions of Reasons Why Federal Funding Is the Way to Go
 
Good old Uncle Sammy—in this case, the federal government—offers unlimited technical support and various funding options for entities looking to install and deploy fiber.
 
How much?
 
Per the National Telecommunications and Information Administration, there are more than 55 federal broadband programs available across 14 federal agencies, some of which you know well, like the Federal Communications Commission.
 
These opportunities, which differ in requirements, represent billions of dollars in available grants, loans, and other key resources and can cover everything from fiber and cellular networks to funding broadband efforts for disaster recovery, economic development, and telehealth expansion.
 
Looking for Great Municipal Financing Options? Look Within
 
Municipalities can take multiple financial routes to expand their fiber network, though two are commonplace: General obligation bonds and revenue bonds.  
 
General obligation bonds tie directly to the city’s credit rating and its ability to tax its citizens—which is why, in some municipalities, these bonds require a public approval process, such as a referendum. But that’s not the case elsewhere, where only the signed approval of the city council is needed. Typically, general obligation bonds are repaid one of two ways, or a combination of each: local taxes and revenue, such as a sales tax.
                                                                                                                
Alternatively, revenue bonds are traditionally secured through municipal services that generate a certain level of revenue to advert repayment through a tax. Think utility, such as water, electronic, and natural gas.
 
Another option, which is typical for municipal networks, is internal loans, or when one local town department loans another department the capital it needs for a critical project. Often, states regulate these loans, their interest rates as well as their requirements.
 
Four Great Financing Methods, But Which Is Right For You?
 
Of all the above methods, each with a proven record with wide-ranging success, which is ideal for your project, your town, and your goals? The answer is complex, especially when even more finding options might be within reach.
 
Don’t go at it alone. Trust an experienced fiber optic project management team that has helped reshape and connect America’s No. 1 communications market: the Big Apple.
 
Your project, no doubt, requires lots of labor, planning, and capital. It should not include lots of stress. A well-trained crew with next-level tech insight and expertise will guide you step by step, so you can make the kind of shining headlines Longmont made—just for having the right fiber-optic network.
 
Posted: 6/25/2021 3:20:33 PM