BB&K In the News Aug 02, 2016

Public-Private Partnerships in Municipal Broadband Internet

By Seth Merewitz

Cities have long been the center of economic growth in our country, and smart cities recognize that modern infrastructure is a key threshold issue to be addressed for successful economic development.

Today, all “internal improvements” rely on broadband Internet services. Think about public safety, intelligent transportation or the smart grid. Our communications infrastructure paves the way for a multitude of economic, social and governmental benefits within cities and other regions.

Building gigabit-speed broadband can be — and is now being — done in a multitude of ways. Sometimes, a municipality or its electric utility, like EPB in Chattanooga, Tenn., or Huntsville Utilities in Ala., leads the way. Sometimes, private companies compete for access, as in Austin, Texas, where Google Fiber, AT&T and Grande Communications are all building such networks.

But increasingly, cities are finding that public-private partnerships enable the best division of labor between what cities do best and what the private sector can provide.
Last month, the Institute for Local Self-Reliance, an unusual sort of think tank that champions the local scale in economics and economic development, released a report, “The Secrets Behind Partnership for Improve Internet Access.”

Typical for the Institute for Local Self-Reliance, it’s a solid report low on generalities, high on specifics. ILSR and its Community Broadband Networks website are among the most well-informed advocates for municipalities’ provisioning of Internet services. It reliably counters uninformed criticisms of many public broadband projects.

The Institute argues that municipalities generally do well when they offer broadband services. Hence, it is appropriate to be skeptical of many who have begun using the term “public-private partnerships” as applied to telecommunications infrastructure. The report brings a needed skepticism to the way the label is used.

It focuses primarily on those PPPs that involve a “balanced partnership” through a sharing of risks and rewards. In other words, it avoids a focus on city-led projects, like Chattanooga, and of Google Fiber deployments that may involve “public support,” when primarily driven by private investment.
Among the report’s highlights:

  • A summary of the City of Westminster, Md.’s unique collaboration.
  • An exploration of the ups and downs of the “big broadband” UC2B project in Urbana-Champaign, Ill. These include the important role played by the “right of first refusal” clause in UC2B’s agreement with a private provider, iTV-3.
  • The report nods to the approach being undertaken in Santa Cruz, Calif., which it characterizes as emulating Westminster. (Best Best & Krieger represents the City of Santa Cruz.)
  • A discussion on the more rural Leverett, Mass., and its use of “public-led contracting” in the development of its own unique form of public-private cooperation.

Cities and special districts play an important role in considering all possible options as they explore the necessary steps to build their information infrastructure in an intelligent way.

Note: This article originally appeared on the now-defunct BBKnowledge blog, where Best Best & Krieger authors shared their knowledge on emerging issues in public agency law.

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