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What Should Municipalities Consider Before Deploying Their Own Fiber Networks?

Wade Anderson - Jul 24, 2019 11:00:00 AM

What Should Municipalities Consider Before Deploying Their Own Fiber Networks (featured image)

Before deploying a municipal fiber network, there are many factors that city leaders must consider. Below are some of the biggest questions that need to be tackled:

  • What are the community’s overarching goals?
  • How would the network be funded?
  • What are the key success factors?
  • What expertise and resources are needed?
  • How would the network be deployed?

By answering these questions, communities put themselves in a good position to be successful over the long term.

What Are The Community’s Overarching Goals?

As with any major development project, it’s important for communities to have a very clear sense of their high-level goals and long-term vision.

  • Is the city trying to jump start economic development? If so, where?
  • Do leaders want to attract more residents or businesses?
  • Do any public organizations in particular need better internet?
  • Does the city want to support next-gen technological innovation?
  • Is there a digital divide that needs to be closed?

There are many great reasons to invest in fiber networks. Having a clear idea of what role high-speed internet would play in the community can help shape how the project is marketed, executed, and managed. Otherwise, millions of dollars will go into a development that doesn’t have a well-defined purpose.

How Would The Network Be Funded?

Municipal networks are funded in a variety of ways:

  • Tax revenues
  • Revenue bonds
  • Internal loans
  • Redirected expenses

Tax revenues from local residents and businesses can be used to fund the network’s installation and deployment. In some municipalities, local taxes are increased in order to generate additional funding for the project.

Cities can also issue bonds to private investors in exchange for capital. These bonds are repaid over long payback periods with revenues generated by the network.

Internal loans are another big source of funding for many communities. Under this approach, one or several government departments loan enough capital to the department in charge of deployment. In many cases, loan terms are dictated by state governments.

Finally, cities can cut existing expenses to create budget capacity for municipal fiber projects. Often times, budget cuts happen across the areas that support existing broadband service provision.

What Are The Key Success Factors?

City leaders also need a firm grasp on what the key economic success factors are for their municipal fiber networks.

  • How many subscribers are needed?
  • Is the population dense enough to achieve adoption goals?
  • How much will the network cost to subscribers?
  • What is the time horizon for cash flows to begin? When does the network breakeven?

Fiber network developments are major projects that require heavy financial investments. It’s critical for operators to know what their target metrics are in order to be successful. This helps leaders determine which deployment approach to take, as well as inform their decision-making around marketing and future capital allocations.

What Expertise And Resources Are Needed?

Deploying fiber networks is no easy undertaking. No matter the community, geography, or scale, network developers must have significant experience and the right resources to successfully build and run networks. Without the right team and tools, cities risk pouring a lot of public money into networks that will not perform as well as private ISP networks would.

Communities also need to see what ISPs in the area would want in order to participate, should the city choose to deploy an open access network. A poorly designed network or unattractive incentives could scare providers away who are vital to the network’s success. Investing in a publicly owned network is not worth the risk or effort if there is any chance of failure.

How Would The Network Be Deployed?

There are numerous approaches that communities can take to deploy their own municipal networks. From building out an entire dark network or establishing private-public partnerships, there are many ways to approach creating high-speed broadband access.

The right deployment model depends both on the needs of the community and local market dynamics. Leaders need to understand what fiber infrastructure already exists that could be utilized. On top of that, municipal networks should be built in such a way that network expansions and add-ons are relatively easy. Choosing the right deployment approach is so important as it has a tremendous impact on the overall performance of the network.

Running Your Municipal Network Well With OSPInsight

For small to mid-sized communities with limited access to high-speed internet, municipal networks may be the perfect solution. Although only a brief summary, this article should serve as a good jumping off point for city leaders who are exploring municipal networks.

As a network operator, communities are counting on you to help them manage high-quality broadband for residents and businesses. With a network management solution, like OSPInsight, you have all of the tools and resources you need.

Contact us to learn more about our comprehensive platform today!

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