A long-time staple of transportation, utilities and other services, the public-private partnership is new to the US broadband industry. That, however, is changing.
As state and local communities consider public-private partnerships (P3s), they can learn from other markets and nations while crafting agreements that speak specifically to current and future broadband needs. Although there's no such thing as a cookie-cutter P3, both providers and communities should consider several best practices for these concessionaire arrangements, according to a recent webinar presented by FTTH Council (registration required).
Under these pacts, a private partner -- such as a cable operator -- finances, builds and operates a network for several decades, while the public sector guarantees the operator's investment, with some agreed-upon allocation of risk, said Joanne Hovis, president of CTC Technology and Energy during the webinar.
By taking these steps, providers and communities can reap the benefits of commitments that can last 30 years, Hovis said. So far, there's been only one large-scale broadband P3 in the US, but stakeholders also can consider partnerships from Europe, she said. And while some may look at relationships between Google Fiber and certain cities, P3s don't usually involve a community building, then leasing, fiber, Hovis added.
With that in mind, here are best practices public and private sector organizations should consider before entering a P3:
On the Books
More than 30 states have legislation that allows agencies and communities to enter into P3s, according to Marcel Ham, co-founder and president of IMG Rebel, an international economic and financial advisory firm that has worked with agencies such as Florida's Department of Transportation. These laws allow agencies to enter into the type of long-term arrangements necessary for private-sector fiber and broadband companies to commit to these partnerships, he said during the FTTH Council webinar. Some states are very proactive.
"Many have built or are building specialized P3 teams," Ham said. "There is some level of acceptance and understanding of P3 arrangements. When we start using P3s in a new domain [like broadband] it's helpful to build on the expertise and practice of other sectors."