In late October, Lit Communities’ Chief Strategy Officer, Rene Gonzalez and Chief Client Officer, Jessica Fowler traveled to Washington, D.C. to begin building strategic relationships and create awareness of our company and our priority markets. Through the assistance of the Ice Miller Strategies team, we met with five different Congressional offices, the National Economic Council within the White House, and the National League of Cities.
To build awareness of Lit Communities, we provided an overview of our company founding, mission, and approach to working with municipalities through our Community Assessment process. By explaining our process and outcomes, we were successful in demonstrating how Public-Private Partnerships (P3s) can be leveraged to close key infrastructure gaps and ultimately, the Digital Divide. As an extension of the P3 approach, we also explained how Lit Communities launched Medina Fiber in March 2021, our very first fiber to the home deployment in Medina County, Ohio.
We talked about our success in establishing a partnership with Medina County’s Board of Commissioners, Medina County Economic Development Corporation, and Medina County Port Authority to leverage its middle mile network for a last mile deployment to nearly 50,000 residential and business customers throughout the County. Medina Fiber is Lit Communities’ first network deployment, and we shared what we are learning through this project and how it can help our future network deployments succeed. Given the onset of federal funding for broadband infrastructure, it was very important for us to share how P3s can be utilized vs. traditional private sector approaches. We also had the opportunity to brief various Congressional offices on the priority markets where Lit Communities is developing partnerships for last mile infrastructure deployment.
Combined with the timing behind Congress’ approval of the Infrastructure and Investment Jobs Act (IIJA) and the historic funding allocation of $65 billion for broadband infrastructure and adoption, municipalities have a once in a lifetime opportunity to partner with the private sector to ensure that their communities are not left with bandwidth that won’t allow for virtual learning, remote work and telehealth. Coordination and work with federal, state and local representatives will be required by any municipal leader as partnerships with providers and private equity are created.
We found from our time in DC that there is tremendous support and strong interest from Congressional representatives and their staff in seeing both local networks succeed and the effective and efficient use of resources. There was also interest in the data from the community survey that Lit performs as part of a Community Assessment. How residents in Lit’s emerging markets view current services and their opinions on pricing, reliability and speed were discussed and we have made a commitment to provide Congressional representatives with continued feedback from community members.
Lit’s Community Assessment process helps municipalities begin this journey of creating enhanced broadband connectivity and learn how to be effective in their role as a partner in a P3 network. The Community Assessment is built around providing answers to three key questions:
- What would a municipal network look like?
- How much would it cost to build?
- Would my community support it?
What would a municipal network look like?
A preliminary design for both a middle mile and a last mile network are the assessment’s key elements- the two designs supply important financial metrics used to inform the financial models for the networks and to provide cost information. Think of this middle mile (or “core” network) as the interstate on a road system or a main fiber artery. The middle mile network connects core anchor institutions such as municipal buildings, emergency and health services, libraries and schools and other organizations deemed critical to the wellbeing of the community. The last mile connects homes and businesses and runs off of the middle mile network.
Example- In Medina, OH, Lit found a middle mile partner in the Medina County Fiber Network. In 2010, the Medina County Port Authority bonded a broadband project, Medina County Fiber Network (MCFN), to create the infrastructure for robust broadband service that could be shared by multiple telecommunications carriers as part of driving economic development within Medina County. The MCFN created a strategic plan in 2017 that addresses expansion of certain fiber trunks into industrial parks and to introduce a residential and small business fiber product through commercial partnering.
In 2021, a relationship was created with Lit’s commercial entity, Medina Fiber, to introduce a
residential and small business offering to Medina County. Medina Fiber is partnering with MCFN and leasing strands to build last mile connectivity to the residents and small businesses of the County. Since March 2021, Medina Fiber has deployed fiber across nearly 4,000 households in Seville, Westfield Center, Montville and Medina City combined. In October 2021, Medina Fiber opened its first Demonstration Center in Seville for customers to provide direct customer service and learn about gigabit internet services and its utilization in the home and business.
How much would it cost to build?
Once the preliminary design is completed for a middle and last mile network the number of overall road miles and the estimated percentage of aerial and underground construction are both used to create a financial model with a project budget, income statement, cash flow statement, revenues that can be earned (from internet, TV, VoIP, telehealth, smart home, 5G/small cells services), expenses (engineering, construction and O&M), and debt and equity scenarios.
An important number included in the financial model for communities and their partners to know is the cost per household passed, which is based on engineering and construction costs (labor and materials). Investors in broadband networks watch this number carefully to ensure it falls within their acceptable range (more on this in another blog!). As part of the cost estimating, Lit’s Community Assessments provide for the creation of a capital stack that includes public and private funding opportunities. Local, state and federal funds as well as sources of private equity are part of this stack and combined together can finance the network.
Lit believes that every community should have the opportunity to have an ownership position in a community network and we strongly encourage municipalities to consider this type of investment. Community ownership in the middle mile network can set municipalities on the path of revenue generation as they can charge for access to their network (think of a toll that is paid on an interstate by every driver!).
Would my community support it?
Lit Communities works closely to engage stakeholders and residents through focus groups, town halls and community surveys, all used to gauge and encourage support for a network. Oftentimes there are community institutions and organizations with similar goals and desired outcomes who can be terrific partners with their municipal leaders. The survey is designed to ask respondents questions about current and desired services, pricing, and reliability. Knowing how community members view their connectivity is critical in planning how to address challenges.
Example- According to the National Digital Inclusion Alliance (NDIA), Brownsville, TX, has consistently ranked as one the least connected cities in the United States, with 47.13% of households without broadband of any kind and 67% of households who do not have cable, DSL, or fiber broadband. Recognizing the severity of this problem, the City established a partnership with seven community anchor institutions to fund the Broadband Feasibility and Digital Inclusion Plan to study and address the lack of broadband in the community.
In July 2020, Lit Communities began working with Brownsville on a Citywide broadband feasibility study and digital inclusion plan. In July 2021, Lit Communities Broadband, Inc. created BTX Fiber, LLC for the sole purpose of serving Brownsville’s residents and businesses and partnering with the City to provide a source of revenue generation. BTX Fiber will work with the local workforce and community college (Texas Southmost College) to meet both the skills and labor needs of the project. Currently, the City is embarking on a 24 month effort to develop its own 93-mile middle mile backbone network utilizing $19.5 million in American Rescue Plan Act funding, allowing for further opportunities to work with private partners such as BTX Fiber to deploy last mile services in priority areas of the community. Additionally, the City’s proposed network will connect 32 anchor institutions including city facilities, Police, Fire, EMS, and public parks.
With answers to these three questions, municipalities are now poised to consider next steps in making the networks a reality and can engage withs State Broadband Offices as they will be the gatekeepers for all the IIJA funding. Be involved, know your needs, and know how much your solution costs so it can be included in the long-range plan!
Looking for a guide you can trust to help you explore these questions for your own municipality? Book a free demo with our team today!