Good day to everyone!While we are waiting to begin, please take a second to click on the chat box and tell us one or more things that you look for in a long term partner.…Thanks for contributing your thoughts on the characteristics of good partnerships. READ LISTI think that one very positive benefit of the MIRC project has been the development of new partnerships – between state partners, between state partners and local organizations, and within communities. We need to keep those partnerships rolling after the MIRC funds are depleted. Hopefully, we are cementing those relationships through our good work.
I think that every broadband policy document that I have ever encountered encourages public private partnerships. And with good reason. The benefits and costs of overcoming the challenges that we face in deploying and utilizing broadband are unevenly distributed, especially so in rural communities. High capital and operating costs depress the ROI for investing in rural networks, especially outside of regional centers and towns. The same is true in market development activities. How many people walk by a kiosk promoting a broadband company at the Mall of America in a day? Probably more than live and visit most rural communities in a year. When the business community in a small town all get online and using all facets of broadband, the benefits to the community greatly exceed the benefit to the provider – more sales, cheaper cost of goods sold, a healthier Main Street. Significantly more benefit than accrues to a national provider.
The simplest advice can be the hardest to follow.Exercise more, eat less.An apple a day keeps the doctor away.Follow the Golden Rule.So what is the difficulty in creating and sustaining private public partnerships? Some areas where we need to improve the environment for partnerships include:A community feeling that there is no one to partner with in their present provider setMaintaining a level playing field with all providersNo single place of contact or ownership at the community levelSharing costs and benefits appropriately within communities and with providers
Today we are going to talk about ways that communities are partnering with providers to improve their economic vitality – by enabling investment in infrastructure and services and by increasing the tech vitality of local residents, businesses and organizations.We will use some great community examples and discuss the opportunities and challenges of creating and maintaining these partnerships.Ask questions at any time either by jumping in with a question or using the chat box.
Having adequate infrastructure and services is a prerequisite for community economic vitality. The bar on “adequate” is rising rapidly. Our state goal is 10 – 20 Mb everywhere; the federal goal is 100 Mb to 100 Million household, with a 4 Mb service for rural areas. I certainly prefer the Minnesota goal, but getting there poses a significant challenge.One great benefit of the stimulus projects is that the costs to serve rural areas are more transparent than ever before. Grants and low-interest loans are necessary for these projects to be successful. As ARRA funded projects, Blandin Foundation and the Northeast Service Coop partnered on a technical assistance project study that will soon be completed. That report will provide great information to rural communities about the financial viability of deploying and operating rural broadband networks. Look for that report to be issued soon. No doubt it will show that rural broadband deployment requires significant subsidy.In fact, we all recognize that rural telephone service has always been deployed provided through public private partnerships though these subsidies are complex and have generally been invisible to the general public.
There are both benefits and risks to private public partnerships.The question of whether or how to partner generally evolves as a community goes through a detailed planning process. Some of that consideration is financial. Political considerations may be equally important.Having a great partner can make things incredibly smooth – easier ramping up of services, established procedures, experience.Having a bad partner can be a very difficult experience resulting in finger pointing, delays, lost customers and reputation, and lawyers.
Communities should spend considerable time and energy determining your own goals. You can some of these goals on the list. You may have others in your community. Prioritizing your goals may make it more difficult to fulfill others. For example, the costs of reaching far-flung customers put ubiquity and affordability at odds. Partnering with the incumbent provider may impact the competitive environment.Communities should spend investigating possible partners and understanding their goals, company culture, technology preferences. Your partner’s long term ownership plan, I think, is especially critical. A company positioning itself for sale may transition your community partner from a family-owned company down the road to a global venture capital firm.
Long term finance tools are one of the primary assets that communities bring to the broadband table. In the economic development finance world, matching the life of assets to the finance tool is the primary benefit of the SBA 504 loan program. Bonding and capital leasing are the two primary tools that communities can use.Two other strategies – reducing costs and improving cash flow – can be powerful incentives. Access to the public ROW can be a significant cost of new telecom providers; communities need to be sure of the need to treat all companies fairly.The City of Minneapolis wireless network, owned and operated by US Internet, was enabled by pre-payment of significant wireless connectivity fees. The City has not used the network to the extent of its pre-payments yet, but the model is viewed as an excellent success story in its coverage and quality. There are also significant non-cash ways to partner to further network deployment. Aggregation of demand is the most significant. This is essentially bundling up the large public sector customers to the new provider, usually resulting in lower costs, plus much higher bandwidth services.A City can also make a underutilized piece of city property or building available for little or no-cost. They can also help to market the new market entrant by holding tech fairs, etc.Google, in choosing Kanas City, KS for its fiber network, cited the easy permitting and guaranteed inspection approach that the City offered, saying that it will save 3 – 5% in construction costs.
This chart takes the community goals noted in the earlier slide – ubiquity, affordability, etc. and matches it up with some available community broadband partnership options. Green indicates a strong ability to influence the impact on community goals; yellow a moderate impact and red – no impact.For example, in the top left corner, providing financing incentives to a credit worthy provider reduces a community’s risk in ensuring broadband. A traditional municipal utility may reduce or restrict competition. Where communities have historically provided broadband, I think that there is little chance of competition emerging. These are my takes on the risks and benefits. A community could move a dot from yellow to green through effective negotiations. This chart is meant as a discussion starter and is definitely open for revision. We can talk about this chart at the upcoming broadband conference.
All partners should recognize that a telecommunications provider start-up will not be a straight-forward worry free process. Knowing and recognizing that in advance advises partners to think about how to maintain a healthy partnership.Upfront identification of partnership challenges is necessary to craft a quality partnership agreement.Partners should mutually agree to benchmarks and performance standards. Early warning systems that point to emerging problems should be established.A quick process to resolve disputes and and equitable process to dissolve a partnership should be established in advance.If you cannot come to an agreement about these communication processes, maybe you need a new partner!
An emerging trend of community broadband in Minnesota is the interest of incumbent providers in partnering. In at least two of our current Robust Network Feasibility Fund projects – Todd County and Redwood County – incumbent providers are helping to financially support the feasibility study. These providers may use this information to understand the market demands in their existing service areas as well as identify opportunities to expand their service footprint.The vast majority of areas that are unserved or underserved with broadband are outside of cities and towns and are served by the larger telephone companies. Most smaller telephone companies have made commitments to either FTTH or FTTN networks. Larger companies have not had the financial incentives to make these investments; it is possible that revised USF rules may change this.Many policy documents point to increased competition as a goal. In rural areas, most people would settle for one quality network, with or without an open access component. Communities partnering with incumbents may face choices about how important competitive services are to them. Requiring networks financed through public funding to be open access, either immediately or after a period of several years might be an option.
Nothing happens till someone buys something!Working on market development offers an opportunity to work with all providers to build the tech sophistication of your community. Depending on your cast of providers and community partners, working on market development can be a piece of cake or relatively difficult.Effective market development does not require telecommunications providers to participate, but creating a linkage between community interest and providers’ sale processes really can multiply the impact. Including tech support companies in addition to the ISPs is a great way to promote the abilities of these local firms.Market development also involves engaging local partners – the Chamber of Commerce, local schools, service clubs, senior citizens, etc. Getting these groups to participate requires you to inform of the possible benefits that they and their members would gain from being more tech savvy.Finally, do not forget about giving opportunities to your tech savviest youth and young adults. Market development is more than getting people an introduction to technology; it is pushing forward at all levels of sophistication.
Many market development efforts are aimed at digital inclusion – helping those who are not online due to lack of money or knowledge or disability status get online. I t also includes:Building awareness and skills for folks at all levelsCreating local content, including local business sites, YOUTUBE channels, school activities, church services, etc. Blogs, civic engagement, local online newspapers. Building an online presence is not only a service to your own community, but changes the way the people who may be investigating your community – such as new residents, new businesses, etc. view your communitySupporting tech adoption by community institutionsE-governmentSchools and bond issuesHealth care organizationsNon profits and service organizations
Digital inclusion is an important part of market development activities. Age and income is a driving force for low-broadband adoption rates. The older and poorer, the lower the adoption rate.We know that three elements are required for successful digital inclusion programs – computers, training and connectivity.PCs for People is a great MIRC partner distributing refurbished PCs. Comcast is now offering $150 home computers for families that qualify for free school lunch. We are seeing new local PCs for People affiliates forming in at least three locations. Almost every community has one or more possible sources for significant numbers of PCs – schools, hospitals, businesses. Finding ways to turn recyclables into treasure is a great local project.Adult Basic Education and libraries do great training. Connect them to recycled computers and you have ongoing computer uses.Connectivity is critical. Either public access spaces or discounted service. We have a growing number of providers willing to help use by targeted populations by offering discounts in partnership with community groups. Help them participate by working with them to set up a manageable structure.Willmar – Somali population Winona – Hispanic and Hmong – LLBO – Tie to Head Start
Community awareness and skills – ALL Levels, not just beginner!Business – in addition to the MES training, determine how to help drive use and sophistication higher. Highlight local success. Highlight local resources. Bring in experts in a targeted way to those companies with interest and potential. BRE connection. Less focus on connectivity, more focus on the business operations.Youth – SOPHISTICATION and SUPPORT Let them know that their future is important to the community!Seniors – find out what interests them! Go where they are. Begin using technology to keep seniors happy and healthy. And connected to the community.
Internal useExternal use and image building.Build connections between people. Ensure good linkage around the community. Use community partnerships.Connect the online managers together to build partnerships rather than competitions.Video, video, video.
Encourage leadership.Influence local boards on technology vision and decisions.Bring tech sophistication to the table for community problem solving – Senior Health – connect health care, peer seniors and others around keeping people in their homes.
Rural communities face many issues – economic development, jobs, health care, Main Street, education, community survival. Technology will be a key component of any survival/thriving strategy. Communities have little choice but to actively engage in promoting broadband access and use.Telecom providers face their own challenges – changing regulatory environment, dynamic technology, declining populations in some area, changing demographics.Their choices on how they decide to engage with communities will impact the future of the community as well as their own.Partnerships have the ability to give both communities and providers a greater chance for success. Explore the possibilities. Exploit the opportunities!
Bb webinar 3 pp partnerships
Public-Private Partnerships Working together for successful broadband deployment and use Let us know what you think is important – use the chat box!
“ENGAGE IN PUBLIC PRIVATE PARTNERSHIPS!” SOURCE: ALMOST ANY BROADBAND POLICY DOCUMENT Kind of like getting the following advice…
“EXERCISE MORE, EAT LESS!” My doctor advised me just this week that this approach works!
On InfrastructureOn Market DevelopmentCOMMUNITIES ARE PARTNERINGSUCCESSFULLY WITH PROVIDERS INSEVERAL WAYS
To Partner or Not To Partner?Benefits Risks• Improved broadband • Loss of complete control services • Unbalanced partnership• Stimulate private sector agreement investment where the – Privatize profits projected ROI is low – Socialize losses• Lessens burden on • Partner fails to perform community to act alone over the short and/or long• Shared risk term• Easier political sell – Poor technology choice – Poor sales and service• Leverage partner strengths – Ownership change
Selecting a PartnerKnow thyself Know thy partner• Prioritize your goals • Compatible goal fit – Reduce financial risk • Reputation for service – Control over service offerings • Technology preferences – Ubiquity • Long term ownership plan – Affordability – Competition – Economic development• Take your time
Ways to PartnerDirect Financial Participation Non-cash Value• Sell bonds to finance • Organize and aggregate network demand of major customers• Capital lease to finance the • Provide free or low-cost network office/facility space for• Reduce/eliminate ROW and start-up operations permit fees • Community marketing• Prepay for services through events long term contract • Ensure prompt permitting and inspections
Staying Partners Requires Clear Communications and Lawyers• Process for information sharing• Process for decision making• Process for settling disputes• Process for parting ways• Relying on people and processes cementing a long term relationship
Incumbent or Competitive Provider as Partner?Incumbent Competitor• Incumbents may be opening • May provide opportunities to partnering for more of an equal• Incumbents have existing partnership infrastructure and • Increases competition customers • More risk• Lower risk, but may lock in • Possibly more open to monopoly scenario “open access” – May be mitigated by • Likely to favor FTTP emerging wireless • May be harder to find• May propose incremental technology improvements
PARTNERING ON MARKETDEVELOPMENT Provider inclusive activities to build the tech sophistication of your community and improve provider ROI!
Market Development Activities• Address digital inclusion• Build community awareness and skills• Create and share community content• Support technology adoption by key community institutions
Address Digital Inclusion• Key elements – Computers – Training – Connectivity• Digital Inclusion Community Partnership• MIRC examples – Winona – Willmar – Leech Lake Band of Ojibwe
Build Community Awareness and Skills• Key audiences – Business community • Ecommerce training • MES/MNSCU/Local IT support companies – Youth • CISCO Academy • Web site development • Gaming, graphics and video – Seniors • Health • Genealogy • Finance • Travel • Peer communication
Create and Share Community Content• Web content• Calendars• Video• Newspapers for snowbirds• Connection to schools• Connection to worship• Many others!
Key Institutions as Tech Leaders• Education• Health care• Faith communities• Local government• BusinessesMULTIPLY IMPACT THROUGH CROSS SECTORINITIATIVES!
No Broadband = No Community Vitality Robust Network = A Chance for Community VitalityRobust Network + Tech Savvy People = A Great Place to Live! Community + Providers = Greater Success
Bill ColemanCommunity Technology Advisorsbill@communitytechnologyadvisors.com651-491-2551FOR MORE INFORMATION