A presentation for the 2015 Border to Border Broadband conference in Minneapolis MN. Sponsored by the Blandin Foundation.

1. Forming Successful
Broadband
Partnerships
November 20, 2015
Shannon Sweeney, Associate
David Drown Associates, Inc.

2. Forming Broadband Partnerships
Units of government have been involved
in economic development for many years.
Many of the same principals that apply to
supporting local industry can be applied
to promoting additional services in the
community, including broadband
services.

3. Forming Broadband Partnerships
The standard approach is to methodically
pursue project alternatives that offer the
least amount of financial risk prior to
pursuing alternatives that require taking
all or a majority of the project related
financial risk. This would be the partner
identification phase.

4. Forming Broadband Partnerships
Examples (over-simplified):
Step 1) Spend some time/money/energy to define the level of
broadband service that is required in your community.
Step 2) Contact existing service providers to see if they plan to
make capital investments to provide or improve broadband
services to meet the identified goal.
Step 3) Contact existing service providers to see if they would
make capital investments to meet the identified broadband service
goal if some assistance (financial or otherwise) is provided.

5. Forming Broadband Partnerships
Examples (over-simplified):
Step 4) Contact other service providers to see if they are willing to
serve your residents and businesses in accordance with your
identified service goals.
Step 5) Contact other service providers to see if they are willing to
meet those goals if assistance is provided.
Step 6) Only after all other opportunities are exhausted do we
begin to look at alternatives for providing services through a start-
up company, and even then, we go back to Step 1 and have similar
conversations with operators, companies or cooperatives in other
industries that could potentially provide this service.

6. Forming Broadband Partnerships
How can units of government partner?
1)We can reduce project barriers (review franchise
agreements & fees, right-of-way usage
fees/agreements, etc.); and
2)We can use a variety of resources to provide project
financing.

7. Forming Broadband Partnerships
Governmental HRA’s and EDA’s enable units of government to
participate in a number of activities that support businesses and
services. These activities include:
1) The ability to budget and levy taxes for
economic development.
2) The ability to issue bonds for economic
development projects.
3) The ability to purchase and sell land for
economic development projects.
4) The ability to serve as a limited partner.

8. Forming Broadband Partnerships
Financial Partnership Examples – RS Fiber Project:
1) The Blandin Foundation provided matching grant funds to assist
in the early analysis (remember Step 1); and
2) Multiple Cities and Counties provided matching funds of
approximately $150,000 in the project development phase; and
3) Four EDA’s provided revolving loan fund loans in the project
development phase; and
4) Several local investors provided private loans to the RS Fiber
Cooperative for project implementation; and
5) Two local banks provided primary lending for project
implementation; and

9. Forming Broadband Partnerships
RS Fiber – Cont’d
6) Local electric and grain cooperatives provided project financing
through direct participation and federal programs they are able
to access; and
7) The State of Minnesota provided grant funding through the
Broadband Grant Program; and
8) The operator for the project invested a significant amount of
time and capital in the project development phase without a
secure form of repayment; and
9) Ten cities issued bonds (or made direct loans) totaling
$8,740,000.
10) A new private cooperative is going to build and own a fiber
optic network and coordinate all of these partnerships.

10. Forming Broadband Partnerships
Financial Partnership Examples – Southwest MN
Broadband:
This project has a long and storied history like most broadband
projects and involves numerous partners, but a partner of note
was Jackson County. Jackson County pre-paid for services in
order to provide the working capital needed to get the project up
and running.

11. Forming Broadband Partnerships
Lessons Learned:
1) The partner(s) you start with are often not the partners you
implement with. Partners will be vetted when faced with risk
(political/legal/financial). Keep communicating with all potential
partners.
2) Do not proceed with a partner that lacks commitment to the
project. They will cost you time, money, energy, momentum,
and they will likely drop out just prior to implementation.
3) If a partner does not seem committed, offer them an easy way
out of the project as early in the process as you are able.