Stirring the Pot: A little public funding sweetens the broadband deal

As originally posted in Blandin on Broadband

To quote Mary Poppins, “A spoon full of sugar makes the medicine go down!” That promise of that sugar, soon to be available from the Office of Broadband and from the FCC, is providing motivation for public and private sectors to talk about partnering. What is amazing to me is the relatively small amounts of sugar necessary to stir these discussions after a decade of talk of public private partnerships. Remember, Minnesota’s “share” of the $100 million FCC fund is $2 million dollars and even if we doubled our take, that will be less than $5 million. Our state broadband fund is $20 million, an impressive down payment on what many hope will become a long-term funding program, but is currently far short of what is required to meet the broadband goal statewide.

One consideration that must be driving city and county officials crazy is the lack of clarity around the public sector role in partnerships. There is little definition around what sources of public funds might be used to defray deployment costs – general revenue, excess TIF, tax abatements, revolving loan funds, CVB lodging taxes? Equity, loans or grants – what would be the impact of those choices? Public hearings or closed-door negotiations? Competitive bidding or reverse auctions, incumbents or competitive providers? Against the framework of short timelines, there is potential for public controversy and/or lawsuits (see Lake County, Monticello and the Vikings stadium!) For the public sector, even offering the incentives listed on Google Community Checklist brings policy considerations that could have far-reaching and long-term impacts regarding the use of public Rights of Way and waived permitting fees.

The Office of Broadband should work with the State Auditor, Attorney General, LMC and AMC and others to provide some guidance to local officials in advance of the Border to Border Broadband Fund application process. I fear that communities will feel a bit whipsawed by providers seeking the best community deal, similar to what happens when Walmart starts shopping a regional distribution center opportunity, all under the veil of non-disclosure agreements. At least in the bricks and mortar economic development world, the rules are pretty clear. Quite different than these new broadband attraction battles. To be fair, these prospective partnerships are new to the broadband providers! And to the Office of Broadband!!

Coming back to Mary Poppins…remember that the sugar available from the state and the FCC is like a tablespoon or two in a gallon of lemonade. Make sure that you measure your own sugar carefully to come up with a sweet project!

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