“Promise, Pitfalls on Road to Municipal Broadband.” Broadband Business Report, February 25, 2003

Keywords: Municipal broadband

Abstract:

Municipalities venturing into the telecommunications business can face strong opposition and legal nightmares from powerful entities.

This article focuses on a project underway in three small communities in Illinois’ Fox River Valley, west of Chicago. Referred to as the tri-cities, Batavia, St. Charles and Geneva Ill. together have a population of about 70,000 well educated, economically comfortable residents, many of which are technology workers. What the tri-cities don’t have is decent broadband services and they have grown tired of waiting for the local telephone and cable incumbents to provide those services; so they have decided to do it themselves.

The tri-cities fit a unique demographic for small towns; well educated, economically comfortable, technology savvy and they have their own electric utility, a combination that gives the tri-cities an advantage and maneuvering room to offer a variety of services. The right demographics are important for financing the project. Municipal broadband projects are often financed through bond financing schemes which require certain rates of return to ensure revenue generation.

Demand, public support, responsive local governments as well as the advantage of what is called “home rule” – local governments can do what they want unless prohibited by state or federal laws - lend the project positive momentum and good chances of success.