Thinking of Taking a Broadband Journey? What utilities should know before they go

So you’ve read the research about the benefits of broadband—for the community, your business and electric customers. You’ve sat through town council meetings or board of director meetings, listening to residents and business owners lament the spotty service and slow connect speeds of the current service providers. Now you’re thinking about taking matters into your own hands, launching the kind of affordable, giga-speed broadband network that your community deserves, one that your utility—public power or co-op—can grow on. Good for you!

They say the first step in any journey is the hardest. Embarking on a broadband project is no exception. Before setting out, you need to get a sense of what lies ahead. While the following is not by any means a comprehensive guide to your broadband journey, it gives you some idea of what issues you’ll face and the degree of pre-planning involved before the first cable is spliced. With that in mind, let’s unfold the map.

Step 1: Identify the community’s need and your role

Broadband offers a wide range of benefits and opportunities that speak to various subsets of your community; some resonate more deeply with your community than others. Understanding what’s most important is critical. At the same time, consider the project from an investment perspective, as it affects both the community and your utility. Don’t get stuck in the weeds; look at the quantitative data holistically to understand the total impact on the community and your utility’s operations. Finally, understand the role you are being asked to play and by whom. Will building fiber to your substation let you better manage your distribution network? Will you be able to provide dark fiber and communication services besides offering electrical power? Will your broadband network be used to increase competition in the market? Is the community, board of directors and/or city council, and your customers looking for you to facilitate the process, build the network, or manage all aspects, including operating and maintaining the network once it’s up and running?

Creating a Shared Vision

Recently, Fujitsu was asked to assist a Midwestern public power utility as they embarked on their broadband journey. Key to the project’s success was that everyone who needed to be involved—business stakeholders, the utility’s management, and municipal leaders—were involved from the beginning.

There was a lot of discussion at the outset, as participants worked to establish a unified vision while ensuring their own interests were being addressed. Once that was done, everyone was able to focus on working toward the shared vision. This helped streamline the decision-making process and accelerate the project toward a successful build.

It is important to note that, without the combined efforts of the utility’s various department—finance, HR, legal, engineering, etc—the project would have bogged down, perhaps to the point where it could have failed. Having everyone at the table from the beginning and ensuring they all have a voice is crucial.

Keys to Success

  • Identify and involve all stakeholders from the beginning
  • Define the data sets needed and make no decisions until you have them all
  • Correctly weight the data to account for the most important needs and expectations
  • Assess your internal resources, augmenting with third-party expertise where necessary 

Step 2: Understand the funding options and approval processes

The last thing you want is to over-promise and under-deliver. So it is essential to start out armed with knowledge of what you can accomplish within the guidelines of the law and your utility’s financial limitations.

Funding your broadband initiative is obviously a major concern. A variety of funding models exist, including available federal monies from the FCC’s Rural Digital Opportunity Fund and the USDA Rural Utilities Service. Financial due diligence requires a thorough assessment of all options, not only to help you decide how you will pay for the project, but also to determine how the scope or schedule might need to be adjusted to meet your utility’s or community’s budgetary limitations.

The unique requirements of your stakeholders will also impact your process and final product, especially if you are a municipally owned utility. Every community has different regulations regarding the use of bond money, approval procedures for spending, and the scope of services that can be provided by utilities. There are also significant differences from state to state.  

The local approval process often dictates the pace and schedule of the project. It is important to understand procedures, such as how and when municipal councils vote, and regulations regarding zoning and procurement. For co-ops, this may entail a go/no-go decision by the board of directors, and state regulatory approval to form a subsidiary, borrow money, or both, depending on the specifics of the state regulation. The average utility does not have the in-house resources to handle the various legal, regulatory and financial issues. Partnering with third-party providers who are experienced in navigating these obstacles can streamline the process. Selecting the right financing partner who understands this type of investment, or a technology partner who can help clear the regulatory and approval hurdles, can be critical to moving the project forward.

Managing multiple funding sources and criteria

A multi-county utility located in the northeast was looking to add a broadband network in order to upgrade their services and modernize their network for the future. The utility had targeted multiple funding sources, including some grant and loan money. Combined, the list of requirements to qualify for the funding was huge; some overlapped while others were unique to the funding source.

Working with Fujitsu, the utility has undertaken a study to map all the funding requirements, not only to the various funding sources, but to the communities across their service area. The goal is to identify the most efficient way to meet the myriad requirements while demonstrating the need for as many of the communities as possible.

This critical step provides a methodology for ensuring all requirements of the funding sources and communities are considered. It also provides a more complete assessment of the needs and benefits of each community, helping to increase buy in from everyone involved.

Keys to Success:

  • Consult with local government to ensure access to utility rights-of-way, zoning and franchise fees
  • Research available funding options thoroughly
  • Assess your capacity to handle legal, regulatory and financing issues 
  • Identify any funding restrictions imposed by regulatory bodies

Step 3: Select a technology partner

With a good grasp of your project’s scope and vision, you’re ready to define your business model and select a technology partner.

The model you choose will, in large part, dictate the necessary qualifications of your tech partner. For example, if your project is driven by the need for long-term growth (a dark fiber project, for example), your partner needs to help build future capacity but not necessarily turn up those services from day one. If it’s more of a retail or open-access network project, your partner should have experience in the holistic execution of the planning, design, engineering, deployment and service activation. In either case, you’ll want a partner with a strong multivendor project management resume such as a prime network integrator, because any broadband project involves lots of moving parts. Lastly, don’t cut corners when vetting a potential partner. Once you’ve established a working relationship, change is very disruptive. Ideally the firm that you choose at the outset to conduct the initial studies will help oversee your project through completion of all construction and turnover. Make sure you choose the right one.

Consider the Forest, Not the Trees

In selecting a technology partner, it can be easy to get so overwhelmed by the project’s details that you lose sight of what’s most critical to success.

Often the RFP process for a utility involves multiple RFPs for a detailed list of vendors, services and components. This process not only extends the schedule, it defeats the purpose of engaging with a single partner whose job it is to help manage the project and consolidate accountability.  Simplifying the RFP by selecting the right end-to-end partner with the capabilities and services required, helps keep the focus where it belongs—on achieving the mutually shared goal of a successful project.

Keys to Success

  • Ensure you and your partner have the same definition of risk transfer
  • Be as transparent as possible with stakeholder and vendor information during the selection process
  • Be prepared to scale the project up or down based on input received during the selection process
  • Properly vet your technology partner to ensure they can handle all duties aspects of the project

Know Before You Go

The research articulating the community benefits of broadband is clear. For smaller and rural communities who find themselves on the wrong side of the digital divide, access to broadband that’s affordable, fast and reliable can be a game-changer.

While there is a huge upside, realizing your broadband potential and fulfilling the unspoken promise to your customers requires a lot of pre-planning. The devil is, as they say, in the details. Take the time to familiarize yourself with every aspect of the process, from building a strong business case and securing community buy-in to envisioning how you will operate and manage the network. Yes, it is still very early in the process, but by asking these questions now, you will be better able to navigate the challenges ahead.

About Anthony Bednarczyk

Anthony Bednarczyk is the Broadband Practice Leader at Fujitsu Network Communications, Inc. Leveraging his expertise in business strategy, disruptive technology, network design, integration, and operations, Anthony helps customers create broadband solutions that are value-driven and strategic. His career has included work with global technology companies on mergers and acquisitions, data analytics, software development and business development. Anthony holds an MBA from University of Texas at Austin, as well as a Bachelor of Business Administration in Finance and a Bachelor of Science in Economics from Southern Methodist University. In his downtime, he enjoys the outdoors, travel, and discovering new foods.