We’re on the verge of exciting transformations in our Eastern Kentucky communities. From new small businesses cropping up to downtown revitalization projects that are well underway, the energy and enthusiasm are palpable.
Opportunities for growth and prosperity are at our fingertips. But there’s still much to be done before we can call it a day.
Small business growth, new business formation, and remote work employment all rely on high-speed internet to become a reality for our region.
The KentuckyWired middle-mile network brought high-speed fiber cable to all 54 counties in Eastern Kentucky. Now, it’s up to us to finish the job.
Public-private partnerships (PPPs) will be pivotal to installing last-mile broadband.
If we complete this work, Eastern Kentucky can flourish economically once again. Many PPPs are forming in rural areas across the US right now for the same reasons. We can’t fall behind.
Our Eastern Kentucky towns and counties must start forming PPPs today. You’ll need them to go after funding and start implementing broadband for your communities.
SOAR provides expert advice to towns and counties seeking to form PPPs. Read this guide to learn what a PPP is, why it matters, and the steps to form one.
What is a public-private partnership?
A public-private partnership is a mutually-beneficial agreement between one or more private businesses and a local, state, or federal entity.
It serves to unify government and industry towards a shared goal — one that represents the public’s interest. They’re particularly useful when the individual players can’t achieve a project on their own.
A PPP success story in Eastern Kentucky
There are successful examples of broadband PPPs right in our backyard. Take it from the town of Slade, the first last-mile project enabled by KentuckyWired.
Slade’s PPP transformed its connection speed from an average of 10 Mbps to a minimum of 50 Mbps. The upgrade in network capacity allows local businesses to process credit card transactions faster and sell inventory to customers online. And residents now can participate in the remote work economy with speeds that sustain video conferencing and productivity at home.
A grant from The Center for Rural Development funded the project. The private partner, Eastern Telephone & Technologies, installed the fiber and currently owns the network. And after reaching a contracted subscriber threshold, it returned a portion of the funds to the county.
Why are PPPs important?
PPPs unify stakeholders with different bottom lines towards a shared vision and outcome. They exist to accomplish projects that would otherwise be unlikely or impossible without each others’ contributions.
A PPP relies on the government partner to facilitate the public’s interests, source funding, and streamline interactions with government entities, residents, and utility operators. The industry partner provides specialized expertise, helps to plan the work, and implements the project.
In the case of last-mile installation, the challenge at hand is the financial endgame for broadband providers. The costs of bringing internet connectivity to every corner of Eastern Kentucky are too significant for private industry to justify on its own.
As a result, the last-mile effort in our region will rely on strong partnerships between broadband providers and local governments. Forming official partnerships removes some of the major barriers associated with cost and feasibility — and keeps the community’s needs front and center.
It’s also worth noting that many funders won’t consider your grant application until you have a PPP in place.
How to form a PPP
Step 1: Identify a vision and objectives for the partnership
Be intentional from the start about your PPP’s vision and objectives. Ask yourself the following questions:
- What big-picture purpose does this partnership need to serve?
- How can I best represent my community through this partnership?
- What results does our town/county require?
Write down your answers to these questions. Share them with a trusted colleague to make sure they cover your priorities.
Step 2: Select a business model for your PPP.
PPPs aren’t a one-size-fits-all approach. There are two PPP models you can follow for broadband installation. Each comes with its pros and cons and some wiggle room to adapt the model to your particular circumstances.
- Public financing of private infrastructure: In this approach, the private partner owns the network but assumes the liabilities. The private partner must cover construction costs and continue operating even if revenues don’t meet expectations. In exchange, they receive capital contributions from the locality.
This model typically enables faster turnarounds but comes with risks to the public. There are entities out there making big promises and not fulfilling them. Doing your due diligence on the company’s technology capabilities and customer service history is critical under this model.
- Public financing of public infrastructure operated by the private sector: This approach results in broadband assets owned by the public and allows counties to focus on the areas of greatest need. It’s beneficial for projects in rural or low-income areas where private providers wouldn’t otherwise take the job.
This model can apply to a complete network for a town. Or, the private partner can own the sections of fiber where they expect to gain profitability, and the public partner owns the sections that cover the remaining needs.
Step 3: Review partners and build consensus
An essential part of the process is identifying the partners that will be the best fit for carrying out your vision, objectives, and chosen model. They need to have the expertise and track record that’ll inspire confidence. And importantly, they should be willing to go the extra mile to service their customers and the partnership.
Share your vision and objectives with prospective partners. Take the time to receive their input, and consider whether their approach aligns with your vision.
By doing so, you’ll start building trust and consensus among your future partner right away. This should inspire them to commit their time to your project and prioritize your community’s needs from start to finish.
Step 4: Know what can go wrong with PPPs and take preventative measures
Knowing what can go wrong with PPPs can safeguard your resources and avoid preventable pitfalls.
- Review the technology offered by prospective partners. Consult with a third-party broadband expert to determine which proposals offer the best-in-class devices, methods, and capabilities.
- Approach revenue projections with caution. Ensure revenue projections come from well-thought-out budgets — not wishful thinking. Be wary of broadband partners that make big promises about profitability, especially in rural counties.
- Verify their track record. If you’re putting your trust in a private partner, you’ll need to check in on the health of their business. Review financial statements, customer reviews, and other resources to verify your future partner’s track record.
- Enforce obligations with contractual commitments. When spending public dollars, you must act in the public’s best interest. Ensure private partners hold up their end of the bargain by writing enforceable commitments into your partnership contract. This might include special pricing for the residents you’re serving, participation in federal subsidy programs, or other features that represent your community’s needs.
Remember what you bring to the table, too. Towns and counties entering into PPPs offer significant value to their private partners. You’ll be streamlining the permitting process, right-of-way acquisition, and utilities coordination — efficiencies that significantly enhance the private partner’s bottom line.
Equipped with this knowledge, you’ll want to develop a contract that establishes the terms of your partnership and includes legal protections for your town or county. Be clear with your conditions. Hire a qualified legal professional to write and review it for the greatest level of protection.
Step 5: Maintain accountability by tracking goals and performance.
From the beginning, you should establish a culture of accountability and transparency. The best way to kick this off is by leading with clear goals and a step-by-step process to track progress through completion.
Make sure your partners agree with the goals and tracking processes from the start of your engagement. As with any collaborative project, accountability and good communication will be crucial to success.
Step 6: Establish working groups or committees and meet regularly
Depending on the size of your partnership, you may want to find a streamlined way to allocate the work across stakeholders. Establishing working groups that own specific aspects of the project can help.
For example, it may be helpful to pair up stakeholders from different sides of the partnership. Each will contribute complementary expertise and perspective, which creates a motivating environment for everyone to pull their own weight.
Setting regular times to meet, such as monthly, bi-monthly, or weekly, will also help to keep up the momentum.
Conclusion: Act now to form a PPP in Eastern Kentucky
SOAR’s mission is to support a thriving community of small businesses and local governments. One of our major goals is to enable last-mile connectivity across all 54 of our counties in Eastern Kentucky.
We can support your town or county through the process of forming a PPP for broadband installation. Our team of experts can help you create your vision, assess partners, select a business model, and apply for funding.
Reach out today to get started.