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Private Investors Can Jumpstart Community Networks, Say Broadband Breakfast Panelists

‘We believe that connectivity can be a new and distinct category in impact investing.’

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WASHINGTON, September 29, 2022 – A new report from digital investment house Connectivity Capital is urging private investment firms to diversify their portfolios and plow more money into locally-owned and operated broadband networks worldwide.

Examining case studies from 10 communities worldwide, the September report suggests these firms, which often invest in healthcare and environment projects, put those social and environmental progress “impact investment funds” toward community connectivity providers. Connectivity Capital is such an investor and has funded projects in Africa, Asia, and Latin America.

At a Broadband Breakfast Live Online event Wednesday, Connectivity Capital Managing Partner Ben Matranga identified two common features of successful community providers: Innovation and cost-cutting. “Every single operator that we catalogued and certainty every operator that we invest in is doing something vastly different,” he said. “As you talk to these operators, they all have a culture of frugality,” he said.

Steve Song, telecommunications consultant and policy advisor at Mozilla, argued that community networks are “more than just about connectivity.” He said that, “In almost every case you see other kinds of social connections being built as a result of these initiatives.”

Similar stories from around the world

“Around the world we see a remarkably similar story, Community Connectivity Providers often delay or forgo expansion plans because of the lack of appropriate capital,” Matranga said in a prior interview with Broadband Breakfast. “What that means is that the over 3 billion unconnected people globally are locked out and left behind from the transformational power of the internet.”

Matranga added that he hopes the report will “demystify” the phenomenon of community-driven broadband networks and illustrate the best practices of successful CCPs – i.e., cooperatives, municipal networks, small operators, etc. He said hopes to encourage more impact investors to fund broadband projects.

“We believe that connectivity can be a new and distinct category in impact investing,” Matranga said.

The report comes at a time when multiple U.S. states have put into place roadblocks to municipal broadband builds, though some have rolled-back some of those restrictions. The issue with those types of projects, they say, is that they will prevent private competition.

The National Telecommunications and Information Administration, the Commerce agency tasked with distributing $42.5 billion to the states for broadband builds, has said that municipal builds must be considered when utilizing the federal money.

The reports recommends that policymakers accommodate the needs of various types of CCPs and design a simple, clear regulatory environment in which all can operate. The report also suggests state loans, subsidies, and technical-assistance initiatives.

As federal money hangs over the states, more digital investment firms are putting money toward broadband builds. For example, a Dutch pension fund manager, APG Group NV, last year bought a 16.7 percent stake in SiFi Networks, a network builder that specializes in open-access fiber-to-the-home. SiFi has built its trademark “FiberCity” projects nationwide and on Thursday announced the beginning of constructing on a citywide network in Kenosha, Wisconsin.

Editor’s note: This story and headline, published on the morning of Wednesday, September 28, as “Private Investors Can Jumpstart Community Networks, Says New Report,” have been updated to reflect comments made by speakers during the Broadband Breakfast Live Online event at 12 Noon ET on Wednesday.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, September 28, 2022, 12 Noon ET – Financing Mechanisms for Community Broadband

In the world of digital infrastructure financing, it often seems like there’s a “Private Sector is from Mars” and “Non-profits are from Venus” attitude. The conversations have been segmented and distinct. But a new approach suggests change is underway. A report by Connectivity Capital, in association with the Association for Progressive Communication, Internet Society, and Connect Humanity, provides a new paradigm: Community Connectivity Providers. What are they and why are they important? What are the various operational models and examples? What financial mechanisms have been used and how are investors allocating capital to expand broadband access? Join us for a Broadband Breakfast Live Online discussion exploring this new convergence of financing and broadband.

Panelists:

  • Ben Matranga, Managing Partner, Connectivity Capital
  • Steve Song, Telecommunications Consultant & Policy Advisor, Mozilla
  • Jim Forster, General Partner, Connectivity Capital
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Ben Matranga is the Managing Partner at Connectivity Capital, the world’s first impact investment firm focused exclusively on expanding broadband access in emerging markets. Connectivity Capital manages over a dozen investments in digital infrastructure including ISPs operating in 16 countries across Sub-Saharan Africa and Southeast Asia. Ben has over fifteen years of experience leading private equity and venture capital investments in emerging markets. Ben previously was an Investment Officer with the Soros Economic Development Fund, a $350 million impact investment fund founded by George Soros, where he led a broad range of transactions co-investing with sovereign governments, Development Finance Institutions, and institutional investment funds.

Steve Song is a Policy Advisor with the Mozilla Corporation; a consultant on access regulation and policy to the Association for Progressive Communications; and a research partner with the Network Startup Resource Center. His blog, manypossibilities dot net, is a popular destination for anyone working on African telecommunications and internet issues. Since 2009, Steve has been actively maintaining public maps of undersea and terrestrial fibre optic infrastructure in Africa. He is also the founder of Village Telco, a social enterprise that manufactured low-cost WiFi mesh VoIP technologies to deliver affordable voice and Internet service in under-serviced areas. Previously, Steve worked at the International Development Research Centre (IDRC) where he led the organization’s ICTs for Development program in Africa, funding research into the transformational potential of ICTs.

In addition to serving as General Partner at Connectivity Capital, Jim Forster serves as the Managing Director of International Network Investments. He has over 35 years of hands-on leadership and technical expertise in networking equipment and Internet infrastructure. He spent over 20 years at Cisco Systems, starting in 1988 as the very first software development Manager, and became Distinguished Engineer leading various initiatives across IOS Software Development, System Architecture, and Business Development. He is a contributing author to Wireless Networking in the Developing World, the pioneering guide to building low-cost wireless network infrastructure in the developing world.

Drew Clark (moderator) is CEO of Breakfast Media LLC, the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Under the American Recovery and Reinvestment Act of 2009, he served as head of the State Broadband Initiative in Illinois. Now, in light of the 2021 Infrastructure Investment and Jobs Act, attorney Clark helps fiber-based and wireless clients secure funding, identify markets, broker infrastructure and operate in the public right of way.

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

Funding

Florida, Georgia, Iowa, Minnesota, Missouri and Utah to Receive Nearly $1 Billion in American Rescue Plan Funds

The states will use their funding through the Capital Projects Fund to connect more than 180,000 homes and businesses.

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WASHINGTON, December 1, 2022 – The U.S. Treasury Department on Thursday announced the approval of broadband projects in an additional six states under the American Rescue Plan’s Capital Projects Fund Florida, Georgia, Iowa, Minnesota, Missouri and Utah.

Together, these states will use their funding to connect more than 180,000 homes and businesses to affordable, high-speed internet.

The Capital Projects Fund provides $10 billion to states, territories, freely associated states, and Tribal governments to fund critical capital projects that enable work, education, and health monitoring in response to the public health emergency. In addition to the $10 billion provided by the CPF, many governments are using a portion of their State and Local Fiscal Recovery Funds toward connecting to affordable, reliable high-speed internet.

“The pandemic upended life as we knew it—from work to school to connecting with friends and family—and exposed the stark inequity in access to affordable and reliable high-speed internet in communities across the country in rural, Tribal, and other underrepresented communities,” said Deputy Secretary Wally Adeyemo. “This funding will lay the foundation for the Biden-Harris Administration’s historic investments to increase access to high-speed internet and reduce internet bills for American households and businesses.”

In accordance with Treasury’s guidance, each state’s plan requires service providers to participate in the Federal Communications Commission’s new Affordable Connectivity Program.

The Affordable Connectivity Program helps ensure that households can afford the high-speed internet they need for work, school, healthcare, and more by providing a discount of up to $30 per month (or up to $75 per eligible household on Tribal lands). Experts estimate that nearly 40% of U.S. households are eligible for the program.

The Administration also commitments from 20 leading internet service providers to offer all ACP-eligible households high-speed, high-quality internet plans for no more than $30 per month. As a result, ACP-eligible households can receive internet access at no cost and can check their eligibility for free internet and sign up at GetInternet.gov.

In addition to requiring funding recipients to participate in the Affordable Connectivity Program, Treasury’s guidance requires recipients to consider whether the federally funded networks will be affordable to the target markets in their service areas and encourages recipients to require that a federally funded project offer at least one low-cost option at speeds that are sufficient for a household with multiple users.

The following descriptions summarize the six state plans that Treasury approved today:

  • Florida is approved for $248 million for broadband infrastructure, which the state estimates will connect 48,400 households and businesses – representing approximately 10% of locations still lacking high-speed internet access. Florida’s award will fund Florida’s Broadband Infrastructure Program (BIP), a competitive grant program designed to expand last mile broadband access to homes and businesses in rural areas of the state. Funding from CPF will help Florida continue to prioritize fiber-optic networks and projects proposing affordable service. The BIP is designed to provide internet service with speeds of 100 * 100 Mbps symmetrical to households and businesses upon project completion. Florida submitted plans for the remainder of their CPF funds and these applications are currently under review by Treasury.
  • Georgia is approved to receive $250 million for broadband infrastructure, which the state estimates will connect 70,000 households and businesses – representing 15% of locations still lacking high-speed internet access. Georgia’s award will fund the Georgia Capital Projects Fund grant program, a competitive grant program that is designed to fund broadband infrastructure projects that provide service to areas identified by the state to currently lack access to reliable broadband that can meet or exceed 25 * 3 Mbps, and that adopt practices that support both efficient broadband expansion and community engagement. The Georgia Capital Projects Fund is designed to provide internet service with speeds of 100* 100 Mbps symmetrical to households and businesses upon project completion. Georgia submitted plans for the remainder of their CPF funds and these applications are currently under review by Treasury.
  • Iowa is approved for $152.2 million for broadband infrastructure, which the state estimates will connect 18,972 households and businesses – representing approximately 16% of locations still lacking high-speed internet access. Iowa’s award will fund the Empower Rural Iowa Broadband Program, a competitive grant program designed to address inequities in access to broadband throughout the state of Iowa. Using a three-step process, the program combines mapping data, input from communities, and applications from service providers. Funding from CPF will help Iowa bring broadband service to areas identified having a critical need for broadband. Empower Rural Iowa Broadband Program is designed to provide internet service with speeds of 100 * 100 Mbps symmetrical to households and businesses upon project completion. The plan submitted to Treasury and being approved today represents 100% of the state’s total allocation under the CPF program.
  • Minnesota is approved for $44 million for broadband infrastructure. Minnesota’s award will fund two additional broadband infrastructure programs: Minnesota’s Line Extension Program, a competitive grant program designed to address the needs of individuals who are located near infrastructure for high-quality broadband service but where the cost of the last mile connection is a barrier; and the Low-Density Pilot Program, a competitive grant program that provides financial resources for new and existing providers to invest in building broadband infrastructure in low-density areas of the state that currently lack high-speed internet. Funding from CPF will help Minnesota continue its efforts to provide reliable internet access to predominately rural locations previously facing cost barriers. Both programs are designed to provide internet service with speeds of 100 * 100 Mbps symmetrical to households and businesses upon project completion. Minnesota submitted plans for the remainder of their CPF funds and these applications are currently under review by Treasury.
  • Missouri is approved for $196.7 million for broadband infrastructure, which the state estimates will connect 37,979 households and businesses – representing approximately 8% of locations still lacking high-speed internet access. Missouri’s award will fund the Missouri Broadband Infrastructure Grant Program, a competitive grant program designed to fund broadband infrastructure projects in areas that currently lack access to high-speed, reliable broadband. Funding from CPF will help Missouri bring service to areas where broadband infrastructure projects would not be feasible without assistance. The Missouri Broadband Infrastructure Grant Program is designed to provide internet service with speeds of 100 * 100 Mbps symmetrical to households and businesses upon project completion. The plan submitted to Treasury and being approved today represents 100% of the state’s total allocation under the CPF program.
  • Utah is approved for $10 million for broadband infrastructure, which the state estimates will connect 3,080 households and businesses – representing approximately 5% of locations still lacking high-speed internet access. Utah’s award will fund the Broadband Infrastructure Gap Networks Grant Program (Gap Networks Grant Program), a competitive grant program designed to address gaps in broadband infrastructure where reliable broadband service is currently unavailable. Funding from CPF will help Utah continue its efforts to bridge the state’s remaining digital divide. The Gap Networks Grant Program is designed to provide internet service with speeds of 100 * 100 Mbps symmetrical to households and businesses upon project completion. Utah submitted plans for the remainder of their CPF funds and these plans are currently under review by Treasury.
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Funding

Florida, Mississippi, S.D. and Utah Awarded Broadband Planning Grants

‘This award will provide access to those communities who have for too long went without affordable internet connectivity.’

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Photo of Rep. Bennie Thompson, D-Miss,  by Andrew Harnick

WASHINGTON, November 29, 2022 – The National Telecommunications and Information Administration of the U.S. Commerce Department announced Tuesday that Florida, Mississippi, South Dakota and Utah were awarded their first broadband planning grants under the Infrastructure Investment and Jobs Act.

Florida was awarded $7.4 million, Mississippi with $5.8 million, South Dakota with $3.1 million and Utah with $5.6 million.

“I take great pride in knowing that this award will provide access to those communities who have for too long went without affordable internet connectivity, ” said Mississippi’s Rep. Bennie Thompson.

This is part of the Broadband, Equity, Access and Deployment program and Digital Equity Act program of IIJA with the goal to deploy high-speed internet service networks and develop digital skills training programs.

$65 billion will be invested into expanding affordable high-speed broadband under the infrastructure law.

NTIA launched high-speed internet grant programs to build high-speed internet infrastructure across the country, create low-cost internet service options and address digital equity. The grants for 56 eligible entities are expected to be announced on a rolling basis.

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Funding

Small ISPs Face Economic, Incumbent Bundling Headwinds: CoBank Economist

CoBank also mentions that Space X and T-Mobile will begin testing a satellite service by the end of 2023.

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Drew Clark, CoBank's Jeff Johnston, Capital Partners' Angelo Lacroix and Andrew Semenak of Pinpoint Capital Management

WASHINGTON, November 29, 2022 — An economist at a bank that provides loans for rural infrastructure projects said this month on a Broadband Breakfast Live Online event that smaller internet service providers are likely to face challenges on two fronts in the near future: getting financing for fiber projects in a down economy and from the service-bundling prowess of the larger national players.

With economic weakness forecast in the next 12 to18 months, banks will become more hesitant to lend, said Jeff Johnston, lead economist at CoBank, a $170 million cooperative bank that provides lending and private equity services for rural infrastructure projects by smaller providers. That’s despite an unprecedented amount of federal funding, including $42.5 billion from the Infrastructure, Investment and Jobs Act still to come.

Johnston also warned about larger providers taking up market share in certain regions from the smaller providers because they can bundle services. In a fourth quarter financial report in October 2022, Johnston warned local broadband fixed-wireless providers that incumbents like Verizon and T-Mobile are ramping up smartphone bundle deals with wireless services as a strategy to pry consumers away from smaller providers.

Drew Clark, CoBank’s Jeff Johnston, Capital Partners’ Angelo Lacroix and Andrew Semenak of Pinpoint Capital Management

“Broadband operators located in smaller and/or rural cities could face competitive threats if the national operators decide to target these markets,” the report said. “Their fixed wireless market strategy is largely a function of where they have excess capacity in their networks. We do not see standalone fixed wireless operators as much of a threat to fixed line broadband operators as they don’t have a smartphone bundle to offer, which dilutes their value proposition in markets where fixed line broadband already exists.”

Angelo Lacroix, investment director at Capital Partners, added that “we’re not so concerned about customers falling away because they cannot pay the bills; it’s more about losing customers to competitors.”

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, November 16, 2022, 12 Noon ET – How to Value Your Fiber Company

The United States is currently in the midst of what can only be described as a fiber boom. Wireless and 5G technologies aren’t going away, but stringing fiber deeper into neighborhoods is necessary. And because of this understanding, fiber businesses can become very valuable. In this special session of Broadband Breakfast Live Online, we’ll explore the important question of how to value your fiber business.

Panelists:

  • Andrew Semenak, Managing Director, Pinpoint Capital Advisors
  • Angelo Lacroix, Investment Director, DIF Capital Partners
  • Jeff Johnston, Lead Communications Economist, CoBank
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Andrew Semenak has over 20 years experience in corporate finance and investment banking with large global firms. He is the founding partner of Pinpoint Capital Advisors and has advised on numerous domestic and international capital raisings and mergers and acquisition transactions. Andrew’s relationships span leading small and mid market companies, private equity and infrastructure funds, pension plans, sovereign wealth funds, family offices, endowments and insurance companies.

Angelo Lacroix is an Investment Director covering core plus and value add infrastructure investments in North America for DIF Capital Partners with a strong emphasis on digital investments like fiber and data centers. DIF Capital Partners is a leading midmarket private equity infrastructure investor with over 14bn of assets under management. Angelo is a CFA Charterholder with over a decade of transaction experience and has previous global work experience at KPMG Corporate Finance as well as Macquarie Capital.

Jeff Johnston has over 25 years of telecom experience that includes 11 years as a Wall Street analyst covering tech media and telecom, and 13 years of product management and business development experience for telecom operators. He is currently a lead communications economist in the Knowledge Exchange research division for CoBank, a $160 billion commercial bank that finances rural infrastructure (communications, power and energy) and agriculture.

Drew Clark (moderator) is CEO of Breakfast Media LLC, the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Under the American Recovery and Reinvestment Act of 2009, he served as head of the State Broadband Initiative in Illinois. Now, in light of the 2021 Infrastructure Investment and Jobs Act, attorney Clark helps fiber-based and wireless clients secure funding, identify markets, broker infrastructure and operate in the public right of way.

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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