Picking a Good Steward

I’ve been working with a lot of counties and cities that are providing funding to ISPs to expand last-mile broadband. Some of them think of the arrangement as a public-private partnership, while others think of it as making local broadband grants. Almost universally, the hardest question I get asked is how to know if they can trust an ISP to fulfill its promises. They want to know who is going to be a good steward of their money. No local politician wants to provide money to an ISP, and a year later hear the public complaining about that choice.

I rarely have a specific response to the question, but I provide a way for them to think about it. I’ve been suggesting a series of question that makes them dig deeper into the real nature of a given ISP and why they want the local funding.

Does the ISP do a good job today in other markets? Understanding this requires real due diligence, but it’s a question that can be answered. I have yet to see any ISP claim anything other than that they have stellar customer service – and we know that is not true for a lot of ISPs. One way to check on an ISP is to contact local officials in some of the communities where the ISP serves today.

Will the ISP you partner with today still be around in a decade? I never asked this question in the past, but it feels relevant today. A lot of experts foresee a huge roll-up of fiber networks, and an ISP you partner with today might not be the same ISP that will be serving your community a decade from now. There is a lot of venture capital money in the market today, and at least some VCs likely have the philosophy of building a network and dumping it in ten years. Unfortunately, this question doesn’t only apply to VC-backed firms, and there will kikely also be a roll-up of family-owned and sole proprietor ISPs.

Is the ISP trying to grow too quickly? I’ve lately seen ISPs seeking local grant funding that brag about how they already have deals in queue to build hundreds of thousands of other passings. The hardest thing for any ISP to do is to grow quickly – failure to master the complexities of rapid growth has been the fatal flaw for a lot of ISP start-ups over the years. It’s a fair question to ask if the ISP you are talking to is overreaching.

Where does the money come from? I’m seeing ISPs that have been in the business for many years suddenly talking about being able to fund huge expansion. When you partner with somebody like this, are you really partnering with the ISP with the known name or with a venture capitalist hidden in the background?

Are you being offered a too-good deal? I’ve seen several ISPs offering partnerships to cities where there will be a guaranteed profit share paid to the City. Is the ISP dangling money to a community to cover for other weaknesses? This takes me back to the advice I’ve heard for my whole life – if something sounds too good to be true, it probably has an underlying flaw.

Can I trust an ISP who has done a lousy job for many years but now swears they are different? I’m obviously talking about the big telcos. These companies abandoned rural DSL networks and customers. Suddenly, they want localities to believe that they will be a different company with a fiber network – because of the new technology.  But new technology doesn’t change an ISPs underlying philosophy. Will these big telcos keep enough staff to make timely repairs, and will they do the maintenance to keep the fiber network operating in the future?

One of the hardest questions I’ve been asked is how to evaluate a new ISP taking over a terrible network. In recent years the three most prominent ISPs in this category are Consolidated, Ziply, and now Brightspeed. I don’t have a clue how to judge the intentions of a new company. My best advice is to be at least a little wary – companies that have purchased telephone copper networks in the past struggled badly for many years when the copper networks act like an anchor holding them down.

Sometimes the offers of partnerships have an easy and obvious choice. For example, I know counties that have partnered with electric or telephone cooperatives. They trust that these businesses will still be local and operating for many decades to come. After that, picking a partner is a lot harder.

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