I was on a call this morning that got me thinking about the sources of funding for the Nations Public Safety Broadband Network (PSBN). You have the usual suspects of funding sources, i.e. State and Federal tax dollars through grant programs, but there are a many more sources that could be garnered.
Beyond the typical Project Financing realm, and doable within the framework of a Public Private Partnership, you have a host of government and commercial/corporate vehicles.
In the commercial/corporate vehicles you have commercial lenders, capital market bonds, equity funds, credit agencies, development finance institutions, bilateral agencies, multilateral banks and sovereign wealth funds. There are many forms of grants, loans, bonds and tools utilized with varying degrees of complexities and politics, but they are doable and used quite often everywhere in the world....some more than others.
Government vehicles within our borders tend to be isolated to large-scale projects and programs and are delivered through a complex mechanism of grants, bonds and agency budgets. But most particularly are the budgets allocated to State Agencies through Federal Agencies. A good example would a State’s internal Department of Transportation. A statewide deployment of PSBN will undoubtedly require the involvement of the States Department of Transportation (most particularly mass transit and highways). Being that the Federal Government has allocated $7 Billion to stimulate the creation of the nations PSBN -- that is just one course of available funding. Another course would be through allocated budgets within the Federal Highway Administration as well as the Federal Department of Transportation. The organizations already allocate a certain amount of funding to help build the inherent technologies that secure and maintain major transportation projects, i.e. Intelligent Transportation Systems (ITS). There is no discerning differences between an ITS program and the requirement for broadband access within the State DOT. One view is from the DOT business objectives itself (running transportation for the State) and the other is the DOTs requirement for Public Safety; both function using the same technologies. We can then easily ascertain that it is feasible that these sources of budget allocations could also be considered as part of the overall allocation for PSBN. This is not unique to the transportation market…the same can be said for power and the DOE (Department of Energy), or Forestry and the DOA (Department of Agriculture), etc..
Another, and more lucrative alternative, is the private investment scenario. I covered this in an earlier topic on the make-up of a Public Private Partnership. In short, there area available sources of funding through private investors to buy a shares of the P3 SPV (Special Purpose Vehicle). The SPV will be equipped to generate long-term recurring revenue – which is a prime reason LTE was created in the first place…that is to make money. Private investors will see the liquidity of the long-term SLA arrangements between State and Federal Agencies and their required access to the LTE broadband services. In my mind this is probably the most lucrative of the sources of funding and could even impact the necessity to even use State or Federal funding programs. There would be no end-in-sight for the amount of private investors to help make this happen.
Just some guy and a blog…