The value of turnkey

solutions for rural

and municipal
utilities deploying
broadband networks

Sponsored by Fujitsu
Network Communications.
INTRODUCTION
Rural and municipal utilities across North America play a key role in their communities, not only
providing critical services, such as electricity, but also participating in local initiatives to better
their communities. Broadband networks have become an area of keen interest for some rural and
municipal utilities over the past decade, as these entities view fiber and wireless infrastructure as an
excellent way to leverage their existing public assets, particularly rights of way, and engineering and
field operations expertise to provide cost-effective network services such as internet and digital
voice to their service territories.
Key reasons rural and municipal utilities are interested in deploying broadband networks for their
communities include:

Infrastructure development increases attractiveness of living in the

ECONOMIC community, raises property values, and encourages businesses to start or
DEVELOPMENT move into and invest in the community.

STRENGTHEN
Shared vision, inclusion, participation and buy-in can enhance the quality
SOCIAL FABRIC of education and healthcare services.
OF COMMUNITY

Broadband networks ensure people residing in service territory have

access to competitive network services, especially high-speed internet
BRIDGE DIGITAL access. The COVID-19 pandemic exposed the critical need to close
DIVIDE the internet access gap and support remote working opportunities and
critical essential workers.

ALIGN WITH SMART Broadband networks serve a foundational role in a community’s ability
CITY AND SMART to support smart city and smart grid infrastructure, which enables energy
GRID INITIATIVES conservation and promotes economic opportunities.

Several government programs, such as the Connect to Innovate Program

in Canada, and the ReConnect Program, American Rescue Act and Rural
Digital Opportunity Fund, which are available through a variety of U.S.
GOVERNMENT federal agencies such as the Department of Agriculture and the Federal
PROGRAMS DEFRAY Communications Commission, were created to stimulate broadband
BUILD-OUT COST infrastructure investment. These programs provide a range of subsidies,
grants and other incentives to encourage broadband infrastructure
development. Projects pertaining to smart city or smart grid initiatives are
also often eligible to receive government funding.

Utility entities are often able to leverage a portion of their existing

infrastructure, such as plant sites, substations, poles, rights of way and
LEVERAGES conduit lines, to defray a portion of the cost of deploying and operating
EXISTING ASSETS broadband networks. Examples include overlaying fiber and powering
AND EXPERTISE the network. This enables utilities to offer lower service rates compared
to the private sector while improving ROI.

The entrance of a utility entity into the broadband network services

market may pressure incumbent telecom and/or cable service providers
operating in that territory to offer more competitive services and prices
MAY STIMULATE and to spur infrastructure investment. This is a net positive outcome for
COMPETITION the utility entity because it ensures a vibrant ecosystem of investment and
quality services, which is ultimately good for the community and yields the
aforementioned benefits.

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Rural and municipal utilities, and their constituencies, that understand the benefits of community-
owned broadband networks and want to explore moving forward tend to seek out guidance from
third-party consulting and engineering firms that have experience with broadband networks in
helping them create and validate a comprehensive and cohesive plan.
These plans typically consist of five components and address key questions:

FINANCIAL What is my business plan, and how will this project be funded?

Which network and support technologies and vendors should I use, and
INTEGRATION how will I integrate these technologies?

DEPLOYMENT Where should I build, and what is the best way to build the network?

NETWORK Who will operate and maintain the network, and how?
OPERATIONS

BUSINESS How do I handle the nontechnical, day-to-day aspects of the business,

OPERATIONS such as customer support, billing, marketing and regulatory compliance?

While all these components could be, and sometimes are, handled by the utility, these entities tend
to seek outside help for third-party validation and/or to carry out some or all of these tasks on their
behalf.
Though broadband networks share
some similarities with building, owning “We deal with civil works projects, but telecom
and operating public utility infrastructure, doesn’t really fit into civil works, so we needed a third
a broadband network brings significant party involved in our broadband network deployment.
additional considerations and complexities, We needed someone to come in, engineer the
especially as it pertains to technical and broadband network and put it into motion. We needed
operational aspects, such as architectural someone with some skin in the game. We knew from
design, integration, and resource day 1 that we wanted to take a turnkey approach.”
augmentation, which in most cases prompts - Director of Public Service at municipal utility in
the utility entity to seek outside help from Midwest that deployed a fiber network
partners with expertise in these areas, such
as Fujitsu Network Communications.
Rural and municipal utilities that want to pursue broadband networks are eager to participate in
government-sponsored programs to secure funding, but in many cases accessing these funds
requires meeting certain requirements and timelines and there is typically urgency to move quickly.
This is another area where these utilities are relying on third-party consultants to help ensure
compliance and access to these funding sources.
Another path available to rural and municipal utilities to secure funding is by forming joint ventures
(e.g., partnering with other local utilities, local organizations or investment firms), which pool capital
and other resources to make the financial and organizational aspects of the broadband network
build more feasible.

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ENGAGEMENT MODEL OPTIONS
There are two primary models available for deploying broadband networks: piecemeal and turnkey.
Each engagement model has pros and cons, and rural and municipal utilities typically must pick one
of the two models to execute their project.

DEPLOYMENT MODEL PIECEMEAL TURNKEY

The piecemeal model employs In a turnkey model, most or all the
multiple parties to carry out project management and project
certain aspects of the broadband tasks are outsourced to a third-party
deployment, typically overseen firm, which operates on behalf of and
(project managed) directly by the represents the utility. The scope of
utility. The utility may also directly the engagement typically includes
Model Explanation participate in aspects of the build most or all the aspects of the project,
process with its own resources. including design, build, operations and
management phases. The result is to
stand up the utility as a fiber and/or
wireless broadband internet service
provider.
• Potential for cost savings by • Seamless management and smooth
bidding out components of project operation (e.g., project management
• Increased organizational handled by experienced third party)
responsibility • Project stability
• New job opportunities for existing • Cost predictability — preset rates and
staff estimates for full project
• Bundled pricing may be provided
• Seamless, straightforward billing
• Enhanced visibility into project status
— single program manager who is
accountable for the full program and
focused on the project outcomes and
Pros of Model dates
• Single partner for project
implementation limits risks and creates
shared accountability
• Complete, integrated approach
• Least burden on utility’s staff
• Faster time to market with network
• Faster ROI
• Can be lower TCO than piecemeal
model in the long term due to project
efficiencies inherent to the turnkey
model
• Complex to manage and potential • Utility reliant on expertise of partner;
for accountability issues if partner is unable to fulfill certain
• Susceptible to cost overruns requirements, project could be
Cons of Model • Prone to time delays (e.g., more impacted
handoffs between parties creates • Can be more costly compared to
procedural slowdown) piecemeal model, especially during the
• Overburdens utility’s existing staff build cycle

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WHY THE TURNKEY MODEL
IS MORE DESIRABLE THAN
THE PIECEMEAL MODEL
Though there are examples of both engagement models being employed by rural and municipal
utilities for broadband networks, the turnkey model is becoming more popular for several reasons.

Outsourcing to a partner with a proven track record of successful outcomes eases the
burden on the utilities’ internal resources and provides project stability.

The ability for the partner to plan and manage the project keeps the project on track.

The partner tends to bring its own partners, such as pre-vetted subcontractors, into the fold,
which streamlines and speeds up the infrastructure rollout.

The partner can bring pre-integrated and pre-validated solutions, which reduces
technological complexity and technical challenges, speeding up the infrastructure rollout.

According to McKinsey & Co.’s Global Construction Industry Productivity survey, it is estimated that
the implementation of best practices in construction projects can yield around 50% in productivity
improvements and around 30% in cost savings. Similar productivity and cost savings KPIs have
been observed in the deployment of broadband networks when best practices are applied.
Utilizing the turnkey model with an experienced partner is generally able to yield closer to these KPI
outcomes versus the piecemeal model, where the nature of the model makes it more challenging to
implement best practices.

“The turnkey model enabled

our utility to keep focus on its
core business, which is providing
electricity service. We would
definitely go down the turnkey road
again because it streamlines the
process.”
- CIO of municipal utility in Midwest
that deployed a broadband
network

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FURTHER CONSIDERATIONS
FOR THE TURNKEY MODEL
An additional consideration for rural and municipal utilities in their broadband network assessment
is whether they want to outsource the post-build aspects of the broadband network, such as
operations and business support systems (OSS/BSS) integration as well as the operations, technical
support and/or monitoring of the network. This could be an attractive follow-on aspect to a turnkey
engagement as it further reduces the burden on the utility to handle the day-to-day network
operations while bringing in new revenue
from new fiber services. Outsourcing “If you are starting from scratch and do not have
post-build aspects can also help the experience with deploying broadband networks, I
utility leverage the business and network
recommend going with the outsourcing [turnkey]
operational best practices the partner
model. Look for a vendor that is strong in OSP and
brings into the engagement. This extends
both to OSS/BSS systems integration ISP services and that has a full understanding of
and the Network Operations Center how a telco operates, including NOC management.”
(NOC), the latter of which requires a large
- Manager at municipal utility in Southeast that
upfront investment to build, equip and
staff. Using a partner’s NOC to monitor deployed a broadband network using the
and support all network equipment and piecemeal approach but would advise new
internet services reduces upfront capital entrants to use the turnkey approach because in
expenditures and readies the network for hindsight, it would have been the better option
operational success on day one.
Another advantage of the turnkey solution is partnering with a provider who is fluent in the
requirements of operating a broadband ISP. Finding a partner whose expertise extends beyond
the scope of work helps ensure you navigate the challenges, complexity, and issues that arise. The
right partner can bring the technology, operational expertise, procedural knowledge and recovery
knowledge to stand up your whole fiber business on day one, not just the network design and
construction.
For utilities that are using the turnkey model, the utility would only need to contact one vendor
for any issues with the network. This eliminates accountability issues when dealing with multiple
vendors, which would be the case with the piecemeal model.
Flexibility is another key feature of the turnkey model. Rural and municipal utilities are not obligated
to procure the full scope from one partner, but rather can select the aspects of the project they want
to outsource versus keep in-house. For example, some utilities opt to have the partner complete
all aspects of the network infrastructure build-out, but responsibility for day-to-day operations and
maintenance of the network is handled by the utility. Utility entities can negotiate all these aspects at
project outset to tailor the scope of the engagement to their specific needs.
TBR recommends rural and municipal utilities be discerning when being pitched by turnkey
solution providers because the definition of what turnkey means and encompasses can vary by
company. For example, some general contractors and engineering firms that claim they provide
“turnkey” broadband deployment services may only provide design- and build-related services, not
operations management and maintenance services. Rural and municipal utilities that want a true
turnkey solution partner that will take on the full project responsibility, from start to finish, should vet
the partner’s portfolio scope and seek customer references to validate capabilities. Vendors that are
true turnkey broadband network deployment solution providers will sometimes refer to themselves
as prime network integrators.
In short, rural and municipal utilities should seek turnkey partners that can not only handle design,
build and transfer of the broadband network, but can also provide the business and network
operations and maintenance aspects to ensure post-build peace of mind.

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CONCLUSION
Rural and municipal utilities are demonstrating interest in offering broadband network services to
their communities as they realize the benefits are multifold. Interest levels have increased since the
onset of the COVID-19 pandemic exposed the substantial unserved and underserved market need
for high-speed broadband. The significant amount of government funding that has become available
pertaining to digital inclusion initiatives has made it a good time to act.
For those utilities that decide to proceed with broadband network deployment, they will have to
select from two primary models: piecemeal and turnkey. While each of these models has its merits
and detractions, the turnkey model provides the most
flexibility and advantages overall, providing savings
in time, money and effort at lower risk and generally “We went with the piecemeal model for
with better outcomes compared to the piecemeal our broadband network deployment, but
model. if we were to do it again, we would have
opted for the turnkey model. We made a
High-speed broadband access is recognized as lot of mistakes during our build; few co-
a universal, basic life need, on par with water and ops can do this on their own. Going the
energy, making the provision of internet access turnkey route would de-risk the project
services a close adjacency for utility entities to
for the utility and put the onus on the
provide critical, high-value services for the betterment
consulting firm.”
of their communities. The benefits are multifold,
but to ensure project success, relying on partners - CEO of Electric Cooperative in
with a proven track record of successful outcomes Southeast that deployed a
in the broadband network domain is of the utmost broadband network
consideration.

DISCLAIMER
This white paper was commissioned by Fujitsu Network Communications for the purpose of
educating rural and municipal utilities about opportunities in the broadband networks market and to
inform these entities of different deployment models that are available should they opt to pursue
building out their own fiber and/or wireless networks.
TBR conducted secondary and primary research for this study, including fielding four in-depth
interviews with representatives from rural and municipal utilities across the U.S. Each individual has
firsthand experience in deploying rural utility- and/or municipal-owned broadband networks for their
communities. The information TBR gleaned from these interviews is intended to validate and provide
anecdotal information to support the findings in this paper.

ABOUT FUJITSU NETWORK COMMUNICATIONS

Fujitsu Network Communications is a global broadband leader. We partner with municipalities and
utilities to simplify the challenges of a broadband network deployment. As your accountable partner,
we’ll help you mitigate risk and launch a fully integrated, operational-ready broadband network on
time and on budget. With Fujitsu by your side, planning, deploying and operating your broadband
network is easier than you think.

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