Municipal revenue bonds offer low cost way to fund fiber networks

Fletcher Kittredge, chief strategy officer at the service provider GWI, is an expert on financing public networks with municipal revenue bonds. Whereas a general obligation bond is secured by and paid for by taxes, a municipal revenue bond is secured by and paid for by the revenue of the network. And while incumbents may complain and even sue towns and cities that try to fund a broadband network with taxpayer money, incumbents don’t have that argument when it comes to municipal revenue bonds. Kittredge has worked with ECFiber, a municipal broadband network across 31 rural Vermont towns. ECFiber has received total bond commitments of $63.3 million. Private companies are also tapping revenue bonds for their financing. “Lots of private internet service providers have been securing their debt through revenue bonds,” said Kittredge. “If you look at all the different types of financing, bond financing—when backed by a revenue stream—is a lot cheaper than private equity or banks.”