About a year ago, Internet service provider Countrywide Broadband (CWB) and equity firm Seaport Capital announced that they would collectively acquire the assets of Illinois based ISP, iTV-3. The partners would form the subsidiary Internet service provider i3 to take over operations that belonged to iTV-3. Not an unusual course of events when one hears about large companies gobbling up smaller ventures on a regular basis. This situation was different because iTV-3 had been working with the communities of Champaign and Urbana to bring high-quality connectivity to residents and businesses via its publicly owned fiber. Just yesterday, CWB announced that the deal has been completed.
Partners 1 and 2
When the UC2B nonprofit organization chose iTV-3, the partnership was lauded as one that held local concerns a top priority. iTV-3 is an Illinois based company and their interest in participating as a community member, rather than just a distant ISP, made them a desirable choice.
An important component of the partnership was iTV-3’s commitment to invest by expanding the existing network and they did build out in some areas. Expansion did not happen quickly, however, and elected officials hope that i3 can accelerate private investment so more neighborhoods can access the Fiber-to-the-Home (FTTH) network. From the Countrywide press release:
Urbana Mayor Laurel Prussing further commented, "With new management and a more aggressive build-out schedule, more residents will have access to high-speed internet. This is essential for local entrepreneurs in our modern economy and for all other users as well."
The UC2B nonprofit began the project with a $26 million award from American Recovery and Reinvestment Act (ARRA) funding. It was an urban FTTH project that allowed residents to sign up for Internet access for as low as $19.99 per month. In 2014, chose iTV-3 to take over operations and expand the network, resulting in a combination of publicly and privately owned fiber assets.
Partners Aren't Perfect
When iTV-3 decided to liquidate it’s fiber in Champaign and Urbana, the local community was understandably concerned about what kind of company would be handling their network. They didn’t want to get stuck with a large distant provider with little interest in the well being of the Urbana-Champaign community. When working with a partner from the private sector, this is one of the possibilities communities need to consider. P3s have been in the spotlight in recent years as an ideal solution for many communities, but they have their own set of risks. Decision makers should be realistic and review challenges other communities have faced in partnership arrangements.
Check out our 2016 report on partnerships, Successful Strategies for Broadband Public-Private Partnerships
The New And Bigger Era Begins
i3 appears to already be taking a different approach than the national companies by integrating newer video technologies into their offerings:
"Our television packages are very consumer friendly," said Raclin. "We're offering new, smaller channel packages, which provide streamlined video entertainment options at a lower cost, along with increased video-on-demand and 'TV Everywhere' services that allow our customers to watch their favorite shows anywhere they want," Raclin added. "We are focused on providing services that meet and exceed the demands of our customers."
CWB's Raclin has stated that the aim of the company is to add more broadband companies in order to grow CWB. Hopefully, i3 can keep customers' needs a priority as the company expands.