Municipal Broadband Feasibility Study Fundamentals | UtilityEducation.com
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Municipal Broadband Feasibility Study Fundamentals

Russ Hissom, CPA Russ Hissom, CPA
March 14, 2026
2 min read

Why Conduct a Feasibility Study?

Before investing millions in broadband infrastructure, municipalities and utilities need honest assessments of costs, revenue potential, and risks. A comprehensive feasibility study provides the business intelligence required for informed decision-making.

Too many broadband initiatives fail because communities skip thorough planning or rely on overly optimistic projections. A rigorous feasibility study identifies potential problems before they become expensive mistakes.

Key Components of a Feasibility Study

1. Market Analysis

  • Current internet service availability and quality
  • Competitor pricing and service offerings
  • Demographic analysis and income levels
  • Business and institutional demand
  • Subscriber adoption rate projections

2. Technical Design

  • Network architecture and technology selection
  • Route planning and geographic information system (GIS) mapping
  • Make-ready requirements for existing infrastructure
  • Headend and internet connectivity options
  • Scalability for future growth

3. Cost Estimates

  • Construction costs per mile/passing
  • Equipment and electronics
  • Engineering and project management
  • Permits, easements, and right-of-way acquisition
  • Contingency for unforeseen conditions

4. Operating Expense Projections

  • Staffing requirements and personnel costs
  • Network operations and maintenance
  • Bandwidth and transport fees
  • Customer service and billing systems
  • Marketing and customer acquisition

5. Financial Modeling

  • Revenue projections based on realistic take rates
  • Cash flow analysis over 10-20 year period
  • Debt service coverage ratios
  • Break-even analysis and payback period
  • Sensitivity analysis for key assumptions

6. Funding Strategy

  • Grant opportunities (USDA, state programs, infrastructure bills)
  • Low-interest loan programs
  • Revenue bonds and municipal financing
  • Public-private partnership options
  • Customer connection fees and deposits

7. Regulatory and Legal Review

  • State and federal telecommunications regulations
  • Municipal authority and enabling legislation
  • Franchise agreements and pole attachment rules
  • Competition with existing providers
  • Tax implications and legal structure

Critical Success Factors

Feasibility studies must honestly assess:

  • Realistic Take Rates - Be conservative about how many customers will actually subscribe
  • Competitive Response - Existing providers may lower prices or upgrade service
  • Operating Complexity - Retail telecom requires different skills than traditional utility operations
  • Technology Evolution - Networks must adapt as technology and customer expectations change
  • Political Sustainability - Long-term projects need sustained support through election cycles

Decision Framework

A good feasibility study doesn't just present data—it provides clear recommendations:

  • Go/No-Go recommendation with supporting rationale
  • Alternative scenarios (phased deployment, wholesale-only, partnerships)
  • Risk mitigation strategies
  • Implementation timeline if proceeding
  • Metrics for monitoring success
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Russ Hissom, CPA
Written by
Russ Hissom, CPA
Principal, UtilityEducation.com  ·  35+ Years of Utility Accounting Experience

Russ Hissom is a nationally recognized utility accounting and rate expert with deep hands-on experience in FERC and RUS accounting, regulatory accounting, cost-of-service studies, and rate design for electric utilities and cooperatives across the United States. He also serves as an expert witness before FERC, state commissions, and in arbitration proceedings. Learn about consulting services →

Disclaimer: The material in this article is for informational purposes only and should not be taken as legal or accounting advice provided by Utility Accounting & Rates Specialists, LLC. You should seek formal advice on this topic from your accounting or legal advisor.