Financial Limitations on Growth

I’ve worked with rural counties across the country, and one of the most common recurring themes is a hope from elected officials that local internet service providers will step up and build fiber and solve the broadband gaps in the area. County officials often beg local ISPs to pursue grant funding. Far too many times, local ISPs are unable to expand to provide what they are being asked to do. Only rarely have I ever heard a small ISP admit to local leaders the real reason it can’t solve the broadband gaps. The primary reason that ISPs can’t expand at will is the natural limits on financing for growth. I can’t recall ever hearing an ISP tell a County government that they are unable to borrow the needed funding. I think this is because they think it will diminish them in the eyes of the local officials and make them sound like a small business. The market reality is that every ISP has a ceiling on the amount of money it can borrow. This limit is not set by the ISP—it’s set by lenders.