Public/private partnerships are emerging as a much more important factor in the deployment of municipal networks and make a great deal of sense given the resident expertise in private sector firms and the advantages of minimising risks, particularly financial.  Partnership arrangements can take a variety of shapes and forms and can vary from financing the network, operating the network, or both financing and operating the network on behalf of the local government. 

There are very few examples of municipal networks that have been financed by financial institutions, such as banks or private equity groups, such as venture capital organisations.  This type of initiative is relatively new as there is still a reluctance to provide financing to what is still considered an unproven concept.

This is one of the issues faced by UTOPIA when it sought sources of financing for the building of its network.  Although it could provide a very strong business case for its open access network along with an independent evaluation from a highly respected organisation, private financial institutions were unwilling to provide financing.[x]  As a result, rather than project-based revenue bonds, it had to use municipal bonds, which is a conventional system of financing municipal projects in the United States but has been common in Scandinavia and especially in Sweden.

However, as evidenced by recent projects where private companies have been prepared to take on financing municipal networks, such as the wireless network in Philadelphia[xi], the power-line project in Manassas[xii], Virginia and the iTown[xiii] initiative in West Virginia, public/private partnerships are likely to become a more common source of funding in the future.

There is also an emerging trend of using private sector organisations to operate municipal owned networks, as an alternative to operating the networks by the local Government.  This is particularly advantageous in situations where the municipality has limited or no expertise in operating networks and/or where there are restrictions on the provision of retail telecommunications services by local Governments, as is the case in a number of U.S. states.

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