This is the third article in a series highlighting the most important aspect of municipal bonds: how the projects bonds finance help the community.  It appropriately started with Municipal Bonds: Investing In Our Communities. This piece looks at how these days, infrastructure isn’t just traditional big public works projects.

The Evolving Traditional Public Works Infrastructure

Infrastructure conjures visions of big public works projects: roads, bridges, tunnels, mass transit, and water and sewer lines. There is a reason for that. Every day in the U.S., we climb into our cars, trucks, SUVs and minivans to drive more than 8.4 billion miles on public roads, over bridges and through tunnels. Nearly 23 million people get on a train, bus or subway to connect with work, shops and family. An average of 2.1 million passengers catch a flight at the airport. More than 27 billion gallons of water gets used daily, an amount that could fill all the National Football League’s stadiums in America four times over.

States, cities, counties and towns all issue municipal bonds to fund traditional infrastructure. In the past that usually meant plan-and-build. Today, public works projects integrate ESG (environment-social-governance) principles into design and use, taking into consideration that environmental impacts of projects can last for decades.

The New Infrastructure Of Technology

Technology is another rapidly emerging component to next-generation infrastructure, integrated into nearly all aspects of municipal service delivery. As municipalities research “smart city” technologies—using sensors and data analysis to develop evidence-based public policy to address critical issues—many find that they lack the necessary fiber-optic broadband infrastructure to support these new technologies.

Fiber broadband networks are the most important foundation for every future-ready community: the key to better educational outcomes, greater economic opportunity and output, and the essential foundation for all next-generation infrastructure. Without this capacity, communities risk falling behind—separated by an ever-widening digital divide.

A group of communities in Utah saw this divide developing in their area: the population in the region, including Salt Lake City’s suburbs and exurbs, experienced a 10% increase in population since 2010, adding 43,800 people to a total of nearly 461,000. But there was no high-speed broadband internet.

Creating Fiber Bonds

The communities responded by forming the Utah Infrastructure Agency (Moody’s: NR; Standard & Poor’s: A+) and issued municipal bonds to finance a fiber network to homes. The proceeds of the borrowing paid for equipment, construction and onboarding service providers to offer voice, video streaming, data services and future content and smart home services. In addition to the lightning fast speeds precipitated by fiber, the UIA Network operates under an open access model allowing all qualified service providers to operate on the shared infrastructure—an arrangement that often lowers the price of services for consumers and benefits service providers by opening new markets that do not require their capital expenditure on the infrastructure.

The beneficial impact of fiber broadband connectivity on communities is immediate. Today, every business is a technology company in one form or another—from the local dentist office to the manufacturing plant. A high-speed, affordable and reliable internet connection is essential, not optional, for educational attainment, starting and growing businesses, attracting and retaining talent, and connecting the local economy to global opportunities.