Governors Square 15

How an IRS Rule is Unlocking Public Broadband Finance in Rural America 

When Kendall County, Illinois set out to bring fiber and fixed wireless broadband to more than 10,000 unserved and underserved addresses across its rural communities, it faced the challenge every rural broadband builder knows well: the gap between what grants can fund and what infrastructure actually costs. The answer wasn’t a new subsidy program — it was a century-old IRS ruling. When the Port of Lewiston needed to make a choice of serving their community with existing dark fiber, or letting that investment be overbuilt, neither grants nor BEAD were available to help form that decision. The Port enlisted Pivot to develop a 15,000 service location network without risk to balance sheet or any new taxation. In March 2025, Fox Fiber, NFP closed its Series 2025A Project Revenue Bonds under IRS Revenue Ruling 63-20, making Kendall County one of a small but growing number of communities to successfully pair a 63-20 public instrumentality with state broadband grant funding to finance a full-scale hybrid fiber/fixed wireless network. The transaction closed with Kendall County Board authorization, a competitively procured construction and program management team, and a governance structure designed to transfer the network to full county ownership upon bond retirement — with no taxpayer risk along the way. A similar structure is underway in Lewiston, Idaho. Vastly different from the Kendall County process, but the end result will be the same; a community owned network built with no risk or liability to the Port, the City or the taxpayers. Also, a hybrid network, but with new bells and whistles that increase lower income participation while creating a strong business/resi eco-system, as well as a dual play program for revenue diversification. This session will walk through how the deal was structured, what it means for network builders, and why the 63-20 model deserves a closer look from communities and developers across the Mountain West and beyond. Attendees will leave with a practical understanding of:

• How a 63-20 nonprofit instrumentality works and why it qualifies for tax-exempt bond financing
• How to stack grant dollars alongside bond proceeds to close the capital gap
• What competitive procurement, governance, and operational obligations come with the structure — and how to satisfy them
• Why this model can be a genuine alternative to municipal ownership or private carrier deployment in underserved markets
• The risks, tradeoffs, and open questions builders and communities should evaluate before pursuing it

Whether you’re a county official looking for a path to ownership, an ISP exploring new deployment models, or a builder trying to understand how the capital gets assembled — this session will show you how it was done, what worked, and what we’d do differently.