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The Debate Over Lake County, Minn.’s Government Broadband Network

July 10, 2017

In late June, this blog reported that Lake County, Minn. had decided to sell its municipal broadband network, Lake Connections. This network cost federal and local taxpayers approximately $85 million. ($17 million came from local coffers.) In a column later that month, Minneapolis Star Tribune writer Lee Schafer argued that “county officials won’t see much to apologize to the voters for” even though its experiment with municipal broadband has failed. Shafer made that assertion despite the fact that, according to his own column:

  • In the last year, the ratings agency Standard & Poor’s has twice downgraded the county’s credit rating.
  • Lake Connections serves just 2,500 residents, meaning the network cost approximately $34,000 per subscriber.
  • 750 residents are still waiting to be connected to the network. County officials argue that a private sector company would “move a lot faster connecting the customers who are still waiting for service.”
  • The network’s construction was severely delayed due to “speed bumps” with contractors.
  • The county still holds $48.5 million in debt for Lake Connections and a “back of the envelope” calculation puts the network’s value at just $20 million.

About a week after Shafer’s column appeared, the Star Tribune published a “counterpoint” column by Freedom Foundation of Minnesota CEO Annette Meeks. Meeks concluded that county officials should apologize to taxpayers for the Lake Connections debacle. She argues “that the tone of the conversation going forward from Lake County officials [should be] one of regret and concern for the vast amounts of taxpayer dollars that have been wasted on this costly experiment.” Meeks also said she hopes “politicians across the state heed the lessons learned the hard way.”

In his column, Shafer argued that Lake Connections was necessary because private sector Internet Service Providers (ISPs) weren’t interested in offering service in Lake County. In her column Meeks explains that assertion is wrong and that, in fact, when Lake Connections was started “many Lake County residents had access to broadband via three private providers.”

Meeks said her organization would soon release a report on Lake Connections. Stay tuned for information on that study.