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Unworthy Awards Given to Government-Owned Broadband Networks

September 12, 2013

The National Association of Telecommunications Officers and Advisors (NATOA) Board of Directors last week announced the recipients of its annual Community Broadband Awards. (NATOA has also sponsored several events in the last week touting the benefits of government-owned broadband networks, or GONs.) Among the honorees were:

  • Longmont, Colo. NATOA said the city had developed “a vision and business plan to expand world class broadband infrastructure to each home in the City and thereby secure the City’s economic future.” CNE wrote about the Longmont network last week, arguing that its expansion program would cost taxpayers nearly $4,000 per household and noting the city is likely overestimating the number of subscribers it will attract.
  • North Carolina. NATOA said the North Carolina Next Generation Network demonstrated “how community/university collaborations can enable exploration of new models for public-partnerships in broadband.” This network is only at the very beginning stages of development (indeed, bids for the partnership are still being considered.) and while state law has required municipalities to find a private sector partner for this project, it is simply too early to say how this arrangement will work. It could very well incentivize one private provider over another – an effect that would dampen overall broadband investment in the same way a strict GON would.

At least NATOA didn’t choose the Provo, Utah or the Groton, Conn. networks, which were sold for $1 and at $30 million-plus losses; or UTOPIA in Utah, which has resulted in tax increases for local residents; or the North Florida Broadband Authority, which has lost multiple participants due to worries about unfair competition with the private sector, for its awards. But CNE still doesn’t think the two networks are above are yet worthy of any award.

NATOA should instead look at the type of public-private partnerships highlighted by Charles Davidson and Michael Santorelli in their report on community broadband efforts. Davidson and Santorelli argue, “Local and state governments do have critical roles to play in this space, but owning and operating a broadband network is not at the top of the list … We argue that local and state government should instead focus on reforming policies impacting both the supply-side – like modernizing zoning and right-of-way policies – and the demand-side – including supporting digital literacy initiatives and training programs – of the broadband connectivity equation.”

At a NATOA meeting on Sept. 9, Will Aycock, general manager of the city of Wilson, N.C. said the goals for his city’s networks “were to support the economics of the community, improve city services, and enhance quality of life for citizens, he said. Also, the network has to be completely self-sustaining …”

The goals are noble, but, unfortunately as all of CNE’s studies (see here, here, here, here, and here) on the issue have found, it’s the last issue most GONs have trouble with … and why so many fail.