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Low Subscribership, Wasted Tax Dollars Plagued GON’s

May 8, 2014

mom and girlLow subscribership.

It’s a problem that has plagued many government-owned broadband networks (GONs), including those in Utah, North Carolina and Vermont, have faced.

Whether it’s because GON supporters inflate the likely number of subscribers in order to get local lawmakers on board with municipal broadband or because these networks fail to live up to what were well-meaning expectations, when GONs don’t attract the number of subscribers they were promised to, the books don’t balance and these networks go under.

Now, let’s contrast that with Google in Kansas City. According to CNET, “A door-to-door survey of residents in Kansas City suggest that as many as 50 percent of households in Google Fiber neighborhoods are signing up for the service …” If Google could translate that success rate into other cities CNET says the company “could expand its service to pass some 30 million homes during the next several years.”

Google charges $70 a month for its gigabit fiber service, one-fifth of what Chattanooga’s government-owned broadband system originally said it would charge for its super-fast service. (As a reminder, Chattanooga reportedly charged a much higher rate to consumers who wanted to use the gigabit package to its full capacity; then it lowered its prices.)

Despite its similar offering, Chattanooga’s system has attracted nowhere near the number of customers Google’s won in Kansas City (Chattanooga has about 3,600 subscribers), even after tax and utility ratepayers have ponied up more than $330 million. While Kansas City did give some special incentives to woo Google to its city, but we’re pretty certain those incentives, which included free office space and free power, have cost a very, very … very … small fraction of the total cost of Chattanooga’s GON, proving that you don’t need government-owned broadband – or millions of taxpayer dollars – to expand high-speed Internet service to more people.