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Crawford Claims Most Municipal Networks Use No Tax Dollars

June 30, 2014

The Coalition for the New Economy has deconstructed Susan Crawford’s arguments for government-owned broadband networks (GONs) before (we refer readers to our posts here and here), but last week Crawford added one more argument to her usual defense.

In an opinion article on Bloomberg View, Crawford says “According to the Institute for Local Self-Reliance, most municipal networks use no taxpayer dollars, relying instead on revenue bonds and costs saved by avoiding the expense of existing providers’ services.”

First, we remind readers that one of Crawford’s favorite GONs, the gigabit network in Chattanooga, Tenn., received more than $100 million from federal taxpayers and additional funds directly from local taxpayers. Other GONs have received direct taxpayer investment too, including the failing UTOPIA.

But we also want to remind Crawford that municipal revenue bonds are backed by taxpayers. If a GON that relies on bonds fails and can’t pay back these loans, it’s the taxpayers who are on the hook. That may be one step removed from direct taxpayer payments to these networks, but still a little too close for our comfort.