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Are Government Owned Networks Proven Job Creators?

December 8, 2014

small 1Last week TennesseeWatchdog.Org, which is run by a collection of independent journalists who want to improve transparency in government, investigated one of the oft-repeated myths about government-owned broadband networks: that they create jobs.

As an example, writer Chris Butler cited Kimball, Tenn. Mayor Rex Pesnell who has said a government-owned network (GON) would help his community, but didn’t specify how. (Pesnell is part of a group of local leaders lobbying the Federal Communications Commission to overturn a Tennessee state law that limits the reach of Chattanooga’s GON.) When TennesseeWatchdog asked Pesnell how municipal broadband would improve Kimball’s economy, Pesnell only said, “We just feel that it’s something that we need.”

Butler also questioned whether Kimball city officials are “developing a formal proposal to show how they would use broadband Internet to stimulate Kimball’s economy.”

The answer was no.

Officials in other cities who want municipal broadband also wouldn’t answer Butler’s questions.

While the Coalition for the New Economy believes access to high-speed broadband is important to the health of local economies, the question is whether government-owned broadband is the best path toward economic development. When cities pay for their own networks through tax or fee increases, or through higher borrowing, they sacrifice other priorities that are also vital to the health of the local economy: education, public safety and investment in traditional infrastructure. (Not to mention a more attractive tax, fee and budget situation.)

Partnering with the private sector to bring high-speed broadband to town is a better, and less costly, option for municipalities. And, as we have discussed repeatedly in our “Advancing Broadband” posts, private sector investment actually results in job growth.