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Madison, Wis. – Another Seattle Or Another Chattanooga?

January 6, 2016

2000px-Flag_of_Wisconsin.svgAccording to the Milwaukee Journal-Sentinel, officials in Madison, Wis. are considering whether to build a government-owned broadband network in their jurisdiction. Specifically, the city is looking at two models. Under the first model the city would “create and operate a broadband system much like a city-run utility.” Under the other scenario it would “partner with a private-sector broadband provider to offer the service.” Under either plan, the Journal-Sentinel says the government system would compete directly with “commercial Internet providers.”

The newspaper also reports, “Madison has hired a national consulting firm, CTC Technology & Energy, to do a feasibility study on whether to build a broadband network based on the city’s existing fiber-optic cable system that serves city buildings and schools.” The study “should be completed in June” officials told the Journal-Sentinel and will be “followed by a recommendation from the Digital Technology Committee submitted to the Common Council for its approval.”

City officials said they won’t have any idea about how much a government-owned network (GON) will cost until the results of the study are in.

However, we have a good idea.

Coalition for the New Economy readers will remember that Seattle conducted a similar study last year that found a GON would cost the city between $480 million and $665 million to build and that it would be extremely difficult for the system to make money. After the results of the study were released, officials in Seattle decided not to move forward with a city-owned system.

Madison Mayor Paul Soglin must have missed the Seattle debate. He said he wants to explore a government-owned network so his city could “be in a league with Chattanooga.” Before arguing Madison should be more like Chattanooga, however, Soglin should have taken look at this study by Charles Davidson and Michael Santorelli from New York Law School. Davidson and Santorelli note “many aspects of the Chattanooga GON render it very unique, making duplication by other municipalities exceedingly difficult.” The two scholars also point out that “the benefits arising from this very expensive fiber-optic network appear to be less robust upon closer examination, raising the possibility that, over time, the significant costs of building this network might very well outweigh any benefits that it generates.” (Soglin should also check out this list of government-owned broadband failures.)

Finally, there is the question of duplication. According to the Journal-Sentinel, at least three commercial providers – AT&T, Charter Communications and TDS Telecom – already serve the city. Wisconsin State Telecommunications Association Executive Director Bill Esbeck noted, “Madison is one of the most wired communities in our state.”