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“A New Form Of Corporate Welfare”

June 10, 2016

Blue and red fibre optical cablesLast month, the Coalition for the New Economy explored the reasons behind Google’s support for government-owned broadband networks. This week, the Taxpayer Protection Alliance took up the same question.

TPA President David Williams wrote that Google’s cozy relationship with the government, especially with the federal government, “goes back years” and argued Federal Communications Commission (FCC) Chairman Tom Wheeler “has consistently promulgated rules and regulations that benefit Google more than other companies in the tech industry.”

Those rules include last February’s decision to overturn states laws in North Carolina and Tennessee that set limits on the growth of government-owned broadband networks. How did that ruling benefit Google? As Williams explained, “The decision to push for more government broadband eventually benefits Google because Google buys these networks for pennies on the dollar after they fail.” That means, “When all is said and done,  it is taxpayers who have built, and paid for, a broadband network for a multi-billion dollar tech company.” Like CNE, Williams noted Google bought Provo, Utah’s failed government broadband system for $1.

Williams called Google’s actions “a new form of corporate welfare, known as backdoor corporate welfare.” He explained, “The company isn’t receiving the taxpayer funds upfront, they are encouraging the building of these systems hoping and expecting them to fail so they can swoop in and buy the systems for pennies on a dollar.”

So, is Google behind the White House’s support for government-owned broadband? Williams suggested it’s likely. He noted the company’s director of public policy has been to the White House at least 128 times in the last seven years. Google’s chairman also has given to President Barack Obama’s political campaigns and currently sits on the President’s Council of Advisers on Science and Technology. Williams argued, “It seems like a reasonable conclusion to make that this relationship has played a role in the way in which the FCC has steered policy that primarily benefits Google.”