September 1, 2017
In a recent column at The Hayride, Americans for Tax Reform tech and telecom policy expert Margaret Mire told the East Baton Rouge Parish Metropolitan Council that it should reject the idea of building a municipal broadband network.
These networks fail, Mire explains, and cause severe harm to taxpayers. Lafayette, La. has spent at least $160 million on its government network, or about $9,750 per subscriber. Mire said, “While LUS Fiber is technically still alive, it is only a matter of time before this unsustainable model fails completely.” Mire lists three government networks dotted across the south that eventually were sold. Networks from at least four other cities, from Washington to Connecticut, have “all ended in similar tragedy.”
Mire says government networks hurt the private market in addition to taxpayers. She explains, “Government-owned internet networks unfairly compete with private providers because government entities can subsidize costs with tax dollars, and thus charge consumers below the cost of service.” Because of this “private providers are discouraged from investing, remaining, and expanding in areas where GONs are present” since “their odds of success are hindered by unfair competition from an entity that does not need to turn a profit.”
That cycle harms consumers, leaving them with “fewer choices, outmoded technology, and deteriorating service.”
Earlier this summer, Mire made similar arguments in the Richmond Register. The Richmond, Ky. city commission still is considering whether to spent at least $290,000 on a 15-mile fiber network that would connect to the ailing state-owned KentuckyWired system. (According to a more recent Richmond Register article, “The cost that city is looking at to build out in the densest part of the city is between $1,000 and $1,250 for each residence; in more rural areas, the cost skyrockets to about $9,000 per residence.”)
Mire explained that officials from places like Marietta, Ga., which eventually sold its government network, and others with failed networks like Bristol, Va. don’t “consider the long term costs associated with maintenance and technology upgrades, which are frequent and expensive …” Mire also said, “Government entities cannot operate as efficiently or effectively as private sector experts in this industry.”
Certainly KentuckyWired has proved that, which is why these cities should listen to Mire.
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