A new report from the State Government Leadership Foundation (SGLF) has taken aim at the municipal broadband movement, suggesting that networks should be the “last resort” a municipality should consider in expanding Internet access.
“The debate over municipal broadband networks is heated, and a central question in the argument is how these government interventions into the business of building digital networks affect the economy,” said report author Dr. George S. Ford, chief economist for the Phoenix Center for Advanced Legal and Public Policy Studies. “I conclude that because there are questionable economic advantages resulting from government-owned broadband — but numerous disadvantages — municipal broadband should be a last resort option, reserved for markets where private entry is not possible.”
SGLF’s study comes at a time when a number of U.S. municipalities are feeling left out in the broadband race as incumbent telcos and cable operators either refuse or are too slow in updating their last mile infrastructure.
In 2015, the FCC voted to preempt state laws in North Carolina and Tennessee that restrict expansion of government-owned broadband networks.
Tennessee is currently fighting that decision in an appeals court.
A key argument the study makes is that a number of electric cooperative ratepayers have to pay to support subsidies for government-owned networks that compete with privately-owned providers like AT&T and Comcast.
Mississippi Lieutenant Governor Tate Reeves said that “I believe there are more effective ways to promote broadband development in our cities and states: Let the market, not the government, drive those decisions.”
A potential ray of hope emerged for communities that have been left behind in the broadband race when representatives of CenturyLink, Frontier and TDS said during the recent FTTH Conference that they are considering partnering with local communities to build and upgrade their networks to support higher speed residential and business services.
However, the key challenge in such a partnership is who would control these networks.
It’s likely that if telcos like CenturyLink, Frontier and TDS would garner such partnerships with municipalities they would want to take charge of any network deployment in the communities where they offer services.
– see the release.
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