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Local Taxpayers: Look Before Leaping Into Government-Owned Broadband Ventures

By John F. Jones, Senior Vice President of Public Policy and Government Relations

The list is long. Dozens, if not more, municipal and government-sponsored broadband networks that were funded with well-intentioned tax dollars from citizens and businesses are now struggling under the weight of ballooning costs and highly speculative business plans. Interestingly, consultants and cash-strapped city planners in small to medium-sized towns across the country still seem receptive to using taxpayer dollars for venture capital to fund and build government-owned networks on top of existing communications networks.

Most localities are quickly realizing two things. First, communications networks are challenging to operate and capital intensive to build and maintain. Second, there is no “build it and they will come ” when it comes to consumer choice and competition. In other words, the telecom industry makes for a challenging operating environment for even the most experienced and well-financed providers.

CenturyLink invests hundreds of millions of dollars every year to enhance broadband speeds and capacity in our service areas and to bring broadband to more homes and businesses across the country. While we support public-private initiatives that leverage existing communications infrastructure to extend broadband service to unserved areas, we believe a more efficient model is for municipalities to work closely with experienced providers to achieve their telecom needs.

A May 9 story in a Colorado publication highlights the city of Longmont’s move to forge ahead with a municipally-owned broadband project that will compete for customers in the marketplace. However, critics are already pointing out parallels with similar government-run ventures that ran off the rails in other communities—and used the same consultants now shepherding Longmont’s project.  We encourage you to read the article.

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