McAuliffe: Municipal Broadband Networks Plunge Cities into Debt

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Posted by Caroline Sayers on Wednesday, June 28th, 2017, 2:55 PM PERMALINK

Americans for Tax Reform’s Katie McAuliffe, the executive director of Digital Liberty and federal affairs manager, wrote an op-ed for the Hill on the false promise of 'municipal broadband' networks. McAuliffe found that while Americans may want faster internet, municipal broadband networks tend to be failures:

“The problem is – building and operating broadband networks is expensive and complex. They need to be rebuilt and updated almost continually to stay ahead of the breakneck pace of innovation in this space and the constantly spiraling demand for higher and higher speeds online.”

According to McAuliffe, most attempts to create municipal broadband networks results in horror stories, like “the failed iProvo network that cost the city $39 million to build but was ultimately sold to Google for $1 dollar are legion. Indeed, according to new data, over half of these municipal fiber systems fail to bring in enough revenue to cover their ongoing operating costs, bleeding red ink every day they operate and falling further and further into debt.”

These municipalities struggle to keep up with large private companies that can easily invest millions in maintaining the infrastructure for the broadband. Of the 20 municipalities that have tried to implement broadband networks, “only two bring in enough revenue to recover construction costs before the networks become obsolete in 40 years. The rest won’t be paid off for decades after they become useless – or even centuries!”

These risky investments seem troubling at a time when most governments are scrambling to fund more necessary projects, like education and transportation. 

Read more here

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