• Commentary

Broadband Internet without taxpayer risk

Municipal broadband internet services have troubled history

Most people can agree that accessing affordable and reliable broadband internet is becoming increasingly important for Americans. However, there are major disagreements on the best way to solve the problem the nation faces. In fact, some say that city broadband services are the solution.

They say broadband internet is as vital of a utility as water or any other city offered service. Opponents argue consumers be able to get the service from their choice of private service providers. Who actually offers a better option?

Expert Analysis on Local Broadband Efforts from ISEG

One community currently considering undergoing the process of implementing government broadband is Holland, Michigan. Officials representing the city of Holland are advocating for residents to vote to approve a new $24 million initiative to support a municipal broadband service. Critics point out that the area is currently well-served by private providers. Further, the recent track record of similar projects in other nearby Michigan communities have been dismal.

Holland residents will get their chance to decide on the new debt issue at the polls. As a result, there is great interest in the community on the most beneficial way to proceed. On July 8, 2022, Dr. Ted Bolema, Executive Director of the Institute for the Study of Economic Growth (ISEG), made a compelling case in an editorial article titled “Holland can get better internet without taxpayer risk” in the Grand Rapids Business Journal:

Holland voters will be asked in August to subsidize an internet network that, at best, will improve service for a relatively short time for a relatively small number of residents. It is not even clear that the Holland Board of Public Works, starting with $30 million or more from taxpayers and stimulus funds, can do better than private companies looking to expand their service areas without being subsidized by taxpayers. It is crucial that cities use their funds appropriately, and not put taxpayers on the hook for 25-year commitments that are unlikely to offer meaningful benefits after the first few years.

Dr. Theodore Bolema
Executive Director

In other words, local governments have generally proven they are poorly-suited to provide broadband services. For example, city broadband providers typically fail to offer service their constituents at a price lower than private industry. Recent real-world attempts at government broadband even have several catastrophic failures. In fact, even the projects touted as successful are actually just using unfair subsidies or regulatory advantages.

Read the whole article at the Grand Rapids Business Journal.