• Commentary

Government Internet: Limited Utility with Major Downside

There is no way around it: government internet service makes taxpayers liable. However, proponents argue it is necessary in some areas. Where those areas are is open to some debate. Meanwhile, politicians are pointing to economic and societal benefits as reasons for expanding governments involvement in broadband networks.

There is evidence fast internet speeds are helping drive growth. Conversely, they can help prevent people in remote areas from falling behind. As a result, proponents of government owned internet argue access leads to the creation of jobs and economic development.

ISEG Executive Director Ted Bolema Weighs in on Arguments for Government Internet in Detroit 

Jarrett Skorup’s article “Bad Arguments for Government Broadband in Metro Detroit: Government-Provided Internet Puts Taxpayers on the Hook,” appeared in the February 19 edition of the Michigan Capitol Confidential. Skorup quoted Dr. Ted Bolema, Executive Director of the Institute for the Study of Economic Growth (ISEG), as a regulatory law and economics expert.


“Why does the government have to do this, when in most areas private companies come in and build the network? Unless the city has a regulatory advantage, it has no particular advantage over private companies[. Government has] plenty of reason to believe that it can’t build the network as efficiently as companies with experience building them in a lot of other markets,” Bolema said. “This looks like a great deal for private companies thinking about starting a cable and internet service in Farmington[. It looks like] potentially a very bad deal for local taxpayers. The city is considering building an expensive fiber optic network[. The city is] making its residents bear all the risk of cost overruns and possible lack of demand for the service. Then private companies can come in and rent the lines on a network that was built for them[. The networks] risks are shifted to local taxpayers.”

Dr. Theodore Bolema
Former Executive Director – Retired

Read the whole story examining the utility of government internet at the Michigan Capitol Confidential