Local governments continue to push for municipal internet services, but history suggests it is anything but affordable
A key debate happening across America has to do with Broadband Internet Access. Access to affordable and reliable highspeed internet is becoming increasingly important to the everyday lives of people in this nation. So naturally, access to this service is under a bright light of attention with some arguing that city broadband services are the solution.
These proponents think of Broadband Internet as a vital utility like water, and say cities should provide these key services. Should consumers be able to get the service from their choice of private service providers or would local city government broadband be a better option? As a result, people in the community are asking “What role should municipalities play in broadband internet delivery?”
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 17, 2022, Jaime Hope quoted Dr. Ted Bolema, Executive Director of the Institute for the Study of Economic Growth (ISEG), as a regulatory law and economics expert in the article “Holland government broadband proposal follows troubled history” in the Michigan Capitol Confidential:
“We have a lot of necessities,” Bolema told Michigan Capitol Confidential, “including food and gasoline, and we don’t see local governments proposing millages to build more grocery stores or gas stations, or to subsidize the costs of grocery stores and gas stations through millages.”
Bolema, who is on the board of scholars at the Mackinac Center for Public Policy, says if the city does not have enough customers to pay back the debt, residents who are not customers would likely pay. Speaking of city officials, he says, “The temptation is to raise rates for their monopoly services, so that the electricity or water customers end up subsidizing the broadband service.”
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 Michigan Capitol Confidential.com.