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Michael Cathcart: Municipal broadband is risky business

"The city of Spokane wants to get into the telecom industry. We urge caution. Municipal broadband is risky business: it has a high rate of failure, is expensive to build out, and it can actually reduce competition in the local market.


Internet access enhances quality of life and fosters economic growth. So, bridging the divide by improving digital equity through affordability is a noble goal and one worth pursuing. Cheaper, faster internet. That’s the dream. There is a role for the city to play in this, but with numerous examples of failed municipal broadband projects across the U.S., and at a time when already the horizon appears quite bright for emerging wireless broadband technologies, owning and operating our own broadband network doesn’t make a lot of sense.


A 2017 University of Pennsylvania study of municipal broadband cities found that a majority of those analyzed are headed toward insolvency. In fact, the analysis reveals that only two are on track to break even. The Taxpayers Protection Alliance Foundation analyzed data from more than 200 municipal broadband networks and concluded that, “overwhelmingly, these government-owned and taxpayer-funded networks leave budgets in the red due to underestimated build out costs, subscriber rates falling far short of projections, and issued bonds straining local budgets for years to come.”


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