Government-Supported Broadband: Pro and Con

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    The potential advantages of government-supported broadband tend to win the battle of media against opponents because the benefits are very attractive: People with less income will get connected, shopping areas will be more attractive due to the connectivity and so forth. However, there is a case against municipal broadband that deserves a look.

    The case against government-supported broadband was made at The Daily Reflector, a site that focuses on North Carolina news, by two members of the state’s House of Representatives, Democrat Jason Saine and Republican Michael Wray. The two wrote in support of legislation that would stop the Federal Communications Commission (FCC) from overriding a North Carolina law limiting municipal broadband. The FCC voted 3-2 earlier this year to overturn the rule.

    The bottom line, according to the two legislators, is that the approach simply doesn’t work:

    Economists who have examined government-owned broadband networks have found these networks don’t increase private sector employment. Other studies have concluded taxpayers pay a steep price for these networks, both in funds that are spent to build and maintain the networks and in the loss of other vital services. Government-owned networks affect taxpayers in two basic ways: by taking vital funding away from traditional government priorities and by driving cities deeper into debt.

    The commentary that follows seeks to buttress the point: These networks are high maintenance and the funds to do so often come at the expense of other worthwhile projects.

    That opinion hasn’t stopped projects, at least those that rely partially on government funding, from progressing, of course. Earlier this month, a project to create a network across Kentucky took a step as Gov. Steve Beshear created the Kentucky Communications Network Authority (KCNA) and a related board. The new entity will manage the KentuckyWired broadband project, according to Louisville Business First.

    The story has details on the KCNA’s mandate. The state is building the network in a public-private partnership with Macquarie Capital. Construction is slated to begin in Eastern Kentucky. A kickoff event is scheduled for next Monday at Hazard Community and Technical College in Hazard, Kentucky.


    Bringing services to folks in rural areas is a main goal of municipal broadband and one of the drivers of government involvement. Wisconsin is a prime example of a state that is seeking to expand government-supported broadband in this way. The Journal Sentinel Online reports on many grants that have been awarded. For instance, the Central State Telephone Co. will receive $100,000 to enable it to provide broadband to about 100 premises served by the Cranmoor telephone exchange, which is west of Wisconsin Rapids.

    The decision on how deeply the local, state or federal government should be involved in providing broadband to the population is a partisan issue. It’s also an economic one. On one side, opponents of the approach say it simply doesn’t work, while those in favor of it think it’s a no-brainer. Quite possibly, the reality is somewhere in the middle – and determined by local conditions.

    Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at [email protected] and via twitter at @DailyMusicBrk.

    Carl Weinschenk
    Carl Weinschenk
    Carl Weinschenk Carl Weinschenk Carl Weinschenk is a long-time IT and telecom journalist. His coverage areas include the IoT, artificial intelligence, artificial intelligence, drones, 3D printing LTE and 5G, SDN, NFV, net neutrality, municipal broadband, unified communications and business continuity/disaster recovery. Weinschenk has written about wireless and phone companies, cable operators and their vendor ecosystems. He also has written about alternative energy and runs a website, The Daily Music Break, as a hobby.

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