The private model must prevail when it comes to broadband
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The 115th Congress and the Trump administration are making America’s antiquated infrastructure a top priority. Debates about how to address the nation’s infrastructure issues have been accompanied by a renewed openness to private sector investment. Rather than simply pouring in tax dollars, lawmakers are looking anew at ways to improve systems and the tax code so that taxpayers don’t have to shoulder as much of the infrastructure burden.

This news is especially important when it comes to our most important new infrastructure: broadband Internet. When federal, state and local lawmakers get too involved in this arena—sometimes going as far as to get in the Internet business and sell services directly to consumers—taxpayers always lose.

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The Taxpayers Protection Alliance today released Broadband Boondoggles, an interactive online map exposing the results of taxpayer-funded government Internet schemes. Collectively, these unwise ventures cost taxpayers billions of dollars. In some instances, these networks stuck local residents with higher taxes or bigger utility bills. In other cases, government broadband projects devastated municipal bond ratings, making it harder and more costly to borrow for vital projects like new schools.

 

The map, which is available at MuniBroadbandFailures.com, is littered with disastrous outcomes for taxpayers. Residents in Provo, Utah, spent $77 million building and funding operational losses associated with iProvo. The government network hemorrhaged so much money city leaders sold it for $1 so taxpayers wouldn’t have to spend millions more on additional bailouts. In Sun Prairie, Wisconsin, a taxpayer-funded Internet service has just 200 customers – but is more than $9.3 million in debt.

A fiber-optic Internet and cable television network in Tacoma, Washington, that cost $100 million in public funds to build now loses about $9 million annually thanks to plummeting customer numbers. Local residents are forced to bankroll the failing service year after year.

Some advocates of socialist-style government-owned Internet infrastructure claim Chattanooga’s Electric Power Board taxpayer-funded network is a success stories. But the half-billion dollar boondoggle is a failure by any measure.

The Chattanooga government Internet, cable and telephone service charges such exorbitant prices for its gigabit service that business owners who can utilize gig-speed broadband can’t afford it. In fact, critics claim the network can’t actually supply gigabit service consistently or if multiple high-speed users log in to the network at the same time.

In addition to shaking down federal taxpayers for more than $110 million in construction costs, EPB borrowed more than $28 million from Chattanooga’s electric customers to fund marketing expenses. Despite all these costs to the public, EPB’s high-speed government Internet service never lived up to promises that it would spur business development and revolutionize Chattanooga’s economy. Now other cities in the region have faster and cheaper private Internet service and are beginning to leave Chattanooga in the dust. 

Jeez. Some success story.

EPB’s failure has been so monumental it led the Tennessee Advisory Commission on Intergovernmental Relations to look for ways to spur new broadband investment without using taxpayers’ hard-earned money. The commission recommended commonsense steps like lowering taxes on broadband providers by ending the state’s tax on equipment purchases. Officials could also consider reducing pole attachment fees – the rental rates paid by Internet providers to the government for attaching fiber-optic Internet cables to electric poles – and cutting suffocating red tape. 

Any of these options is better than plunging local, state and federal taxpayers deeper into debt for programs and services the private sector already offers. According to the Broadband Association, private sector Internet service providers invested $76 billion in infrastructure in 2015. To put that figure into context, that’s more than three times the amount of money the federal departments of Agriculture and Transportation – two of the federal “leaders” in infrastructure investment – are expected to pay out in total infrastructure awards this fiscal year. 

America’s local, state and federal governments are already struggling to keep up with the construction and maintenance of traditional infrastructure project like road, bridges and airports. The government is in no position to focus money and time on the information superhighway when traditional highways are in need of attention. Fortunately, job creators are addressing Internet infrastructure needs without the government by building high-speed broadband networks across America.  

If lawmakers want to help more Americans gain access to lightning fast broadband Internet service, they should create a welcoming environment for Internet providers by reducing tax and regulatory burdens, and then get the heck out of the way.

Drew Johnson is the national director for Protect Internet Freedom, a grassroots, nonprofit organization representing 1.6 million supporters dedicated to defending a free and open Internet, and a senior fellow at the Taxpayers Protection Alliance.


The views expressed by contributor are their own and are not the views of The Hill.