Across the country, local municipalities and county governments are taking on the task of establishing their own broadband utilities, often funded by taxpayer dollars. While the intention is to provide better internet access to underserved areas, this approach is deeply flawed and risks imposing an undue burden on taxpayers who may never use these services. We strongly believe that broadband expansion should be left to the qualified and experienced private sector providers, or at least managed through public-private partnerships (PPPs) that leverage the best of both worlds.
A number of cities and counties are venturing into the broadband business, raising taxes or fees to fund these initiatives. We are even seeing this here in Idaho, especially looking toward the east at cities like Idaho Falls. This trend reflects a worrying shift towards government overreach, where local governments are assuming roles better suited for private companies with the expertise and infrastructure to deliver reliable service. Private providers with years of experience are better positioned to provide high-quality, cost-effective solutions.
The City of Eagle, here In the Treasure Valley of Idaho, recently decided to scale back its ambitious citywide broadband network, opting instead for a phased approach that prioritizes connecting new subdivisions over existing neighborhoods. This move shows a recognition of the financial and logistical complexities involved in municipal broadband projects, but it still misses the mark by taking on the project itself. Eagle’s decision to go it alone, despite the obvious benefits of involving private sector expertise, highlights the need for a broader rethink in how we approach broadband expansion.
With billions in federal funding available through programs like the Infrastructure Investment Bill and American Jobs Act, states have a unique opportunity to expand broadband access efficiently and effectively. However, this influx of funds should not be seen as a blank check for municipalities to create their own broadband utilities. Instead, the focus should be on maximizing these investments through partnerships with private providers who can bring the necessary expertise and efficiency to the table.
Our recent study highlights key strategies for expanding broadband access, emphasizing the importance of letting private companies lead the charge. Public-private partnerships can provide the oversight and accountability that governments desire, without the risks and inefficiencies associated with government-run services. This approach not only ensures taxpayer dollars are spent wisely but also promotes competition and innovation in the broadband market.
Qualified private sector providers have the experience, resources, and technological know-how to expand broadband efficiently. They are driven by competition, which naturally fosters innovation, cost reduction, and service improvements. Unlike government-run utilities, private companies have the incentive to meet customer needs quickly and effectively, without the bureaucratic red tape that often slows down public sector projects.
Moreover, private companies can adapt to the unique needs of different regions, whether it’s deploying fiber in dense urban areas or using innovative solutions like fixed wireless or satellite technology in rural communities. This was highlighted in a recent docu-series by NCTA named "Every Last Mile." Local governments should leverage these capabilities rather than attempt to replicate them at taxpayer expense.
If local governments feel compelled to be involved, the best approach is through PPPs, where the public sector sets the framework and provides oversight, while private companies handle the heavy lifting of implementation. This model ensures that government resources are used efficiently, private expertise is fully utilized, and risks are shared. By working together, both sectors can achieve the goal of expanding broadband access without burdening taxpayers with unnecessary costs.
We learned after the COVID-19 restrictions that broadband is essential for economic growth, education, and overall quality of life. However, local governments should avoid the temptation to take on roles that belong in the hands of experienced private-sector providers. By prioritizing market-driven solutions and embracing public-private partnerships where necessary, we can ensure that broadband expansion is both effective and fiscally responsible. Let’s keep the focus on what works: a free market approach that leverages private sector innovation and expertise, ensuring that our communities are connected without unnecessary government overreach.
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