The Problems with Municipal Broadband
Background…
President Joe Biden’s American Jobs Plan calls for “future proof” broadband infrastructure, with priority for broadband networks “owned, operated by, or affiliated with local governments, non-profits, and co-operatives?providers with less pressure to turn profits and with a commitment to serving entire communities.”
But…
Municipal broadband and other options that decouple Internet service from profits and losses do not serve consumers in a cost-effective way. Municipal providers rely heavily on subsidies (including cross-subsidies from electric co-ops) to continue operations, creating an uneven playing field. The presence of a municipal provider also means less incentive for private companies to enter or expand in the market. On the other hand, benefits from municipal broadband are minimal and it represents a risky investment for taxpayers that should only be considered a last resort.