IPI Publication Press Release
IPI Ideas - # 31
Related Publication Title:
Just Say "No" to Municipal Broadband Networks
Released by Sonia Hoffman on 12/16/2004
IPI Ideas - # 31
Related Publication Title:
Just Say "No" to Municipal Broadband Networks
Released by Sonia Hoffman on 12/16/2004
Full Text
Press Release (12/16/2004)
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New Study Released by the Institute for Policy Innovation (IPI)
Contact: Sonia Hoffman, shoffman@ipi.org, (703) 912-5742, or (202) 213-0379
(Washington, DC): Municipalities are increasingly infatuated with the idea of government-owned broadband networks. But such municipal networks are not in the best interest of consumers, because they unnecessarily put taxpayers at risk, create an unlevel playing field, and potentially could stifle free speech, according to a new publication by the Institute for Policy Innovation (IPI).
“Both Americans and municipalities will lose, not gain, with government-owned broadband networks,” says Barry M. Aarons, IPI Senior Fellow and author of “Just Say ‘No’ To Municipal Broadband Networks.”
Cities in Georgia and Washington have lost up to 24 million dollars on municipal networks, and some communities have witnessed surpluses dwindle to pennies on the dollar.
If Georgia’s and Washington’s network failures are not enough to dissuade other cities from entering into the business, the following domino effects should more than prove why municipal networks are a seriously flawed policy idea:
· Rapid changes in technology make existing systems obsolete almost from the point of entry. Taxpayers will be stuck with stranded investment and out dated systems. Consumers will not have the type of cutting edge service they want and need.
· Real competition will be gutted because of the governments’ virtually bottomless source of capital in a captive taxpayer base. An unending, spiraling level of taxpayer subsidies will add to present budgetary woes.
· Jobs will be lost because without competition, the private sector will be inhibited to invest in a community. Investment capital will contract. And when the private sector pulls out, jobs, innovation and quality service will likely go with it.
· Owning the “lines” opens the door for government ownership and abuse of content.
“Instead of government owning and providing broadband service, political leaders should create incentives for private sector investment through vehicles such as tax abatement, deductions, exemptions, credits or other opportunities within state law,” adds Aarons.
This report will be released at a conference hosted by the Heartland Institute in Chicago this week.
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The author is available for interview. Contact Sonia Hoffman at (703) 912-5742 or at shoffman@ipi.org.
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