|Private providers can do a better job with high-speed broadband
By Pete Kirchhof
Guest Commentary | Published on DenverPost.com
February 13, 2015
The Obama administration's advocacy of expanded access to affordable, high-speed broadband deserves praise. The initiative, reiterated recently in the president's State of the Union address, has drawn renewed attention to a top priority of the Information Age: linking even the most geographically remote and economically challenged communities to the Internet so that all may benefit.
Where the administration is missing the mark, however, is in promoting government-owned broadband networks as a means of achieving that end. Instead of enticing state and local governments -- and ultimately taxpayers -- into making extensive investments in fiscally shaky, publicly owned broadband systems that have little or no experience in the marketplace, the president should encourage communities to explore the groundbreaking work already being done by private providers.
Colorado does have a unique system among states where municipal governments may enter the broadband market -- but only after approval from local voters. This represents an important check-and-balance by letting taxpayers decide if they want their local government involved in the telecommunications business.
Rural access has been expanding steadily, especially here in Colorado, courtesy of the innovation and proven know-how of seasoned private-sector companies. Our state's mom-and-pop telecommunications firms, many of them generations old, have been among the leaders statewide in bridging the digital divide, bringing high-speed Internet to a host of rural farm and ranch communities in the mountains and on the plains.
Consider the high-country community of Guffey, in southern Park County, where the residents and their only school long had practically no access to high-speed 'Net. Then, a small telecommunications company, the school and the Park County government came up with a plan. The effort raised funds and installed a microwave access point next to the school, allowing it and the surrounding community to pick up high-speed 'Net that was beamed from one of the company's transmitters atop a nearby peak. Success.
Contrast that cost-effective, can-do approach with the top-heavy, bureaucratic model that state and local governments use when trying to play catch-up in the broadband market. They all too often have unsustainable and inadequate business plans, don't know the market, don't understand prices and services and can't deliver as promised. Which means they have a terrible track record of failure:
- Probably the ultimate example of such publicly funded folly is Colorado's EagleNet Alliance, a project that was federally financed, state-directed -- and almost rudderless from the beginning. Eagle-Net's mission was initially to extend broadband to public institutions like schools in underserved rural Colorado communities, especially hard-to-reach mountain towns. The program instead wound up overbuilding existing fiber-optic networks already providing broadband to communities -- while not even attempting to reach more remote and long-neglected places. Soon, it had burned through $90 million of its original $100.6 million federal grant with more than half its original mission undone. The federal government suspended the entire undertaking in 2012, and it resumed operation in 2013 only after being scaled back and partnering with a private company to find additional funding so the work could be continued.
These and many other government-spawned broadband efforts fail, ultimately, because they have come along years too late. According to the National Telecommunications and Information Administration, nearly 99 percent of the U.S. population already has access to wired or wireless broadband. The gaps that remain, largely in sparsely populated, rural regions, are being closed daily by the private-sector pros who know the terrain.
- Government-owned broadband schemes also can backfire big-time on taxpayers. In Utah, the state government's ironically named UTOPIA has hemorrhaged money and amassed more than $500 million in debt over nearly a decade despite $13 million in annual taxpayer support from local governments. An $18-$20 monthly tax now might be imposed on all residents in UTOPIA's service area -- whether or not they are subscribers.
Let's let them do the job they do well -- and not force taxpayers to get in on the action.