美国信息技术与创新基金会-宽带神话：市政宽带规模是否能很好地满足美国宽带需求？（英）-2021.6-18页_172kb

Broadband Myth Series: Does Municipal Broadband Scale Well to Fit U.S. Needs?

Core Content

This document analyzes the feasibility and scalability of municipal broadband in the United States, arguing that local governments are generally not well-suited to provide broadband service. It critiques the idea of treating broadband as a utility and emphasizes the need for a pragmatic approach to broadband policy that considers investment, competition, and innovation.

Main Viewpoints

• Municipal broadband is not scalable: Local governments lack the capacity to sustain the constant investment required to keep broadband technology up-to-date and competitive.
• Private sector leads in innovation: Municipalities do not invest in R&D or contribute to standards-setting organizations, unlike private companies which drive technological advancements.
• Municipal networks often fail: Many municipal broadband projects have struggled financially, with some requiring taxpayer bailouts or resulting in significant debt for the city.
• Municipal broadband can lead to overbuilding: When local governments enter markets with existing private providers, it increases costs and reduces the incentive for innovation and investment.
• Municipal broadband should be a last resort: It is only appropriate in narrow circumstances where private providers are unwilling or unable to serve, despite subsidies.

Key Information

The Dynamic Nature of Broadband

• Broadband requires ongoing investment due to rapid technological change.
• Unlike traditional utilities (e.g., water, electricity), it is not a static infrastructure.
• Municipalities are not well-equipped to manage the continuous evolution and maintenance of broadband networks.

Economic and Financial Challenges

• Municipal broadband projects often rely on federal subsidies or unique financial arrangements to remain viable.
• These projects can lead to deferred maintenance, underinvestment, and declining quality if treated like static utilities.
• The track record of municipal networks is mixed, with many failing to generate sufficient revenue to cover costs.

Examples of Municipal Broadband Projects

• Chattanooga, TN (EPB):

  • A fiber network built with a combination of local revenue bonds, federal grants, and a municipal loan.
  • Despite the subsidies, the network's prices are comparable to private providers.
  • The project was considered a form of wasteful overbuilding as it was not necessary for the city's existing service.

• Ammon, ID:

  • Operates an open-access network, allowing multiple ISPs to use the infrastructure.
  • Users pay upfront fees or long-term bonds to support the network.
  • The city pays for the infrastructure but receives minimal revenue, indicating financial strain.

• Burlington, VT (Burlington Telecom):

  • Once a model for municipal broadband, it failed due to poor marketing, low pricing, and operational inefficiencies.
  • The city had to pay $5.35 per month on residents' power bills to cover bond payments.
  • Eventually, the network was sold to Google for $1, with the city still liable for remaining debt.

• Provo, UT (iProvo):

  • A municipal provider that failed within a few years, incurring losses of $8 million.
  • The city was forced to sell the network to Google, but still faces financial obligations.

Policy Recommendations

• Avoid ideological preferences: Broadband policy should not favor or penalize any particular ownership model.
• Subsidies should be ownership-neutral: Federal broadband funding should be awarded based on need and cost-effectiveness, not ownership.
• Promote private sector competition: Private companies are better suited to drive innovation and investment in broadband.
• Limit municipal broadband to underserved areas: Only in cases where private providers are unwilling or unable to serve should municipalities step in.

Conclusion

While municipal broadband may work in specific, narrow cases, it is not a scalable or sustainable solution for the U.S. broadband landscape. The document argues that the private sector is better positioned to ensure continuous investment, innovation, and competition in the broadband market. Policymakers should focus on enabling private sector participation and ensuring that subsidies are used effectively to address gaps in service, rather than mandating municipal ownership.