On November 7, Fort Collins, Colorado voters will consider a ballot question on whether to authorize the government to build a taxpayer-funded internet service.
In August, the City Council approved the language for a ballot question asking voters to approve Light and Power Utility’s charter to allow the city government to spend up to $150 million, funded by new public debt, on a new government-owned broadband network.
If approved, the network might take up to five years to be completed. The Fort Collins City Council estimates the project would serve about 62,000 residences.
Money Losers
Steve Pociask, president of the American Consumer Institute, says governments generally fail to dial up success in the broadband business.
“Municipalities say they want to provide broadband service at a higher speed and lower cost,” Pociask said. “The reality is, when we look at all of these ventures, we see they don’t anticipate the full costs, and once the municipally owned networks enter the market they lose a lot of money.”
Taxpayer-funded internet services are a bad deal for everyone except the government, Pociask says.
“Municipal broadband networks survive by shifting their financial losses to consumers and taxpayers,” Pociask said. “This is often done by raising taxes, issuing bonds, and pushing surcharges on electric and water consumers and other municipal services.”
Pushing Private Businesses Out
Fort Collins resident Sarah Hunt says the plan would push out private businesses in the city.
“The current internet service providers will be at a competitive disadvantage because they do not have taxpayer funds to back them,” Hunt said. “They will be discouraged and inhibited from innovation, because they will not be able to compete against a subsidized city of Fort Collins. Nobody benefits from decreased competition and innovation.”
