Georgia legislators introduced a bill in the State Senate that would require municipalities to hold referendums before launching high-speed Internet service. Georgia SB 313, according to bill cosponsor State Sen. Chip Rogers, would enable private companies to compete on a level playing field with cities and counties that offer Internet broadband service.
SB 313 was introduced in late January 2012 and is cosponsored by Rogers (R-Woodstock) and fellow senators Doug Stoner (D-Smyrna), David Shafer (R-Duluth), and Renee Unterman (R-Buford). Rogers says government-operated service providers have an unfair advantage because they can run the municipal broadband systems at a loss.
Consumer advocates Michael Sanera and John Stephenson, however, argue the bill doesn’t go far enough because true competition can never exist between private companies and taxpayer-funded government enterprises.
Sanera, research director and local government analyst at the North Carolina-based John Locke Foundation, commented, “I think it is impossible for a private company to compete with government provision of broadband. Government always has the advantage. It does not pay taxes, loans it receives are not based on the same principles as private companies, and government can force taxpayers to pay for deficits and losses,” he said.
Sanera and Stephenson, director of the Communications and Technology Task Force at the American Legislative Exchange Council, both say requiring a public referendum will do little to create a level playing field.
“A referendum is like asking people if they want free Internet,” said Sanera. “Of course, everybody is going to say, ‘Yeah, I want free Internet.'”
Stephenson added, “So if [a public referendum] is the basis of having a level playing field, it’s one of the worst possible ways of creating one.”
Subsidizing the Affluent
Sen. Rogers said his bill would not keep cities or counties from offering Internet service.
“They can go and set up the broadband service, but if they recognize it’s going to lose money they need to be very honest with the taxpayers and go to referendum and ask them if this broadband plan, which they think is so important for their community, is worth exactly what they plan to spend on it,” Sen. Rogers said at a press conference.
Sanera warns less-advantaged people may end up subsidizing the more affluent sections of a town that show up to vote on a proposition like this.
“You’re basically creating a cross-subsidy between less-wealthy people that don’t have computers and don’t want computers, which belong to a demographic heavily weighted toward the elderly,” Sanera said. “So those people are going to be subsidizing the businesses and the more affluent sections of a town because the homeowners’ fees are not going to pay for the system,” he said.
Rogers agrees with Sanera and Stephenson on the point that local governments don’t have the best track record of offering high-speed Internet services. Rogers points to the examples of Tifton and Marietta, in his own state, which have “wasted” millions of taxpayer dollars on “failed” Internet service providers, according to a press release by Rogers’s office.
Sanera uses North Carolina as an example of why “cities must be barred by state law from competing with private broadband,” after one city pledged its city hall and fire stations as collateral for the loans to pay for a broadband system.
Alyssa Carducci ([email protected]) writes from Tampa, Florida.
“Bill Targets Public Internet Service,” Sen. Chip Rogers press release: http://www.scribd.com/doc/79274799/Georgia-SB-313
“Georgia Senate Bill 313,” Sens. Chip Rogers, Doug Stoner, David Shafer, and Renee Unterman, January 23, 2012: http://news.heartland.org/sites/default/files/georgia_sb_313.pdf