The Peachtree City, Georgia City Council recently approved spending $3.2 million in taxpayer dollars to build and fund a municipal broadband Internet system.
The new taxpayer-funded Internet service provider (ISP) will be funded through a mixture of subscriber fees and excise fees paid by cable television subscribers.
“I can’t speak for Peachtree City residents, but I think taxpayers are fed up with funding government boondoggles, especially when government is attempting to compete with the private sector,” said Kelly McCutchen, president of the Georgia Public Policy Foundation. “In Peachtree City, several private vendors are already in the market with a tremendous amount of fiber optic cable already installed. Why the city would rush through its plan without even asking for private-sector bids is inexplicable.
“These deals are often sold to taxpayers as a great deal, but the ongoing capital investments necessary are often greatly underestimated, which results in financial problems a few years out when the original equipment becomes obsolete,” McCutchen said. “If you look at the track record of government-owned networks, it is not a pretty sight. The issue is whether taxpayer dollars should be used and, if so, whether the government should be providing the service.”
‘The Yellow Pages Rule’
Seton Motley, president of Less Government, says governments should not compete with private businesses.
“I think the Founding Fathers inherently understood the yellow pages rule,” Motley said. “The yellow pages rule basically says, if you can find it in the yellow pages, the government shouldn’t do it.”
The government has an unfair advantage over private business, Motley says.
“I have the wallet rule: If you go out on Friday night with your wallet, then the following Friday with my wallet, [on] which Friday night will you have more fun?” Motley said. “The problem with government is that it’s always [using] someone else’s wallet, and the Friday night party never ends.”
Poor Track Record
Government-owned businesses have little incentive to succeed, Motley says.
“The government stinks at everything it does,” Motley said. “My favorite example [is] they took over the Mustang Ranch[, a brothel in Nevada,] because [Mustang hadn’t] paid its taxes, and it went bankrupt. They couldn’t make money selling sex. When the oldest profession and the second-oldest profession combined can’t make money, you should be out of the business of being in business.”
Tony Corvo ([email protected]) writes from Beavercreek, Ohio.
Kelly McCutchen, “Municipal Broadband Puts Taxpayers’ Wallets at Risk,” Georgia Public Policy Foundation: http://www.georgiapolicy.org/2015/10/municipal-broadband-puts-taxpayers-wallets-at-risk/