Lawmakers in Portland, Maine are proposing the creation of a taxpayer-funded Internet service, an “open access fiber network” for residents, by expanding existing government networks to cover the entire city.
Steve Pociask, president of the American Consumer Institute, says taxpayer-funded Internet service leads to higher tax bills.
“I think the thing that consumers need to know, is that when you look at all the empirical evidence, time and time again the public provision of private goods such as broadband services seems to lead to unprofitable operations,” Pociask said. “When that happens, that means they push to recover the losses to taxpayers or other public services. As some examples, you’ll see fees attached to your water or your electricity or other municipal fees or to bonds. So, rarely are these things even close to profitable.”
Pociask says meeting consumers’ demands just isn’t in the government’s “code.”
“When you look at it, these companies lack the incentive to maximize revenues and satisfy consumers,” Pociask said. “Just go to the state DMV and see how long the lines are.”
‘The Broadband Wagon’
Frank Conte, communications director of the Beacon Hill Institute, says lawmakers should give up on the idea of building taxpayer-funded broadband networks.
“I don’t think it’s a wise move at all.” Conte said. “I think government tends to get on the broadband wagon at the wrong time, and it has no way of keeping up with either the infrastructure that it seeks to maintain or the changing technology.”
Conte says lawmakers should ensure government sticks to its core responsibilities.
“I think the city government ought to concentrate on what it does well: public safety, [a] basic level of public education, [and] road and highway maintenance,” Conte said. “I think that for them to get into this risky business is questionable.”
Markets, not governments, are good at filling consumers’ demands, says Conte.
“It seems that government will fail in judging what consumers really want,” Conte said. “If you have a private monopoly provider, the answer is to introduce more competition. This should all go back to the fact that government provision of some goods is always inferior to what the private market can provide.”
Andrea Dillon ([email protected]) writes from Holly Springs, North Carolina.
Brian Deignan, “Community Broadband, Community Benefits? An Economic Analysis of Local Government Broadband Initiatives,” Mercatus Center: https://heartland.org/policy-documents/community-broadband-community-benefits-economic-analysis-local-government-broadband/