Lawmakers in Seattle, Washington rejected a proposal to create a government-owned Internet service provider (ISP) that would have competed with private-sector businesses.
Michael Mattmiller, the city’s chief technical officer and city budget Director Ben Noble urged the Seattle City Council to vote down the proposal in June 2015, after a feasibility study concluded the plan to create an Internet service provider would require the use of general revenues, reducing the amount of funds available for core functions, such as law enforcement and emergency services.
Shortage of Shortages
Erin Shannon, director of the Washington Policy Center’s Center for Small Business, says government-owned networks, also referred to as municipal broadband networks, are like hammers searching for nails.
“Municipal broadband is a solution in search of a problem,” Shannon said. “Nationally, 79 percent of American households had some form of Internet access. Entry-level prices in the U.S. broadband market are among the lowest in the world, and consumers enjoy more high-speed Internet technology choices than [people in] most other countries.
“When unfettered by government regulations, private companies respond to the demand for more broadband access the way the free-market predicts they will: They innovate to provide better services at lower prices,” Shannon said. “Private companies spent $69 billion innovating and building broadband networks in 2012 and another $75 billion in 2013.”
Browsing History for Past Successes
Encouraging private-sector innovation by reducing regulatory burdens has been proven to work, Shannon says.
“Seattle is a great example of this,” Shannon said. “When the city sought to encourage broadband providers to provide more households with Internet access, the implementation of policy changes reducing regulatory barriers worked. Private companies have increased broadband infrastructure investment since the red tape was cut, providing Internet access to tens of thousands of homes in Seattle.”
‘Responding to Consumer Demands’
Brent Skorup, a research fellow with the Mercatus Center’s Technology Policy Program, says consumers’ digital demands are mostly well-served by the private sector.
“You’d be hard-pressed to make a case that the market is not responding to consumer demands,” Skorup said. “Because of consumer demand for new broadband services and ISP investments, today nearly every American has [access to broadband] from multiple providers, including wireless and wireline. All the available data suggests that for the vast majority of Americans without broadband, it is a choice.”
Skorup says government regulations are the real roadblock to consumers trying to get onto the information superhighway.
“The ironic thing is that many of the competition and affordability problems for Internet access today were created by government,” Skorup said. “We’re still living with some of the ill effects from the days of regulated telephone and cable monopolies.”
Andy Torbett ([email protected]) writes from Atkinson, Maine.
Charles M. Davidson and Michael J. Santorelli, “Understanding the Debate Over Government-Owned Broadband Networks: Context, Lessons Learned, and a Way Forward for Policymakers,” Advanced Communications Law and Policy Institute at the New York Law School: https://heartland.org/policy-documents/understanding-debate-over-government-owned-broadband-networks-context-lessons-learn/