The WasteWatcher: The Staff Blog of Citizens Against Government Waste

The Turducken of Broadband

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


A turducken is the epitome of overbuild.  One takes a deboned chicken, covers it in stuffing, wraps it with a deboned duck, adds some more stuffing on top of the duck, and wraps it again with a deboned turkey.  That may be all well and good for a hearty Thanksgiving, but it is no feast when a city or town decides to spend taxpayer dollars to build a government-run broadband network.  The thick layers of government control over easements, pole attachments, permitting requirements, and the local tax base that are slapped together to directly compete against private internet providers make a turducken look like a simple endeavor. 

Building broadband internet networks is neither easy nor cheap.  According to NCTA, an internet association, since 1996 U.S. companies have made more than $250 billion in capital investments to expand and improve their internet networks.  US Telecom estimates that since 2014, cable companies have invested an estimated $6 billion in capital, and competitive fiber providers have invested an estimated $9 billion for capital improvements and expansion.

When a municipality decides to provide broadband services, the high initial and ongoing costs involved are passed on to taxpayers, with little to nothing in return.  A 2014 study by the Mercatus Institute concluded that government-run broadband networks have virtually no impact on the economic status of a town or city, other than swelling the size of government. 

Provo, Utah found this out the hard way.  In July 2004, the city began building a $39 million fiber-optic network, called iProvo, which would be operated as a publicly-run utility.  The debt incurred by construction of the project would be paid through a $5.35 monthly telcom debt charge tax on city residents’ utility bills.  On April 18, 2013, Google and the city announced that Google Fiber would be brought to the city as part of an agreement by the local government to sell the existing municipal fiber deployments set up by iProvo for $1.  While the sale removed Provo from the business of providing internet service to its residents, the taxpayers are still paying off the debt already incurred.

Often touted as a model for municipal broadband, Chattanooga, Tennessee has had its ups and downs.  Dr. George Ford, the chief economist at the Phoenix Center for Advanced Legal & Economic Public Policy Studies, noted in an August 18, 2016 article in The Tennessean that that the project could not have even begun without a large infusion of taxpayer dollars through the federal stimulus program.  According to Ford, the city’s $330 million expenditure included $105 million from taxpayers across the country, and the remainder was funded through the city’s captive electricity ratepayers.  Yet, most of the residents of Chattanooga continue to purchase internet services from private providers rather than rely on the city-owned network. 

In 2015, Seattle, Washington investigated a stand-alone municipal fiber optic network build-out.  The city estimated the cost would be $480 million to $665 million, which would force the city to obtain either outside financing or partner with the private sector to deploy the network.  Yet, Seattle already has two major broadband internet providers, Comcast and CenturyLink.  In addition, Frontier offers DSL-based internet access, and Startouch provides fixed wireless internet to most of Seattle.  In other words, a municipal broadband system in Seattle would overbuild a turducken network on top of existing service providers. 

Rather than trying to have it all, like the turducken at Thanksgiving dinner that just leaves one with a very full stomach and perhaps major indigestion, towns and cities across the country should review and revise laws and regulations that might restrict greater private sector investments in broadband within their communities, such as pole attachment rates, and permitting requirements, while also allowing network providers to install fiber optic or cable lines to unserved communities during road construction.  Municipalities should take every other possible step to encourage private investment in expanding communications capabilities.  Otherwise, taxpayers could be hampered with an unnecessary and expensive system that will only increase their debt rather than their internet access. 

Issues/Topics: 

Sign Up for Email Updates!Click Here!

View Archives

Posts by Author

Posts by Tag

Big Government (151) Waste (72) Obamacare (68) Budget (66) Healthcare (66) Congress (59) Uncategorized (56) Telecommunications (49) Debt (43) Technology (42) Deficit (42) Internet (41)