Government-Owned Networks Are Still A Bad Idea

Citizens Against Government Waste has long been concerned about wasteful spending on government-owned networks (GONs) that provide services that duplicate private sector providers in the same communities.

This concern has heightened since the enactment of the Infrastructure Investment and Jobs Act (IIJA) in 2021, which allocated $42.5 billion for the Broadband Equity, Access, and Deployment (BEAD) program, managed by the National Telecommunications and Information Administration (NTIA).  While the IIJA did not set a preference or otherwise promote GONs, the NTIA guidance for BEAD included a preference for GONs to deploy broadband.  CAGW has suggested that the BEAD guidance be revised to remove that provision, among others.

There are approximately 450 GONs across the country, with more expected to be built using BEAD funding.  According to a December 2, 2024, Information Technology & Innovation Foundation report when those networks are in financial distress, it becomes necessary to sell the assets, like when Google bought the GON in Provo, Utah in 2013,  for $1, or adopt taxpayer-supported bailouts.

The Phoenix Center for Law and Economics May 5, 2025, report on GONS notes, “Municipal entry into fixed broadband services requires significant investments and sustained losses, and for a GON these losses must be covered involuntarily – in most cases, by constituents rather than investors.”  The study found that in California, Kentucky, Louisiana, Michigan, local cities are selling their networks, citing the inability to afford capital upgrades and, business decisions based on a competitive marketplace, including funding made available through the BEAD program.

GONs should be gone because they are expensive to build, maintain, and operate.  More communities that have built or want to build these networks are recognizing the breadth of these costs and that there is little to be gained, especially when there are already providers (usually more than one) in their local area.  If they do not refrain from funding GONS, taxpayers will continue to foot a growing bill for redundant, wasteful, and eventually obsolete networks.