Gallatin County, Montana, Recklessly Invests in Broadband Boondoggle | Citizens Against Government Waste

Gallatin County, Montana, Recklessly Invests in Broadband Boondoggle

The WasteWatcher

Despite substantial evidence of the wastefulness and inefficiency of government-owned broadband networks (GONs), Gallatin County, Montana, has become the latest government entity to agree to make such an investment.  Citizens Against Government Waste has often written about these projects, including a July 2021 report, “The Folly of Government-Owned Networks,” which points out that while expanded access to the internet is a laudable goal, GONs typically increase financial burdens on the taxpayers and rarely, if ever, bring the benefits localities seek.

At a public hearing on Tuesday, October 5, 2021, the Gallatin County Commission voted unanimously to support a $65 million bond to fund the expansion of Bozeman Fiber’s network. Prior to the vote, the Council for Citizens Against Government waste urged the Gallatin County Commission to avoid this fate.

The Bozeman Broadband Boondoggle began in 2015, when members of the Bozeman business community joined with the city of Bozeman, Bozeman Public Schools, and Gallatin County to develop a “modern gigabit fiber network to support local businesses, attract new business, and help ensure economic growth.”  The fruit of those efforts, Bozeman Fiber, Inc., was formed as a nonprofit in order to evade a Montana prohibition on GONs.  Since then, the company has laid a 25-mile ring of fiber optic cable and recently announced plans to expand beyond buildings run by the city of Bozeman, Bozeman Public Schools, Gallatin County, and two hundred commercial clients.

To fund the expansion, Bozeman Fiber appealed to the Gallatin County Commission for the issuance of a $65 million bond.  The initial plan calls for the construction of fiber infrastructure within the city of Bozeman itself, an area that already has access to five internet service providers, rather than the rural areas that need it most.  The plan, then, rests upon the belief that enough residents of Bozeman will leave their current providers and select a new one through Bozeman Fiber, thus making further expansion to rural areas of Gallatin County financially feasible, even though shows that 88.9 percent of Gallatin County already has access to speeds of at least 25 Mbps, while 85.3 percent of residents have access to 100 Mbps.  

An additional concern for the project’s success, however, is Bozeman Fiber’s relationship to the Utah Telecommunication Open Infrastructure Agency (UTOPIA) Fiber, a company owned by eleven cities in Utah.  UTOPIA, which will manage “network design, oversight of engineering and construction, materials management, remote monitoring of the network, provisioning, IT systems and running a service provider marketplace,” has a record of failure and setbacks.  

Like Bozeman Fiber, UTOPIA was originally funded in 2004 through a $185 million bond with the promise of becoming financially viable in five years.  Instead, UTOPIA Fiber currently holds $330.2 million in debt and operates at a loss.  Both Bozeman Fiber and UTOPIA run the risk of following the path of iProvo, an attempted GON in Provo, Utah, sold to Google Fiber for the grand sum of one dollar.  To make matters worse, the iProvo project left taxpayers holding $39 million in debt from a construction bond after the city “found the operation too daunting and turned it over to a succession of private partners that have struggled to break even.”

These lessons, in addition to the various red flags raised by the lack of transparency in Bozeman Fiber’s operations, its relationship with UTOPIA Fiber, and the potential for corruption, ought to serve as a warning to Gallatin County and local communities across the nation.  Instead of forcing residents to adopt and then bailout government-owned networks, local governments should reduce red tape and allow consumers to choose the technologies that best fit their needs, whether that be fiber or another option like cable, DSL, fixed wireless, 5G, mobile broadband, or satellite.

Sign Up For Email Updates

Optional Member Code