Another Questionable Government Owned Network

(TPA would like to apologize for anybody who is trying to read this blog posting on a government owned/taxpayer subsidized broadband network that is taking forever to download) Taxpayers understand the need to fund essential government services like public safety and transportation.  What taxpayers don’t understand is when the government ventures into areas that they have literally have no business being a part of.  The failure of government owned cable television/broadband networks across the country have reminded taxpayers of the proper role of government and that taxpayer funded cable television/broadband is NOT an essential function of government.

The most recent example of this failed multitasking is with a cable television/broadband company in Groton Connecticut. As the Groton Patch newspaper reported, “Groton City borrowed $34.5 million to build an independent cable company to give viewers choice. Last month, it sold Thames Valley Communications for $150,000 to the only taker.”  The failure of this (or any other) company is bad news but this fiscal disaster is compounded by the fact that this company was taxpayer subsidized and the collapse could have been entirely avoided.  At the time the idea for a new cable company was floated people in the Groton area were already served by established cable providers like Comcast, with AT&T nipping at Comcast’s heels by planning to serve Groton.  With satellite service, this would have given Groton residents plenty of options without using taxpayer funds.

The news for Groton just kept on getting worse.  The Groton Patch also noted that, “The company needed to double its customer base to become profitable, but after 18 months, ended with flat sales, he said. The city found itself subsidizing the operating expenses of the company at a cost of about $2.5 million a year.”

Unfortunately, when it comes to failed government cable television companies this is not the first one.  The poster child for taxpayer dollar waste and a failed government owned system is in Chattanooga, Tennessee that cost federal taxpayers and local electric customers a total of $552 million.  The Chattanooga EPB promised a billion bits (1 Gigabyte) of Internet excitement per second.  In reality, it was actually the private sector that stepped up to the plate and delivered the gig. (read previous blog post here).

Last year Utah state legislators received a report on the Utah Telecommunications Open Infrastructure Agency (UTOPIA), an 11-city government owned network in which an audit showed deep revenue gaps and lagging subscribership. After the report was issued, The Salt Lake Tribune wrote, “The audit suggests that providing broadband infrastructure at wholesale to independent content providers may never work.”

Also in Lafayette, Louisiana, the Louisiana Public Service Commission, which regulates all utilities in the state, voted to conduct an additional audit of LUS Fiber, Lafayette’s government-owned broadband network.  The network was racking up debt at the rate of $45,000 per day. When called before the Lafayette Council a few months later, LUS Fiber administrators, in a near miraculous reversal, said the system was in a “strong financial position.”

History should be our guide.  Before taxpayers in other localities invest in cable companies that end up costing them, they should learn from the past and see that government cable companies are not a good bet.  And as Albert Einstein said, the definition of insanity is doing the same thing over and over again and expecting different results.