This piece was originally published by The Center Square on October 4, 2022.
Back in the 1800s, Texas prospectors were looking to hit it big by drilling for oil. Now, prospectors are drilling for taxpayer dollars by trying to land lucrative broadband contracts. With the billions of taxpayer dollars in federal money flowing into states for the purposes of extending high-speed internet infrastructure, broadband consulting is quickly becoming big business.
The Taxpayers Protection Alliance (TPA) has written extensively about some of the major national broadband consultants, such as Magellan and CTC. Now, more companies are entering the consulting market on a state or regional level. One case in point: CobbFendley, a Houston-based engineering firm with offices across the west and southeast that has ramped up its consulting business in Texas.
CobbFendley has prepared feasibility studies in at least three communities – Harlingen, Fort Bend County and Victoria. All three localities have recommended that government officials there build a middle-mile fiber network, which CobbFendley will be happy to design and construct. The company is now preparing studies for Texas in Cedar Park, Buda and Cameron County.
Cobb Fendley Project Manager Melissa Beaudry recently told commissioners in Harlingen that, “We really are looking at building a fiber network for you all as a part of this design.”
According to BroadbandNow, Spectrum offers broadband services to more than 96 percent of the Harlingen community, with AT&T covering three quarters of the residents. And, about 78 percent of residents can choose between two wired broadband providers.
CobbFendley notes in its report for Victoria that “digital equity issues cannot be resolved by lower prices” because “those who don’t adopt broadband services have not experienced the value that it brings.” That would seem to indicate that communities like Victoria ought to focus more on education than duplication of broadband services. BroadbandNow reports that three providers cover at least 85 percent of Victoria with broadband, and Rise Broadband offers coverage to nearly 97 percent of residents there.
Appealing to the heart of every bureaucrat, CobbFendley notes in its Victoria report that contracting with a private provider to build a middle-mile fiber network would “make the city look good in the eyes of the public” and notes that plenty of broadband-specific grants would likely be available.
Fort Bend County commissioners have been considering a nearly $37 million proposal from CobbFendley for a middle-mile network, with the county forming a steering committee to determine ways to find matching funds to federal grant money. The commission removed from its Tuesday meeting agenda an item regarding moving forward with intent to apply for grant money for the middle-mile program so the plans remain up in the air.
CobbFendley didn’t return a call from TPA seeking comment on its work in these Texas communities.
In the scale of poor decisions regarding government broadband, middle-mile networks generally aren’t as bad as all-in government-owned networks that include the last mile, but there are exceptions. KentuckyWired is the most egregious example, putting state taxpayers there on the hook for as much as $1.5 billion for the border-to-border, middle-mile network.
What local officials often don’t realize when it comes to middle-mile networks is that they are often duplicating the work of private providers and they still have to convince said providers to connect to their middle-mile, which providers are often reluctant to do because they already have their own fiber backbone infrastructure. The last mile is significantly more expensive, too, so creating a middle-mile isn’t a foolproof way to connect the currently unconnected.
Brent Skorup, senior research fellow at Mercatus Center, told TPA that he’s seen a lot more broadband consulting services pop up around the country with the federal coffers flowing.
“There’s a broadband gold rush right now and there’s going to be small companies of varying quality and expertise trying to get some of these tens of billions of dollars flowing to states and cities,” he said. “Unfortunately, in a gold rush a lot of people lose their shirts.”
In this case, the shirtless could be taxpayers. Skorup said he’s concerned that Congress encouraged sloppiness with the federal broadband grant programs by requiring low matching funds by local governments in the contracts. There are also time pressures to meet deadlines to get the funding, but he hopes communities do their due diligence.
His advice to politicians: “Hold on to your wallet and hire a lawyer that knows the broadband industry.”
Taxpayers hope that local officials take the time to do their homework and don’t depend solely on the advice of broadband consultants who have a financial stake in getting their clients to say “yes” to a new network.
With billions of dollars of taxpayer money at stake, it’s important that governments get this right and use the money effectively to close the digital divide.
Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance.
