Op-Ed: Detroit should abandon wasteful internet project

Count Detroit as the latest big city beginning the process of constructing its own broadband network, siphoning taxpayer dollars to a project with questionable need that may do more long-term harm than good for digital access.

City officials announced recently that work will begin on a $10 million pilot project for 2,000 homes and businesses in the Hope Village neighborhood, using funds from the American Rescue Plan Act (ARPA).

Detroit’s Digital Access Policy and Strategic Infrastructure Plan proposes a mammoth longterm project — a citywide fiber broadband network with open access costing $900 million and taking a decade to complete. This would make the network easily the largest such municipal broadband project in the U.S.

The funding for the project is murky. The city says it will pursue money from a variety of sources in a time where a historic amount of taxpayer is being allocated for broadband infrastructure.

In addition to ARPA, Detroit hopes to tap into the National Telecommunications and Information Administration’s Broadband Equity, Access and Development Program and the Michigan state broadband grant program. But with plans so large, and a tab approaching $1 billion, city taxpayers would almost certainly have to fund some (or a large portion) of the project with debt.

The city doesn’t make a compelling case for spending that kind of taxpayer money to blanket all of Detroit in a new fiber network. Broadband Now, a website that tracks internet coverage across the U.S., points out that few such gaps exist in Detroit.

“Most in this city also have superb access to internet service, thanks to high-speed connections provided by companies such as AT&T, Xfinity, and MetroNet,” the website says, adding that AT&T and Xfinity “offer gigabit speeds and various plans in almost all neighborhoods.”

Data from the Federal Communications Commission show that only about 0.5% of Detroit residents are not served by a wireline broadband provider. Meanwhile, 88% of residents have at least two options for fixed broadband service. In addition to fiber options, the growth of 5G wireless continues to bring blazing-fast speeds to residents who lack wireline broadband.

City leaders have mostly agreed that the bigger issue leading to a digital divide in the city is due to demand. Connect 313 is the city’s digital equity strategy program created in 2020 to educate residents about the importance of broadband and offer subsidies to help low-income residents pay for service. It has done an effective job of closing the digital divide by providing mobile hot spots where there are gaps in coverage.

Joshua Edmonds, Detroit’s director of digital inclusion, said in a news release that the city’s plan calls for an open access system in which “the city provides the infrastructure and internet service providers can use the fiber lines the city installs to deliver service to residents.”

The city’s plan seems to indicate a willingness of Detroit to strong-arm providers into using the city’s fiber. On page 23 of the plan, under the section asking what the plan means for Detroit’s incumbent providers, the paper points out that the city could refuse access to rights of way.

“As system bandwidth is shifted from delivering channelized video to internet and data services, these operators will have no legal claim to continue accessing Detroit’s ROW,” it states.

“This plan effectively solves this problem by providing cable operators with the ability to move their internet or data only customers over to the municipal fiber optic utility infrastructure with no capital costs incurred.”

The plan was developed by EntryPoint Networks, a Utah-based consultant that has proposed and built an open access network in Ammon, Idaho, a city with 2% of Detroit’s population in which residents have a median income more than two times that of residents of Detroit.

EntryPoint assumes a 65% take rate for residents of the Detroit municipal network. But as the Taxpayers Protection Alliance’s 2020 report, “GON with the Wind: The Failed Promise of Government Owned Networks Across America,” points out, the rosy projections of consultants rarely pan out when incumbent providers respond competitively to the new entrant in the market.

Rather than motor ahead with its plan for citywide fiber, funded by taxpayers, Detroit leaders should put the brakes on this network. With the already widespread availability of broadband and the efforts of 5G wireless and the Connect 313 program to close the small gaps, this would just be a massive waste of money.