TPA Releases Report on Taxpayer Funding of Government Owned Broadband Networks

Taxpayers Protection Alliance

May 13, 2020

For Immediate Release
May 13, 2020
Contact: Grace Morgan
(202-855-4380)

WASHINGTON, D.C. – Today, the Taxpayers Protection Alliance (TPA) released a report detailing the problems with government-owned networks (GONs) for taxpayers and broadband consumers across the country. The report, titled “GON with the Wind: The Failed Promise of Government Owned Networks Across America,” lays out the massive amount of taxpayer dollars being wasted as governments continue to build broadband networks across America. Taxpayer-funded broadband networks are rarely successful as they are poorly targeted and underutilized, often times being sold to private companies for less than the cost of construction. These taxpayer-funded broadband networks undermine private efforts to keep America connected during the COVID-19 crisis and are therefore especially harmful for households.  In tandem with the new analysis, TPA re-launched its website munibroadbandfailures.org, a clearing house for information regarding GONs.

TPA’s report outlines 30 GONs of varying sizes spread out over 18 states. The report finds:

  • The simple average broadband penetration in 2018 across all of the GONs analyzed was 40.3%.   
  • The weighted average broadband penetration (i.e. total broadband customers for all GONs divided by total structures passed by GONs) was 36.8% in 2018.
  • There is a great deal of variation in the penetration rates among the GONs. Salisbury, NC had the lowest penetration at 16.7%; Cedar Falls, IA, had the highest penetration at 83.3%.

TPA president David Williams criticized the wasteful GON projects, stating, “the COVID-19 pandemic has shown the American public that the Federal Communications Commission (FCC) and private sector have stepped up and shown leadership to keep Americans connected with innovative digital services.  The last thing that taxpayers need right now is being forced to fund unnecessary broadband projects that will soon be obsolete due to technological changes and upgrades by private companies. Officials have ignored the problems posed by GONs, resulting in the widespread waste of hard-earned taxpayer dollars. Taxpayers struggling to pay the bills and telework shouldn’t be funding programs grounded in outdated technology and premised on rosy, cherry-picked take rate projections.”

Williams also called on municipalities to follow the report’s recommendations: “Local leaders must curb these reckless projects and critically assess the flawed assumptions that result in taxpayers losing money. Local governments cannot continue to support programs that waste taxpayer dollars and fail to increase broadband access. Based on the report’s findings, TPA recommends refraining from GONs altogether and allowing for private innovation. If these projects must go forward, however, government officials should critically examine consultants’ claims and allow taxpayers access to all data related to projected financials and performance. The status-quo of opaque, unsuccessful broadband projects paid for by taxpayers must change.”

Williams concluded, “TPA will continue to call for accountability as elected officials evaluate GON proposals. Hopefully this report shines a light on the billions of taxpayer dollars being systematically squandered by officials pursuing expensive, ineffective GON projects. Households need fast, cost-effective internet to get through the Coronavirus crisis, not more government boondoggles.”

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