TPA Urges House Members to Press FCC Members on Municipal Broadband

The Taxpayers Protection Alliance sent a letter yesterday urging House members to use today’s Federal Communications Commission (FCC) oversight hearing in the Energy and Commerce Communications and Technology Subcommittee as an opportunity to raise important questions regarding the agency’s actions on preempting state laws around the country as it relates to municipal broadband. The FCC must answer for their role in overreaching into the states, without proper authority, on broadband expansion. 

Read the letter below:

November 16, 2015

Dear Members of the House Energy and Commerce Communications and Technology Subcommittee:

On November 17, the Energy and Commerce Communications and Technology Subcommittee will hold an oversight hearing with Federal Communications Commission (FCC) members. The Taxpayers Protection Alliance (TPA) encourages you to ask the commissioners about their 3-2 February decision to preempt laws in Tennessee and North Carolina restricting municipal broadband networks. These laws are a reaffirmation of states’ important autonomous powers and that the FCC has no authority to override them.

TPA has been studying government-owned networks (GONs) for several years and we have concluded that these networks put local, state and federal taxpayers at grave risk. Also, legal scholars have noted that Supreme Court precedent shows the FCC does not have the authority to tell states what they can and cannot do when it comes to broadband.  In fact, the U.S. Department of Justice suggested as much when it refused to advocate on the FCC’s behalf in front of the 6^th Circuit Court of Appeals.

These networks are much more likely to fail than to make money for the municipalities that operate them. These failures have occurred around the country including: Marietta, Georgia; Groton, Connecticut; and Provo, Utah, just to name a few. Each of these cities sold their GONs at multi-million dollar losses and taxpayers were left holding the debt. Municipal networks fail because local officials overestimate how much money they’ll need to maintain and upgrade their networks. The consultants who convince these officials to enter the broadband business also overestimate the number of consumers who will subscribe. Higher outlays combined with lower revenues spell fiscal disaster.

Even if municipalities and states were awash in funds, it is completely unnecessary to spend taxpayer funds on a service the private sector can provide at competitive prices. Ninety-eight percent of Americans have access to high-speed broadband today, and the millions of dollars spent on duplicative municipal networks each year would be much better spent on public safety, local infrastructure and other core government responsibilities.

Finally, municipal networks have a chilling effect on private investment. In Chattanooga, Tennessee, small locally-owned Internet Service Providers have said the city’s government system threatens their businesses, and the jobs they’ve created in Tennessee.

TPA urges you to turn a skeptical eye toward municipal broadband. There are more effective ways of expanding broadband access, adoption and affordability than putting millions of taxpayer dollars at risk. TPA officials would be happy to discuss those options with you, or with members of your staff.

Sincerely,

David Williams
President
Taxpayers Protection Alliance