In the quest to expand broadband, some have suggested the implementation of government-owned broadband networks as a way to expand internet access. However, before such proposals are adopted, it is important to consider the key problems with government-owned networks.
In the first place, it is important to define what a government-owned network is (GON). GONs are broadband networks that are owned by a state or local government entity. The government entity usually also handles the operation of the network. Advocates of such networks claim that they help fill in the gaps in private sector service, but it is important to test such claims against the actual track record of the networks.
Mississippi has not seen a widespread implementation of GONs. But the effect of potential future implementation should be considered in light of the experiences of other states. According to a study conducted by the Taxpayers’ Protection Alliance, GONs have a consistent track record of costing more than expected to build and maintain.
Such networks consistently do not reach their targeted populations effectively, with many of them only reaching as little as 40 percent of the targeted households. On top of this, many municipalities have incurred millions of dollars in debt that the broadband networks themselves have not been able to pay for. This has led to higher taxes in some places as municipalities try to recoup their losses.
These facts point back to the principle that government entities interfering in the market by shifting taxpayer funds is an ineffective strategy for broadband. Not only are such programs prone to the problems mentioned above, but there is also the systemic issue with the fact that such government intrusion disincentivizes private sector broadband investment.
While a government network pulls from the flow of taxpayer dollars and lacks real competition, private sector companies have to deal with real challenges in a competitive market. In this way, government broadband has an unfair advantage over private-sector broadband companies. This stagnates private sector broadband investment in these areas and makes the broadband infrastructure expansion the exclusive domain of central government planners. Such centralized planning has a consistent track record of faulty projections and an inability to meet the demands of the market.
In order to prevent such failures, Mississippi should do as other states have done and restrict the formation of government-owned networks. Particularly in the wake of new broadband funding coming into the state, leaders should ensure that government entities do not use the funding to create such networks that will put them into debt and crowd out the private sector.
Mississippi needs real solutions to broadband expansion. While municipal broadband advocates often insist that government-owned networks are a pathway to expansion, empirical evidence and free market principles suggest otherwise. Rather than bring false “solutions” to the broadband gap, Mississippi should pursue free-market models that reject the poor track record of government-owned networks.