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Broadband in America: Alternatives to GONs Needed

Widespread broadband-stockbroadband access is a noble goal. The question comes down to how expansion of current networks takes place. The Coalition for the New Economy wants to make sure such investments are both effective and efficient.

Read its latest study, released earlier this week. The group’s press release is below:

The Coalition for the New Economy today (Monday) released a study by Dr. Joseph P. Fuhr, Professor of Economics at Widener University in Chester, PA. The study outlines the complex and problematic history of government-owned broadband networks (GONs) and looks for alternatives for achieving universal broadband access.

“Policymakers around the country are hurriedly trying to find ways to extend high-speed broadband access to all Americans,” said Fuhr, “This is a noble goal, but in their haste some local lawmakers have made bad business decisions, opting to build public networks that often leave taxpayers deep in the red.”

The report cites several case studies that show GONs:

  • Do not meet their stated goal of universal service;
  • Fail financially because they lack clear, sustainable business plans, based on realistic cost-benefit analyses;
  • Are often duplicative;
  • Create an unfair playing field between the public and private sector; and
  • Are so costly they crowd out spending on other essential social services, including law enforcement, healthcare and education, as well as stifling innovation.

Fuhr says, “At a time of declining local revenues and rising budget deficits, taxpayers have the right to scrutinize how their local leaders are spending precious tax dollars. They deserve to know GONs are simply not the best, fairest or most cost-efficient way to achieve universal broadband access.”

In his study, Fuhr outlines a more effective way to extend broadband access, advising municipalities to explore public-private solutions. “For example, reducing the tax and regulatory burden on private telecommunications firms could be enough to compel these companies to invest in, and bring jobs to, underserved areas,” Fuhr says.

The Coalition for the New Economy (CNE), which commissioned Fuhr’s study, is dedicated to ensuring that all Americans have access to innovative technologies and that policies are fair, fiscally responsible and will allow for increased access and adoption.