Out of Control Policy Blog

Should we ban gov't broadband business

My colleague Jeff over at Reason Express tipped me off to a law being considered in Ohio to ban city governments from starting broadband telecommunications businesses. Apparently Pennsylvania passed a similar law this year. And the American Legislative Exchange Council has created model legislation to limit municipalities from competing with private providers of broadband telecommunications.

I think there are a lot of good reasons for such restrictions. Right now in virtually any spot on the US map that has an incorporated city government, you can get broadband via at least satellite, and in most via phone wire and cable. There is rarely if every any good reason for local governments to get into a new line of business by providing broadband telecom. Many bad things can and do happen when they do so--a number have lost money hand over fist, and that takes real doing in that serve, while others have cross-subsidized from other service for which people pay fees. Economist Don Alexander did a nice analysis a few years ago of the reasons why government should not get into the internet access business.

Any justification for cities to provide broadband could just as well apply to having them provide grocery stores, WalMarts, and gas stations.

Some organizations advocate for municipal provision of telecoms and it doesn't take long looking at their stuff to see they are arguing for internet access as a fundamental right akin to the right to vote and building a new entitlement system around it.

How quickly a new technology goes from being vilified by the left for destroying jobs to being the core of a new expansion of government.

Adrian Moore is Vice President, Policy


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