For the most part, municipally-built broadband networks have the economic chips stacked against them and, where tried, have saddled local taxpayers with a mountain of debt and half-built networks that are then sold at fire-sale prices to vulture investors. Taxpayers in Provo, Utah, for instance, spent $40 million to build a relatively small and modest network only to sell it for $1 a few years later because they underestimated the massive costs of operating, upgrading and maintaining it…
It’s as destructive as it is unnecessary. Here in Maryland we’ve so far chartered a wiser course, targeting scarce public funds at truly under-served areas using less risky and far more appropriate methods… Yet local governments continue to flirt with an idea that should have been discarded years ago.
wrote Maryland Sen. Catherine Pugh (D - Baltimore City) on the various problems with municipal broadband in a Baltimore Sun op-ed. She continues:
Broadband is an extremely competitive market — more so than it ever has been. Over 80 percent of the public can get super-high speeds of over 100 Mbps, and nearly all Americans can (or will soon) get four different wireless 4G technologies with speeds up to 20 Mbps. Prices per megabit are dropping quickly. Even advocates of government-owned networks like US Broadband Coalition founder Jim Baller have grown skeptical that government-owned networks can win enough customers, arguing that community broadband projects “are more challenging now than they’ve ever been.”
Of course, broadband could be more competitive — to start, if local governments would just get out of the way, we’d have more new entrants like Google Fiber.