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July 31, 2006

Muni Broadband: Another One Bites the Dust

Marc Kilmer, Buckeye Institute research associate, reports that the city of Lebanon, Ohio, is in discussions with Cincinnati Bell about unloading its municipal broadband system, which has racked up $9.8 million in debt.

The system launched in 1999, Lebanon became one of the first towns to attempt to compete with the local cable TV company. Year after year, costs outpaced return.

The failure of Lebanon’s telecommunications business illustrates why governments should not compete with private enterprise. When Lebanon was considering this venture, there was no indication that the city had the expertise or resources necessary to compete with a large multi-national corporation like Time Warner Cable.

The city’s grand plans looked good on paper, but the government soon found that the market demands results that the city could not deliver. So now the city is sitting on a telecommunications system that loses money every year and is $9.8 million in debt.

The city may realize that with advances in technology, the market for providing video services will soon become much more competitive. Phone companies are poised to enter the market with video services over their fiber optic lines. This means consumers will see more choices and lower prices through increased competition. The city-run system in Lebanon was struggling when it competed against just Time Warner. The prospect of more competition would be disastrous for that system.

Lebanon defends its venture by pointing out that cable television prices were lowered by the entry of the city-run system into the market. While cable prices are indeed lower in Lebanon due to competition, these lower prices have been subsidized by the taxpayers of Lebanon. Competition is indeed good, but this competition should not be subsidized by taxpayers.

Kilmer’s wrap-up is here. The news follows just weeks after a Buckeye report, authored by Kilmer, examining the fiscal and legal problems Lebanon’s municipal netowk has faced since Day One.

Posted by steve.titch at July 31, 2006 02:45 PM




Comments

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Comment by: Sten11329 at January 25, 2007 09:03 AM

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Comment by: Sten76997 at January 28, 2007 07:47 PM

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I just don't have anything to say right now. I haven't been up to anything recently, but it's not important. I've just been sitting around waiting for something to happen, but shrug.

Comment by: Sten28425 at January 29, 2007 12:53 AM

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My life's been pretty dull recently. Shrug. My mind is like a void. I haven't gotten anything done lately. I can't be bothered with anything recently.

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Comment by: Sten2622 at January 29, 2007 06:30 PM

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Comment by: Sten45680 at January 30, 2007 07:31 AM

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Not much on my mind. I don't care. I've just been letting everything happen without me , but shrug. Whatever. I feel like a void.

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Comment by: Sten57830 at February 1, 2007 12:17 PM

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Not much on my mind. I don't care. I've just been letting everything happen without me , but shrug. Whatever. I feel like a void.

Comment by: Sten92909 at February 1, 2007 05:11 PM

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I haven't gotten anything done recently. I've just been hanging out doing nothing. I haven't been up to anything these days, but it's not important. Today was a total loss.

Comment by: Sten43411 at February 1, 2007 09:37 PM

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Comment by: Sten16605 at February 2, 2007 07:12 AM

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Comment by: Sten47701 at February 2, 2007 04:38 PM

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My mind is like a bunch of nothing, but I guess it doesn't bother me. I haven't been up to anything recently. I've pretty much been doing nothing to speak of.

Comment by: Sten72571 at February 3, 2007 12:14 AM

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Comment by: Sten14103 at February 3, 2007 01:06 AM

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My life's been pretty dull recently. Shrug. My mind is like a void. I haven't gotten anything done lately. I can't be bothered with anything recently.

Comment by: Sten1659 at February 3, 2007 05:33 AM

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My life's been basically bland today. More or less nothing seems worth thinking about. My mind is like an empty room. I've more or less been doing nothing to speak of. Not much on my mind recently.

Comment by: Sten98182 at February 3, 2007 06:08 AM

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Not much on my mind. I don't care. I've just been letting everything happen without me , but shrug. Whatever. I feel like a void.

Comment by: Sten32987 at February 3, 2007 12:10 PM

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I haven't been up to anything today. I don't care. I've just been staying at home not getting anything done. Basically not much happening right now. Maybe tomorrow. I guess it doesn't bother me.

Comment by: Sten8464 at February 3, 2007 09:30 PM

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Comment by: Sten59947 at February 4, 2007 02:00 AM

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Comment by: Sten54691 at February 4, 2007 04:42 PM

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Comment by: Sten9450 at February 4, 2007 08:30 PM

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Comment by: Sten36885 at February 4, 2007 10:44 PM

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I've just been staying at home waiting for something to happen, but I don't care. Basically nothing seems worth thinking about. I can't be bothered with anything recently.

Comment by: Sten34700 at February 5, 2007 04:42 AM

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Comment by: Sten40705 at February 5, 2007 09:44 AM

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Comment by: Sten32013 at February 5, 2007 03:01 PM

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Comment by: Sten40743 at February 5, 2007 06:58 PM

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Comment by: Sten60323 at February 5, 2007 10:32 PM

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Basically nothing seems worth thinking about. I haven't been up to much these days. I just don't have much to say right now. I can't be bothered with anything , but whatever.

Comment by: Sten13799 at February 5, 2007 11:41 PM

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Not much on my mind. I don't care. I've just been letting everything happen without me , but shrug. Whatever. I feel like a void.

Comment by: Sten86815 at February 6, 2007 03:18 AM

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My life's been pretty dull recently. Shrug. My mind is like a void. I haven't gotten anything done lately. I can't be bothered with anything recently.

Comment by: Sten18383 at February 6, 2007 07:34 AM

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Comment by: Sten88849 at February 6, 2007 07:40 AM

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Not much on my mind right now, but it's not important. I've just been letting everything happen without me. I just don't have anything to say right now.

Comment by: Sten93410 at February 6, 2007 08:19 AM

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