Out of Control

A Pacific Research Institute survey of 52 municipal broadband systems has found that they have soaked up $840 million in local taxpayer money over the past 20 years, while failing to gain the traction of positive cash flow amid greater and greater debt..

Wi-Fi Waste: The Disaster of Municipal Communications Networks, by Sonia Arrison, Dr. Ronald Rizzuto and Vince Vasquez, represents the latest round-up of municipal broadband financial performance, confirming again what past studies have shown: municipal broadband systems invariably costs more and deliver less than promised. They heavily on loans and transfers from established municipal utilities such as electricity and water. Even with the power of the public purse, 77 percent of the time, muni networks can’t pay their way, the report states.

Dalton, Ga., (est. 2005 population 32,140) gains the dubious distinction of the nation’s top municipal “money pits,” accounting for $171 million, or $5,320 per capita, of the $840 million spent across the 52 cities studied.

The other nine cities are:
Tacoma, Wash, $110.9 million
Grant County, Wash., $76.4 million
Jackson, Tenn., $63.7 million
Alameda, Calif., $59.3 million
Provo, Utah, $45.7 million
Newnan, Ga., $41.8 million
Bristol, Va. $37.8 million
Marietta, Ga., $25.9 million
Muscatine, Iowa, $22.9 million

Together, the ten systems account for 78 percent of the total government-initiated spending within the telecom industry.

Download the 90-page report here.