By Bob Rankin, The Rankin File, November 9, 2015.
The worst nightmare of Verizon, Comcast, and other commercial broadband providers is coming true. Across the USA, their customers are voting to establish municipally owned and operated networks. The tide is turning overwhelmingly in favor of public alternatives to private broadband. Here's what you need to know, if you'd like low-cost, super-fast Internet in YOUR town...Municipal Broadband Networks.
Municipalities that operate their own electric power utilities are in a good position to offer broadband service at lower retail prices than commercial companies in part because they face lower capital and operating costs. They don't have to negotiate for, and pay rental for, pole attachment rights and access to ducts and manholes. They don't have to negotiate a franchise agreement and pay franchise fees. They can fund construction projects through low-interest revenue bonds or general obligation bonds.
Depending on the municipality they may not have to maintain a separate office or cover the expense of such things as customer service, billing, accounting, insurance, legal services, rent and lease expense, utilities, vehicle expense, amortization, depreciation, interest and taxes. And of course, as non-profit municipal corporations, they don't have to pay dividends to stockholders.
So yes, in favorable circumstances, municipalities can indeed offer broadband services at lower retail prices than commercial companies. Chattanooga is a well-known example; other examples include Wyandotte, Michigan and Windom, Minnesota. Each of these cities owns its own electric power utility.
But even owning an electric utility doesn't always guarantee success. Provo's iProvo network has not been financially successful. In 2013 it announced that Google would acquire the network for $1.00.