“Never let a good crisis go to waste.” This quote has been used over and over again in situations when people are afraid and illustrates how readily some people will use a horrible situation to advance their political agenda. The COVID-19 pandemic is the latest crisis to be used in this manner, this time in the ongoing battle over whether the government should own and operate internet companies.
The latest salvo comes from those pushing Congress to preempt state laws so that cities can build and own their own internet systems. Unfortunately, those folks are resorting to misleading and downright dishonest tactics to scare an already frazzled public during the worst public health emergency in our lifetimes. Backers of government-owned networks (GONs) angrily accuse “greedy” private-sector internet companies of getting laws passed banning government-owned internet utilities, ostensibly to eliminate the competition. These GON devotees then up the deceptive ante by claiming that only local governments and municipalities have the incentive and willingness to offer low-cost or free internet to low-income residents.
After wrongfully arguing that laws restricting GON development are keeping poor people from getting affordable broadband, taxpayers are forced to endure the familiar plea for Congress to jump in and take over all internet governance laws so that struggling households across the country have to foot the bill for local governments to build flimsy broadband systems.
Contrary to these false claims and insinuations, private-sector companies have invested more than $1.5 trillion of their own dollars to build and consistently update their state-of-the-art systems while also offering extremely affordable internet service for low-income customers. And they’ve been doing this long before the COVID-19 pandemic. For example, Comcast offers Internet Essentials, which is a service available to low-income households for $9.95/month. In response to the pandemic, Comcast announced that low-income families who are new customers can sign up for 60 days of free Internet Essentials. In addition, private-sector companies often offer plans to help the elderly and schoolchildren from low-income families get access to the internet.
GON networks have a lot to live up to, but sadly don’t come close to replicating the successes of their private-sector counterparts. Importantly (but conveniently ignored by governments and consultants) most places that have government-owned broadband systems are not actually cheaper than privately owned systems.
While a study by the Berkman Klein Center at Harvard found that prices for GONs were marginally cheaper than private providers in the communities studied, critics pointed out that the examination used an apples-and-oranges comparison of GONs with slower speeds to private providers with faster speeds. Meanwhile, a study by the University of Pennsylvania found that 11 of the 20 GONs examined had negative cash flow and only two of them would ever generate enough revenue to recoup the cost of construction, leaving taxpayers or electric ratepayers to foot the bill for the failing internet. But these facts don’t stop the tireless GON pushers from exploiting people’s fears about this pandemic to advance their government-does-everything-best agenda.
Congress has bigger and better things to focus on than preempting every state’s broadband and internet laws so that taxpayer-funded consultants and local governments can take and use even more of Americans’ hard-earned dollars. Installing government-owned networks would indeed let this crisis “go to waste” by strapping taxpayers and consumers with astronomical bills for poorly functioning internet services.
If these champions of the poor and underserved are serious about connectivity, they will support the Federal Communications Commission in tearing down regulatory barriers rather than building expensive and unnecessary broadband networks that will ultimately fail.