RALEIGH – Municipalities in North Carolina and elsewhere seem fascinated with the prospect of creating government-owned broadband networks, arguing that the information highway of the 21st century is analogous to the surface highway of the 20th century – both requiring government action to build and operate. Indeed, the North Carolina League of Municipalities is so intent on keeping the option alive that it is fighting legislation, House Bill 1587, that would keep city governments from misusing their tax exemptions and regulatory power in the construction of telecom networks.
Unfortunately for the League – and fortunately for taxpayers and ratepayers – the timing couldn’t be worse for those advocating government telecom experiments in North Carolina. “Across the United States,” reported the Associated Press on May 22, “many cities are finding that their Wi-Fi projects are costing more and drawing less interest than expected, leading to worries that a number will fail, resulting in millions of dollars in wasted tax dollars or grants when there are roads to build and crime to fight.” My favorite quote in the piece is from Anthony Townshend, research director for the Institute for the Future, who observed that municipal broadband projects are “the monorails of this decade: the wrong technology, totally overpromised and completely undelivered.”
Municipalities seem to be under the impression that their citizens will lack access to the Internet without government intervention. It’s one of the oddest misperceptions of reality I’ve ever seen. Salisbury, for example, is one of the jurisdictions considering a municipal communications network – a “fiber to the home” system, by the way, not wireless – and worried about legislative preemption. But Salisbury is hardly a remote mountaintop village. It is wired. You can purchase high-speed Internet service from the phone company or the cable company. If you wish, you can then install a relatively inexpensive unit and have a wireless network in and around your home or business. More generally, 83 percent of North Carolina is already wired for broadband service, according to the state agency e-NC (it takes credit for this accomplishment, though there is good reason to believe that market demand would have led to virtually the same result). Even the 83 percent figure understates the availability of high-speed Internet, given the availability of in most rural climes.
What digital-divide activists really mean, I guess, is that some consumers, be they urban or rural, do not consider the value of a high-speed Internet connection to be worth the cost. If policymakers really want to treat an Internet connection as an inalienable human right, and its universal provision a worthwhile expenditure of tax dollars, the most efficient solution would be to provide low-income North Carolinians a direct subsidy with which they can purchase the service they want from private providers – just as there are subsidies for the poor to purchase groceries, but not municipally owned grocery stores. As it happens, I think that treating Internet service as a right is a gross abuse and trivialization of the concept of individual rights, but in any event it is scarcely a persuasive justification for local government to get into the broadband business.
Perhaps North Carolina municipalities would have a better case for entering said business, and for battling state legislation to block unfair government-subsidized competition with private firms, if the opportunity costs weren’t high. But they are. We have municipal governments to do things such as protect us from criminals and maintain city streets. Any city tax dollars or bonding authority used to provide cable, telephone, or wireless-Internet service represent dollars that could better be spent fulfilling true local-government responsibilities. And as recent experience in dozens of communities over the past decade has demonstrated, municipal governments have a miserable record of delivering these communications services promptly and cost-effectively. At the same time, North Carolina state and local tax policies have unwisely increased the cost of private telecom services.
Sorry, city officials, if filling potholes and nabbing street criminals aren’t sexy and trendy enough tasks for you, but that’s the profession you chose. Most taxpayers would sincerely appreciate it if you’d get back to that.
Hood is president of the John Locke Foundation.