Moore: Superior broadband is a pricey government boondoggle
Superior should look to partner with these companies to keep this progress going and ensure that every Superior resident can adopt broadband internet and the benefits it brings.
Did you know this is the Year of Broadband Access, according to Gov. Tony Evers?
More to the point: Do you know why he declared this year, and why broadband internet access matters so much?
The answer to this question has never mattered more than right now, as our state strives to emerge stronger from the COVID-19 pandemic. High-speed broadband is essential to helping families, businesses and learners of all ages connect to the opportunities they need to succeed, which helps explain why Gov. Evers made this issue a priority for the year.
Yet while cities across Wisconsin are striving to expand broadband access, Superior is pursuing a plan that will hobble, not help, this important cause.
Start with the good: Superior is analyzing their broadband needs, with an eye toward spurring “economic development, livability, public safety, education and health care.”
The bad news is that Superior is considering trying to boost broadband access by creating a so-called “government-owned network.”
That’s exactly what it sounds like — a broadband provider which could very well end up being wholly owned and operated by the city — and under the city’s plan, this $31 million project could potentially receive significant amounts of taxpayer funding. This strategy, which has been tried elsewhere, is more-or-less guaranteed to waste that money without bringing broadband access to the families who need it most.
Superior isn’t the first city to consider a government-owned network. Madison did something similar in 2015 with disastrous results. A 2019 report by the MacIver Institute found that Madison’s network cost the city approximately $900,000. Yet for all this spending, the network only signed up less than 2% of the potential subscribers in the pilot project. A horrible return on investment if ever there was one.
Madison’s boondoggle is not an isolated incident. There are other examples such as the case of Traverse City’s government broadband network in Michigan. Phase 1 of this government broadband network estimated that it could break even after 40% of local subscribers signed up, yet the city has gotten nowhere close to that number. Now Traverse City Light and Power is barely hitting 50% of their revenue goals, and the government-owned network shows no sign of achieving its goals, much less making money for taxpayers.
These examples bear on Superior. Right now, city officials have factored into their financial models that about 60% of targeted consumers will sign up for broadband offered by this government-owned network. This estimate is optimistic in the extreme. The simple fact is that a government entity will struggle to give consumers what they want and need, especially those who don’t already have a broadband plan.
There’s a better way to expand access to this public good. Private companies have already invested billions of dollars in Wisconsin to deploy advanced digital services to more than two million locations in the state. They continue to invest hundreds of millions of dollars each year to extend, upgrade and service our digital networks. And they’ve already ensured that more than 99% of residents have access to high-speed internet that meets the FCC’s standard of 25/3 megabits per second.
Superior should look to partner with these companies to keep this progress going and ensure that every Superior resident can adopt broadband internet and the benefits it brings. A government-owned network is the last policy the city should consider — especially in this Year of Broadband Access.
Tom Moore is the executive director of the Wisconsin Cable Communications Association.