Government-owned Broadband Networks EXPLAINED: Part 2 – A Consultant Driven Business
Chip Baltimore of the Taxpayers Protection Alliance in Part 2 of his series “Government-owned Broadband Networks EXPLAINED”
In this video, Chip describes how building municipal owned broadband is a consultant driven business.
Below the video is a summary of Chip’s points.
Chip’s points:
- The only municipal broadband systems that have been “successful” have been ones with large amounts of taxpayer money put into them or an existing electric utility to subsidize construction & operational costs.
- “Municipal owned broadband” is a consultant driven sales industry. The consultants start with a low cost survey and a pre-feasibility study, which pushes the city into a more expensive feasibility study.
- The consultants will dress up the feasibility study results in a nice report telling the city it can build a better, cheaper, more reliable & faster internet service, indicating likelihood of break even with 40% or 50% participation. This leads to the next step of an expensive design costing between $250k to $700k.
- At this point in time, the city has spent almost $1m just to study this issue. Unfortunately costs usually exceed projections and by then cities have spent so much already they feel they can’t back out.
- TPA has seen very limited success, especially in communities of 10k or less where the weighted average take rates are usually around 38% (not enough for success). Because cities have already invested so much, they continue what they regrettably started.
More about Chip Baltimore and the TPA (https://www.protectingtaxpayers.org/about/):
Chip Baltimore is a Senior Fellow at the Taxpayers Protection Alliance, a former 4 term state legislator for Iowa. He is also an attorney having spent the 13 years as General Counsel and Trust Officer of Boone Bank & Trust Co., and 10 years in private legal practice in Boone, Iowa.
The Taxpayers Protection Alliance (TPA) TPA is a rapid response non-profit, non-partisan taxpayer group dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy. TPA will hold government officials accountable at all levels of government.
Additional Resources
For additional information on PROP B and risks Lucas taxpayers need to know, see the article:
“Risks Lucas Taxpayers Need To Know About Prop B: The Vanity Internet Project”
For a 3rd part independent review of the Magellan Feasibility study which is the foundation of PROP B, see the article:
Taxpayers Protection Alliance Weighs in with Negative Review of Magellan’s Study