The private sector should drive rural broadband | Opinion
Over the last couple of years, as Americans have become increasingly reliant on the internet to function in their daily lives, billions in taxpayer dollars have been allocated toward broadband expansion to rural, unserved communities that don’t have the access they need. There’s no denying that attention and investment need to be paid toward this important issue, but as reckless government spending continues to fuel inflation, it’s also imperative that we use funding for such projects in a way that achieves this goal without needlessly wasting taxpayer dollars.
This rings particularly true here in Tennessee, where the Tennessee Department of Economic and Community Development is reviewing grant applications for a $400 million fund aimed at expanding broadband access. A significant cause for concern is municipal utilities, many of which have no experience in the telecommunications industry and have never even laid a foot of fiber, that are applying for funding from the TNECD. Recent history in Tennessee shows that internet projects run by municipal utilities often fail to reach their overly optimistic projections while costing taxpayers a fortune.
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A recent example is in Pulaski, where the Pulaski Electric System launched its government-owned network, PES Energize, in 2005 for approximately $8.5 million. So far, the network’s rate of return has been so abysmal that it would take over 450 years to break even.
Outside of the likelihood of failure, the objective should be to connect unserved rural areas as quickly and as cost effectively as possible. That means there are various reasons why investing in projects run by inexperienced municipal utilities, which ultimately want to build duplicative internet networks where private providers have already invested, is a bad idea.
First, private providers have spent years laying fiber across Tennessee, meaning that they are already “shovel ready” and equipped to expand their networks to unserved areas in the most expedited manner. They also know what that process entails and how to deliver quality service. Second, inexperienced utilities often rely on false assumptions about success rates and do not adequately consider operation and maintenance costs. And in some cases, these municipal utilities applying for state grants haven’t even received the required approvals from the Tennessee Valley Authority, the state and their local governments. So it’s not clear when, if ever, they would be able to start their projects.
We do not have years to wait to deliver unserved areas the internet service that they need, nor should we expect the government to just keep printing money. Delayed broadband expansion hurts our economy. Students without a connection will continue to miss out on the digital resources they need for school and fall further behind. Unserved Tennesseans who want an honest day’s work will continue to go without the professional online services that help them find jobs, and seniors will continue to be deprived of the telehealth services they need to live healthier lives.
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We need to deliver essential internet services to unserved Tennesseans in the quickest and most effective way possible, and it’s clear that working with experienced private providers on shovel-ready projects is the best way to do that. As we continue to get robbed at the gas pump and overpay for essentially every good on the market due to inflation, is now really the time we want to gamble tax dollars on unproven, government-run networks with a clear history of failure?
Grant Henry is an activist and government relations professional in Tennessee advocating for smaller government, personal responsibility and constitutional liberties.
This article originally appeared on Nashville Tennessean: The private sector should drive rural broadband