LaMura: The Facts of Municipal Broadband
I have followed with great interest the discussion about the new municipal broadband network in Roanoke and the possibility of expanding it into Roanoke County. Some of what I have seen and heard suggests the network will deliver coverage that the region, and specifically Roanoke County, has never seen before. For clarity’s sake, I’d like to expand upon some of the information I’ve seen out there and correct many misstatements.
Claim: The new network will provide service to areas that don’t currently have access to broadband.
Fact: While the region’s taxpayers will be on the hook for the estimated $9.6 million network, at the moment, it is only intended for government facilities, businesses and select non-profits that need to move lots of data on a daily basis. No residential customers will be directly served by the redundant new lines, which will simply duplicate existing fiber networks in the region.
Claim: Network speeds will be up to 15 times better than what’s commercially available now.
Fact: Several existing providers already offer the same speeds that the new network promises to offer, and some offer higher speeds. In fact, many local providers have been offering speeds up to 10 gigabits to businesses for many years. Local providers have also routinely increased residential speeds. One local private provider has already announced that its gigabit Internet service for residential customers is coming to Roanoke. The company will offer speeds 100 times faster than the average speed in the U.S. today.
Claim: The new network will address the digital divide in the Roanoke region.
Fact: While existing providers are working to bring gigabit speed service to local residents as well as address the digital divide through low-cost adoption programs for low-income families, the new network does nothing to serve residents who currently have no access to broadband or do not use broadband that is available. Isn’t that where limited taxpayer dollars should be focused? Instead they will be spent on businesses and government buildings that already have access to state-of-the-art networks.
Here’s my assessment: The drivers of economic development in Roanoke are complex and challenging. According to economic development experts, when it comes to choosing a location, a company’s top three criteria are access to quality labor; costs associated with taxes and real estate; and accessibility to markets and transportation-related resources. Given the need to address these three key areas, should limited resources be dedicated to duplicating infrastructure where networks already exist?
Roanoke County should not be competing with its private broadband providers which employ hundreds of people in the community, make philanthropic contributions to local non-profits and invest millions of dollars in capital in the region.
What message are elected leaders sending to new business prospects when they are using tax dollars in an attempt to compete with the private sector?
Perhaps a similar vision in Bristol, Virginia should serve as a cautionary tale. That city built a broadband network by way of federal and state grants – and taxpayer dollars. The Bristol network cost taxpayers over $100 million and it’s now being sold for about half of that amount, leaving taxpayers with tens of millions in losses.
In theory, municipal broadband networks sound like a great idea, but in reality, they are far more complex than many realize. That is why they have to be heavily subsidized by tax payer dollars and even then many of them eventually fail.
Maintaining and upgrading a network while providing 24 hour customer service requires an ongoing investment that could costs millions of dollars every year – something that existing providers have the resources to do, but can be a challenge for municipalities.
When Roanoke County Supervisors consider this proposal, they should be very skeptical about the promises being made to them about the benefits the network will bring. You know what they say about a promise that sounds too good to be true – it usually is.