The FCC’s order opens the door for financial instability and corruption

So say the 11 states who filed a friend of the court brief on behalf of Tennessee and North Carolina in the 6th Circuit Court of Appeals.  This action by the states was highlighted in an article on posted yesterday and reinforced by a study conducted by Phoenix Center’s Chief Economist Dr. George S. Ford referenced Wednesday on regarding the same topic.  First from the article.

Officials from 11 states are siding with North Carolina and Tennessee in their battle with the Federal Communications Commission about limits on muni-broadband networks.

The states are asking the 6th Circuit Court of Appeals to vacate a recent FCC order that invalidated limits on muni-broadband in North Carolina and Tennessee….

“The FCC’s broad preemption of state municipal broadband regulation eliminates states’ control over their own subdivisions and frustrates state efforts to increase access to broadband,” the group of states argues in a friend-of-the-court brief filed recently with the 6th Circuit Court of Appeals.

The states contend that laws restricting muni-broadband offer “important checks on abuse and mismanagement.”

“The FCC’s order prevents states from governing their own instrumentalities, broadly usurps power without authority, and opens the door for financial instability and corruption,” they argue. The states signing the friend-of-the-court brief are Alabama, Arkansas, Arizona, Colorado, Florida, Idaho, Michigan, Ohio, South Carolina, Utah, and West Virginia.

See the full article here:

Secondly, the Forbes articles details a 2014 report that finds that Government Owned Networks (GONs) are not good for the consumer and in fact most of the time have higher initial costs as well as a longer term tax burden that everyone pays even if they use a private company for internet service.

The most oft-repeated myth about GONs is that they improve outcomes for consumers.

This myth persists despite the fact that studies show these systems don’t offer better prices. Indeed, in 2014 Phoenix Center Chief Economist Dr. George S. Ford examined whether municipal wireline broadband service providers offered better triple play prices (the combo package of broadband, video and phone) than privately-owned broadband service providers. Dr. Ford concluded, “The evidence suggests that the government’s provision of broadband services does not lead to lower prices. While municipal entry may serve valid purposes, lower prices do not appear to be one of them.”

While technology is changing so fast, government works at glacier speeds, and their operations are typically bureaucratic, inefficient and costly. That cost often translates into higher price and lower consumer demand for municipally-provided broadband services.  In fact, a quick review of dozens of municipal broadband ventures shows a very long list of bankruptcies and ventures that lead to higher consumer cost and taxpayer burden.  But, governments don’t go out of business, they simply push their losses to consumers and taxpayers.

Read more here: