Subsidies For Big Boys? Knoxville News Sentinel Op-Ed
In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.
We've reprinted the op-ed here:
Christopher Mitchell: State needs better broadband, not subsidies
If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.
Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?
AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.
It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.
These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.
