Government-financed broadband is a bad deal for taxpayers

On June 6, Federal Communications Commission Chairman Tom Wheeler will be in Pikeville for the SOAR summit to discuss the future of broadband in Kentucky and across the United States. His remarks are likely to turn into a pep rally for government-owned broadband.

Taxpayers shouldn’t cheer.

Government-owned broadband already has harmed Kentucky taxpayers. A few years ago, a handful of lawmakers dreamed up a plan for a statewide “middle mile” network calledKentuckyWired. The network would largely be financed by taxpayers, but managed by an Australian financing firm. The total cost of the project is pegged at more than $300 million with the state issuing $289 million in bonds to finance the project. State taxpayers would be on the hook for $30 million while federal taxpayers will kick in another $23.5 million.

KentuckyWired isn’t even finished and already it’s run into significant problems because state officials planned to allow KentuckyWired to provide service to state public schools. This maneuver would have allowed the state to use federal school broadband dollars to pay KentuckyWired for service.

That may not sound so bad — shouldn’t a government network provide service to government entities like schools? Perhaps, but for that plan to work, the state had to take away the schools’ contract from their current broadband provider and give it to KentuckyWired.

The gentleman who was in charge of that process later went to work for KentuckyWired. That’s not only unethical, it sends a message to private sector job creators that they shouldn’t invest in Kentucky. State officials cannot be trusted. They’ll change the rules in the middle of the game and throw private job creators overboard when it suits.

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About Mark Milliman

Mark Milliman is a Principal Consultant at Inphotonics Research driving the adoption and assisting local governments to plan, build, operate, and lease access open-access municipal broadband networks. Additionally, he works with entrepreneurs and venture capitalists to increase the value of their intellectual capital through the creation of strategic product plans and execution of innovative marketing strategies. With more than 22 years of experience in the telecommunications industry that began at AT&T Bell Laboratories, Mark has built fiber, cable, and wireless networks around the world to deliver voice, video, and data services. His thorough knowledge of all aspects of service delivery from content creation to the design, operation, and management of the network is utilized by carriers and equipment manufacturers. Mark conceived and developed one of the industry’s first multi-service provisioning platform and is multiple patent holder. He is active in the IEEE as a senior member. Mark received his B.S. in Electrical Engineering from Iowa State University and M.S. in Electrical Engineering from Carnegie Mellon University.

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