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Wednesday, September 22, 2004

Government-Owned Communications
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USA Today has a story painting a pretty rosy picture of Danville, VA's new government-owned and operated broadband system which is being built in phases. At this point, there are only anecdotes to go on as far as measuring success or failure. It will be interesting to see how things develop as Danville gets deeper into the communications business.

I'm pretty confident that, over time, the evidence will show that, absent unnecessary regulatory impediments, the private sector can provide consumers and businesses with the broadband services they desire more efficiently than government. For a study of government-owned systems that contains more than anecdotes, see the paper by my colleague Tom Lenard that demonstrates that the most prominent municipalities that have entered the communications business thus far have not been able to cover their costs without being subsidized. And there is very little prospect of any of the municipalities paying off the initial investment.

Maybe next time USA Today will dig a little deeper.

posted by Randolph May @ 9:31 AM | General

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