Louisiana Should Continue to Reject Government Owned Networks
There is major movement on the broadband front in Louisiana. Not only will the Federal Communications Commission spend over $300 million to provide access to previously unserved areas over the next six years, Louisiana is also poised to spend $180 million on broadband projects due to federal funds.
With tens of millions of dollars on the table, many are lining up for their piece of the government grants. One concerning group looking for this funding is government owned broadband networks or GONs.
During two recent legislative hearings, Lafayette Utility System (LUS) Fiber lobbied the legislature for an expanded authority and for an exception from the Louisiana Fair Competition Act. Other municipalities looking to expand their footprint into broadband provision did the same. While these GONs promise expanded access and provide better service to consumers, an examination of LUS Fiber’s track record shows their promises are unlikely to be the case.
The area LUS Fiber serves already contains multiple private providers, not including the satellite company Starlink which will soon serve all of Louisiana. Rather than stepping into fill the gaps in rural areas, LUS and most other GONs serve densely populated areas where the private sector has already invested.
Since there is already private company competition, LUS has struggled to maintain a high subscriber base and turn a profit. This struggle led to LUS Fiber illegally billing the electricity and water services in Lafayette for millions of dollars for phantom services it failed to provide.
This kind of behavior is hardly confined to Louisiana. Story after story of GONs show networks with massively high upfront costs that fail to deliver on their lofty promises. And study after study questions their value to taxpayers.
While Louisiana has a substantial amount of money to invest in broadband, legislators still have to be careful with spending the money wisely. The Pelican Center for Technology and Innovation has laid out principles to ensure that the money goes as far as possible to connect Louisianans without a broadband connection. Louisiana spending money on GONs would just further widen the digital divide.
The protection for taxpayers from the boondoggles of GONs are important. Lawmakers should keep them in place and partner with the private sector to close the digital divide in Louisiana once and for all.
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