To Members of the Grand Junction City Council,
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer organization, I urge you to oppose the creation of a government-owned broadband network. Since 1969, NTU has advocated on behalf of taxpayers at the federal, state, and local levels. Our goal is to encourage elected officials to pursue prudent fiscal policies. After examining the failures of government-owned networks in a variety of other jurisdictions, we have serious concerns about Grand Junction’s proposed network, which is estimated to cost between $50 and $70 million. The experiences of other local governments suggest the true cost to taxpayers will likely be significantly more.
Dr. Ronald Rizzuto, a University of Denver finance professor, estimates that between 75 and 80 percent of government networks fail to break even on an annual basis, meaning taxpayers will most likely continue to lose out – beyond their initial “investment.” Likewise, a 2014 study by New York Law School found that government networks often cost significantly more to build and operate than initial projections. By way of example, the city of Provo, Utah, spent approximately $60 million creating its network but eventually sold it for $1 to Google. The city still has to pay off about $40 million worth of debt. Meanwhile, the city of Bristol, Virginia, is currently in the process of selling its network to a private entity because it was such a disaster for the city’s taxpayers. These are just a few of the many disastrous examples of governments attempting to compete with the private sector.
Virtually every citizen within your jurisdiction has access to multiple choices for high-speed Internet service at relatively affordable costs. The creation of a government network would be an enormous waste of valuable resources that could instead be used for more fiscally responsible purposes, such as improving infrastructure or cutting taxes.
Competition in the private broadband market is increasing, and rapid technological innovation is helping to deliver good quality broadband service at affordable costs. When government competes with the private sector, taxpayers lose out – almost without exception. Accordingly, NTU urges you to reject a government-owned broadband network in Grand Junction and instead look for ways to remove barriers that hinder broadband innovation and deployment.
Counsel and Government Affairs Manager