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Failing at 100 Mbps


Andrew Moylan
May 24, 2012

Louisiana readers: I have some shocking news for you. You might want to sit down for this. A taxpayer-subsidized project is rapidly turning into a dismal failure. Who'da thunk it?

An audit of a taxpayer-subsidized municipal broadband provider called LUS Fiber in Lafayette, Louisiana has revealed that the company lost $45,000 per day during the last fiscal year! The Lafayette Consolidated Government suffers from $150 million in debt and must make an upcoming principal payment next year of $3.2 million. That has led to calls to cut budgets across the board by 5%, meaning fewer police and less maintenance of things that really are basic infrastructure like roads.

In sum, LUS Fiber is losing boatloads of money and exacerbating an already-difficult budget situation in the area. There is a silver lining though! According to LUS's own numbers, the project might break even by the time 2014 or 2015 roll around. Or maybe not...you know, whatever. It's just taxpayer money, which I'm pretty sure just falls from the magic money tree in the sky when we shake it at no cost to anyone.

This is, unfortunately, just another bullet point to add to the huge list of municipal broadband failures across the country, many of which we covered in a study we released last month called Municipal Broadband: Wired to Waste (PDF). In the study, we detailed the growing trend of local governments piling hundreds of millions of dollars in debt and other costs on the backs of taxpayers in order to build entire retail television and internet service providers. It's just too bad that we hadn't written the study yet when Lafayette officials decided to approve this boondoggle.


 

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