To the Members of the West Virginia Legislature,
On behalf of National Taxpayers Union’s (NTU) West Virginia members, I strongly urge you to reject SB 315, sponsored by Senator Chris Walters. If enacted, SB 315 would appropriate $72 million of taxpayer dollars to the construction and implementation of a statewide broadband network. Expanding the scope of Government Owned Networks (GONs) will almost certainly create substantial costs for Mountain State taxpayers with little corresponding benefit.
Dr. Ronald Rizzuto, a University of Denver finance professor and broadband expert, estimates that between 75 and 80 percent of GONs fail to make a profit or break even on an annual basis. A 2014 study by New York Law School found that GONs often cost significantly more to build and operate than initial projections. In addition, Provo, Utah recently sold its GON to Google at a $39 million loss. These are just a few of the many disastrous examples of governments attempting to compete with the private sector, but they should give West Virginia lawmakers pause.
Competition in the private broadband market is increasing and rapid technological innovation is helping to deliver good quality service at affordable costs. When government competes with the private sector, taxpayers lose. Simply put, creating a statewide GON in West Virginia is not a legitimate function of government. Accordingly, NTU encourages you to defeat the ill-conceived SB 315 and instead look for opportunities to remove government barriers that hinder broadband innovation and deployment.
Sincerely,
Clark PackardPolicy and Government Affairs Manager