Uncommon Wisdom

Jun 9 2009   1:55PM GMT

Municipal broadband projects with questionable benefit

Tom Nolle Tom Nolle Profile: Tom Nolle

A Minnesota Appeals Court has ruled that municipalities can fund broadband infrastructure with bond issues, something that a local telco objected to on grounds that the use of public bond issues for the application wasn’t legal. The court said that telecom was a utility and thus could be covered by bonds, and that would facilitate municipal broadband networks.

But the ruling is valid only in Minnesota, and even there, it could be changed by legislation since the issue isn’t constitutional. We’re of the view that the option for municipal broadband should be legal everywhere, but making it legal doesn’t necessarily make it smart. Most municipal broadband projects have not been successful, and there is a significant risk of public money to no benefit. That’s true of virtually everything public money is spent on, though. Guidelines for a successful muni broadband deployment would be useful if objective recommendations could be obtained.

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