Private sector best to close gapDec 18, 2017
This Letter to the Editor appeared in The Columbus Dispatch.
The Dispatch’s Dec. 11 editorial, “Help bridge digital divide,” urged the legislature to prioritize two bills aimed at “closing the digital divide” in areas without sufficient broadband access.
This is a worthwhile goal. As the editorial states, having major broadband gaps in the state does create economic hardships; however, when dealing with government intervention into the marketplace, the devil is in the details.
Any effort that uses government funding or, even more problematically, leads to actual government ownership of broadband assets should be viewed with extraordinary caution. As a forthcoming report from The Buckeye Institute shows, government-owned networks often are inefficient and have trouble enticing enough consumers to voluntarily subscribe. This leads to opaque subsidies which leaves less money for core government services.
A recent University of Pennsylvania Law School research report reviewed 20 government-owned networks that reported their financial results separately from their utilities. In 11 cases the network generated a negative cash flow, another five would take more than 100 years to recover costs, and two would take more than 60 years.
Ohio should look to models that utilize the innovations of the private sector to expand broadband internet service and not rely on taxpayer dollars to build, fund and own inefficient networks.
Greg R. Lawson
The Buckeye Institute