Broadband Not Recommended as Public Utility

A study by a Baltimore-based financial research firm is telling cities to stay out of the high-speed Internet business.

The research which was paid for by communications companies was presented to the Tennessee Chamber of Commerce and Industry (today/yesterday) as cities around the state consider offering broadband as a public utility.

Michael Balhoff led the study and says that while many have tried, no city has created an economically viable model. He says unlike typical utilities like water and electricity, too few people use broadband to justify using tax dollars to provide universal access, and technology changes too fast for government-run companies to react. 

“I don’t think anybody knows no matter how knowledgeable you are on the subject, exactly how this marketplace is going to play out and exactly what the financial models are going to be…Let’s see. How can I be polite in saying its crazy, but it is. It’s crazy. It’s irresponsible.”    

 

Balhoff recommends that only small municipalities in rural parts of the state should try building their own networks since rural communities have a harder time getting high-speed connections. He says that to lower broadband costs urban areas should offer incentives for more communications companies to move in and offer subsidies to low-income families who can’t afford broadband access.

Balhoff testified before Metro’s broadband taskforce (yesterday/Monday) as Nashville considers providing less-expensive Internet access in order to spur economic development.