Debunking the Failure Myth

Big cable and telephone companies are spreading negative rumors about Community Internet. They accuse municipal broadband of being an unsustainable, low-quality service that is a needless waste of tax dollars. But a deeper look at the telecom industry's arguments against these networks shows that their opposition is based on faulty and manipulative reasoning.

1. Lack of profits
Opponents of Community Internet argue that these networks don't make a profit. Although often true, this argument reflects typical industry logic. It shows that, for telco firms, a business venture is not worth the effort unless it is profitable. It is this same logic that underlies the dismal state of our nation's broadband market, where telcos regularly neglect to serve communities that are 'not worth' their investment. In reality, community broadband was never conceived as profitable. Like other public services, it sacrifices high profit margins to bring affordable broadband access to everyone.

2. Waste of tax dollars
Municipal broadband opponents say these networks are a drain on taxpayer money. In fact, municipal broadband projects are based on comprehensive, well thought-out business models that consider the resources and needs of the community. One of the greatest benefits of municipal broadband is that each city or town is able to decide for itself what type of business model it will use to build its network, rather than having to rely on the whims of a private company with little incentive to offer low-cost broadband service to all residents. Based on its needs, each community can choose to build its own, publicly-owned network, or to enter into a public-private partnership to outsource some or all costs to another entity. Learn more about ownership models.

3. Unsustainable business models
Telecom lobbyists try to convince us that municipal broadband networks are bound to fail. Indeed, it is wholly unreasonable to expect that all community broadband projects around the country will survive. As with other new businesses, broadband networks can run into numerous problems during construction, operation, and maintenance. But the hundreds of successful wireless projects show that on average, Community Internet holds much promise. And as more and more broadband networks become operational, new initiatives can learn from the successes and mistakes of other projects around the country.

4. A note on competition
Municipal broadband also increases competition. Studies repeatedly show that the number of private providers in a given area increases once municipalities invest in building out broadband infrastructure, or simply threaten to introduce municipal service. When a municipal network begins to lose money, it is often because its introduction causes private companies to drop prices below expected levels.

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