Government networks generally are subsidized directly by the taxpayers or are backed by government bonds carrying below-market interest rates. They are granted special privileges, such as favored rights-of-way treatment, which are unavailable to their private-sector competitors.
Of course, they are excused from running the bureaucratic gantlet of permitting and licensing processes through which private firms must pass.
There have been many examples across the country of high-profile local government communications networks going belly up or losing money, with taxpayers and government bondholders often left holding the bag.
These troubled systems can be found in places that range from Burlington, Vt., to Provo, Utah, with many in between. Of course, these financial flops inevitably affect the government’s ability to deliver other services, from providing police and fire protection to repairing potholes, which actually are within its traditional bailiwick and presumed competence.
It’s no wonder, then, that so many states have adopted bans to prohibit their localities — which, after all, are solely creatures of the state — from competing with private-sector companies providing broadband services in the same locales.
The wonder is that the FCC chairman would suggest that the way to enhance “competition” in the broadband marketplace is for the agency affirmatively to act to encourage governments to compete with private-sector companies.
The proper way to encourage competition is to remove existing, costly regulations that no longer are necessary in today’s competitive communications environment and to refrain from adopting or threatening to adopt new ones.
Mr. Wheeler’s decision to keep “on the table” the threat of imposing the panoply of traditional public utility-style regulation on private-sector broadband providers is improper.
To paraphrase Lincoln, while Mr. Wheeler and I may both declare we are for enhancing “competition,” in using the same word, we do not mean the same thing.
Randolph J. May is president of the Free State Foundation.