- - Thursday, January 15, 2015

ANALYSIS/OPINION:

President Obama has set out to do for the Internet what he did for the nation’s health care system. He’s determined to destroy the Internet, which has changed the way the world works, as we know it.

Mr. Obama, in a speech this week in Iowa, called on local governments to get into the Internet business, even though the law in some states prohibits risky and expensive government-owned broadband networks. The president pledged billions of dollars to encourage cities to build broadband infrastructure.

The prospects are not encouraging. Municipal broadband networks in Florida, Virginia, Louisiana, Vermont, North Carolina, Utah and Tennessee have cost millions and failed to make good on promises of quality service at low cost to subscribers. Under the president’s plan, time and money, and lots of it, would be spent to provide broadband service in places already well-served by private Internet providers. The president’s scheme won’t do much to help deserving and underserved rural areas get better service.

Mr. Obama hailed the Internet service provided by the government electric utility in Chattanooga, Tennessee, as the gold standard for what Internet service could be. But Chattanooga broadband service is actually the standard for measuring a debacle. The municipal Electric Power Board there promised to revitalize the Tennessee economy in southeastern Tennessee by providing Gig, or gigabit-per-second, Internet speeds — which would be the fastest Internet service in the Western Hemisphere. In 2009, Mr. Obama awarded the Chattanooga Electric Power Board $112 million of federal stimulus funds to pay for the infrastructure necessary for the network. Local electric customers and Chattanooga taxpayers picked up the rest of the tab. In total, including interest, the price tag for the network will top $550 million.

What have federal and local taxpayers and Chattanooga electric customers got in return for that investment? Not much. The boom in business never happened. No new businesses arrived in Tennessee as a result of the Internet service. No new jobs were created. A document last year by the Electric Power Board revealed that only 11 business customers subscribed to the Gig service.



Four years later, Chattanooga does not have the fastest Internet service in the Western Hemisphere. In fact, it doesn’t have the fastest Internet service in Tennessee. Web surfers in about 30 U.S. cities have Gig speed service available now, mostly through private providers, and more such surfers are on the way. The Electric Power Board, for its part, did not expand the Web to new users, and offered service only in areas already served by reliable private Internet providers, such as Comcast and AT&T.

That the president offers the government-owned broadband experiment in Chattanooga, which has failed by every measure, as the example of what he wants for everybody, only demonstrates what a bad idea government Internet service can be.

Expanding broadband service and improving Internet speeds is the right idea, but the president wants to go about it in the wrong way. Competition in the marketplace always works. New Internet options will emerge and make the Internet faster and less expensive, and broadband service will expand to more places. The proper role for government is to lower taxes, cut unnecessary regulations and get out of the way.

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