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-“There is no doubt that an effective broadband infrastructure is essential for the 21st century U.S. economy. This is why the misinterpretations of a recent Government Accountability Office (GAO) report are so problematic. The policy recommendations that are being derived from these incorrect interpretations, if followed, would significantly inhibit the growth and efficiency of the U.S. broadband infrastructure.

The GAO report compared broadband services for 14 federally funded and municipal networks to the broadband services in 14 communities that have not received government funding. According to the GAO report, the 14 federal funded or municipal network communities had faster speeds and wider availability. Cheerleaders for greater federal involvement in the broadband services, such as Congresswoman Anna Eshoo, erroneously concluded that “This GAO report confirms that when it comes to closing our digital divide, federal investment in broadband deployment has been pivotal to the success of America’s small businesses.”

However, the GAO report does not demonstrate what Representative Eshoo or others suggest.

First, the report was not designed to be used as the basis for policy recommendations. It offers no evidence that these 28 communities (14 federally funded, 14 not federally funded) are representative of either the typical government network communities or the typical private network communities. In fact, the GAO states in the report that “the results of our interviews cannot be projected to all service providers and small businesses.

Second, the report does not account for the total costs associated with government-run networks. Unlike private-sector networks where private entities are providing the investment capital, government-operated broadband networks require consumers to pay for the infrastructure costs through taxes or fees. Therefore, the actual cost of a government-operated network, which should include the costs incurred by taxpayers to construct and operate the government-operated broadband networks, is much higher than a simple rate comparison implies.

Third, the role of government funding is dwarfed by the role of private capital in building and maintaining broadband networks. The nation’s broadband infrastructure has been developed, and continues to be driven by, private-sector investment. Since 2008, the federal government has authorized $15 billion in grants and loans dedicated toward broadband deployment. In comparison, private sector companies have invested more ethan $250 billion building and maintaining the nation’s broadband infrastructure in just the last 3 years.

The sheer expenditure discrepancy alone illustrates that it is private-sector networks, not federal investment, driving the success of America’s broadband infrastructure. The funding discrepancy also shows that the key to our broadband success will be policies that promote private investment and deployment."

Excerpts from a blog posting by Wayne Winegarden PhD, Senior Fellow at EconoSTATS at George Mason University regarding a recent report on municipal broadband networks.


The above is a quote from the March 28, 2014 issue of the PTA Friday Report. To view the full issue, please log into the Active Members Only Section of this site (telcos only) or contact to be added to the distribution list (members only)



2014 Meetings
(you must be a member to attend)

APRIL 16 & 17
PTA Spring Conference
State College, Pa

JULY 7-9
PTA's 112th Annual Convention
Hershey, PA

PTA Small Company Meeting
State College, Pa

PTA Technical Showcase & Conference

PTA Small Company Meeting
State College, Pa

Small Company

Spring Conference

111th Annual Convention

PTA Technical Showcase & Conference


Pennsylvania Telephone Association
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