Research

It is an era of unprecedented interest in broadband as a platform of economic and community development. Advanced communications networks are increasingly recognized as a growing engine for economic activity, democratic participation, healthcare, and education. Local governments, in particular, increasingly embrace opportunities to develop next-generation broadband in their communities—and to reap the many benefits that broadband will deliver to their residents and businesses. Emerging public–private partnership (P3) models present a promising alternative to the traditional “municipal broadband” or “middle mile” models for the many communities that lack the capital or expertise to deploy and operate fiber networks, or to act as Internet service providers (ISPs) on their own. These models include: 1) Public facilitation of private investment, 2) Public funding and private execution, and 2) Shared investment and risk.

The authors conducted an analysis of every municipal fiber project in the United States based on the authoritative documentation issued by the cities, specifically the official legal disclosures filed with securities regulators when issuing municipal bonds and their audited financial statements.

We identified 88 municipal fiber projects. Of these only 20 of them report the financial results of their broadband operations separately from the financial results of their electric power operations. We then apply the conventional tools of financial analysis to determine the likelihood that municipal fiber projects will remain solvent. Specifically, we focus on Net Present Value (NPV), which provides a more accurate picture of the cash flowing into and out of an organization than do analyses based on a project’s operating profits and losses.

We also take a closer look at seven projects that either have been successful or have received substantial publicity: Bristol, Tennessee; Vernon, California; Chattanooga, Tennessee; UTOPIA, Utah; Burlington, Vermont; Lafayette, Louisiana; and Wilson, North Carolina.

An examination of the NPV covering the five-year period from 2010 to 2014 reveals that of the 20 municipal projects that report the financial results of their broadband operations separately, 11 generated negative cash flow. Unless these projects substantially improve their performance, they will not be able to cover the costs of current operations, let alone generate sufficient cash to retire the debt incurred to build the project. For the nine projects that are cash-flow positive, seven would need more than sixty years to break even. Only two generated sufficient cash to be on track to pay off the debt incurred within the estimated useful life of a broadband network, which is typically projected to be 30 to 40 years. One of the two success stories is an industrial city with few residents that is unlikely to serve as a model for other cities to emulate.

For years, studies have shown Americans’ trust in the news media is steadily declining. In recent months, the rise of so-called fake news and the rhetoric of President Donald Trump about journalists being “the enemy of the people” have made the question of trust in a free press an even more prominent issue facing the country. At the same time, data show that over the past decade, people have been consuming more news than ever. How are we to explain the apparent paradox?

New research suggests public attitudes about the news media are more complex and nuanced than many traditional studies indicate, with attitudes varying markedly depending on what media people are asked about. The findings show that on many fronts, Americans are skeptical of “the news media” in the abstract, but generally trust the news they themselves rely on. And most people mention traditional or mainstream news sources as the ones they turn to.