GON, baby, GON? Or new life for muni broadband?

[Commentary] Federal Communications Commission Chairman Tom Wheeler spoke forcefully at the annual NCTA Cable Show in Los Angeles. Most observers focused on his Open Internet remarks, but Chairman Wheeler also made waves by asserting an FCC power to overrule state laws that limit the ability of cities and towns to build their own networks.

In recent years, at least 20 states, after witnessing a number of failures of such municipal networks, enacted limits on such government owned network (GON) ventures. This list failures or aborted launches is long, and growing -- Chicago, Seattle, Tacoma, Utah’s UTOPIA, Minnesota’s FiberNet, the Northern Florida Broadband Authority, Burlington, Vermont, and Philadelphia and Orlando’s abandoned Wi-Fi networks, to name a few. So the financial case for GONs is not a strong one.

The bottom line is that until the FCC, states, and localities do a lot more to remove the remaining barriers to broadband investment, we shouldn’t be using scarce tax dollars to build duplicative networks.

[Swanson is president of Entropy Economics]