Grant Funding for Government-Owned Networks

The State of New York recently awarded $140 million in grants to support publicly-owned open-access networks. These projects will cover more than 60,000 homes with broadband. The grant funding comes from $228 million provided to New York by the Capital Projects Fund that was created by the American Rescue Plan. The projects are all being touted as public-private partnerships because the local governments will own the infrastructure, and internet service providers (ISPs) will provide service to customers. This arrangement is generally described as open-access, because the goal of the network owner is to bring multiple ISPs to a market. In an open-access network, no ISP has a technical advantage since they share a network and ISPs must compete for customers with price and service. These particular grants are interesting because, while the grants are made to local governments, in the long-term, most of the profits on an open-access networks go the ISPs that operate on the networks. You would think it would be harder for opponents of municipal broadband to oppose projects that ultimately benefit for-profit ISPs—but many even oppose these public-private partnerships.