When the city is your internet provider, the real cost may be hidden

[Commentary] In 2010, Highland (IL) leaders and residents decided they were not getting the broadband service they deserved, so they built their own fiber optic network. The city’s fiber optic company was just cited in a Harvard University study as fifth for value out of 27 public utilities compared to private competitors. A resident will pay Highland $383 a year compared to $679 a year for Charter, the study said.

However, It is publicly funded, and is still paying about $1 million a year toward debt for the system’s $12.2 million construction tab. It will continue paying until 2032. Out of the $4 million current year’s budget, Highland’s fiber optic will run $1.63 million in the red. That cost is hidden on every resident’s city utility bill. Getting to those additional 763 customers will cost $53,000 in engineering. The construction costs have yet to be tabulated.

So while Highland should celebrate the Harvard honor, their fiber optic company represents a cautionary tale for other cities pondering going into business. No matter how capable or efficient you might be, a changing market that shutters a private business just turns into a never-ending ratepayer or taxpayer burden when it is a public utility.