Should States Fund Municipal Broadband and Cooperatives?

Despite the more than $1.6 trillion private internet service providers (ISPs) have invested in broadband infrastructure since 1996, the internet landscape in the US faces significant challenges. As private ISPs have struggled to tackle these challenges, two related models have emerged as creative alternatives: municipal broadband and cooperatives. These models differ from private ISPs in that they are locally controlled—local governments or public utilities in the case of municipal broadband networks and subscribers in the case of cooperative networks—and are more focused on expanding access and affordability for residents than in making a profit. Today, there are over 600 communities served by a municipal network of some kind and 300 served by a cooperative. Though municipal broadband and cooperatives have been growing in popularity, they have also been a topic of heated debate. Ultimately, we find that these models have the potential to address the shortcomings of private internet service. However, states, local governments, and potential cooperatives need to consider many factors—including cost, market dynamics, long-term financial feasibility, and social and economic benefits—before deciding if these policies are the right fit for their unique circumstances. To that end, it is critical for these entities to conduct feasibility studies to get a clearer picture of whether the benefits of building, owning, and operating their own networks outweigh the costs.

[Kevin Schwartzbach is a graduate research assistant at the Rockefeller Institute of Government.]