[RTC List] Time Warner and Embarq can't compete with city-owned ISP, trying to outlaw it

[William Van Hefner]

Just because a municipality can offer service for less money, doesn't mean
that their operating costs are lower. Unlike the government, private
businesses can't print their own money or accumulate huge debts without
going out of business. Inefficiency is simply hidden by being passed on to
the taxpayers. While a city may very well be able to offer "cheap cable",
that same city is also likely to raise property or sales taxes to cover
the added overhead. Try finding any municipality that makes a profit, or
even breaks even on such a project that hasn't amassed a huge amount of
debt or raised taxes. You won't find any.

If you want a perfect example of what I am talking about, just look at the
case of iProvo. Initially, residents there may have gotten "cheap
internet", but it ended up costing taxpayers tens of millions of dollars
that they will be paying off (at interest) for probably the next 40 years.
 It was the largest municipal fiber to the home project in the country to
date. The city was eventually forced to sell the shipwreck ISP at a huge
loss in order to keep from losing tens of millions of additional taxpayer
dollars. The company that purchased iProvo has lost so much money that
they have been missing installment payments to the city lately. Trying to
turn around such a hugely mismanaged government project and make a profit
on it has proven nearly impossible. These days, customers get crappy
service at rates that aren't anywhere near competitive. Just try doing a
Google search on iProvo, and you'll see what I mean.


-- 
William Van Hefner - President
Vantek Communications, Inc.
http://www.humboldtonline.com
e-mail: editor at humboldtonline.com

On Thu, April 23, 2009 6:01 pm, JBilderback wrote:
> This is an interesting and somewhat timely article. And wasn't the
> reason for privatizing everything that public entities were so inefficient
> and wasteful that most things (from war to water) could be better handled
> and are best left to private industry?
>
>
> http://www.engadget.com/2009/04/22/time-warner-and-embarq-cant-compete-wi
> th-city-owned-isp-trying/
>
>
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