Why Los Angeles should avoid the fool’s gold of public broadband
There is a new gold rush in California, and the prospectors are already lining up. With a deluge of cash from Washington and Sacramento ready to flow down to counties and cities across our state, there is no shortage of ideas for how to invest this newfound money.
Some proposals make a lot of sense, like shoring up California’s crumbling roads, bridges, and other key public infrastructure, and providing additional stimulus directly to households and businesses most in need. But some proposals make little sense, like those calling for L.A. and the state itself to build their own broadband networks.
Broadband is complex and dynamic infrastructure that requires deep expertise to build, operate, and protect. A water pipe looks largely the same as it did 50 years ago and will flow into our homes in pretty much the same way.
Not so with Broadband infrastructure. The infrastructure itself, as well as the process to build it, are rapidly innovating to meet the technology needs of the future. Hundreds of billions of dollars in private capital have been deployed across the country in the last decade alone to compete in this highly competitive marketplace. While the pandemic has rightly created urgency for advocates to advance digital inclusion, the policies that are crafted need to be informed by actual experts who are specialized in broadband technology, engineering and operations.
Any public broadband network will enter a market teeming with private competitors. California generally and Los Angeles specifically are incredibly well served by numerous broadband providers. Indeed, except for certain well-defined pockets of the state – mostly in remote or sparsely populated areas – high-speed wired internet access is available to almost 98% of the state population according to Broadband Now.
In L.A., almost every person in the city can access wired or mobile broadband connections, and 96% are serviced by multiple wireline providers.
A new government-owned broadband system would be duplicative, and would waste critically needed funding to address the real drivers of the digital divide- namely a gap in affordability. The upfront costs of building a broadband network and the long-term costs of operating it are prohibitive.
At the municipal level, it is worth noting that the largest municipal broadband network in the U.S. is in Chattanooga, Tennessee, a city that is 22 times smaller, by population, than Los Angeles. That network cost about $390 million to build, which means a similar network in L.A. would likely cost over $7 billion. And that doesn’t take into account the hundreds of millions in annual funding needed to operate and maintain the network. We could waste years building duplicative infrastructure only to be left with the exact same affordability gap we have today, only we won’t get another once in a generation opportunity to make meaningful progress to close it.
Public broadband networks are prone to failure. The history of state- and city-run broadband networks is littered with costly, and sometimes spectacular, flops. These include systems in Bristol, VA, which sold its failed network at an $80 million loss; Provo, Utah, which sold its failed network to Google for $1, leaving taxpayers with tens of millions in debt; and Lake County, Minnesota, which sold its failed network at a $40 million loss. The list goes on and on.