News Story

Strong Demand For Government-Owned Broadband – From Government Officials

Two more Oakland cities well-served by commercial broadband looking to enter the business

The Southeast Michigan cities of Farmington and Farmington Hills are moving ahead with a plan to develop some form of municipal broadband internet service, hoping to provide reliable, high-speed connections at a lower cost than currently available private sector options.

Whether they can manage it remains an open question.

Government-backed broadband has, at best, a checkered history of success. A consulting contract for a feasibility study of various municipal broadband options is expected to be awarded within weeks, said Kelly Monico, the Farmington Hills director of central services.

The cities have explored a government alternative to service provided by cable and telecommunications companies has been ongoing for nearly two years. The effort is propelled by what officials say are complaints from local business owners and residents about existing broadband options.

Those officials likened public sector provision of comprehensive broadband technology to local government efforts in the 19th and 20th century to build road, water and sewer infrastructure. Broadband, they say, is vital for economic prosperity in the 21st century.

“It’s time for us to do this ourselves, to take the lead on this technological revolution,” Aaron Paluzzi, a member of the cities’ joint broadband task force, told the Farmington Hills City Council in December.

The scope of the project is yet to be determined. But one option explored by the task force — deploying a fiber optic backbone throughout the two communities (absent hookups to end users) — was estimated to cost nearly $7 million.

At a City Commission meeting in December, Farmington Hills Mayor Vicki Barnett expressed her support for a municipal broadband system to create “real, true free market opportunities.”

The U.S. is “far behind other countries” in broadband deployment, she said.

Those kinds of claims generate significant skepticism, however — especially as they apply to a highly-developed region like Farmington — about the efficacy of government intervention in the telecommunications marketplace.

U.S. Census Bureau data shows that Farmington and Farmington Hills households have among the highest levels of subscription to broadband internet service (above 85% in both) in the country.

Bill Morand, a spokesman for Charter Spectrum, a primary cable providers in the area, said that virtually all of the Farmington and Farmington Hills area is covered by existing fiber-optic networks. These networks, he added, can deliver (via coaxial cable from that network) broadband service of up to one gigabyte per second to both residential and business customers.

State and local initiatives to boost internet access proliferated in Michigan early in the 21st century. The most ambitious project, launched by the Legislature and then-Gov. John Engler in 2002, created the Michigan Broadband Development Authority to aid in the expansion of broadband infrastructure in rural areas. It was suspended in 2006 after failing to recover $14.5 million in loans.

Leon Drolet, a former Republican state lawmaker from Macomb County and chairman of the Michigan Taxpayers Alliance, said government-backed broadband is largely a solution in search of a problem.

“The failure of these programs is well-known,” Drolet said. “Government should focus on doing things the private sector cannot.”

“They say, ‘Building broadband is like building roads,’ but look at the job (government) is doing building roads. Is that what we want?”

But Farmington City Council member Joe LaRussa the cities’ broadband initiative is the result of well-documented deficits in local internet service. Area residents don’t believe they are getting advertised speeds from existing service providers, he said. And the providers, including Charter Spectrum, have declined to commit to upgrades, LaRussa said. Some government-backed broadband systems have achieved their goals, but others have not, he acknowledged.

“That’s not surprising,” LaRussa said, “There are always opportunities to fail in planning, or to fail in execution. We’re trying to get things right.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.