Originally published: January 7, 2010
Last updated: January 7, 2010 - 3:59pm
[Commentary] The truth is that publicly owned networks do quite well. Communities typically borrow from outside investors to build the network and pay off the loans over a 15-20 year period with revenues from phone, television, and broadband services (for wired networks). These networks have eased telecom budgets (e.g. by increasing speed to schools while dramatically cutting costs) and encouraged economic development. Nationally, they average high take rates—a measure of how many people take service on the network. State barriers to publicly owned broadband networks may benefit monopolistic cable and telephone companies but can cripple communities within those states. Of course, such policies also give a competitive edge to cities in other states who have moved ahead.
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