Municipal broadband internet: The next public utility? | Smart Cities Dive: “Indeed, according to new data, over half of these municipal fiber systems fail to bring in enough revenue to cover their ongoing operating costs, bleeding red ink every day they operate and falling further and further into debt,” McAuliffe, who is also federal affairs manager at the conservative Americans for Tax Reform organization, wrote. “These bad investments crowd out other needs and, in the worst case, can put a city’s financial solvency at risk.”
This warning is grounded in the paradigm of so-called "take rate risk:" that too few premises will subscribe to advanced telecom connections. It's predicated on the now two-decade-old view of advanced telecommunications over Internet protocol as a cutting edge, luxury service that would be shunned by many. That's no longer the case. The expectation now is there be landline connections as common as voice telephone connections were in most of the 20th century. Particularly now that they deliver such a wide array of voice, data and video services. And unlike private sector, investor owned providers wholly reliant on subscription revenues, governments have other forms of financing available to them to build and operate advanced telecom networks.
The more real risk public sector owned advanced telecom projects face now is faulty financial planning and poor project management that leads to cost and budget overruns -- a common problem that many public works projects encounter. These can be managed by employing best practices and fails to support the view expressed here that only private sector, investor owned entities are competent to own and operate advanced telecom networks.