Lake County’s search for funds

The Heartland Institute recently featured Lake County’s efforts to deploy fiber in an article that ironically seems to promote letting the market lead broadband deployment. The Heartland Institute’s tagline is free market solutions, so I understand their position. It just seems as if Lake County is an interesting choice for an example community.

As the Heartland reports…

Lake County, Minnesota, is hoping for a federal grant to fund its proposed $70 million municipal broadband service—and, lacking that, will hope Google or municipal bonds will get the long-delayed project underway.

Gary Fields, CFO of Minneapolis-based National Public Broadband, a firm that facilitates municipal broadband services across the country, said in May the chances Lake County will see its project come together without local funding are uncertain.

Heartland warns of the dangers of municipalities getting involved with telecommunications projects…

Scott Testa, professor of business administration at Cabrini College in Philadelphia, says municipalities like Lake County, Minnesota, should rethink the idea of using taxpayers’ money to get into the broadband business.

“The idea is that these projects are supposed to promote economic growth, but municipalities have not done a very good job from a profitability standpoint,” Testa said. “When it comes to a bond issue, maybe the money could be better spent in other areas.

“If history tells us anything, it tells us that municipalities don’t do these things as well as the for-profit sector,” he added. “Cities have to hire engineers and others for these projects, whereas companies like Verizon work on them day in, day out.”

But there are a couple of reasons that I think Lake County was an interesting choice here. First, according to the Lake County Fiber web site, the county will not be building or running the network…

The County Board issued a Request for Proposals for qualified companies to build and operate the network. They selected National Public Broadband, Inc., a non-profit company comprised of a team of people who have already built and operated publicly-owned networks.

And that network will use the open access model…

Private voice, video, data and other service providers will be able to purchase wholesale access and use the networks to offer competitive services.

Also pursuing financing from taxpayers does not appear to be Plan A for Lake County…

National Public Broadband is developing financing applications for federal stimulus funding as well as other sources. No taxpayer funds will be pledged to fund the network.

Finally Lake County is pursuing public funds for the network because they are underserved, which would indicate to me that the market is not serving their needs…

This stimulus money is to help underserved areas to be able to compete with areas that already have the fiber in place. Because we are a county with a small population we decided instead of waiting Lake County would take advantage of the stimulus money and build a fiber network and have a first class informational highway.

Also the Connect Minnesota broadband coverage maps indicate that there are unserved areas in Lake County…

1 thought on “Lake County’s search for funds

  1. Heartland is famous for absurd “analysis.” Their experts have confused Wi-Fi with fiber-to-the-home and I find them worthy of reading only for comic relief.

    So long as telcos pour money into them, they’ll bash any community that wants better choices in broadband.

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