The project received $66 million in grants and loans through the U.S. Department of Agriculture’s Rural Utilities Service (RUS) as part of President Barack Obama’s stimulus legislation. Including federal and local money, more than $80 million was sunk into Lake Connections.
After seven years of operations, Lake Connections has 2,500 customers, with 750 more interested parties waiting for service, and ironically the Board of Commissioners sought to sell its government network because it felt a private provider could do a better job of hooking up eager customers sooner.
The commission had hoped to sell the network for $20 million, but found that estimate grossly overvalued. Instead, according to a July 27, 2018, Lake County News Chronicle article, Pinpoint Holdings offered an initial bid of $3.5 million before a higher price was agreed upon. Taxpayers get to eat about $40 million that’s still owed on the debts. RUS agreed with the county that the sale price will fulfill the balance of the loan.
Freedom Foundation of Minnesota founder Annette Meeks previously told Taxpayers Protection Alliance (TPA) that Lake Connections is one of the worst examples of the detriment effects of municipal broadband projects. Local taxpayers were forced to sink $17 million into the project, money that would have been better spent on other projects improving the quality of life of the area.
Research we did for the Blandin Foundation two summers ago found that people in Lake County were happy with the network and policy makers did not regret their decision. Each household with broadband reaps on the average a $1,850 economic benefit annually – at 2,500 homes that’s $4.6 million a year.