Tennessee Could Give Taxpayers America's Fastest Internet For Free, But It Gave Comcast and AT&T $45 Million Instead (vice.com)

Chattanooga, Tennessee is home to some of the fastest internet speeds in the United States, offering city dwellers Gbps and 10 Gpbs connections. Instead of voting to expand those connections to the rural areas surrounding the city, which have dial up, satellite, or no internet whatsoever, Tennessee's legislature voted to give Comcast and AT&T a $45 million taxpayer handout. Motherboard reports: The situation is slightly convoluted and thoroughly infuriating. EPB -- a power and communications company owned by the Chattanooga government -- offers 100 Mbps, 1 Gbps, and 10 Gpbs internet connections. A Tennessee law that was lobbied for by the telecom industry makes it illegal for EPB to expand out into surrounding areas, which are unserved or underserved by current broadband providers. For the last several years, EPB has been fighting to repeal that state law, and even petitioned the Federal Communications Commission to try to get the law overturned. This year, the Tennessee state legislature was finally considering a bill that would have let EPB expand its coverage (without providing it any special tax breaks or grants; EPB is profitable and doesn't rely on taxpayer money). Rather than pass that bill, Tennessee has just passed the "Broadband Accessibility Act of 2017," which gives private telecom companies -- in this case, probably AT&T and Comcast -- $45 million of taxpayer money over the next three years to build internet infrastructure to rural areas.

Comments

Re:Money well spent.

[Shatrat]

A politician's constituents are the people who donated the most to their campaign.

It's not a free market

[sjbe]

However, I have serious, fundamental reservations about government competing with the free market.

That might be a valid concern if provision of wireline data was actually a free market. It is not and never has been and there is no reasonable prospect of it becoming one in the near future either. Companies like AT&T and Comcast have a government granted monopoly because of the substantial capital costs involved in setting up and maintaining such a network. As such they need to be regulated to assure against abuses. Given that fact it is perfectly reasonable for the government to get into the market with alternative offerings if the private corporations are not providing sufficient value to the citizens.

Re:It's not a free market

[jittles]

It is not and never has been and there is no reasonable prospect of it becoming one in the near future either.

That's not exactly true. Just look for pictures of NYC at the turn of the century and you can see neighborhoods with hundreds of power and telephone lines from competing companies going through neighborhoods. It's an eyesore and incredibly dangerous. This is why it will never be that way again and why there should be no corporate interests invested in owning utility lines.

Re:Monopolies suck. $4,400/house aint free

[drinkypoo]

It's not free. It's government providing needed infrastructure. High speed Internet access is a requirement for being a first-class citizen in the modern age.

Re:America!

[Thruen]

In this situation, "their way" (the current way) is to have regulations that prevents competition from entering an area the cable companies aren't expanding into amyway, "my way" (the alternative that got shot down) is to get rid of the regulation and allow a profitable company to expand where nobody has yet at no additional cost to taxpayers...

Cities providing internet does not create a "legislated monopoly," it creates a public service. However, having legislation that protects monopolies by not allowing competition does create a "legislated monopoly." Really basic stuff here, guys, shouldn't be this difficult for this crowd.

Re:Monopolies suck. $4,400/house aint free

[ranton]

Chattanooga EFB took over $300 million from taxpayers. There are 75,000 households in Chatanooga, so the cost is $4,400 per family even if you don't get the service, with an additional monthly charge if you want the service. When you have to pay $4,400 plus $60-$150 per month, that's not free. That's not anywhere near free.

This is quite inaccurate. EPB only took $111 million from taxpayers. $300 million was the total cost including the amount paid for by Internet, cable, and electricity customers of EPB. That comes to $1628 per household, not $4400. Fiber optic cables are tax depreciated over 15 years, with a presumed service life of 25 years, so that is $15 per month per household in taxes.

And considering these taxes then mean you don't have to deal with companies like Comcast, it seems like quite the bargain.