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Broadband Myth Series: Does Municipal Broadband Scale Well to Fit U.S. Needs? DOUG BRAKE AND ALEXANDRA BRUER | JUNE 2021 No, local governments generally are not well-suited to providing broadband service. Economic theory suggests city-run broadband would not serve the country well, and previous real-world attempts bear that out with a mixed track record marked by several failures. KEY TAKEAWAYS Unlike traditional utilities that are relatively static, like electricity distribution, broadband is dynamic, requiring consistent investment to keep up with technological change. The private sector can better adapt and drive continual improvement. Municipal networks often deploy first in low-cost, high-return business-improvement districts and are necessarily limited in their jurisdiction, making it difficult for regional providers to support areas outside city limits. Municipalities do not support innovation as well as the private sector does. For example, they do not contribute to standards-setting organizations or invest in RD. Several municipal networks have failed, and those that remain financially viable often owe their success more to federal subsidies or unique circumstances than to their ownership model. That said, broadband policy should not be ideological or absolutist. If there are areas that private providers are not interested in serving, even with subsidies, then municipalities should be empowered to step in and offer broadband. INTRODUCTION The Biden administration has proposed a preference for federal funding of broadband infrastructure provided by municipal or nonprofit operators, thrusting municipal ownership of broadband facilities back into the center of telecommunications policy debates. Any federal broadband infrastructure subsidies should be awarded on an “ownership neutral” basis, neither favoring nor penalizing government-provided broadband systems. Municipal broadband does not scale well to serve the country, but should be an available option fo
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