PPI - Radically Pragmatic
  • Donate
Skip to content
  • Home
  • About
    • About Us
    • Locations
    • Careers
  • People
  • Projects
  • Our Work
  • Events
  • Donate

Our Work

Obama’s Muni Broadband Initiative: Bad Economics, Bad Politics

  • January 15, 2015
  • Michael Mandel

Here are some staggering statistics: Since 2006, state and local real investment in highways and streets has fallen by 22%.  Their spending on sewer systems, in real terms, is also down by 22%. And real investment by state and local governments in water systems has fallen by a stunning 34% (chart below).

Meanwhile, over the same period, private real investment by telecommunications and broadcasting companies is up by 13%, according to statistics from the Bureau of Economic Analysis.

broadband

Why, then, does President Obama want to load yet another spending burden–muni broadband–on localities that are already stretched too thin to cover their existing obligations? On Wednesday the President unleashed a set of initiatives designed to make it easier for cities and towns to build their own broadband networks.   Setting up muni broadband networks certainly has some superficial appeal—apparently creating more competition for private ISPs and offering cheaper rates to poor residents.

But there’s an enormous problem: State and local governments are already  struggling to come up with the funds to maintain the current infrastructure of roads, bridges, sewer and water systems.  Government infrastructure spending in real terms is way down compared to before the recession, leading to potholed roads, leaky water systems, and inadequate sewers.

Meanwhile private investment in telecom and broadcasting has continued to rise, boosting network speeds for both wireless and wired broadband.  Private companies are putting private money into improving the nation’s networks, without any cost to the taxpayers.

So if state and local governments have any spare change—or rather, if they have any of the taxpayer’s spare change—they shouldn’t put it into building broadband networks that would duplicate already existing private networks. Rather, they should fix the roads, bridges, and other infrastructure for which they are legally and politically responsible, and for which there are no private alternatives.

Focusing on rebuilding traditional infrastructure can have big economic payoffs. As Diana Carew and myself noted in a March 2014 PPI policy memo– ”Infrastructure Investment and Economic Growth:  Surveying New Post-Crisis Evidence”–recent studies show that investment in transportation infrastructure can have large positive multiplier effects on the local economy.

Finally, running a muni broadband network is hard and expensive, especially since broadband networks–unlike roads and water systems–need continuous upgrading to keep with technological change.  Does the Democratic party–and local politicians—really want to be on the phone when voters complain about their Internet service? In the end, Obama’s muni broadband plan looks like both bad economics and bad politics.

 

Related Work

Op-Ed  |  August 22, 2025

Manno for Philanthropy Daily: A Donor Playbook for Local Workforce Renewal

  • Bruno Manno
In the News  |  August 15, 2025

Ritz on News Nation: 90th Anniversary of the Social Security Act

  • Ben Ritz
Press Release  |  August 11, 2025

Ahead of its 90th Birthday, PPI Offers Innovative Blueprint to Secure Social Security’s Future

  • Ben Ritz Nate Morris
Publication  |  August 11, 2025

Reform That Rewards Work: A New Vision for Strengthening Social Security’s Intergenerational Compact

  • Ben Ritz Nate Morris
Op-Ed  |  August 3, 2025

Ritz for InsideSources: Work requirements increase bureaucracy more than accountability

  • Ben Ritz
Publication  |  July 30, 2025

Five More Problems With the ‘One Big Beautiful Bill’

  • Alex Kilander
  • Never miss an update:

  • Subscribe to our newsletter
PPI Logo
  • Twitter
  • LinkedIn
  • Facebook
  • Donate
  • Careers
  • © 2025 Progressive Policy Institute. All Rights Reserved.
  • |
  • Privacy Policy
  • |
  • Privacy Settings