Another Alabama city is threatening to create its own broadband network despite the folly shown by other municipalities that have lost billions in taxpayer money on such projects.
Andalusia Mayor Earl Johnson told Mediacom, the city’s cable franchisee, that the city would invest taxpayer dollars in building its own broadband network if the company didn’t improve its service.
“[Mediacom] operate[s] here because we let them,” Johnson said in February, as the Andalusia Star News reported. “As a city government, we can’t tell them or make them do anything. But we can locate someone who is an expert on broadband and internet who can tell us what we can do.”
Johnson didn’t return several calls from the Taxpayers Protection Alliance Foundation (TPAF) on the issue in the past few weeks. Mediacom also didn’t return a request for comment.
Johnson told the Andalusia Star News he’s been studying how Opelika Power Services (OPS) built its own broadband system to service residents there. Opelika is famously known as “Gig City,” but Yellowhammer News previously reported in 2016 that the gig service (meaning subscribers could get download and upload speeds of 1 gigabit per second) had just one subscriber at that time.
The number of gigabit subscribers has increased after OPS lowered its rates for the service, but the utility faces a new problem – a recent auditor report shows that the cost to build the broadband network has been a drain on city finances.
Opelika accountant John Boles, who conducted the audit for the city, said the telecommunications fund, OPS One, has a negative balance of $13.4 million, the only major city fund that is in the red. In addition, the power division of OPS loaned the broadband system about $7.5 million, creating a total negative position of $20.9 million for OPS One.
That debt falls in lockstep with other similar projects across the U.S., as reported on TPAF’s “Broadband Boondoggles” website. The page highlights about 200 taxpayer (or ratepayer) funded broadband networks from coast to coast that have lost money squandering resources in communities that often had existing internet service.
Johnson said he’s concerned Andalusia could be missing out on economic development without better internet.
“This city will not grow or attract businesses and industries that we want here unless they can be assured the broadband and television services that are necessary to run a business,” he said. “A lot of businesses, if they don’t have broadband, it shuts their business down. It’s a serious thing.”
But it’s not as if Andalusia, a city of about 9,000 residents near the Florida panhandle, is a broadband desert.
A search of internet service shows that Andalusia is serviced by multiple providers. Mediacom and CenturyLink both offer broadband speeds (up to 200 megabits per second for the former and up to 100 mbps for the latter), while HughesNet offers satellite internet with speeds up to 15 mbps. That’s not broadband by the Federal Communications Commission’s (FCC) new standard, but it’s plenty fast enough to stream video on multiple devices.
Rather than commit millions of its taxpayers’ dollars to creating a city-owned broadband network, Andalusia could instead work with the FCC to help spur the local development of 5G wireless services, which promise gigabit-capable speeds over a wide area of coverage. Just this week, FCC Commissioner Brendan Carr announced a plan to work with local governments on establishing rules that will make cities more attractive to providers looking to build 5G infrastructure.
Rather than seek to build a fiber-based system that could be obsolete in a matter of years, Andalusia should instead look to the future of wireless.
Johnny Kampis is an investigative reporter for the Taxpayers Protection Alliance Foundation.
