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In the USA, typically government agencies are prohibited from selling services that compete with private sector companies.

ClumsyPilot 6y ago
Buzzare. If they can compete without making a loss/tapping taxpayer money, then incumbents don't deserve to survive.
- exabrial 6y ago
  That should be the way it works, but the [federal] government is allowed to incinerate a nearly infinite amount of cash. Some state governments are becoming that same way unfortunately. Municipalities don't really have this option, so it may not be as big of a deal. See my other comment about contractors though... what we saw in TN was Comcast "contracting" its services to "build a municipal network", but instead just built their own crap using taxpayer funding.
- rsj_hn 6y ago
  It is never the case that they can compete without making a loss, as that would effectively make them a private company. The Post Office, for example, is supposed to have its own P&L, yet we keep giving them billions every time they run out of money. So you get the worst of all worlds, the lack of accountability of a private company but the taxpayers are on the hook. Almost all these pseudo-government projects are funded out of the general budget, and some are off-books but still off-balance sheet liabilities of the government. E.g. a port authority that floats its own bonds, but those bonds are guaranteed by the local government, so if the port authority becomes insolvent the government is on the hook. If you think entity X can make its own profit and loss, then ask yourself: who is on the hook when the bonds sold by X default? It is always going to be a taxpayer for a government project. A clean separation between things that are supposed to turn a profit and things that should be funded socially is a good separation, and trying to blur those lines is usually a bad idea, as you create these unaccountable subsidized bureaucracies that end up being poorly run sources of graft after a few generations. Now whether internet access itself should be subsidized or turn a profit is a different matter. It's critical infrastructure, like roads, so you can make a case for subsidies.
  - salawat 6y ago
    Post Office is a bad example as I understand it because from what I've heard it's being run by someone notorious for wanting it dead to clear the way for private sector competitors, and it is the single private organization in the United States required to pre-fund its pension fund.
  - mschuster91 6y ago
    > The Post Office, for example, is supposed to have its own P&L, yet we keep giving them billions every time they run out of money. And they run out of money because of pension benefit requirements and a lot of other politically mandated issues (see e.g. https://www.politifact.com/factchecks/2020/apr/15/afl-cio/widespread-facebook-post-blames-2006-law-us-postal/ https://www.politifact.com/factchecks/2020/apr/15/afl-cio/wi...). Not to mention the events of the 45th Presidency with tearing down sorting machines and other actions intended to impede by-mail voting...
- rhino369 6y ago
  I would agree with the last sentence, but municipal projects rarely operate on a level playing field. At a minimum, they get access to tax-payer backed bonds to raise capital that private companies can't match. They also get to regulate their competition.
- BurningFrog 6y ago
  The city can always regulate the competition out of existence, so they are predestined to win the competition. Which in turn means no one tries to compete, since it's pointless, and the city has a monopoly by default. Or at least that's how it usually plays out. Don't know if any jurisdictions have found a way to make this work well.
dredmorbius 6y ago
Source / citation?
bjt 6y ago
That's not a blanket policy or typical law. Commercial broadband providers lobbied to have state laws passed specifically prohibiting or restricting municipal broadband projects.

ClumsyPilot 6y ago

Buzzare. If they can compete without making a loss/tapping taxpayer money, then incumbents don't deserve to survive.

exabrial 6y ago
That should be the way it works, but the [federal] government is allowed to incinerate a nearly infinite amount of cash. Some state governments are becoming that same way unfortunately. Municipalities don't really have this option, so it may not be as big of a deal. See my other comment about contractors though... what we saw in TN was Comcast "contracting" its services to "build a municipal network", but instead just built their own crap using taxpayer funding.
rsj_hn 6y ago
It is never the case that they can compete without making a loss, as that would effectively make them a private company. The Post Office, for example, is supposed to have its own P&L, yet we keep giving them billions every time they run out of money. So you get the worst of all worlds, the lack of accountability of a private company but the taxpayers are on the hook. Almost all these pseudo-government projects are funded out of the general budget, and some are off-books but still off-balance sheet liabilities of the government. E.g. a port authority that floats its own bonds, but those bonds are guaranteed by the local government, so if the port authority becomes insolvent the government is on the hook. If you think entity X can make its own profit and loss, then ask yourself: who is on the hook when the bonds sold by X default? It is always going to be a taxpayer for a government project. A clean separation between things that are supposed to turn a profit and things that should be funded socially is a good separation, and trying to blur those lines is usually a bad idea, as you create these unaccountable subsidized bureaucracies that end up being poorly run sources of graft after a few generations. Now whether internet access itself should be subsidized or turn a profit is a different matter. It's critical infrastructure, like roads, so you can make a case for subsidies.
- salawat 6y ago
  Post Office is a bad example as I understand it because from what I've heard it's being run by someone notorious for wanting it dead to clear the way for private sector competitors, and it is the single private organization in the United States required to pre-fund its pension fund.
- mschuster91 6y ago
  > The Post Office, for example, is supposed to have its own P&L, yet we keep giving them billions every time they run out of money. And they run out of money because of pension benefit requirements and a lot of other politically mandated issues (see e.g. https://www.politifact.com/factchecks/2020/apr/15/afl-cio/widespread-facebook-post-blames-2006-law-us-postal/ https://www.politifact.com/factchecks/2020/apr/15/afl-cio/wi...). Not to mention the events of the 45th Presidency with tearing down sorting machines and other actions intended to impede by-mail voting...
rhino369 6y ago
I would agree with the last sentence, but municipal projects rarely operate on a level playing field. At a minimum, they get access to tax-payer backed bonds to raise capital that private companies can't match. They also get to regulate their competition.
BurningFrog 6y ago
The city can always regulate the competition out of existence, so they are predestined to win the competition. Which in turn means no one tries to compete, since it's pointless, and the city has a monopoly by default. Or at least that's how it usually plays out. Don't know if any jurisdictions have found a way to make this work well.

dredmorbius 6y ago

Source / citation?

bjt 6y ago

That's not a blanket policy or typical law. Commercial broadband providers lobbied to have state laws passed specifically prohibiting or restricting municipal broadband projects.