This has been a tough week for public/private partnerships in the telecom sector.
Last night the city of Corpus Christi, Texas, voted to take its Wi-Fi network back from EarthLink, which bought the 147-square-mile network a year ago for roughly the same amount it cost the city to build ($7 million). Shortly after the network was completed last August, EarthLink, under new management, began pulling out of muni Wi-Fi altogether, and Christi saw the writing on the wall. Now, rather than public Internet access, the city will use the network for its originally intended purpose: reading utility meters.
Earlier this week, the governor of Kentucky vetoed $2.4 million in state funding to deploy broadband in rural areas. Though the gov was in favor of the concept, he noted that the price tag was rising and that the legislation calls for funds to be allocated “without specifically identifying any services to be rendered to the state or providing any oversight, control or performance measures.” Despite controversy surrounding the public/private project, known as Connect Kentucky, on the grounds that it lends too much influence to the incumbent telco, AT&T, the model is being proposed in several other cities under the brand “Connected Nation.” If that nationwide approach depends on Kentucky as its showcase, cutting the purse strings could have implications far beyond the state line.
Meanwhile, in Utah, some taxpayers are growing frustrated with the rising cost of an 11-city muni fiber project that wholesales an open fiber-to-the-home network to private service providers. The leaders of Utopia, as the project is unfortunately known, want to refinance its existing $135 million in debt with $189 million in new, lower interest bonds and stretch the term from 20 years to 33 -- what the Salt Lake Tribune called “doubling down.” “Given Utopia's track record so far, that's not a good investment,” the Tribune, long critical of Utopia, wrote in an editorial last week. “The cities might be better advised to take their losses now and unwind this deal before they get in even deeper.”
All of these are overshadowed, however, by the biggest blight on public/private partnerships in telecom lately: The FCC’s failure to find a buyer for the D block in the 700 MHz spectrum, ownership of which would require the operation of a nationwide public safety network. Understandably embarrassed, federal officials are now trying to figure out what to do next.
Public/private partnerships are sometimes imagined to be able to sneak past the religious debates that bog down government participation in broadband. One side says big telecom companies are greedy and rapacious, the other side says government is incompetent and wasteful, and no one gets anywhere. Public/private partnerships often carry with them the promise of attaining the best of both worlds. But in some cases, they can also represent the worst of both worlds as well.
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