from Dallas Business Journal
by Bill Sproull, CEO of the Richardson Chamber of Commerce
The city of Dallas and Dallas Independent School District (DISD) are considering a set of recommendations to bridge the digital divide made even more apparent and urgent by the COVID-19 pandemic. I applaud the city and school district’s focus on increasing access to affordable internet connections and expanding the adoption of high-speed service through education.
I have concerns, however, with the recommendation to build and maintain city-owned fiber and wireless networks because history has shown time and again that taxpayers shoulder the financial risk and ultimately pick up the tab when these networks fail.
The list of failed government-owned networks is long, and the costs of failure have been staggering for taxpayers.
For example, the city of Opelika, Alabama, sold its city-owned network at a $29 million loss.
In Connecticut, the city of Groton’s $28 million communications company lost $2 million a year, eventually selling for only $550,000.
Lake County, Minnesota, took a $40 million loss when it sold its government-owned network.
After years of financial struggle, the city-owned network in Tacoma, Washington ultimately failed and had to be sold at a heavy loss in recent years.
These networks' failure usually has to do with a failure to plan for or secure sustainable revenue to maintain and upgrade the network. Take-rates from customers with access to government-owned networks are notoriously low as well. In fact, there is a significant lag in adoption or subscribership to broadband service generally among Texas consumers, and the drop-off increases as speeds increase.
What’s more, too few households are enrolled in existing low-cost options for broadband service. According to CTC Technology, which prepared the recommendations for the city and DISD, only 3% of low-income residents are enrolled in Spectrum’s Internet Assist program. Fifty-eight percent had not heard of the program. That’s why the recommendation to expand the city’s “Digital Navigators” program to help families enroll in low-cost programs and federal subsidy programs are worthwhile. Expansion of digital skills training for Dallas residents is another good idea to ensure that residents have the skills to use the services and devices they receive.
The most efficient and sustainable approach to delivering and maintaining broadband service to more Dallas residents is for public entities to work with the private sector. Cities and school districts can use funds from the American Rescue Plan (ARP) to fill the gap in unserved areas in partnership with the private sector, which can implement broadband deployment with experience and technical know-how to build, maintain and upgrade the networks.
City and school district leaders are wise in focusing on broadband connectivity and ways to use ARP funds to meet residents’ broadband needs. ARP represents a once-in-a-lifetime opportunity to make real strides toward bridging the digital divide and closing the homework gap that exists for students and families that lack access to high-speed connections, the devices they need or the skills to use them. How our leaders choose to spend this money matters. I hope that solutions to meet this critical need will be thoughtful, sustainable and executed in partnership with the private sector.
Bill Sproull is CEO of the Richardson Chamber of Commerce.