Isleboro, Maine is looking to launch a service offering it to everyone in town for $30/month. This makes the telecom companies look like extortionists.
Many of the ISPs charge much more for significantly slower service.
Current ISPs installed their hardware when bandwidth cost more. This company can offer higher speeds at lower price because they get to start with the newest hardware and gain a whole town at once.
It’s not a company, it’s a municipal service (i.e., not designed to earn a profit), it’s financed by a bond issue (which normally means the cost to borrow money is lower) and much of the infrastructure already exits.
In other words, it’s an entiirely different cost and pricing structure than when your average telephone or cable company wants to come in.
To put it mildly. If all 500-something residents sign up for this service, it will cost them $360 a year plus about $7,500 for the cost of repaying the $3.8 million bond that will be issued to cover the installation costs. It’s just that the $7,500 will be covered through taxes, not a monthly bill for the ISP.
I love it when people artificially separate for profit business from government business in such arbitrary ways.
Usually the only extra cost that government might have in providing a service, is that they pay their workers better. Which those workers almost immediately spend in that community served by that government. And also are taxed on too.
Business also takes on debt in various ways and then passes that debt cost back to you. Plus taking profit. Plus, hiding profits from taxes. Plus paying top executives more than the public sector. Also laying off workers and paying workers so little that they often need taxpayer subsidized programs to survive.
It is known that in the long run. Most important services are provided cheaper and usually better by government. There are vast numbers of horror stories about what happens after privatization of such services.
I do have to acknowledge that government personnel can also be horribly negligent and corrupt in running some of these things. But on the whole. The economies of scale, streamlining of various support issues, billing, and other aspects. Favor government as the best provider of some services.
As the internet and it’s various services become more vital to the basic functioning of our society. I believe they should be treated or supplanted as public utilities.
The question that was posed to us was “how can the government provide the service for only $30 a month?” I think it is fair and reasonable to explain that there is going to be a tax imposed on the residents and businesses of the city, in addition to the $30 a month, to pay for the service. We aren’t debating the optimal method for providing internet service to the city. We are trying to answer the question of how it is being paid for.
The tax will be imposed on all the businesses and permanent households and summer-only households, so it’s going to be split up among a lot more taxpayers. And, presumably, a lot of households have more than one person, but the whole household will be sharing one subscription. So they are counting on a lot of businesses and summer-only residents to also sign up.
But, in any case, the cost of paying off the bonds is being imposed on a lot of businesses/households who may not want to sign up for the service.
Also, we do not know the interest rate of the bonds or the duration of the bonds. There will be some years of interest to add in to the $3.8 million. But, on the other hand, since it will be a tax, local taxes are federal tax deductions, so the federal government will be subsidizing some of the cost.
From the article:
If >50% and <100% of voters want the service, then this arrangement is a good deal for them, and a bad deal for everyone else.
It is obvious that this is a good cheaper method. Because other providers have gone to great lengths to actually make it against the law to do this in some jurisdictions. They are trying to make a community built and run service, illegal.
https://www.eff.org/deeplinks/2014/07/act-immediately-stop-congresss-sneaky-move-shut-down-broadband-competition
My local PUD ran fiber-optic cables all over the city and offered access to it, free of charge, to any local ISPs who wanted on.
So I could be paying LocalTel $40-something a month for that.
Unfortunately, the guy who owns my apartment building refuses to allow the PUD to attach the necessary hardware to the building*, so I have to pay Charter $60/month for cable Internet. Despite the fact that their cables were installed a couple decades before the PUD showed up with the fiber-optics.
- This about 10 years after the PUD started offering the service, and every other damned building in the area is hooked up. I have a suspicion that my landlord has a deal with Charter.