Friday, June 29, 2018

Portland, Oregon Considering Municipal Broadband, Despite Existing Competition

Earlier this month, Multnomah County, Oregon, where Portland is located, announced that it will adopt a feasibility study to evaluate the prospect of building a county- and city-wide fiber network. The study is projected to cost $300,000 and early estimations project that the network could cost $500 million to build.  If the network is adopted, it would be the biggest municipal network in the country.
This week, the Free State Foundation published a Perspectives from FSF Scholars titled “Big City Municipal Broadband: Repackaging Net Neutrality Arguments Won’t Fly,” which discusses how big cities throughout the country are adopting municipal broadband projects in the name of net neutrality. While it’s unclear why Multnomah County is proposing this municipal network, it is the latest example of a big city considering a municipal broadband project, along with Baltimore, San Francisco, and Seattle, which we discuss in-depth in the paper.
Of course, before a city begins building a network, adopting a feasibility study is a necessary and responsible step for the municipality to weigh the costs and benefits of a potential network. However, as Ted Bolema and I state in our paper, municipal networks have a history of financial instability and that likely would continue in Portland and its surrounding county, where competition already exists.
In Multnomah County, 83.4% of residents have access to two of more fixed broadband providers offering 25 Mbps or greater. Therefore, if this county- and city-wide network is adopted, it will have to compete with incumbent private providers who have a greater incentive to provide pro-consumer offerings because they cannot subject taxpayers to the burden on their inefficiencies, while a public provider can.
See our new paper to learn more about big cities considering municipal broadband projects!