A little thought experiment: let's pretend broadband was electricity: The Previous Millennium Research Council today released a report that strongly opposes the entry of municipally owned entities into electrical power generation, distribution, and delivery. The PMRC's report, sent out by telegraph to business centers around this great country, is dated Nov. 1895, although it will take several weeks for sufficient copies to be printed and distributed by rail to business centers.
Electricity is too important a resource for America's future to be left in the hands of cities and towns, the council argues, which are inefficient enterprises that take profits from industry in their pursuit of ever-greater control of the flow of capital within their borders. "How big may these so-called public utilities grow in their efforts to stifle free enterprise and increase the size of government?" the report asks.
The report notes that 97 percent of all neighborhoods in the U.S. have at least one functional electric street lamp running built through private enterprises' effort, and that some urban areas have two electrical lamps on each corner, as well as lighting available at different times of the day and night both within and outside of homes and businesses.
The report dismisses the concern that in many areas, only a small percentage of all buildings are equipped with electricity and rejects the fact that private utilities in some municipalities only provide enough voltage and amperage to power a few dim lights.
His Honor, Mayor Charles Franklin Warwick of Philadelphia has recently said that he intends to provide universal electrical service, but critics argue that merely providing electricity will not ensure that the "electrical divide" will be bridged because poorer inhabitants of cities and towns will not use their hard-earned pittances to pay for electrical appliances, such as a motor-driven wringer or electrical lamp, much less power. And, in any case, most of them are illiterate and work 16-hour days, and thus have no need for the modern wonder of electrical lighting which would merely disturb their few hours of rest each night.
Several authors in the report state that the abiding interest of the community is served best by providing financial and monopoly incentives to existing private utilities to expand their electrical offerings. For instance, Variegated Zandegraaf and Sons received a subsidy of $1 million to substantially increase the flow of electricity through Pennsylvania over the last decade. While it has provided some additional service, the company required additional infusions of millions to complete the task over the next 10 years without the threat of competition which would diminish the utility's motivation.
The PMRC also takes the stand that installing electricity in every home would drain tax coffers, and expects that once projects are begun, the revenue from them might never cover the immense cost of such service. "One might imagine a city building an electrical network that could provide any amount of service at any time of day or not, rather than at particular times that are most advantageous for power generation," the report states.
Businesses are also not interested in electricity, the PMRC states, noting that horses, railroads, coal, and the Irish are the driving forces of the economy. "Providing universal access to electrical power is not a leading consideration in business development," the report says. While certain businesses require electricity, such as theaters or carnivals, business conditions are best improved by well-honed service provided by a single company in each field which reduces the chances of disruption.
One report author did suggest that a new form of ground-transmission technology invented by Nikola Tesla might provide enough energy to be substantially less expensive for a municipality to install but have limited enough utility that both private and public electrical generation could be possible.
The PMRC report comes on the heels of legislation passed in several states that require municipalities to petition the local private utility before they attempt the arduous work of installing electrical plants. If a private utility states that they plan to add power within 30 years, the municipality is required to wait.
Breaking News! This correspondent has learned that PMRC is a paid agent of Issithorp and Dankerbottel, two gentlemen who have contracted with Variegated Zandegraaf and Sons to increase their reputation and improve business conditions on their behalf. Although severely pummeled by Pinkertons, I remain your faithful scribe, and will have further dispatches as they come available.
Wonderful piece. I've passed on to the folks at Minnesota Municipal Utilities Asociation.
Also going to send to contacts at American Public Power Association.
Municipals have done a world class job managing and growing electrical distribution systems for 100+ years. Public Power is the least expensive power in the nation (and some of the most reliable).
Broadband Access (wireless or wired) is this century's new public utility. If residents and business truly want innovation in the area of high speed telecommunications, just let the munis play with incumbents.
Mistakes will be made in both camps. Technology will change and grow, spurred on by increased competition.
Your analysis that if private telco didn't fear Muni's they would let them fail and then ride in on their big white horse and rescue their abandoned networks at pennies on the dollar.