October 1, 2020
To: Mayor John Agenbroad and Members of the Springboro City Council
From: Americans for Tax Reform
Re: Oppose City-Owned Fiber Network
Dear Mayor Agenbroad and Springboro City Council Members,
On behalf of Americans for Tax Reform (ATR) and Ohioans for Tax Reform (OTR), and supporters across Springboro, we urge you to oppose the government-owned network (GON) proposal pending before you. GONs are a terrible deal for taxpayers that result in unfair competition and jeopardize access to innovative technologies.
Springboro’s GON proposal – which is being rushed through via an emergency ordinance without public review or discussion – would authorize the Warren County Port Authority to issue $3.5 million in bonds that would be backed by the taxpayers to construct a middle mile fiber and infrastructure network.
As has been demonstrated by GON disasters in other parts of Ohio and throughout the country – where GONs have either failed outright or are being propped up by taxpayers – the construction and maintenance of broadband networks are not functions that government entities are well suited to take on. Government entities lack the resources and expertise necessary to maintain a state-of-the-art broadband network, as they require ongoing and expensive maintenance and upgrades in order to function properly.
In addition to underestimating the true costs involved, government entities also overestimate the demand for a GON. Three providers already serve Springboro, with most consumers having access to gigabit speeds. As many elected officials have learned the hard way over the years, consumers often choose to remain with their trusted private sector providers instead of switching over to a GON.
Underestimated costs and overestimated demand is a recipe for a financial gap that the city’s taxpayers will be forced to fill. But concerns with Springboro’s GON proposal do not end there.
In addition to the clear financial risks at stake, Springboro’s GON would also jeopardize access to new technologies. The proposed city-owned middle mile network would allow consumers to be charged below the cost of service since those costs could be subsidized with tax dollars. Such manufactured “competition” would encourage other providers, who would not have this luxury, to prioritize investments and upgrades to other areas that have a level playing field.
There is simply no justification for moving forward with the proposed GON in Springboro. Thanks to millions in investment from the private providers who currently serve the area, consumers have choices and can access fast internet speeds. Moving forward with this unnecessary network would do nothing more than leave taxpayers at risk for future tax increases.
ATR and OTR oppose the proposed Springboro GON and urge you to vote NO.
Sincerely,
Grover Norquist
President
Americans for Tax Reform
Doug Kellogg
Director
Ohioans for Tax Reform