The Coalition for the New Economy (CNE) today released a short case study by Dr. Joseph P. Fuhr Jr., professor of economics at Widener University in Chester, PA, that examines Burlington Telecom, a government-owned network (GON) in Vermont that offers Internet, television and telephone services. The paper is the third in a series of micropapers released by CNE that highlight the negative budgetary and economic side effects of GONs.
Florida has seen its fair share of failed GONs. As taxpayers in Orlando and Quincy will tell you, Florida has seen its fair share of failed GONs. In 2005, Quincy residents were left with a $515,000 debt when their fiber optic network, NetQuincy, failed. Today, cities and counties across north Florida can attest to the risks being posed to their tax dollars by the North Florida Broadband Authority, a GON looking for investments from local governments in a 15-county area. After a freeze on their federal funding, many local governments are withdrawing their support and choosing not to participate in the NFBA.
Dr. Fuhr’s latest study reveals that GONs can end up costing taxpayers much more than just dollars and cents. Burlington Telecom, a GON in Vermont, is $51 million in debt – $17 million of which Dr. Fuhr notes was borrowed illegally from taxpayers. In the paper, Dr. Fuhr explains these difficulties and outlines how a lawsuit may prevent Burlington from getting out from under its troubled fiber network.
The Coalition for the New Economy’s latest study on GONs can be read here.
