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Warren, NJ | Natural Monopolies vs. Socialism, and more... A few important points still missing from this discussion.
The "last mile" for virtually all public utilities are what's known as a Natural Monopoly, where it's more efficient for the utility to be supplied by a single entity (firm, muni, etc...) For instance, you wouldn't want 20 water companies burying pipes under your road and competing for your business, nor would you care to see the mess that multiple electric companies could make by stringing their own wires on their own poles on every street in your town. So... many electric (or water) companies may compete for your business, but the last mile delivery is done by one company, through negotiations, contracts, and regulation by government entities. Broadband is a bit more complicated for historical reasons. Initially, TPC (The Phone Company) held the monopoly on POTS (first nationally, then regionally) and cable companies held monopolies on delivering TV content by wire (usually at the municipal level.) Technology advanced and both TPC and Cable found ways to deliver additional services (like broadband) over their existing last mile right of way. In this case, we have a "natural duopoly."
The pejorative term "socialism" is fairly irrelevant to this discussion. Governments involve themselves in many public utilities: sewer, roads, police, fire, parks, etc... Some we pay for whether we use them or not; some (like sewer) we pay only if we're hooked up; some are paid for in multiple ways (gas tax funds federal and state highways, but municipal and county roads cost you whether you use them or not.) Muni broadband could be financed and administered similarly to municipal sewer authorities, i.e. a quasi-government entity, whose bonds are backed by the full faith and credit of the municipality, but who nonetheless must generate revenue from customers to support their expenses and debt service, and be accountable to the public through their elected management.
Reliable, affordable, high speed broadband is an economic asset to a community. It attracts small business, enhances education, raises real estate values, and ultimately these all bring in higher tax revenues without raising tax rates.
Municipalities negotiate powerfully with private firms seeking a natural monopoly. The firm stands to gain sole access to the municipal customer base and they will make concessions to the municipal government to become the incumbent. Sometimes this works against the public when public officials are corrupted, and sometimes the public gains valuable concessions. Credible threats by municipalities to implement DIY broadband are part of the negotiation. Their posture can not be credible unless they are truly prepared to install their own infrastructure.
TPC inherited a 100+ year old copper plant. The level of investment required to replace it dictates that the new plant must be viable for the next 100 years. Will that be FTTH or cellular or something else? Cable has a 40 year old plant. This is the cash producing part of the infrastructure cycle, as their plant is largely paid for.
Finally, Verizon is a publicly held company and must be responsive to their shareholders. Often these shareholders do not appreciate the value of the 100 year time frame (the potential life of a new last mile infrastructure) and thus limit such long term investments to cherry picked communities that promise the greatest short term ROI. Municipalities who are not picked will then put pressure on these same shareholders to persuade them otherwise.
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