Irritated by either shoddy quality or no broadband service at all, many cities and towns across the U.S. have taken matters into their own hands. Laying fiber and setting up shop as independent ISP's, many have seen mixed success, and others are considering the option. Some analysts are critical of the concept, arguing that municipal business models are unsustainable once pressured by national competition.

Several Illinois communities were impressed by the efforts of cities such as Thomasville, GA and Palo Alto, CA and decided to take a field trip there to better develop their own broadband plan. After receiving mountains of negative feedback from area residents over the quality of broadband services, the city of Geneva, in concert with nearby St. Charles and Batavia, began considering development of a fiber optic network to serve business and residential areas.

Since we originally discussed the plan back in February, the city of St. Charles, which keeps a progress log for the project, has seemingly been locked in an endless loop of debate and analysis over the viability of a city run broadband network. After a requested feasibility study took most of the summer to complete, the city has yet to digest the 700 page study and come to a decision. If the city approves the plan, a vote could come as early as April.

It's peculiar to note that the city was concerned enough with local broadband service to consider starting their own network, yet the city's progress log indicates that they quickly granted a franchise transfer to AT&T with little fight. Many areas have been using the transfer as leverage for area service improvements, yet an area that has perhaps been excessively outraged over poor service failed to use the opportunity to their advantage.

While the city remains unsure if it wants to enter the broadband business, others are considerably less undecided.

The Heartland Institute, a national nonprofit research organization based in Chicago, released a 22 page report that states the project is likely to go bankrupt, and that the city would be unable to compete with the private sector. While the city has had moderate success running its own electric utility, the report argues that the project, which is expected to cost more than sixty million dollars, would simply face too much hostility from national broadband competitors to survive.

The Heartland Institute (which commonly takes "pro-business stands on public policy issues such as privatization of public services" according to the Kane County Chronicle) named the report "Municipally Owned Broadband Networks: A Critical Evaluation" and made it publicly available via the institute's website.

According to the report, only 8 percent of U.S. counties and local governments with more than 5,000 residents own their own electric utilities, with Municipal cable systems being a true anomaly at only 1.3 percent. Offering Internet access is rarer still, at 0.7 percent.

Pointing at the rarity of the endeavor as proof of the concept's illegitimacy, the report goes on to explore the financial impact of such ventures.

One such network, built in Spencer, Iowa, cost the town $17 million to implement. Based on the town's 11,000 residents, the project cost $1,545 per resident and $3,777 per household....a pricey solution. The report suggests that the immense cost of such projects is almost impossible to recoup if a competitor wants to engage in a price war. It goes on to commend the cities for suggesting the idea as means for change, but advises against proceeding into serious application.

"I understand their motivation," notes Heartland president Joseph Bast, "but the Tri-Cities think they can beat the odds and do something other cities are unable to do, and that is provide municipal service more effectively than a private sector competitor — I wouldn't bet on that pony."

The cities, however, weren't phased. One Batavia city administrator believes that Bast does not have an "accurate understanding of the project", while others argue that since the city already runs its own electric utility, start-up and operation costs should be significantly less. "Historically, we got into the electric utility for the same reason: the residents wanted it," Geneva Information Systems Supervisor Peter Collins said. "We're used to being different."