Imagine if Borders and Barnes & Noble, claiming it was killing their book sales, asked lawmakers to ban cities from building libraries. The legislators would laugh them out of the State House. Yet the same thing is happening right now with respect to Wi-Fi and other municipal broadband plans, and it is being taken all too seriously. In fact, although it is almost universally acknowledged that broadband access is essential to economic growth and education, phone and cable companies are lobbying furiously to prohibit municipalities from providing free or discounted broadband to their residents.
Cedar Falls Utility Gets High Bond Rating from Moody's
We have long been impressed with Cedar Falls Utilities (CFU) in Iowa. They built an incredibly successful municipal cable network that has now been upgraded to a FTTH network. CFU transfers $1.6 million into the town's general fund every year, reminding us that community owned networks often pay far more in taxes than the national cable and telephone companies.
Last week, Moody's Investor Service gave an investor-grade A-3 rating to revenue debt from CFU, another sign of its strong success.
Moody's rating report noted the utility's large market share, competitive pricing and product offerings, expansive fiber optic network, long-term financial planning and conservative budgeting practices as reasons for the continued strong rating of the utility's revenue debt.
CFU also compiles the community savings resulting from each of its services by comparing its rates to nearby communities (see most recent comparison [pdf]). The benefits total $7.7 million each year, almost $500 per family. This includes a $200 difference in cable TV bills and a $130 difference in Internet service.