It is duplicitous to suggest that the incumbents represent the “free market” against “government-subsidized” municipal networks. Incumbents are incumbents precisely because they have had the weight and resources of government to back them up for years. Furthermore, they have had backing from those levels of government - the federal and state - which are least pervious to direct participation by local residents. Municipal networks, funded by the public and accountable to the public, represent a balance to the domination of telecommunications infrastructure by huge corporations which have long enjoyed substantial government subsidy. Banning or restricting municipal networks will end this effort to create a level playing field.
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.