|reply to Simba7 |
Re: Broke or not broke
Well we need to clarify how an infrastructure bond is used as a debt instrument, just like at a big corporation and this is a bond where the full value is to be recouped by revenue (Internet service) NOT taxes. I watched a thingy on how some small town in Texas took out some huge bond to build a jail w/ no capacity need, because some consultant conned them into thinking otherwise..Bad investment. My town issued a $20m bond to build a new football stadium..Bad investment. I can go on on how tax money is squandered, and to build a utility --which this really is -- publically funded with an expectation of return for the taxpayers is a GOOD investment.
In the case of a muni bond they issue the debt instrument and sell it on the open market (I have LOTS of these because they are tax advantaged BTW) and there is a reasonable interest depending upon the risk level. I would say a cooperative has a reasonable risk profile. If the bond defaults the town rating takes a beating, however the taxpayers are not the ones hurting it is the PRIVATE investors who took the risk in the first place to fund the endeavor. So don't watch too much Michael Moore, he will twist the reality of how the world works.
Now do I believe a township can do it on their own, no... they will need to join w/ the local business community and COC interests to make this successful because in such a venture business customer need could be gauged up front and charged at a higher rate and on board. While they are at it, they could sprinkle in whitespace wifi for residents w/ say a roaming agreement for free around town with unlimited browsing. REINVIGORATE downtown, crappy idea huh?
So I sit back looking at my Verizon BILLS (FIOS/phones) lapping over $250/month and while I appreciate VZ investing in FTTP many are not nearly as lucky, and for rural america (look up REA) the citizens in the span of 3-4 years had middle america lit up in the form of community/regional electrical cooperatives, so just look at the past. If these corporate bills keep passing, maybe cooperatives are in order again. Look at Green Bay...
Now this same verizon has paywalls ALL over the place stopping my family from accessing their services seemlessly so they can monetize each and every nickel. It would be SO easy for a community to innovate because its already there today, the incumbents have no reason to and I live in a highly competitive area. BTW - This could also reinvigorate local news and media also, which say a big corporation could care less.
The level playing field is crap because these mega-corporations have serious tax advantages, federal government sponsored monopolies (spectrum auctions), and access to cheap capital to make the barrier of entry for a community/small business to even get started almost impossible. Oh you innovate, they will sue you.
Take a look at how VZ and T pay taxes and then you may see how the playing field IS NOT LEVEL.
So electricity in the 30's is fibre in 2012, and if you are not connected at 10Mbit without filtering you are in the dark ages.