Jarrett Skorup, Mackinac Center for Public Policy

Government officials in Marquette have spent the last year exploring creating a publicly funded broadband network. This would be a mistake, with the city following a path that have hurt the finances of many others. But there is still much Marquette can do to expand high-speed internet for Upper Peninsula residents.

Most of the city of Marquette has broadband coverage, with access to high-speed internet, including gig-speed internet. That’s according to maps from the federal government, private ratings websites and the feasibility study commission by the city. Marquette’s broadband coverage is equal to the city of Grand Rapids, despite being one-10th the size.

But there are some issues. The highest internet speeds, some people feel, are too expensive (though they’re similar to prices in Traverse City and Midland). And some residents in the city, and many in surrounding communities, don’t have access to reliable, high-speed internet.

To get at this problem, the Marquette City Commission approved $89,000 for a broadband feasibility study last January. To its credit, the commission was wise to study the issue closely before dedicating huge amounts of funding to a project like this. But in July, commissioners discussed allowing the electricity utility to build and run a broadband network. This would be a mistake.

The vast majority of government-owned broadband systems across the country fail financially. According to the University of Pennsylvania, only 10% of fiber internet projects generated enough revenue to cover their costs. A study from the Mercatus Center, a research institute at George Mason University, analyzed 80 projects and found minimal economic benefits to the communities funding public broadband systems.

So, why is the city exploring the government-run option? It is difficult to say, as even the feasibility study did not make a strong case for a new, government-owned network.

The report noted that its survey found residents were “generally satisfied” with internet speed and prices and there is little willingness to switch unless prices were much lower. It also notes that gig-internet is offered already and that the areas that mostly need internet access are in rural communities, which are difficult and expensive to reach. In other words, a financially viable network is even less likely to stay above water there.

The city should not build out its own network. There is a low likelihood of success and, even then, puts taxpayers on the hook. So, what can Marquette and the surrounding areas do? Here are some ideas, from the feasibility study as well as a broadband report from the Mackinac Center:

≤ Clear away needless local regulations

≤ Lower barriers to additional private investment

≤ Foster competition among private providers

≤ Resist one-size-fits-all technological solutions

≤ Provide vouchers to low-income households to purchase high-speed internet

Marquette, like many other cities, has already received an influx of federal stimulus money. The newly signed infrastructure bill dedicates $65 billion specifically to broadband, so more will be pouring in. It is crucial that cities use this money appropriately, not putting taxpayers on the hook for future expenses.

Editor’s note: Jarrett Skorup is the director of marketing and communications at the Mackinac Center for Public Policy. Additionally, Hugo Eyzaguirre, a professor of economics and the director of the Center for Economic Education and Entrepreneurship at Northern Michigan University, assisted in writing this column.