by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
Earlier this decade, several N.C. cities were piling up multi-million-dollar debts trying to offer broadband services. It was so bad, the new Republican majority passed the Level Playing Field Law in 2011 to:
To sum up: Cross-subsidization, unfair competition, and taxpayers being on the hook for service costs were particularly bad problems leading to the Level Playing Field Law.
But look at what HB 431 would do:
Then it would:
In writing about HB 431 in Carolina Journal, I asked:
Are legislators less worried than they used to be about governments getting intertwined in private markets and raising taxes and costs on their own citizens? That would be a shame if so. Especially if the real costs of the service were hidden in property tax hikes instead of direct service costs.
This sleight-of-tax is exactly the sort of cross-subsidization problem the General Assembly of 2011 sought to prevent.
Who would compete against a company awarded such a lease? The local government would build the company’s infrastructure, charge the locals for it in their involuntary role as taxpayers (not as voluntary consumers), and lease it to a chosen “winner” company.
It’s unlikely a small innovator would take on a propped-up competitor. But maybe a new entrant with a next-generation idea could. Either way, local taxpayers would still be paying for the infrastructure on lease, obsoleted or not.