Becca Vargo Daggett Director, Municipal Telecommunications Project -- Institute for Local Self-Reliance, February 2006
This study examines the economic feasibility of a public owned network, using a hypothetical model based on the experienced outcomes of other cities. Two public owned scenarios are provided in the findings, one leaning to a conservative conclusion and the other toward a more optimistic one. The results of the conservative outcome, called the "Base Scenario", see a 12% annual return on investment with a payback period of 7.9 years. The total net benefits of the base scenario are weighed in a bar graph, predicting benefits of $33 million in the first ten years, with a total of $70 million in the first 15 years. The less conservative model, called the "more realistic scenario", offers similar benefits at a faster rate so that $55 million is made in net benefits by the first 10 years and $129 million within the first 15 years. This scenario has the cost of the network paid back within the first 5.2 years. Either way, both models project positive results. Therefore, the conclusion we reach from this study is that publicly owned networks provide a financially sound and economically beneficial business model. Initial financial investments are not only repaid within a short number of years, but once repaid the revenue generated from the network would provide a significant surplus to be poured back into the city, instead of into the pockets of private institutions. For the complete study and its findings: http://www.newrules.org/info/mplswireless/broadbandfinancial.pdf
