Welcome to the Fair Competition Alliance. In this site you’ll find resource and background materials useful in understanding “municipalization” and government competition with private enterprise.
The near opposite of “privatization,” where government services are shed in favor of private provision, municipalization is where services, which have typically been provided by private corporations, like electric energy utilities, telecommunications and cable providers, and garbage haulers and recyclers, are taken over by a governmental entity or, less commonly until recently, where government begins providing the service in direct competition with private providers.
In a 1997 paper for the California Taxpayers Association, Elaine and Richard Davis said:
Municipalization turns privatization on its head – with government preparing to compete aggressively with private business, even if it means using its financial subsidies, regulatory authorities and powers of condemnation to drive out private sector competition. This is not government becoming more business-like; it’s government misconstruing its purpose.
Government can be more business-like. It cannot, and should not, be in the business of competing with the private sector. The efficiencies of privatization are derived from free-market competition. Consumers, speaking with one voice, send a clear and unambiguous signal to businesses wanting to make a profit: Offer a better product or service at a competitive price, or we’ll take our business elsewhere.
Government marches to a different beat. Politicians listen to many voices and respond to different incentives. As a result, municipalization efforts are destined to be noncompetitive, leaving taxpayers to pick up the tab.
The Telecommunications Policy Act of 1996 prompted several early attempts at municipal broadband service delivery. With this legislation congress intended that government regulation of the industries in question should allow and encourage greater competition in order to reap the efficiency benefits attendant to competitive environments.
Unanticipated by lawmakers at the time was the clarion call the legislation would have for many local governmental entities intent on expanding their authorities. Indeed, President Clinton’s Council of Economic Advisors expressed concern in its 1997 Annual Report about entities using their “special privileges” to distort markets.
The Fair Competition Alliance is committed to assuring that all citizens of Washington have access to high-speed Internet broadband services. Government resources can help to realize this goal in the most remote areas of our state, but scarce public resources should not be used to duplicate private broadband facilities that already exist throughout the most of the state. Government — using taxpayer and ratepayer-subsidized pricing — should not compete with these same private businesses.
Our chief objective is to work with local and state leaders to promote policies on public broadband that will assure fair, cost-effective, and full Internet access to broadband consumers throughout the state.
On this site we provide unedited connections to news on public broadband efforts from around the state and the country. These decisions — both good and bad — affect the broadband futures of the local communities in which they are being made. Through this site’s blog we provide our own thoughts about how best to achieve full and lasting broadband coverage and offer others the opportunity to join the discussion. As well, we will share our periodic research and the research of others on the problems and pitfalls of public broadband.