Subsidies

Federal Broadband Effort Displaces Private Companies

Why invest in fiber-optic if the feds are going to subsidize the competition?

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A $100 million, federal stimulus-funded project intended to expand high-speed Internet access in rural Colorado is raising an outcry from longtime local telecommunications providers, who say the effort is backfiring on the private sector and squandering public dollars.

About 25 small-town providers — mostly generations-old telephone co-ops and private mom-n-pops — say the federally subsidized effort needlessly duplicates their own budding, high-speed fiber-optic networks and will wind up stealing their biggest customers. They also say the project is poised to poach market share just when the rural phone companies have gone into debt to upgrade their infrastructure.