In 2020, many Michigan residents learned just how important reliable, high-speed internet is. For months, if you couldn’t get online, it meant severe limits on your kids in school, going to work, buying supplies, ordering food or even visiting a medical professional.
And, for the most part, Michigan’s broadband networks held up. For decades, speeds have been increasing and prices have been competitive — and the price for the speeds we are now getting has plummeted. During the COVID pandemic, even with internet usage surging, the United States saw better access and fewer outages or slowdowns than European nations.
A key reason for that is our companies and networks deal with fewer regulations and restrictions than those overseas. As a result, they can adjust faster and invest more as the market demands.
But there are still problems. Many areas of Michigan have little or no internet access. Some have only one provider. So how do we help ensure that we get increased investments and better speeds and access without government regulations that produce an unlevel playing field and poor service?
A key answer is in a bill the Mackinac Center supported in 2020. A public act passed last fall sets up rules for distributing broadband money – especially funds the federal government gave Michigan. It does two key things. First, it prevents government-owned municipalities from receiving the money. Second, it ensures these broadband grants go to private providers that set up in areas without internet service.
In Michigan, we’ve had a problem of local municipalities setting up and running government-owned networks. It’s been happening for decades, and they almost always fail. The result is bad service being run by a public entity that choked off competition and put taxpayers on the hook.
A better path is to lessen government rules and regulations, including high fees imposed on internet service providers and heavy restrictions on how they string or lay service lines. This will encourage more private investment and competition. Only after that has been done should the government subsidize service. Even then, it should focus on individual vouchers or in areas with a lack of service. Not in cities that already have multiple internet providers, as we are seeing now.
The bill Michigan passed will encourage private competition and keep the government out of an area where it has limited expertise. Unfortunately, there has already been an attempt to repeal that law and encourage municipalities to go into the broadband business. A new bill, said to be supported by the governor, would spend $400 million in federal funds, designate public entities as internet service providers and allow them to compete with private companies — on an unlevel ground, with taxpayer funds and freedom from rules others must follow.
This would be a mistake. The internet is too important for the government to run. The Mackinac Center will continue its work to limit government to its core missions and let private industry provide better services.