If you drive around my hometown of Midland, Michigan this week, you’ll see a constant stream of utility workers. Many of them work for internet companies and are hard at work expanding services.

Charter and AT&T have both announced expansions of fiber internet. In the last two years, my bill with Charter declined by $20 per month while at the same time almost quadrupling in speed.

A new competitor, Ripple Fiber, has also entered the market. The company is in 1,200 homes with a goal of getting to 12,000 in the next year. Plans run from $65 per month for 500 Mbps to $95 for 2 Gbps. And Omni Fiber is expanding in the city as well, connecting people in the heart of the city and expanding out from there. The company is in 7,000 homes in Midland and plans to cover the whole city next year and is building across mid-Michigan (and beyond). 

That’s how things are supposed to work for consumers. A variety of companies in the market competing over customers with the government setting an even playing field for everyone. Midland has done a good job following the advice of the Mackinac Center’s broadband toolkit for local governments and high-speed internet at competitive pricing has followed.

That’s in stark contrast to what has happened in Traverse City. For at least six years, the public electric utility, Traverse City Light & Power, has been pushing hard for a government-owned and operated high-speed internet service across the city. This network has costs millions in taxpayer dollars and missed virtually every goal – in terms of cost, build-out and number of customers.

Phase 1 of the project – a full build-out in the core of the city – was supposed to be done years ago. The TCL&P predicted it would be built with 50% of people signing up for service in year two and bring in $1.2 million. The latest claims is that it may finally get done by the end of this year or in 2026 and the services currently rolled out have resulted in a $645,000 deficit.

That’s why the network is asking for another $1 million loan from taxpayers for a project that has now ballooned to $14 million. Taxpayers are ultimately on the hook if not enough people sign up and the network fails financially, as has repeatedly happened with other city-owned internet systems.

And what have customers gotten for all this time, effort and money? Not much. The public-run network – TCLPfiber – currently offers monthly plans costing $60 (up to 200 Mbps), $70 (up to 500 Mbps) and $90 (up to 1 gig). The main private provider – Charter Spectrum – currently offers monthly plans costing $30 (up to 100 Mbps), $50 (up to 500 Mbps) and $70 (up to 1 gig).

In sum, taxpayers have shelled out $3.5 million for a fiber/smart grid project in Traverse City and are on the hook for $14.5 million for internet speeds that are more expensive than what the private operator currently provides. That’s really bad – even for government work.

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