LANSING, Mich. — A new study from the Mackinac Center for Public Policy finds that Michigan’s primary strategies for expanding internet access, including large subsidy programs and government-owned networks, have done little to connect more residents while costing taxpayers billions of dollars. The report, “Subsidies and Setbacks: The Pitfalls of Government-Funded Internet in Michigan,” lays out connection results and outlines alternative policy solutions that would help clear barriers, save taxpayer dollars, and connect more residents to broadband.
The study shows that taxpayer-subsidized programs overstate the number of “unserved” households and rely too heavily on fiber infrastructure as a one-size-fits-all solution, even when less expensive alternatives would better meet household needs. These programs move slowly and frequently bundle unrelated and contradictory priorities, such as union wage mandates and climate change initiatives.
Government-owned internet networks in several Michigan communities also have a poor record competing with private providers. Even when local governments grant these systems special favors, such as expedited approvals and exclusive access to city-owned rights-of-way, they frequently underestimate what it will cost to build and maintain them. They then rely on tax dollars to keep systems afloat, tilting the rules in their favor and forcing non-subscribers to shoulder part of the bill.
The study recommends policymakers adopt a different approach to expanding internet access, including:
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Establish realistic standards for what households actually need so resources are not wasted and consumer choices are not reduced.
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Maintain technology-neutral broadband policies rather than treating fiber as the only acceptable solution.
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Target funding to truly unserved areas instead of projects in communities that already have multiple providers.
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Stop using broadband programs to advance unrelated agendas like union contract mandates or climate change initiatives which cost more and slow down projects.
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Let private providers expand more quickly by reducing regulatory barriers, streamlining permitting and approval processes, and expanding access to local rights-of-way.
“Michigan has poured billions into broadband subsidies and government-run networks, but too many families are still waiting for a decent connection,” said Dr. Ted Bolema, Mackinac Center Board of Scholars member and author of the report. “Lawmakers should stop chasing one-size-fits-all fiber mandates and political wish lists, and instead focus on realistic service needs, truly unserved areas, and clearing the way for private providers to do their job.”
