Lessons Learned from Government Owned Broadband Networks (GONs) and Implications for Solving ‘Digital Divide’ Problems
October 26 – 2:00 pm to 2:30 pm
In this presentation, I review the performance of GONs.
I highlight the insights I have gained in my 20+ years studying GONs.
Key insights from my research include the following:
- Most often the GONs are not “sustainable”—services are priced such that GON cash flow is < costs (operating, debt service and capital reinvestment). The GON cannot “pay its bills”.
- Many of the GONs with negative cash flow continue to operate because they borrow funds from ‘sister utilities’—power, water, sewer, etc.
- Eventually one of the following things happen: 1) the GON is sold; 2) the GON continues to borrow from the sister utility; 3) the GONs debt to ‘sister utilities’ get restructured—the sister utility cancels the debt; or 4) the GON achieves ‘sustainable cash flow”.
The presentation will explore some of the reasons for the above outcomes. The discussion will also consider the role of GONs in addressing the ‘digital divide’ problem and the opportunity for public/private partnerships in addressing this problem.