Municipalities Compete with the Private Sector

At a general discussion yesterday at the NATOA National Conference down here in New Orleans, I was stunned to hear someone from the muni world accept the idea that some municipalities do not want to compete with the private sector. I say stunned, not because I'm surprised to hear that some towns do not want to provide telecommunications services in competition with the private sector, but because towns "compete" with the private sector in many ways that go unnoticed.

Police and education are two examples in which every community provides services in competition with the private sector (security guards and private schools). Most communities have libraries - taking sales away from hard-working bookstores. Some towns provide municipal golf courses or public swimming pools. There are many ways in which it is acceptable for the public sector to "compete" with the private sector.

The problem with accepting the blanket statement that the public should not compete with the private sector is that it 1) is factually inaccurate and 2) suggests that to provide telecommunications services would be a substantial deviation from the historic role for municipal and local governments.

The truth is that local governments have long stepped in, where necessary, to ensure the community has everything it needs to be successful. Interestingly, this has included both municipal liquor stores and lumber yards in many remote communities. Properly posed, the question is not whether communities should deviate from their historic role of avoiding competition with the private sector, but whether telecommunications falls into that area that communities have long elected to serve when a community need is unmet.

This is a question with which most communities will wrestle, but they should do so on honest terms. Though providing telecommunications services in some communities may be novel, they have long "competed" with the private sector in other generally accepted areas. Communities will come down on both sides of providing services and time will tell if they made the right decision for their community.