It's still not a level playing field. The existing company has all the advantages of being an incumbent. 'Most' of them managing to kill the initiatives when they pop up not by legal threatening but by improving their service indicates that they can do better.

I'll remind you that, aside from the startup funding, the cooperative is still constrained by state and federal laws. Indeed, any commercial company can come in to offer the SAME service, and receive most, if not all, of the same benefits that a cooperative being formed by the local government can enjoy.

For example, the recent article from NY, where the state 'gave out' millions in tax breaks, such as tax free zones, to commercial companies in an attempt to 'create jobs'. Note that these tax breaks can disadvantage existing companies against new incomers who meet the standards.

So, for example, it's perfectly possible for the citizens of an area, deciding that a monopoly for internet service, offers various tax benefits, even direct funding in the form of a grant, to provide service of certain standards in the area. They can even exclude the existing operator. Any commercial company able to meet the requirements gets the money.

So while the government can give the cooperative various advantages, it's ability to do so is actually no more than what it can do for a commercial company. Whether it's more likely to offer them to it's new cooperative depends. Most of the time they seem to give the seed money but no more.

Why? And they're not 'taking over', they're 'forming competition'. Customers can still buy service from the commercial company.

In areas that they have done so they tend to kill the competitor, but that's because, like I've said multiple times, by the time they do so the company they're competing against is such a dinosaur that can't find it's own backside that it's universally hated.

Only if 'everyone' in your neighborhood also has panels and a lifestyle just like yours. They're starting to hit it over in Hawaii, on their highest sun/lowest power usage days, but even then generally speaking the commercial district is closer than the power plants.

More realistically, when less than 10% of houses have solar panels even in a neighborhood, the power isn't going far.

Seeing as how the losses are basically per 'step' on the grid, peer to peer sharing would normally mean that you're sharing power with your neighbors - IE 100 feet away and no transformers, not many miles and lots of transformers and other switching equipment.

I'd argue that they always had the opportunity to recoup their investment(profit is NOT guaranteed in business!). Like I pointed out in the other post, people and jurisdictions don't go through the hassle of setting up municipal broadband unless the current provider is a horrible failure.

Like I said elsewhere, in many cases the mere threat of this causes the local ISP to 'straighten up'.

Remember, I've always phrased this in terms of this being done by a public vote of the citizens. This isn't the Mayor deciding to set one up and doing so unilaterally, but where, with the expenses and risks in mind, over 50% of the voting public decides to go forward with the plan.

In many cases, no. They made that back years, even decades ago.

Correct. Which is why I said 'mostly'. However the bond money allows a multiplicative effect, once formed the cooperative is able to use said funding to secure more funding. For that matter, the bond is at least a known accounted for risk.

I did mention that my preferred form of utility is indeed a cooperative, didn't I? As for the 'advantages', I'm going to point out that they're advantages shared by for-profit companies that the government is trying to lure into the area. For example, Tesla goes to build a battery factory, various governments line up to offer them various incentives - free land, tax rebates, services, and such if they'll only build the factory in THEIR jurisdiction.

Why do we have to make competition by private companies 'easy'? Why do we have to 'guarantee' a private company's profits, especially when they're doing a lousy job?

Like I've said before: people don't go to the hassle and expense of setting up a cooperative when they're satisfied with their internet service. They only do so when the available ISPs are horrible.

The current supplier isn't a cooperative and doesn't want to expand. They ended up going with a cooperative type system because NO commercial company wanted it.

I have to ask - what do you have against cooperatives? As for floating another bond, well, if it's looking to expand, it has to convince the CURRENT customers that expansion is in their interests. Which can be difficult. 'Floating another bond' would only work if they were expanding into a DIFFERENT bond area, basically a different local government paying them to expand into their area. Keep in mind that in such a system the customers are also the owners. I occasionally get a check from my power company because of this, and I get to vote for the board members.

I've had the best experiences with cooperative utilities, the worst from commercial for profit ones. In NO cases was the government still continuing to fund the cooperative, it's only in the startup that they get funding, and that's generally limited with the starting company having to borrow money on the basis of it's assets and business model in order to finish construction.

Besides -

No, actually they don't. There are many options, which includes borrowing money to gain the capital to expand. Secured loans for property, same with a family buying a home.

Have you read what a lot of these municipal broadband companies are offering, even with having to pay back the bonds? We're talking about things like 100mbit service for $40/month where the phone company was offering 1mbit for $100.

Normally they offer vastly improved service for less money. Of course they slaughter the incumbent when they open up, and normally they don't require continuing support by taxpayer money to boot!

Oddly enough just the motions of starting to implement such a motion is enough to get the incumbent to make massive network improvements.

Both would be set up by the same funding source - municipal bonds, but generally you structure it as a cooperative for liability reasons. With it being a cooperative, if the initiative fails, you can dissolve it and the incurred debts(mostly) don't fall back on the local government. That doesn't mean that the government can't offer it 'sweetheart deals' as part of the start up, and the government stays as a owner for as long as the bonds aren't paid off.

Not being taxed is complicated. Generally speaking, as a 'not for profit' cooperative it's not going to have any profits to be taxed via corporate income tax(there's ways they can structure growing cash reserves to avoid those being taxed), as a business it doesn't pay sales tax. Generally speaking, it would end up paying property taxes on any real estate it ends up purchasing(such as the central office), though easements generally don't count against them. But even then, the local government has various options to 'forgive' those, the same ones they use to try to attract new businesses.

So, generally speaking, the cooperative gets it's initial operating capital from the bond issuance, approved by the majority of the voters. Which, like I said, means that all the voters have to approve the move KNOWING that their property taxes will be going up by X amount in order to fund this, and choosing to do so for the improved internet.

Continuing to support the company through tax revenues would be highly unusual, and probably require continuing votes to keep the funding going.

In many cases simply building a new network would be cheaper than the court case.

There's a small distribution company that services a small part of the city. The company being set up is not going to be competing with them(IE the coop won't expand to where they currently have pipe). There have been some rumors of buying them out. The proposed cooperative would service the rest of the city, some nearby towns/villages, and overall serve about 100x the customers.

The proposed rate charges are basically the same as what the private company charges right now, it's just that the company doesn't want to expand. They were actually asked TO expand, complete with incentive packages, but didn't want to.

Because they can do it better?

I'll note that the areas that voted to have the government 'provide' internet service, normally by setting up a cooperative, have the lowest customer satisfaction rates. As a libertarian, I'll point out that a business should never be guaranteed business. If they're doing a bad enough job that a competitor can come in and take their business away from them, especially when they already have existing infrastructure, they SHOULD have that business taken away from them.

In areas where the local companies are providing a satisfactory level of service, nobody's willing to allow the tax money to be spent to create a new cooperative. It's only when people are truly and epically pissed at the companies that these votes go through.

And when the monopoly is actually larger than your relatively small town and doesn't want to sell for anything approaching a reasonable price, when their infrastructure is so bad that, because they've been stripping profit out of your region and not upgrading, it would be cheaper to just build entirely new?

Personally, I'd add a zero to your estimate, more like 4M. My city's around 40k and they're setting up a cooperative to distribute natural gas.

Then what do you do when, despite having the monopoly, they don't provide universal coverage and provide universally lousy service, such that a super-majority of people in the district are willing to vote to have their taxes increased to set up some competition?

It actually often evens out though. The USAF ended up reversing a number of privatization initiatives because what savings were realized were done so by the company hiring the USAF trained maintainers, and the moment those started running out, costs skyrocketed way beyond what doing it in house used to cost.

You have to be careful, there are actually tasks the government is more efficient on, and that can include things like maintaining vehicles.

Ideally, it'd be the former, but I've seen initiatives where it's more like the latter. Like I said though, if it's a voter led initiative, then it's what they voted for.

Right now we're doing something very similar in setting up a natural gas distribution company in my town.

Which is pretty much why I'm only willing to call myself 'libertarian leaning', not a full-up member of the party that agrees with the entire platform.

As quint mentioned, I DO rail against the corporate welfare, the exclusive monopolistic deals signed with various levels of governments, the states forbidding local governments from setting up networks to compete with the local cable/telephone company.

In my view internet service at this point is equivalent to a utility. My favorite form of utility is a cooperative. If the communication companies manage to piss off a a local government such as a city or township to the point that they're willing to vote for a bond initiative so set up their own ISP, then by golly they should be allowed to set up said ISP. It's a way to set up said cooperative utility.