Iowa Is Selling One of the Oldest Government-Owned Fiber Optic Networks

Right now, Iowa operates one of the nation’s oldest government-run fiber-optic telecom networks. The Iowa Communications Network (ICN) was built in 1989, covers 8,600 miles, and cost $320 million to get off the ground. It serves tens of thousands of Iowans, and 79 percent of the internet it provides is used by educational entities. It is also for sale, a move towards privatization that's been in the works since 2011.

The Iowa General Assembly recently passed legislation that approves the sale of the ICN to the private sector. In its request for proposals (pdf), the government makes the pitch:

The Network was established to make it possible for Iowans, physically separated by location, to interact in an efficient, creative, and cost-effective manner. Through partnerships with education, health care, the judicial system, government agencies, and the National Guard, the Network provides live, full-motion video to over 700 classrooms around Iowa, located in schools, National Guard armories, libraries, hospitals, and federal and state government offices, as well as providing video over IP, voice, data, WAN connections, and high-speed Internet to authorized users.

So, any takers? The biggest stipulation of the deal is that any buyers have to provide internet access to all extant clients at the same or lower costs.

Right now, only an estimated 10% of the network’s capacity is utilized, and the ICN does not provide private citizens with internet access—it has until now been operated exclusively as an educational and governmental tool. It coexists with private internet providers, which serve private and commercial users. State Sen. Matt McCoy (D-Des Moines) told the Courier that the ICN was never meant to be a government-run internet provider. "The vision was this would be something available in all 99 counties," he said. "It would connect the schools and institutions in places that the private marketplace wasn't. We don't buy satellite or cable television for everybody."

Well, maybe they should. Iowa essentially has approximately 8,000 miles of underutilized broadband accessible only to remote schools and government institutions. Why not build off that in order to let private citizens get a slice of that pie? Perhaps that’s some of the motivation behind the sale.

Predictably, free marketeers are gloating over the fact that another government-run broadband network anything has apparently crashed and burned. The Free State Foundation writes that the development proves that government thinks “the private sector could, and likely will, provide service more efficiently to consumers than the government system can.”

Except the consumers are mostly other government personnel and children in public schools, and it is unclear how a private company could “provide service more efficiently” in a system that is already fast, efficient and underused. The real problem is likely costs; providing internet to 700 rural classrooms and a few National Guard offices is definitely important, but it’s certainly not lucrative.

Regardless, it does seem ridiculous to have a vast network of fiber-optic cables just mostly sitting idle. Even if a private company doesn’t aim to take over, with a little additional investment, Iowa could indeed become a major state-run high-speed internet provider. And why not?

Sure, some government broadband projects are big fat messes, but private providers are currently doing a terrible job, too. Maybe a public one, with the bulk of its costs already sunk and access to almost 10,000 miles of fiber-optic cable, could find a way to sustainably provide its citizens with low-cost high-speed internet access. Or Iowa could always just pawn the thing off to Comcast or something and watch it jack the rates and slow down service. Either way.