How Much Do You Pay For Broadband Access?

It's Over Thata Way

No Problem! It's Only "Government Money"

Not another tax payer shakedown attributed to the 2009 American Recovery and Reinvestment Act (ARRA)? Yes, I’m afraid so. In between writing and reading this weekend plus doing the old chores, I kept hearing about this and I’m appalled that someone wouldn’t even do a cost analysis on this before proceeding. But then again, maybe it was done and the “damned the torpedoes, full speed ahead” attitude that is prevalent in the Obama administration had them in a head lock or a brain freeze maybe.

How much do you pay if you have broadband internet access? Whatever the cost is maybe after reading this you’ll recalculate a bit. I’m not sure if this is under the “jobs saved” or “jobs created” category. I’ll ask Biden when I see him. The debate here isn’t whether the stimulus worked or not. If you ask a Democrat it was a rousing success. If you ask a Republican it was a belly flop. One thing is for certain though, if you look at the cost of a job created it is usually astronomical. In the case of a “job saved,” I think that whole concept is a bit on the abstract side. What kinds of jobs were saved?

One of Obama’s campaign pledges was to expand broadband access to the internet. The first thing I question is that a government function or a private enterprise function? Free enterprise interests usually go through a thorough cost analysis before making decisions. Our federal government doesn’t seem overly concerned with that since it isn’t their money they are spending. It is ours and the future generations that will come after us.

There is a price too high to pay for producing a product or service. That’s both a business fact and a principle of economics. In the case of the expenditure of our stimulus tax dollars those policymakers seemed to have totally ignored that important principle. It wasn’t their money so why worry about it.

Have you ever heard of Navigant Economics? Me neither until they issued a study of what it cost for the ARRA to subsidize rural broadband access. They looked at three rural areas, in particular Southwest Montana, Northwest Kansas and Northeast Minnesota. For info purposes, the median household income in the areas is $40.1 -$50.9K and median home prices run from $94 to $189K.

How much would you guess it cost to provide broadband access to those in the unserved areas? Hold onto your seats tightly now. The bill came to $349,234 per household. Now go back up and look at what I called “for info purposes.” How many multiples for houshold income does that equate to? How can it cost more than the house costs and by how much? I guess the real question is not “how?” but “why?” The “why” comes easy to me here. It was “government money.” In other words, it was the tax payer’s hard earned dollars being squandered again.

Montana was well served I reckon. Though it is by no means unserved or underserved, with more than seven (7) broadband providers in that area, a whooping 1.5% of the households had no wired access. Factoring in 3G, there were a grand total of seven (7) households who had no access to broadband. This is where this whole subject goes over the cliff. The cost of each additional house covered in Montana came to $7 million per household? You could probably buy the entire state of Montana for that kind of scratch.

But no problem right? The total cost of this fiasco was around $7.2 billion. Chump change to the chumps on Capitol Hill making such stupid economic cost analysis decisions. Or did they even bother? After all, it’s only “government money. What a disgusting thought process that is.

And You Want Obama For How Many More Years?

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Comments 24 comments

Stu From VT 5 years ago

At $7 million per home, if the govt wanted a 15% ROI, they would have to charge about $90,000 per month per home, assuming all seven homes signed on. Maybe if they bundled it with free VOIP? Would eat a bit into margins, but turnaround situations are messy. I think this is one even Jack Welch might have troubles fixing.


marcoujor profile image

marcoujor 5 years ago from Jeffersonville PA

You cannot keep a good Frog down...!! Well penned, dear.

Voted UP & UAB... just wonderful to see #101!

Please keep them coming, mar!


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Stu - We just had a talk about this on the phone with a myriad of other topics. 7 X 7 is what? Massage the math a bit.

Maria - Just call me Rubberband Frog. LMAO. Resiliency is one of my stronger suits. Thanks for the Kudos.

The Frog


Stu From VT 5 years ago

Well, I must make some major corrections, as I didn't realize it was $7 million per home. Let's say 4 of the 7 subscribe, and we goose the ROI to 20% (to cover FIT). We then end up at about $205,000 per month. I don't think free VOIP would do the trick. They would have throw in free cable TV too, with HBO and Cinemax. Now I think we need Warren Buffett.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Stu - We need to make sure they get FOX News so they can keep up with some of this garbage.


Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

Thanks for another great piece of information regarding the stupidity of those making these type decisions. With the thought in mind that even government employees are not this stupid when it comes to basic math, I'd suggest we follow the money down the trail and see who really profited from this stupid decision. I'm positive we would find some dirt in the form of political favors. This was either a "thank you card" for some large campaign contributions, or a "brother-in-law" contract with shared profits. Is it even possible to track the persons who authorized this expenditure and those individual companies who received the money? I suspect we would find some very interesting facts and gain knowledge into someone's family tree.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

OP - I'm sending an inquiry to my two Senators. My Representative is like tits on a bull.

Jim


Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

FP - When looking at our huge deficit, things like this should not be shrugged off with a "Oh well, that is just the government in action." Even they are not that stupid, and somebody put some big cash in their pockets. This one should be put on the table and examined until the truth comes out.


AnnCee profile image

AnnCee 5 years ago from United States

"The first thing I question is that a government function or a private enterprise function?"

It's a stinking POLITICAL function, Jim. Pure and simple. The monster wants his sheeples connected to his effing borg empire. It's hard not to hate these vermin.


Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

FP - The more I think about this one, the madder I get. If and when you get some answers from your Senators would you please share their response with the rest of us? This one needs to get splattered all over the media until those responsible have to explain their stupid decisions.


RealHousewife profile image

RealHousewife 5 years ago from St. Louis, MO

Yep another example of our tax dollars hard at work. Sheesh! I have a feeling there was some hand shaking and back patting behind the curtain. Not that I am accusing any of those fine political people of BRIBERY or giving kickbacks - they wouldn't do that would they???


Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

Yep, we taxpayers got ripped off big time with this one. I doubt this will piss off any of the 40 some percent who don't pay taxes, but it pisses me off beyond words. Hell, maybe one of the non-tax payers was lucky enough to get one of these 7 Million dollar broadband accounts. I wonder how TexasBeta and his band of followers will explain this one to us. Even they might, just might, be able to find something wrong with the math on this one.


Stu From VT 5 years ago

Hi Frog,

We're talking about Montana here. Do you think anyone would pay $205,000 per month in Big Sky Country for cable that DIDN'T have FOX News?

Stu

PS: And one of your Senators is just "bull." :)


Stu From VT 5 years ago

OP,

Your fears may be well founded. There have been number of recent allegations about Congressmen voting for earmarks/bailouts to companies where relatives have investments in the recipient company. Pelosi's husband was one of them. Unfortunately, Ethics Committees are ususally where there allegations are buried, not investigated.

Stu


dallas93444 profile image

dallas93444 5 years ago from Bakersfield, CA

Enjoyed. Voted "up" and awesome!


Ghost32 5 years ago

Golly, and here I am still paying Hughes for such limited broadband (via Satellite) that I can't even watch an hour of streaming video.

When's that program coming to rural Arizona, eh? LOL!


Stu From VT 5 years ago

Hi Ghost,

Not sure. $205,000 per month may seem like alot, but it includes internet, cable TV, and VOIP. Installation is free too.

Stu


Prairie Wind profile image

Prairie Wind 5 years ago

If only all around here would open their windows and shout how mad they are, it'd sound like a Farmer's Market in Juarez, no, Walmart in Dodge, but in rapid Spanish and then the heat approaching 110F daily will fry anyone having stuck their head out to yell. Internet here is limited to 'ole DSL with distance limitation from the primary server. It sucks and monthly prices aren't any less. I'm Mad As Hell too! LOL Grins to all


Becky 5 years ago

I have phone w/unlimited long-distance, broadband, and cable w/3 TV's plus all the bells and it only costs me $140 a month. I could never afford that bill.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Fred - I don't think Obammy and his administration have Arizona high up on their priority list except to tey to prosecute you for enforcing the border laws they refuse to enforce.

Stu - That seems a bit steep unless you're soending someone else's money.

PW - Good to see you old friend. Here's the link:

http://www.youtube.com/watch?v=WINDtlPXmmE

Becky - If you pay taxes evidently you can afford that bill. That isn't government money they are spending so recklessly.

The Frog


Pollyannalana profile image

Pollyannalana 5 years ago from US

You can see how easily this can lead into a One World Government, things have never been so crazy and no one has answers and no one is responsible. Then wham, here comes the man with all the answers...we are at the door.


Stu From VT 5 years ago

Polly,

The "man" comes with answers, and YOU have to pay for them, whether you want them or not. Wait till all the "features" of ObieCare kick in; some estimate our annual medical bill will go up by more than $100 billion per year, and care will be poorer. And you won't be able to avoid it by purchasing a non-conforming policy - you will be assessed a penalty tax, your providers will still be subject to all the extra paperwork and recordkeeping in respect to your care, and your time with your doctor will be truncated (some clinics are already reducing time with patients to accomodate data collection compliance; my own doctor has cut back to a strict 15 minutes with each patient due to government red tape).

Stu


Harvey Stelman profile image

Harvey Stelman 5 years ago from Illinois

Froggy, To Obama there is no governmet, or private jobs. There is only "OBAMA JOBS." If the world wants in fine, as long as he is in control. He tells you what you can have, the man is out of control. H


saif113sb profile image

saif113sb 5 years ago

This is a wonderful and great hub. God Bless You.

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