The Pacific Research Institute commissioned this review of 52 major muni telecom networks that compete in the cable, broadband, and telephone markets. This analysis demonstrates that these public systems are financial disasters. Many received their initial funding through suspicious means, including insider loans at special rates. As many as 19 were originally financed with questionable non-interest-bearing loans from public utilities. As of 2004, long after the initial start-up phase, 13 were still shamelessly dependent on these schemes and were unable to break even financially. Muni networks demand constant reinvestment; the ones in our sample have raided more than $840 million from taxpayers over twenty years. Analysis of the total track record of muni systems shows that 77 percent of the time they don’t pay their way.

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