To sell or not to sell?
October 10, 1995
Iowa officials are asking a question which, when answered, may have a major impact on taxpayers, schools and businesses.
Should the state sell its fiber optic communications network, one of the largest and most expensive projects ever undertaken by state government?
A task force study is underway to determine whether a sale of the network, praised for its education-enhancing potential, would be wise. The network is required to be state-run until 1997, after which it can be sold.
Eventually destined to cost $300 million dollars, it is of interest to several companies for a price of nearly $100 million. At present, the operation appears to be losing money.
A prospective buyer would assume ownership of 3,000 miles of optical cable, connecting all 99 Iowa counties. A system of this size (and thus, potential) is unparalleled in any other state.
But it’s unclear as to whether a private company would retain the present educational priorities of the heavily-used network.
The impact the new owner would be extensive, especially if system-rates were altered in any way. Furthermore, in the long run, is taking such a large financial loss reasonable in the face of unassured and smaller fiscal losses?
As use increases, and as debt from building the network is paid off, the system will obviously become self-supporting. To let go of such an infinitely powerful tool at this point would be a grave mistake.