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How Does This Create Jobs?

Inside Higher Ed reported yesterday that the University of Maine and a GWI, a telecommunications partner, are applying for $32 million of federal stimulus money to expand its high-speed network to 10 sites not now on its system.

Great, you think. Maine no doubt needs the expanded network, and building it will put people to work.

But wait a minute. Everyone is not pleased.

FairPoint Communications is objecting to the University of Maine System?s participation in a bid for stimulus funding, saying it would lose customers to the university?s proposed broadband network expansion....

... FairPoint wants $20 million to complete its infrastructure and offer a 90-percent availability rate by 2011, said Jeff Nevins, a spokesman. He said that since the University of Maine System is tax-subsidized, the stimulus funds would lend its broadband network an unfair edge in the telecommunications market.

?We question the fact that we are going to be in competition as a private business with a publicly funded, publicly supported institution,? Nevins said. ?That?s the issue, is that these are public monies that are going to compete with private enterprise.?

The Obama administration, of course, did not invent the concept of using public money to compete with private enterprise (remember TVA?), and it is not doing that only with ?stimulus? money (think healthcare health insurance reform). But ?stimulus? money is supposed to stimulate the economy by creating jobs. If the University of Maine is awarded these ?stimulus? funds at the expense of FairPoint, no net new jobs will be created. The employment produced under a UM project would also have been produced under a FairPoint project. The only effect of awarding the project to the University would be allowing, yet again, a public entity to expand at the expense of private industry.

After only six months of Obama, why is this no longer surprising?

Full post as published by Discriminations on August 07, 2009 (boomark / email).