Local broadband initiatives, self-funded: the so-called "craze" in your post. Are these "government"?
Local government is still government. And the main point of the original article wasn't even local government but a federal program.
Do they use taxpayer funding?
Yes, if perhaps not always. The federal program uses billions in taxpayer funding. The North Carolina debate is about tax payer funded schemes, and subsidies happen in other states as well, and many of those pushing municipal broadband praise the subsidies in other countries.
Do entrenched interests use taxpayer money?
I don't see how, but then again rent-seekers can be ingenious and government officials often toss money their way. If the answer really is yes, than the answer is simple, stop giving them public money (except for direct compensation for reasonably charged services, I'm arguing against subsidies, not government buying the services it uses from the private sector).
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6. Cities that have attempted to build and operate broadband networks often report large losses borne by taxpayers or ratepayers.
Of some 55,000 towns and municipalities in the U.S., only about 200, or 0.5 percent, operate municipal broadband networks. Many communities that have taken the plunge have experienced large losses that must be paid for by taxpayers or ratepayers. For example, Iowa Communications Network “consistently requires large subsidies to continue in business”; California’s CALNET system was some $20 million in debt when it was privatized in 1998; Lebanon, Ohio originally projected the cost of building its FTTH network at $5 million and ended up spending $9 million and later had to authorize $14.8 million in mortgage revenue bonds to cover operating losses; and Marietta, Georgia lost more than $35 million operating its municipal broadband network before it was sold (at a loss) to American Fiber Systems in September 2004.
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