Gervais: VT broadband victim of the Sunk Cost Fallacy

by Joe Gervais

The Sunk Cost Fallacy is the notion that once an entity invests in something, it becomes harder to walk away from it. When I worked in Tech as a business line manager I was trained to fail early and fail often. The earlier you could determine a program wasn’t meeting its objectives and kill it, the better off you were, and the sooner you could move on to the next opportunity with more time and money available. Unfortunately, our state government doesn’t operate that way, consistently failing to be good stewards of their constituent’s resources.  

In 2021, the Vermont State Legislature passed ACT 71 and over the past two years allocated $245 million dollars to the buildout of rural broadband using wired systems. Around the world, many developing nations deployed telephone systems that entirely bypassed the landline telephone systems used widely in the US. This was due to infrastructure costs to deploy to rural villages being much more expensive than wireless cellular systems. At the time of ACT 71, there was discussion of wireless satellite alternatives to meet the rural broadband need, but Starlink, the primary offering in 2021 was thought to be too new. A year later, when Ukraine found their internet destroyed by war, Starlink immediately provided replacement service. Vermonters that have deployed Starlink on their own have robust broadband service today.  

The Vermont State Auditor recently published a report on the risks associated with ACT 71, and suggests it could eventually cost between 600 and 800 million dollars to complete this broadband rollout. Furthermore, the deployment is still years away for many homes. Rob Roper recently wrote that a Starlink solution could be provided to 50,000 rural homes for just over $100 million dollars including a five year full subsidy on monthly service. Why not scrap the existing plan, save millions, and be done this year? The Vermont Legislature will never do this because we are too far down the road with the current plan (that pesky sunk cost fallacy), even though staying the course means years of additional delays and an ultimate system that is vulnerable to failure from winter storms and falling trees.  

The Vermont Legislature continues to throw good money after bad. Which is more wasteful – the $245 million in sunk costs, or another $250 to $450 million of further spending to complete the project over the cost of a more economical and resilient alternative? I’d contend it is the latter, but rather than changing direction now, my representative is telling her constituents we’re making progress on providing rural broadband, and we’re getting free federal money to do it. Unfortunately, she fails to realize or choses to ignore that every “free” federal dollar costs us in the hidden tax of inflation.  

Joe Gervais is an Arlington resident, and was a 2022 candidate for State Representative. 

Categories: Commentary

4 replies »

  1. The Tesla owner was welcomed to Vermont not too long ago to show his electric cars, they went with that because it fit their agenda but now he has spoken out on political issues that they don’t agree on, they would rather cut off their nose to spite their face than give him anymore business. Talk about political bias! Is this what Vermonters really want running this state?

  2. 100% agree. We *should have* (and still could) negotiate bulk rates with Starlink for rural customers across the whole state. It’s a great service that is virtually indistinguishable from wired broadband for 99% of use cases. And as you point out, actually has some advantages.

    Instead, we have fools (blinded by their own self-interests and ulterior-motives) like Christine Hallquist spouting idiotic tripe like “if it’s not fiber, it’s not broadband.”

    These people are great at doing one thing and one thing only – spending other peoples’ hard-earned money.

  3. I have Starlink It’s great until you have bad weather then it drops off line. Last big snow storm My dishy could not get to the sats for 20 hours or so.
    We have had Fiber at ou small library for some time now (the .gov deal with Sovernet)
    put I cannot buy any access to it only two miles away.
    The State had a deal with local libraries to build out the second mile (bringing fiber on the phone poles in the area). But no one can buy any access. Why is that?