In this month’s cover story, the risk of price manipulation is raised about municipal broadband networks. While this isn’t very likely, in my view, the point that municipalities are limited to selling broadband at “cost-recovery” prices should not offer comfort. The notion of “cost-based pricing” is itself flawed.

Not only is determining cost a complex, costly, inflexible and opaque process, but more importantly, cost is irrelevant to price. Cost may affect the profitability and sustainability of a company or project, but it does not determine price. Cost merely determines whether or not a service can be provided at a given price.