The Next Huge Thing – Muniopoly?

The march to US-wide municipal Wifi gained speed today with the announcement that Portland, Oregon has selected a vendor for a citywide installation.  According to the press release, the free (ad-supported) version of the service will operate at a full megabit speed – three times as fast as the free service Google and EarthLink are promising San Francisco and faster than most DSL.  The same speed will be available without ads for about $20/month.

Earlier this week, I predicted that all US cities (but not necessarily rural areas) will have free sponsored WiFi available in three or four years.  The reported low cost of the Portland project - $10 million dollars which is less than a medium to small bridge or a short stretch of highway  - reinforces how little obstacle there is.  In fact, according to Om Malik, a board member of the small company which was selected promised to cover the cost out of his own pocket if the company comes up short.

But there are some downsides to municipal broadband project like those announced for San Francisco, Portland, and Philadelphia.

All these projects involve granting monopolies.  The real-estate on city-owned light poles, parking meters, etc. is valuable.  Cities get companies to put up their own money for projects like these by granting a monopoly on the right to use these locations for service.  Without these locations, it’s hard for any competitor to enter the market.  Without the monopoly, it would be hard to get any company to put up the money for installation.

We’ve been here before.  Phone companies had absolute monopolies for a while and have virtual monopolies now thanks to the infrastructure they built in their monopoly days.  Cable companies have local monopolies.  Neither telephone nor cable service is as good or as cheap as it would be if there were more competition; most other developed countries have better broadband access at lower prices than the US has.  The Wall Street Journal says cites an OECD report saying that the US has slipped to number 12 in percentage of broadband subscribers with only 16.8 subscribers per 100 residents.  Moreover, our service is both slower and more expensive than in many other countries.

Granting monopolies is a good way to get a service built and to raise municipal revenues; monopoly providers, however, have little incentive to improve the service they deliver. 

So should these municipal projects be discouraged?

I don’t think so.  The new wireless monopolies will compete with the existing cable and telephone company monopolies in Internet access.  The net is a gain in competition.  It would have been better if the Bells had actually been forced to share the facilities they inherited from their monopoly days as specified in the last telecommunications bill; such sharing has been very effective in incenting better services in countries like the UK.  But it didn’t happen.  Granting a new monopoly may be the best way to compete with the old ones.  Duopolies are sometimes as anti-competitive as monopolies.  But having cablecos, telcos, and muni-wireless providers all competing is likely to lead to better service – I hope.

Would be good if the cities would bargain hard on the length of the monopolies they grant.  Looks like there IS competition developing among those who want the muni contracts so that ought to be possible.

Comments

[Laz Sanchez]

Municipal Co-Operative WiFi ISP - We are looking for townships that are interested in private sector funding under Co-Op enviornment.

MUNICIPAL WIRELESS CO-OPERATIVE OFFER!!

To all rural communities, please contact us!

EXECUTIVE SUMMARY

Mission Statement

To seek a cooperative arrangement from interested communities who desire to partner with Alarius-Net for the purpose of offering the local residents, the business community and the municipal government a 3rd choice for Broadband Internet Access, and the first municipal mesh wireless option that supports and provides a ubiquitous blanket of advanced wireless technologies that serve the entire community foot print.

Primary Goals:
To ensure that the communities contacted understand that we are not soliciting them to engage in a wireless endeavor costing the community millions of dollars to build an infrastructure and to then leave them to maintain it themselves. *This is always an option, but not one preferred by most rural or underserved communities with a small and tight budget.
To ensure that the communities contacted understand that little to NO capital outlay on the part of the town to build or run the proposed service is required for most of our Co-Op options. We finance and build the infrastructure, and run the Co-Op ourselves in most Co-Op scenarios.
To ensure that the new Co-Op introduces a less costly competitive broadband option for residents and businesses within the community’s foot print.
To provide wholesale or “Free” use of infrastructure for all Town offices. Depending on what flavor of “Co-Op” is selected by the municipality.
To provide a wholesale or a “Free” and dedicated network to support Public Safety needs. Depending on what flavor of “Co-Op” is selected by the municipality.

Primary Objectives:
Creation of a more competitive market for Internet Access which should drive better price points and value for the town.
To introduce a reduction in the Town’s operating budget due to cost savings introduced by the cooperative arrangement with the town being a “cornerstone client”.
To guarantee an increased efficiency of municipal operations with the introduction of “Wi-Fiber” gigabit+ licensed microwave technology.
To introduce public safety technologies like video surveillance, tag recognition, automatic WiFi “utilities” meter reading, High Speed Mobility for law enforcement, healthcare “Mobility” for telemedicine, Homeland Security WiFi Mesh, video conferencing and streaming and many other technological advances.

Desired Outcome:
To successfully gain an audience with your community leaders to review a number of proposed “Co-Op” options.
Ultimately, if any options qualify as a possible viable project, a movement to make up project plans is brought up at a subsequent town meeting.
Co-Operative Project Fruition and a satisfied Community.

Key Notes:
Alarius-Net partners with Agility Solutions for lease financing and WiFi consultation. Bill McNamara of Agility Solutions can be contacted for reference or questions concerning our infrastructure financing, technical consultation, implementation questions, and any other municipal or WiFi deployment or ongoing operational questions that you may want answered by our experienced consultants and subject matter experts.

http://www.agilitysolutions.net

Alarius-Net uses the finest carrier grade microwave hardware, towers and installation practices.
Alarius-Net partners with over 80 carriers for bandwidth and dial-tone “wholesale”.
Alarius-Net uses open source Linux servers and appliances for all email, file storage, SAN, DNS, IDS, VoIP IPBX, and other core applications.

PS

It's election time. lol

Laz Sanchez
Alarius-Net
407-756-7109 cell
laz.sanchez@yahoo.com
http://alarius-net.com

[moon]

what is mostly important is that the free sponsored WiFi is ON!
that's good news
and i hope it will become a standard world wide.