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October 03, 2005

Municipal Wireless Broadband – Boon or Boondoggle?

Google has offered to provide free, relatively slow WiFi access to most of San Francisco (more from MuniWireless.com here). Philadelphia is taking bids for free or cheap WiFi access citywide (more from Om Malik here). 

Ersatz wireless broadband networks have been built with incredible speed in Katrina-devastated areas and in the places where evacuees are sheltered.  With a little more battery power (and perhaps solar panels) a well-diversified wireless network would bend but not break in a catastrophe – much like the Internet itself.

A map of real and wannabe municipal broadband projects available here shows a healthy sprinkling of dots across the country but nowhere near a nationwide phenomenon – at least not yet.

A law passed in Pennsylvania with lobbying support from Verizon almost scuttled the Philadelphia plan – but didn’t.  Senators Lautenberg and McCain have introduced a bill of good intent but questionable constitutionality that would “protect the rights” of municipalities to offer these service from state interference.  The issue of municipal broadband could be a spur for campaign contributions for years to come.

Traditionally municipalities and states have granted monopolies for services which involve tearing up the streets or building in the public right of way.  That’s how the local power and water and cable and telephone monopolies got started.  Sometime municipalities provide these services themselves with mixed success. The benefits of competition don’t exist in either scenario.

The legacy of these granted monopolies is that most of us in the US have no more than two choices for broadband Internet access and many of us have one or no choices.  The Telecommunications Reform Act of 1996 was supposed to address part of this problem by requiring local telcos to make their facilities available to competitors.  The local bells were very good at doing this slowly and have recently won court and regulatory battles which eviscerate this provision of the act.  In the UK most individuals can choose between dozens of broadband ISPs.  In much of the world including Japan and Korea broadband penetration rates are much better than in the US.

There are dangers beside slow deployment and relatively high prices in these local duopolies.  For example, it is often suggested that Internet access providers may start “favoring” their own higher-level services.  Are Comcast and Verizon going to do a good job of supporting your use of Skype to avoid paying their tolls on long distance calls?  No evidence of widespread blocking yet but clearly a danger.  “Carrier grade” Skype-blocking technology is available here from a company called Verso.

I’m a strong believer in the law of unintended consequences and an optimist.  I believe that wireless deployment is happening faster than it would otherwise BECAUSE of the protection the duopolists have gotten and the consequent overpriced underperforming service they’ve delivered.  And municipalities, the grantors of most of the original monopolies, have a role to play in opening up the field and making sure their citizens have the access services they need at a reasonable price.  I think this can even be done without public subsidy.

But, in general, I don’t think cities and towns should be the operators of wireless networks. I don’t think they should be prohibited from doing this, either; it should be a local choice.  The political process – even necessary bidding safeguards – are probably too slow for deployment and redeployment of rapidly changing technology.

Nor do I think governments should continue the practice of granting monopolies.  Building a wireless network doesn’t involve tearing up the streets.  There is plenty of room on city-owned light poles, buildings, even parking meters for lots of low-power antennas. For technical reasons, limited radio bandwidth is not a problem either.

Local government should aggressively rent out its antenna-suitable facilities to a large number of wireless broadband competitors.  In some case it may be desirable for the city to provide a fiber loop of connectivity to the devices but I don’t think that will be necessary often.  Part of the rent might include a community service obligation to make basic service available free or at low cost.  I suspect this won’t be necessary either because, as Google is ready to bet, there is value besides rents in providing this access.

The temptation is to grant a new citywide monopoly because the value of the monopoly helps raise money quickly for whomever exclusivity has been granted to.  But the long term benefits of competition will far outweigh the short term  benefit of granted monopoly.  It is a good thing that our Federal-State-Local governance assure that a variety of models will be tried.  I’m optimistic that America will soon be competitively “unwired”.

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