The Big Muni WiFi Debate

from the a-bit-complex dept

We've already written a bit about the massively overhyped story concerning Philadelphia government types thinking about covering the city in WiFi, but now the story is generating a big debate over municipal WiFi. MIT's Tech Review kicked it off by suggesting municipalities generally shouldn't be offering WiFi, because the costs of maintaining such a system are high and it's going to come from the taxpayers. Muniwireless shoots back accusing the article of being one-sided while ignoring plenty of successful muni wireless implementations. There are a lot of different issues here. On the technology side, it still seems like WiFi might not be the best solution, but that's (perhaps) a different discussion for a different post. The question of municipal providers of service opens up a whole different can of worms, many of which have been discussed before. Municipalities believe they can offer better service, stimulate the local economy and generally do a good thing for their constituents. Those against it, point out that it has the potential to waste taxpayer money in an area where private competition may be better suited. Of course, there's a third argument that gets almost no attention in all of this. If the government were to consider bandwidth to be something of a natural monopoly, then why not have the government build the backbone, but let anyone offer service on it? The benefit is that competition remains at the service end, and efforts aren't wasted duplicating the same technology buildout on the backend. The risk, however, is that the government would choose the wrong technology (maybe the question of whether WiFi is the wrong technology is relevant to this discussion after all) or do a bad job on the implementation. Already, many residential broadband offerings are a monopoly or duopoly situation, suggesting some market failure -- though that may simply be a function of time and technology (certainly wireless ISPs would like to think so). Still, most opposition to muni broadband is coming just a bit too loudly from providers in those monopoly/duopoly situations -- suggesting they know the real competitive threat isn't from upstarts, but from the government breaking control over their monopoly. No, muni broadband (wireless or otherwise) may not be the most efficient use of taxpayer money based on the way most locations are implementing it, but that doesn't mean the current broadband providers are doing a very good job serving their markets either. Letting local governments offer up broadband connectivity while letting others openly offer services on those networks is a model takes away many of the downsides of municipal broadband offerings while also fixing the market failure that has lead to less competition.