The holidays, it seems, cant pass without a Scrooge story.
This years comes from the state of Pennsylvania where early this month Gov. Edward Rendell inked legislation that effectively left the future development of municipal wireless broadband services in that state in the hands of Big Broadband.
The bill lets incumbent carriers (in Pennsylvania, that would be Verizon) determine whether Pennsylvania cities can create— and charge for— municipal wireless access services. The new law came hot on the heels of Philadelphias announcement that it planned to do just that. Now, its up to Verizon to exercise thumbs-up or thumbs-down on Philadelphias wireless ambitions. The company claims it wont scotch the citys plan. But what happens when Pittsburgh, Wilkes-Barre, Scranton or Harrisburg decide to unwire?
Verizon President and CEO James ORourke declared Rendells signature on the bill “the right call for Pennsylvanians.” Advocates of municipal wireless services disagree. In a recent edition of his Wi-Fi Networking News, Editor Glenn Fleishman opined:
“Its strange how businesses that hate regulation in theory love how it supports their business models. Also strange how many folks who claim to want real markets only really want big businesses to be able to dictate to their markets what things cost.”
Its not just strange. Its discouraging—for two big reasons.
First, its a giant step backwards.
Municipal access was becoming quite the trend—much to the delight of most of us who would just like to power on and be connected. It sat on the horizon like some sort of nirvana. A world where we neither had to struggle with high fees nor endure long waits on hold when we called our individual service providers. A world where, when doing business in a distant city, we wouldnt have to suffer the mind-numbing slowness of dial-up or be held hostage to exorbitant access charges in hotel rooms. (The New York Hilton charged eWEEK.com columnist Guy Kewney $165 per night!) A world where those of us who didnt want to pay those charges wouldnt have to jump out of our pajamas and pack off in search of a hot-spot in the wee hours just to check our e-mail.
More and more, that world seemed at hand. Before the City of Brotherly Love decided to bless its residents with wireless broadband access, San Francisco got the idea, put it in place in its downtown area around Union Square, and now plans to expand it to other areas of the city. Smaller cities, as geographically diverse as San Jose, Calif., Chaska, Minn., St. Cloud, Fla., and Rio Rancho, N.M., have similar plans.
That brings us to the second discouraging item—the specious argument that putting the future of these plans into the hands of Big Broadband somehow embraces free market principles and the spirit of competition.
What about those free
Just before Christmas, muni-wireless evangelist Esme Vos, posted a copy of “model legislation” for municipal Internet access (called the Municipal Telecommunications Private Industry Safeguards Act) on her Web site. According to Vos, it is being promoted by the American Legislative Exchange Council (ALEC).
Founded in 1973, ALEC is a lobbying group with a history thats tied as deeply to conservative lawmakers as it is to big business (or, in this case, big broadband). The brainchild of Republican party regulars U.S. Rep. Henry Hyde of Illinois and Lou Barnett, a veteran of Ronald Reagans 1968 Presidential campaign, it moved from think tank to advocacy group in 1981 with the formation of a series of task groups charged with developing model legislation. And, it boasts an unusually successful track record.
“This ridiculous piece of nonsense, masquerading as model legislation like the Uniform Commercial Code,” writes Vos, “is making the rounds of U.S. state legislatures.”
Ridiculous, perhaps. But it is also formidable. And, in the case of Pennsylvania, it was successful.
I couldnt find the Municipal Telecommunications Private Industry Safeguards Act on ALECs Web site. Then again, I couldnt find any model legislation on ALECs Web site, although its obviously out there somewhere. Model legislation coming out of the groups Telecommunications and Information Technology Task Force (and all their task forces, in fact) is tucked behind a gated Web page for members only.
This country-club approach puzzles me. By ALECs own description, the groups Telecommunications and Information Technology Task Force is designed “to guide policymakers” through the “uncharted waters” of modern technology. The group claims it brings together “state legislators, industry representatives, and public policy experts to develop state public policy that will preserve free-market principles, uphold deregulation efforts, and keep the communications and technology industries free from burdensome regulations”…from sea to shining sea.
The seas are my addition. I couldnt resist. Something in my upbringing just says a group that espouses “free market principles” shouldnt be blocking tax-paying citizens (who fund legislators salaries, consume the products of industry, and represent the “public” in public policy) from learning how it plans to influence our governance.
But, then, lets get real. Ask yourself why would Big Broadband want to publicly show its hand before it slides its intentions into law? Would any consumer of Internet services ever accept, under any circumstances, the protectionist arguments of an industry that most users believe charges too much and delivers too little?
The case against municipal
That said, there is merit to cities studying the implications of a program as ambitious as municipal wireless, particularly when it is to be offered for free. But it should be the cities that make the call—not the states. Thats what local governance is supposed to be about.
Right off the bat, I can think of two key issues cities should consider.
1) The impact on local revenues. Big Broadband is not the only one that reaps benefits from the monthly bills. Governmental taxes, surcharges and fees also apply. A municipality has to consider whether it can live without those surcharges and franchise fees.
I looked at my December bill to get some idea of the impact. A full 94 cents of the $122 I paid my cable provider for broadband and video services this month went back to my local government in the form of a franchise fee. (Additionally, the state reaped 38 cents and the FCC took 6 cents.) So, my municipality would have to weigh whether it could live without the sub-$12 it makes off the more-than-$1,400 I pay each year for cable services. Speaking strictly as a consumer, I suspect Id do better paying $12 per year for broadband access directly to my municipality and separately dealing with my cable provider on the video. Would you agree?
2) How to provide attendant services such as tech support, security, spam filtering and general liability. No right-minded city would put legions of muni-workers on salary to build a help desk big enough to handle tech support for potentially tens of thousands of users. If municipal decontrol has done nothing else, it has demonstrated the wisdom of outsourcing municipal electrical maintenance services. So its safe to expect cities, instead, to shop the IT challenges out to local integrators and VARs, leaving the municipality to negotiate citywide service with broadband providers, much as they presently do for cable television.
In this scenario, the municipalitys role might look something like Wal-Marts in the retail world—hammering on suppliers to get the best possible prices and services and passing the savings along to customers. And, at the same time, local IT contractors would prosper from the suddenly greatly expanded market of customers.
So…hmmm….all of a sudden, the case for municipal wireless begins to sound like a scenario in which we actually preserve free-market principles, uphold deregulation efforts, and keep the communications and technology industries free from burdensome regulations. It has a familiar ring to it. Doesnt it?
ALEC, are you listening?
Where do you weigh in on the fight for municipal wireless? Write and tell me what you think.
More from Carol Ellison: