If you thought the debate over municipal broadband and its attendant Wi-Fi services ended with the passage of House Bill 30 in Pennsylvania late last year, think again. Not only does it rage on, but new players are entering the fray even as Philadelphias wireless rollout, the highest-profile project in the fracas, is moving toward completion.
Variations of the law passed in Pennsylvania are rearing their ugly heads before other state legislatures, a trend lamented by advocates of municipal wireless who find bills in Indiana and Ohio even more threatening to municipal services than the one in Pennsylvania.
Ohios House Bill 591 says municipalities shall not “subsidize in any manner the operations of a public cable service provider or public telecommunications service provider with public money of the political subdivision.” Muni programs would not only be prohibited, says muni-advocate Esme Vos, “but any public-private partnership will be illegal also.”
Indianas House Bill No. 1148 presents visions of endless red-tape or no muni-broadband at all. It would prohibit municipalities, or for that matter, any “political subdivision” not only from constructing and operating a municipal service but also from controlling one (which, in a not-so-broad interpretation, also means it could not contract with a private operator to provide service) unless it first “determines, after conducting an inquiry under section 6 of this chapter, that there is not a person that:
- provides the desired services at the time of the political subdivisions inquiry under section 6 of this chapter; or
- intends to provide the desired services not later than nine (9) months after the date of the political subdivisions inquiry under section 6 of this chapter; in the designated area.”
Curiously, the project that appeared most threatened by Pennsylvanias HB30—Philadelphias plan to offer city residents and business low-cost broadband, while providing free wireless in its parks and public places—is forging merrily ahead, thanks to an agreement that the city struck last year with Verizon. HB30 invested Verizon, as the regions incumbent carrier, with veto power over municipal broadband projects in the state.
Philadelphias project will be governed by a public-private partnership the likes of which, the citys chief public information officer says, “we havent seen before.”
The city is asking private companies to submit proposals to establish and operate the network, expected to cost $10.5 million. That model may be new in the broadband world but its reminiscent of the kinds of contracts cities have had with cable TV providers for the last 30 years.
: Enter Intel”> Its heartening to see that Philadelphia is able to deliver on its promises, but you have to question how generous Verizon, actually any incumbent carrier given monopoly control over broadband services in its area, will be to other municipalities that bring similar proposals to the table.
You cant blame Verizon (and, lets face it, Verizon is getting the bum rap here because it happens to be the incumbent carrier in the state that first moved in this direction) if it nixes others that are forthcoming. The issue of market protection is at play here. And, if other states buy into the argument that state-sanctioned monopolies somehow embrace the free market more than municipal operations as Pennsylvania did, municipal programs could be a thing of the past—except we now have a new player in the game.
As someone said, “The story just keeps getting interestinger and interestinger….”
Its no surprise that Intel has joined the fray. As I said earlier, this is about market protection, and Intel has a distinct interest in this market, separate and apart from that of the incumbent carriers, the telcos.
In the effort to expand the boundaries of wireless communications, no company has worked quite so vigorously as Intel. It has staked its future on mobile and wireless technologies, and wide-area wireless, in the form of WiMax, plays a significant role in its plan for the future.
Legislation such as HB30 strikes a significant blow to competition among service providers. Instead of offering new technologies to a plethora of competing providers, eager to provide new and better services in an effort to capture customers, telcos that effectively own the market may well opt to sit back and preserve aging infrastructures, once those infrastructures are built.
You couldnt blame them. Build-outs are costly. But what happens to innovation when incumbent carriers opt to preserve investments instead of competing on the basis of new services, better performance and price? Innovation is left on the drafting table.
To its credit, Intel isnt entering this game as a proponent or adversary to either side. Spokespersons for the company say, instead, it tends to play a mediating role to bring both sides together. Mediation, at this juncture, is just what is needed.
To date, the debate over municipal broadband has been bogged down in rhetoric about the free market. But beyond rhetoric, there are serious issues of innovation, economics and what happens to both in a market where state mandate gives a single company control over the future of an entire industry.
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