Well, no surprise here, not one word of my response made it to the article. Actually, I was a little piqued because it’s parent company, the Heartland Institute, is so ardent in its defense of free markets while disparaging muni networks that I was sure they could withstand a little blunt critiquing of of their position. I guess not.

But I do feel I should share those thoughts with folks in the media because I’ve seen countless attacks on muni broadband via OpEd pieces and press releases that should be challenged. So here are my un-edited answers.

First, the municipal broadband movement started because the free market time and again failed to deliver vital services to potential customers. Make no mistake, the local governments are just as much customers as are local citizens and businesses. And as customers, if they cannot get what they want from what vendors or service providers want to sell them, they have every right to look elsewhere or make it themselves. Many small governments and then larger ones decided that they wanted to do it themselves, or build networks with business partners other than incumbent telcos.

Second, if a rightfully elected government, as a potential customer of particular services, decides it wants to get into a business to provide those services, then they answer to the citizens for that decision. I don’t remember in my civics classes where it said we as Americans have abdicated to the telecom companies our right to hold our elected officials accountable to the will of the people. *The people,* not just some incumbent’s shareholders.

Basically those officials work for us, and we the people are customers as much as government organizations. We can buy from whomever we choose and build whatever we want – or not – as people decide with their votes and their wallets. Therefore, all of the actions of telcos to prevent governments from taking actions that elected officials feel is in the best interest of their citizens seems pretty much counter to the ideal of democracy, an act made more repugnant by the telcos’ refusal to provide the services they try to sabotage.

Third, if you look at several of the municipally-driven projects that are in place, such as in Minneapolis, Metamora, IL or  Rutherford and Polk Counties in NC, private sector organizations have done the building and operating of the wireless networks, even when government has a partnership role. In most of the communities with these networks, private sector businesses are thriving, new ones are moving in and entrepreneurs are starting new ones, all in large part because of the network.

By this measure, free markets appear to be doing just fine. But it so happens that the government made these business activities possible because they fought off the attacks by a few large businesses – the large national telcos and cable companies – in favor of enabling the many local businesses to take root and grow.

It seems to me that government-owned or instigated muni broadband – fiber and wireless – may be anti competitive for large incumbents, but it’s very pro local business, and it’s very pro local consumers and education institutions and hospitals. Yeah, there are failures and there was a very silly business model pursued by local governments. But I accept those as the price for advancing the public good and common interests.

Well, three things have happened recently to counteract the fear mongering sock puppets.

1. Cablevision has just revealed that free municipal wireless dramatically drives up cable service subscriptions.

2. WiFi network manufacturer Meraki is changing the economics of muni network deployment.

3. Successful municipal network projects are breeding more success.

Game Changers

Over a year ago I predicted that muni wireless would give cable companies a good way to expand and protect their wired service offerings - http://tinyurl.com/b5xydk (And no, you can’t borrow my crystal ball). Cablevision eventually took the plunge, and last week disclosed a 70% sequential growth in net subscriber additions, attributed primarily to its free wireless service.

Once this realization becomes absorbed in the cable operator world, along with the resulting fear of being left behind, it’s going to change the proposal-writing strategy of some of these providers when they see they have a play in mid-sized and even large cities. Smart local governments now have leverage to get small and regional cable companies to partner in projects to reach underserved communities.

Meraki has quietly over the last couple of years enabled dozens of towns and communities to build either limited-reach networks that cover neighborhoods where they want to improve economic development, or complete area-wide networks. The company recently released a new outdoor access point they claim gives good coverage for less than 1/3 the cost of competitors’ APs. 

There are thousands of small towns in America that, whether they have fiber throughout the town or just a few strands coming into key areas, will find it economical to consider a wireless network if it’s inexpensive enough. Couple that with network management features and services that make it possible for a non-techie to deploy and keep running, local governments have an option worth considering with or without broadband stimulus money.

Success breed success

The muni wireless success stories bubbling up point to the positive economic benefits these networks deliver, as I point out in my recent Fierce Broadband column, and strike fear into the hearts of incumbents. They’re worried that in some areas their days might be numbered. And they’re right. Hence the OpEd trench warfare.

These success stories are the key to effective pushback strategies when local governments go to apply for stimulus money. The Obama administration wants to create successes quickly with its stimulus bill, so where are NTIA and RUS likely to invest those grants? I’d say definitely into communities that show how they can emulate these wireless success stories.

The agenda’s available for the FCC/RUS/NTIA meeting next Tuesday (3/10). It looks to be a pretty innocuous affair. We lucky souls who get seats will see agency senior brass who most of us probably won’t get close to again in life. We could all be pleasantly surprised if they say anything during the first 40 minutes that’s noteworthy. But I’m guessing not.

The next 20 minutes could provide some insight to how steep a hill folks are going to have to climb to get to those grants. The final 30 minutes of Q & A? This is a pretty good analogy for the broadband stimulus bill conundrum. There are way more people (500+) needing answers than there are time and resources (staff) to meet the need. A lot of folks are going to leave that meeting not fully satisfied.

If you’ve been writing or following reports about how many public and private sector entities in states nationwide are lining up wish lists for broadband grants, you see the really big issue that trumps all others. There are way more organizations coming in with broadband needs than there are time, money and (maybe) agency staff to meet these needs.

So the really big question on March 10 is: in a year, will the logistics of administering this money have worked well enough so at least a reasonable number of communities are satisfied with the result? Yeah, there are a lot of pressing policy questions that determine who benefits from these grants and by how much. But none of this matters if the grant-administration process implodes under the weight of demand.   

This just popped up yesterday and it has very disturbing implications for Pennsylvanians who could benefit from some of the $7.2 billion in broadband stimulus money. It could also be the initial act in a telco national strategy to disrupt the stimulus bill’s impact in other states.

State legislators in Pennsylvania are trying to subvert the sovereignty of local governments with an incumbent-protection anti-taxpayer bill. They introduced Senate Bill 530 that will prevent local and county governments from being involved with broadband projects.

This bill pretty much spends most of its pages explaining in great detail who’s excluded and from doing what. One thing about House Bill 30 (the original PA bill that limited municipal involvement in network projects) is that local governments can ask Verizon for certain types of broadband networks, and the telco has an option to refuse to do it and let the city build it however it wants. Or Verizon has to agree, in which case they have 12 months to build that network according to spec. If they don’t do it in 12 months, the cities can build it.

This new SB 530 prohibition will be enforced regardless of whether local governments determine there is a need to partner with private entities to provide broadband to areas the large telecom and cable companies refuse to service. This bill allows incumbents to nullify the will of voters and local governments, as well as try to hog money that is supposed to help taxpayers, not further enrich companies that are the main cause of so many communities lacking broadband. The bottom line here is this proposed bill eliminates the questionably logical, but bearable HB30 option to give the incumbent right of first refusal.

This appears to be a total stealth move. People who follow broadband for a living didn’t know about this except for a fluke e-mail. Since PA has a history of legislators meeting late at night to pass bills a lot of the public might object to, I expect this is the case here. 

It’s time shine the light of day on this outrage, and rally constituents to put pressure on the PA state senate. The prime sponsor is Sen Patrick Browne, a Republican and chairman of the Senate Finance Committee.

Originally I thought this was a possible move by the incumbents to attack the effects of the stimulus bill. However, after receiving a note from Verizon, I believe I should present their side of things while maintaining my criticism of the bill itself. 

Craig:

I wanted to make a couple of points in response to your post on Pennsylvania Senate Bill 530. 

First, Verizon had nothing to do with the introduction of S.B. 530.  The bill sponsor, State Senator Pat Browne, has introduced this legislation for the past three sessions.  You should contact the senator for his views on the legislation.  I repeat: It is not a Verizon bill.

Second, on House Bill 30 from 2004: That legislation has been a success – with commitments to ubiquitous broadband deployment throughout Pennsylvania and a Bona Fide Retail Request program that, to date, has accelerated broadband service to 124 communities in some of the most rural parts of the state in addition to the many hundreds of communities whose residents and businesses already have broadband. 

Harry Mitchell
Verizon
Communications
Director-Media Relations, Mid-Atlantic/South-Central Regions

Update

Harold Feld’s post on The Wet Machine does some more analysis of SB580.

The national broadband discussion, both in Congress and elsewhere, has to stop making it seem as if our only options for solution providers are Verizon and incumbent cable companies. As in, “open access will limit incumbents’ involvement,” or “requiring 50 Mbps will prevent the cable companies from participating.” Yeah, that’s true, but it’s only one side of the story. Let’s not present it as if they’re the only game in town. They’re not!

There are regional and local telcos such as MTCO in Metamora, IL that can step up to the plate (read about them in my report). Have we forgotten that it is the small and the swift that bring technology up to the next level? In the closing days of this stimulus battle, if Congress stands firm for tougher requirements, local or new players will step into the breach.

Some politicians live and die in the name of tax credits, but when you talk to some of the smaller players, doesn’t it seem as if easier access to bank credit will do much more for them to get network projects going than tax credits? This is the feedback I’m hearing. Besides these regional players, there are local government-managed options.

Though people don’t want to bring up the ghosts of municipal wireless projects failed, if you look at the broadband solutions developed in rural places such as Greene County and Bristol, VA, you see many viable solutions run by municipalities or public utilities. They’re providing services and operating in the black.

Let stimulus money flow to local governments, and pass national legislation that removes the handcuffs of telco-influenced restrictions on their ability to provide their own solutions. Pulaski, TN officials talk about how their public utility cannot provide the community that’s down the road with service that could save this town millions of dollars, thanks to telco-induced anti-competition legislation. At the same time, the telcos whine about how difficult it is to get fiber into remote areas because of the vast expanse of our national geography while side-lining those with proven ability to do just that.

If Congress looks at what’s working, and listens to the people in the trenches making it happen, we would hope they craft a final version of the broadband stimulus bill that opens the universe of options for local communities in a real and meaningful way. Otherwise, it’s just more dollars for the same old failures. 

This virtual roundtable, mostly people who’ve brought broadband to their communities, lays out what it takes for broadband to impact economic development. And there are plenty of wise words (get a synopsis) for the legions of folks camped in D.C. trying to create/influence the broadband New Deal.

Download it, read it, tell us what you think.

Happy New Year!

My survey of these professionals on the front lines fighting the economic crisis fuels the rapidly growing call for a national broadband strategy, but reveals it may not be Washington or the telcom industry that carries the day. The solution for turning broadband into an economic development engine lies primarily in the hands of local and regional governments and businesses, with the federal government playing a vital supporting role. The worse thing that could happen is to have the national telecom companies driving national broadband policy.

The report I released today reveals that among the respondents to this survey

• 13% have or are building area-wide wireless networks and 38% have limited-reach wireless networks, while 27% have or are building wired networks and 16% have limited-reach wired networks
• 25% with wireless networks say these directly or indirectly improved local businesses’profitability, as do 41% of those with wired networks
• 66% without limited-reach wireless and 46% without limited-reach wired networks would encourage business communities to build them
• 66% feel muni networks can improve disadvantaged businesses, 69% say the networks can be used to re-train the workforce in these areas
• 71% believe muni networks can influence individual entrepreneurship in underserved areas

Click here to access the survey report.

Equally or more important, though, is the supplement to this report I’m writing that comes out next week. I’m conducting in-depth interviews with additional experts and others who have been delivering economic development results through various broadband projects. Together in the supplement we’ll present a blueprint for action that local and federal government agencies should consult to move these projects forward successfully.

Another page of interest: Many people who completed the survey left comments on muni broadband you may find interesting.

Nov 21st I launched my 2008 national survey of economic development professionals to gauge their assessment of the impact of municipal wireless and wired networks on economic development, and early results are in. I will present a final report to the technology policy group of President-elect Obama’s transition team in mid-December, and also make it available to the general public. 

Sponsored for the second year by the International Economic Development Council, this year’s survey addresses three areas:

1. the impact of citywide and regional broadband networks on economic development;
2. the influence of wireless and wired networks that just cover commercial zones or districts within a city: and
3. how muni or community broadband affects personal economic development and individual entrepreneurship within underserved communities. 

The survey cutoff date is December 4, but there are some interesting trends unfolding from the nearly 200 people who’ve already completed the survey. Other executives and managers of economic development organizations are encouraged to take the survey online.

Some early results

Wired municipal networks, predominately fiber, appear to have the edge over wireless networks in improving local economic development. This is true both for the value that professionals have observed in areas where networks are in place, and the value survey respondents expect to see in areas where these networks have yet to be built.

• 19% of cities and counties of those surveyed have wired networks that businesses can access, as compared to 3% whose areas have wireless networks.
• 7% of survey respondents say their cities or counties are currently building a wireless network and an equal percentage says wired networks are being built in their areas.
• 41% of respondents believe their wired networks have directly or indirectly enticed new businesses into the area, while 31% of those with wireless networks feel the same.
• 45% with wired networks believe these directly or indirectly influence businesses to stay, and 34% feel this way about their wireless network.
• 42% believe wired networks help their local businesses be more competitive, and 25% believe the same about their wireless networks.
• An almost equal number of survey respondents believe their wired (22%) and wireless (20%) networks will revitalize depressed business areas.

Keep an eye on my blog in December for the complete survey results and my analysis of the personal as well as business economic development changes muni networks can stimulate. In the meantime, you can get a copy of last year’s survey report.

I started wondering the other day about this Google Android thing. What are the chances this is going to end up like that other notable Google initiative I’m particularly familiar with - the free Google muni wireless network across America?

Remember that? End of 2005, Google makes worldwide noise saying they were going to build a free wireless network for San Francisco. Media across the continent collectively swooned and within a couple of weeks everyone was speculating on a national network. You see how that played out in S.F. and elsewhere.

Given this and questions being raised about Google’s Facebook-killer, Open Social, I pose some issues we should ponder. I offer these from a business, not consumer, market perspective.

Does Google have marketing or technology competencies to unseat those mobile operating systems with entrenched market share, name recognition, committed developers, etc? If each of us had $10 in a coffee can for every large company that unsuccessfully tried to market a product not within their scope of established expertise or market strength, we’d be less worried about the current market turmoil.

T-Mobile G1

True, a lot depends on Google’s developers and marketing partners staying the course, but if you consider how their Open Social product has fared (click here for an example), could the same happen with Android developers. I’m a developer with finite resources. I have a choice between iPhone and Android. IPhone = Facebook. You decide.

Are we making too much of Android’s open source? Of course it’s an advantage for vendors and end users to have anyone be able to develop apps for your hardware without the hassles of proprietary technology. But with Symbian planning to become open source, and LiMo Foundation’s upcoming Linux OS for mobile devices, there goes that advantage.

Expect resistance from IT at the enterprise gate. The initial products won’t be targeted to businesses. But by the time you see Android devices for that arena, IT people are going to be so pressed to support devices from the Big Four (RIM, Win Mobile, iPhone and Symbian) that open or not, Android represents yet another operating system and more headaches.

The double-edge of the “converged devices” sword presents a boardroom challenge. The big argument for converged devices is that they pack enough features and capabilities so they’re good for personal or work use. Many consumers buy them with this in mind. But vendors such as Palm and Microsoft aren’t asleep at the wheel. They’ll just push out marketing campaigns for established business users that say, “You’ve used our devices for work, try these ‘new and improved’ devices for work and play.” Boardroom takes path of least resistance, Jane and Joe consumers working for these businesses have a compelling reason not to buy Android.

Yes, iPhones breeched the enterprise gates from the consumer side. But one, iPhones are tres chic in executive circles, to the point of weakening CrackBerry addiction. And two, RIM, Microsoft et al aren’t going to make the mistake of letting another consumer device of foreign OS parentage erode their business market share.

Is Google really serious about Android? Google reminds me of the person with lots of money, but little knowledge of the game, who sits at a blackjack table and throws money on ridiculous bets to see what happens. They mess up the game for others, raise blood pressures, cause a few players to go bust, then leave when they get bored.

Looking at the potential challenges to their plans (hopes?) to become a dominant player in mobile device operating system, you have to wonder what are the odds that Google picks up its chips and moves on in a year or so. How likely is that? Take the “Show Me the Money” test.

When some higher up at Google sat down and asked the question, show me the money in muni wireless (particularly after EarthLink folded its hand), the argument for potential ad revenue didn’t seal the deal. Don’t see a nationwide Google WiFi network, do you? So where’s the money for Google in Android? They don’t sell the operating system, they don’t sell the applications that run on Android phones and they don’t lock in phones to use Google service and that makes ad revenue somewhat speculative.

It’s hard to predict, but if you believe past is prologue…

Xperia X1

Later came the announcement and marketing hype that T-mobile’s Google phone will rival the iPhone, extending the theme of convergence. But as one executive [not on the panel] at the Xperia event mentioned in a private aside, “do you think we’re overdoing this convergence thing a bit trying to put everything into one device? “

My take? Yep, you betcha. His follow-on comment was along the lines of, wouldn’t it be better to have a device on which the end-user could converge [my word] their own features?

Vendors are initially marketing converged device heavily to consumers. But if a key selling premise is that you also can use these devices for business tasks, journalists need to consider the business customer in their coverage. I for one believe device convergence, in and of itself, holds some serious PIA (pain-in-the-a**) potential for IT staffs. How much depends on each vendor.

1. Converged devices targeting consumers are getting into to enterprise through the back door with no central approval or purchase process, hit-or-miss adherence to enterprise-chosen standards and probably no tie-in to business strategy. Consumer-friendly features – and the lack of appropriate business features – produce tech support, security, device management, carrier management and other headaches.

What are vendors doing to keep PIA levels down until the next generation devices, or some third party, introduces features to make these devices more IT-friendly?

2. Mobile devices in the workplace should meet some demonstrable business need to justify their existence this environment. If they don’t, they’re just an executive toy.  Furthermore, some management folks assume a winning mobile strategy is to simply go out, buy a bunch of iPhones or iPhone killers and wait for the ROI. The devices may prove valuable to a point, but this value could be offset by IT headaches that lead to a high total cost of ownership (TCO). See point above.

If these devices turn out to meet just 10% or 20% of the true business needs of the users, what’s the cost for upgrades or new hardware to meet their greater need? Organizations should head off the marketing wave to meet these challenges before new devices become popular.

3. Convergence counters the proven value of simplicity, which could curb organization’s ROI. The BlackBerry became the CrackBerry because its original purpose was simply to send and receive e-mail. RIM eventually added phone capabilities. Then boom! Here came the iPhone to put marketing pressure on all device manufacturers.

As I learn about devices waiting in the wings wanting to add DVD playing, handwriting recognition, barcode reading and heaven knows what else, I have to ask, at what point does this feature set arms race produce diminishing returns? It’s 2008 and we still have executives who need someone to print out their e-mails before reading them. Doesn’t seem particularly effective to give these folks digital Swiss Army knives.

Coming back to the earlier comment about giving end users (or end user’s organizations) the ability to decide what they want converged on their device. Xperia has a feature called “panels.”

I was able to get a Sony exec to agree that panels are similar to the BlackBerry e-mail push feature, except panels push user-selected application data and dynamic Web content to the device screen.  Customizable data convergence, if you will.

Wouldn’t it be cool if a vendor group established a set of Needs/Convergence panels on a Web site where corporate and government buyers could select several panels that meet their organizations’ respective needs. The panel would pop up a device from the product line with the best set of converged hardware features and apps that would likely produce a strong ROI.

It might seem farfetched getting a vendor to do something like this, but I take heart from the fact that Vodafone UK has come up with software to help IT staff to secure information, devices and connectivity and enforce IT security policy. Vodafone’s approach reflects the fact that it’s in vendors’ interest to address the PIA factor in mobile technology.

Late this week I hope to have on my other blog (http://roisforyou.wordpress.com) some guidelines for end-user organizations on how to cope with the convergence PIA factor. Subscribe and be watching for that.