Media Briefing on Broadband & Mobility

April 22, 2009

Free Markets vs the Public Interest

Recently a writer doing a story for a publication asked for my views on municipal broadband. Specifically, the questions were: “Should governments be doing this? Doesn’t that interfere with the free market? And wouldn’t private businesses provide better, more up-to-date service? 

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.

March 16, 2009

The Muni Wireless Phoenix

They’re baaaaack. The enemies of muni wireless (and all muni-driven network projects) are rearing their head with a vengeance in the recent couple of weeks. They’ve taken to the OpEd pages to attack local government involvement in anything coming from the broadband stimulus bill. And using a marginally accurate “report” as their hammer. You have to check out Glenn Fleishman’s dissection of this sham-as-research

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.

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