Broadband disruption
TV cable companies and local phone companies are fighting vigorously over who will get to dominate the area of broadband connectivity, as businesses and consumers agree that they must have high-speed access to the Internet. They've found, through cable modems and DSL lines, a lucrative new source of income, and are eager to stake dominant positions. But they can agree on one thing: they don't want to be swept aside by inexpensive wireless Ethernet (Wi-Fi) access.
An increasing number of rural areas, tired of waiting for the big companies to give them access, are turning to inexpensive wireless access to get the job done and keep them in the twenty-first century. According to a BusinessWeek article ("Welcome to Broadband City", 10/4/2004) notes that the cost of building a Wi-Fi connection can be as low as $30 per connection, as opposed to $60 to $80 for cable or DSL hookups. Municipalities can also offer the service for free (like streets) or for every little (like water), far less than the $30 or more a month that cable and DSL Ethernet services cost. And it's not just rural communities; Philadelphia recently announced an initiative to set up wireless connectivity throughout the city.
This new disruption comes just as cable and phone companies were starting to get good at making money off these services and as they are ramping up. It's happened so fast they didn't see in coming. But the phone and cable firms aren't taking the new competition lying down. Already in 13 states, they've managed to use their lobbying leverage to make it illegal for municipalities to set up wireless zones. One Verizon exec is quoted as saying (showing his profound, selfless concern for the taxpayer) "It's better for all involved if private companies are using risk capital and not taxpayer money." And they'll keep on trying to use laws to defeat market forces and to protect their oligopolies, while mouthing pieties of about the sanctity of the free market.
But the disruptive forces may be too strong for even some of the most powerful lobbying groups in the country. An effective, easy-to-install wireless system, with even better technology on the way, may be unstoppable. Many people have alreday set up a wireless system in their houses, so the cocnept is easy to sell to many users. No-one sane could have predicted this development even two years ago.
