Stopping municipal Wi-Fi
US phone and cable TV oligopolies are bitter rivals in almost every sphere. As the phone companies invade the cable TV turf and cable companies start to install VOIP telephone service, bitter struggles continue in a new competition matrix. Both are trying to win the battle for high-speed Internet access. The phone companies through DSL, the cable companies via cable modem technology.
But both groups are fully agreed on one thing: they want to stop the spread of publicly supported, low-cost Wi-Fi services, called "municipal wireless."
A number of US cities and rural areas from Los Angeles to Atlanta to rural Vermont are offering or planning to offer inexpensive wireless access to their citizens. Worldwide from Finland to Taiwan, the movement to municipal wireless is expanding rapidly. But in the US, the phone and cable companies have reacted by trying to change the rules.
Philadelphia recently announced it will set up citywide Wi-Fi access with either no fee at all or a small fee for access, for everyone with a computer. The stated reason is twofold: first, poorer citizens have not given affordable, widespread access to the Web (only 60% of the city's neighborhoods have high-speed cable or DSL access); second, Philadelphia wants to gain the status of a high-tech-friendly haven to attract business and residents.
The cost to the city for full deployment of Wi-Fi antennas would be around $10 million, and the cost per year to operate is estimated at $1.5 million. That's a pretty small amount for such a major utility, one that would close much of the so-called Digital Divide..
Verizon, the regional phone monopoly, has used it enormous political clout, managed to quietly pass a bill through the Pennsylvania legislature prohibiting municipalities form offering such services. The bill is awaiting the signature of the governor, who has not announced whether he will sign it. The prohibition is tucked into a much larger telecommunications bill which also subsidizes (corporate welfare queen) Verizon's expansion of its fiber network. The idea was to have it slip through unnoticed, but it is starting to cause some serious controversy.
A dozen states have now passed such legislation, with the militant lobbying of the "Baby Bell" phone companies "helping" legislators draft the new laws. As a Wall Street Journal article ("Telecom Giants Oppose Cities On Web Access", 11/23/04) puts it, "Telephone companies have long used local legislative muscle to stave off competition." Read this article to get a full description of the way in which the whole bill subsidizes Verizon big time while prohibiting any competition. This is just another oligopolies use their power to prevent change.
The argument is that they should not have to compete against not-for-profit government agencies. Fair enough, but the telephone companies don't deliver what is now becoming a basic service to anyone but the most easily accessible and most profitable clients, then it would seem that the local government has a right to step in. Philadelphia owns its own municipal gas and water companies; why shouldn't it won a wireless utility, especially when, thanks to new technology, it can offer prices far below the current prices?
Instead of competing directly with the municipal services by offering better value and more functions and so letting "the market decide", the phone companies especially a re interested in changing the rules to favor them and to hold back the tide. The phone companies have to be scared at a low cost services that make obsolete their giant investment in wiring, so they a re trying to nullify changes in technology through legislative faits accomplis.
