By : Cord Blomquits
Wireless Internet access is a good thing-which is exactly why cities
shouldn't provide it.
Back when Saturday Night Live was still funny, Lily Tomlin's character
Ernestine, the ill-mannered telephone operator, deftly parodied all
that was wrong with the old phone system when she proclaimed the phone
company's motto: "We don't care. We don't have to. We're the Phone
Company." Today, Ernestine may seem like a relic from the days of Ma
Bell's monopoly. But if some Wi-Fi companies have their way, they soon
won't care either because they won't have to.
Not all cities are facing difficulties in their municipal Wi-Fi
projects-dozens of cities around the country are moving forward with
similar partnerships. For details of WiMax logon to : www.knowingabout.com/wimax.
But even if these ventures are financially viable, are they good for
the marketplace?
That's worth asking because in recent years broadband has spread
across America at a rapid pace. A recent Pew Internet & American Life
Project study found that DSL rates have dropped by 15 percent in the
last two years, while the consultancy JupiterResearch estimates that
falling broadband prices will result in 80 percent of the country
logging on at high speeds by 2010. In a little less than a decade,
we've gone from the dominance of dial-up to deep market penetration by
cable and DSL carriers, with wireless, cellular, satellite, and even
broadband over power line joining the mix. Does a market as rich,
varied, and competitive as this really need municipal Wi-Fi?
More competition is generally a good thing for the marketplace. But
that doesn't necessarily apply to hybrid public-private partnerships,
since these arrangements tend to take on the anti-competitive traits
of government without the dynamism of business. The result can be a
poison pill for the connectivity marketplace.
Companies that enter into public-private partnerships enjoy favorable
treatment. Special access to city or county rights of way, shelter
from liability, and the backing of a public partner with the power to
tax makes Wi-Fi firms that enter into municipal deals formidable foes.
Potential competitors may find these advantages too much to overcome,
thus driving them out of the marketplace.For details of WiMax logon
to: www.knowingabout.com/wimax. With potential competitive rivals
driven out, we are soon left with an ossifying public utility
disguised as a private enterprise.
As municipal Wi-Fi companies become entrenched, we can expect them to
not only demand that cities be anchor tenants, but that they help make
up for the shortfalls that will inevitably result when new
technologies supplant Wi-Fi. Worse, seeking to put off that day of
reckoning, they may well ask for regulations stacking the deck in
their favor, slowing the spread of the latest and greatest tech.
Limited access rules and special privileges are what brought us
Ernestine in the first place. Technological solutions have opened up
markets to more players recently, but government can truly open the
competition floodgates by liberalizing markets, which would help lower
prices and bring broadband to the masses. It's time to stop playing
favorites and give Ernestine the pink slip.
Cord Blomquist is a technology policy analyst at the Competitive
Enterprise Institute.
Source : www.knowingabout.com/wifi
