Municipal wireless took another hit recently when Senator John Ensign (R-Nevada) introduced the Broadband Investment and Consumer Choice Act of 2005. The 74-page bill, which is generally regarded as a rewrite of the broad Telecommunications Act of 1996, includes a section that specifically limits local governments' abilities to deploy public broadband systems.
The bill says local governments that want to build a public network must issue a Request for Proposal--through a third-party agency--and that in the case of competing bids between private and public sector parties, the neutral agency shall give preference to private sector companies. In addition, if the government wins the bid, private companies will have the "ability" to use the publicly built conduits and trenches. Governments that are already delivering network services would be allowed to continue but could not add new features or expand the service area.
This bill is a culmination of a series of state and federal actions stemming from intense lobbying from Verizon and other internet providers:
In response to the uproar, Senators John McCain (R-Arizona) and Frank Lautenberg (D-New Jersey), introduced a bill, the Community Broadband Act of 2005, that defends local governments' ability to compete with private sector service providers. It says that no state law can prohibit a "public provider from providing ... advanced telecommunications capability."
For advocates of municipal wireless, the stakes are high. Says Ben Scott, policy director of Free Press, a nonpartisan media policy group: "Soon, nearly all information--TV, radio, telephone, and the Web--will be delivered via high-speed broadband. Community internet connects rural communities, attracts new businesses, and serves schools, libraries, and public safety sectors. It will make access to the information superhighway affordable and accessible to everyone."
And in introducing the bill, McCain pointed out:
"...In many rural towns, the local government's high-speed internet offering may be its citizens' only option to access the World Wide Web. Despite this situation, a few incumbent providers of traditional telecommunications services have attempted to stop local government deployment of community high speed internet services. The bill would do nothing to limit their ability to compete. In fact, the bill would provide them an incentive to enter more rural areas and deploy services in partnership with local governments."
The argument from Sessions, Ensign, and the telcos is that the private sector will always deliver services more efficiently than government and that government competition would discourage companies from investing in infrastructure.
To hear Sessions tell it, governments are directly competing with telcos. "My goal in introducing this legislation is to discourage municipal governments from wasting taxpayer funds on building duplicative infrastructure, while at the same time encouraging private companies to offer continually innovating service in underserved areas by removing the specter of government competition," Sessions said in a statement.
On the Ensign bill, Verizon says simply, "This bill recognizes that the world has changed and consumer-driven markets work better than those managed by the government."
Jim Baller, an attorney who represents local governments interested in starting public access networks, issued a statement that the Ensign bill is predicated on five false assumptions, including that local governments have an unfair advantage that should be transferred to private companies, and that the reason incumbent providers have failed to deliver universal service is because of these government advantages, not "their own short-term profit objectives."
[The bill's procedures would] create a host of disincentives and unintended consequences. For many communities, it would retard economic development, educational opportunity, homeland security, public safety, cultural enrichment, and the many other benefits that access to affordable advanced telecommunications capability and services would foster. It would disserve America's private sector, particularly our high-technology industry, which has been a willing partner in municipal networks nationwide and would be a major beneficiary of a rapid increase in broadband deployment across the United States.
Dana Spiegel of nycwireless, a volunteer group that advocates and provides technical support for community wireless, points out: "It's not government involvement that's preventing broadband deployment. In New York, there's no competition from government and there are huge swaths of residential and commercial with no DSL or cable service. These companies act from a business interest and they decided not to service these areas because they're not profitable."
In a recent report FreePress documented numerous cities where the existence of public networks has resulted in falling prices and service improvements. In Tacoma, Washington, where the local utility operates the Click! network, the report found, "In the cities where Click! Network services are available, prices for cable TV and high-speed internet are 20 to 25 percent lower than areas where competition does not exist. Tacoma has a thriving marketplace for broadband, including several ISPs that use the Click! Network as a vendor-neutral delivery system. . . Not only has the system offered a low-cost alternative in underserved communities, it has prompted both the incumbent telco and cable providers to build out their networks to compete."
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In Tacoma, as in most cities, the point is not to play cable company but to provide the infrastructure to guarantee that services can be delivered where public interest rather than corporate profits dictate. This is the model being pursued in Tempe, Arizona, which is on track to be the first city of over 100,000 people to deliver citywide WiFi.
The city of Tempe partnered with MobilePro and Strix Systems. Tempe is offering streetlights for access nodes, in exchange for city employees and public safety workers getting free access. The network will allow different ISPs, including cable operator Cox Communications, to offer services on top of the network.
"This will be a freedom-of-choice network," Bruce Sanguinetti, president and chief executive officer of MobilPro's Neoreach Wireless Division, was quoted in an article in the Arizona Republic. "That's the magic of what Tempe has pulled off. If you look at other wireless opportunities, you have to take what they give you. . . . This allows competition."
In rural America, some 30 communities are providing services where no other service is available; Sessions' bill wouldn't prohibit these towns from offering their own service, since no cable company or telco offers any service.
Esme Vos, an Amsterdam-based lawyer and consultant who writes for muniwireless.com notes: "The best is public/private partnership where the broadband infrastructure--wired or wireless--is laid down by the government but it is wholesaled off at very low rates to all service providers. This ensures that there is competition on the service provider level and no one owns the infrastructure and the service."
She points out that Europe has been following this model with stellar results. "Scandinavia has the same model although the public utilities roll out the infrastructure. They are 100 percent owned by the city but are required to be self-supporting. They might get public funds to roll out infrastructure but then they have to wholesale it to other providers. And in the end, they all slowly pull back once they have seeded the market and there are enough ISPs around."
That's what nycwireless' Spiegel would like to see in New York. He points to Philadelphia as the model approach. "In New York, no single provider can provide coverage for the entire city and the burroughs. A good model is Philadelphia's public-private partnership, where the city provides carrier-neutral infrastructure and ISPs provide competitive services. NYC should provide the infrastructure--only the city is in a position to do that," says Spiegel.
He has little hope that will happen, though. The City of New York and DOIT, the Department of Information Technology, have "very close ties with Verizon" in the form of massive contracts. Essentially, Spiegel said, if Verizon doesn't want something to happen, it won't. In fact, DOIT released a general plan for technology infrastructure that made no mention of public wireless. "The city is unable to plan for assisting affordable broadband. Mayor Bloomberg is doing a terrible job," Spiegel said.
To city managers, this is not about "wasting taxpayer dollars" or corporations suffering from competition from public networks. It's a question of whether communities can create policies that serve their citizens' social and economic interests or whether the policies will be created by the increasingly unregulated telcos and cable companies through their Washington proxies.
In Santa Rosa, California, where the city has struck a deal with local ISP Sonic.net to provide free WiFi in the downtown core and fee-based WiFi in city parks, Michael Frank, Director of Administrative Services for Santa Rosa, bristles at the notion that a city's ability to provide services would be controlled from Washington. "It's hard enough for us to exert control over national companies like Comcast under the current law. If our underserved communities aren't being served, it's hard for us to act. If you remove any regulatory ability, it will make it that much more difficult." Speaking generally for local governments, there are a number of policy objectives in providing public WiFi, Frank said, including economic development, providing services to underserved neighborhoods, and creating a perception that the city is a technological leader.
"Economic development is a key driver of this initiative," Frank said. "We want to draw business to the core. Economic development is about perception and the city wants to be seen as a technological leader." Another key interest of cities is in providing universal access to underserved neighborhoods. "We don't want to be in the cable business," he said. "The only reason we get involved is where the private sector isn't providing service."
Ultimately, attempts to limit broadband access to the internet are bad from an economic-competitiveness perspective. "Any society, U.S. or other, will eventually be disadvantaged for not deploying wireless broadband over unlicensed spectrum," says muniwireless.com's Vos.
Writing in an email, Vos said:
Americans should really ask why they are paying so much more money for less bandwidth than Europeans. Sweden is a sparsely populated country--9 million people in an area about the size of California--yet they have better broadband access (10 Mbps+) and it costs on the average 20 EUR per month for 10Mbps symmetrical. By the end of 2006, most Swedes will have access to high-speed broadband. Can you say that about California? And that's with a vibrant, competitive ISP market. No state aid there except on the infrastructure level. Europeans and Asians see broadband as a necessity like electricity, roads, and railway. It's on the service level that they let private companies do what they like."
The smart money consensus is that the Ensign bill will not pass this session. But the tech industry and state and local governments are on notice. The telcos do not intend to fight muni WiFi on a city-by-city or state-by-state basis. They want a federal rule that will essentially outlaw all muni broadband installations in one fell swoop. Once again, eyes turn to the major corporations with a financial interest in the outcome, Intel and Cisco, to assert their lobbying muscle and make a noise in Congress. If no noise is made, either from Silicon Valley or state and local governments, a similar bill will pass.
Richard Koman is a freelancer writer and editor based in Sonoma County, California. He works on SiliconValleyWatcher, ZDNet blogs, and is a regular contributor to the O'Reilly Network.
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