City-sponsored 'Wi-Fi': save from the telecoms?

• Author: Peirce, Neal
• Position: Commentary

One of the greediest moves ever by big telephone companies appears--for the moment--to have run amok, if not backfired.

Telecom giants, including Verizon and SBC Communications, have been pressing legislatures to stop cities from sponsoring their own high-speed wireless networks--no matter if the cities' goal is to improve efficiency of municipal services ("e-government") and deliver lower-cost broadband Internet services to citizens and businesses.

As soon as Philadelphia announced it wanted to build an audacious citywide Wi-Fi (wireless fidelity) network, the Pennsylvania Legislature was lobbied heavily until it agreed to forbid any other city in the state from following suit.

It's unfair competition, the telecoms have argued, for local governments to use public funds to offer telecommunication services--even though the phone companies received (according to a Wall Street Journal report) $5 billion in federal subsidies last year.

The stakes, of course, are huge because it's likely that Internet, television signal, and phone service will eventually all be available by a single broadband connection.

Bills blocking municipal Wi-Fi were introduced in 14 legislatures this year; in Colorado, Nebraska, and Florida, they passed. But then cities began to counter-lobby. And some corporate heavies--Intel and Texas Instruments, makers of chips for modems and Wi-Fi routers; and Dell, which offers Wi-Fi in its new laptops--joined them.

In June, the cities' cause got a major boost when (in a deliciously ironic piece of federalist "pre-emption of pre-emption"), Sens. John McCain, R-Ariz., and Frank Lautenberg, D-N.J., introduced a bill invalidating any state laws that stop municipalities from offering direct broadband service.

Sympathizing with cities' complaints of tortuously slow or expensive broadband offerings by the telecoms, McCain said it was "appropriate and even commendable" for local citizens, acting through local government, to "improve their lives by investing in their own future."

In the meantime, reports Ron Sege, CEO of Tropos (a firm providing equipment for Wi-Fi networks), it's "a wild ride" as localities' demand for Wi-Fi soars--up to 250 cities served by his firm alone. Most, he reports, are aiming to offer citizens and businesses "all you can eat" broadband access for $20 or less a month, far below average telecom prices.

Proponents say broadband needs a major boost. The United States blithely assumes its technological superiority...