March 22, 2008

Municipal Internet -- Deader Than A Doornail?

Many of us wondered about the feasibility (not to mention the propriety) of these municipal internet schemes when they were first announced. Now it would appear that we were right -- and there is a question as to how much these failed efforts will cost taxpayers.

It was hailed as Internet for the masses when Philadelphia officials announced plans in 2005 to erect the largest municipal Wi-Fi grid in the country, stretching wireless access over 135 square miles with the hope of bringing free or low-cost service to all residents, especially the poor.

Municipal officials in Chicago, Houston, San Francisco and 10 other major cities, as well as dozens of smaller towns, quickly said they would match Philadelphia’s plans.

But the excited momentum has sputtered to a standstill, tripped up by unrealistic ambitions and technological glitches. The conclusion that such ventures would not be profitable led to sudden withdrawals by service providers like EarthLink, the Internet company that had effectively cornered the market on the efforts by the larger cities.

Now, community organizations worry about their prospects for helping poor neighborhoods get online.

Of course, this begs the question of whether or not it is the responsibility of government (whether municipal, county, state, or federal) to provide internet access -- especially high-speed internet access -- to residents of any economic class. We wondered how the private companies involved would make a profit on the programs, and whether it would eventually be taxpayer dollars that would sustain what is, in the end, a luxury rather than a necessity. We also questioned how poor people who could not afford the cost of internet service could afford the cost of a computer to access that service if it were free.

While the last question has not been answered, advocates for free municipal wi-fi networks are already attacking what they see as the root problem that led to the failure of the programs in the American cities mentioned above -- free market capitalism and the concept of a profit-driven market.

“The entire for-profit model is the reason for the collapse in all these projects,” said Sascha Meinrath, technology analyst at the New America Foundation, a nonprofit research organization in Washington.

Mr. Meinrath said that advocates wanted to see American cities catch up with places like Athens, Leipzig and Vienna, where free or inexpensive Wi-Fi already exists in many areas.

He said that true municipal networks, the ones that are owned and operated by municipalities, were far more sustainable because they could take into account benefits that help cities beyond private profit, including property-value increases, education benefits and quality-of-life improvements that come with offering residents free wireless access.

So the solution, in the eyes of the folks from the New America Foundation, is increasing the level of socialism in America and undermining the free market. After all, if cities offer for free (or at cut rates) what private businesses have spend billions developing and building, we will quickly see the vast improvements in internet connectivity come to a screeching halt. After all, why invest in improving the ability to access the internet when the government is going to strip you of your market?

Adam Smith is no doubt whirling dervishly in his mausoleum.

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