Life, Liberty and Wi-Fi in San Francisco

City's enthusiasm is no substitute for expertise

Life, liberty, the pursuit of happiness – oh, and high-speed Internet access, too. Broadband Internet access is so important to Mayor Gavin Newsom that he recently declared it a “fundamental right,” one that City Hall must provide to the people of San Francisco. After the city solicited bids from two dozen companies to blanket The City with cheap and fast Internet service, Google offered to do the job for free. The tech titan plans to make money by selling ads and offering service upgrades.

Local leaders can clamor for free Wi-Fi, but enthusiasm is no substitute for expertise. We shouldn’t expect cites, many of which have trouble filling potholes, to dive into this dog-eat-dog industry and keep their heads above water.

Roughly 200 of our nation’s municipalities have taken the Internet provider plunge, and many of them are already drowning. The combined losses for just two small towns – Lebanon, Ohio and Marietta, Georgia – have already hit the $50 million mark. Imagine the scale of potential costs if a big city like San Francisco tries to subsidize this business.

Yes, Georgia is a long way from the Bay Area. But if it fills local leaders with a false sense of competence, San Francisco’s proximity to technology juggernauts could actually make city-provided Internet even riskier. San Francisco has become a high-tech hub because bottom-up experimentation has been allowed to flourish. From dial-up to DSL to the new generation of Internet services, savvy San Franciscans have routinely been early adopters and upgraded to better and better technology.

If The City backs one technology, what happens when something better comes along?

Wi-Fi is hot today, but satellite, microwave, and digital services have already emerged and Wi-Max and BPL (broadband over power line) are coming soon. If one of these, or an entirely unforeseen technology, proves faster, cheaper and more functional than Wi-Fi, will The City be locked into a commitment to feed its dinosaur with taxpayer money? Or worse yet, what if government subsidies and other political pressures discourage new options from sprouting?

Imagine if, say 10 years ago, city leaders had teamed up with one dial-up provider like America Online – innovation might have slowed. As it stands, San Francisco has one of the nation’s highest rates of broadband use – 63 percent of the population enjoys high-speed access. The free Wi-Fi plan would hope to bump that number up to 90 percent access – if everything goes perfectly.

There’s good reason to stick with the private sector’s research and development process that has helped make San Francisco and the Bay Area the world-wide tech leader. And if City Hall simply can’t resist involving itself in Internet services, then leaders should approach the issue from the user’s side. Instead of choosing a specific provider, offer vouchers to those who can’t afford high-speed access right now. At least then providers would still hustle to offer new and better options and the cost of the vouchers would shrink over time.

And if Google or any other company still wants to offer folks free service, good for them. San Franciscans can sign up for that plan without the mayor’s help.

Ted Balaker is the Jacob’s Fellow at Reason Foundation.