San Francisco taxpayers might end up being the biggest losers after all now that Bay Area muni-loonies have succeeding in getting the city to second-guess its planned deal with Google and Earthlink. The Institute for Local Self Reliance (ILSR) and Media Alliance, which for months have been protesting the San Francisco plan to allow Google and EarthLink to provide free wireless access across the City by the Bay for the sole reason that the two companies might actually profit from it, instead want the city to fund and operate the network. Never mind that the formula that has proved fiscally and operationally disastrous in just about every market it’s been tried. Here ILSR promises that a municipal network will cost San Francisco just $10 million, and revenues will be enough to pay back that investment in 4.2 years. For starters, $10 million is a dubious figure. Google itself estimates it’s a $12 million job. Back in 2005, when it was considering a municipally-financed network, Philadelphia, a smaller and far less challenging city from a radio engineering point-of-view, estimated the cost of a citywide system to be $10 to $15 million (see CNET story here). Overall, ISLR says, San Francisco’s municipal system would generate $6.1 million in revenue over the first five years. How ISLR derived these costs and projections is not really explained. But then again, the group is just following the old muni playbook, throw out numbers that look good, let the taxpayers deal with the consequences later. Remember Chaska, Minn., hailed as a muni wireless success, until TechDirt reported that the town went 50 percent over its $600,000 budget just to get the system to work right–and that was before they decided to upgrade to a new generation of equipment. Followers of this blog will recognize ILSR as the group that tried to derail the Minneapolis private-public partnership with the same anti-business whining. Fortunately, its diatribes fell on deaf earsÃ¢â?¬â??and its wasn’t as if Minneapolis, with police, roads and schools to fund, had the extra millions sitting around to fund a service that would primarily be used by university students and middle-class professionals. Nonetheless, the San Francisco Board of Supervisors has agreed to revisit the idea of a municipal network, with a report due in December. Meanwhile, Google and EarthLink are growing impatient with the pace of negotiations as cities all around the Bay Area find success in choosing private enterprise over the public purse. Google itself has launched free wireless service in Mountain View. Then there’s the massive IBM-Cisco-Azulstar-SeaKay project that will feature 1 Mbps free service and span 1,500 square miles in Silicon Valley. Even as this occurs all around, Media Alliance and ILSR have somehow sold San Francisco’s government that there is market failure in public broadband and the only solution is government ownership.
Steven Titch served as a policy analyst at Reason Foundation from 2004 to 2013.