Yes, Let There Be WiFi

In a just-published article praising municipal WiFi, Washington Monthly reiterates all the myths of the superiority of municipal ownership to the point of fudging details and misrepresenting opponents. So what else is new? The article, written by Robert W. McChesney, founder and president of Free Press and John Podesta, president and CEO of the Center for American Progress, spends a lot of time comparing the few similarities of 21st century broadband technology to 19th century electricity infrastructure with no regard to the more numerous differences. It repeats the tired, old “phone-and-cable-companies-have-98-percent-of-the-broadband-market” statistic with no attribution. In all, its general thesis is that government ownership is necessary because the market has failed. Google’s $130 billion market cap, Wayport’s 12,000 WiFi hotspots, and the 2005 launch of competing nationwide wireless broadband networks robust enough to support video are not mentioned. Why would they be? All they do is muddy their premises. The most creative distortion comes when the article recounts the story of Wireless Philadelphia, or should we say Wireless Philadelphia Powered by EarthLink, which is how the city calls it per its agreement with the national ISP and WiFi franchisee. Although McChesney and Podesta praise Philadelphia Wireless as an exemplar of the anti-capitalist, people-first municipal approach, they neglect to say it carries a brand name–kind of like the Tostitos Fiesta Bowl. Here’s the section:

Last year, sensing their citizens were being stranded on the wrong side of the digital divide, Philadelphia’s leaders launched an ambitious plan to blanket the entire city with wireless Internet service. To provide universal, affordable Internet access, Philadelphia plans to construct a gigantic “wireless mesh network”ââ?¬â??a system of interconnected antennas placed on streetlights, traffic signals, and public buildings. Each of these “nodes” broadcasts a broadband signal, which connects up with other nodes to create a cloud of Internet access for PCs, laptops and wireless devices. The technology is similar to the “WiFi hotspots” that have popped up at cafes and libraries across the country. Philadelphia’s hotspot, however, will cover 135 square miles. No tax dollars will be used to build the system, which will be financed instead with $10 to $15 million in bonds and private investment. The city is finalizing a contract with a consortium led by EarthLink to build and run the systemââ?¬â??and several Internet service providers (ISPs) will compete to market the service to local residents. The service will cost about $20 a month ââ?¬â??with subsidized access for lower-income households for about $10. The city plans to deploy the first of 3,000 nodes soon and complete the system by 2007. For all its potential benefits to the city’s residents, Wireless Philadelphia was nearly crushed before it started. Last fall, behind closed doors in the state capitol, industry lobbyists slipped a measure into a massive telecommunications bill to stop municipalities from entering the broadband business. “The Verizon bill”ââ?¬â??as it was known around the state legislatureââ?¬â??sailed through both chambers before city officials and media advocates got wind of its contents. A last-minute compromise carved an exception for Philadelphia, allowing that effort to go ahead as planned, but the rest of the state was shut out.

All this is true, but a lot has been left out to make the case for municipal ownership look stronger than it is. The authors start by creating the wrong impression when they say the current plan, which they describe here, was “nearly crushed” by opponents. On the contrary, the EarthLink deal is nothing but a validation of the initial criticism of the original plan — which did indeed call for public financing and outright city ownership of facilities under so-called “cooperative wholesale.” The decision to abandon the cooperative wholesale idea, touted all last summer as the linchpin of the Philadelphia Wireless plan, gets no mention in the Washington Monthly article. Other distortions and omissions designed to make the case for government ownership look better include the statement that EarthLink will lead a “consortium” that will build and operate the system. This isn’t true. The Wireless Philadelphia system will be wholly owned and operated by EarthLink for EarthLink. Separately, Wireless Philadelphia will operate as a non-profit funded by a percentage of revenues EarthLink generates. Second, although the plan calls for EarthLink to make its network available to retail ISPs who will in turn compete with EarthLink, no one knows what the wholesale terms will be, no ISPs have come forward, and the overall deal will not fall apart if none do. After this, the authors truly go off the tracks. They equate municipal broadband with Community Internet when the two are not necessarily the same thing. Many Community Internet projects, such as NYCwireless operate independently of municipalities and raise their own funding from private donors for digital divide programs. They are not targets of anti-muni legislation as the authors suggest. In fact the article does readers a tremendous disservice by completely avoiding discussion of the trend toward what might amounts to pre-emptive privatization of municipal networks: where the city talks up WiFi at first but then turns the whole kit and caboodle over to a private company to be operated (gasp!) at a profit. This is the plan in San Francisco and seems to be taking hold elsewhere. All this does is reinforce the fact that broadband is not a public utility than can be run as a monopoly by a city. Once smart municipal planners take a good look at the realities of the broadband market, they opt out in favor of a commercial franchisee. Indeed, let there be WiFi! But let’s not pretend that idea of municipal ownership is seizing the nation. There’s every indication that municipal broadband projects–where cities attempt own and operate their own competitive networks–are in retreat, and that private enterprise will build it and own broadband. And that’s the right way to go.

Steven Titch served as a policy analyst at Reason Foundation from 2004 to 2013.