Does Municipal Wi-Fi Have the Incentive for Security?

by on August 7, 2007 · 26 comments

USA Today reports that most are unaware of the dangers facing them at public Wi-Fi hotspots, which brought to mind an interesting question about municipal Wi-Fi. What incentive is there for municipalities to provide encryption and other security technologies?

The article mentions that AT&T and T-Mobile are the largest providers of free Wi-Fi hookups in the country and although the Wi-Fi itself is unsecured, both companies encourage the use of freely provided encryption software. The incentives for both companies seem fairly obvious. If people are going to be Wi-Fi users they need to feel safe and encryption technology is a way to do this. Customers stay safe and continue to use the service, making AT&T T-Mobile and other providers money.

Do municipal setups have the same incentives? Depending on the financial structure of such a system I can see how there would be little incentive to provide security software or other safeguards to users. Yet these Muni-Fi services would still distort the market, making it less likely for companies–that might be affected by privacy concerns–to invest in those areas.

Question: Does Muni-Fi pose a risk to security because of the lack of incentives to push security solutions and its edging out private competitors who have that motivation?

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Answer: Private companies, as far as I can tell have no more interest in security than the public sector.

    Additionally, the public sector is just a much a part of the free enterprise system as private companies. If a private company can’t compete, too bad.

    An often overlooked aspect of public sector involvement in providing a public service is that they still buy equipment and consulting services from private enterprise. So private enterprise still gets its cut.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Answer: Private companies, as far as I can tell have no more interest in security than the public sector.

    Additionally, the public sector is just a much a part of the free enterprise system as private companies. If a private company can’t compete, too bad.

    An often overlooked aspect of public sector involvement in providing a public service is that they still buy equipment and consulting services from private enterprise. So private enterprise still gets its cut.

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    Why no link to the mentioned USA Today article?

    I agree with Steve: there are very few reasons why a Public agency would have more or less reason to provide security than a private company would.

    There are many reasons why municipalities should provide Wi-Fi free. It is just a natural extension of the same urge that caused many cities to build public libraries. Libraries have every motivation to have good security as book stores do right?

    Why do you seem to find it odd that a municipal hot-spot should provide adequate security when it is taken for granted that municipal libraries do have good security?

    Saint Louis by the way has announced they will provide Wi-Fi through out the city (presently it is limited to just down town.) We also have an excellent public library system BTW, just voted best in country by the ALA, I believe.

    The motivations to provide a library system–to develop universal litaracy, and an educated public–is the same motivator of a free internet access–to create a connected and informed populace.

    These are both cases were the social goods produced are greater than the sum of their parts, in the same way that a large group of well maintained houses and stores creates a third entity: a neighborhood.

  • http://www.techliberation.com/ Tim Lee

    Link?

  • http://enigmafoundry.wordpress.com eee_eff

    Why no link to the mentioned USA Today article?

    I agree with Steve: there are very few reasons why a Public agency would have more or less reason to provide security than a private company would.

    There are many reasons why municipalities should provide Wi-Fi free. It is just a natural extension of the same urge that caused many cities to build public libraries. Libraries have every motivation to have good security as book stores do right?

    Why do you seem to find it odd that a municipal hot-spot should provide adequate security when it is taken for granted that municipal libraries do have good security?

    Saint Louis by the way has announced they will provide Wi-Fi through out the city (presently it is limited to just down town.) We also have an excellent public library system BTW, just voted best in country by the ALA, I believe.

    The motivations to provide a library system–to develop universal litaracy, and an educated public–is the same motivator of a free internet access–to create a connected and informed populace.

    These are both cases were the social goods produced are greater than the sum of their parts, in the same way that a large group of well maintained houses and stores creates a third entity: a neighborhood.

  • http://www.techliberation.com/ Tim Lee

    Link?

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    When someone says: “USA Today reports that most are unaware of the dangers facing them at public Wi-Fi hotspots,…” I kind of expect that there will be a link to the article referenced…?

  • http://enigmafoundry.wordpress.com eee_eff

    When someone says: “USA Today reports that most are unaware of the dangers facing them at public Wi-Fi hotspots,…” I kind of expect that there will be a link to the article referenced…?

  • http://cei.org Cord Blomquist

    Sorry about the lack of link. I edited the post to include it–thought that I had it in there.

    http://www.usatoday.com/tech/wireless/2007-08-06-wifi-hot-spots_N.htm

  • http://cei.org Cord Blomquist

    the public sector is just a much a part of the free enterprise system as private companies

    I agree with you that the public sector is part of the free enterprise system, but I think that role should be as an officiator, rather than player in the game.

    In competitive environments the state, even at the municipal level, has many unfair advantages. Most obviously, it can subsidize industries to compete at below cost. Also–and this is especially true in Wi-Fi–the state can use eminent domain powers or simply its usually vast land holdings to place networks in places it may deny to other providers.

    Tax-subsidized, state-run industry probably isn’t going away anytime soon, but we can try to reform franchising and other network limiting arrangements to allow the private sector to place Wi-Fi in as many places as the municipality.

  • http://cei.org Cord Blomquist

    Sorry about the lack of link. I edited the post to include it–thought that I had it in there.

    http://www.usatoday.com/tech/wireless/2007-08-0

  • http://cei.org Cord Blomquist

    the public sector is just a much a part of the free enterprise system as private companies

    I agree with you that the public sector is part of the free enterprise system, but I think that role should be as an officiator, rather than player in the game.

    In competitive environments the state, even at the municipal level, has many unfair advantages. Most obviously, it can subsidize industries to compete at below cost. Also–and this is especially true in Wi-Fi–the state can use eminent domain powers or simply its usually vast land holdings to place networks in places it may deny to other providers.

    Tax-subsidized, state-run industry probably isn’t going away anytime soon, but we can try to reform franchising and other network limiting arrangements to allow the private sector to place Wi-Fi in as many places as the municipality.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Cord: You have valid points, its becomes a philosophical question on how much government involvement in the free market system would be considered reasonable. Providing a public service that competes with private enterprise, such as Wi-Fi is reasonable, manufacturing Wi-Fi equipment would not be reasonable.

    I do not believe that governments have an intrinsic “unfair advantage”. Large corporations, such as Verizon that have national exposer can play the offering services below cost game. The major criticism of Walmart is that it puts the Mom and Pop local business out-of-business.

    In terms of tax subsidy; we really have two questions. First, a municipal Wi-Fi system can be run by the municipality as a “private” enterprise that would be shutdown if it could not cover its operating expenses. Second, free market systems are based on choice. If the citizens desire to use their tax dollars to provide a Wi-Fi system then it should be considered acceptable. Private industry has no intrinsic right to define how a person can spend his/her money.

    Finally, what about the case were private industry would consider it “too expensive” to provide a public service, such as in a rural area. Does, this mean that citizens should do without? Actually, I would rather have have the municipality provide the service directly rather than subsidize a private company to provide the service.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Cord: You have valid points, its becomes a philosophical question on how much government involvement in the free market system would be considered reasonable. Providing a public service that competes with private enterprise, such as Wi-Fi is reasonable, manufacturing Wi-Fi equipment would not be reasonable.

    I do not believe that governments have an intrinsic “unfair advantage”. Large corporations, such as Verizon that have national exposer can play the offering services below cost game. The major criticism of Walmart is that it puts the Mom and Pop local business out-of-business.

    In terms of tax subsidy; we really have two questions. First, a municipal Wi-Fi system can be run by the municipality as a “private” enterprise that would be shutdown if it could not cover its operating expenses. Second, free market systems are based on choice. If the citizens desire to use their tax dollars to provide a Wi-Fi system then it should be considered acceptable. Private industry has no intrinsic right to define how a person can spend his/her money.

    Finally, what about the case were private industry would consider it “too expensive” to provide a public service, such as in a rural area. Does, this mean that citizens should do without? Actually, I would rather have have the municipality provide the service directly rather than subsidize a private company to provide the service.

  • http://mcgath.blogspot.com Gary McGath

    Municipalities shouldn’t be in the Wi-Fi business, but I don’t see any reason they’d be either more or less lax on security than private businesses. There’s no liability for the provider, so there’s little incentive in either case to enhance security.

    Private companies should have an incentive to authenticate themselves as protection against spoof hotspots, though, since the spoof sites could damage their credibility simply by providing cruddy service.

  • http://mcgath.blogspot.com Gary McGath

    Municipalities shouldn’t be in the Wi-Fi business, but I don’t see any reason they’d be either more or less lax on security than private businesses. There’s no liability for the provider, so there’s little incentive in either case to enhance security.

    Private companies should have an incentive to authenticate themselves as protection against spoof hotspots, though, since the spoof sites could damage their credibility simply by providing cruddy service.

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    Well, Cord, if Municipalities shouldn’t be in the Wi-Fi business, why should they be in the library business?

    Both efforts have very similar aims, and libraries ‘compete’ with bookstores and video rental establishments, right?

  • http://enigmafoundry.wordpress.com eee_eff

    Well, Cord, if Municipalities shouldn’t be in the Wi-Fi business, why should they be in the library business?

    Both efforts have very similar aims, and libraries ‘compete’ with bookstores and video rental establishments, right?

  • http://cei.org Cord Blomquist

    Second, free market systems are based on choice. If the citizens desire to use their tax dollars to provide a Wi-Fi system then it should be considered acceptable.

    I think that this statement is confusing free-markets with democracy. In democratic arrangements, groups make decisions on majority vote–this would describe Muni-Fi. Free markets are based on individual choice making. In the free market then, 51% don’t decide for 49%; rather, each person makes decisions for themselves.

    Muni-Fi is unfair for this reason. Verizon can’t level a tax to pay for Wi-Fi services, because Verizon is a private enterprise that deals with individuals, not polities.

    Providing a public service that competes with private enterprise, such as Wi-Fi is reasonable, manufacturing Wi-Fi equipment would not be reasonable.

    What’s the difference between manufacturing and providing services? Goods are just services waiting to be performed. Think about a pen. Is it valuable because it’s a pen? No, it’s valuable because it provides the service of enabling easy writing.

    what about the case were private industry would consider it “too expensive” to provide a public service

    I think this is why the free market system is a winner, because it seeks efficiency and ends up benefiting everyone. Wi-Fi may actually be too expensive for rural areas according to whatever metric a wireless company is using, so it makes sense for them not to lose money to build there. Money is a gauge of efficiency, so it would follow that Wi-Fi in rural areas isn’t efficient. Other options, like satellite connections, don’t offer the same low latency as DSL or Cable connections, but that just comes with the territory of living in a rural areas–you’re also living far away from city centers, big box stores, and malls, but it’d be silly to demand that Target or HomeDepot be run by a municipality so that rural folks didn’t have to drive to visit them.

    Also, think about how money would otherwise be allocated in the economy. W/o Muni-Fi other internet firms would receive more money, some of which would be put into R&D. Also, residents will keep more of their money presuming that Muni-Wi is funded through tax dollars. This money can be spent by the company or by the citizens of a municipality later through private arrangement to setup a Wi-Max network that is privately run and actually profitable, i.e. efficient.

  • http://cei.org Cord Blomquist

    Well, Cord, if Municipalities shouldn’t be in the Wi-Fi business, why should they be in the library business?

    I believe that incentives are real and that owners take care of their investments better than other parties. So, based on those principles I would have an objection to public libraries, but they’re really a low-priority. Bookstores like Barnes & Noble and Borders are thriving despite the competition from libraries and most public libraries I have been to aren’t horribly mismanaged by any means.

    However, membership libraries did exist in the past and some still exist today in small numbers. These private, non-profit institutions charged membership fees to readers, but often offered reduced or free membership to other who couldn’t afford the fee.

    In many ways, some bookstores function in the same way now, but by default. Barnes and Noble often has people hangin’ around just reading, and not buying.

    But here again the question is about efficiency and what the money may have been spent on instead. Certainly we can all see the benefits to public libraries and I’m not denying they are beneficial, but we’ve also seen a lot of beneficial public services turned into even better private services when privatization has taken place in the past. I think this would also be possible with public libraries.

    Again, I’m not itchy to privatize libraries, but there are economic arguments to be made for why private for profit or non-profit libraries might work well.

  • http://cei.org Cord Blomquist

    Second, free market systems are based on choice. If the citizens desire to use their tax dollars to provide a Wi-Fi system then it should be considered acceptable.

    I think that this statement is confusing free-markets with democracy. In democratic arrangements, groups make decisions on majority vote–this would describe Muni-Fi. Free markets are based on individual choice making. In the free market then, 51% don’t decide for 49%; rather, each person makes decisions for themselves.

    Muni-Fi is unfair for this reason. Verizon can’t level a tax to pay for Wi-Fi services, because Verizon is a private enterprise that deals with individuals, not polities.

    Providing a public service that competes with private enterprise, such as Wi-Fi is reasonable, manufacturing Wi-Fi equipment would not be reasonable.

    What’s the difference between manufacturing and providing services? Goods are just services waiting to be performed. Think about a pen. Is it valuable because it’s a pen? No, it’s valuable because it provides the service of enabling easy writing.

    what about the case were private industry would consider it “too expensive” to provide a public service

    I think this is why the free market system is a winner, because it seeks efficiency and ends up benefiting everyone. Wi-Fi may actually be too expensive for rural areas according to whatever metric a wireless company is using, so it makes sense for them not to lose money to build there. Money is a gauge of efficiency, so it would follow that Wi-Fi in rural areas isn’t efficient. Other options, like satellite connections, don’t offer the same low latency as DSL or Cable connections, but that just comes with the territory of living in a rural areas–you’re also living far away from city centers, big box stores, and malls, but it’d be silly to demand that Target or HomeDepot be run by a municipality so that rural folks didn’t have to drive to visit them.

    Also, think about how money would otherwise be allocated in the economy. W/o Muni-Fi other internet firms would receive more money, some of which would be put into R&D.; Also, residents will keep more of their money presuming that Muni-Wi is funded through tax dollars. This money can be spent by the company or by the citizens of a municipality later through private arrangement to setup a Wi-Max network that is privately run and actually profitable, i.e. efficient.

  • http://cei.org Cord Blomquist

    Well, Cord, if Municipalities shouldn’t be in the Wi-Fi business, why should they be in the library business?

    I believe that incentives are real and that owners take care of their investments better than other parties. So, based on those principles I would have an objection to public libraries, but they’re really a low-priority. Bookstores like Barnes & Noble and Borders are thriving despite the competition from libraries and most public libraries I have been to aren’t horribly mismanaged by any means.

    However, membership libraries did exist in the past and some still exist today in small numbers. These private, non-profit institutions charged membership fees to readers, but often offered reduced or free membership to other who couldn’t afford the fee.

    In many ways, some bookstores function in the same way now, but by default. Barnes and Noble often has people hangin’ around just reading, and not buying.

    But here again the question is about efficiency and what the money may have been spent on instead. Certainly we can all see the benefits to public libraries and I’m not denying they are beneficial, but we’ve also seen a lot of beneficial public services turned into even better private services when privatization has taken place in the past. I think this would also be possible with public libraries.

    Again, I’m not itchy to privatize libraries, but there are economic arguments to be made for why private for profit or non-profit libraries might work well.

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    Cord:

    Well, two observations:

    1. the analogy with libraries seems to be a good one–at least you haven’t described any really substantive differences between municipal library and municipal Wi-Fi. They are actually pretty similar, and both appear to be popular. In a democractic systems, we will get MuniFi, unless there exists some coercion or dis-imformation campaign to stop it.

    2. To show what I mean look at your comments below:

    “In democratic arrangements, groups make decisions on majority vote–this would describe Muni-Fi. Free markets are based on individual choice making. In the free market then, 51% don’t decide for 49%; rather, each person makes decisions for themselves.

    Muni-Fi is unfair for this reason. Verizon can’t level a tax to pay for Wi-Fi services, because Verizon is a private enterprise that deals with individuals, not polities.”

    No–you have not demonstrated that Muni-Fi is unfair–just that it runs counter to what you call a ‘free market’

    But the market that you describe and apparently advocate really isn’t ‘free’ because it does not admit the possibility of citizens coming together to create a commons–as they have to create Art Museums, Libraries, and Municipal Opera’s for example.

    The reality is that certain developments in technology and social organization are causing organized for-profit commercial organizations to be displaced, or even eliminated entirely from certain sectors.

    You see that as a bad thing, and it does have it’s downside–but–except for shareholders–it seems to be an overwhelmingly positive phenomena.

    “A Process that (very strangely) is under the radar of most right now is the expansion of the Not-for-Profit Sector into fields that were traditionally the exclusive reserve of the for profits. There was an interesting article in The McKinsey Quarterly* a while back that caught my attention with some facts about the Not-for-Profit sector:

    1. The NFP sector as of 1997 was the third largest contributor to the GDP, contributing $349 billion to the U.S. economy, dwarfing the $85 billion contributed by the motor vehicle parts and manufacturing sector

    2. The NFP/NGO sector employs 1 in 15 of employed Americans.

    3. This sector has grown at an average annual rate of 5.1% from 1993 to 1998, beating GDP growth which was 3.1% annually…”

    See more at:
    http://enigmafoundry.wordpress.com/2007/03/07/not-your-fathers-thousand-points-of-light/

  • http://enigmafoundry.wordpress.com eee_eff

    Cord:

    Well, two observations:

    1. the analogy with libraries seems to be a good one–at least you haven’t described any really substantive differences between municipal library and municipal Wi-Fi. They are actually pretty similar, and both appear to be popular. In a democractic systems, we will get MuniFi, unless there exists some coercion or dis-imformation campaign to stop it.

    2. To show what I mean look at your comments below:

    “In democratic arrangements, groups make decisions on majority vote–this would describe Muni-Fi. Free markets are based on individual choice making. In the free market then, 51% don’t decide for 49%; rather, each person makes decisions for themselves.

    Muni-Fi is unfair for this reason. Verizon can’t level a tax to pay for Wi-Fi services, because Verizon is a private enterprise that deals with individuals, not polities.”

    No–you have not demonstrated that Muni-Fi is unfair–just that it runs counter to what you call a ‘free market’

    But the market that you describe and apparently advocate really isn’t ‘free’ because it does not admit the possibility of citizens coming together to create a commons–as they have to create Art Museums, Libraries, and Municipal Opera’s for example.

    The reality is that certain developments in technology and social organization are causing organized for-profit commercial organizations to be displaced, or even eliminated entirely from certain sectors.

    You see that as a bad thing, and it does have it’s downside–but–except for shareholders–it seems to be an overwhelmingly positive phenomena.

    “A Process that (very strangely) is under the radar of most right now is the expansion of the Not-for-Profit Sector into fields that were traditionally the exclusive reserve of the for profits. There was an interesting article in The McKinsey Quarterly* a while back that caught my attention with some facts about the Not-for-Profit sector:

    1. The NFP sector as of 1997 was the third largest contributor to the GDP, contributing $349 billion to the U.S. economy, dwarfing the $85 billion contributed by the motor vehicle parts and manufacturing sector

    2. The NFP/NGO sector employs 1 in 15 of employed Americans.

    3. This sector has grown at an average annual rate of 5.1% from 1993 to 1998, beating GDP growth which was 3.1% annually…”

    See more at:
    http://enigmafoundry.wordpress.com/2007/03/07/n

  • http://librarianwoes.wordpress.com/ Woeful

    “I believe that incentives are real and that owners take care of their investments better than other parties. So, based on those principles I would have an objection to public libraries, but they’re really a low-priority.”

    As a public librarian, it’s always nice to be such a high priority to everyone all the time…

    This attitude is exactly why public libraries are a necessity. They are open to everyone regardless of what’s in their investment portfolios. Public libraries are the only institution bridging the digital divide between the technological haves and have-nots today. We’re fighting a tough fight, often with the technological equivalent of stone knives and bearskins.

    Public libraries provide the same quality service to the homeless as they do to the wealthy. If libraries were privatized this would undoubtedly change. To quote (of all people) Keith Richards, “The public library is a great equalizer.” Without them there would be even more pervasive information poverty than there currently is.

    Public libraries today have adapted to the times, and currently provide (among many other things) MP3s, WiFi, and personalized research conducted by professionals with Masters Degrees to anyone who wants it without charge. I would like to see any private company take that on. I dare say that if public libraries provide what they provide “the government” has the right to provide the same services… Since we are just another department of the government anyway this is already precedent.

  • http://librarianwoes.wordpress.com/ Woeful

    “I believe that incentives are real and that owners take care of their investments better than other parties. So, based on those principles I would have an objection to public libraries, but they’re really a low-priority.”

    As a public librarian, it’s always nice to be such a high priority to everyone all the time…

    This attitude is exactly why public libraries are a necessity. They are open to everyone regardless of what’s in their investment portfolios. Public libraries are the only institution bridging the digital divide between the technological haves and have-nots today. We’re fighting a tough fight, often with the technological equivalent of stone knives and bearskins.

    Public libraries provide the same quality service to the homeless as they do to the wealthy. If libraries were privatized this would undoubtedly change. To quote (of all people) Keith Richards, “The public library is a great equalizer.” Without them there would be even more pervasive information poverty than there currently is.

    Public libraries today have adapted to the times, and currently provide (among many other things) MP3s, WiFi, and personalized research conducted by professionals with Masters Degrees to anyone who wants it without charge. I would like to see any private company take that on. I dare say that if public libraries provide what they provide “the government” has the right to provide the same services… Since we are just another department of the government anyway this is already precedent.

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