For some time now here at the TLF, we have been documenting the track record of various government-owned or subsidized utility projects — municipal wi-fi projects, locally-owned telecom ventures, city or state fiber projects, and so on. We’ve attempted to see if the rhetoric matches the reality when it comes to the grandiose promises made about government investment or ownership of communications or broadband networks being our ticket to high-tech paradise.
The results? Well, the record speaks for itself. It’s been one miserable failure after another. And yet the high-tech pork barrel rolls on and taxpayers are all too often stuck picking up the tab.
I just wanted to make everyone aware of the fact that I finally got around to collecting most of our essays on the subject here into an “Ongoing Series” page that will be permanently housed here. (As far as I can tell, we’re up to about 18 or 19 installments). I encourage my TLF contributors to help me contribute entries to the series and I also invite our readers to continue to submit examples of these experiments so we can continue to document their failure. Of course, if there are success stories, we’d like to hear about those too. But that will likely be a much shorter series!
In my nearly 17 years of public policy work, I have never felt so vindicated about something as I did this weekend when I read Dan P. Lee’s Philadelphia magazine feature on “Whiffing on Wi-Fi.” It is a spectacularly well-written piece about the spectacular failure of Philadelphia’s short-lived experiment with municipally-subsidized wi-fi, which was called Wireless Philadelphia. You see, back in April 2005, I wrote a white paper entitled “Risky Business: Philadelphia’s Plan for Providing Wi-Fi Service,” and it began with the following question: “Should taxpayers finance government entry into an increasingly competitive , but technologically volatile, business market?” In the report, I highlighted the significant risks involved here in light of how rapidly broadband technology and the marketplace was evolving. Moreover, I pointed to the dismal track record of previous municipal experiments in this field, which almost without exception ended in failure. I went on to argue:
Keeping these facts in mind, it hardly makes sense for municipal governments to assume the significant risks involved in becoming a player in the broadband marketplace. Even an investment in wi-fi along the lines of what Philadelphia is proposing, is a risky roll of the dice. [… ] the nagging “problem” of technological change is especially acute for municipal entities operating in a dynamic marketplace like broadband. Their unwillingness or inability to adapt to technological change could leave their communities with rapidly outmoded networks, and leave taxpayers footing the bill.
I got a stunning amount of hate mail and cranky calls from people after I released this paper. Everyone accused me of being a sock puppet for incumbent broadband providers or just not understanding the importance of the endevour. But as I told everyone at the time, I wasn’t out to block Philadelphia from conducting this experiment, I just didn’t think it had any chance of being successful. And, again, I tried to point out what a shame it would be if taxpayers were somehow stuck picking up the tab, or if other providers decided not to invest in the market because they were “crowded-out” by government investment in the field.
But even I could have never imagined how quickly the whole house of cards would come crumbling down in Philadelphia. It really was an astonishing meltdown. Dan Lee’s article makes that abundantly clear:
Continue reading →
Boynton Beach, Florida’s experiment with municipal wi-fi has ended. [Add it to the list of recent failures]. According to the
South Florida Sun-Sentinel:
There’s a roadblock in Boynton Beach‘s information superhighway. The city’s Community Redevelopment Agency decided this month it has no more money for free wireless Internet service in its district. Boynton Beach was the first city in Palm Beach County to offer Wi-Fi three years ago. It operated 11 “hot spots,” or access points, paying $44,000 annually for vendors to keep the system running. But the CRA dropped vendors who failed to meet their contracts. Other companies wanted to sell the Community Redevelopment Agency new equipment, but in a tough budget year, offering free wireless was no longer viable, said the agency’s executive director, Lisa Bright. […] “There is clearly no way for it to be a revenue generator at this time,” Bright said. “It’s premature for us to go to the next level.”
Whenever I read one of these articles about the small town or mid-sized town wi-fi experiments failing so miserably I have to admit that I am a bit surprised. After all, many muni wi-fi supporters have argued that it is precisely in those communities where government support is most necessary and will be most likely to fill in gaps left by sporadic / delayed private broadband deployment. Frankly, I always thought this was the best argument for muni wi-fi and it’s why I made sure to never go on record as opposing
all government efforts, even though I am obviously a skeptic and don’t like the idea of wagering taxpayer money on such risky ventures. (By contrast, I could just never see the reason for government subsidies of wi-fi ventures in major metro areas with existing private broadband operators. Like Philly and Chicago.)
But the fact that many small town or mid-sized town wi-fi experiments are failing is really interesting because it must tell us something about either (a) the
viability of the technology or (b) demand for such service. Now, many municipalization believers will just say that clearly (a) is the case and argue that we just need to wait for Wi-Max solutions to come online and then all will be fine. It certainly may be the case that Wi-Max will help boost coverage in low density areas, but is that really the end of the story? What about demand? What really makes me mad when I read most of these stories about current failed experiments is that they rarely give us any solid numbers about how many people utilized the services. To the extent any journalists or analysts are out there contemplating a story or study on this issue, I beg you to dig into the demand side of the equation and try to find out how much of the currently muni-wifi failure is due to technology and how much is due to demand, or lack thereof. Of course, government mismanagement could also be a culprit. But I suspect there is a far less demand for these services than supporters have estimated.
Portland’s muni wi-fi experiment has failed. [Add it to the list of failures]. According to Broadband Reports, taxpayers are going to be on the line for $60K:
Portland had high hopes of being one of those cities where citywide wireless networks might actually work but those hopes did not pan out. Earlier this summer, Wi-Fi provider MetroFi announced that the company could not afford to continue operating the network there. Attempts to sell it off failed and the network was shut down. That’s not the end of the story, though. In order to launch the network, MetroFi had to set up 600 (arguably unsightly) antennas throughout the city. The company had claimed that these antennas would be removed by the end of July but they remain up; MetroFi says that they still plan to follow through on removing them but city staff members report fears that the company is too strapped for cash to keep their end of this bargain. Estimates for removal are around $90,000; subtracting out a $30,000 bond for removal that was part of the MetroFi contract would still mean that Portland’s taxpayers could pay up to $60,000 to get those antennas taken down.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.