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.
“Don’t Believe the Hype” — Chuck D, Public Enemy
De Tocqueville is famous for discussing the American way of enlightened self-interest, in which there are mixed elements of private and public goods involved. But when it comes to self-interested lobbying by the tech industry, it’s the words of an American rapper, not a French rapporteur, that I’d like to discuss.
“Innovation!” – “openness” – “jobs” – “choice.” There’s a lot of buzzword hype thrown out by IT companies. Policymakers hear these buzzwords all the time, which are usually connected to how certain regulatory polices can benefit the public interest the most.
So, what does it all mean? Well, a recently released paper of mine tells you absolutely nothing about which IT polices are better than others. That’s right, nada. Zilch. Zippo.
Instead, the paper — Understanding the IT Lobby: An Insider’s Guide — is an explanatory of business models in the Information Technology industry, and the public policies that can help or harm companies over their competitors. It’s not a Scott McClellan tell-all – rather it connects the dots between public policy rhetoric and licensing, service, and ad-based business models.
The gist: the pursuit of one public policy can disadvantage not just one company, but an entire business model. Continue reading →
Tim Wu has an absurd piece in today’s New York Times comparing America’s broadband marketplace to OPEC. This really is quite outrageous, beginning with the fact that OPEC is a GOVERNMENT-RUN cartel. Wu also had a comment in the Washington Post today saying that he didn’t think broadband metering was an outrage. Well, that’s nice. I’m happy that we have Tim’s permission to experiment with new business models for financing broadband networks going forward!
This is indicative of what we can expect in the future once Net neutrality laws get on the books: A world of incessant “Mother may I?” permission-based forms of preemptive Internet regulation. Tim and his radical band of regulatory advocates over at Free Press will incessantly petition the FCC to review each and every business model decision and encourage the unelected bureaucrats at the agency to manage the Internet to their heart’s content.
And what does Tim offer for an alternative vision of the way the world should work since he doesn’t believe private markets can handle the job? Well, it’s back to the Big Government drawing board for more tax-spend-and-subsidize solutions! “Amsterdam and some cities in Utah have deployed their own fiber to carry bandwidth as a public utility,” he says. Yeah, that’s the promised land. After all, it’s working out soooooo well at the municipal level. Please.
Oakland Wireless appears to be in trouble. Add it to the list.
[Actually, is anyone out there keeping a running tally of the muni failures? If so, let me know so I can just start linking to it instead of all the random blog links. ]
When I saw the announcement of Google’s “Internet for Everyone” campaign on their Public Policy Blog, I have to admit, my BS detector started to rise.
“Ubiquitous and open broadband access for every American [should be] a priority in the next administration,” they say.
How about now, Google, and you?
You could have bought the spectrum that you encumbered with “open” rules in the 700 MHz auction, but you didn’t. Now you’re sitting back saying the government should do it for you.
Who would gain from the next administration making broadband “a priority”? Google, of course.
Then I clicked over to the site and saw the evil kid alone at the computer in the living room. Is that a parent drinking wine in the kitchen? Really, I couldn’t help myself.
The campaign “stands for” access, choice, openness, and innovation. What about fair play? Peace? Ending world hunger? A platitude in every pot and a bromide on every CRT.
Really, it’s a bunch of pap that Google will use in Washington, D.C. to insulate itself from competition and drive wealth to its owners. Seeking profit is what compaines like Google are supposed to do – but not using the nation’s public policies.
Update: Julian Sanchez nails it with: “All this may have a whiff of ‘and a pony’ about it . . . .”
They teach you in law school to make all possible arguments in favor of your client’s position, no matter how far-fetched, since you never know which one will stick. The lawyers for Hawaiian Telcom evidently have taken that advice to heart in making the case that it should be eligible for subsidies from the FCC’s high-cost support mechanism under the Universal Service Fund. In January, the firm asked the FCC for a special waiver from the normal eligibility for payments from the fund, which subsidizes phone service costly areas. Under current rules, a telephone company’s eligibility for payments depends upon its statewide cost average. Hawaiian Telcom is asking that its eligibility be determined on a more specific, wire center by wire center, basis.
It may sound like a technical distinction, but – because many parts of Hawaii have costs far above the statewide average – it is significant, and could mean some $24 million per year in subsidies for the firm, which until a few years ago was owned by Verizon.
It’s not unusual for Hawaii to ask for special dispensation in such matters – in 2006, for instance, the Senate telecom reform bill had a provision creating special telecom subsidy rules for states “comprised entirely of islands.”
In this case, however, the lawyers for Hawaiian Telcom outdid themselves, arguing that the subsidies aren’t just a matter of getting cheaper phone service for Hawaiians, but that they are necessary to national defense. Hawaii, they say, is of “strategic importance” to the U.S., making a well-funded telecommunications system essential.
Continue reading →
Back in 2005, I released a report entitled “Risky Business” about Philadelphia’s muni wi-fi plan, which was then in the planning stages. In that report and some subsequent blogs, I laid out a few possible scenarios for what might unfold as problems developed with the municipalization plan, as they always do. I predicted that, as those problems developed and costs grew, it wouldn’t be surprising to find the city proposing a bailout for the plan, or look to selling it off to some other established provider at fire sale prices.
At the time, I got a bunch of grief from pro-muni wi-fi advocates for that prediction. They tried to paint me as some sort of enemy of the people and anti-progress, but I just explained to them that the government’s track-record on the municipalization front was consistent; consistently disappointing that is. That’s usually because the best laid government plans can’t keep pace with marketplace / technological developments in this fast-moving field.
Anyway, I felt strangely vindicated today after I read this blurb from Broadband Reports under the title, “Philadelphia Makes Back-Up Plan In Case Earthlink Bails: The city is prepared to take over if need be“:
Terry Phillis, Chief Information Officer for Philadelphia’s Mayor’s Office, has stated that the city expects EarthLink to bail on its construction of a citywide wireless system. He says that more will be known within the next sixty days but the city is making back-up plans for municipal Wi-Fi based on the belief that EarthLink will sell (or entirely abandon) the system. They would prefer if EarthLink sold the system to another provider but are prepared to take it over themselves if need be. Phillis was vague about the city’s plans but stated that the city sees the network as a valuable asset for residents as well as for their tourist economy.
Valuable for the tourist economy? Yeah, I know I make all my travel plans according to which government’s offer muni wi-fi systems. Please.
Commerce Secretary Carlos Gutierrez issued this statement on Friday:
The TV Converter Coupon Program opened as scheduled on January 1, and is off to a great start. Americans have begun requesting coupons that will help them get the converter boxes needed for when our television signals change on February 17, 2009. With these coupons, the federal government will defray $40 of the cost of an eligible converter, which is expected to cost between $50 and $70.
The demand for coupons is strong. We’ve taken requests from every state for nearly 1.9 million coupons from more than one million households.
The demand is strong? Really? For something that’s free? You’re kidding.
Let’s see, 1.9 million coupons requested at $40 a pop is $76 million of taxpayer money out the door in just four days. As Secretary Gutierrez says, “off to a great start” indeed. At this “great” pace it’s good to know the coupon fund totals $1 billion.
What are you waiting for? Get your piece of the American dream here.
I’ve been trying to keep tabs on the status of various municipal wi-fi experiments going on across the nation by posting local news reports about them whenever I see them. The results so far have not been encouraging, but this hasn’t been that surprising since those of us who study these issues know that most wireline muni experiments failed too.
And speaking of failed wireline experiments, it appears there’s another one that might soon be added to the list. The Utah Telecommunications Open Infrastructure Agency–or “UTOPIA” as it is known–was created in 2002 by local Utah officials who wanted to bring high-speed Internet access to their communities. Eleven communities pledged roughly $200 million over 20 years to back the bonds needed to finance the construction of advanced fiber-optic facilities. Utilimately, the goal was to ensure inexpensive broadband for the masses at minimal cost to taxpayers.
But there are problems in paradise. According to this recent article by Steve Oberbeck of The Salt Lake Tribune:
[F]our years after 11 Utah cities… pledged to financially back the UTOPIA system, its finances are in shambles. Construction is behind schedule. Its top promoters have quit, and its newest chairman has uttered the unthinkable – that despite promises to the contrary, the cities that pledged their support eventually may have to pony up hundreds of millions in taxpayer dollars to prop up the system.
What went wrong?
Continue reading →
EarthLink appears to be getting out of the muni wi-fi business for good. The company is at least is abandoning the major Philadelphia experiment it was in charge of. According to today’s press release:
“After thorough review and analysis of our municipal wireless business we have decided that making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value,” said Rolla P. Huff, EarthLink president and CEO. “Accordingly, at this time, we are considering our strategic alternatives with respect to this business,” Huff added. EarthLink will seek to work closely with the municipalities in which it has operations as it considers these alternatives. The net book value of the assets attributable to EarthLink’s municipal wireless business is approximately $40 million.
A few years ago, many folks were telling us that muni wi-fi was like manna from heaven; the ultimate free lunch that would give us a broadband nirvana. As some of us predicted–reality often proves more complicated. Indeed, one lesson from this experiment is that demand counts. There was always a bit of “if-you-build-it-they-will-come” reasoning behind the Philly deal and other muni wi-fi proposals. But you can’t build a network without a customer base, and recent news reports indicated that demand was lacking.
Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.