18 October 2005

US Broadband penetration and municipal networks

I came across this post that brought up municipal networks in light of the declining US standing internationally in broadband service penetration. To that end, Jackson West pointed out the distinction between municipal wireless and citywide wireless coverage in connection with the San Fransisco project. Though he does not elaborate on the subject, the distinction he has in mind appears to be that the former are city provided services while the latter are privately provided services throughout a metropolitan area (apparently the model that San Fransisco and Philadelphia are following).

How aggressive should localities be about pushing this kind of service? Should they be providing resources (such as financing, rights of way) for free? Is it appropriate for cities to be biased towards wireless (as they appear to be)? Would you anticipate regulatory favoritism on the part of a city toward its own initiative (whether municipal or not)?

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4 comments:

Anonymous said...

I found this in from the P-G today
which suggests that the spread of
mobile telephony has other implications as data.

http://www.post-gazette.com/pg/05291/588999.stm

Martin Weiss said...

This is interesting, thanks for posting it. In areas where traffic density is very low, even anonymity as promised by Missouri would be of much help. A reasonable observer would be able to deduce who is going somewhere if there are only a few residences on a street ...

On the other hand one could make the case that this is not an unreasonable privacy loss for a public good (basically, echoing Scott McNealy -CEO of Sun- who said something like "You have no privacy anymore. Get over it"). Furthermore, users can always turn their phone off, which would prevent them from being tracked ...

KuangChiu Huang said...

I support the ideas that municipalities play proactively to escalate the competition of broadband Internet market, however, I believe they need to prevent involving network operation and retail business as much as possible. One is they may not have such capabilities, the other is it could be difficult to have a fair competition between public and private sector.

There are two main scenarios:
1. Cities or rich suburban areas: Two major broadband Internet service providers (BISP), ADSL and Cable, in these areas, local governments do not worry about broadband service existing or not but try to bring reliable broadband service with affordable rates for residents. Those governments can take Philadelphia or San Francisco models for reference. Local governments need to collect possible business plans, figure out potential benefits and risk of each proposal, and pick up the project not only maximizing social welfare but also minimizing municipalities’ financial burden and operation risk.
2. Urban areas: Only one BISP, satellite, or no BISP in these areas, local governments are not able to solicit telephone and cable companies to deploy the network and offer affordable service over there. In this condition, the municipalities have to find other firms to build/operate the network for keeping economic development and narrowing the gap of digital divide. If the municipalities could not find any firm to do this business, they can not but form a company to executive the mission. In this situation, I would suggest to take a reverse auction to find an appropriate company to offer service. The reverse auction in this case means 1. Each bidder can propose how much compensation to offer broadband service in rural areas. 2. The bidder with lowest compensation can win the auction. If the compensation has been minimized through an auction, residents need to justify the cost and benefits of the project.

Jackson said...

You hit the nail on the head. Traditionally, private companies that provide infrastructure are granted defacto monopolies through 'franchise agreements,' arguing that the cost of installing and maintaining that infrastructure would otherwise make the business of providing competitive services unprofitable.

For the municipal infrastructure model, I would point to an organization like Seattle's City Light, which is a charter corporation wholly owned by Seattle citizens. I did point out in the article that Tom Ammiano, a local supervisor, was the first to suggest that The City operate a municipal broadband network, which would have included the backbone, wired and wireless services.