Wi-Fi Everywhere

You probably know already that the City of Philadelphia plans to build the largest, municipal-owned wireless Internet system -- a 135-square-mile "hot spot" to serve 1.5 million people -- so that residents and vistitors alike can surf the Web wirelessly. E-Commerce Report: Big Wi-Fi Project for Philadelphia [NYTimes.com]. What you may not know is that this move has sparked a raging debate about whether all of this should be left to private-sector ISPs.

In New York, the city government recently awarded contracts to six wireless contractors, who paid a total of $23 million for the right to use 3,000 city light poles as bases for cellular and, possibly, wireless Internet service for paying customers. In contrast, Phildelphia says that government cannot just "let the market do this because there are societal needs that aren't inherently part of the capitalist system. We need to be sure no communities n Philadelphia are excluded, whether there's an ROI [return on investment] or not."

This mirrors the debate over municipal ownership of telcos generally, something to which conservative think tanks and the local monopolies (like SBC and Comcast) object vehemently. Yet USA Today headlined recently that "Small Towns Tired of Slow Rollout Create Own High-Speed Networks." I tend generally to agree that government should stay out of competition with private firms and that the market will produce more and better products than a government-run cooperative. But where the market is not responding, why should economic theory or idealogy stand in the way of the people giving themselves what they want? If Philadelphia is wrong, about demand, or costs, or otherwise, it is entitled to make its own experiment and mistakes, since no one else will be footing the bill.

Besides, having ubiquitous Wi-Fi would be way cool and would solve the perplexing question of whether, and if so how, private-sector Wi-Fi providers -- like T-Mobile at Starbucks -- can create a sustainable business model. Since the market ain't happening, at least just yet, more power to Philly!!

 Posted by glenn