Get Smart about Business Spending
This law precludes any local Pennsylvania municipality--except Philadelphia, which appears to have obtained an exemption for its initial deployment--from providing telecommunications services to its citizens as it sees fit. The law will also have the effect of reducing competition while slowing the availability of low-cost broadband access.
If a Pennsylvania city or town government wants to initiate broadband, it will now need to ask and then wait for the local telephone company to decide if it wants to provide the service.
The bill came about because new wireless networking technology is today enabling Philadelphia to provide residents and visitors in large downtown areas with low-cost broadband Internet connections. While I am pleased that Philadelphia will be able to continue these efforts, the digital benefits the municipality is pursuing for its citizens will not be available anytime soon throughout the rest of the state.
State and local officials throughout the country have echoed the need to speed up broadband deployment for educational and economic purposes. Ironically, the Pennsylvania law purports to share this goal. Yet it eliminates a potentially fast and easy deployment source for carrier-grade wireless broadband by limiting local government options and setting leisurely time frames for incumbents to meet the stated and demonstrated need for the same.
Municipal broadband wireless technology helps public servants, citizens, community groups and businesses obtain access to wireless broadband quickly, cheaply, anywhere, anytime. What's more, it works regardless of the provider--whether it be a telecom, cable operator, municipal government--or even a police or public safety agency.
Cities like Philadelphia seek to provide real-time video and other communications capabilities at speeds not before seen by its agencies. At the same time, they wish to provide broadband access to citizens, community groups and businesses. But the wording of the Pennsylvania law sidesteps the market and forces local governments to ask the telephone company if it can provide the service. Instead of promoting competition, the law purges it.
When there are more competitors, prices drop, the menu of services expands and more people are able to use the technology sooner. That's why the best interests of our citizens require the fostering of an environment where there are ample incentives and that no alternative be precluded. That's a very different recipe than what's inside the Pennsylvania law.
If we are to ever bring pervasive broadband access to the multitudes, cities should be able to choose the best way to deliver broadband services to their citizens.
Biography
Ron Sege is CEO of mesh equipment provider Tropos Networks.
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I couldn't agree less with these arguments - most of these municipalities are wanting to provide services because their local providers are NOT innovating and ARE unfairly exploiting their monopoly advantage. Furthermore governments are directly responsible to their citizens but customers are usually at the mercy of their providers when that providers is essentially a monopoly. Just as people what they think about their local phone company and look at how many are ditching those phone companies to go with mobile phones where there is at least a choice of a few providers in most markets (even that is reducing).
The "digital dialtone" market desperately needs more competition and in IMHO any source is a welcome one. If corporations can't compete with local municipalities then they need to re-examine why they are in business in the first place. Perhaps they need to IMPROVE their service, offer NEW services and be MORE EFFICIENT themselves?
Well, I disagree with your opponent to this extent: I don't think it's "unfair competition" at all--as I'd rank it as no competition at all...;) Rather, it seems to me that all local governments do is simply pick from among a group of private companies to supply the municipal service they choose, and so the customer is deprived of commercial choice among competing services by government fiat.
While I think local government mandate and control of these services may be exploitable for political gain by the politicians in the local communities who control it, I don't see it doing any good for the average customer at all in terms of service choice. Heh...;)
Your argument sounds just like Ma Bell's complaining about how "unfair" it would be to break up the old Bell long-distance monopoly. Ma Bell complained that breaking up its monopoly would disadvantage consumers and rob them of the "low prices and great service" she could provide--but in hindsight we all know that wasn't so, don't we?
"I couldn't agree less with these arguments - most of these municipalities are wanting to provide services because their local providers are NOT innovating and ARE unfairly exploiting their monopoly advantage."
So, OK, where oh where is the competitive impetus for a local government, pray tell? If private companies competing to offer services among each other are not innovating, then it strains credulity to think that a local government which *erases* the possibility of inter-company competition can do better. I'm afraid I don't get it...;)
"Furthermore governments are directly responsible to their citizens but customers are usually at the mercy of their providers when that providers is essentially a monopoly. Just as people what they think about their local phone company and look at how many are ditching those phone companies to go with mobile phones where there is at least a choice of a few providers in most markets (even that is reducing)."
Seems like you wrecked your own arguments, as what are mobile phone companies except private companies competing with private traditional land-line companies?.....;) That's what competition is--it's *private companies* competing with each other for the customer's business, right? Seems odd you'd think it was great for the phone companies but lousy policy for broadband providers.
And please, can we keep *politics* and *politicians* out of the technology business? Last thing I want is for politicians to start using people's personal broadband Internet connections as political footballs. I'll pass, thanks...;)
"The "digital dialtone" market desperately needs more competition and in IMHO any source is a welcome one. If corporations can't compete with local municipalities then they need to re-examine why they are in business in the first place."
OK, private companies compete with each other. Municipalities are not "in business" and have no similar competition--ie, if I don't like the present Mayor I can't run down the street and "sign up" with another Mayor tomorrow, can I?...;) OTOH, if I don't like my cable broadband provider I can sign up with land-line or wireless broadband tomorrow, if I want to, and I don't have to wait three years for an election, either, do I? Heh...;)
I think you've seriously confused politics with business here. The only private companies I can imagine who might *favor* this proposal would be a company that expects *it* will receive the government contract to serve the municipality to the exclusion of all others.
But let's turn the premise around, shall we? If local municipalities can do so much better than private companies--well then, let them start up their own broadband companies and *compete directly* with existing private broadband providers on a level playing field--then we can *really see* all of this "innovation" you keep talking about, right?
But with local governments it doesn't work like that, does it? No, first they have to *abolish private competition and usurp it*, don't they, so that at the end of the day the only player left standing is the Municipality.
On the whole the idea is a good one *if* municipalities will form their own broadband companies to compete with private companies on a level playing field. But I have a feeling it'll be a cold day in Hades when that happens...;)
Signed, a true believer in private enterprise...;)
I couldn't agree less with these arguments - most of these municipalities are wanting to provide services because their local providers are NOT innovating and ARE unfairly exploiting their monopoly advantage. Furthermore governments are directly responsible to their citizens but customers are usually at the mercy of their providers when that providers is essentially a monopoly. Just as people what they think about their local phone company and look at how many are ditching those phone companies to go with mobile phones where there is at least a choice of a few providers in most markets (even that is reducing).
The "digital dialtone" market desperately needs more competition and in IMHO any source is a welcome one. If corporations can't compete with local municipalities then they need to re-examine why they are in business in the first place. Perhaps they need to IMPROVE their service, offer NEW services and be MORE EFFICIENT themselves?
Well, I disagree with your opponent to this extent: I don't think it's "unfair competition" at all--as I'd rank it as no competition at all...;) Rather, it seems to me that all local governments do is simply pick from among a group of private companies to supply the municipal service they choose, and so the customer is deprived of commercial choice among competing services by government fiat.
While I think local government mandate and control of these services may be exploitable for political gain by the politicians in the local communities who control it, I don't see it doing any good for the average customer at all in terms of service choice. Heh...;)
Your argument sounds just like Ma Bell's complaining about how "unfair" it would be to break up the old Bell long-distance monopoly. Ma Bell complained that breaking up its monopoly would disadvantage consumers and rob them of the "low prices and great service" she could provide--but in hindsight we all know that wasn't so, don't we?
"I couldn't agree less with these arguments - most of these municipalities are wanting to provide services because their local providers are NOT innovating and ARE unfairly exploiting their monopoly advantage."
So, OK, where oh where is the competitive impetus for a local government, pray tell? If private companies competing to offer services among each other are not innovating, then it strains credulity to think that a local government which *erases* the possibility of inter-company competition can do better. I'm afraid I don't get it...;)
"Furthermore governments are directly responsible to their citizens but customers are usually at the mercy of their providers when that providers is essentially a monopoly. Just as people what they think about their local phone company and look at how many are ditching those phone companies to go with mobile phones where there is at least a choice of a few providers in most markets (even that is reducing)."
Seems like you wrecked your own arguments, as what are mobile phone companies except private companies competing with private traditional land-line companies?.....;) That's what competition is--it's *private companies* competing with each other for the customer's business, right? Seems odd you'd think it was great for the phone companies but lousy policy for broadband providers.
And please, can we keep *politics* and *politicians* out of the technology business? Last thing I want is for politicians to start using people's personal broadband Internet connections as political footballs. I'll pass, thanks...;)
"The "digital dialtone" market desperately needs more competition and in IMHO any source is a welcome one. If corporations can't compete with local municipalities then they need to re-examine why they are in business in the first place."
OK, private companies compete with each other. Municipalities are not "in business" and have no similar competition--ie, if I don't like the present Mayor I can't run down the street and "sign up" with another Mayor tomorrow, can I?...;) OTOH, if I don't like my cable broadband provider I can sign up with land-line or wireless broadband tomorrow, if I want to, and I don't have to wait three years for an election, either, do I? Heh...;)
I think you've seriously confused politics with business here. The only private companies I can imagine who might *favor* this proposal would be a company that expects *it* will receive the government contract to serve the municipality to the exclusion of all others.
But let's turn the premise around, shall we? If local municipalities can do so much better than private companies--well then, let them start up their own broadband companies and *compete directly* with existing private broadband providers on a level playing field--then we can *really see* all of this "innovation" you keep talking about, right?
But with local governments it doesn't work like that, does it? No, first they have to *abolish private competition and usurp it*, don't they, so that at the end of the day the only player left standing is the Municipality.
On the whole the idea is a good one *if* municipalities will form their own broadband companies to compete with private companies on a level playing field. But I have a feeling it'll be a cold day in Hades when that happens...;)
Signed, a true believer in private enterprise...;)
In many places small companies ARE filling the gap, but by no means all and by no means in a unified and coherent way thats in the best interests of consumers. And a government provided service in no way prevents free enterprise coming back to compete, indeed history shows it will. Why do we have FedEx, UPS and DHL delivering packages for substantially premium rates and with very healthy profits. Then again why is it that only the USPS will always deliver to almost anywhere at a rate that is accessible to everyone?
And yes I do think this is a socio-political issue. I just hate to think what society would look like if free markets really ran riot and the government provided nothing - we had a taste of it in the gilded age of the 1800s with robber barons, environmental ruin and the pillage of the commons. No thanks. Remember use of our (the real peoples) public commons by corporations is a privilege not a right.
So if the people in that area decide democratically they want their government to provide wireless then let them have it, warts and all. If it doesn't work out so be it, it wasn't meant to be - far greater sums of money have been spent and lost on more frivilous things. If it kicks the local monopoly into action and generates some capital investment in the area then even better - private enterprise can always find a market for premium services and no one is saying that governments should prohibit them from doing so.
- Sometimes the market just fails and you know it
- by March 15, 2005 11:29 AM PST
- Thank you Branden for simply clarify my long and windy verbage - sometimes the free market just fails to serve the consumers. This happense when the 300-lb gorillas of the market decide that its not profitable for them to do something (or that they just don't want to), and there is no investment and entreprenurial innovation to support others doing it then thats when governments can step in to jumpstart the market.
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(18 Comments)In many places small companies ARE filling the gap, but by no means all and by no means in a unified and coherent way thats in the best interests of consumers. And a government provided service in no way prevents free enterprise coming back to compete, indeed history shows it will. Why do we have FedEx, UPS and DHL delivering packages for substantially premium rates and with very healthy profits. Then again why is it that only the USPS will always deliver to almost anywhere at a rate that is accessible to everyone?
And yes I do think this is a socio-political issue. I just hate to think what society would look like if free markets really ran riot and the government provided nothing - we had a taste of it in the gilded age of the 1800s with robber barons, environmental ruin and the pillage of the commons. No thanks. Remember use of our (the real peoples) public commons by corporations is a privilege not a right.
So if the people in that area decide democratically they want their government to provide wireless then let them have it, warts and all. If it doesn't work out so be it, it wasn't meant to be - far greater sums of money have been spent and lost on more frivilous things. If it kicks the local monopoly into action and generates some capital investment in the area then even better - private enterprise can always find a market for premium services and no one is saying that governments should prohibit them from doing so.