May 3, 2005 4:28 PM PDT

Local officials sound off on municipal wireless

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PHILADELPHIA--A group of local government officials gathered in Philadelphia this week to discuss strategies for deploying their own citywide broadband wireless networks.

Attending the Digital Cities Convention, sponsored by the Wireless Internet Institute, the officials focused on everything from network construction to political pressure for broadband service.

Wireless networks, whose construction costs are a fraction of those for fiber-optic networks, have become all the rage in the past year. Across the country, cities large and small have developed business plans to build their own wireless systems.

"The future of our city depends on getting this access to everyone now."
--John Street
Philadelphia mayor

Some officials said their cities are building their own networks because local telephone or cable suppliers have moved too slowly in bringing broadband to residents. Others said they consider wireless networks a draw for business and a smart way to reduce operating costs for local government.

Phone companies and cable providers, meanwhile, claim that city-owned networks would introduce unfair competition into the market, and have lobbied against these plans at the state and local levels.

As the battle rages between cities and incumbent service providers, local officials seem more committed than ever to moving forward with their plans. During the meeting in Philadelphia, these officials said their approach is valid, despite the resistance they face from local phone and cable companies.

"There are huge neighborhoods that you'd think would have access to broadband that don't," said John Street, mayor of Philadelphia, which has received broad media coverage for its planned citywide Wi-Fi network. "And they aren't just the poorest neighborhoods, although they are at the top of the list. The Verizons of the world say it's coming, but we don?t have time to wait. The future of our city depends on getting this access to everyone now."

Some cities say that building a wireless network is essential to their economic development. Bill Graham, mayor of Scottsburg, Ind., a city with a population of 8,000, said during one panel discussion that the town had been asking for broadband service from its telephone and cable companies for four years. Graham noted that the companies told city officials over and over that they couldn?t justify the cost of rolling out the service to the community.

But when the owner of an automobile dealership came to the mayor and said he needed broadband because the car manufacturer was putting all of its repair manuals on the Internet, the city decided to invest $385,000 to build its own wireless broadband network. Without broadband access, the car dealer said, he?d have to move to another town, which would cost the city roughly 70 jobs.

Even in places where access is offered, it might be too expensive for most residents, some city officials noted. Chaska, Minn., for example, built its wireless network and is offering Internet service for $15.99 a month. Before the city installed the wireless network, the local phone company, Sprint, offered DSL for $40 to $45. And the local cable company, Time Warner, offered service for $45 to $50.

"About 25 percent of our residents make less than $30,000 and another 20 percent make less than $50,000," said Brad Mayer, IT manager for Chaska. "Now, these aren't poor people, but it's really hard for them to justify spending $40 or $50 a month on Internet connectivity."

Phone and cable companies have argued that it's unfair for cities to build their own networks and then offer services at prices far below market rates. These companies are especially upset with plans by some cities to offer broadband for free. In San Francisco, Mayor Gavin Newsom has talked about offering wireless broadband for free to all citizens. Philadelphia also plans to offer free Wi-Fi access in some public areas, such as parks.

"We're still trying to figure out exactly how we can do this," said Chris Vein, senior technology adviser for the city of San Francisco. "But the mayor just wants to get people thinking of new ways to offer broadband service so that everyone has access."

Some people in the industry believe that free Wi-Fi may not be the best answer and likely will stir up trouble with the incumbent service providers.

"Offering free wireless broadband to bridge the digital divide is very noble," said Paul Butcher, marketing manager for Intel. "But these strategies are positioned to agitate the telcos and cable operators."

Most experts agree that cities will end up working with private industry to provide broadband services. Despite its proposal to offer free wireless broadband in certain areas of the city, Philadelphia's plan also calls for a partnership between the city, which will build and own the infrastructure, and individual service providers that will pay wholesale prices for bandwidth from the city and then sell broadband service to its residents. Other cities are looking into similar models.

2 comments

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Wi-Fi for the homeless, woohoo!
This debate wouldn't be complete without Mr. Newsom, the man who rose to power by trimming welfare checks to the homeless by 80%. Well, now we know where the money is going. "Yes to wireless, screw the homeless" does have a nice ring to it.
Posted by Chung Leong (111 comments )
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City built and sold wholesale is the right move
I agree that the telcos and cable carriers ARE dragging their feet when it comes to rolling out service. Let the towns build fiber and wireless networks and let the service providers add on security and other services on top of it. We will then see Voip and other applications explode with cheaper and more competitive services under this model. I'd be willing to get voip service and more tv channels if it didn't initially cost me $50 a month to do so. $15-20 is more reasonable and with the savings, I'd add more services. Getting basic digital cable and internet for $120 a month is f'ing ridiculous, and that doesn't even include my phone bill. For $120 I expect the premium cable, voip, and broadband.
Posted by jamie.p.walsh (288 comments )
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