Session Date: August 17, 2005
Annual Meeting Session Summary: Municipal WiFi: Government as a Communications Provider? Is It a Proper Role?
By Larry Clark
Communications Specialist, Washington House Democratic Caucus
This summary is provided for information purposes only. NCSL does not endorse any views it contains.
SEATTLE - When the utility bill from the city arrives, could it soon include water, garbage... and wireless broadband Internet?
Legislators attending the Annual Meeting of the National Conference of State Legislatures this week heard a panel of experts discuss the possibilities and pitfalls of municipal governments building and operating wireless broadband Internet service, or WiFi.
Currently 38 city and other local governments in the United States have built public access WiFi networks and another 34 municipal governments are considering the idea, according to MuniWireless.com. Supporters say the nation is losing its technology lead, and broadband Internet is the 21st century equivalent of getting electricity and water to residents.
The trendiness of WiFi could cloud the problems with municipal governments offering the service, said Steven Titch, senior fellow for IT and telecommunications policy at the Heartland Institute. He said the comparison to traditional utilities like water is inaccurate.
Titch pointed to a July 2005 report by Jupiter Research that says 50 percent of municipal initiatives to establish broadband service will fail. The report says the cost of $150,000 per square mile over five years could prove difficult for local governments already struggling with expenses.
Titch added that other complications include a maturing technology, liability and privacy problems, and government competition with private industry.
The demand to bridge the "Digital Divide" drives cities like Philadelphia to build and operate lower-cost broadband like WiFi, said Pennsylvania Rep. W. Curtis Thomas. Thomas, vice-chair of the NCSL Communications, Technology and Interstate Commerce Committee, said local WiFi networks could enhance visitor experience, business competitiveness, city operations and access for residents.
"The underlying notion was that the marketplace would come up with a way to spread broadband. That has not happened," said Thomas. He called municipal WiFi networks the "last mile" of Internet connectivity.
Michael Balhoff, a telecom and technology consultant from Balhoff and Rowe, said a new study his firm recently completed found the rationale for municipal wireless networks was shaped by financial and policy risks.
He said the financial risks consist of not only capital investment, but also operating expenses, and that most municipal WiFi networks will lose money. Balhoff added that municipal networks could work when the broadband market fails, but otherwise governments with limited resources shouldn't be in competitive market for wireless broadband.
Thomas said he believes public-private partnerships are crucial for success of municipal WiFi, when municipal governments join with Internet service providers and telecom companies in developing and operating the networks.
State laws authorizing or limiting local governments' providing of WiFi services were part of the consideration for the legislators attending the panel discussion.
Panelist David Olson, director of the city of Portland's Cable and Communications Franchising Office, asked that city governments like his be allowed to invest in wireless networks. "Municipals face demands for service, and we want to provide higher level, interconnected service at lower cost," he said.
NCSL is a bipartisan organization that serves the legislators and staffs of the states, commonwealths and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system.
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