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« BT Offers SBC-Like Wi-Fi Deal to Mobile Customers | Main | FCC Approves Software-Defined Radio »

November 24, 2004

Kill Phil(ly)

It's untrue that lobbyists are trying to kill Philly wireless plan, as this article's headline reads: Instead, incumbent telcos and cable firms are trying to kill all competitive broadband offerings and extend monopoly powers beyond their traditional base into a field they've been struggling to own since about 1996. It has little to do with Philly's plan in particular: the language in the Pennsylvania bill is from April 2003. No one should be hung up on the Philadelphia segment. This bill will prevent even tiny towns from installing their own for-fee (even fee recovery) networks if the incumbents serve that town and if they are engaged in a modernization plan.

It's fascinating to see that having failed over 10 years to meet goals that were set, the incumbents have been told, okay, well, just another 10 years before we think about breaking the monopoly and allowing better competition.

My take is that municipalities should be allowed to build infrastructure on a vendor-neutral basis that they charge recovery fees to private carriers and others to operate the network side. You could have non-profits charging $5 per month to lower-income residents through subsidies and Comcast and Verizon charging $19.95 per month as an add-on to the phone or cable bill. It's all logical, quite literally.

What the incumbents have done now is radicalize the issue so that towns and cities will be more likely to demand to serve as their own ISP instead of working on vendor-neutral basis to allow all comers.


What the incumbents take issue with is simply competition in all forms. Particularly when the public is subsidizing their competitor. Only the BOCs are allowed to receive that kind of treatment and be granted profits from monopoly positions of power within publicly-funded network build outs!!!:)

So in the recovery scheme you are talking about, does the local WISP get a piece/percentage of the slush fund? How does that work in the favor of the local, smallish ISP/WISP provider that was the only one to service the area with best-effort wireless and is now going to be in competition with a free public network operated by the city?

Methinks the ISP/WISP is wrestling with "Who's the enemy of my enemy" here, no?

[Editor's note: In my view, the city hires a firm to build the infrastructure, and contracts another firm to handle vendor-neutral fee settlement and operations. That firm gets paid on a contract basis. The fees charged to hosts who want to use the infrastructure are based on capital expenditures and their depreciation, ongoing operational costs, metered elements (probably unnecessary unless there are out-network parts that have metered costs), and future capital expansion. It's not a market rate, but rather a realistic rate for a city to charge so that the general fund is totally uninvolved; the city can back it with bonds. In this scenario, the more hosts that get involved, the lower the fees wind up being year over year because CapX is recovered more quickly. In my scenario, the city doesn't offer a free wireless network, but offers a fee-recovery based infrastructure that all providers have equal access to at equal costs. This way many ISPs can offer services over the network. You could have SBC reselling access to Philadelphia and their own Wi-Fi hotspot network, for instance. --gf]

Something else these articles are missing:

This is but one of DOZENS of similar bills that have either already been passed, or will be passed in states around the country.

Often they're actually written by the incumbents themselves.

So basically with SBC and Verizon only rolling out fiber and next generation DSL to profitable communities, then pushing bills that ban unserved communities from wiring themselves....they're doing what they do best and leaving the country with gaping broadband holes....

People should be outraged about this, yet the most I see from readers is casual concern. Or rants from fiscal conservatives who believe the answer to all ills is full deregulation.

While the vendor neutral model is much better than city-run networks, I still think it is a bad idea. It limits competitive advantages that may be had in network architecture, equipment, and technology. Further, what is the incentive for the city to upgrade said infrastructure at a later date when technology changes? If cities want a wireless network than it needs to be done virtually on top of privately owneded networks where roaming agreements are in place. That allows private companies to choose where, when, and what they deploy with roaming agreements ensuring the consumer can use the network anywhere.