Glenn Reynolds asks from the right side of the aisle, what do incumbents fear? Reynolds, the No. 1 Google Glenn and author of the Instapundit blog, has a decidedly and honestly conservative viewpoint, but he's as interested as folks to his left as to why the incumbent telecommunications providers are so worried about the interest by cities and towns to build their own broadband networks or have those networks built for them under franchise.
He writes, "There's nothing illegal or improper, of course, about companies talking down competition, or hiring lobbyists to persuade cities to do things their way instead of somebody else's way, but there's nothing terribly impressive about it, either. In fact, the more those companies criticize the municipal wi-fi approach, the more it makes me wonder what, exactly, they're afraid of."
I have to agree. I'm not a fan of sub rosa lobbying, which is why I've written so much that complains about the attempts by incumbents to fund reports from groups that appear independent. What's ironic, of course, is that if incumbents bid to build the networks that the reports say are impossible to run reliably and are unnecessary, how do the incumbents explain to their shareholders their participation in those projects?
Reynolds also has the very reasonable concern that city-run networks could be subject to city-run monitoring. I've heard this concern in poor contexts before; here it's presented without any baggage. The most rabid pro-municipal-broadband supporters should acknowledge that under the current set of laws in the U.S. having municipalities directly responsible for the operation of new broadband networks could lead to personal information finding its way into government hands. Filtering laws, if they ever make it past the U.S. Supreme Court, might also affect these networks.
The proposals we're seeing from cities that want to have networks built are morphing, though, probably due in part to the firestorm of Philadelphia's initial reaction and the rash of laws spreading from state to state to restrict what some cast as a vital public utility that's underbuilt and others view as municipal attempts to regulate on a local level what only states or the federal government should have the ability to micromanage or not micromanage.
Philadelphia's plan hands off its network fundraising, build-out, and operation to a non-profit that will be ostensibly outside city control. This arm's length plan would also ostensibly remove the city's ability to monitor or be required to filter the network. Further, the non-profit would only sell wholesale access to ISPs. Minneapolis's request for proposal says, "keep the city out of it!" A private company or consortium would receive essentially a franchise and a commitment for city telecom business. This would remove filtering, monitoring, and censoring from the pile of concerns as well.
Reynolds, like me, is interested in diversity, and that's probably the broadest argument one can make for more competition of all kinds: "...municipal services are likely to be better when people have a standard for comparison, too. Being the only game in town is never good for service."
Update: There are some great comments below. But a number of those commenting seem to have missed the point that many municipal networks are being planned as (or already set up as) hands-off affairs from the standpoint of funding, taxation, and operation. If a city can't pay to have trash removed, but they're not paying for the municipal network, you have to readjust your attitude. If the structure is set up so that taxpayers are completely insulated--that is, it's encoded in a charter or local legislation that there's no bail out--then the network might go belly up, but it didn't cost you, as a taxpayer, any money.
Interesting side note here, too, on funding and taxes. Most municipal projects are criticized as having two tax and funding advantages: a city can issue tax-free bonds, and a city doesn't pay a variety of taxes. The newest projects I've seen don't provide that advantage to the municipal project. And if you look at one of the oldest broadband networks in the country run by Tacoma Power, they pay cable franchise and local and federal taxes. They even devote a page to their tax bill. Of course, Tacoma Power is separate organizationally from the local government.