An op-ed article in the Toronto Star notes that profit from the new city-wide network launched last week goes into the city's coffers: Graham Longford and Andrew Clement argue that charging for the network after an initial several months of free usage as the network is built out makes little sense given where the funds go. If Toronto Hydro Telecom were privately held, then perhaps putting profit in shareholders' hands would make sense. The op-ed's authors maintain that conserving the fees that individual users would pay would have a beneficial impact on the city beyond the revenue that this indirectly causes. They also note that a smart meter program was mandated, requiring a network to built at the utility's expense anyway.

They miss one common American argument here, perhaps not as relevant in Canada, is that by charging users, only users pay for the system. By not charging users, all Toronto residents will pay, although much smaller amounts. Thus, Toronto Hydro's method is a fairer form of taxation--which the op-ed authors call "covert taxation"--unless the benefits of this network could be projected to be larger than the costs to those residents not participating in its use.

This is the public good model, of course. We all pay for roads, not just the ones we used, because we all get a benefit from goods and services traveling over those roads. Cyclists like myself would like to argue that we need more bike paths and tools for multimodal transportation that include bikes, because the social good is fewer cars on the road and greater health. Less cars means less smog, less congestion, and less gas used (less demand). Greater health among bikers means less social demand on medical resources, funded or unfunded.

We'll see how this plays out. I don't know what control citizens of Toronto have over their government or the government over its 100-percent ownership of the utility.