No fighting city Wi-Fi

10 Mar 2006

It's been almost a year and a half since the carrier world and legions of free-market proponents were positively shocked and scandalized at the news that the city of Philadelphia was planning to roll out, at the taxpayers' expense, a municipal Wi-Fi network blanketing the entire city. The telcos freaked - even the ones that didn't even want to roll out Wi-Fi due to the lack of a business model - saying it was unfair for the government to compete against them, and besides, it would never work and thus was a big waste of taxpayers' money. Some telcos have lobbied for legislation banning municipal Wi-Fi. In some cases, their wish has been granted.

But that hasn't stopped other municipalities from considering the same idea. Telcos have deployed the same arguments almost every time. They may prove to be right in the long run, but for now the anti-muni broadband contingency has not made its case. According to VisionGain, there are over 100 operational city and regional wireless broadband networks worldwide. Well over half of them are outside the US, but there are at least another 300 US cities in the planning stages. By the end of this year, that number will double.

And that's just wireless. Some municipalities, like Amsterdam's City Council, plan to deploy citywide FTTH.

The upshot is that no matter how bad an idea they might be, municipal networks are happening whether anyone in the telecom space likes it or not. What will be interesting is whether the consequences turn out to be as bad as the doomsayers have imagined.

The most likely answer is, 'Of course they won't,' if for no other reason that telcos have a commercial incentive to overplay the potential disaster of letting someone offer public broadband to anyone who wants it. That doesn't mean they're wrong. Cock-ups and mismanagement will be inevitable in many cases.

Everyone's doing it

However, with the growing mantra among the telecoms intelligentsia that connectivity plays a significant if not major role in spurring economic development, no one should be surprised that governments are getting a jump on commercial providers that don't have the commercial incentive to do it themselves - at least not right now. It's unfair to blame the telcos, of course, especially after so many weathered the recent telecoms meltdown to emerge with a honed sense of caution about throwing money at projects that no one has a reliable business model for. But the muni broadband message is clear: if you don't build it, we will.

Besides, it's not just governments that can't wait around all day for service providers to roll out connectivity. University campuses have been doing it for several years now. Even property developers are getting in on this - new residential developments typically come broadband-enabled, and some offer complimentary Wi-Fi as an incentive to rent or buy property.

An example is Hong Kong Resorts, the developer of the Discovery Bay residential village in Hong Kong's Lantau Island. As reported in Telecom Asia in January, HKR provides free Wi-Fi in the public plaza, on the beach and its ferry piers. Eventually, it will officially extend coverage to the actual ferries that shuttle back and forth from Hong Kong Island. To HKR, Wi-Fi is just another facility for residents to use.

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