OPINION
The Wires May Be Gone but Government Meddling Remains

Gavin Newsom, San Francisco's controversial mayor, was in the spotlight again this week as he and his staff contemplated which lucky company will get the rights to provide WiFi access around the city. The real question is, why is government making this choice rather than market forces? To many in the communications industry, particularly cable, this is a familiar situation.

Under cable franchising rules, thousands of local government authorities get to decide which cable companies are allowed to provide service and under what conditions. The argument for this system was that cable service was a sort of natural monopoly in need of government regulation -- and local authorities milked this power for all they could.

Because they controlled the rights of way that the cable companies needed in order to provide service, government bureaucrats could extract all sorts of goodies such as free movies for residents or the planting of trees in city parks. Now, it's happening to WiFi, under an updated argument.

No Free Lunch

At a press conference this week, Mayor Newsom called WiFi a "fundamental right," a shocking statement given that his play to control the means of access seems more like that of the rights-abusing Chinese government than a freedom-loving mayor. A key line from Newsom and other would-be Internet gatekeepers is that government controlled "free" WiFi will help the poor. But if helping the poor get online is really the goal, why not propose giving them vouchers and letting them pick the service that suits them best?

This is the pattern with food stamps, which do not oblige residents to shop in government stores, and housing vouchers, which do not oblige residents to live in government housing. Low-income recipients select the stores and the dwellings. But perhaps this is not really about the poor. The mayor's call for "free WiFi," attracts a certain amount of glamour, but reasonable people understand that there really is no such thing as a free lunch.

One of the current front-runners in the race to be anointed as the official city WiFi provider is Internet search giant Google (Nasdaq: GOOG). While the company hasn't released the details of its proposal, Google spokesperson Nate Tyler told CBS MarketWatch that if Google were chosen, it would be "an opportunity to make San Francisco a test-ground for new location-based applications." In other words, users would pay for the WiFi service by looking at advertisements, just as they do when they use Google's "free" e-mail service, Gmail. Not that there's anything wrong with that, but no one should mistake it as "free."

Shine Off the Star

Indeed, when one considers that the mayor may be promoting ad-based WiFi service, the glamour of his plan fades like last month's issue of Vanity Fair. Then there's the question of why the mayor and his staff get to choose which company gets the rights to provide city-wide WiFi at all.

According to the mayor's office, a committee of people, representing interests such as utilities, philanthropic offices, and privacy groups, will make recommendations on the WiFi proposals in about a month. But what about consumers?

If it weren't for all the problems companies have dealing with city governments on permits and rights-of-way issues, such as getting permission to use lamp posts and other areas around the city to place their WiFi equipment, there would be a lot more access to the service today. And the people who are using that access would make the choice, not some politically appointed committee.

Competition, Not Politics

If WiFi is indeed as essential as the mayor says, he should promote competition among providers, rather than choose one that promises to follow political direction. History shows that while political directives today might call for no-charge WiFi, tomorrow the calls could be for free movies or planting trees -- demands that distort the market, raise prices, and lower service quality.

Government should not be in the business of picking winners and losers in the marketplace. WiFi is just beginning to take off, and it's hard to predict where it will go. But one thing is certain: consumers, businesses, and communities will be better off if their wireless systems evolve based on market demands, not political control and grandstanding.

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Sonia Arrison, a TechNewsWorld columnist, is director of Technology Studies at the California-based Pacific Research Institute. She also serves on the Technology Advisory Board for the Acceleration Studies Foundation.

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