San Francisco Mayor Gavin Newsom asked for public feedback this week on a plan to create a citywide, free wireless broadband network. The response should be a no-brainer, especially in a city dubbed the number-one wireless market in the United States.
Getting high-speed access in San Francisco is not a problem. According to the Federal Communications Commission (FCC), when all San Francisco zip codes are taken together, the number of high-speed Internet providers (DSL, cable modem, wireless, satellite, fiber) offering broadband service to at least one customer is around 12. The same number, the data show, applies to poorer neighborhoods, like the Bayview District, Hunters Point, and Western Addition.
Look at the Evidence
Fees for broadband have been dropping at an amazing rate. DSL service used to cost around US$50, but now one can buy SBC’s DSL for $14.95. Strangely, these facts don’t seem to resonate with local government bureaucrats. Instead, they think that residents of San Francisco should have “nomadic” wireless broadband access and they should have it now. This impatience could carry a heavy price for taxpayers and consumers.
Municipal broadband networks are costly, risky to build and difficult to maintain. And San Francisco, like so many other cities, is in no position to lead the way. Indeed, the city faced a projected $59-million budget shortfall this year, but dodged it by raising parking fines for locals and fees for public services.
If City Hall can barely afford to provide residents the critical services that matter most, such as police, fire protection, and public transportation, why would anyone think it will be able to maintain a high-quality, cutting-edge broadband network? Those who agree with the mayor should consider the many examples of city broadband plans gone wrong.
Tacoma, Washington; Marietta, Georgia; Kutztown, Pennsylvania; Ashland, Oregon; Bristol, Virginia; Trion, Georgia; and Cedar Falls, Iowa are just a few of the examples of city broadband failures. And the price tag for these mistakes is either a tax increase to cover the costs or service cuts in other areas.
In Tacoma, for example, the city’s utility ran a $23-million operational deficit in 2001-2002, on top of $16 million in operating deficits that accumulated over past years. Such a dire situation would lead a private corporation into bankruptcy, but Tacoma avoided this scenario by making residents pay for the mismanagement. Unfortunately, these examples don’t seem to bother Mayor Newsom and his staff.
Showing his commitment to the current WiFi craze, Mayor Newsom said, “We either are going to find a partner or we’re going to write a big check.” That’s quite the attitude, and some wireless experts in Silicon Valley wonder why the mayor is pushing so hard.
“WiFi is over-hyped,” said venture capitalist Richard Ling. Indeed, there’s a whole history of technologies and products that have been over-sold — recall the Internet bubble — only to fall flat on their faces before really making a difference.
Before San Francisco officials make a huge mistake, they should open their minds and look to the future. Recent changes to telecommunications regulations, combined with innovations happening at mind-blowing speeds, mean that the broadband market is only at the beginning. If the city actually does go ahead with a so-called free WiFi plan, by the time it rolls it out, it will be obsolete.
The DMV-ization of broadband is something San Francisco can do without, especially if it increases taxes and makes it harder for the private sector to innovate. The city should dump the WiFi plans and co-operate with the private sector through rights-of-way and other issues when the market is truly ready to provide “nomadic” access. That way, San Francisco can maintain its status as the nation’s wireless leader.
Sonia Arrison, a TechNewsWorld columnist, is director of Technology Studies at the California-based Pacific Research Institute.