Okay, Muni networks (be they wireless, fiber or string and tin can) are all about improving the internet access options in their towns. I think we can all agree that more, better, and cheaper internet is good for the average community. And let’s face facts here—sometimes a community won’t support a commercial internet provider. Sometimes the only way people will get the services they need is going to be to build it themselves.
But all too often, cities are building public data access networks with public money even though there are already one or even several broadband options in the area. I don’t know about you, but the idea of a taxing and regulatory body competing against private industry seems more than a little incestuous. There’s just nothing quite like the ability to vote your competition out of business.
Then, worst of all, there are the ones that manage to pour huge sums of money into networks that don’t get used or completed. These are money pits (often, literally holes in the ground) that the tax payers are left holding the bag for.
Vital, but not a utility
We all seem to agree that, today, broadband is as important to people’s lives as is electricity, roads, automobiles etc. (Please note that I did NOT include food and water here. I think it’s important to differentiate between true needs and convenience/lifestyle items.) Even the Federal Trade Commission’s report “Municipal Provision of Wireless internet” [.pdf] starts out with:
(“FCC”) 2005 Wireless Broadband Access Task Force report Connected & On the Go, Broadband Goes Wireless noted that “broadband networks . . . can increase productivity and drive economic growth, improve education, and allow consumers to make more informed purchasing decisions.”
And here’s where the waters start to get muddy, at least for me they do. First, is broadband a utility? Heck, in this day and age, are any communications systems a utility? Britannica Online defines a public utility as an “Enterprise that provides certain classes of services to the public, including common-carrier transportation (buses, airlines, railroads); telephone and telegraph services; power, heat and light; and community facilities for water and sanitation.”
Under that definition, certainly communications systems are a public utility. Then the reason becomes one of why? Britannica has this to say “Given the technology of production and distribution, they are considered natural monopolies, since the capital costs for such enterprises are large and the existence of competing or parallel systems would be inordinately expensive and wasteful.”
Okay, that all makes sense. It’s completely impractical to build layer upon layer of road, electric lines, water lines, gas lines and such. The spatial and cost requirements of such items (services or utilities if you like) make it impractical, maybe even impossible, to build competing layers.
Then along comes the communications infrastructure. It fits the definition of a public utility in that it is a service offered to the public. And back in the “good ol’ days” there was only one choice too. Telegraph signals that ran over telegraph wires. Then around 1900 that all changed. An amazing new device came along. It was able to insert information into an electromagnetic wave! The new electromagnetic device is commonly called a radio. Now we had two utility services able to deliver communications to the same people at the same time but in different ways (yeah, I know they both had their strengths but don’t write off this line of thinking just yet).
Fast forward to the 1950s. Along came yet another communications mechanism. Cable TV. According to Britannica, CATV was first used to improve signal in remote or hilly locations. In the 1960s, it was introduced into urban areas as a means to combat poor signals that many large buildings were causing. In the mid 1970s, CATV started to offer programming not available via traditional TV broadcast systems.
A mere 20 years after the advent of Cable TV, we see a mechanism practical for less urban areas come to life. Yes, that’s right, earth orbiting systems sitting around 25,000 feet above our heads, more commonly known as Communications Satellites.
According to About.com, Motorola’s Dr Martin Cooper made the first cell phone call on a device he created in April of 1973. It took another 10 years to improve the regulatory and technological environment enough to make the cell phone a commercial reality. By 1987, there were over 1,000,000 cell phones in use nation wide.
In the mid 1990s, companies started to build wireless data systems. Products designed to link locations together via common office style network protocols vs. telecom protocols. It was suddenly easy and not too expensive to used one transmit site to link many remote data networks together. ISPs (internet service provider) started to put the technology to use to provide high speed internet access. Early in 2000, the WISP (wireless internet service provider) industry was in full swing.
Whew, that took many more keystrokes than I thought it would. What does it all mean in the municipal data network context? It means that, today, there are 4 (f-o-u-r) different, often overlapping, technologies that are delivering internet services to people.
- Traditional phone lines (the old telegraph system)
- Cable (an additional service riding on the CATV coax)
- Fiber optic (high speed communications cables sometimes run all the way to the end user)
- Wireless (via cell phone, satellite or dedicated ground based systems)
And there’s an also-ran technology: broadband over power lines (BPL).
If we really break things down based on who does what, there are even more.
- Cable internet
- Cell phone internet
- Satellite internet
- Fiber to the home (FTTH)
- Broadband over power lines (BPL)
- Wireless internet (Wi-Fi, Wi-Max and others)
These are all viable technologies, all delivering broadband services to the public, all with their own infrastructure, all working at the same time, often in the same markets.
The real question then becomes, is communications (specifically broadband) really a utility? Certainly it’s not a natural monopoly anymore. Because there are so many options to more and more users, broadband can be more closely compared to the local gas station or grocery store than the electrical or water systems.
Intervention is unfair competition
I do have to laugh when people try to compare the internet to electricity, roads, or water. Just what we need in communications!!! Boston traffic jams, California rolling blackouts, or Arizona’s version of a lawn. Oh yeah, that would be my broadband dream! (Deep Sigh)
Okay, the last time I looked, gas stations work pretty well around here. I can walk into a grocery store and get food any time of the day or night. Shoot, I can even go to the doctor any time I feel the need! Wait! How can that be? Those are things absolutely necessary to life. The local plumber, carpenter, mechanic etc. all service people without heavy handed government regulation. NOR do they have to try to compete AGAINST government entities offering the same goods and services.
The question begs to be asked. Why do our communications need to be offered by (or controlled by) the government? Communications are no longer a natural monopoly. There are thousands and thousands of providers of communications. Toss in the content providers and there are hundreds of millions (you and I are content providers when we send e-mail, talk on the phone, send faxes etc.). So, again, why the need for governments to build networks?
I can think of one example of where I’d clearly support government provided communications networks. When government’s job is to care for people rather than to protect them, government clearly should provide communications as yet another necessary service. Countries like China, the USSR, France, etc. People who are unable to construct their own networks should be cared for by their governments.
I’m kidding. Mostly. Kinda.
Should a city like Portland, Ore. that’s had cable internet, wireless internet, DSL, and satellite access for many years be spending any taxpayer money to build a network that competes with private businesses? Is it proper for Boston, Mass. to install a network that would compete with companies like Towerstream or any other broadband provider?
The justifications are certainly valid. When there are areas that have no service, we all want them to get advanced communications, including broadband. We all want economic growth. We all want greater access to information, life saving services, entertainment, and all of the other things that come with a broadband connection. Heck, we all want our public safety folks to be as efficient and as effective as possible.
However, if we look at history, is government really, honestly, a good choice for offering those goods and services? How often has government guessed right at the next big technology (remember Y2K, last year’s fiber to the home networks, etc.? Did government create the telephone, automobile, airplane, plastic, rubber tires? Sure, government has funded people that have created amazing products. NASA’s space program has brought us a wealth of ideas. The dialysis machine, cat scans, smoke detectors, portable tools, and many others. The list is long and impressive. I think we can all agree that the exceptions are few and far between ,though. Mostly, most of us think of government as the ones in the way of our daily lives, the ones with one guy working and three leaning on shovels.
End the USF
I think that the real reason government wants to be so deeply involved in the communications industry is more a matter of power and control than it is making sure that services are offered to people that aren’t getting them. In my years in the broadband industry, I’ve consistently seen examples of government spending money far in excess of what it would have cost them to fund an expansion of my business. Lets think about this carefully for a minute. What’s usually better? Building another car, or just replacing the tires that are worn out? Do we build new electrical lines beside every one already there or do we simply find ways to help the companies with expansion of their lines.
In the telecommunications industry there is a program called Universal Service Fund. It’s a cost recovery mechanism put in place years ago to help providers in low density or otherwise high cost regions build and maintain networks that otherwise couldn’t be build or maintained. The idea is sound. It’s certainly important for people outside of the large cities to be able to communicate with people in the large cities. It’s also important that we keep roads into low density areas so that farmers and ranchers can get food into the cities. As an idea, USF is great. Its implementation has turned out to be less than ideal. You see, it was created as a cost recovery mechanism. The more money a company spends, the bigger the check they get. Wouldn’t it be great if the more you spent the bigger your tax refund?
Local ISPs should build local networks
The part that amazes me the most is how municipal networks seem to get designed and built. Very rarely do we see the cities hiring local people that are already experienced in the technology and the local operating environment. Nnooooo, they have to hire Cisco, Lucent, or Google. Google? They make search engines! What does Google know about high speed wireless access in San Francisco? Give me a break. What does Cisco know about building Wi-Fi networks in your city? Sure, they bought out Aironet many years ago, but Aironet didn’t deploy networks, they built data radios.
I’m not saying that those companies aren’t good. I’m not even willing to say that they can’t build good wireless networks. What I am saying is that the operators in Dallas would be able to build a better network than someone that has never been to Dallas.
If municipalities are going to keep building networks, I do hope that they will look before they leap and only build networks where no one else has. And I hope that they will work closely with existing providers in the area. I hope they will work with those that have already built networks in their communities.
Can we have advanced communications networks without government involvement? I think it would be nice to at least try! Shoot, the internet as we know it is only a decade old. Am I really the only one that thinks that we’re panicking over a bunch of nothing? Here America has had one of the best communications networks in the world in 1990. Suddenly in 2006, when the rest of the world has had to build brand new state of the art networks just to have any kind of a network, Americans are supposed to be upset that we don’t have the best one?
On top of that, should we feel bad that we don’t need a bigger, better, faster communications infrastructure? We’re supposed to feel bad that we already get our games, phone, movies etc. via a network that’s not fiber to the home? Does it seem at all normal that there are some that are trying to tell us how ignorant and behind the times we are because we aren’t willing to pay for additional networks to be built? Is it really that horrible of a thing that we actually have jobs and entertainment mechanisms that don’t require yet another investment? Is it bad that we’re finding ways to improve the usefulness of the networks that are already out there?
Now, before anyone (again) accuses me of being either an old stick in the mud (I’m only 40) or that I’m not a fan of building newer and better networks let me defend myself. See, I’ve spent the last 6 years building a state of the art wireless network that spans part of three counties. Our customers have access to VoIP services. Heck, we’ve used Vonage in my office since 2002. We built a network that allowed public safety to roam, not only from cell to cell but from town to town at speeds in excess of today’s DSL services clear back in 2001. We have customers that get 8 meg down by 8 meg up broadband service for a mere $75 per month. We’ve offered customers that can’t even get phone service wireless service in excess of 1 meg both ways as far back as 2000.
I’m certainly no technophobe. I’m one of the guys building the next generation network. I was in the broadband business when it was too young to be called cutting edge. We had to grow up to cutting edge. I sure hope I never have to go through that hell again! What a pain in the you know what.
The part about my story, and the part that those that hate this article won’t understand or believe is that I’ve built this network. Sorry, that should read “am building this network” with my own money. I’m not funded by you. I’m not building my network the way some bureaucrat thinks it should be built. I’m not building it faster than it can support itself. I’m building the network that my customers want to be serviced by. One that they don’t have to pay taxes to support. One that they don’t have to pay higher prices that would be used to cover the costs of people who don’t even want the service. It’s organic. It’s entrepreneurial. It’s home made. It’s totally customized for those who are expected to use it. How cool is that?
We can build what we need
We need broadband to the masses. Scratch that, we have broadband to the masses. The rest need it too. The government has to stay out of the way if they are going to get it, though.
Before anyone gets too worked up about broadband, there needs to be better data collection. In my industry, fixed wireless, the FCC has had around 400 WISPs fill out the form 477. WISPA (wireless internet service providers association) claims that there are at least 3,000 WISPs. Pew Internet’s May, 2006 report, Home Broadband 2006 [.pdf], claims there are several thousand WISPs serving 6 million subscribers.
I believe that the gap between the broadband haves and have nots is actually much smaller than is commonly reported. And whatever problem does exist is fixing it’s self at a high rate of speed. Talk to any manufacturer of any broadband technology and ask them how sales have been. Then ask MOST of their customers what percent of their spending is funded by government. I think you’ll be surprised at how little government money has gone into the average advanced communications network over the last decade.
Relax, take a deep breath. Let capitalism work for a while. In another 10 years, if there are still pockets of America that don’t have good broadband choices, let’s revisit the issue. Goodness knows, living without advanced communications will be less than easy in the coming century. Let’s take enough time to make sure that we build the network right. Let’s not create a broadband panic like we’ve created a health care panic. I certainly don’t want my internet fees to shoot up like my insurance costs have!
Story courtesy of ISP-Planet.