Friday, February 17, 2006

Municipal wireless

Okay, so municipal wireless. On the surface, it sounds like a great thing. Decently-fast access to the internet anywhere within a city...why not?

Of course, I'm naturally skeptical of government involvement in anything (as we all should be; after all, it's our money being spent), and municipal wireless is no different. What I'm absolutely opposed to are city-run projects, such as the one in Chaska, MN. Philadelphia was going to set up their municipal wireless like this; however, they've since decided to work with Earthlink.

Such arrangements, where a city contracts with some private company to build a wireless network, don't really seem all that bad. The Philadelphia plan is intriguing because Earthlink will provide wholesale service that will be resold to [I assume a variety of] ISPs that then offer retail service. That's the idea, at least.

At first, the Philadelphia plan, which seems pretty similar to ones conceptualized for Minneapolis and Chicago, reminded me of local cable TV monopolies. For cable TV, a city grants local monopoly powers to some cable company (like Charter, Time Warner, Comcast, etc.) for some fee, and then the residents of that city can only get cable through that one company. The justification for this monopoly-grant system is, presumably, that it's unreasonable and inefficient for competing companies to build physically duplicate cable networks. Interestingly, Barry Goldwater is responsible for the federal legislation that made this possible. (Sidenote: apparently there was a bill in Congress to reform this monopoly system. I don't think it passed, and it was opposed by the National League of Cities presumably because cities get revenues from cable company monopolies)

Anyway, at first, this is what I thought cities like Philadelphia were going to do. But upon further contemplation, I don't think the Philadelphia plan is all that bad.

In the Philadelphia plan, Earthlink will get right-of-way access to city streetlights and electricity for mounting and powering their equipment. This appears to be the only favor Earthlink is getting from the city. There's more to the relationship then that, but some of it involves Earthlink offering discounted prices for the city and poor residents. According to the Earthlink press release:
Under the terms of the proposal, no City or taxpayer dollars will be used to fund the project. EarthLink will finance, build and manage the wireless network, and provide Wireless Philadelphia with revenue sharing fees to help support the Wireless Philadelphia Non-Profit Corporation.
So, from what I gather, there's no reason some other company couldn't build their own wireless network (Wi-Fi or otherwise). The use of city streetlights and power is not a negligible benefit, but it's not as bad as a cable TV monopoly. Plus, the fact that retail service will be provided competitively should mean that consumers will have choices, something consumers don't have with cable TV monopolies.

The big question for me is this: If a company like Verizon wanted to buid an independent, duplicate citywide network in Philadelphia, would the city prohibit it? If they would, then the Philadelphia plan is too much like the cable TV monopoly system that gouges people today and I don't like it.

However, if the city wouldn't prohibit an independent competitor, then I guess I support the plan, despite the fact that government is involved on some level. But since wireless internet access increases mobility (socially and physically) and will likely expose more people to the information of the internet, I think the net benefit is more liberty, which is good.

I sent an email to and, somewhat to my surprise, actually got a response. Here's what I wrote to them:
Me (2/18/06)
I'm interested in citywide wireless systems (Minneapolis, where I live, will be getting one soon), and I have a question about the Philadelphia system.

If a competing company (say for example, Verizon) wanted to build a duplicate, independent citywide network in Philadelphia to compete with Wireless Philadelphia/Earthlink's network, could they? In other words, has Earthlink been granted any sort of local monopoly with Philadelphia?
and here's their response:
Them (3/9/06)
Thank you for your interest. EarthLink has not been given a monopoly. Please see the contacts on
Well, it looks like Earthlink doesn't have a monopoly. That's great!


At 8:36 PM, Blogger Curtis Palmer said...

Regarding your Verizon comment... my understanding of the Philly system is that Earthlink will also be offering their network at wholesale prices to other ISPs. I wonder if it'll become like the ILEC/CLEC regulations where the host Bell companies can actually set wholesale prices so high no one else can underprice their own offering for dial tone. I dunno.

Good analysis!


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