The Viability of Municipal Wi-Fi Networks

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Ownership of broadband networks by municipalities, like many other government initiatives, is framed in terms of best intentions.  Proponents of municipal broadband ventures assert that a high-speed network will be a means of energizing decrepit downtown areas, breaking poverty cycles, increasing tourism, and earning a reputation as a tech-friendly city.  Advocates seem to possess a euphoric “build it and they will come” mentality, hoping that fast and convenient internet access will attract businesses and workers that stimulate the tax base, and keep young tech-savvy professionals from moving elsewhere. 

Local government spending projects that attempt to create a better living environment and business climate are not new and can be desirable. But is broadband infrastructure the equivalent of a performance hall, art museum or public utility?  

Today’s municipal broadband considerations differ from yesterday’s need for electricity co-ops. Often, the stated rationale for a municipal broadband project is to do battle against existing broadband providers. Such cities as Lafayette, Louisiana, Philadelphia, Pennsylvania and San Francisco, California intend to invest in infrastructure that would directly compete with existing cable, satellite and telephone companies. 

City officials allege that current Internet access costs are too high and that the communications market would benefit from more competition.  Framed in terms of a “citizen revolt,” local officials lure their constituents with the promise of fast broadband at costs that undercut market prices.

The latest craze for local governments is the installation of wireless access points to blanket cities with wireless “clouds.”  Wi-Fi, the wireless standard for short-range access to networks, is a good technology, but not a great one.  Lacking forward-correction, connections fail while traveling in a bus or car. It is also highly susceptible to environmental interference and other access points, and throughput speeds degrade as more users connect.

With all the hype, it’s easy to overlook some basic questions that deserve to be answered.   Does Wi-Fi possess the characteristics of a public utility that warrants governmental involvement in the marketplace?  As a market participant, can the public sector compete fairly against the private sector? Finally, can a government that operates a network that transmits disparate forms of content respect free speech rights guaranteed by the First Amendment?