The fight over wireless.

Innovation, the Internet, gadgets, and more.
Oct. 24 2005 5:20 PM

The Fight Over Wireless

Will we get Internet access from big government or big business?

Click on image to enlarge. Illustration by Mark Alan Stamaty.

Wireless Internet access means more than being able to check your e-mail at Starbucks. Imagine if the town you live in transformed into one gigantic wireless hot spot overnight. You could feed parking meters with your MasterCard instead of hunting for quarters. Utility companies might read meters in real time and pass the savings on to customers. The next time you saw a pothole, you could instantly e-mail a camera phone photo to city hall.

Municipal wireless wouldn't just make life easier for citizens—it has the potential to save lives. Firefighters would be able to turn traffic lights green as they race to put out a blaze. Police could tap into a bank's surveillance cameras to get a head start on cracking a heist. And emergency responders would be able to communicate during a natural disaster or terrorist attack, a need that became obvious in the aftermath of 9/11 and Hurricane Katrina.

Advertisement

This wireless fantasy land, where wireless is as much a public utility as water and electricity, has become irresistible to hundreds of cities. Earlier this month, Philadelphia chose EarthLink to build and manage a wireless network spanning the entire city. Cost to taxpayers? $0. The deal requires EarthLink to put together the network on its own dime—an estimated $10 million to $15 million—and share future revenues with the city. To recoup its investment, EarthLink will charge users $20 a month (half that to low-income households). Chicago; Miami Beach; Milwaukee, Wisc.; and Portland, Ore., are also exploring muni wireless. Recently, Google offered to make all of San Francisco wireless for free, reaping revenue by targeting ads to users.

According to a recent study, the United States has dropped to 16th in the percentage of citizens with access to broadband, trailing South Korea, Canada, Israel, and Japan, among others. There is consensus across the political spectrum that we need to go wireless—and fast. The disagreement is about who will cover the country with hot spots: big government or big business.

Public-private partnerships like the one in Philadelphia probably won't be the model for the rest of the country. After Philly announced its intention to provide citywide wireless last year, Verizon spent more than $3 million to lobby the state government to pass a bill preventing cities and townships in Pennsylvania from offering broadband or wireless services unless the phone company has refused to do so. More than a dozen states have similar statutes on the books that make it difficult for government to get into the wireless broadband business. Florida Gov. Jeb Bush signed a law in June that prevents municipalities from offering broadband if there are competing private services. Nevada bans most cities and counties from offering telecommunications services. Texas flatly prohibits it.

Companies like Verizon, Sprint, AT&T, and SBC don't want citywide wireless broadband because they'd much prefer the wireless market to look like the cell-phone market. Instead of wireless becoming something akin to a public utility, the telecom companies envision a pastiche of providers divvying up the market much the way cell-phone providers have carved up the United States. If you want wireless broadband, you may have to subscribe to a local phone service or accept a slew of services you don't want. And even if the country is blanketed with wireless, you might have to pay roaming charges to access competitors' networks. In the end, you'll probably end up paying more than with muni broadband, not to mention that emergency responders crossing from one network to another won't be able to communicate as efficiently.

Verizon lobbyists helped draft Pennsylvania's anti-wireless statute in 2004. That law, in essence, gave Verizon veto power. After the legislation passed, Philadelphia officials were forced to negotiate with Verizon so they could proceed with their wireless plan. After much public outcry, the company agreed to a settlement.

It's not just state politicians who are promoting the interests of the telecommunications industry. Rep. Pete Sessions, R-Texas, a former SBC executive, introduced a bill in the House of Representatives earlier this year that would prohibit state and local governments from offering telecommunications services unless the area wasn't being served by a private company. According to Sessions' House financial disclosure forms from 2003 (the most recent year they were available), he has between $500,000 and $1 million in SBC stock options.

In July, Sen. John Ensign, R-Nev., a member of the Republican High Tech Task Force, introduced the Broadband Investment and Consumer Choice Act. If passed, the bill would severely hamper cities' ability to build and manage wireless networks. Ensign and his ilk believe that private industry and not government is the cure for what ails us. Of course, they also believe that states should be able to govern themselves without interference from Washington. Is it a coincidence that Ensign has received more than $125,000 in political action committee donations from AT&T, Verizon, SBC, Sprint/Nextel, the National Cable and Telecommunications Association, Qualcomm, Qwest, Comcast, and Cingular?

In response to Ensign's bill, Sens. John McCain, R-Ariz., and Frank Lautenberg, D-N.J., have introduced legislation that gives municipalities free rein to offer broadband. Who will win is anybody's guess. But with all this money carpeting the halls of Congress and state legislatures, don't expect municipal wireless to take root without a big fight.

Adam L. Penenberg is an assistant professor at New York University and assistant director of the business and economic reporting program in the school's department of journalism. You can email him at penenberg@yahoo.com.