Wireless Boondoggles
Public broadband rip-offs
Hundreds of cities are planning to provide Internet access to their citizens. But a new study from Jerry Ellig, a former Federal Trade Commission official, suggests such projects probably will turn out to be boondoggles.
The study, published by the Reason Foundation, the nonprofit that owns this magazine, shows that 93 percent of U.S. ZIP codes already have two or more competitors in the high-speed Internet market. Those private broadband providers don't seem to be bleeding poor citizens dry: The Bureau of Labor Statistics' consumer price index for Internet services has fallen by 23 percent since 1997, and access continues to increase via private markets.
Thanks to constantly evolving technologies, government money sunk into particular methods of Internet access has a high risk of going to waste. In the mid-1990s, consumer interest groups called for the government to mandate provision of what then looked to be the most promising high-speed Internet technology: ISDN via telephone. By 1998, notes Ellig, "ISDN was the most expensive and second-slowest form of Internet access."
Even the apparent gift of free or highly discounted corporate-supplied WiFi, an idea in play in Philadelphia, Houston, and San Francisco, can cause unanticipated and unwelcome market distortions, Ellig finds, because such deals often involve monopoly grants of rights of way.
Editor's Note: As of February 29, 2024, commenting privileges on reason.com posts are limited to Reason Plus subscribers. Past commenters are grandfathered in for a temporary period. Subscribe here to preserve your ability to comment. Your Reason Plus subscription also gives you an ad-free version of reason.com, along with full access to the digital edition and archives of Reason magazine. We request that comments be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of reason.com or Reason Foundation. We reserve the right to delete any comment and ban commenters for any reason at any time. Comments may only be edited within 5 minutes of posting. Report abuses.
Please
to post comments
xtg