"You should refund this overpayment of $105,240.00 within 30 days."
When Mayor John Street announced plans to make Philadelphia the nation’s first major “wireless city” back in the fall of 2004, the press couldn’t get enough. “Forget cheese steaks, cream cheese, and brotherly love,” declared The New York Times. “Philadelphia wants to be known as the city of laptops.”
Philadelphia’s goal to cover 135 square miles with a cloud of Internet connectivity was ambitious. But the need was undeniable. High-speed Internet access was fast becoming an economic, educational, and social necessity. Yet most of Philly’s residents were stranded on the wrong side of the digital divide, unable to access or afford a broadband connection.
When Earthlink—a dial-up Internet company looking for a foothold in the broadband world—came forward promising to build a state-of-the-art wireless system without the city paying a dime, Philadelphia signed up. And soon, you couldn’t go a week without another major metropolis—San Francisco, Chicago, Houston, Portland, Oregon—jumping on the Wi-Fi bandwagon.
So what happened?
Three years later, many of the projects seem to be sputtering. The tens of thousands of new subscribers didn’t materialize. Getting the equipment up on streetlights and buildings proved more expensive and technically challenging than expected. Chicago and St. Louis scrapped their plans last summer. In Tempe, Arizona, a company called Gobility shuttered the system there and unplugged its customer-service line. Earthlink abandoned projects in San Francisco and Houston, before announcing it was getting out of the municipal wireless business altogether.
With its flagship Philadelphia project still unfinished, new Earthlink CEO Rolla P. Huff announced last fall that “making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value.”
Then the press pounced, with stories appearing in the Associated Press, USA Today, BusinessWeek, and the Times, declaring municipal projects to be floundering, fading failures. One tech writer dismissed municipal wireless as “the monorail of the decade.”
But all the obituaries are premature. A closer look at what’s happening at projects across the country—public and private, wired and wireless, big and small—suggests that it’s far too early to start the funeral arrangements. Much of the media are confusing the collapse of one company—or one model of broadband deployment—with the failure of the entire idea of municipalities providing high-speed Internet services.
“It’s like someone striking out in a boat in 1490, it sinking, and people saying, ‘You know what? This whole ocean travel thing isn’t going to work out,’ ” says Christopher Mitchell of the Institute for Local Self-Reliance, a Minneapolis-based research group that tracks municipal projects.
Even in Philadelphia, all is not lost. In June, a group of local investors announced they had arranged to take over Philadelphia’s network and offer free Wi-Fi outdoor—but details are sketchy.
Many projects—especially in small towns and mid-sized cities—are thriving. From Hermiston, Oregon, to Scottsburg, Indiana, to St. Cloud, Florida, city-owned wireless systems are up and running, serving local residents and businesses or local police and emergency workers. Places like Sallisaw, Oklahoma, and Kutztown, Pennsylvania, are building their own fiber-optic networks that offer high-speed Internet and cable TV.
In total, more than 400 cities and towns already have launched, or are developing, municipal broadband systems. Spending on municipal networks increased last year and is expected to keep rising. MuniWireless.com projects that annual spending on equipment and services will exceed $900 million by 2010.
Municipal broadband is caught up in a classic “hype cycle”—a term coined by the Gartner Research Group to chart technology trends. It works like this: First, new technology triggers a wave of excitement that builds to a “peak of inflated expectations.” For municipal broadband this was 2005’s heady days of “free Internet for everyone everywhere.”
After the peak, there’s a rapid slide toward what Gartner calls “the trough of disillusionment”—a.k.a. rock bottom or, in this case, the headline in the March 22 edition of The New York Times: “Hopes for Wireless Cities Are Fading.”
Vermont’s Tim Nulty isn’t mourning the troubles some cities are having with municipal wireless. To him, it was never the right technology for the job at hand. “Think about 747s and helicopters,” he says. “Helicopters are marvelous when they’re used for what they’re good at. But you don’t use them to fly thousands of people between Boston and Chicago. For that you need 747s.”
Wireless systems may offer mobility, but a fiber-optic network connected directly to homes boasts nearly unlimited capacity. Fiber is the jumbo jet of municipal broadband. Though conventional wisdom says fiber is too expensive or complicated for cities to handle, Nulty—who spent more than ten years in the ’70s and ’80s on Capitol Hill as the chief economist for the key Senate and House committees that make telecom policy—was recruited out of retirement to help the city of Burlington get a municipal fiber network off the ground.
That project became Burlington Telecom—a city department that now provides high-speed Internet, phone, and cable TV service to some 3,000 residential customers. While revenue from subscribers goes into the public coffers, at Nulty’s insistence the network itself was financed by private investors without any taxpayer money. Not only is the system up and running, but it already has a positive cash flow.
Nulty recently left Burlington Telecom to spearhead a project to bring fiber to smaller towns across Vermont. Twenty-five towns voted—many of them unanimously—to join a venture called the East Central Vermont Community Fiber Network. As in Burlington, the networks will be built without taxpayer funds.
“I’m convinced this is the only way we in Vermont are going to get access to this high-speed stuff,” Jerry Drugonis of Pittsfield, Vermont, told the Rutland Herald after the vote. “We’ve been at the tail end of the dog for a long time.”
It doesn’t necessarily take a city department to bring high-speed Internet access to local residents. Some of the most innovative projects are small-scale, community-based efforts.
“We’re finally coming back around to ideas that were around before the corporate franchise was shown to be a failure,” says Sascha Meinrath, research director of the New America Foundation’s Wireless Future Program, who launched one of the nation’s first community wireless projects while he was a graduate student at the University of Illinois at Urbana-Champaign. “So much money was being spent to push the corporate model that it was all cities heard about. There was no PR or marketing for community wireless groups. But unlike the corporations, their focus has always been maximizing the public good.”
In Asheville, North Carolina, the Mountain Area Information Network (MAIN) has been operating as a nonprofit Internet service provider since 1996, first with dial-up and now with wireless broadband. It uses “mesh network” technology created by a company called Meraki to serve hundreds of citizens in nine Asheville neighborhoods.
The network—the same type that Meraki is using to offer free wireless in San Francisco—allows many people in the same area to share one Internet connection. This type of neighbor-to-neighbor sharing is discouraged by the big phone and cable companies, but MAIN has its own connection to the Internet backbone.
MAIN is far from a traditional Internet Service Provider: It’s committed to closing the digital divide and recycles computers for use by local residents who otherwise couldn’t afford them; its website is a community media hub; and the group also runs a local low power FM radio station. Wally Bowen, MAIN’s executive director, sees the future of community media.
“I firmly believe that every public access TV operation, every community radio station, every nonprofit community technology center can be doing this,” he says. “It’s not rocket science. All of those technology-based nonprofits are strapped for revenue. We’ve got to figure out a way to capture some of those digital dollars that are falling out of our communities, and this is it.”
Small-town success stories are encouraging but they don’t answer whether municipal broadband can work in the big city. The recent completion of a citywide wireless network in Minneapolis suggests that cities may be learning from Philadelphia’s mistakes.
Minneapolis has already signed up 8,000 users, and its Wi-Fi network was used by emergency responders after the I-35W bridge collapse. Unlike Philadelphia, Minneapolis agreed to be the network’s “anchor tenant,” committing $1.25 million per year for the next decade.
“Having the city itself as the anchor tenant gives the provider an incentive to set up a good network,” says Esme Vos of MuniWireless.com. “From the get-go, there’s a set amount of money. Philadelphia never had that deal. San Francisco never had that deal.”
However, some in the Twin Cities are disappointed that Minneapolis opted to support a private network rather than constructing its own public one. “If a private company decides they just aren’t going to do it anymore, the community is stuck because it’s privately owned,” Mitchell of the Institute for Local Self-Reliance explains. “If it’s publicly owned and the network is not going exactly as planned, they can decide if it’s still worth it for their police officers to have access; if it’s still worth it to have inspectors and social workers be able to enter their data remotely; if it’s still worth it for citizens to be able to connect anywhere. They can ask those questions and decide whether it’s good for the community or not.”
However, unlike Philadelphia, Minneapolis did choose a local company, U.S. Internet, to build the network. “That’s key,” Vos says. “U.S. Internet is not investing in a mobile handset project and trying to still provide DSL service and outsourcing their customer service to India. This is their main project.”
Local control—and with it, jobs and revenues staying in the community—appears to be one of the elements of success for municipal broadband projects large and small. The money stays in the community, jobs are being created, and everyone from firefighters to meter readers benefits.
“If you’re not sending money out to shareholders across the country and expecting a huge return on investment,” Mitchell says, “you can already have an advantage in terms of pricing it more reasonably to make sure your businesses and your people can afford to have fast connectivity that’s going to keep the city competitive regionally and globally.”
While municipal broadband projects can’t succeed without buy-in from local stakeholders, ubiquitous high-speed Internet access won’t be achieved via local governments or groups alone. We need a national broadband policy.
Back in March 2004, President Bush called for “universal affordable access for broadband technology by the year 2007.” Yet in 2008, we’re nowhere close. And the United States is falling further behind the rest of the world. Much of Asia and Europe enjoys broadband speeds that are twenty to fifty times faster than what we get here—and they pay less for it.
“We have a failure on the national level that’s too important to ignore,” says James Baller, an attorney who represents local governments and public utilities and closely follows municipal broadband issues. “Not to view broadband as a strategic asset is a significant shortcoming. The other leading countries of the world do view broadband in that light, and they are thinking about how to get more of it at much faster speeds and lower rates because it’s a platform for so many other things that are important.”
Policymakers could create incentives for local communities to build telecom networks, spurring new competition and growing the new market for entrepreneurs and innovators, especially in areas bypassed or underserved by the big phone and cable companies. Better yet, says Asheville’s Bowen, these incentives could mandate that systems be locally controlled and nonprofit, ensuring that the investment stays in the community.
Yet, fourteen states currently have laws on the books—drafted by phone and cable company lobbyists—restricting municipalities from erecting their own broadband systems. The Community Broadband Act, bipartisan legislation that already passed the Senate Commerce Committee, would tear down the roadblocks. “The first thing we have to do,” Mitchell says, “is make sure that communities that want to solve their own problems, that want to build the network they need, can do that.”
Congress and the Federal Communications Commission also could improve municipal wireless by setting aside a greater portion of the airwaves for public use. Wi-Fi systems operate on narrow “junk bands” already cluttered with cordless phones, baby monitors, and the like, requiring more transmitters and higher costs to set up a network.
Meanwhile, vast portions of the broadcast TV spectrum—as much as 70 percent in some markets—are sitting unused because of outdated regulations and a misinformation campaign waged by the broadcasters’ lobby. These “white spaces” would allow signals to go farther and travel through obstacles. “If we open up the unused spaces between the television channels, it suddenly becomes possible to deploy the network that we need at a quarter of the cost,” says Harold Feld of the Media Access Project, a public interest communications law firm in Washington.
There is growing bipartisan support for many of these policies. And the nation’s broadband policy—or lack thereof—is even becoming a presidential campaign issue. To his credit, John McCain is a lead sponsor of the Community Broadband Act, though he hasn’t always backed public interest policies during his years on the influential Senate Commerce Committee and voted against restoring crucial “Net Neutrality” protections.
For his part, Barack Obama hasn’t yet signed on to McCain’s community broadband bill. But he supports Net Neutrality and has pledged to make Internet issues a top priority of his administration. In a June speech in Flint, Michigan, Obama declared: “As President, I will set a simple goal: Every American should have the highest speed broadband access—no matter where you live, or how much money you have. We’ll connect schools, libraries, and hospitals. And we’ll take on special interests to unleash the power of wireless spectrum for our safety and connectivity.”
In the end, the biggest obstacles to universal, affordable Internet access aren’t economic or technical. They’re political. Broadband is too important to the economy, education, and, well, democracy to be at the mercy of Comcast, Verizon, or AT&T. It’s time to rethink the approach to these problems and move the discussion past short-term technical fixes and next quarter’s profits.
“We need to start looking at this as an infrastructure issue rather than as a business,” Feld says. “We don’t ask cities and towns to cost-justify bringing in fresh water and having a sewer system when we could outsource it to private companies. Nobody says, why should my town compete with the private water market? I can get Perrier, why should I have water? We treat water as a utility. We do the same thing with electricity. We have to take the same attitude here toward broadband.”
Craig Aaron is the communications director of Free Press, the national, nonpartisan media reform group. A senior editor of In These Times, he blogs regularly about media, journalism, and the future of the Internet at SavetheInternet.com, StopBigMedia.com, and The Huffington Post.