FTC Democrat Backs State-Owned Wi-Fi
Today the Federal Trade Commission issued a report on the “Municipal Provision of Wireless Internet.” The report, prepared by FTC staff, cautiously endorsed the idea of local governments competing with private wi-fi providers. The staff acknowledged "the possible competitive harms arising from a municipality operating as both a market participant and a regulator"; but Jon Leibowitz, a Democrat and FTC member, issued his own statement embracing the notion of governments competing with private firms.
Leibowitz argued that wi-fi access is tantamount to a civil right:
It is by now clear to everyone that access to broadband needs to improve in this country. In cities where there is broadband, consumers still have little choice between providers. Nearly all homes that can get broadband get it either from their cable or telephone company although, to their credit, in those communities the telephone and cable companies often compete intensely for subscribers. In other communities, especially rural America, where deployment has lagged behind more densely populated urban areas, many cannot get broadband at all. Among those who have access, many have no choice between providers because only one firm offers broadband to their community.Liebowitz is incensed by the move in some states, like Pennsylvania, to prohibit government-run wi-fi. He said Congress should forbid the states--Tenth Amendment be damned!--from restricting the ability of municipalities to offer wi-fi services. Liebowitz said elected state officials were incapable of handling such matters because they were beholden to incumbent telecommunications companies. Unelected federal regulators like himself, however, are in a perfect position to "protect competition" in conjunction with "grassroots" local officials.[. . .]
The municipal broadband movement is a grassroots effort by this country’s local officials – many of whom recognize that broadband Internet access is increasingly essential to economic growth – to respond to real needs on the part of their constituents to make broadband more available and affordable.
Leibowitz said it was "unconscionable" for any state to consider restrictions on government-owned wi-fi. The nation's top Democratic competition regulator even offered this handy analogy:
[I]magine if Barnes & Noble and Borders, claiming it was “killing” their book sales, asked state lawmakers to ban cities from building new libraries. The legislators would laugh them out of the State House. Yet the same thing was happening with respect to wireless high speed Internet services; and elected state officials were taking the argument all too seriously.I don't think Barnes & Noble has ever lobbied against public libraries. It's hard to imagine why they would. Government-run libraries are poor substitutes for for-profit bookstores. Liebowitz should know that, except that he's spent his entire career working for the government, so he doesn't have any practical experience with markets.
Liebowitz thinks the government is just as good as the private sector when it comes to providing a service. I guess the public schools, the Post Office, the Social Security system, Medicaid, and Medicare are just exceptions to the rule.
Comments (8)
Municipalities aren't local governments, they're government-owned enterprises, like the electrical or water utilities. There is no way to know exactly what they should or should not be providing without the marketplace. To say that a municipality should not be providing wifi is no more valid than to say that it should, it is just your own personal preference.
Published: October 11, 2006 4:35 AM
What's interesting is that many(most) "municipalities" already have wireless mesh networks, of some extent, already in place--think of radio-comm to "first-responders".
Businesses like Padcom, www.padcomusa.com , can leverage those existing assets, easily, to provide Wi-Fi, secured, access to a great number of people.
Shouldn't the "taxpayer", already supporting these 'nets', be allowed to leverage their existing 'investment(s)'?
The Pennsylvania situation v. "municipally-owned" Wi-Fi nets is a great example of entrenched interests, Cable/Telco, buying legislators, yet again, to their bidding for them.
Published: October 11, 2006 7:58 AM
M E Hoffer,
I don't think that's fair. I've personally watched a city next door to me build a wireless internet service. It has been a very expensive disaster - I don't think they "saved" a dime by any pre-existing radio networks.
Published: October 11, 2006 11:50 AM
When government is a partner in an 'enterprise' it is always the Senior Partner.
When government is at the same time provider and regulator it holds the role of Advantaged Competitor.
I suggest Mr Liebowitz be promoted to run Amtrak. Lets see what he can do with that first. MM
Published: October 11, 2006 4:18 PM
Brent,
You'll note that I was pointing to : "What could be...".
The grand gulf between "what is" and "what could be" is, as ever, up to us to navigate.
Published: October 11, 2006 5:50 PM
I can assure everybody that this Gov run WiFi setup will be done so incompetently and insecurely that computer crime rates will go through the roof. Mostly it will be identity theft, but others will also use it as a medium for comitting crimes remotely. I also would not be suprised if a wifi area became a botnet to launch DDOS attacks.
At which point this market intervention will create more interventions, such as being required to have a gov issued user ID (or formal registration), or time-rationing (as this tragedy of the commons will lead to), or other draconian methods. Another example of such, can be the requirement that users have anti-malware software provided by company X, or the gov will buy these licenses in volume (corporate subsidy) and resell to the public at large - which must prove that they have it installed prior to registration, analogous to vehicle registrations.
What is also obvious is that some areas will have better coverage than others, and will therefore be a subsidy to that better area.
Idiots (or non-libertarians) always like to point out the free rider problem that must be solved by government. What they all fail to realize is that the government creates a much worse free rider problem - that of having EVERYONE pay, but only SOME receive the service, as opposed to the free market free rider non-problem where some definitely PAY and get the service regardless if anyone else enjoys it.
Published: October 11, 2006 6:37 PM
Quincunx
Your comment is brilliantly stated and should oft be repeated:
government creates a much worse free rider problem - that of having EVERYONE pay, but only SOME receive the service, as opposed to the free market free rider non-problem where some definitely PAY and get the service regardless if anyone else enjoys it.MM
Published: October 12, 2006 7:07 AM
Thank you for an article that paints a Dem as a villian. I was getting a bit worried as several articles over the last year and half seemed to indicate that perhaps Dems were the lesser of two evils. From where I sit, while the Repubs, by and large, sit where JFK was 45 years ago, the Dems are further left economically. And while Dems are, on paper, more socially liberal, it is of little worth if not economically liberal (in the classic sense) as well. Being able to smoke pot if one wants to is of little worth when you're little more than a laborer for the State.
Published: October 12, 2006 9:58 AM