Hopes for Wireless Cities Fade as Internet Providers Pull Out - New York Times

I have always been a skeptic of the models for municipal Wi-Fi that were all the rage a few years ago. They always seemed to me more hype than substance. Those muni partners who, like Earthlink, believed that they could wrest enough broadband customers from telcos and cablecos to subsidize 'free' service to certain demographic/social groups deceived themselves. Those social advocates who sponsor 'free lunches' for people now must seek a different approach for broadband access.

As a matter of principle, I do not generally favor municipalities building and owning telecommunications facilities that compete directly with the private sector when private sector providers are available and willing to provide essentially the same services. However, Vermont law allows it, as does that of other states.

If governments decide to sponsor 'free' services, they should directly subsidize those users who they believe may find market prices unaffordable. Then, if services are available, users can choose their own provider. Where broadband services are not available, then munical ownership may be the only feasible alternative.

This broadband subsidy issue will surface in Vermont and elsewhere soon, I think. I sense pressure is building to include broadband access in Vermont's 'Lifeline' service definition as broadband access to the Internet becomes increasingly important for folks to participate effectively in today's and tomorrow's society. Certainly broadband is becoming an essential service, but the method of subsidizing access to that surface won't fit the paradigm used for today's Lifeline program.

Today, that subsidy for low income folks is obtained by surcharges on the monopoly services provided by the telcos. Broadband and wireless are presently 'information services' under the FCC rules that support the Telecom Act of 1996. However, the federal Universal Service Fund does support both wireless and wireline carriers who build out voice services in rural and high cost areas, but (to the best of my knowledge) does not cover Lifeline support to end users/customers.

The rules of the game need to change at the federal level if broadband access is to become part of the FCC lifeline subsidy program.

Hopes for Wireless Cities Fade as Internet Providers Pull Out - New York Times