Municipal Wireless Madness

[David Farber <dave () farber net>]

------ Forwarded Message
From: Dewayne Hendricks <dewayne () warpspeed com>
Reply-To: <dewayne () warpspeed com>
Date: Fri, 25 Feb 2005 17:15:24 -0800
To: Dewayne-Net Technology List <dewayne-net () warpspeed com>
Subject: [Dewayne-Net] Municipal Wireless Madness

[Note:  While I don't agree with a number of comments in the piece,  I
strive to find and post opposing points of view on important issues
when possible.  DLH]

Municipal Wireless Madness
  Opinion by Robert L. Mitchell
<http://www.computerworld.com/mobiletopics/mobile/technology/story/
0,10801,99853,00.html?source=x596>

   FEBRUARY 21, 2005  (COMPUTERWORLD)  -  What would your boss say if
you proposed providing low-cost wireless broadband access to the public
in your local industrial park? You'd probably be sent packing -- unless
you're an IT manager for a municipality. In that case, providing Wi-Fi-
or WiMax-based broadband access to your neighbors downtown is a hot
topic.

  As an increasing number of municipalities consider going into the
wireless broadband business, the New Millennium Research Council issued
a report [QuickLink 52381] this month concluding that municipal
wireless services aren't necessarily a good thing. Supporters of the
idea fired back, stating that the NMRC research was commissioned by
Issue Dynamics Inc., a lobbying firm for the major telecommunications
companies. But whether the report is biased is really beside the point;
you don't need a study to know that turning the IT organizations of
municipalities or any other government entity into vendors of wireless
services is a bad idea.

  The NMRC report -- and legislative efforts by the telecom industry to
block municipalities from pursuing such projects -- have changed the
focus from whether it's a good idea for municipalities to provide such
services to whether they should have the right to provide those
services at all.

  In cities with municipal wireless initiatives, the IT organization
will have a major distraction from its core mission. Even large,
well-run companies that stray from their core business models by
diversifying into new markets often fail -- a phenomenon that stock
market guru Peter Lynch calls "diworsification."

  A municipal IT department that moves from supporting its internal
client base to selling low-cost broadband services to the public is
clearly changing its mission. It's moving from an IT support role to
selling a service and building and maintaining a wireless broadband
infrastructure. It's moving from a bureaucratic model to a business
model. And it's creating a quasi-monopoly by using tax dollars to fund
a low-cost access scheme.

  Even if a municipality succeeds, creating a price structure with a
zero or below-market margin is likely to hamper a transition to
competitive alternatives, leaving customers with a government utility
that's likely to be less responsive than a private business. Would
anyone really rather talk to city hall when his broadband connection
fails? And those low prices won't help the city continually upgrade and
rebuild its wireless infrastructure as technology leaps forward. If
municipalities had done this five years ago, I'd wager that they'd
still be using 2Mbit/sec. 802.11 technology.

[snip]

  Robert L. Mitchell is Computerworld's senior features editor. Contact
him at robert_mitchell () computerworld com.

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