Out of Control

Provo, Utah tried the wholesale fiber route, and still couldn’t be competitive and has had to borrow nearly $1.6 million this year to maintain operations. In Palo Alto, just a drive down the peninsula, after several years of languishing without financing, the city gave up on a municipal fiber project. After MetroFi began offering free WiFi in nearby, it was difficult to maintain the myth that the market has failed and no commercial enterprise will ever make any form of cheap broadband available.

As the Guardian reports (and cited on this blog in the past), many of the anti-business groups behind the original push for the San Francisco wireless were livid when the city turned the project over to Google and EarthLink. Agencies like Media Access and others who less than a year ago so fervently advocated wireless as an effective way to spread broadband access are now saying that the idea is all wrong. The city instead should finance and build its own fiber network and lease capacity to retailers. No price tag was mentioned, for good reason. By comparison, the cost for a similar wholesale network proposed for Portland, Ore., was pegged at $470 million. That idea has since gone nowhere. Sounder heads prevailed and Portland opted for MetroFi.

Now that same debate is playing out in Frisco. Here’s an excerpt from the Bay Guardian article reporting an exchange between Joanne Howis, CTC founder and principal analyst and a more skeptical Brian Roberts, the DTIS senior policy analyst for both projects, at public meeting Aug. 15.

Howis outlined the scope of her firm's study and sang the praises of what’s known in her industry as Fiber to the Premises (FTTP), noting that it's the most reliable, high-capacity broadband technology and that the price of delivering it to people's homes has fallen tremendously in recent years, to the point where it’s the best all-around broadband delivery system.

Later, activists pushed the point on wireless versus fiber. “Fiber can do many of the things wireless can't do, but it can't go mobile," Howis said, also noting that fiber is essential to a reliable public safety system. "Fiber and wireless speak to different needs and are used in different ways.”

But when asked what’s better for residential users, she said, “Anyone who can have fiber or wireless to their homes will choose fiber.”

“Unless it’s free,” Roberts interjected.

Ah, there’s the rub. As if municipal systems don’t have enough trouble competing with the private sector, activists are pushing what would likely be a taxpayer-funded multimillion dollar plan to have San Francisco compete with its own broadband partnership--one offering free service to boot! Now you know why I call these people muni-loonies.

Misplaced as it is, there is a lot of passion against the use of the private sector in the San Francisco deal from influential groups who believe broadband is the purview of government.

Finally, don’t forget, EarthLink and Google will have to build a backbone to network its wireless hotspots. If I didn’t know better, I would say this whole plan was an effort to sabotage the Google-EarthLink deal. After all, the relationship will require the two companies to share highly proprietary customer information and market research data with DTIS if this deal is to move forward. I can’t see them doing this if DTIS goes forward with its own broadband business.

At first, San Francisco seemed to be wising up to what most U.S. cities have learned--that urban wireless is best left to private sector experts. But the political mentality in San Francisco isn’t the same as most others, even those with liberal sympathies. Don’t underestimate the city’s ability to create a bureaucratic and tax boondoggle in place of a technological and fiscal victory.