September 29, 2005 (San Francisco) — San Francisco's plan to provide universal wireless broadband access to all of the city's residents is more likely to waste taxpayer dollars than it is to provide state-of-the-art Internet access to residents, according to a coalition of scholars speaking out against the city's plans.
A group of 20 scholars from numerous organizations say that if cities like San Francisco become Internet providers it will "undermine technological progress" and needlessly force taxpayers to subsidize Internet access for the large segment of society that already pays for access as well as those who don't use the Internet.
The Municipal Broadband Compact points to the rapidly declining prices of broadband Internet access and growing penetration rates as a clear sign that government intervention is not needed. It also suggests that the city and taxpayers will quickly be saddled with outdated technology that will require hefty, ongoing taxpayer investment just to keep pace with private companies.
"San Francisco couldn't pick a worse business to get into. Internet service delivery is a fast-paced, dynamic industry that the government is ill-equipped for. We all know government agencies are slow moving dinosaurs that regularly take years or even decades to implement minor changes. The broadband industry will not wait for the government and as a result a lot of taxpayer money will end up being wasted on this project," stated Adrian Moore, who has signed the compact and serves as vice president of research at Reason Foundation, a free market think tank.
"Unlike businesses, governments are not held accountable by the marketplace." Without the worry of losing customers to competitors, there is no incentive for the broadband provider to continue to innovate or provide excellent service," said Sonia Arrison, director of Technology Studies at Pacific Research Institute and leader of the Municipal Broadband Compact. "Over time, San Francisco residents will become stuck with sub-par broadband service — the victims of a city government monopoly."
The report issues four recommendations to expand Internet access and reduce costs:
1. Access to broadband can often be expanded by eliminating unnecessary regulations that delay, raise the cost, or even effectively ban the construction of new network facilities.
2. Municipalities and other local units of government should be prohibited from investing in, managing or operating broadband infrastructure and services.
3. Congress should restrict the authority of states to regulate and tax broadband infrastructure and services in the interest of preserving interstate commerce.
4. Telecom taxes and cable franchise fees should be eliminated to encourage investment in broadband services.
Full Compact Online
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About Pacific Research Institute
For 26 years, the Pacific Research Institute has championed freedom, opportunity, and individual responsibility through free-market policy solutions. The Institute is a non-profit, non-partisan organization.
Sonia Arrison, Director of Technology, Pacific Research Institute, (415) 955-6107
Susan Martin, Media Relations, Pacific Research Institute (415) 955-6120
Adrian Moore, Vice President of Research, Reason Foundation (661) 477-3107
Chris Mitchell, Media Relations, Reason Foundation, (310) 367-6109