Government Wireless? North Carolina Says No Thank You

Georgia has many examples of failures where municipal governments tried to compete with the private sector to provide Internet access, telephone service, cable television and other services. Taxpayers were left holding the bag.
As Bartlett Cleland of the the Institute for Policy Innovation reports below, Phildelphia is the latest example of government mission creep. The article also explains how North Carolina has wisely put in place some protections against this behavior.

Philadelphia taxpayers left stranded, again, with a failed municipal wi-fi network might wish Philly was in the Tar Heel State.

In spring, the North Carolina legislature debated the value of municipalities building their own wi-fi networks and decided against it.  The legislation passed and was made law by the Democratic governor.

Municipalities are not banned from entering into the business of wi-fi provision, but rather imposes certain requirements intended to provide a level playing field with any competing private sector participant. This is a minimum standard: Governments entering into competition with the private sector should have to play by the same rules and not rig the game in government’s favor.

The proposal allows communities to compete with private companies providing phone, cable and broadband services. But, importantly, they must allow the citizens, those whose money is at risk, a vote before incurring debt when the venture competes against a private sector company.

As an additional taxpayer protection , amongst other provisions, a local government commission must evaluate the competitive environment before approving loans for a competitive purpose.

FCC Commissioner Mignon Clyburn—along with many who posted on the topic on the Huffington Post—argued against this legislation. They trust big government to provide satisfactory broadband. But in Philadelphia government has delivered nothing.

A brief history of the wireless shakedown of Philadelphia consumers:

  • 2004 – Mayor announces Philly will build and operate its own wi-fi network, estimated to cost $20 million.
  • 2005 – Plans scrapped; Earthlink plans to build and operate a citywide network by 2007. Earthlink was to provide free government access, low-cost access for all, and really low-cast access for low-income households.
  • 2006 – Citywide plans pushed back, Philly CIO leaves to join company she awarded with a generous consulting contract for the project.
  • 2007 – Citywide plans pushed back further, Earthlink, having spent $27 million, sees no workable business model and looks to sell the assets.
  • 2008 – Citywide plans pushed back yet again; assets transferred to a private investor after being given to the city with the investor again promising a citywide network. Philly pockets a couple million dollars
  • To date – Nothing but empty promises for eight years because of a lack of uptake in a municipal service, lack of a business plan, and because a government has no expertise in competing with private providers.
I wonder if any of those Huffington Post “posters” are from Philadelphia?


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