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Report: City-run Wi-Fi plans could have 'grave flaws'

Despite good intentions, city officials could be making a mistake

By Linda Rosencrance
February 4, 2005 12:00 PM ET

Computerworld - City-run wireless broadband networks such as those now under discussion in a number of places, including Chicago, Philadelphia, Las Vegas, New York and San Francisco, haven't been fully studied and are being touted with dubious claims about their benefits, according to a report issued by the New Millennium Research Council.
The Washington-based NMRC is an independent subsidiary of Issue Dynamics Inc., a "consulting firm specializing in public affairs and relationship-management services." Its clients include SBC and Verizon, companies that municipalities would be competing with if their plans to provide Wi-Fi service are realized.
The six authors who worked on the report (download PDF), which was released yesterday, warn that if the proposals aren't studied fully, taxpayers could be left to pay for what could soon be outdated technology.
"Municipal Wi-Fi networks present a number of serious problems that are being overlooked as cities rush into committing millions in taxpayer dollars to pay for network development and expansion," the report said.
"[While] the intentions of city officials and administrators are admirable, the rollout of municipally held Wi-Fi networks will likely have a detrimental effect on city budgets and on competition in the telecommunications industry, and fail to produce the economic growth and jobs promised by municipal leaders," the authors said in the report.
"[City] ownership of Wi-Fi networks is not the solution for bridging the Digital Divide or encouraging competition in the broadband market," the report says.
The authors cited what they called "grave flaws" in city-run Wi-Fi plans, including potential cost overruns that would draw more taxpayer dollars away from other city priorities; damage to legitimate commercial broadband competition resulting from taxpayer-subsidized municipal entry; a lack of evidence that economic development and jobs will result from the new Wi-Fi systems; the fact that previous municipal attempts to deploy broadband networks have failed; and a disturbing reliance by proponents on unsubstantiated "if you build it, they will come" assumptions that are at the heart of most city-run Wi-Fi scenarios.
Despite those cautionary words, others said it's too soon to know whether the Wi-Fi networks will be a boon or bust for cities. That's because they haven't yet been built to any large extent, said Frank Hanzlik, managing director of the Austin-based Wi-Fi Alliance.
"What has been done is hot-spot kinds of applications and perhaps campus types of applications," he said. "And because Wi-Fi technology is a maturing technology, some of the uncertainty is taken out of the equation. Wi-Fi is showing up in all sorts of applications -- it works, and it's cost effective.
"The technology bugs have been workedout over the past several years," Hanzlik added, "so the challenge that cities like Philadelphia appear to be embarking on is how can they take that hot-spot concept and really put it on steroids."

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