Philly’s Wi-Fi Failure Contrasts With North Carolina’s Caution

Philly’s Wi-Fi Failure Contrasts With North Carolina’s Caution
August 8, 2011

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

Earlier this year the North Carolina legislature debated the value of municipalities building their own wi-fi networks and decided against it. They passed legislation that was made law by the state’s Democratic governor.

The law does not ban municipalities from entering into the business of wi-fi provision. Instead, it imposes certain requirements intended to provide a level playing field with any competing private sector participants.

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.

Citizen Say-So

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

As an additional taxpayer protection, among 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 their opinions on the topic on the Huffington Post—argued against this legislation. They trust big government to provide satisfactory broadband.

Failure in Philly

But in Philadelphia, government has delivered nothing.

Here’s a brief history of the wireless-project 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 chief information officer leaves to join company she awarded 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 of 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 a government that has no expertise in competing with private providers.

Bartlett D. Cleland (bcleland@ipi.org) is policy counsel with the Institute for Policy Innovation.