Thursday, October 02, 2008

 

What's wrong with 'free' broadband

IPIThe Institute for Policy Innovation has released a report [ pdf] that asks "Should the U.S. Favor a Free Nationwide Wireless Network Provider?"

The report is in response to plans under development by policymakers for a free nationwide wireless broadband network. The FCC has floated an idea to auction 25 MHz of spectrum for a national wireless network offering free filtered content.

The report takes issue with government intervention - picking a preferred supplier - which interferes with the workings of the marketplace.
Keeping a federal thumb off the scales in the competitive process between providers is important to maintain a stable climate for investments and maintain accountability to consumers.
Many US companies have already placed substantial investments in wireless broadband. Sprint and Clearwire plan a $3.5 billion joint venture with Google, TimeWarner, and others to provide a nationwide 4G wireless broadband service open to any device. AT&T and Verizon have spent about $10 billion each on spectrum for 4G wireless broadband.

The report concludes that experience of a number of communities building free WiFi networks may be instructive. The firm contracted to offer municipal Wi-Fi in Portland, Oregon, found the deal uneconomical and tried to bow out, but found no buyers. The nationwide wireless proposal sets up a future bailout at taxpayer expense.

In the meantime, the Washington Post reports that the US has passed new legislation that requires the FCC to compile a list of locations that lack broadband service, detailing the population and income levels in those areas. The bill will also require the US Census Bureau to add questions about Internet use, asking whether respondents have a computer, Internet access and, if so, whether dial-up or broadband connection.

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