Monday, March 24, 2008

Government Problems; Market Solutions

For some reason, politicians in the City of Philadelphia thought they could do a better job providing wireless Internet access than the private sector. They were wrong:

It was hailed as Internet for the masses when Philadelphia officials announced plans in 2005 to erect the largest municipal Wi-Fi grid in the country, stretching wireless access over 135 square miles with the hope of bringing free or low-cost service to all residents, especially the poor.

Municipal officials in Chicago, Houston, San Francisco and 10 other major cities, as well as dozens of smaller towns, quickly said they would match Philadelphia’s plans.

But the excited momentum has sputtered to a standstill, tripped up by unrealistic ambitions and technological glitches. The conclusion that such ventures would not be profitable led to sudden withdrawals by service providers like EarthLink, the Internet company that had effectively cornered the market on the efforts by the larger cities.

Now, community organizations worry about their prospects for helping poor neighborhoods get online.

In Tempe, Ariz., and Portland, Ore., for example, hundreds of subscribers have found themselves suddenly without service as providers have cut their losses and either abandoned their networks or stopped expanding capacity.

As the costs of expanding wireless networks drop, wireless coverage will expand from cities to rural areas. We should remember Philly's folly when politicians promise to use the power of government to expand wireless access in New Hampshire.

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