Broadband-Internet.GOV - When Government Gets Involved
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The more people adopt full use of the internet, the less use other public services may have and the more useful it will be. For some things, the internet is the only choice. There are no global yard sales like eBay. Some provide products people may not be able to find locally. This is public infrastructure. Just because it can also provide entertainment should not automatically relegate it to the domineering hand of entertainment companies.
Needless to say, cable and phone companies are automatic opponents of any government competition, and they have deep pockets. There are a few well publicized battlegrounds between local governments and telecommunications companies. A case where the government and businesses found a compromise is Philadelphia, where the city will be building a new wireless network to blanket the entire area.
The $10 million required for Philadelphia’s Wi-Fi construction will come from grants, loans, and other sources that do not involve taxes. Subscriptions to the city’s service will repay the loans, and then they will be a source of revenue for new programs, such as the city’s plan to provide computers to low-income households. Other local governments would likely follow this model instead of instituting new and controversial taxes to build the networks, and after loans are repaid the revenue can fund new or existing programs (possibly reducing taxes as a result, or at least keeping them from raising).
Pennsylvania is one of many states that have restrictive policies in place to inhibit small governments starting ISPs. But while this Philadelphia project will undercut current ISP rates, businesses aren’t being removed from the formula. Instead, what will basically happen is that the city will build the infrastructure from one end of town to the other, then turn around and sell throughput wholesale to distributors. Those distribution companies will then resell the wireless internet to consumers for a reasonable markup, and they will be the ones responsible for managing accounts and customer service. End prices are expected to range from $16 to $20, a great relief from $30 DSL and $45 cable.
The local government is ideal for building and maintaining the Wi-Fi network. Private companies would have to invest large amounts of money up front to build their own network structures, which weeds out the majority of competitors and boosts the prices of those that remain. Building redundant towers for different private providers would not be advantageous. Philadelphia’s plan will help stimulate competition and business. It gives more companies without the startup capital a chance at offering high speed and convenient connections, like the ISP industry was not that long ago.
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