Why Municipal Wi-Fi May Be a Bad Investment for Cities

This is a response by Walter White, vice president state and local government, for Verizon Communications, to a March 18 Viewpoint by John Eger titled: "Freeing Cities from Cable and Telco Monopolies."

Firstly, let me say we have a common bond in our passion for broadband. I have opportunities to speak to state and local officials all across the country, and I often remark to the fact broadband has quickly become a "critical infrastructure in the 21st Century."

Now, if I read your article correctly, I get the unmistakable impression you believe the telecom industry is dead set against municipal networks.

I'd like to take this opportunity to attempt to ratchet down the intensity of the debate a bit, perhaps to a more sober and practical discussion about whether having municipalities offer Wi-Fi makes sense.

First let me briefly state Verizon's policy position on muni Wi-Fi, since I don't believe it has been accurately reflected either in the press or the blogosphere.

• Verizon is not against muni Wi-Fi.
• We were not the ones who inserted the muni Wi-Fi provision in the 30-page Pennsylvania legislation that set the rules for all of telecom.
• We decided not to participate in the city of Philadelphia's Wi-Fi endeavor, but we have given the city a waiver so it can embark on this project.
• We will work with cities to offer broadband where it makes sense. In fact, we're working with a few municipalities today in a public-private partnership to aid them in offering local broadband services.

With all of that said however, let me also be clear -- we are highly skeptical about whether muni Wi-Fi is a good idea. From our perspective, taxpayers should ask hard questions about whether pouring money into muni Wi-Fi is a good use of scarce resources. There are several reasons it almost certainly is not.

First, this isn't Field of Dreams -- even if you build it, often they don't come. The city of Orlando shut down its system, having logged an average 27 visitors a day. Other muni Wi-Fi systems are also struggling. While some may succeed, the many that ultimately fail will leave the taxpayers holding the bill. If a private company risks capital, private investors foot the bill, not taxpayers. From our vantage point, that's a better way to go -- let the private sector take the risk.

Moreover, even if cities could attract users, there still may be better uses of taxpayer money than muni Wi-Fi. Economists call this the opportunity cost. Cities around the country are making very difficult choices about what to fund and what not to fund. Very basic city services are being cut back. Is Muni Wi-Fi on a par with aid to the homeless, drug rehab, and fixing potholes on the street? That's not for me to answer for you, but it's a question that begs an answer.

I will suggest my own answer. Muni Wi-Fi is at best a "nice-to-have," not a "must-have."

Web access is widely available to all -- the headline in the New York Times June 23, 2005 said it all -- "almost all libraries offer free Web access." What's more, 18 percent of libraries already offer free wireless access and 21 percent plan to offer it within the next year. That's in addition to the almost ubiquitous commercial broadband availability in cities like Philadelphia as well as the ubiquitous availability of dial-up for e-mail and Web access.

The benefits of muni Wi-Fi above and beyond what's already in place simply don't live up to the enormous hype. Faster wireless connectivity is certainly good, but it's already available today from Verizon Wireless and other competitors.