W.Va. should be wary of broadband-for-all plans
The economic stimulus package contains, among other line items, around $7 billion in grants to increase the availability and adoption of broadband Internet services - a key goal for West Virginia, which ranks 50th in the country in broadband adoption.
The economic stimulus package contains, among other line items, around $7 billion in grants to increase the availability and adoption of broadband Internet services - a key goal for West Virginia, which ranks 50th in the country in broadband adoption. Despite gaping needs of new computer hardware and digital education in many urban cities and rural hamlets, some are throwing their support behind the somewhat dated idea of municipal governments building their own broadband networks.
But if local governments stop and first look at the history of municipal telecommunications forays, they will surely find that, for the most part, these projects are a sink-hole for taxpayers.
In 2004, when the City of Philadelphia first embarked on building a citywide wireless broadband network, I warned that such a project could lead the city down the road of Boston's now infamous "Big Dig" - the notorious tunnel project which swelled in cost from $2 billion to $22 billion. It became a poster child for government profligacy.
The cost of Philadelphia's municipal wireless experiment, known as Wireless Philadelphia, similarly skyrocketed from the initially promised $11 million to $17 million for a naively Pollyannaish plan that was supposed bring low-cost Internet service to underserved Philadelphians. Wireless Philadelphia ended up requiring twice the amount of wireless hardware than what was initially budgeted and generated so little demand that EarthLink, the city's private partner, abandoned the project last summer.
If federal policy makers now allow the stimulus funds to be used on highly experimental and speculative taxpayer-financed municipal networks - particularly where there already is broadband service and where the municipal networks thereby face daunting economics - they will be inviting the kind of pork and waste that President Obama has foresworn.
At the heart of the problem is this: the economics simply didn't work. To come close to breaking even, municipal systems need to attract sufficient numbers of low-dollar subscribers to help offset the ever-swelling capital costs of building, maintaining and upgrading the network.
Typically, any wireline or wireless broadband network will cost, conservatively, tens of millions of dollars in initial investments. On top of massive start-up capital costs for initial construction, broadband networks require huge annual operating costs to pay for administrative staff, customer service, repairs and maintenance. Equipment upgrades - needed every four to five years - often cost tens of millions of dollars more.
To offset these costs, municipal systems need to attract thousands of local subscribers by either drawing customers away from commercial providers or by persuading non-broadband users to sign up.
But commercial providers generally offer more reliable and faster service - few of their subscribers are likely to switch to a slower municipal service to save a couple of bucks. And, as the Pew Internet & American Life Project has found, broadband non-users don't see relevance of the technology in their lives, making it unlikely that a taxpayer-subsidized network would suddenly change their minds.
This is why most municipal broadband projects have failed. The same has happened in major cities in Utah, California, Georgia and Oregon. Fearing the same failure, Chicago canceled its municipal broadband project altogether.
What's really needed is not a utopian dream bound for fiscal bankruptcy, but rather a true national broadband policy that will give the nation's mayors the resources for low-cost computers, digital training, local technology centers, and resources for creative non-profits and other third parties to generate targeted on-line content that will foster greater interest in broadband by non-users. When Wireless Philadelphia failed, we did just this with the Digital Inclusion 2.0 program, and as a result, more low-income residents are online in our city than ever before.
This is the kind of imagination the Feds now need in order to make sure that the stimulus doesn't become another Big Dig.
Rizzo is a councilmember-at-large for the city of Philadelphia.
The economic stimulus package contains, among other line items, around $7 billion in grants to increase the availability and adoption of broadband Internet services - a key goal for West Virginia, which ranks 50th in the country in broadband adoption. Despite gaping needs of new computer hardware and digital education in many urban cities and rural hamlets, some are throwing their support behind the somewhat dated idea of municipal governments building their own broadband networks.
But if local governments stop and first look at the history of municipal telecommunications forays, they will surely find that, for the most part, these projects are a sink-hole for taxpayers.
In 2004, when the City of Philadelphia first embarked on building a citywide wireless broadband network, I warned that such a project could lead the city down the road of Boston's now infamous "Big Dig" - the notorious tunnel project which swelled in cost from $2 billion to $22 billion. It became a poster child for government profligacy.
The cost of Philadelphia's municipal wireless experiment, known as Wireless Philadelphia, similarly skyrocketed from the initially promised $11 million to $17 million for a naively Pollyannaish plan that was supposed bring low-cost Internet service to underserved Philadelphians. Wireless Philadelphia ended up requiring twice the amount of wireless hardware than what was initially budgeted and generated so little demand that EarthLink, the city's private partner, abandoned the project last summer.
If federal policy makers now allow the stimulus funds to be used on highly experimental and speculative taxpayer-financed municipal networks - particularly where there already is broadband service and where the municipal networks thereby face daunting economics - they will be inviting the kind of pork and waste that President Obama has foresworn.
At the heart of the problem is this: the economics simply didn't work. To come close to breaking even, municipal systems need to attract sufficient numbers of low-dollar subscribers to help offset the ever-swelling capital costs of building, maintaining and upgrading the network.
Typically, any wireline or wireless broadband network will cost, conservatively, tens of millions of dollars in initial investments. On top of massive start-up capital costs for initial construction, broadband networks require huge annual operating costs to pay for administrative staff, customer service, repairs and maintenance. Equipment upgrades - needed every four to five years - often cost tens of millions of dollars more.
To offset these costs, municipal systems need to attract thousands of local subscribers by either drawing customers away from commercial providers or by persuading non-broadband users to sign up.
But commercial providers generally offer more reliable and faster service - few of their subscribers are likely to switch to a slower municipal service to save a couple of bucks. And, as the Pew Internet & American Life Project has found, broadband non-users don't see relevance of the technology in their lives, making it unlikely that a taxpayer-subsidized network would suddenly change their minds.
This is why most municipal broadband projects have failed. The same has happened in major cities in Utah, California, Georgia and Oregon. Fearing the same failure, Chicago canceled its municipal broadband project altogether.
What's really needed is not a utopian dream bound for fiscal bankruptcy, but rather a true national broadband policy that will give the nation's mayors the resources for low-cost computers, digital training, local technology centers, and resources for creative non-profits and other third parties to generate targeted on-line content that will foster greater interest in broadband by non-users. When Wireless Philadelphia failed, we did just this with the Digital Inclusion 2.0 program, and as a result, more low-income residents are online in our city than ever before.
This is the kind of imagination the Feds now need in order to make sure that the stimulus doesn't become another Big Dig.
Rizzo is a councilmember-at-large for the city of Philadelphia.
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Anyway, I think he is right in that whatever we do here in WV ought to be developed and implemented on a concise and accurate business plan. I know I would like to have some choice other than dial up or satellite where I live.
I liked to have water lines too...wonder where WV ranks in not getting water to its citizens?
Many small business owners and would be small business owners need Broad Band in the rural areas to compete in the global market.
In rural West Virginia cable is not available, Verizon will not add fiber lines to permit Broad Band and only cater to the urban areas and 'cherry pick' where Broad Band is possible.