Muni-WiFi projects deserve to be considered for stimulus money

By Craig Settles

The dark forces of anti-government sentiment are creeping into the OpEd pages, slamming municipal involvement with broadband networks funded by the stimulus program.  It's time to push back before this backward thinking gains a toehold in the upcoming grant process.

I sat through the meeting this week at the Dept. of Commerce and shuddered at the thought of these old foes influencing policy. Listening to what was being said, an unspoken reality hit home. The National Telecommunications and Industry Association and Rural Utilities Service, to their credit, are going to solicit a lot of input on how to distribute this money. However, with such a broadly defined directive from Congress and a short timeline for execution, both agencies are vulnerable to backward thinking.

The latest line of attack against the broadband bill's intent, started by some of the big telcos in December, is that many muni-wireless projects failed, so any municipal involvement in broadband projects funded by the bill is bad. Wrong! Let me make this clear: Wrong premise, wrong logic, wrong answer!

The premise behind the anti-muni position is that it's a bad idea for municipalities to own broadband networks, or partner with private sector companies in broadband projects because muni-wireless networks failed. This premise doesn't reflect two key points.

First, muni wireless as a government policy took hold because of blatant failure and direct refusal of incumbents to provide adequate service in rural and urban communities that wanted them. This has not changed. Even as incumbents come to the table of broadband stimulus, their supporters keep trying to justify the position that it's not profitable to bring service to many of these communities. Or if only one service exists, no matter how bad it is, then no money should go toward developing other options. Sock puppets keep preaching the word that free market dynamics will save un-served communities--some day.

Second, many muni-wireless projects failed not because they were bad ideas, but because they were driven by an incredibly bad business model: private sector companies would bear all the costs AND give away many of the access services for free. One of the more awesome aspects of the stimulus bill is that it pushes grantees to have a business plan for sustaining broadband projects that get funded. In other words, those drafting the bill saw the muni-wireless problems for what they were--a failure of adequate planning.

The logic driving the enemies of muni networks is mistaken. Because initial wireless projects failed, the idea should be abandoned? Where were these people in the early days of cellular networks? How many of those companies provided crap for service at insane rates? Some failed, new technologies and new approaches were tried with mixed results. From failure and shortcomings, success evolved. So it is with muni networks.

It is true some muni wireless failures were spectacular and very public, though with minimal financial traumas given the "free" business model. But in rural and urban communities lessons from the failures and shortcomings of other projects have created successful projects. NTIA and RUS should hold these success stories up as justification and motivation to stay their course of prioritizing local government projects for stimulus funds. 

Since 2003 there have been successful municipal or municipal-driven fiber network projects. Today, however, I'm focusing on wireless because I feel it's not getting the respect it deserves. Wireless in its many incarnations needs to get as much consideration from communities and NTIA/RUS as wired networks.

My baseline for success in the context of the stimulus bill is not whether these networks generated lots of individual subscribers, but did they have significant short- and long-term economic impact.

The government of Prestonburg, a small Kentucky town, built a wireless Meraki network with one objective being to revitalize the business district. Within three months of buildout, 22 new businesses moved into the area bringing 40-45 new jobs. Tax revenue in the network's first year increased by $111,000, mostly from new business development in the area.

Seattle built and operates two wireless networks in business districts targeted for economic revival. 36 percent of businesses surveyed in these areas feel the network increased revenue, 70 percent felt it was valuable to the business district and 75 percent of shoppers said the network encouraged them to go into a business in the area.

Rural Greene County, N.C., bought wireless network equipment they lease to a private company that built and operates the network. Subsequently a dog supply company converted from catalogs to the Web to generate sales and went from three to 20 employees. A new food manufacturing plant whose equipment relies on broadband connectivity brought $6 million investment and 63 jobs. A new tennis ball manufacturer invested $250,000 into the community, and created 15 jobs.

In San Francisco, wireless networks in low-income housing developments allow nonprofits such as the St. Anthony Foundation to give individuals technology skills to get jobs and advance in careers, and achieves success through people using those skills at home. Wireless Philadelphia has documented success working with funding agencies and community-based organizations to move low-income individuals into the workforce or up the business ladder.

I'm working on a Municipal Broadband Snapshot Report in which communities outline how broadband networks, using various technologies and business models, can deliver economic benefits that the new administration dreams about accomplishing. The path to success is there. NTIA and RUS are in a great position to enable communities to obtain the networks they want and need and help the administration accomplish its mission. The means to achieve initial success are there.

The effective use of stimulus money is heavily dependent on this upcoming public comment period. Looking around the room yesterday, I got a little nervous wondering how rural and urban communities' interests will be effectively represented in these meetings. That's the third main ingredient to success.

Craig Settles is an industry analyst and workshop leader who helps organizations understand the benefits of broadband and mobile technology. Check out his website at www.successful.com.

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