An argument against MuniNets

A bunch of economics and political science departments at Brigham Young University say that Provo, Utah should not get into the business of providing broadband services to their citizens and leave high speed Internet access to the professionals.

bq. If faced with the full cost, it seems unlikely that all or even a majority of the residents would choose to spend their money on expanded bandwidth and more rapid Internet access via a fiber-optic connection, especially since Internet access is widely available through local phone lines.

These gentle folks clearly don’t understand that the telecom business is changing. The service and the conduit have been decoupled, and if they own the fiber then anyone – who is willing to pay a certain fee – can offer a service using the city-owned fiber. It is called recurring revenues. So today DSL is enough for Utah residents, but tomorrow they could get a better and cheaper and faster service over this network. More for the same amount of money – isn’t that the reason why WalMart is in pretty much every community.

bq. While we are not technical experts, the future may well be in wireless technologies. Given this distinct possibility, why is Provo so intent on spending another $39 million to push what may prove to be an obsolete technology?

I think this again is missing the point. If wireless takes off, then it becomes a complimentary technology to the fiber infrastructure. I think Esme says it best in her piece: “it is precisely the failure of cable and DSL companies to bring affordable broadband to communities and, where there is cable/DSL, the absence of competition (there is ONE provider offering lousy service), that are the driving force behind municipalities’ push to deliver broadband services themselves.”


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