Free WiFi Causes BellSouth-New Orleans Rift

11 Comments

It was only a matter of time before we saw some kind of a backlash on the New Orleans wide Free WiFi network.

The Washington Post reports that BellSouth has withdrawn its offer to give one of its damaged buildings that was a possible site of the new police headquarters. The offer was rescinded in a chat with Terry Ebbert, New Orleans homeland security director. The report says that BLS was upset about the free WiFi network.

BellSouth spokesman Jeff Battcher disputed the city’s version of events.”Our willingness to work with the mayor and the city is still on the table,” Battcher said. “We’ve been working for over two months on this building . . . we are a little surprised by these comments.”

Greg Meffert, the city’s chief technology officer and a deputy mayor, said he is saddened that BellSouth finds the city’s network so objectionable.

If it is true, this is particularly distasteful and petty, given the immense tragedy suffered by New Orleans. It is the kind of public relations disaster that can have a domino effect. While it clearly is a case of he-said, she-said, the recent track record of Bell operators has been that of lobbying against any municipal Internet plans. BellSouth for instance has been fighting MuniNET plans of Layfaette, Lousiana . It has been an ongoing issue in other cities such as Philadelphia, and is not going to end any time soon. Local communities are going to have trouble keeping up with the scorched earth lobbying efforts of incumbent phone companies.

11 Comments

Andrew R

Give me a break….Seems like New Orleans is going for all the freebies it can get … A city so unorganized that it melted away and reach critial mass with its total lack of metropitian leadership and planning ….Millions of dollars of work on levees that did not do what they were suppose to? Cell towers destroyed…
Then when they take a offer that will undermine Bell whose was offering them a building….
Can you serious think that most of money for this will be syphoned off in a state that is the most corrupt in the united states?

Jesse Kopelman

Kevin, if a company cannot compete with something as inefectual as a government entity, they need to close up shop immediately. No high value customer will ever be satisfied with government provided service (this is why wealthy Canadians use private hospitals dispite universal government provided healthcare). These high value customers are the ones telcos and cablecos really want. Customers on the other end of the spectrum, they will get no service unless the government provides it or compels someone else to do so.

On a related subject, it is important to recognize that with IP we can easily separate the services provided from the network. Thus, anyone, even the ILEC and MSO, can sell video and voice services over a publically provided “pipe.” Having government provided roads isn’t stopping UPS from making money.

Kevin

Is BellSouth complaining about a private competitor? No. They are upset that legal and political entities (cities in most cases) that have a huge amount of control over the local regulatory environment in which BellSouth operates are now preparing to establish competitive infrastructure and offerings.

I have heard this compared to situations where cities own their own utility infrastructure – such as electric or gas utilities. The implication being that this is nothing new “nothing to see here, move along…” But there are differences and they are important. In the cases where cities own and manage other kinds of utilities; I believe that the city has an exclusive franchise to provide those utility services in a particular geographic area. They do not compete with other utility companies in the area. The city has a monopoly in its jurisdiction.

In the cases of wifi networks being proposed by cities, these services are being offered in direct substitution and competition to other companies existing and planned services (such as BellSouth)in those areas.

I believe that with existing technologies that only a small number of service providers can afford to build out local broadband infrastructure in an area and to expect a reasonable return on that investment. If local politicians create a subsidized broadband network that does not depend upon normal commercial signals (investment costs, rates of return, revenues from customers, etc.) then that makes further investment in other competitive networks that much more questionable and potentially risky.

So, if the government takes actions that make your company’s planned investments and business plans more risky and potentially less viable – what do you do?

I assume that the majority of writers on this topic feel that BellSouth (and similar companies such as LECs, IXCs and Cable companies) should just keep their mouths shut and only compete based on technology and business expertise and HOPE that the playing field will not become too unfavorable.

Jason

Can’t wait to see who comes out of the woodwork here in San Francisco when the Mayor starts pushing his plans for SF citywide WiFi.

James

FWIW, Mayor of New Orleans Ray Nagin was chairman of Lousisiana Cox Communications prior to becoming mayor. Also, one of the first things Nagin did when he was first elected was to establish an Office of Technology for the city of which WiFi-ing was its first priority -this was long before Katrina hit.

BTW, Cox has suspended billing its customers for the last 3 months. I’m on my 3rd month of free cable internet service!


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sean

Thankfully, the politicians have their priorities in order.

Housing, poverty, and future flood prevention are much less important than free WiFi access for the politician’s middle and upper class constituents.

I agree that the gall of BellSouth is unparalleled. They should smile and graciously accept the government entering their business as a tax-subsidized competitor.

If free WiFi is a good idea, then why doesn’t Mayor Nagin offer free broadband and cable TV? He has shown great skill in management and should be rewarded. Perhaps a clever lawyer on his payroll can twist the Kelo decision to allow him to ‘nationalize’ all existing telecommunication infrastructure within his kingdom; his upgrade and improvement of those services for taxpayers will certainly make everyone better off.

nwistheone

these large corporations continue to amaze me with their selfish, childish acts. they seem to be nothing but toddlers w/ loads of money.

Buzz

If I recall correctly, they, i.e. BellSouth and Sprint put the full court press on the Florida legislature to insure that there would be no Muni-Wifi here in Florida. There is nothing like a good monopoly!

Om Malik

rick, hate to say this, but politicans are asleep at the wheel. i think a lot of people are not aware of the issues at stake.

Rick

Unbelievable, guess we know where their heart is. Hope politicians take note of this when it comes time to make some regulatory decisions.

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