Wireless (and Wired) Minneapolis

The Pioneer Press’ recent examination of the increasing interest in citywide wireless systems (“Cities ride the Wi-Fi wave”) failed to make a crucial point.  Ownership matters.  Both Chaska and Moorhead have publicly owned networks.  Minneapolis, on the other hand wants to facilitate another privately owned network.

Chaska residents and business owners can rest assured that no matter what restrictions are placed on the use of phone and cable lines to their homes, there is a third connection, a wireless connection, that is neutral to content and competitively priced. Minneapolis will have to rely on the good will of the private company granted the city’s wireless franchise.

Relying on corporate good will is a chancy proposition. Consider one recent development.

Privately owned networks are working on plans to charge companies like Vonage and Google for the Internet traffic they generate. In an interview with Business Week, SBC CEO Edward Whitacre said, “there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?”

Phone and cable companies think it’s not enough to charge you upwards of $45 per month for a fast internet connection. Now they want to charge the companies that operate the sites you visit.

By Mr. Whitacre’s logic, the monthly fees you pay for your Internet connection do not entitle you to choose what you do on the Internet.

This violates the principles of “network neutrality.” Network neutrality is the idea that customers should be able to use their broadband connections to access the content of their choosing, run the Internet applications of their choosing, and attach to their connection any devices of their choosing. The opposite of network neutrality is rules that allow the cable or phone company to restrict your ability to download music and videos from the Internet, or to use services like Skype, which allows you to talk to other Skype users anywhere in the world for free.

Network neutrality is possible because with Internet Protocol, bits are bits. Whatever you do with your internet connection – listen to radio programs, post your work on a web site, send pictures to family, or talk to friends in Canada – is broken down into little packets of data that move through the network in the same way. The FCC has formally adopted four network neutrality principles as part of their decision-making activities.

Private companies want to maximize revenue from their networks not by offering faster or more affordable connections, but by charging you for what you do with your connection. For example, they might offer one rate to download video created by their company (or subsidiaries), a higher rate to download video from an independent filmmaker, and an even higher rate to post your own video for others to download. Since the cable and phone duopoly provide 98 percent of the high-speed internet connections in the U.S., they face no competition from companies that simply want to sell you a fast internet connection to use as you please.

There is an alterative. Publicly owned networks can allow open access. Open access creates competition, virtually ensuring that network neutrality requirements are not needed. If any single service provider placed unreasonable restrictions on internet usage, customers could simply choose a different provider.

A publicly owned broadband network would not be a monopoly. Customers could still choose to continue to use the incumbent phone or cable company’s pipes. But they would have that choice.  The smart money is on people gravitating toward publicly owned pipes, which allow them to choose how they use the internet. This is why the incumbent phone and cable companies oppose municipal broadband.

Recent history teaches us that relying on the good will of private corporations is short sighted.  Many local governments required, as part of their franchise agreements, that cable companies allow competing companies to provide internet access over their cable networks.  The companies fought open access requirements. The FCC not only took the cable industry’s side, it went further.  This year it eliminated its existing open access requirements for phone networks.

Saint Paul and other cities have an once-in-a-lifetime opportunity to create a competitive local market for broadband by building publicly owned networks. They should not waste it.