Whose Wi-Fi is it?
Should municipalities compete with telecom firms to provide the hottest new wireless technology? A bill backed by the Colorado Municipal League would allow cities to provide Wi-Fi if they get voters' OK first.
By Will Shanley, Denver Post Staff Writer
Wednesday, May 4, 2005


A fight between telecom firms and cities over who should have the right to deliver broadband services could be decided by the public.

Some cities want to use free or low-priced wireless as an economic development tool to persuade businesses to relocate. Others see it as a public service.

But telecommunications companies such as Qwest have pushed for passage of a state law prohibiting local governments from providing television, telecommunications and high-speed Internet services, including wireless fidelity, or Wi-Fi.

After some language changes, cities and telecoms support a bill that allows municipalities to provide taxpayer-supported broadband service if they first get approval from voters in an election.

Cities in rural areas would be exempt, the bill says, but only if commercial providers decline to offer Internet access there.

The bill is backed by the Colorado Municipal League.

Glenwood Springs and Frisco offer some city-funded wireless Internet service. Colorado Springs is considering it.

The Wi-Fi issue is coming to a head in Colorado and nationally.  Wi-Fi allows computer users with a wireless card to access the Internet from "hot spots" without a wire connection.

The New Millennium Research Council, based in Washington, D.C., and funded by telecommunications lobbying firm Issue Dynamics Inc., has urged local governments not to enter the Wi-Fi market.

"If a city is allowed to price its service below cost and use its taxing authority to subsidize the municipal operation, the private sector will have no incentive to reinvest in its network," wrote Ron Rizzuto, a finance professor at the University of Denver, in a report for the council.

Qwest spokesman Michael Dunne said cities that offer wireless Internet have unfair advantages over private companies, including the ability to cross-subsidize a telecom service with city funds.

Advocates of city-funded Wi-Fi argue the Internet is a public service that should be provided in low-income and low-density areas. They contend it would promote competition, diminish the digital divide between rich and poor and foster technological advances.

Some local consumers are clamoring for more Wi-Fi, especially if the price is right.

"It would make it easier to use the Internet," said Zack Shenk, 25, of Denver.

Telecommunications companies don't take issue with shopping districts like Denver's Cherry Creek North and Boulder's Pearl Street that offer wireless "hot spots," because local merchants pay the tab.

The merchants see it as an amenity that coaxes customers into staying - and shopping - longer.

Nationwide, dozens of city governments offer some level of Wi-Fi access at nominal or no cost.

The battle is expected to heat up in 2006, when Philadelphia and Portland, Ore., plan to blanket their cities with low-cost wireless coverage.

Computer users in Philadelphia are expected to pay up to $20 per month for Wi-Fi access, compared with $40 that commercial providers charge.

Philadelphia wants to "create a digital infrastructure" that would "help citizens, businesses, schools, and community organizations make effective use of this technology," according to the Wireless Philadelphia Executive Committee website.

The Colorado bill's co-sponsor, Denver Democrat Jennifer Veiga, said cities in Iowa, Washington and Ohio have lost money as Internet providers.

"It's a big risk to taxpayer dollars," Veiga said. "I think it should require public input."

The bill, which passed the Colorado House and Senate last month, should land on Gov. Bill Owens' desk this month. Owens hasn't declared his stance on the bill.

Staff writer Will Shanley can be reached at 303-820-1473 or wshanley@denverpost.com.

Where to find city-funded Wi-Fi serviceGlenwood Springs

Frisco
Austin, Texas
Chaska, Minn.
Chicago
Grand Haven, Mich.
Montpelier, Vt.
Rio Rancho, N.M.
Spokane, Wash.
Tallahassee, Fla.
Philadelphia (2006)
Minneapolis (planning)
San Francisco (planning)
New York (planning)

Whys and why nots
The pluses and minuses of city-funded Wi-Fi connections:

Pros
Allows Internet access for more people
May help cities recruit businesses
Lower price for Internet access

Cons
Puts taxpayer dollars at risk
Could hurt traditional telecoms
Government would act as both regulator of, and competitor with, telecom businesses

Sources: Wireless Philadelphia Executive Committee; New Millennium Research Council