Phone & cable cos. try to muscle in on municipal wireless
"Telecom and cable giants have traditionally been critical of city-sponsored broadband initiatives, questioning their financial viability and, in some cases, even pushing for state laws to bar or restrict them. Now, in an effort to compete with similar initiatives by Google Inc., EarthLink Inc. and others, some of the companies are changing their tune.
"AT&T Inc...put in a bid March 7 to build a wireless Internet service for Michigan's Washtenaw County...Cox Communications recently teamed up with two companies to offer wireless Internet access in some Arizona cities, and Time Warner Inc.'s Time Warner Cable has signaled interest in Texas.
"Experts say the companies were forced into the shift in strategy. 'It's inevitable that municipal wireless is going to become prevalent in cities large and small,' said Craig Settles, author of the book Fighting the Good Fight for Municipal Wireless....'You just can't get away from this wave.'
"Cities and small localities across the country have started offering their residents cheap or even free access to the Internet either because their areas aren't reached by regional telecom providers or because the available offerings in their areas are too pricey. More than 50 municipalities around the country have already built such systems, and a similar number are at some stage in the process, including Philadelphia, Chicago, San Francisco and Houston, according to Esme Vos, founder of the Web site www.muniwireless.com, which tracks such projects nationally...
"The cities often charge users around $15 a month for the service, though cities such as St. Cloud, Fla., are opting for free access. That compares with cable broadband bills that typically run around $40. DSL services from the large phone companies can run as low as $15 a month for slower speeds, but speeds closer to cable are roughly $30.
"Those economics are a real threat to the large telecom and cable companies, which is why they initially fought hard to stop city-based networks....As they wage those regulatory battles, the large telecom and cable companies are watching competitors jump in to offer municipal-based Wi-Fi services...
"To be sure, both the phone and cable companies say what they have opposed is having to compete with publicly owned or operated services that have access to municipal subsidies or other advantages. They say they have been more open to having local governments facilitate projects by giving out contracts to companies, which is the tack municipalities are increasingly taking."
The Wall Street Journal
Fighting the Good Fight for Municipal Wireless by Craig Settles