Municipal Wireless Grows Local Economies, AES Says

“In nearly every case, municipalities wholesale their networks to carriers,” said Ford: “Essentially, municipal networks are unbundled,” which allows CLECs to piggyback on public safety or educational networks at cheap, wholesale rates. “The stimulation effect is the unbundling of the network,” he added. The principle question a procompetitive municipality has to ask itself, Ford said, is are there “fewer CLECs in a market that has a communications network?” The answer, he said, is “no.” Half of Gainesville, Fla.’s 25 largest customers, for example, are CLECs. Ford, former chief economist of Ztel, focused on Fla. municipalities like Gainesville, Leesburg and Lake County -- which he called the “fastest growing county in the state of Florida” -- for their proximity to AES and their wide-reaching public networks.

AES isn’t the only group weighing in on what has become a heated debate. Whether municipalities should be providing residents -- and CLECs -- with communications networks that circumvent Bell control is being fought out in legislatures in Col., Fla., Ill., Ind., Ia., Neb., O., Ore., Tenn., Tex. and Va. Municipal network proponents claim that antiwireless legislation was sculpted by large incumbents. One vocal group, MuniWireless, lead by intellectual property lawyer Esme Vos, claimed SBC and Verizon have crafted the legislation themselves in several states. Incumbents, on the other hand, claim govt. involvement in heavily invested markets, especially in dense cities, can cause more problems than it solves.

In Tex., a major telecom bill has an amendment pending that could create a ban on free public hotspots. Though the language isn’t unclear, opponents of the amendment say its sponsor, state Rep. Phil King (R- Weatherford), the Regulated Industries committee chmn., is reintroducing his failed bill to help incumbents. The bill, HB-789, originally included a ban that was amended, then removed, under pressure from municipal network supporters. King said this week he plans to reintroduce the amendment on the floor. A King staffer confirmed that the broader telecom bill would be “up for debate and hopefully a vote” today (Wed.). King was unable to return a call by our deadline, as were Vice-Chmn. Robert Hunter (R-Abilene) and ranking Democrat Sylvester Turner (Houston).

“What’s happening in Texas is part of a national movement… We're kind of hoping to draw a line in the sand in Texas,” said Chip Rosenthal, founder and coordinator of SaveMuniWireless.org, an organization devoted to keeping free hotspots and municipal wireless networks legal in Tex. SaveMuniWireless recently organized an outreach drive to connect residents and legislators in support of municipal networks, which the group claims, “help Texas cities… help the Texas economy… help bridge the digital divide… [and] don’t limit the growth of high-speed internet in Texas.” Rosenthal said he was confident pronetwork advocates would have enough support in the legislature to keep a ban out of the final bill.

Verizon is “very strong believers in broadband and want to see it promoted as widely as possible,” said Link Hoewing of Verizon, who declined to take a position on what it called “unclear” legislative language in Tex. But “if the markets are doing a pretty good job, it doesn’t make sense for cities to just start jumping in” and undercut heavily invested networks like the fiber-to-the- premises that represents one of Verizon’s biggest rollouts this year. Hoewing said he didn’t oppose municipal Wi-Fi networks as such: “I don’t think we'd have any concern about a government doing a Wi-Fi [network] in a library or a park… Our main concern is the discussion we should be having about whether a city should be doing a build-out in the first place.”

“A lack of service from incumbents has fueled the explosion” of municipal networks, Ford said. “Essentially the ILECs have created this problem by not offering service to rural, underdeveloped areas… to the extent that they [cities] think it’s a problem,” he added, noting that when municipalities need networks to monitor electric utilities or wire schools, “in almost every case they ask the ILEC to do it first.” Hoewing said: “We have to work on that” and added Verizon is open to many potential rural development solutions, including possible bond incentives. He also pointed to recent connectivity models for Grundy, Va. (Wi-Fi), LeGrand, Ore., and several Indian tribes (DSL) that mark successful public-private partnerships for getting rural areas connected.