Wednesday, October 26, 2005

Is wireless a public good

This Slate article asks whether wireless internet access should be provided privately or publically. Usually public goods are goods where the benefits are so widely dispersed, or there are so many positive externalities, that a private market would undersupply it and so a centralized authority should provision it instead (usually the government). By this definition, wireless should not be supplied by the government, since one person having wireless does not make another person having wireless more valuable, nor does there seem to be any private unwillingness to 1) put up wireless networks and 2) charge for them or give them away for free.

If a government put up wireless access, then the money would come from general tax revenues, which seems unfair since people's usage of the internet varies wildly. The article sees this as a big business lobbying conspiracy
Companies like Verizon, Sprint, AT&T, and SBC don't want citywide wireless broadband because they'd much prefer the wireless market to look like the cell-phone market. Instead of wireless becoming something akin to a public utility, the telecom companies envision a pastiche of providers divvying up the market much the way cell-phone providers have carved up the United States. If you want wireless broadband, you may have to subscribe to a local phone service or accept a slew of services you don't want. And even if the country is blanketed with wireless, you might have to pay roaming charges to access competitors' networks. In the end, you'll probably end up paying more than with muni broadband, not to mention that emergency responders crossing from one network to another won't be able to communicate as efficiently.
It forgets, though, the government run telco monopoly has been a disaster, both in the US and worldwide. Phone rates in the US were extortionately high compared to today's low low levels until AT&T was broken up into the baby bells. Long distance and international rates were extortionately high until that monopoly was broken up as well, and countries, like the UAE and Pakistan, that are still government monopolies have prices which benefit the government monopoly, not the consumer. Why anyone would want to replicate that with wireless access is beyond me. The assertion that private, competing networks will be more costly than a single government mandated one goes against historical reality.


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