Monday, October 23, 2006

New Orleans will end free wireless service

According to the T-P New Orlean's is going to loose its free muni wi-fi service. Probably this was inevitable from the day that the city failed in its attempts to overturn the restrictions placed on it by the Local Government (un)Fair Competition Act during last year's emergency session of the legislature. We were initially told that Earthlink would continue to provide free WiFi and that the city's free system would continue to operate -- both for as long as the city was in recovery. Since I don't know of anyone who thinks that blessed day is coming in this decade most of us assumed the hour was comfortably far off.

Surprise. Apparently the city has made a miraculous recovery: New Orleans will be standing down its system as Earthlink stands up its and Earthlink will consider dropping its free portion next year.

Next year? My that was a fast recovery.

The Times Picayune broke the story. In that article the Picayune quotes the new CIO as saying that taking down their system would "avoid overlap." I'm not sure what that could mean as the original idea had been to run the networks concurrently and for Earthlink to build out from the already established core. You avoid physical overlap by not overlapping new construction. Possibly they are worrying about or trying to imply they are worrying about interference. But that really isn't a credible issue. There's more than enough spectrum for two large-scale networks and modern digital wireless routers are pretty darn sophisticated about dynamically avoiding interference if there is any room at all in the spectrum.

All that raises the question of what is the real reason for taking down New Orlean's public network. The answer almost certainly is to bolster the future income of Earthlink, the city's private "partner." It hands over the wifi-using community the city built directly to the new Earthlink network. This will increase the chance that Earthlink's books will look good. Next year, not too long after the Earthlink system goes up (recall that it is not yet in place) and with the public alternative already gone, the company will reassess its commitment to a free tier. It isn't hard to see that Earthlink will find it difficult to resist charging for the service.

The promise of free service during the recovery? Gone. The illusion of a public/private partnership? Similarly vanished. Vanished with it is the dream of re-imaging New Orleans technological future around a community-controlled communications network. In the place of that dream is another city-granted franchise similar to the cable franchise already in place. A private company will have different goals for its services than will the city.

A city-run wifi project would, inevitably, be run like a public utility. It's goal would be be to offer reliable service at the lowest possible price. That's not the goal of private providers who, quite reasonably, hope to maximize profit. In the long run these goals are not compatible and one or the other of them will be the one to remain standing. The New Orleans network, this news makes clear, will be controlled by the values of private corporations.

This can make a lot of difference. Bandwidth, like water and to a lesser degree electricity, has costs that lie mostly in the building and maintanence of the network. Water is almost free to pump out of the ground. It's getting it to you that is expensive. Similarly, information is mostly free. The costs all lie in getting it to you. In the natural course of events this would result in "commodity pricing." Commodities are by definition low-margin products. This doesn't upset the utility model--they are not out to make a large profit anyway. But it does distress private corporations who will do almost anything to avoid their product being "commodified." In the world of communications networks this means that they attempt to refuse, as much as they can, to sell you raw, commodified bandwidth and use their control of the provisioning network to offer you unique, monopolized services. Current networks spend most of their available capacity on either analog phone service or cable video. If they were forced to commodification, they'd instead have huge amounts of raw bandwidth to sell you cheaply and you'd use VOIP and download your video for much less expense than under the current "differentiated" system.

The current network neutrality fight is, at its root, really about the phone companies trying desperately to avoid the commodification of their bandwidth as they shift toward selling IP-based products. They want what the cable companies already have: the right to monopolize lucrative "products," to devote almost all of the available capacity to products that they can sell you at a premium by denying any competitor a similar ability. In the end that is what prioritizing bits boils down to.

The dynamic that drives private corporations in this direct is understandable--product differentiation and monopolization leads to higher profits for its owners and huge wealth for the bureaucrats that run the companies. But it is not what is best for the consumers or communities these corporations serve. The wisest solution for communities is to become the owner themselves--and allow, nay encourage--commodification. Prices fall dramatically, much more bandwidth is made publicly available, and enormous shifts take place in that put more control in the hands of users (no longer simply consumers) than our Republic has seen in generations.

The possibility that New Orleans could be one of the places that pioneered that future is what was lost when the public network was handed over to the private corporation that is Earthlink.

GigaOm, commenting on the news, provides a crucial piece of the story:
“Our business model is a paid service,” says Roscoe, pointing out that the partnership with Google to unwire San Francisco is an exception. Earthlink needs the subscriber numbers to make back its investment in muniFi. Earthlink’s recent earnings show that the company gained 47,000 net broadband customers, and a third quarter loss of $3.2 million. No wonder free isn’t in the works.
Earthlink's presence in New Orleans will not be driven by the needs of New Orleanians. It will be driven by the needs of Earthlink's bottom line. It is a testament to the power of the economic logic of private profit that the promise to put New Orlean's needs high on the priority list during rebuilding probably won't outlast the opening of the Earthlink network by even six months.

It is also a testament to the poverty of the idea that public/private partnerships can balance the needs of public good and private wealth. If ever there was a situation where the morality of public good should have had a strong influence it is in post-Katrina New Orleans. The public/private model has failed the test.

It's not that an Earthlink network won't be good for New Orleans. It will be a wonderful and useful addition to the city that will put New Orleans in a relatively advanced stance. But it will not offer the city local control over its own future and the possibility of a new network designed to serve its people and their future first.

It is hard not to see it as a sad day.

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