A telephone industry official Tuesday urged Congress to bar government-run wireless Internet services such as the one being considered by Fremont and other Bay Area cities, saying they compete unfairly with private companies and stifle innovation.
But those behind eDistrict, a wireless educational network being built for Hayward public school students, parents, teachers and administrators, say the project would not be hindered by such a ban.
Although the network will provide free wireless access anywhere in the city for those affiliated with the Hayward School District, it will be owned and run by a nonprofit organization, Partners In Education. Unlike some of the municipally run networks in question, it would limit Internet access to educational sites included on the school district's Web portal.
"I purposely designed this strategy to circumvent these kinds of politics," said Patrick Simon, chief technology officer for the Hayward School District.
Setting up a government-owned network is like having "City Hall opening a chain of grocery stores or gas stations," said Douglas Boone, chief executive of Premier Communications, a phone company in Sioux Center, Iowa.
"They typically require heavy taxpayer subsidization, which minimizes any net benefit to local residents," said Boone, who was speaking for the U.S. Telecom Association. "They also benefit from tax advantages and regulatory exemptions that do not apply to private firms."
Finally, government-owned networks "often neglect innovation, which leads to technological stagnation," he told the Senate Commerce Committee, which is examining the growth of municipal-backed networks.
But Donald Berryman, executive vice president of EarthLink Inc., an Atlanta-based Internet service provider, said partnerships between governments and private ISPs can provide low-cost, high-speed citywide service that offers many advantages to residents, visitors and taxpayers.
EarthLink Municipal Networks, a subsidiary created to design and implement wireless broadband services, has been awarded two of the country's biggest municipal ISP contracts, covering Philadelphia and Anaheim.
"EarthLink will build, own and manage the wireless network at no cost to the city, while providing Wireless Philadelphia a revenue share to fund its operation," he said. "EarthLink has guaranteed network upgrades on an ongoing basis."
Dianah Neff, chief information officer for Philadelphia, said the partnership with EarthLink will bring affordable broadband service to low-income neighborhoods that otherwise would get passed over by private companies.
Failure to establish public-private partnerships for wireless service "will leave people behind," she said.
By working with EarthLink under a 10-year contract, Philadelphia hopes to be able to deliver high-speed Internet service to residents for a monthly cost of about $20, about half of what it usually costs from a phone or cable company.
Many local government officials are joining EarthLink in urging Congress to pass the Community Broadband Act, authored by Sens. John McCain, R-Ariz., and Frank Lautenberg, D-N.J.
They say cities have as much right to provide broadband service as water or public transit systems. So far, more than 100 municipalities, from San Francisco to Atlanta to Boston, have launched or are exploring city-backed wireless Internet networks.
In Fremont, officials are negotiating with a company to provide wireless Internet access throughout the city, and hope to reach agreement within two months.
Meanwhile, 17 cities in San Mateo County are planning to join Palo Alto, San Jose, Los Gatos and Santa Cruz in a regionwide initiative to get broadband wireless to every street corner, however rural.
The project is being orchestrated by the Joint Venture Silicon Valley Network, a public-private nonprofit representing government and business leaders, and the San Mateo County Telecommunications Authority, a joint-powers authority comprising most of the cities and the county.
"Municipal networks expand economic opportunities," Lautenberg said. "We've got to open new doors, not slam them shut."
But cable and phone companies are urging state and federal lawmakers to shut down the municipal broadband movement. Already, 14 states have passed laws restricting or prohibiting municipal networks.
In his proposed rewrite of the Telecom Act, Sen. John Ensign, R-Nev., would give incumbent providers of broadband service the right of first refusal before a local government could offer such service.
"I don't like to see local government competing with the private sector," Ensign said. Private companies will be pushing innovation because they can "respond to changes in a faster way."
