NCPA - National Center for Policy Analysis


September 7, 2005

Officials in Addison, Texas, sped up their town's Wi-Fi deployment by becoming a business catalyst, not a competitor, says the Dallas Morning News. Across the nation, many municipalities are using public dollars to build and operate wireless systems to compete with existing satellite, cable and telephone companies.

In Addison, however, after a bidding process, the city hired RedMoon Inc. to turn the suburb into a "hot-spot" for residents and businesses to connect wirelessly to the internet.

The News says, as a rule of thumb, government should not get involved in ventures that private industry can do better. But frankly, they say, Addison did what governments should do:

  • Addison encouraged competition in the bidding process, and then stepped aside and let the vendor build and operate the system.
  • Addison did not commit taxpayer dollars to the project, nor will it attempt to regulate the service.

Municipally owned or funded systems threaten to turn Wi-Fi into just another bureaucratic, city-run utility, while also freezing out innovative, private sector competitors. Consider:

  • Private sector firms respond to new markets and competition with improved services; if they do not, consumers go elsewhere.
  • The public sector, however, lacks financial survival incentives and the expertise to continually innovate.
  • A government-run telecom network will remain a step behind what is generally available in the marketplace or consume considerable taxpayer resources that would be better spent on traditional government services.

A bill introduced earlier this year by U.S. Rep. Pete Sessions (R-Dallas) would prevent cities from offering their own telecommunication services if the private sector offers a substantially similar service. With clearer signals like these from state legislators and federal regulators, advanced high-speed internet services are slowly gaining momentum after years of regulatory uncertainty, says the News.

Source: Editorial, "An A+ for Addison: City got Wi-Fi Without Using Tax Dollars," Dallas Morning News, August 31, 2005.


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