Way back in the early days of mass marketed Internet service small independent companies provided dial up service. The broadband business has been a duopoly, cable and telephone companies are the only two options for the vast majority of high speed Internet subscribers. Technologies such as fixed wireless and powerline promised to introduce greater competition into the marketplace. Fixed wireless fell by the wayside due to high costs of federal licenses of radio frequencies that were sold by auction. Powerline broadband has failed to go past the prototype stage simply because of the lack of investment in the development of the technology.
With the rise of WiFi many towns and cities most notably the city of Philadelphia, have been creating ‘WiFi clouds’ most just covering several square blocks allowing anybody with a WiFi equipped computer to hop online at tax payer expense. Although most of these projects are just pilot projects many of these communities are looking to cover their entire areas with wireless network signals that anybody can access for a small monthly fee, usually a fraction of the cost of a cable modem or DSL connection.
The idea of receiving a Broadband connection provided by the city is attractive to those who claim that Broadband should be a public utility and not a service provided by private companies. Homeowners everywhere have felt the pain of city hall raising the price of municipal water service whenever elected officials felt the need. Telephone and Cable Television rates have typically have been regulated by the Federal Communications Commission in the United States and in Canada by the Canadian Radio-Television and Telecommunications Commission. For broadband Internet service the free market has been only thing that has governed prices.
While municipal governments are planning on sinking millions of taxpayers it has been the telephone and cable companies that had to take on billions of dollars of debt upgrading local telephone and cable networks and laying fiber optic cables from coast to coast to deliver broadband service that consumers enjoy today. If any broadband service provided by municipal government fails to make a profit, it’s taxpayers who end up subsidizing the service.
Telephone and cable companies pay taxes in the communities that they sell broadband Internet and other services, so is it fair that they will end up paying taxes to those who may become their competition. It’s like being forced to pass the knife and fork to the fat guy who is out to eat your lunch.