Should Wi-Fi Networks be a City Utility?

Last week, one of our neighboring Dallas suburbs launched a city-wide wireless network in conjunction with a private Wi-Fi provider. You can read about it at (free registration may be required):
http://www.wxpnews.com/rd/rd.cfm?id=050830ED-City_WiFi

Addison is only one of a number of cities across the country that have built or are in the process of building wireless networks that will provide Internet access almost anywhere within the city limits.

The City of Addison is helping to fund the building of the network, but users will have to pay $16.95 per month or $9.95 per day for the service. Some cities around the country are footing the bill completely (or, more accurately, their taxpayers are footing the bill) to provide "free" wireless access to anyone with a wireless-equipped computer. And that's where the issue gets controversial.

Private Internet Service Providers complain that they can't compete in a market where the government sees Internet access as a welfare entitlement. Why would any average computer user want to pay an ISP for access when they can log on "free" to the city's network? After all, if they pay taxes, they're having to pay for the municipal network whether they use it or not.

Those on the other side argue that 'Net access has become almost as essential as electricity, water, or phone services, and thus should be seen as a utility and provided, or at least partially controlled by the government. Traditionally, "utilities" - whether run by the government itself or by profit making companies - were monopolies. With the deregulation of first the phone companies and later (in some states) electric companies, that changed.

Competition was supposed to drive prices down, but does it really work that way? California was one of the first states to deregulate electricity and soon had prices that were shocking to the rest of us. Texas followed suit and deregulated a few years ago, and my electric bills are literally four times what they were before deregulation. Of course, it's hard to say how much of that, if any, can be blamed on deregulation since other factors (the price of natural gas being one of the biggest) are also at work. Yes, we have more choices now, but it seems as if all of those choices are expensive.

The reason government-owned utilities are (theoretically) cheaper for the consumer is that government agencies (theoretically) aren't concerned with making a profit. But the personnel and resources used by the government to provide a service have to be paid for somehow, and generally there are two ways for governments to get revenues: taxes and user fees. With tax-funded services, everyone pays. With user fees, as Addison plans to charge, those who use the service pay for it. But those fees can still be less expensive than a private company can afford to charge because no profit is necessary.

As we discussed in a recent editorial, private ISPs are already being driven out of the DSL business by recent court rulings that phone companies don't have to make their infrastructures (DSL lines) available for their use. Now they're being driven out of the wireless business as cities decide to get into it.

Of course, this new trend of setting up city-wide wireless networks gives urban dwellers yet another choice in Internet services, and doesn't do a thing to help all those folks in rural areas who are still limited to either analog phone lines or satellite.

What do you think? Is it great that cities are getting involved in creating wireless networks, or should the government stay out of the Internet business? If cities are going to run their own Wi-Fi nets, should they be "free" taxpayer funded services, or should users pay to connect? Will small local ISPs soon be a thing of the past? If so, is that a good thing or a bad thing? Let us know your opinions at feedback@wxpnews.com.