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February 14, 2007
Municipal Wi-deology
The ongoing debate in San Francisco about how the City proceeds with its Wi-Fi initiative demonstrates - more than any similar initiative to date - how ideology plays a central role in the world of public broadband. Decisions are not made based solely on financial analysis and technical assumptions; they are clearly grounded in ideology. And increasingly, far-right and far-left viewpoints are dominating the debate.
I argue that the far-left viewpoints being expressed by the ACLU (on electronic consumer privacy) and ILSR (on public ownership) are as damaging to the public broadband movement as the far-right viewpoints advanced in 2005 by conservative think tanks and special interest groups. Just like the far-right arguments we heard in 2005 that “cities are too stupid to own or manage communications networks” and “cities are wasting taxpayer money, competing with the private sector,” far-left organizations are now hijacking the debate on public broadband, and leaving little ground in the middle for moderate, level-headed viewpoints.
And it’s time for this to change.
For proof, watch the comments that will be posted to this article, ripping me to shreds - and I predict there will be many – but keep in mind that those who are on the far-sides of these issues are the ones who raise their voices the loudest. And as you watch this, take care not to assume that these loud voices represent the mainstream viewpoint, as I believe they do not.
Now I am being naïve of course. Moderate, level-headed viewpoints don’t make for interesting news stories; at least not with the level of intrigue, the passionate pronouncements and the dueling editorials that characterize the far-left vs. far-right debate in San Francisco papers.
Take the recent “Board of Obstructionist” editorial in the San Francisco Chronicle. While I find myself agreeing with some of the author’s underlying arguments in that editorial, taking it to the level of suggesting that those on the San Francisco Board who are opposed to private ownership are intentionally trying to obstruct the process - or playing politics - is a bit unfair in my opinion. The editorial steps over the line, with rudeness and disrespect. While I may not agree with the opponents on the Board who argue for public ownership of Wi-Fi (I have made my opinion on this issue clear in open forums with the Board,) I assume that their viewpoints are grounded in an honest conviction that public ownership is best for their constituents.
Let’s consider the ACLU’s recent criticism, which is based on a viewpoint that the agreement with EarthLink does not provide for adequate consumer privacy protections. On the surface, most would agree that having more protections in this area is better than have fewer protections. But, this fails to put the issue into context, by assuming automatically that the “gold standard for consumer privacy” that the ACLU (together with EPIC and EFF) has advanced is the standard that should be applied. I argue that it is not the right standard. Rather than defend “why we didn’t restrict A and B in the EarthLink agreement,” I openly object to the argument that we should have applied all of those standards in the first place. Why?
• There are dozens of existing federal and state laws that regulate in some way electronic consumer privacy, but none of these laws require the protections called for in the ACLU’s gold standard; if they did, there would be no reason to regulate EarthLink on these points at a local level.
• I have reviewed the privacy policies for incumbent broadband providers in San Francisco, finding that none of them would come close to meeting the gold standard called for by the ACLU.
• Protections in the EarthLink agreement go far beyond those in similar Wi-Fi public-private-partnership agreements. If the ACLU thinks the protections in the San Francisco-EarthLink agreement are weak, they should go read the Philadelphia agreement, or those in numerous other major U.S. cities. The only thing required in most of those agreements is that operators discloses their privacy policy and require users’ explicit acceptance before service is provisioned.
• I happen to have my own ideological belief that consumers are smart enough to make informed decisions about whether to use any given product or service, and that my use of a service is a contract between me and my provider. I don’t want a world where the products and services available to me are based on the ones that the ACLU has decided meet their standard.
If the ACLU feels so passionately that these standards should apply, why not address this at a federal and/or state level? Why fight a battle that wouldn’t win the war? This would have the added benefit of making sure that all providers would be on a level playing field, and that the DSL and cable companies in San Francisco would be required to provide the same protections. Even for the ACLU, the outcome would be better, as they wouldn’t have to argue their points in each and every city involved in a Wi-Fi initiative with a private operator.
Several provisions exists in the agreement with EarthLink that no-one seems to have recognized the significance of. First is the requirement that EarthLink abide by Applicable Laws (which you will find this in various parts of the Privacy section of the agreement.) Now, it’s understandable why no-one finds this interesting or relevant, since it seems obvious that they would have to abide by any applicable laws, and that this kind of language can seem like lawyerly fluff. Second, in the Broadband Non-Discrimination (aka network neutrality) section of the agreement, it says “More specific standards may be established by a separate ordinance of general applicability, which would apply to all similarly situated providers of broadband service.”
So, to the Board I would say “don’t delay Wi-Fi for San Franciscans by imposing valid, justifiable restrictions on the EarthLink agreement - in a way that is discriminatory; instead create local regulations and apply them to all broadband providers in San Francisco.”
Isn’t this a more moderate, level-headed way of thinking about the issue? Of course it is. It recognizes that the number of regulations placed on a competitive entrant to the San Francisco broadband market (EarthLink in this case) should not go far beyond those placed on incumbent providers, who most would agree hold more market power, and have a greater ability to abuse that market power.
So, in the end, the ACLU doesn’t appear to be opposed to the terms of the EarthLink agreement, but rather they appear to be opposed to Applicable Law, and naïve to the precedent set by dozens of major U.S. cities. There are different remedies for that, and the right one is not to delay the right of San Franciscans to have free citywide Wi-Fi.
Are public private partnerships for Wi-Fi truly partnerships? Are they really just opportunities for cities to gain every single concession imaginable by special interest groups, academics and far-right or far-left ideologists? Should cities be trying to create a “telecom policy panacea” that feels like a win to policy makers, but guarantees that the competitive Wi-Fi entrant will be disadvantaged against existing providers? Is the role of cities to “get back” every bad concession that many of us feel have been made in national broadband policy through regulations at a local level? Are we trying to impose the national broadband policy that we wish was in place at a national level on competitive entrants at a local level, but leaving established providers playing by the same old - some would say more favorable - rules? These are critically important issues, but again the far-left has us focused on their out-of-context, discrete special interests instead.
Public broadband may be the best hope for positive change for the state of broadband in the U.S. It has already shifted huge power from the halls of the FCC and congress to City Hall, at a time when other forms of local control (e.g. cable franchising) have been moving in the other direction. But we are at risk of screwing it up through letting these discrete special interests dominate the issues. We are losing perspective on what the goal was in the first place for these projects; stimulate economic development, improve government efficiency and bridge the digital divide. San Francisco is allowing the valid goals outlined by the Mayor to be twisted into ideological debates over public ownership, consumer privacy and all manner of other issues. What was the Board doing about electronic consumer privacy in San Francisco before the EarthLink agreement was delivered to them? How much debate was happening in the Board chamber about network neutrality in 2006? Are these issues important? Yes; but only when considered in the context of the overall initiative, market, program, etc.
To put a finer point on this, let’s consider open access. Following Brand X and the FCC’s decision on DSL line-sharing, cable and telephone companies were relieved of any obligation to share their facilities with competitive providers. But cities have brought back similar regulations and placed them on Wi-Fi operators at a local level. I believe this is a wonderful thing, but it further makes the point about the self-imposed pressure the muni-wireless industry is placing on those motivated to deploy these new facilities.
Shifting gears to the debate over public ownership, again the far-left arguments dominate any moderate, level-headed discussion. In August, 2006, the nonprofit organization Institute for Local Self-Reliance (ILSR), in cooperation with Media Alliance, issued a four-page report entitled Is Publicly Owned Information Infrastructure A Wise Public Investment for San Francisco? The report claimed to be “a preliminary financial analysis” of the viability of a publicly-owned Wi-Fi network.”
While ILSR presented its report as an independent, objective analysis, this independence and objectivity is debatable. On its New Rules Project website, which apparently represents ILSR’s agenda in the telecommunications sector, they stated:
“ILSR believes that only public ownership of a city's information infrastructure can guarantee citizens a controlling voice in the design and operation of those systems. Information networks can operate like road networks: a common carrier, open to all users and suppliers, small and large, at similar rates. We're working with key officials in a half dozen cities to foster publicly-owned information networks.”
Only public ownership …can guarantee..? This statement clearly demonstrates a bias on the part of ILSR for public ownership and calls into question whether its “analysis” of San Francisco’s plans could have led to any conclusion other than that public ownership was both financially viable and desirable.
And ILSR goes on to say “This [publicly-owned Wi-Fi] investment, on the other hand, will yield a 10 to 20 percent annual return.” Hold on a minute; if the argument is about all the revenue and profits that “the City is leaving to the private sector,” this could become a slippery slope. Aren’t “essential services” provided by a municipality often regulated on the rate of return they can achieve? I am quite sure that Public Utility Commissions exist, at least in part, to address this issue. Building a financial model based on replicated pricing, revenue, cost and other assumptions from a private provider (who is justifiably responsible to shareholders for maximizing a rate of return) seems a bit shallow to me. Not to mention that I believe there is little, if any, data available on the revenue, uptake, profitability and other metrics from free-tiered Wi-Fi business models. With so little data available to even the private-sector operators who’ve made these investments, how can we place so much trust in a financial model built by a Minnesota-based not-for-profit? Accept their advocacy for a given position – public ownership – and applaud them for making their viewpoints know – but don’t translate this into an expert-based, objective analysis of the investment, and don’t make it the cornerstone of the City’s financial feasibility analysis.
Now, counter to ILSR, The San Francisco Planning and Urban Research Association (SPUR) delivered a memo to the Board in support of private ownership and the agreement with EarthLink. After testifying in front of the Board about the memo, the representative from SPUR was asked only one question; “has SPUR ever advocated for public ownership of anything.” After the SPUR representative tried unsuccessfully to give a politician’s answer to a politician, the chair commented “I think the answer is no” and thanked him for his testimony. What’s my point? In part, my point is that the same question should be asked to ILSR; “has ILSR ever advocated for private ownership of anything.”
More importantly, my point is that all of these organizations; ILSR, SPUR, ACLU and others are advancing their viewpoints, as they have the right to do, but none should be taken as expert, independent, objective advice to the board. Following the dueling viewpoints of ILSR and SPUR noted above, you will find a copy of the ILSR report on the Board’s website at http://www.sfgov.org/site/uploadedfiles/lafco/SF_Financial_Final.pdf but I can find no copy of SPUR’s memo, unless I go to their website. Once again, it is not about moderate, level-headed consideration of the issues, it is about ideology.
But the Budget Analyst did an objective analysis you say? Well, I believe the Budget Analyst did a fantastic job looking into the numerous, complex set of issues here. But the Budget Analyst did not conclude that public ownership was feasible, which many advocates of public ownership seem to be suggesting. Here are just a few excerpts from their report to demonstrate my point:
• “The estimates used in this report result in a wide range of possible outcomes. Therefore, if the City wishes to examine further the option of a municipally-owned and operated wireless network, cost and revenue benefits would need to be substantially strengthened through competitive bidding and acquisition of firm vendor price information.”
• “The Budget Analyst is unable to estimate potential advertising revenues which would be available to the City for a municipally-owned wireless network.”
• “..the Budget Analyst was not able to obtain exact cost estimates to install and operate a municipal wireless network in the City of San Francisco from vendors or other jurisdictions as vendor information is proprietary, cost factors differ among different jurisdictions due to density and geographical variations, and data were not readily available for relatively new municipal wireless networks.”
Note: it is public knowledge that one proposal received in connection with the RFP process estimated the costs for a city owned network and associated programs to be $100M over 10 years, again demonstrating the wide range of estimates, and the uncertainty and risk still present in the market.
The trouble that both the far-left and far-right have in these situations is that they can never reconcile their viewpoints. For example, if the board adopts public ownership (which ILSR advocates), and puts a privacy policy in place that adheres to the ACLU’s gold standard, both would be happy, right? Not so fast. I predict the ACLU will have a new concern; and it’s called Big Brother. While the ACLU is noted as saying “knowing [personal] information is being collected will cause users to limit what they say and do on the Internet,” how will users feel about “knowing that not just personal information, but everything they say, will travel over a government-owned network?” And how will concerns over ownership intersect with other far-left viewpoints (e.g. in the area of censorship and free speech?) Consider the publicly-owned Wi-Fi network in Culver City, and that city’s controversial decision to filter content - http://www.dslreports.com/shownews/77538
Whatever the outcome, the entire debate is fascinating and desperately needed. I just hope that viewpoints can drift back to the center a bit, or else San Franciscans will be getting 802.11z in the year 2020.
For the record, Civitium supports private-ownership of Wi-Fi for San Francisco, and we support the recommendations for public-ownership of fiber (with an open, wholesale model) presented by our partner, CTC. We have the opinion that Wi-Fi should be advanced now, through the approval of the EarthLink agreement, and that tying Wi-Fi to a 15-year fiber plan would be disastrous for San Francisco. None of these positions are based on the ideological arguments discussed above, as is evident by the fact that we support two opposing approaches to the ownership issue.
Posted by Greg at 12:24 PM | Comments (0)