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Making IT Work for Municipalities:

Building Municipal Wireless Networks

Matt Stone Senior Partner Civitium, LLC

902 Huntington Chase Circle Warner Robins, GA 31088

Phone 478-447-2944 matt@civitium.com www.civitium.com

Carleen Maitland, Ph.D.

School of Information Sciences & Technology The Pennsylvania State University USA

phone: 814-863-0640 cmaitland@ist.psu.edu

Andrea Tapia, Ph.D.

School of Information Sciences & Technology The Pennsylvania State University USA

phone: 814-865-1524 atapia@ist.psu.edu

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Making IT work for municipalities: Building municipal wireless networks

Matt Stone¹*, Carleen Maitland², Andrea Tapia²

¹ Senior Partner, Civitium, LLC, Warner Robins, Georgia

² School of Information Sciences & Technology, The Pennsylvania State University

Abstract

The lack of widely available, affordable broadband Internet access has spurred a

movement in which municipalities are rolling out wireless broadband networks. This

movement has raised a number of questions including: Why are municipalities acting as

the early adopters of wireless broadband technology? How does increased state

regulation of municipal broadband networks affect this trend and how can cities respond?

As cities use wireless broadband technology to enhance services to citizens, the growth of

municipal wireless deployments has transitioned from linear to exponential. In response,

many states have passed laws to regulate and restrict cities' ability to own, operate,

deploy, or profit from either telecommunications or information services. Current and

pending laws will be examined to understand how cities can deploy a wireless broadband

network under these regulations. An analysis of municipal facilities and technology

expertise illustrates the opportunity for public-private cooperation in wireless

deployments. This paper will show that cooperation is beneficial in many cases. Finally,

current business models will be examined for their ability to foster cooperation between

the public and private sectors, bridge the digital divide, and create competition among

private sector providers.

Corresponding author. Tel.: +478-447-2944. E-mail address: matt@civitium.com (M. Stone).

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1. Introduction

As the Internet increasingly becomes a cornerstone of American life, the

transition from dial-up to high speed access has taken center stage. This transition is

reflected in recent statistics that found 55% of all adult Internet users - or 34% of all adult

Americans, subscribe to high-speed Internet connections either at home or on the job.

Secondly, 39% of adult Internet users - or 24% of all adult Americans - have high-speed

access at home, an increase of 60% since March 2003.1 High speed access can make

Internet use more enjoyable and can lower the threshold to further integrate it into

peoples’ lives. This is likely to result in Internet content (richer web sites, voice, video,

etc.) being geared toward high bandwidth users.

As broadband access increasingly becomes a necessity, greater attention is being

placed on whether access is universally available and affordably priced to avoid a

deepening of the digital divide. The digital divide refers to "the gap between those who

have access to and can effectively use information technologies and those who cannot."2

While the US has made significant gains in broadband adoption, a first step in closing

this gap, it still lags far behind other countries.3 For example, among industrialized

nations, the US is ranked 10th in per-capita broadband penetration, trailing such countries

as South Korea, Canada, Japan, and Sweden. The US also trails these countries in terms

of the average speeds available over their broadband connections.4 Recent commentary

has characterized US broadband among the “slowest, most expensive, and least reliable

in the developed world, and the United States has fallen even further behind in mobile-

phone-based Internet access.”5

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These dismal statistics have not gone unnoticed. President Bush recently

announced that he wants to make universal, affordable, broadband access available by the

year 2007.6 According to the President, broadband connectivity guarantees "that we have

access to the information that is transforming our economy.”7 To achieve his goal, the

President ordered federal agencies to streamline the process of granting broadband

providers access to federal land, to deregulate fiber-optic connections, to develop

specifications for broadband over power lines, and to curb taxes on Internet access.8 It is

unclear, however, the extent to which these initiatives will address the root cause of the

problem.

The slower adoption of broadband service in the US is likely due in part to high

prices.9 Prices for broadband access via wired media (DSL or cable) have steadily risen

to hover around the $50.00 per month mark, making broadband connectivity too

expensive for many lower income households. According to Mark Cooper of the

Consumer Federation of America, “Cable rates continue to rise at three times the rate of

inflation and "bundling" products and services is costing subscribers an estimated $4.5

billion a year” (2004, p. 10). In addition, the two trends of consolidating service

providers and the bundling of services into high cost packages will ultimately mean fewer

provider choices and higher prices for consumers. The consequences of these high

prices, as noted by New York City Council member Gail Brewer, are limits on the

economic potential for residents, businesses, and non profits of New York City.10

Policies concerned with universal access to telecommunication services, including

Internet access, exist at the federal, state, and local levels. Such efforts follow a long

tradition of “universal service” programs that attempt to provide low cost

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telecommunication services both to low income persons and those living in areas where it

is costly to provide such services (i.e., rural areas). At the federal level, Internet access is

subsidized to certain schools, classrooms, health care providers, and libraries through the

universal service fund, which is administered by the Federal-State Universal Service Joint

Board (Prieger, 1998). Additional efforts at the state levels include programs to improve

the benefits of Internet access (see Strover, S., Chapman, G., and Waters, J., 2004) and

tax incentives for fixed line operators to deploy broadband “last mile” networks.

However, together these efforts have been insufficient to guarantee ubiquitous low-cost

broadband access. One likely reason for this is that these programs are implemented

through the incumbent local exchange carriers (ILECs) rather than directly through

potential users of the technology.

A second possible reason current policies fail is also related to the focus on the

carriers. ILECs are typically large, established companies that face the innovator’s

dilemma (Christensen, 2003). As such, they tend to concentrate on meeting the needs of

their current customers with sustaining technologies, pursuing strategies that have led to

past successes instead of focusing on innovative new services. The need for greater

innovation in broadband has been publicly acknowledged by the FCC in its recent

broadband ruling11, although it will be some time before it is evident whether or not

relieving ILECs of common carrier obligations regarding broadband results in greater

innovation. To date, they have yet to take advantage of new wireless network

technologies that create the possibility for widely deployed, inexpensive broadband

access.

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These new wireless technologies, namely Wi-Fi (wireless fidelity or 802.11a/b/g)

and WiMAX (802.16), enable broadband Internet access without requiring a spectrum

license from the FCC, such as is required for cellular telephone service providers.

WiMAX is a wireless standard designed to extend wireless Internet access across greater

distances, as well as to provide last mile connectivity to an ISP or other carrier. These

technologies enable networks to have a wireless last mile solution and will be especially

useful in bringing broadband access to low density areas. Similar to wired access such as

DSL or cable, Wi-Fi can provide connection speeds of up to 54 megabytes per second.

However, unlike wired infrastructure, wireless networks do not require “last mile” fixed

connections, which account for much of the high cost of deploying and maintaining wired

networks. While early use of wireless technologies such as Wi-Fi was targeted at local

networking for homes and businesses, it is evolving to support metropolitan areas,

granting high speed Internet access to address the needs of mobile users.

Thus, municipal governments are attempting to provide broadband Internet access

in a context where access is becoming essential, and yet, Americans face relatively high

prices for it as compared to other industrialized nations. These municipal actions have

provoked a flurry of responses from concerned constituents, fixed line operators, and

state legislators, and raise question such as: Why are municipalities acting as the early

adopters of wireless broadband technology? How does increased state regulation of

municipal broadband networks affect this trend, and how can cities respond? Why are

public-private partnerships a beneficial means of offering municipal broadband? What

business models can be used to facilitate this?

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This research paper addresses these questions through an examination of current

activities at the municipal and state levels. The paper begins by examining in greater

detail the incentives for municipalities to offer wireless broadband service, as well as the

challenges. Subsequently, the strategic response by incumbent local exchange carriers

(ILECs) and state legislatures are discussed. This is followed by a discussion of various

business models that have been proposed or implemented, including a model that is based

on a public-private partnership. The paper concludes with a discussion and suggestions

for future research.

2. Incentives for municipal broadband deployment

Given the circumstances presented above, there are certainly adequate public

interest grounds for municipalities to consider offering wireless broadband. As a public

entity charged with providing high quality services for citizens, some municipalities feel

compelled to act. However, undertaking such a project requires consideration of a wide

variety of issues, many of which can be broken down according to the dual role of the

municipality as both provider and consumer of broadband access (Gillett, S. E., Lehr, W.

H., & Osorio, C., 2004).

It should also be noted that municipal provision of broadband may achieve a

variety of goals. Recent initiatives underscore an intense focus by municipalities to use

wireless broadband to strengthen economic development, promote digital inclusion, or

improve the efficiency of government services. These goals can be accomplished in

many different ways. Such a project might be limited to offering free Wi-Fi access in

parks, downtown areas, and/or pedestrian malls to attract businesses to blighted areas,

providing low cost broadband access and hardware in low-income neighborhoods, or to

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allow municipal employees to receive daily assignments and submit reports via the

wireless network. In the latter case, the city may earn no revenue to offset the cost of

investments from the project, but instead may realize cost savings and new efficiencies.

Revenue generating projects might include making broadband access available to

businesses or residents for a fee or providing wholesale access to firms who then sell the

business and/or residential access themselves.

2.1 Municipality as wireless broadband provider There are several reasons for municipal entry into the market for broadband

service provision. The first is simply that the technology now makes it possible. FCC

regulation of wireless broadband technology has been extremely limited as the

technology has matured. Through the creation of the Wireless Broadband Access Task

Force, the FCC has proactively worked to remove obstacles to widespread deployment.12

The only substantive regulation on wireless broadband devices comes from FCC Rule

Part 15, which governs wireless devices that operate in the unlicensed spectrums.13

Cities most often use unlicensed spectrum solutions for public access networks since the

only alternative is licensed spectrum, which is auctioned by the FCC to private providers,

often for billions of dollars.14 Part 15 requires that users allow interference on the

network and that wireless devices that utilize unlicensed spectrum are regulated in several

areas, including directionality of device, type of device, and power usage.15 The FCC

continues to revisit Part 15 and the 2.4 GHz band through rule changes intended to

increase the effectiveness of unlicensed spectrum. The FCC has also reserved the 4.9

GHz band for wireless networks dedicated to public safety at the local level. As a result,

municipalities are able to leverage both the unlicensed spectrum and spectrum reserved

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for public safety to support a metro-scale wireless network. This low barrier to entry has

motivated many urban and rural municipalities to explore deploying wireless broadband

technology.

A second incentive for municipal broadband deployment is that filling the gaps in

affordable broadband access will necessarily vary by locale. The identification of

appropriate solutions must take into account local variation in what is deemed

“affordable,” as well as technologies appropriate for a given terrain. Furthermore, while

local governments do not have control over state and federal policies, they do have

control over local government policies that can influence communications infrastructure

deployment, business and residential demographics that shape demand, and the nature

and quality of existing infrastructure (Gillett et al., 2004).

Given existing municipal assets such as buildings, rights of way, and structures

that can house wireless antennas, a third incentive is that municipalities may enjoy lower

cost of broadband infrastructure deployment. This lower cost of infrastructure provision

presents several benefits for municipalities. As a low cost provider of broadband

services, municipalities can offer these services to those who could not otherwise afford

them. This includes low income populations as well as small businesses. This position

can provide a competitive advantage compared with other municipalities for attracting

businesses and consequently fostering economic development. Municipalities have also

seen low cost ubiquitous broadband as a means of increasing education opportunities and

tourism (Gillett et al., 2004).

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2.2 Municipality as wireless broadband consumer Municipalities may also enter the broadband market based on the incentives they

derive from their position as consumers of broadband services. Local municipalities have

become involved in the development and deployment of Internet services within their

boundaries to lower the cost they themselves incur in delivering services to citizens.

Wireless broadband, with its use of free airwaves and unlicensed spectrum, is

substantially less expensive to deploy than other broadband solutions.16 In general,

municipalities become Internet service providers to decrease telecommunications

expenses by lowering the cost of broadband Internet access for government institutions

and citizen users.

In addition to low cost, wireless broadband solutions have also been touted as a

solution to providing portable and mobile Internet access for municipal employees. The

need for such access continues to grow, particularly with internal e-government

programs, referred to as government-to-government (G2G) and internal efficiency and

effectiveness (IEE) initiatives (Lee, Tan, and Trimi, 2005). These initiatives, and the

resulting need to extend Internet and email access to mobile public servants, such as

public works personnel, can place a financial burden on a municipality. For example,

outfitting an entire public works crew with mobile cellular devices could be costly.

Wireless broadband presents a comparatively inexpensive solution. Widespread, yet

inexpensive, Internet access by municipal employees has advantages for citizens such as

faster response times and written records of communications, but also improves quality

of work life for employees (Sawyer, S., Tapia, A., Pesheck, L., and Davenport, J., 2004;

Sawyer and Tapia, 2005). As organizations that must compete with the private sector for

the best and brightest, municipalities must rely on competitive advantages other than

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salaries. Finally, ubiquitous Internet access may also help municipalities to achieve

broader objectives, such as improving inter- and intra governmental communications and

promoting workforce development (Gillett et al., 2004).

Thus, municipal governments derive incentives for wireless broadband

deployment from their roles as both suppliers and consumers of broadband services. This

position, however, has prompted responses from concerned citizens, industry players, and

government entities. In the following sections the basis for, and consequences of, these

responses are discussed.

3. Strategic and policy responses

The context of the strategic and policy responses to municipal entry generated by

municipal entry into the broadband services market has been largely defined by the locus

of power for making telecommunications policy for wireless technologies. Since the

Federal Communications Commission’s (FCC) inception during Franklin Roosevelt’s

administration, communications regulations have largely come from the federal level and

restricted what and how states and municipalities could be involved in

telecommunications. However, in the context of municipal wireless broadband

deployments, this “top-down” model of policymaking has been flipped on its head, with

the power shifting away from the FCC to city halls and state legislatures throughout

America. This is partly a result of the FCC’s own policies that lower the barriers of entry

for cities to deploy wireless broadband networks. The result is that over 100 cities have

announced such plans.17 In turn, state legislatures have been pressured by private

providers to regulate if and how a municipality can deploy and operate a broadband

network.

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Recently, policy makers at the state level have proposed legislation to prevent

local municipalities from entering the wireless Internet provider sphere. Most states have

legislation proposed, pending, or passed that constrains municipal provision of

telecommunication services directly or indirectly. In some cases, state legislatures have

prevented municipalities from expanding existing networks. In other cases, state

legislatures have not explicitly prohibited the development and deployment of municipal

broadband networks, but they have created nearly insurmountable organizational and

bureaucratic barriers so that these networks have effectively been outlawed. The central

argument on the part of those lobbying state legislatures is that the public funding and

support of municipal broadband networks will unfairly impact competition in municipal

markets between traditional private telecommunications providers and new ventures

funded in part with public tax funds.

Several reasons have been discussed for dissuading municipalities from

developing and deploying broadband networks. The key arguments center around cost,

competition, and a failure to stimulate economic growth and social equity as expected. It

has been argued that these broadband networks may cost more than the cities anticipate,

resulting in money and attention being diverted away from other public interests18.

Another argument that has been made against the development of municipal broadband

networks is the impact it might have on competition and the telecommunications

market.20 Following this line, the city would have unfair regulatory and economic

advantages. The regulatory advantages stem from their control over rights-of-way, which

puts municipal providers of network services in the dual role of both purchasers and

purveyors of these rights.21 In addition, there is currently no evidence that economic

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development and a lessening of the digital divide will directly result from municipal

broadband deployment.22

As municipal wireless deployments have received greater attention in the last

twelve months, private sector providers have expressed a number of concerns. Private

providers understandably express concern that cities providing wireless broadband

service have an unlimited base from which to raise capital, act as a regulator for local

rights of way and tower permitting, own public infrastructure necessary for network

deployments, including street lights, and are tax-exempt organizations. While

opportunities for partnerships between private providers and local governments exist,

many companies have sought legislative relief at the state level, which would regulate or

restrict a municipality’s ability to provide wireless broadband services to the public. In

the last twelve months, fifteen states have responded by considering such legislation.23

3.1. State legislation

State governments have regulated a municipality’s ability to provide

telecommunications services for many years. Before the emergence of metro-scale

wireless broadband, at least fifteen states had passed laws regulating a city’s right to

provide telecommunications services.24 These laws often required a city to have public

hearings, develop detailed business plans, and use separate cost accounting methods for

the telecommunications utility. However, existing laws do not apply to broadband or

voice over Internet protocol (VoIP) services because they were not defined as

telecommunications services in the 1996 Act, and their treatment has been determined by

the FCC.25

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Since the existing laws were not applicable, state legislatures began considering

how to respond to the objections of private sector providers. The legislative initiatives

make use of a variety of tools that ostensibly aim to insure that

1. A majority of local residents are behind the initiative

2. The broadband project will not negatively affect a city’s finances

3. The broadband deployment does not compete or competes on a level playing field

with private carriers.

The tools used to achieve these objectives include the following. First, to insure that a

majority of the residents support the initiative, several states include a requirement that

municipalities hold hearings and/or referenda about the broadband deployment. These

activities also go some way to answering the second concern, that the project not

negatively affect finances. In addition to reporting to the public, some states have also

required plans be submitted for approval to a state entity. Tools used to achieve the third

objective include a variety of stipulations ranging from providing the local exchange

carrier the right of first refusal to outright prohibition of competing with LECs. In some

cases, municipalities are strictly prohibited from charging for broadband services

altogether. These tools and their use in legislation in the various states are summarized in

Table 1.

<Table 1 about here>

Rather than provide a summary of each bill that has been introduced, this paper

will address and analyze the objectives of the legislation and the tools used to regulate or

prohibit municipal wireless broadband initiatives. A review of proposed and passed

legislation must include an analysis of how politics impacts the legislation process.

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Therefore, the effect of the political process on Pennsylvania’s House Bill 30 will be

discussed.

Three states and one special interest group have crafted legislation that focuses on

the financial soundness of municipal wireless broadband initiatives. As a result, Florida,

Indiana, Ohio, Oregon, and the American Legislative Exchange Council (ALEC) have

considered bills that would require municipalities to conduct due diligence efforts to

build a business plan and project capital and operating expenses for the network over a

period of time. After this work is complete, the final results are released at a public

hearing where citizens have the opportunity to comment. Florida’s Senate Bill 1322

requires Florida cities to hold two public hearings to discuss their wireless broadband

initiative.26 Ohio requires cities to hold public hearings and develop detailed costs

projections during the planning process.27

In addition to the state bills that require public hearings, the conservative

American Legislative Exchange Council (ALEC) think-tank released a template

legislative bill in December, 2004, that would require a municipality to conduct an in-

depth feasibility test, develop a business plan, and present the results in a public

hearing.28 The ALEC template also signaled the first move by private providers to

influence the debate through arms-length third parties. After the template was released,

critics of the template pointed out that both Verizon and BellSouth are represented on

ALEC’s private enterprise board.29

Since most municipalities conduct feasibility studies to measure costs for a

project, these obstacles can easily be overcome for municipal wireless broadband

initiatives. These provisions actually encourage cities to perform due diligence for their

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citizens to insure that the wireless solution will be a viable investment for the community.

Such work is necessary to protect political leaders from making costly decisions, buying

overly expensive equipment, or not understanding the total cost of ownership of a

wireless broadband network.

Other states require cities to hold a referendum before moving forward with a

wireless broadband network. ALEC, Colorado, Iowa, Louisiana, and Oregon all

proposed legislation that required a municipality’s governing body to call a referendum

election to approve a wireless broadband initiative. The focus of such legislation is to

measure the support of local citizens for a municipal Wi-Fi network. Initially, many of

these bills required a supermajority for the community to move forward with its wireless

initiative. In many cases during the legislative process, the requirement was lowered to a

simple majority.

The requirement to have a referendum can often be avoided if certain conditions

regarding cooperation with the private sector are met or certain financing vehicles are

used. Colorado’s Senate Bill 152 allows a city to move forward without a referendum if

the incumbent provider denies a request for service from the municipality after sixty days

or is unable to build the requested network within fourteen months.30 In Oregon, a

referendum must be held to approve government financing of the broadband initiative.31

Florida cities can avoid holding a referendum if the network is financed by revenue bonds

that mature within fifteen years.32

While it may sound politically popular to hold an election to measure the pulse of

the people, the referendum tool can be easily abused to delay and defeat wireless

initiatives. Most political leaders know that referendum items can become quite

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controversial and decide to shy away from any initiative that requires a referendum vote.

When local leaders move forward with a referendum, the resulting campaign can confuse

citizens about the initiative in question. During referenda to approve municipal

broadband initiatives involving fiber to the home, private providers funded push polls in

which citizens were asked questions meant to create opposition to the initiative including,

“Should tax money be allowed to provide pornographic movies for residents?”33 During

a similar referendum in Lafayette, Louisiana, private providers spent $400,000 in

lobbying efforts to oppose the broadband initiative.34 For this reason, states should be

cautious in requiring referenda that can be manipulated by private providers willing to

outspend supporters to derail a municipal wireless initiative, especially when past

elections show a willingness to use less than honest tactics.

While the first two legislative strategies focus on local oversight through study or

public hearings, two states have chosen a different route to examine the financial

soundness of municipal wireless initiatives. Tennessee and Texas are both considering

legislation that requires cities to submit their financial models to state agencies for

approval before moving forward with their initiative. Currently, Tennessee proposes that

municipalities present a business plan to the State Comptroller’s office and receive

approval before moving forward with a wireless initiative.35 However, HB 1403 and its

Senate counterpart, SB 1760, would place a moratorium on municipal wireless initiatives

until the State Comptroller finishes auditing the existing municipal providers and

authorizes cities to again move forward.36 Texas HB 789 would require municipalities to

file a notice of intent with the Texas Utility Commission to provide either free or fee-

based wireless broadband services to end users after June, 2006.37

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Local leaders who work with state agencies on projects learn how bureaucratic

such organizations can be. Requiring a city to receive approval from a state agency only

prolongs the process and increases the political risk for the applicant city. Tennessee has

gone even further to propose a moratorium until the state can conclude an audit of

existing municipal broadband initiatives. The state does not make clear what information

will be used to decide whether or how Tennessee cities will be able to deploy wireless

broadband networks based on the audit’s results. Furthermore, the audit includes cities

that have deployed other broadband solutions that have substantially different costs per

location passed and served, making the data collected and inferences made incomparable

to wireless broadband solutions.

A majority of states have chosen legislative language that requires cities to grant

the local exchange carrier the right of first refusal before deploying a wireless broadband

network. Meant to ensure a level playing field and foster partnership between the private

and public sectors, these bills allow a city to deploy wireless broadband technology only

after requesting that their incumbent provider build a network with similar speeds. Even

after a private provider has waived the right of first refusal, many states require cities to

meet additional criteria, including hearings or referenda, before moving forward with the

initiative. Though Colorado’s bill requires cities to hold a referendum, it can be avoided

if the incumbent provider denies a request for service from the municipality after sixty

days or is unable to build the requested network within fourteen months. Before an

Indiana city can hold a public hearing and move forward with a project, the municipality

must examine the existing services being offered and defer to any private provider who

committed to build the requested network within nine months.38 Ohio’s bill requires

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cities to move forward with an initiative only if fewer than two private providers are

offering competitive services within a city.39 Pennsylvania’s House Bill 30, the first

municipal wireless broadband legislation introduced and the most high profile because of

its potential effect on the Wireless Philadelphia initiative, requires cities interested in a

wireless broadband initiative to request a network supporting similar speeds from the

“local exchange telecommunications company serving the area” and allow the private

provider up to two months to decide whether they would build the network and provide

the requested services.40 If the private provider agrees to provide the service, then the

company has up to fourteen months from the date of the municipality’s request.41

Otherwise, the city could move forward with its own initiative. After the West Virginia

legislature introduced a bill favorable to municipal networks, private providers lobbied to

require cities to partner with the private sector to deploy networks only if the private

provider did not commit to build the requested network in the future.42

Since the right of first refusal strategy allows the private sector to build the

network but preserves the city’s right to build infrastructure demanded by its citizens, it is

easy to see why many legislative bodies have chosen this option. However, in order to

provide reasonable time frames for private providers to consider a municipality’s request

for network service and then build the network, these bills often allow the private sector

as long as two months to decide whether to provide service and over one year to build the

network. While this timeframe is reasonable to build a broadband network, it is

unreasonable to require a city to wait that long to see if the private provider will meet its

citizens’ broadband needs. In a space where entire countries can roll out wireless

broadband in the span of a year, cities and states can lose incredible ground in the

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information economy by forcing a one year stop to network deployments, expansions,

and upgrades.

Furthermore, private providers have responsibilities to shareholders to be

profitable. In telecommunications, such focus requires (and rightly so) the prioritization

of service areas based on return on investment models. For that reason, private providers

only cover certain areas in any given state. In contrast, cities do not answer to

stakeholders seeking profit but rather to citizens seeking quality services that strengthen

the economy, assist the disadvantaged, and improve the quality of life. Therefore, cities

that embark on wireless broadband initiatives either have broadband service from private

providers that is too expensive for many of its residents or no broadband access at all.

Profit-driven companies that have been unable to build a business case to provide service

to a particular community will usually be unable to build a network even after a request

from the local government. The right of first refusal, then, limits a city’s ability to

quickly move to provide services requested by citizens.

Finally, a number of states are considering an outright prohibition on services.

The main difference between the bills is whether free municipal Wi-Fi networks are

prohibited along with fee based wireless networks. Illinois is considering SB 499 to

prohibit a municipality from providing “for sale, either to the public or to a

telecommunications provider, a telecommunications service.”43 This language prohibits

both wholesale and retail offerings by municipalities. Michigan may prohibit both free

and fee-based telecommunications service from cities. However, due to the legal

definition of telecommunications service, HB 4600 might not affect a city’s ability to

deploy a wireless broadband network.44 Nebraska’s legislation would prohibit cities from

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charging wholesale or retail fees for their broadband networks while the Texas bill would

prohibit fee-based networks immediately and free networks after September, 2006.45

Since a city’s responsibility is to provide those infrastructure services that are

essential to a community’s viability and growth, prohibiting municipal leaders from

deploying wireless broadband networks will hurt municipal efforts to both strengthen the

economy by attracting new tech firms and drive down the cost of broadband access so all

residents can connect to the Internet. Furthermore, this prohibition gives private

providers fiat power to decide which areas will and will not have broadband access and

how much those with service will pay based solely on financial considerations.

Due to the complexity of the legislative process and the controversy surrounding

state regulation of municipal wireless broadband initiatives, many of these bills have not

survived the committee review process or been passed by the legislature. The following

table provides the status for each bill:

<Table 2 about here>

Though these bills are often supported by well funded private providers with an

established lobbying presence, many of them fail to be signed into law. This high failure

rate is due in part to a politically charged legislative process. Pennsylvania’s House Bill

30 provides an interesting case study to illustrate how politics changes this type of

legislation. The Pennsylvania General Assembly was the first to consider legislation that

would regulate if and how a city deploys wireless broadband infrastructure. House Bill

30 was initially focused on increasing the deployment of broadband networks and

regulating telephone services when it was introduced in April, 2003.46 However, the City

of Philadelphia announced an initiative to deploy a city-wide wireless broadband network

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for public use that highlighted the emerging trend of municipal wireless networks. As a

result, language was added to House Bill 30 to restrict how municipalities could deploy

wireless broadband networks that would provide fee-based services.

The bill required cities interested in a wireless broadband initiative to request a

network supporting similar speeds from the local telecommunications company serving

the area and allow the private provider up to two months to decide whether they would

build the network and provide the requested services.47 If the private provider agreed to

provide the service, then the company would have up to fourteen months from the date of

the municipality’s request.48 However, the private provider’s choice not to deploy the

network would allow the city to move forward with its initiative.49 This late addition to

the legislation created controversy across the country as municipal leaders and

organizations spoke out against the restriction, state legislators considered whether the

municipal wireless trend was a threat to private providers, and technology leaders

representing both the wireless broadband ecosystem and the incumbent providers debated

whether cities should have the authority to become a broadband provider. Essentially,

the bill requires that cities offer the local exchange carrier the right of first refusal before

deploying a wireless broadband network to provide fee-based access to the public.50

Before Governor Ed Rendell, who previously served as the Mayor of

Philadelphia, would commit to sign the bill into law, he worked with Verizon and the

City of Philadelphia to reach a compromise to allow Philadelphia’s wireless initiative to

move forward unimpeded.51 Verizon agreed to waive their right of first refusal for

Philadelphia’s project, thereby allowing the city to move forward without delay.52

Despite Governor Rendell’s efforts to appease both sides, he was criticized by many

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political observers and technology leaders for protecting his hometown while signing

away the rights of every other city.53

Pennsylvania’s process is illustrative of how nearly every state deliberates over

bills to regulate municipal wireless broadband networks. Original language is softened,

timelines are extended or reduced based on negotiations, and compromises are made to

avoid or minimize controversy. The legislative focus is clearly not on the technology’s

capabilities or limitations, security issues, or emerging business models.

In an effort to build consensus for this legislation, nearly every proposed bill has

allowed municipalities to deploy a wireless broadband network for internal government

usage without any regulation. This trend to in-source broadband services can save a

municipality thousands of dollars each year. In Allegany County, Maryland, the local

governments deployed a wireless network for internal use and currently save government

organizations over $65,000 each month.54 While the networks cannot provide public

access without meeting the legislative regulations, cities are able to provide both fixed

and mobile wireless access to their government agencies, thereby increasing efficiency

and improving delivery of services while lowering operational costs.

The intent of the legislation proposed in fifteen states is to ensure cooperation and

communication between the public and private sector when considering wireless

broadband networks for public access. However, while legislators have been grappling

with ways to restrict municipalities from owning and operating wireless broadband

networks, city leaders have been creative in developing business models that support

their community’s motivation for deploying the network.

24

4. Potential business models

The ideological focus of the debate on municipal wireless initiatives has

propagated the idea that only two business model options exist for broadband networks:

privately owned or publicly owned and operated utilities. However, a number of other

models have emerged and countless hybrid possibilities exist. These other options are

important to understand because they can help educate the current policy debate

occurring at state houses throughout America.

4.1. Community network The community network model is focused on providing free or low cost wireless

broadband access. Two hybrid models have emerged from cities using this model, but

both share similar characteristics: free Wi-Fi access in areas known for tourism or

targeted for revitalization. This model most often supports wireless hot zones or city-

wide networks and is being used in Hermosa Beach, California, and Austin, Texas.55

The first hybrid involves the city or a non-profit entity obtaining funding from

taxpayer funds, foundation grants, donations from citizens and businesses, and

advertising revenue from a splash page. The city or non-profit entity then builds the

network and provides marketing and customer service. Hermosa Beach has used this

model to provide free Wi-Fi to residents throughout the city.56 The network has been

funded largely through general fund monies, although the city is evaluating options to

partner with Google to generate advertising revenue.57

The idea of partnering with a content provider like Google or Yahoo for

advertising revenue is being tested. One municipal wireless commentator has suggested

that combining Google’s Adsense program with local search and mapping capabilities

25

could provide both ongoing funding for a free Wi-Fi network and compelling content to

increase users (hence strengthening the revenue stream).58

The second model involves a non-profit community group or government entity

that acquires funding to educate business owners about the benefits of deploying a Wi-Fi

hotspot. The city or community group then acts as a catalyst to encourage the organic

build-out of a Wi-Fi network in downtown areas. Since the city or non-profit

organization is not funding the network deployment, the need to use city funds is

substantially lower. The network, however, may not be ubiquitous because it depends on

venue owners’ financial support. This model is being used in Austin, Texas.59 Through

this organic approach, the Austin Wireless City Project is responsible for deploying over

80 hotspots throughout downtown Austin.60

The most pronounced advantage to the community network model is free access

to broadband. The model supports targeting certain areas for revitalization by attracting

people to downtown areas. Since the network is most often provided as an amenity, little

focus is given to building a universally available, secure, and reliable network.

Therefore, the city government usually chooses not to use the network to support mobile

applications for public safety and public works functions. However, many of the state

bills only pertain to cities that provide wireless broadband access for a fee. Since most

community networks offer free service, municipalities are able to proceed without

meeting those state requirements.

Though this model does not currently provide an ongoing funding strategy to

support network maintenance and upgrades, many communities may be able to generate a

return on investment through economic development and revitalization efforts that

26

increase property values and attract the “creative class” to a targeted area. However, the

potential lack of both a sustainable funding strategy and direct revenue stream can make

it difficult to partner with private providers for network management and customer care.

4.2. Public utility Under the public utility model, the need to deploy, operate, and manage

broadband service for its citizens requires a local government to establish a new city

department or combine operations with existing water, gas, and/or electric departments.

The broadband utility's capital cost is funded through the use of taxpayer dollars and

revenue bonds. The public utility installs the network, markets the service, and provides

customer support and billing. In addition, the local government may choose to provide

both fixed and mobile broadband to its agencies. This model is most often used when

private providers choose not to offer broadband service in a city for financial reasons.

The City of Chaska, Minnesota, has used the public utility model to deploy a citywide

Wi-Fi mesh network.61

Most states allow municipalities to form enterprise funds for utility projects.

Unlike a general fund, which must be balanced each fiscal year, enterprise funds are able

to show annual profits or losses.62

The public utility model allows local governments to control a number of

variables involving broadband access. Since governments have easier access to capital

through tax dollars, bonds, and other revenue sources, municipalities do not always face

the same capital scarcity that private sector providers do. With a clear funding strategy,

public utility networks can be built quickly by a city interested in providing broadband

service to its citizens. Cities are also able to control the price of broadband access to the

27

end user through this model, even subsidizing enterprise fund losses with general fund

monies.

However, this model's dependence on taxpayer dollars can make it both

politically unattractive and almost financially impossible for most city leaders. Though

the national economy continues to rebound from the recent recession, municipal budgets

are still strained. According to the National League of Cities' report, "City Fiscal

Conditions in 2004," nearly two out of every three municipalities were less able to meet

their financial needs in 2004 than they were in 2003.63 The vast majority of cities simply

cannot fund capital projects like wireless broadband networks while their revenue

declines and their expenses increase.

Cities are also hesitant to enter direct competition with private sector providers.

Since this model requires head-to-head competition between the local government and

private sector providers, little opportunity is left for local government to partner with for-

profit firms to operate and manage the network.

However, the public utility model is used by rural cities that cannot receive

broadband access from a private provider or that cannot have competitive prices for

broadband service. In these cases, cities are much more willing to use this model to

insure that citizens have the access to information that many require.

4.3. Private consortium The private consortium model involves one or many private sector provider(s)

offering broadband service to end users. Funded by private investment, the provider

offers access to both the city and to subscribers for a monthly fee. The provider is

responsible for operating and maintaining the network and providing technical support,

28

customer service, and billing. The vast majority of broadband networks in the US are

built to support this business model.

Since the private sector bears the responsibility for funding the network

deployment and maintenance costs under this model, no taxpayer funds are required and

no city employees are needed to provide service. Businesses provide the service where

they can do so profitably, thereby creating local jobs.

Opportunities for partnerships exist between the local government and the private

provider under this model. Private firms often need access to city assets, including street

lights or traffic lights, to deploy a wireless network. Cities often provide these assets to

private providers at low fees in exchange for low-cost wireless broadband access. Some

wireless broadband providers agree to revenue sharing agreements with the city, creating

a new revenue stream for the local government. Since the network is professionally

monitored and can be secured, government agencies, including public safety, can use the

network for mobility applications. In addition, many states have created tax incentives

for private providers who extend broadband networks into rural areas.

However, deciding where to deploy broadband networks under this model is often

based on building business cases and return on investment models. Such profit-driven

decisions can limit the markets for broadband providers and prevent the deployment of

ubiquitous broadband networks.

4.4. Cooperative wholesale The cooperative wholesale model provides two options for local political leaders.

The first is a city-owned model in which the city makes a “build versus buy” decision

29

regarding broadband service. The city builds a broadband network to provide its

broadband and telecommunications needs.

Funding for the network comes from taxpayer dollars, state and federal grants,

foundation grants, and/or bonds. After securing funds, the city issues an Request for

Proposals (RFP) for the design, deployment, and management of the network.

After the network is deployed and the city has completed in-sourcing its

broadband needs, the excess capacity is sold to private providers, including Wireless

Internet Service Providers (WISPs), Incumbent Local Exchange Carriers (ILECs),

Competitive Local Exchange Carrier (CLECs), or another local Internet Service Provider

(ISPs) at wholesale prices. The private providers then compete for business and

residential subscribers while providing marketing, technical support, customer care, and

billing. Free cash flow (or the total positive cash flow remaining after network upgrades

and maintenance) generated from the wholesale fees can be used to fund a number of

programs, including economic development and digital divide initiatives.

While the first model meets many municipal leaders' needs, it still requires

taxpayer dollars and city employees to be successful. Instead of the city funding and

managing the network, the community can create a non-profit organization to accomplish

the following tasks:

• Raise funding for the wireless broadband network deployment

• Outsource network design, deployment, and management to a private sector

company

• Provide broadband service directly to city agencies and employees (fixed and

mobile)

30

• Market wholesale service to WISPs, ILECs, CLECs, and dial-up ISPs

• Develop social and/or economic development programs that are funded by

free cash flow

The local government provides low cost access to light poles and other assets for

the network deployment and acts as an anchor tenant for the network. With a social

and/or economic development charter, the non-profit is able to secure funding for the

network deployment from state and federal grants and private foundation donations.

Additional monies can be obtained through bank loans, which are easier to obtain with a

secure anchor tenant commitment from city government agencies.

The non-profit partners with private companies to both build and manage the

network, resulting in a smaller staff. The non-profit's focus is to monitor network

management, develop effective social and/or economic development programs, and

attract and develop relationships with retail providers. This model was developed for the

Wireless Philadelphia initiative to deploy a 135 square mile wireless broadband network

to support fee-based public access, T1 replacement service for businesses, and fixed and

mobile services for government agencies.64

The Cooperative Wholesale model allows cities to have influence over a

broadband network build out and the wholesale price offered to retail providers without

necessarily relying on taxpayer funding. By determining the wholesale price for service,

the non-profit can estimate the retail price for the end user.

The wholesale approach also ensures cooperation between the public and private

sector and reintroduces competition into the Internet access market, a move that can drive

down prices and lead to innovative, value-added applications and content. Since the local

31

entity builds out one neutral host network, scarce assets, including towers and light poles,

are maximized.

The model also allows both the government and the private sector to maximize

their strengths. Though the government acts as a catalyst, the private sector is able to

maximize its existing customer base, back office systems for billing, customer service,

and technical support expertise and facilities. The model is not restrictive since private

providers not interested in the wholesale program can deploy their own network

infrastructure. Finally, this model can improve cash flow that can be used to fund

economic or social programs related to technology.

However, the model does rest upon attracting enough funding from loans and

grants to fund the initial capital expenses without using tax dollars. In addition, cities or

non-profits must recruit private providers to offer their service over a network owned by

another party to support operational costs. Many of the proposed legislative bills regulate

both retail and wholesale broadband services provided by a city, requiring that this model

comply with some proposed regulations. Even if the non-profit approach is chosen in the

regulatory states, the legislation most often precludes cities from being involved in the

creation or management of such entities unless the state requirements for a municipal

broadband network are met.

Though the legislative debate has only focused on the two polarized positions of

the public utility and private consortium models (see Figure 1), cities have developed

(and will continue to develop) innovative, viable business models to meet their needs.

<Figure 1 about here>

32

Policy makers need to understand the multi-dimensional realities of such business

models as they consider what type of regulation is appropriate to require of municipalities

interested in wireless broadband. Clearly, most of the models allow for, and encourage,

partnership with the private sector. Therefore, an environment that provides incentives

for such cooperation and fosters further creativity should be preferable to legislation that

compels cooperation and diminishes decision making power at the local level.

5. Conclusions

Wireless technologies create possibilities for ubiquitous, low cost Internet access.

This possibility has consequently raised questions of who will fund, own, design, deploy,

and manage these networks, and under what terms and conditions. The debates over

these questions have resulted in legislation that aims to achieve three objectives:

measuring local resident support, developing a sound financial plan, and maintaining a

level playing field with private telecommunications carriers. While these goals have

merits, the policies by which they will be achieved, in many cases, will lead to negative

consequences, as highlighted in the following narrative:

Since many of our government clients are located in states

considering restrictions on municipal wireless broadband networks,

we have seen the first hand effects of such legislation on a city’s

thought process. In a recent meeting with a local government to

clarify project objectives and choose an appropriate business model,

the officials’ focus was on pending state legislation to regulate

how cities could deploy broadband networks.

33

As I outlined the bill’s requirements to have public meetings,

create a business plan, and hold a referendum, my clients asked how

they could avoid meeting such requirements. Since nearly all of the

proposed legislation allows networks to be built for internal use

without public approval or a business plan, they adjusted their objective

to provide broadband to government agencies and later examine if

they could support free public access in certain areas. However, at

least two business models were eliminated and the opportunity for

innovation in applications and public access was lost. The state legislation

being considered around America has a chilling effect on municipal

broadband networks and innovation at the local level that will never be

quantified. (Stone Interview, March 2005)

This chilling effect created by the legislative tools has several dimensions. While some

municipalities may speed up network deployment to “beat” the deadline of the enactment

of restrictions, others may either roll back their plans or abandon the project altogether.

In these latter cases, the result is the diminished potential of wireless networks. While

the benefits of wireless networks may accrue to municipalities, as consumers of

broadband services, private citizens and small firms may be denied these benefits. The

broader implications of such an occurrence include missed opportunities for economic

development based on wider use of broadband by individuals and firms in the local

34

economy and the possibility of a deepening digital divide. Whereas municipal

employees, who in some populations are already envied for holding stable jobs with

benefits, will enhance their computing skills by having ubiquitous access, others could

remain stagnant.

However, even if municipal broadband networks are not deployed to the public,

there may yet be positive outcomes. With broadband serving as a disruptive technology

and municipalities playing the role of entrepreneur, the actions of these entrepreneurs

may spur private sector innovation, or at least wider broadband deployment.

This result is evident in the provisions of Pennsylvania’s House Bill 30, which in

this light appears to have a silver lining. In particular, the bill is an incentive package to

broadband providers like Verizon to update and improve their current broadband service.

Under the Pennsylvania legislation, any political subdivision would have to get the

permission of the local telephone company to provide a telecommunications service for a

fee, including broadband. If the telecommunications company rejects the plan, it would

have to offer a similar service within 14 months. Under the law, the telecommunications

provider in a region is required to provide high-speed Internet access across its territories

over the next decade. In Verizon's case, such access must be made available by 2013. In

addition, House Bill 30 might actually give cities greater leverage by allowing them to

push Verizon and other dominant telecommunications companies to speed up their

broadband efforts or step aside.

Finally, this research has contributed to the body of work on municipal broadband

initiatives by explaining the incentives for these actions, identifying the implications of

corporate and state strategic responses, and by identifying business models that facilitate

35

the establishment of public-private partnerships, which are a tool to address many of the

state and corporate concerns. Despite these contributions, this research raises several

interesting questions for future research. These questions include: Given all the

legislative activity at the state levels, how many municipalities have carried on to meet

the requirements laid out in the legislation? How did the process of fulfilling these

requirements change the project, and did municipal leaders consider the changes to be

improvements? And finally, how successful were the incentives provided to ILECs in

facilitating the wider deployment of broadband networks?

Footnotes

1 Raine, L. (2005). Internet: The mainstreaming of online life. The Pew Internet

& American Life Project. Available:

http://www.pewinternet.org/pdfs/Internet_Status_2005.pdf.

2 Wilhelm, A. G. (2001, April). They threw me a computer ... But what I really

needed was a life preserver. First Monday, 6(4) (April 2001). Available:

http://www.firstmonday.org/issues/issue6_4/wilhelm/.

3 Bleha, T. (2005). Down to the wire. Foreign Affairs, 84(3). Available:

http://www.foreignaffairs.org/20050501faessay84311/thomas-bleha/down-to-the-

wire.html.

4 Little, A. (2005). Broadband update 2005. Retrieved May 26, 2005, from

http://www.websiteoptimization.com/bw/0505/.

5 Bleha, T., note 3, above. 6 Ibid.

36

7 White House. (2004). A new generation of American innovation: Executive

summary. Retrieved May 26, 2005, from

http://www.whitehouse.gov/infocus/technology/economic_policy200404/innovation.pdf.

8 Ibid.

9 Cooper, M. Consumer Federation of America. Available:

http://www.consumerfed.org/021304_cablereportrelease.html.

10 New York City Council Int. No. 625. Gail Brewer.

11 See FCC 15050. Retrieved October 5, 2005, from

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-150A1.pdf.

12 Federal Communications Commission. The Wireless Broadband Task Force.

Retrieved May 13, 2005, from http://www.fcc.gov/wbatf/.

13 Cokenias, T. (2002). New rules for unlicensed digital transmission systems.

Compliance Engineering. Available: http://www.ce-

mag.com/archive/02/Spring/cokenias.html.

14 Cramton, P. (1998). The efficiency of FCC spectrum auctions [Electronic

version]. Journal of Law and Economics, 41, 727-736. Retrieved May 26, 2005, from

http://www.market-design.com/files/98jle-efficiency-of-the-fcc-spectrum-auctions.pdf.

15 Cokenias, T., note 14 above.

16 Wanichkorn, K., & Sirbu, M. (2004). The role of fixed wireless access

networks in deployment of broadband services and competition in local

telecommunication markets. Department of Engineering and Public Policy, Carnegie

Mellon University. Retrieved September 4, 2004, from

http://itc.mit.edu/itel/docs/2002/wanichkorn_sirbu.pdf.

37

17 Vos, E. (2005). March 2005 report. Retrieved May 26, 2005, from

http://www.muniwireless.com/reports/docs/March2005Report.pdf.

18 Lenard, T. M. (2004, February). Government entry into the telecom business:

Are the benefits commensurate with the costs? Progress on Point, Release 11.3.

Available: http://www.pff.org/issues-pubs/pops/pop11.3govtownership.pdf.

20 Lenard, T. M. (2005, April). Wireless Philadelphia: A leap into the unknown.

Progress on Point, Release 12.3. Available: http://www.pff.org/issues-

pubs/pops/pop12.3lenardwifi.pdf.

21 See Day (2002) and the rebuttal of Malone (2003) for a detailed account of both

sides of the argument for and against continued involvement of municipalities in

managing municipal rights-of-way.

22 Lenard,T. M., note 19 above.

23 Baller Herbst Law Group. (2005). Proposed state barriers to public entry.

Retrieved May 13, 2005, from

http://www.baller.com/pdfs/Baller_Proposed_State_Barriers.pdf.

24 Civitium LLC. (2005). Municipal broadband and telecommunications.

Retrieved May 13, 2005, from http://www.civitium.com/states.htm.

25 The Telecommunications Act of 1996 (1996). Retrieved May 22, 2005, from

http://www.access-board.gov/about/laws/telecomm.htm.

26 S. 1322, Florida General Assembly (2005). Retrieved May 15, 2005, from

http://www.flsenate.gov/session/index.cfm?BI_Mode=ViewBillInfo&Mode=Bills&Sub

Menu=1&Year=2005&billnum=1322.

38

27 Ohio General Assembly. (2005). House bill status report of legislation: 126th

General Assembly. Retrieved May 16, 2005, from

http://lsc.state.oh.us/coderev/hou126.nsf/House+Bill+Number/0188?OpenDocument.

28 MuniWireless. (2004, December 20). Do-it-yourself anti-municipal broadband

kit. Retrieved May 15, 2005, from http://muniwireless.com/municipal/504.

29 Ibid.

30 Colorado General Assembly. (2005). Summarized bill history for S. 152

(Concerning Local Government Competition in the Provision of Specified

Communications Services). Retrieved May 13, 2005, from

http://www.leg.state.co.us/Clics2005a/csl.nsf/fsbillcont3/FA216226F45192FE87256F410

07B483C?Open&file=152_enr.pdf.

31 Oregon Legislative Assembly. (2005). House Bill 2445 (Summary). Retrieved

May 16, 2005, from

http://www.leg.state.or.us/05reg/measpdf/hb2400.dir/hb2445.intro.pdf.

32 Florida General Assembly: S. 1322, note 26 above.

33 Case, D. (2005, May/June). GigaFight [Electronic version]. Mother Jones.

Retrieved May 20, 2005, from

http://www.motherjones.com/news/dispatch/2005/05/municipal_broadband.html.

34 Cauley, L. (2005, January 3). Bells dig in to dominate high-speed Internet

realm [Electronic version]. USA Today. Retrieved May 20, 2005, from

http://www.usatoday.com/tech/news/2005-01-03-fiber-cover_x.htm.

35 Baller Herbst Law Group, note 23 above.

36 Ibid.

39

37 Texas Legislature. (2005). House Bill 789. Retrieved May 16, 2005, from

http://www.capitol.state.tx.us/cgi-

bin/tlo/textframe.cmd?LEG=79&SESS=R&CHAMBER=H&BILLTYPE=B&BILLSUF

FIX=00789&VERSION=3&TYPE=B.

38 Indiana General Assembly. (2005). House Bill 1148. Retrieved May 15, 2005,

from http://www.in.gov/legislative/bills/2005/IN/IN1148.1.html.

39 OhioGeneral Assembly. (2005). House Bill 188. Retrieved May 16, 2005,

from http://www.legislature.state.oh.us/bills.cfm?ID=126_HB_188.

40 General Assembly of Pennsylvania. (2004). House Bill 30. Retrieved May 15,

2005, from http://www2.legis.state.pa.us/WU01/LI/BI/BT/2003/0/HB0030P1554.pdf.

41 Ibid.

42 Baller Herbst Law Group, note 23 above.

43 Illinois General Assembly. (2005). Amendment to Senate Bill 499. Retrieved

May 15, 2005, from

http://www.ilga.gov/legislation/fulltext.asp?DocName=09400SB0499sam001&GA=94&

SessionId=50&DocTypeId=SB&LegID=17288&DocNum=499&GAID=8&Session.

44 Michigan State Legislature. (2005). House Bill 4600. Retrieved May 16,

2005, from http://www.legislature.mi.gov/documents/2005-

2006/billintroduced/house/pdf/2005-HIB-4600.pdf.

45 Texas Legislature: House Bill 789, note 37 above.

46 General Assembly of Pennsylvania: House Bill 30, note 40 above.

47 Ibid.

48 Ibid.

40

49 Ibid.

50 PaPowerPort. (2004, November). Governor Rendell signs House Bill 30.

Retrieved May 15, 2005, from

http://www.state.pa.us/papower/cwp/view.asp?A=11&Q=439281.

51 Ibid.

52 Ibid.

53 Muniwireless (2005). Retrieved May 26, 2005, from

http://muniwireless.com/municipal/491.

54 "Marconi Adds Quality of Service to Wireless Broadband Network." Retrieved

September 4, 2004, from

http://www.marconi.com/Home/customer_center/Case%20Stud/Enterprise%20Networks/

Ethernet%20Switching/Allconet.

55 Muniwireless (2005). Retrieved May 22, 2005, from

http://muniwireless.com/municipal/436.

56 Ibid.

57 Ibid.

58 Vos, Esme (2005). “Fund a Free Citywide Wi-Fi Network.” Muniwireless.

Retrieved May 22, 2005, from http://muniwireless.com/municipal/631.

59 Austin Wireless City [On-line]. Retrieved February 17, 2005, from

http://www.austinwirelesscity.org/about.php.

60 Austin Wireless City [On-line]. (2005). Participating hotspots. Retrieved May

22, 2005, from http://www.austinwirelesscity.org/hotspot-list.php.

41

61 Chaska.net [On-line]. Retrieved February 16, 2005, from

http://www.chaska.net/.

62 Weeks, J. D., & Hardy, P. T. (Eds.). 1989. Handbook for Georgia mayors and

councilmembers. Athens, GA: University of Georgia, Carl Vinson Institute of

Government.

63 Pagano, M. "City Fiscal Conditions in 2004." National League of Cities.

Retrieved February 11, 2005, from

http://www.nlc.org/content/Files/RMPctyfiscalcondrpt04.pdf.

64 Wireless Philadelphia. (2005). Wireless Philadelphia business plan. Retrieved

May 22, 2005, from http://www.phila.gov/wireless/pdfs/Wireless-Phila-Business-Plan-

040305-1245pm.pdf.

42

References

Christensen, C. M. (2000). The innovator's dilemma. New York: Harper Business. Cooper, M. (2004, February). The continuing abuse of market power by the cable

industry: Rising prices, denial of consumer choice, and discriminatory access to

content. Consumer Federation of America. Available:

http://www.consumerfed.org/Pdfs/Mpcableindustry.Pdf.

Day, C. R. (2002). The concrete barrier at the end of the information superhighway:

Why lack of local rights-of-way access is killing competitive local exchange

carriers. Federal Communications Law Journal, 54(3), 461-491.

Gillett, S. E., Lehr, W. H., & Osorio, C. (2004). Local government broadband

initiatives. Telecommunications Policy, 28, 537-558.

Lee, S. M., Tan, X., & Trimi, S. (2005). Current practices of leading e-government

countries. Communications of the ACM, 48(10), 99-104.

Malone, W. (2003). Access to local rights-of-way: A rebuttal. Federal Communications

Law Journal, 55(2), 251-272.

Preiger, J. (1998). Universal service and the Telecommunications Act of 1996.

Telecommunications Policy, 22(1), 57-71.

Sawyer, S., Tapia, A., Pesheck, L., & Davenport, J. (2004). Observations on mobility

and the first responder. Communications of the ACM, 47(2), 62-65.

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Sawyer, S., & Tapia, A. (2005). The sociotechnical nature of mobile computing work:

Evidence from a study of policing in the United States. International Journal of

Technology and Human Interaction, 1(3), 1-14.

Stone, M. (2005). Interview with Florida Legislator. Confidential Source.

Strover, S., Chapman, G., & Waters, J. (2004). Beyond community network and CTCs:

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485.

44

Table 1 Tools Used in Various State Legislation States Hearings Referenda State level

authorization LEC right of first refusal

Prohibit Fee Based Service

ALEC Template

Florida SB 1322

*

Oregon HB 2445

Indiana HB 1148

Ohio HB 188 Iowa HF 861 Louisiana SB

126

Colorado SB 152

Tennessee HB 1403/SB 1760

Texas HB 789 Pennsylvania

HB 30

Virginia HB 2395

West Virginia SB 740

Illinois SB 499 Michigan HB

4600

Nebraska LB 157

* - Depending on use of bonds for financing purposes

45

Table 2 Bill Status

State Bill Assigned to

Committee

Died in Committee

Waiting Vote in

House or Senate

Passed House

Passed Senate

Signed into Law

Pennsylvania HB 30

Colorado SB

152

Florida SB 1322 Iowa HF 861 Ohio HB 188 Texas HB 789 Tennessee HB 1403/SB 1760

Illinois SB 499 Indiana HB

1148

Virginia HB 2395

West Virginia SB 740

Louisiana SB 126

Michigan HB 4600

Nebraska LB 157

Oregon HB 2445

46

Fig. 1. The Municipal Broadband Business Model Continuum