White House Opposes Free WiFi Plan

By Justin Gardner | Related entries in Bad Decisions, Internet, Social Programs

I wrote about this plan recently, but today I find out that it may not happen.

Why?

Because it’s not “free market” enough.

Good times…

The FCC has been considering auctioning 25 megahertz of spectrum in the 2155MHz to 2180MHz band. As part of the rules for using the spectrum, the FCC plans to require license holders to offer some free wireless broadband service.

The FCC sees the idea, which is based on a proposal submitted to the FCC by M2Z Networks in 2006, as a way to provide broadband Internet service to millions of Americans who either can’t afford or don’t want to pay for high-speed Internet access.

However, in a letter sent to FCC Chairman Kevin Martin on Wednesday, Commerce Secretary Carlos Gutierrez expressed the administration’s opposition to the idea, which could be voted on as early as next week, according to the report.

“The administration believes that the (airwaves) should be auctioned without price or product mandate,” Gutierrez wrote, according to the Journal’s report. “The history of FCC spectrum auctions has shown that the potential for problems increases in instances where licensing is overly prescriptive or designed around unproven business models.”

An FCC representative told the newspaper that it had received Gutierrez’s letter and was reviewing it.
“We agree that market forces should help drive competition, but we also believe that providing free basic broadband to consumers is a good thing,” the representative told the Journal.

I’d urge those FCC folks to just wait another month and a half and they’ll have a much more receptive audience.


This entry was posted on Friday, December 12th, 2008 and is filed under Bad Decisions, Internet, Social Programs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

9 Responses to “White House Opposes Free WiFi Plan”

  1. Dennis Sanders Says:

    My question is this: how would it pay for itself? Would free wifi have to rely on ads?

    Also, should the internet be free? I mean all the infastructure has to be paid for somehow.

    I do think that there should be more competition for high speed internet. Right now most areas have only one or two providers that get to set high fees. In other countries, there is more competition that allows the price to fall and make it more affordable to people. I do think that is a plan that we should consider. Not only is it using the free market, but it would allow for more people to have access to high speed internet.

  2. Justin Gardner Says:

    My question is this: how would it pay for itself? Would free wifi have to rely on ads?

    Do roads and bridges have to rely on ads?

    The simple fact of the matter is that the internet is knowledge infrastructure, and the more hands we get it into, the more we’ll be able to create distributed networks of workers who can tele-commute from their homes, thus saving money on driving and helping us bring back jobs to the US.

    Also, this would be the basic, lower speed internet. There will always be a market for high speed internet, and that’s what for-profit providers should focus on.

  3. kranky kritter Says:

    Roads and bridges have to rely on TAXES, Justin. And since many highways have ads, I guess they have to rely on ads sometimes, too. Bottom line, since there’s really no such thing as free, it’s up to people with swell ideas to figure out how to pay for them. All the roads and bridges we have were paid for with tax dollars. That’s awfully hard to miss. And you’re awfully glib to reply as you did.

    The thing that concerns me about attaching this free internet provision to newly auctioned portions of the spectrum is that it adds even more confusion, balkanization, and complexity to the telecommunications world. It’s challenging enough to figure out whether you can come up with a profitable enterprise without the extra wrinkle of even more and different regulations for one part than for the other part.

    This new spectrum will be inherently less valuable because of the extra rules and conditions that apply. This idea in effect picks winners and losers, and provides advantages to enterprises with already existing licenses, and punishes those unfortunate enough t be seeking more capacity. Schemes like this are, in a sense, an adverse side effect of the overweening reluctance to use a straightforward tax to provide a government-mandated service. This scheme is still a tax, it’s just a stealthy one that is being applied unevenly. So the dumb, the ignorant, the feckless, and the willfully opaque won’t even notice it.

    If we really want to make basic internet access a new entitlement, that’s our democratic right. I don’t have an intrinsic problem with doing that if regular folks really want to say “let’s do it.” But if we do, do it via a targeted tax or regulation that burdens related businesses evenly. And above all, don’t pretend it’s free.

  4. George Mauer Says:

    “Roads and bridges have to rely on TAXES, Justin.”
    Well yeah…this would be paid for taxes too.

    “highways have ads”
    Huh? You mean billboards? I wasn’t aware the state made money off that.

    “It’s challenging enough to figure out whether you can come up with a profitable enterprise”
    And its easier to be profitable with a larger audience

    “This scheme is still a tax”
    Yup

    “And above all, don’t pretend it’s free.”
    Fair enough. Subsidized internet for everyone who previously wasn’t getting it an ok way of putting it?

  5. rob Says:

    Way to follow up a great response with a crappy one George.

    regarding taxatation:
    Is it really that hard to see that punishing new businesses for being late to the game isn’t wise policy? Such a policy encourages monopolies when what we should seek is competition.
    If you want to tax people or businesses to subsidize the internet, then do it in the open with something that applies to the industry and/or it’s users, not just a select group.

    regarding states making money off billboards:
    Actually in many states the billboards are a source of property taxes either valued on the cost of the actual billboard (lower) or the revenue stream it represents (higher).

  6. ExiledIndependent Says:

    And many states charge a fee to place a business advertisement on the “Gas/Food/Lodging” signs you see at exits.

    If the federal government wants to own and operate/manage a free broadband piece of the spectrum, then they can certainly attempt that. Sort of a FedEx vs. USPS sort of thing. But adding it as a requirement to the purchaser of a spectrum auction isn’t the way to go.

  7. George Mauer Says:

    Heck, I am agreeing with kranky, let’s not call it free, it IS a tax, I still want it and think it would be worth it. Oh and in addition to property taxes, billboards help generate revenue indirectly by driving consumption – that’s kind of my point, new infrastructure means new markets.

    How exactly? I dunno, perhaps the free wifi internet comes with a new protocol for doing financial information exchanges – something better than https and the problematic authentication certificates system. So the government sets up this system, people benefit from its use, it charges a tiny fee. Just an idea off the top of my head, but there are plenty of possibilities.

  8. Jim S Says:

    “Is it really that hard to see that punishing new businesses for being late to the game isn’t wise policy?”

    Huh? This post is very confusing. Are you saying that you think that some business will step in to fill this need? I doubt it. There isn’t enough money on the table in this business to make a publicly held company happy.

  9. Chris Says:

    How about I don’t want the government in control of the internet. that’s even worse than having to get service from Charter, the root of all evil.

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