by Fiona Morgan
In a report bashing a city-owned broadband utility, the conservative John Locke Foundation reveals a stunning level of ignorance about technology.
"Wilson's Fiber-Optic Boondoggle," written by research director Michael Sanera and intern Katie Bethune, criticizes Wilson, N.C.'s $28 million investment in a fiber-optic network that makes high-speed Internet, cable TV and phone service to every resident and business in the city. The utility project, called Greenlight, is funded by bonds which under the city's business plan are expected to be repaid through subscription revenue.
JLF leads with the critique that the technology "could be obsolete before it's paid for."
"WiMax wireless Internet technology is rapidly leapfrogging fiber-optic cable technology, making it obsolete."
To anyone who actually follows Internet technology, that statement is a howler.
Fiber is far and away the most advanced technology available for connecting to the Internet. It offers effectively unlimited capacity and speed. WiMax is the next generation of wireless technology, reaching further and moving data faster than the WiFi most of us use now -- but nowhere near as fast as fiber. And every wireless system has to connect up to some kind of backbone. WiMax works best if connected to a fiber network.
It's expensive to run fiber through city streets and connect every home and business. That's why most private companies aren't willing to do it unless they're assured of making a hefty profit on the investment, and a city must be more densely populated than Wilson for that profit to be high enough. Even in the Triangle, companies like AT&T, Embarq and Time Warner prefer to stick with the copper and coax lines they've already got in the ground.
The JLF report cites no sources for its embarrassing tech analysis, except a footnote to a brief article in the Washington Times that reads like a press release for Sprint's acquisition of wireless company Clearwire. That piece talks about WiMax surpassing the WiFi technology most of us use -- but it makes no mention of fiber.
I showed the JLF report to Jim Baller, a Washington, D.C., attorney who's widely respected as an expert on broadband technology. He recently convened a broad coalition of industry and public interest groups who hope to shape a national strategy for deploying broadband technology.
"The John Locke Foundation's suggestion that WiMax will render Wilson's fiber system obsolete is just absurd," Baller said by e-mail. "The Foundation should understand this -- and perhaps does. To be sure, WiMax offers mobility, and fiber does not. But as any expert will tell you, no wireless technology, including WiMax, has anywhere near the capacity of a fiber-to-the-home system. As applications become increasingly bandwidth-rich, fiber will be able to accommodate them, and wireless won't. At the same time, we will increasingly want to be as mobile as possible. In Japan, South Korea, and other leading broadband nations, fiber and wireless extend and complement each other. That's where we're heading too."
The Indy published this story about Wilson's municipal Internet utility when it launched last summer that explains how and why the city went into the ISP business.
Residential customers in Wilson get a minimum of 10 megabits per second -- faster than any commercial service available in the Triangle -- for $35 a month, and business subscribers can get speeds up to 1,000 mbps.
Even the JLF report touts WiMax speeds of only 10 mbps. So much for "leapfrogging" fiber.
The report claims that Greenlight's prices are "about the same as Time Warner's" while including a chart that shows Greenlight's Internet service is more than $10 cheaper per month than Time Warner's. And while cable prices are comparable, the report leaves out the fact that Time Warner has not raised its prices in Wilson this year, while hiking basic cable rates 20 or 30 percent in nearly every town and city the Triangle, according to this report by Catharine Rice and Bob Sepe of Action Audits. At the time Greenlight launched, a Time Warner spokesperson admitted that the company increased speeds in Wilson without raising prices "because of the competitive environment." Even residents who don't subscribe to Greenlight are saving money because of it.
All this WiMax stuff is just new wrapping on the same package of industry spin Bethune published on the JLF site back in August shortly after Greenlight launched. The heart of her critique is that Wilson is taking an expensive risk, and if the city's initiative fails financially, taxpayers could be left holding the bag. That's a legitimate point.
But her report rests its argument on paragraph after paragraph of speculation rather than telling us how the project's actually performing -- after all, the thing's been live for more than six months now, and information about it is public. Wilson's Assistant City Manager Dathan Shows said neither Bethune nor Sanera has contacted any Wilson officials since the city manager sent a set of factual corrections to them in August. (Did I mention Sanera is the foundation's research director?)
If they'd asked, the authors would have found out the Greenlight network has already been built out to the entire city -- the latest JLF report says it's slated for 2010. They could have also asked for the number of subscribers, as well as actual and projected revenue numbers, some of which is here (with the city's spin, of course) and in a presentation (PPT) Shows just made to Wilson's city council.
But Bethune and Sanera don't seem all that interested in giving an honest economic assessment of Greenlight. The telecom and cable industries pulled out all the stops to try to keep Wilson from launching this service, lobbying for a bill that would have made city-owned Internet utilities effectively illegal. The industry lost that battle, but hasn't disarmed. It appears the John Locke Foundation is fighting right alongside Time Warner.
Sanera and Bethune call Greenlight "corporate welfare" because the city hopes the network will attract new businesses. In fact, their report is just corporate spin.