To date, public officials have focused on the challenges of supply. Where will the money come from? How can we make the technology work? But what about other important institutional concerns such as liability rules? Interference is a double-sided challenge: technical and legal. Are municipalities prepared for a commons problem. Where no one owns the network, each individual is given an incentive to use as much as possible without regard to negative externalities such as the effect on capacity. Indeed, some members of the community will have malicious intent.

Meanwhile, a new report out this week from the Seattle City Council recommends a municipal fiber network to meet broadband demand. I'm suspicious. Not only do municipal fiber networks have a dismal track record, I don't think it will improve the situation in a highly educated and wealthy city like Seattle. My guess is that a great number of homes have access to broadband but the take-rate is still lower that city officials would like. As a result, they want to duplicate efforts with additional supply. If they are so worried, why not give broadband coupons to all the households that have access but don't subscribe? At least the subsidy would be clear and explicit and probably have the virtue of greater efficiency.

N.B. My vote for the scariest line in the Seattle announcement: "The next step is to create a broadband office," said Councilman Compton. Yikes! As Patrick noted on Monday, having a broadband office in local government may be benign but not in the context presented by Councilman Compton.

posted by @ 3:03 PM | Broadband , Municipal Ownership , Wireless

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