connectivity matters
cell phones February 25, 2013

Free Nationwide WiFi – Who Picks Up the Tab(s)?

Every once in a while, the concept of free, powerful, nationwide WiFi coverage regains the spotlight. The latest proposal, from the FCC, involves tapping unused television spectrum to ‘blanket’ many under-served areas across the country. This is not a new issue, and has been proposed in various forms over the past five or six years. The proliferation of WiFi-enabled devices, however, along with the perceived lack of available spectrum, makes this more of a mainstream issue now.

Proponents like Google point to the innovation boom that would accompany the availability of new spectrum as equipment manufacturers scramble to develop new devices (think of the proliferation of baby monitors and wireless headsets that followed the availability of additional spectrum in the 1985 timeframe). Others point to the cost savings to be realized by schools and municipalities.  Others cite the access provided to disadvantaged Americans, who would benefit from free WiFi internet and voice connectivity.

Innovation.  Connectivity for the masses. Sounds ideal, doesn’t it?

Well, if you want to see something become expensive, just wait until it’s free.

What is a free network?  Who deploys it? Who owns it?  Is it competing with other organizations’ paid networks? If the government would provide ample free spectrum – who maintains the free network? Given the deployment and upkeep requirements of a network of this scope, someone has to maintain it – and somehow get paid.

There are some missing details.  Networks do not deploy themselves, and certainly aren’t self-maintaining.

As Dan Frommer commented on SplatF,

And once you start there, someone has to pay for the network infrastructure, the bandwidth management, the CRM software, the billing, the credit card processing, etc. I still have never seen anyone explain how these airwaves would actually turn into free Internet service.

Carriers like AT&T, Verizon, T-Mobile and others pay for spectrum AND the equipment. The players in this $178 billion industry might have something to say about such a network. And does its existence dis-incent carriers from enhancing their own networks?

Consider this: How quickly will a major device manufacturer such as, say, Apple, rush to develop new technology to allow users to tap the proposed WiFi blanket when the bulk of their iPhone revenue is generated by the same carriers opposing the proposal?

While this modest proposal (again) sounds enticing on the surface, and certainly offers benefits for many Americans, it presents an epic balancing act and a complex set of economic and ownership questions. The big questions, for now, are how long until this idea is again moved to the back burner, and if the issues of ownership and maintenance will ever be properly addressed.

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