In a recent editorial, the Chronicle says opponents of the Earthlink-Google deal should put up or shut up (“Wire those jaws,” January 22). But the editorial missed two crucial points.
First, a recent report from the Budget Analyst, a neutral third party, concluded that the process leading to the Earthlink-Google deal was profoundly flawed.
The process was off-track from the beginning. In October 2004, the Mayor and the Board of Supervisors announced broadband initiatives at the same time. According to the Budget Analyst, city staff chose to address the Mayor’s goal of providing free wireless internet access “separately and more quickly” than the Supervisors’ plan to study an expansion of the city’s fiber network.
The decision to separate the two objectives prevented the City from leveraging existing city-owned fiber and its own substantial demand for information services to get the best possible deal in the proposed contract.
Next, the City sought a consultant to conduct a feasibility study that considered both fiber and wireless. Again, staff made a decision to focus exclusively on wireless. Moreover, the feasibility study was never done. At staff’s direction, a “Request for Information and Comment was issued instead of a formal analysis of wireless broadband feasibility.”
These two decisions, to focus exclusively on wireless and not to complete a feasibility study, eliminated a priori solutions that combine fiber and wireless to create a more robust, higher capacity network than is possible with wireless alone.
The result of this flawed process is the inadequate Earthlink-Google deal, which accomplishes little more than the most basic goal of free Internet access. The free service is decidedly slow: half the speed of the DSL access AT&T is now required to sell for $10 per month, under terms imposed on its acquisition of BellSouth, and one-third the speed available for free in neighboring communities. The need for a wireless bridge device, to bring the outdoor wireless signal indoors, forces low income households either to buy such a device for $80 to $200, or subscribe to the paid service at $22 per month. Both these options limit the number of low-income individuals that will use the network.
The network also limits potential competition. According to the Budget Analyst’s report, the Earthlink agreement “would almost necessarily exclude any potential competing wireless network providers from entering the market for a Citywide wireless network.” As both a retailer and the wholesaler, Earthlink would have incentives to limit the level of competition, a conflict of interest that can be limited but not avoided.
The Chronicle concedes the deal is flawed, but insists the Board of Supervisors ratify it because there is no alternative. Fortunately, that’s not true. The Budget Analyst’s report concluded that a municipally owned network is a fiscally viable option.
I can personally vouch for that conclusion. At the request of several San Francisco organizations and individuals, my organization, the Institute for Local Self-Reliance, developed the first financial analysis of a publicly owned, citywide wireless network in San Francisco. The Budget Analyst confirmed our conclusion. A $10 million capital investment could build a network. Far from requiring taxpayer support, the network could generate nearly $1 million annually in surplus revenue to fund other public priorities. The slight risk that the network could lose money is mitigated if the public sector’s demand for network services is added to the equation.
Members of San Francisco’s robust communications technology community have put forward a model for a fiber and wireless network run by a technically competent non-profit organization, independent of the City, and open to any qualified service provider.
The dissenting Supervisors are considering both the municipal and non-profit models, but are reserving judgment until they have seen the results of a broadband feasibility study that is finally being completed in accordance with the Supervisors’ October 2004 resolution. Unlike others in City Hall, they choose not to rush into a project with long-term consequences without considering all the options.
It is hypocrisy to railroad through this bad deal under the cover of digital inclusion. The wireless network at the Alice Griffith Housing Development, and other similar projects carried out by community wireless organizations throughout California, show that underserved communities can be reached quickly and inexpensively without a citywide solution.
As Mayor Newsom said, this is “too big of an idea” to accept anything less than the best possible outcome for the City, its residents and businesses.
Becca Vargo Daggett is Director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance, and author of a new report, “Localizing the Internet: Five Ways Public Ownership Solves the U.S. Broadband Problem”

• Overall Rating: 10