If you weren't already aware, Google is making headlines: The Internet search giant is offering to install fast Internet access via fiber-optic lines to a few cities of its choosing. The eager supplicants include Los Angeles; Topeka, Kan.; Duluth, Minn.; Baltimore; Pittsburgh; Santa Monica, Calif.; Asheville, N.C.; Oklahoma City; Madison, Wis.; Sarasota, Fla.; Seattle; Austin, Texas; and Fresno, Calif. Winners will be announced later this year, but in the meantime, cities have gained notoriety to the degree of their obsequiousness, including some--like Topeka--that have offered to rename their towns "Google."
As a test project, the California company plans to offer high-speed service of 1 GB per second--100 to 1,000 times faster than most current "high-speed" Internet service of 1 to 10 MB per second--to 50,000 to 500,000 people at low cost. The possibilities of such a service are immense for residents, businesses and government. Google deserves kudos for this venture, which could spur broadband service.
There is, however, a question that no one is asking: Why don't towns and cities just do it themselves? Cities, like Google, are corporations, and they have money and power to build broadband infrastructure, including laying fiber-optic lines.
This is not a new argument. Municipalities have successfully built and run public utilities for decades. The Los Angeles Department of Water and Power serves approximately 4 million residents and contributes some $200 million annually into the city's coffers, all with reasonable utility rates. During the deregulation wars in California over the last decade--when private electricity companies jacked up rates more than tenfold in some areas--Los Angeles residents were immune to such tactics.
The capital investments are not minor, but neither are they out of the question. Clearly great advantages will accrue to any city or region that offers lightning fast Internet access to all its citizens and businesses at a low cost. Google's website paints an amazing picture: "Imagine sitting in a rural health clinic, streaming three-dimensional medical imaging over the Web and discussing a unique condition with a specialist in New York, or downloading a high-definition, full-length feature film in less than five minutes."
Infrastructure is one of the primary ways that towns, cities and states can make themselves more competitive. Build the right thing at the right time, and new residents, jobs and businesses will come. But this terrain is rife with strife. A century ago, towns and cities started public power companies, and saw private power companies resist such efforts in courts and with legislation. Today many of these public power companies are doing quite well, thank you very much, as exemplified by the Los Angeles Department of Water and Power and others in small towns.
In the 1930s, President Franklin Roosevelt attempted to make the formation of public power companies government policy as a way to push private companies to keep rates down and spread the economic benefits of plentiful power. But as it occurred with the "public option" in the recent health-care battles in Congress, powerful interests pushed such an option off the table. Roosevelt did get Congress to pass laws encouraging the formation of rural electric cooperatives, many of which are still operating in places like Minnesota and Wisconsin.
What water and power were in 1910 or 1930, Internet access is in 2010. Cities needn't wait for Google like a home-bound Cinderella waited for her prince to rescue her from her ashes and sack clothes. Cities and towns could deliver such services more cheaply and comprehensively than private companies, and even more importantly, could spark new business ventures within their borders in ways impossible to calculate.
Some towns and cities already have ventured into this rich but dangerous terrain. The Minnesota Supreme Court affirmed in 2009 the right of Monticello, a suburb of Minneapolis with about 10,000 people, to lay its own fiber-optic lines, something its citizens chose in a referendum for a project dubbed "FiberNet Monticello." A private company, TDS, opposed the project in court, but the city already had issued $26 million in bonds and plans to begin work in July, according to press reports.
The much larger city of Philadelphia, population 1.5 million, similarly received immense resistance a half decade ago from private companies when it set out to provide low-cost wireless Internet access to its citizens. Some states have even attempted to bar localities from providing Internet service directly.
The logic here is outrageously contradictory. Usually opponents say that because government may be able to provide service more cheaply and better, it should not be allowed to do so. But when private companies can claim to provide something more cheaply, such as prisons, then they should be allowed to. Municipal and state officials do not have to keep straight faces with such self-serving logic.
The intricacies of Internet connectivity are many, and I don't pretend to be an expert in them. But the broad outlines are clear: An opportunity exists for localities to take charge and not wait on private companies, including Google, to implement fiber-optic networks. Right now our reluctance to venture into these areas keeps our country behind. The Information Technology and Innovation Foundation ranked the United States 15th in the world in how well its citizens are provided Internet access. By comparison, once third-world South Korea now leads globally in providing fast and cheap Internet access, largely because its government has not hesitated to get involved.