Municipal systems do not “crowd out” private providers any more than the New York City Subway “crowds out” private taxi cabs and car services. To the contrary, studies and anecdotal evidence repeatedly show that where municipal systems take on the expensive task of building network infrastructure, the number of private providers increases.
Wireless networks have been greatly hyped and maligned over the past 5 years. The result is a lot of confusion about what wireless can do, whether it is "good" or "bad," and where it should be used. Communities have successfully built wireless networks across the United States for a variety of reasons using a variety of business models. That said, there have been setbacks.
Let's start by dispelling the myth of "Muni-wireless" failures. After being used by many people to describe different networks, structures, and business models, the term "Muni-wireless" has become meaningless. Unfortunately, a number of high-profile networks failures were labeled Muni-wireless and failed. In many of these cases, such as San Francisco, Houston, and Philadelphia, the local government had very little role in the network and the failure was a result of a private company over-promising and under-delivering a network it owned. Peter Collins has rightly rebranded this:
“Pri-Fi” = A broadband delivery model in which a private-sector wireless provider constructs, own, and operates a WiFi network in a major city without requiring any substantial commitments from the city or exposing the city or its taxpayers to any financial risk. When such projects fail, as they usually do, opponents of municipal broadband misrepresent them as failed municipal projects and cite them as proof that public broadband projects are failures.
Too many discussions about the failures of Muni-wireless (or even more broadly - community broadband), inevitably use examples where the community was barely involved.
That said, wireless was over-hyped by many from the media to vendors who overstated their benefits while ignoring the drawbacks. Wireless networks, especially Wi-FI networks, are significantly less reliable than wired connections. In most situations, wireless networks offer mobility as a compliment to the more reliable, often faster, wired connections. Wireless is seldom a substitute for wired connectivity.
Fortunately, our choice is not either wireless or fiber. Communities can, and in the long term probably will, build both. A fiber network solves the backhaul problem for a wireless network. When the city has fiber running down every street, it can put wireless access points anywhere and offer each a dedicated amount of bandwidth in excess of what would be possible with a purely wireless network.
Communities in particularly hard to reach spots may pursue a strategy of wireless in the interim while building a wired network. The best approach may be to get fiber paths to towers for wireless as a first stage to ensure everyone has some form of access. These paths can then form the core for a network that will later extend fiber cables to every house.
Some are promoting a new technology, called WiMAX, as the solution to quickly rolling out broadband to communities. WiMAX offers faster speeds and longer ranges than Wi-Fi. Unfortunately, WiMAX remains unproven and has substantial downsides. In the short term, no one has WiMAX cards in their computers. In the longer term, WiMAX still cannot compare to fiber on bandwidth as the bandwidth to each wireless access point must be shared among many users.
White-space devices are on the horizon and should offer better wireless solutions because they can operate at lower frequencies, which will improve reliability. Regardless, we see little reason why the United States cannot pursue policies that will allow any community to have both reliable wired and wireless connections at affordable prices. We have already put a phone line and electrical line to nearly every house across the continent.