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Why are municipalities the only competitors?

The current battle is telephone vs. cable. I think we can agree that both will survive, and absorb related technologies. Telephone/cellular and cable/satellite.

What's left? WiFi/WiMax.
WiFi is being supplied by the telephone companies, but not as the primary source of service.
The duopoly are leaving this technology alone otherwise, except where tactical considerations require an interest.

How can they afford to ignore it?
Big capital investment to become the third player in a market dominated by very large, mature companies.
Assertion: no corporation large enough to be able to compete is interested. They'd be third in a mature market against intense competitors.

So we get municipalities trying to become that third competitor.

The issue will quickly be politicized. A lot of people work for telephone and cable companies, and they all vote. The telephone and cable companies have a lot of resources for lobbying. One place the money goes.

Cities are chronically short of money. As the mayor of San Francisco said, the city needs a partner capable of writing "a big check".
Intel and Cisco may supply seed money, but they can't afford to become the competitor themselves.

Maintaining the system is going to be costly. Anything in a city is costly. If there's a contract, the contractor is going to want to raise prices or obtain a subsidy from the municipality.
Then what?

A few small towns may end up with successful programs when the established companies aren't interested or lack finesse.
But only until Federal and State laws preventing municipal involvement are passed.
Remeber, the public doesn't really care. They don't knopw about increased internet speed (for what?, email?) and the bills they receive may be acceptable. For now, until the market is fully sorted out.

The market will be fully sorted out shortly.

Posted by: Anton Philidor   Posted on: 08/22/05 You are currently: a Guest | Members login | Terms of Use

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