A front-page story in the Washington Post on Monday reported that the "[t]he federal government wants to create super Wi-Fi networks across the nation, so powerful and broad in reach that consumers could use them to make calls or surf the Internet without paying a cellphone bill every month."
Wow -- free federal Wi-Fi for the masses!
Sorry to be the bearer of bad news, but it's not true. For one thing, there's no such thing as a free network. To build a wireless network, you need two things: the physical infrastructure to power the network (including routers, towers, antennas and a connection to the Internet) and the radio spectrum, or airwaves, over which to transmit. The Post story badly conflated two distinct Federal Communications Commission proceedings that would clear airwaves for unlicensed Wi-Fi-like use. In reality, however, neither would provide spectrum that could support a ubiquitous national Wi-Fi network.
Yet even if the FCC were to make sufficient unlicensed spectrum available over which to build a national "super Wi-Fi" network, someone would still have to provide the infrastructure to undergird it. The Post story implied that the federal government would be building this network, but there is no plan to do so. The FCC lacks authority to build and run networks; it only manages the airwaves that others use.
So who else might build a free Wi-Fi network if the FCC made one of the inputs -- spectrum -- freely available? Municipal governments might want to try it as a way to address the "digital divide" -- the fact that many low-income homes don't have broadband access. But many city governments are cash-strapped and looking for ways to cut budgets, not to embark on new billion-dollar infrastructure projects. Second, many municipalities tried citywide Wi-Fi networks late last decade, mostly resulting in spectacular failures. Given that access to unlicensed spectrum is free, the predictable ensued: The airwaves were oversubscribed and congested. And because Wi-Fi is a low-power technology, it was not suitable for covering wide areas. As a result, service was slow and poky.
Even municipal Wi-Fi is not free. City taxpayers would ultimately foot the bill. And no doubt they would ask why they should be financing government entry into a competitive and technologically fast-paced market like mobile broadband. We've gone from zero to more than 6 million 4G subscribers in just three years, and U.S. providers made capital investments of more than $25 billion last year while carriers in 15 European countries (including France, Germany and Britain) spent $18.6 billion combined. That's a sign of a robust marketplace at work.
Another contender to build a free network might be a private company like Google. Today, Google offers free Wi-Fi in parts of Mountain View, Calif., where it has its headquarters, and also around its office in Manhattan. Perhaps the company could recoup the costs of building out the necessary infrastructure by displaying ads to free users and offering a faster tier of service to paid subscribers.
But Google would face the same technological constraints as the municipalities did. And more to the point, a ubiquitous nationwide Wi-Fi network over unlicensed airwaves would be in direct competition with the mobile broadband networks of incumbents like Verizon and AT&T, which pay billions to license their spectrum. To give Google (or any other company) critical airwaves for free would be both unfair and inefficient.
When spectrum is auctioned, licensees have an incentive to manage their valuable resource as best they can to provide the best possible service to as many customers as possible. In contrast, open-to-anyone unlicensed spectrum relies on FCC management of the airwaves to avoid congestion. The FCC accomplishes this with one-size-fits-all rules that limit what users can do in unlicensed bands. Because these rules are set through a political process -- not through a market process, the way licensed users set their own rules -- it is difficult to know whether the right rules are in place.
A free, nationwide, ad-supported wireless network provided by Google or anyone else would certainly be a great thing, but it shouldn't rely on shortcuts. Not only should new entrants have to build out their own network infrastructure, but they should have to buy their spectrum at auction, too.
Jerry Brito is a senior research fellow at the Mercatus Center at George Mason University and director of its Technology Policy Program.