Submitted by acohill on Tue, 08/01/2006 - 09:54
The City of Boston has decided to develop an open access wireless network for the city. This project might actually succeed where many other communitywide wireless projects have struggled. Boston has decided to do some things differently.
The choice of an Open Access Network (OAN) or Open Service Provider Network (OSPN) (two terms that mean the same thing) means that local government officials are not going to try to guess winners and losers in the Internet services marketplace. A fundamental weakness of giving the keys of a communitywide broadband system to a single company means that a handful of local government officials have to be very smart, indeed, to project (typically) eight or ten years into the future and be sure that just one or two private firms will market, sell, and manage services over the community network perfectly.
I am not that smart. I would much rather build a digital road system and let any qualified firm sell services, at whatever prices they choose, and let buyers in the marketplace decide who has the best prices and services. That way, local or regional governments don't have to have the responsibility of picking winners and losers.
An Open Service Provider Network also lets local and regional governments neatly sidestep the thorny issue of creating a de facto public monopoly for services. By using public money to build a network and then selecting just a handful of service providers, there is created a potentially difficult legal challenge from other service providers who want to offer services in the community but have not been "blessed" by local government. An OSPN network lets any qualified provider come in and sell on an equal footing, and takes the government competition issue off the table.
An OSPN system encourages competition, which leads to lower prices for telecom services. When government picks the service providers, competition is diminished, and everyone, even local government, ends up paying more for services.
Finally, when managed correctly, an OSPN network encourages innovation by lowering the barriers for entry into a new marketplace. The current bandwidth model we use everywhere now discourages rolling out new and experimental services by creating up front (and often very expensive) fixed bandwidth charges before even a single customer is subscribed to the service. A correctly designed OSPN system should price the cost of transport based on the services offered along with other factors like time of day, Quality of Service needed, and yes, bandwidth. But transport charges in an OSPN network should be tied to revenue, which encourages innovation. If a service provider has few customers, network use fees are low. If the service is popular, network use fees go up in proportion to revenue. This also means that the network operator has income proportional to network use, unlike the bandwidth model which punishes network use.
Boston is to be commended for this approach, although I still remain skeptical of communitywide wireless. So far, use of these systems has been light for a variety of technology and economic reasons, but that is the subject of another article.
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