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from: Broadcasting & Cable

FTC Issues Municipal Wireless Report
By John Eggerton -- , 10/10/2006 4:59:00 PM

Democratic FTC Commissioner Jon Leibowitz says a new staff report on municipal Wireless Internet networks released by the commission Tuesday should be used to counter state attempts to prohibit cities and towns from creating a government "third pipe" to the home.

Video Franchise legislation passed this year in the House and in the Senate Commerce Committee before getting hung up over the network neutrality issue contained provisions protecting municipal wireless broadband networks, but that bill will likely not pass.

"If there is no federal telecom statue," says Leibowitz, "the danger remains that the telephone and cable companies will renew their efforts at restricting the ability of local governments to improve their residents access to broadband Internet.

The 61-page study does not come down on one side or the other of the issue, however, spelling out federal and state legislative proposals and pros and cons of municipal service.

Pros include increasing competition, lowering prices, and increasing efficiency. Cons are primarily associated wit incentives for government to engage in anticompetitive practices.

But the study does site the advantages of broadband rollout and competition, and advises that "policymakers considering this issue may want to evaluate whether competition and consumers would be better served if they permitted municipalities to provide broadband Internet services but insured that municipalities would not engage in conduct that disadvantaged or excluded private competitors."

It suggests letting the government participate in an open bidding process is another option.

But the report also says that a one-size-fits-all policy does not work, saying there is a difference between markets where there are already several competing providers and rural ones without wireless service, the latter being the more conducive to municipal entry.