David Deans on Texas House Bill 789
Will the Texas legislature knowingly pass a bill that may harm their constituents' ongoing participation in the Global Networked Economy, and negatively impact the future competitiveness of every business within the state?
That's the puzzling conclusion regarding the cause and effect of Texas house bill HB789 if passed. The following is an assessment of each of the main arguments and the associated counterpoints:
Why would any government entity want to invest in telecommunications infrastructure?
There is a clear precedent that government has always exercised the right to invest public money in infrastructure projects for "the public good". For centuries, governments have invested in building waterways, railways, highways and most recently airport facilities. Supporting national, regional and local investments in telecommunications infrastructure is merely an evolution of previously rationalized economic public policy. Telecom infrastructure is the enabling commercial transportation media of the Global Networked Economy.
Can telecommunications infrastructure become a part of existing Municipal Public Works?
Again, there is a precedent for municipal governments to deliver services that are in the public interest. This extends beyond transportation infrastructure to utilities such as water, electricity, trash removal and other essential civic services. Access to competitive telecommunications infrastructure is essential for all Texas communities to prosper, and it is therefore a logical extension of the provision of public works facilities. Access to broadband is becoming essential.
Should local governments provide similar services that compete with private business?
Once again, there is a similar precedent for publicly funded municipal bus and light rail services to be in direct competition with private taxi, limousine and shuttle services. Meaning, competitive coexistence is proven to create consumer choice -- given the availability of various options with associated value propositions, we know that discerning consumers will choose different services to meet their own individual needs. Texans are entitled to choose a public or private telecom provider. Besides, when compared to other forward-looking states, if HB789 is passed then Texans will become relegated to "second-class U.S. citizens" that essentially have fewer options than residents in other states. Granted, this is not the intent of HB789, but the unintended consequence.
Is it unfair when government provides no-fee Internet access, while carriers charge a fee?
Non-profit municipal telecom services that are provided without charge are not really "free" to its users – clearly, this is not a case of semantics. All users of telecommunications services are subject to paying approximately twenty percent of their existing service bill in the form of various federal, state and local government taxes (and associated subsidies). Municipal governments are now finally applying that revenue windfall to directly benefit those people who pay those taxes, by providing a tangible public service. Moreover, it’s already recognized that the American public collectively own the available radio spectrum, and so municipal wireless services simply ensure that this community asset is being used in the public interest. This isn’t a gift; it’s an inherent right.
Is it unfair that all taxpayers must subsidize municipal telecom services, when most people who don’t own a computer may never use the service?
Since the people who will use the municipal telecom service will likely be the same people who use the most commercial (fee-based) telecommunications services, they therefore already pay their "fair share" of the tax burden. Consider this situation to be similar to gasoline taxes – people that use the roads and highways the most ultimately are the ones who pay the most for the ongoing construction and maintenance of those very same resources. Again, the precedent is clear, apportioned taxes have often been applied in this very same manner.
If bill HB789 were passed, would it adversely affect the progress of the wireless sector in Texas?
Outlawing government’s involvement in the provision of broadband telecom services will set a negative precedent that has vast implications – it could undo past positive events. As an example, the State of Texas was nationally recognized as a forward-looking state when it approved the budget for DPS to install and maintain no-fee Wi-Fi services at state highway rest stops (other states are following Texas’ lead). Furthermore, the nationally acclaimed Austin Wireless City Project, an organization that provides free broadband Wi-Fi network installation and maintenance for local business venues across the Texas capital, is a model of American grass-roots entrepreneurial ingenuity at its very best (other cities are following Austin’s lead). By contrast, the passage of HB789 is regressive policy that not only undercuts past progress, but also potentially holds back further economic prosperity. The bill would prohibit the public-private partnership in Granbury, Texas – the nation’s first multiple-use citywide wireless broadband network. In Granbury, the city has contracted Frontier Broadband to deploy a network for public safety AND public access, a first in the United States. In Corpus Christi, a similar citywide network has been deployed for a variety of municipal applications including automated gas meter reading, public safety and in the near future, public access.
Isn’t it an exaggeration to say that HB789 will ultimately harm the Texas economy?
Telecom infrastructure is an enabling foundation for the ongoing growth of both traditional and electronic commerce. Texas needs to deploy as much broadband service offerings as possible, in order to effectively compete with other states that are already trying to attract their unfair share of telecom-enabled commerce. This is a key point -- don’t underestimate the significance -- Texas communities are in a race to build out their telecom infrastructure to match (and hopefully exceed) that of other growing markets. In comparison, HB789 is equivalent to suggesting that the Texas legislature would gladly pass a bill that will hold back the advancement of Texas state highways, or Texas community airports. In summary, bad economic policy is proven to negatively impact investment, the creation of jobs and ultimately people’s overall quality of life – put simply, handicapping Texas municipal broadband infrastructure investment options will harm all Texans.
Compared to other forms of public infrastructure, is wireless really a good investment?
All publicly funded investments should be subject to due diligence, as part of an ROI assessment. However, if the Texas legislature continues to support public funding for the construction and maintenance of other essential forms of infrastructure, then it is surely a clear case of faulty logic to outlaw the funding of essential public telecom infrastructure, without legal cause. Furthermore, wireless infrastructure investment is very prudent, with a compelling return on investment, when compared to other forms of legacy infrastructure. See Table 1 for a cost comparison.
Broadband Infrastructure Costs per Kilometer vs. Other Infrastructure Costs
Fiber Optics; $22,000 - $35,000
Coaxial Cable: $12,000 - $20,000
Copper Wires: $7,000 - $15,000
Wireless: $3,500 - $15,000
[Source: Upper CanadaNet as cited in the Canadian Broadband Taskforce Report, 2001 page 46]