City rejects publicly owned Wi-Fi system

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Turning back a months-long effort by advocates of a publicly owned wireless network, the City Council on Friday authorized staff to pursue a public-private system that council members said would save the city money, spread the risk beyond City Hall, and assure broader Internet accessibility.

“This initiative is about improving the lives of ordinary people,” said Council Member Paul Ostrow (Ward 1), who joined 10 of his colleagues in voting to work with one of two Internet giants—Atlanta-based Earthlink or Minnetonka-based U.S. Internet—to build and operate the network. Council Member Cam Gordon (Ward 2) was the only vote against the plan. Council Member Sandra Colvin Roy (Ward 12) was absent.

Gordon argued that city staff had not sufficiently made the case against a publicly owned system and that the council should postpone the decision for two weeks to study it further. “It’s unfortunate that we didn’t look at this seriously,” he said.

Opponents of the public-private plan, led by Becca Vargo Daggett of the Institute for Local Self-Reliance, had been arguing for several months that the city had dismissed a publicly owned network from the beginning. Daggett contends that a city-owned Wi-Fi network could generate surplus revenues of $1.4 million in the first full year of operation and accumulate some $50 million in surplus revenues over the first five years.

But council members pointed to the capital costs of building such a network and the market and technological risks of sustaining it as reasons to work with a private company. “We don’t have $25 million to put into this, even if we wanted to take the risk,” said Council Member Scott Benson (Ward 11).

Council Member Elizabeth Glidden (Ward 10) explained that the legal and regulatory environment surrounding city-owned Wi-Fi networks was “unsettled” and noted that the city was not giving up ownership of the fiber optic “backbone” on which the system will built. Besides, she added, the contract should allow the city to consider the option of buying the network in the future. “This is not a franchise,” she said. “We have flexibility in our contract.”

Pivotal to the debate, however, was the council’s insistence on a strong Community Benefits Agreement (CBA) as part of any contract negotiated with the eventual winner of the bid to build and operate the network. The CBA will specify the ways in which the company will assure that the system works to break down the so-called “digital divide,” the gap between those city residents who do have Internet access and those who do not.

The CBA was “a pretty significant component,” said Catherine Settani of the Digital Access Project, who has been working for many years to increase Internet and computer access in the inner city. “There are a lot of long-term benefits to this.”

Daggett said she was disappointed by the vote, but defended her campaign to force the city to look at an alternative model. “If we made a difference,” she said, “it was getting the city to own the fiber.”

City officials next week will begin discussions with the two companies about installing pilot Wi-Fi networks in the Cedar-Riverside and Near North neighborhoods. If all goes according to schedule, the citywide network should be operational by Spring 2007.

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