How Do You Support Social Development?

I wrote about the problem with supporting solar development last month; this has come back again in the form of municipal wireless service, which is floundering in the US and doing OK in other countries. The New York Times had a good piece on Philadelphia, San Francisco, and other cities after Earthlink (among others) decided they couldn't make money in their partnerships with cities on municipal wireless.

Municipal wireless is one of the most direct fixes of the digital divide, since poor folks can get wireless for free off the utility pole and not be excluded from the information world the rest of us take for granted. The benefits are obvious, from basic information like phone numbers so you can call ahead to see if your prescription is being filled at the pharmacy you think it is, to new services for housebound people, local niche businesses, and much more. The "network effects" of universal access are well-known. If wireless becomes a utility, whether low- or no-cost (most of the failed business models charged something), who knows what could happen?

One critic of the public-private partnership noted in so many words that the social benefits - or spillovers - greatly outweigh the capacity of any one company to retain profits, and therefore the companies miscalculated - by virtue of the model itself.

"The entire for-profit model is the reason for the collapse in all these projects,” said Sascha Meinrath, technology analyst at the New America Foundation, a nonprofit research organization in Washington.

Mr. Meinrath said that advocates wanted to see American cities catch up with places like Athens, Leipzig and Vienna, where free or inexpensive Wi-Fi already exists in many areas.

He said that true municipal networks, the ones that are owned and operated by municipalities, were far more sustainable because they could take into account benefits that help cities beyond private profit, including property-value increases, education benefits and quality-of-life improvements that come with offering residents free wireless access.

I would add that Earthlink, the biggest company among the withdrawers, had a chance to rescue itself from oblivion with a very cool and distinctive project that could eventually have make it a hero to millions. It could have improved its technological analysis (it underestimated the number of routers it needed to put on poles) and then gone coast-to-coast. Without municipal wireless, Earthlink will remain another leftover from the 90s dial-up services that counts on the millions' techno-backwardness to prolong its death.

Building on stories like this, and on the work of our research partner David Mowery on the central role of "procurement" in making markets for users that take a while to settle in, we should

1. get the Obama and Clinton campaigns to sign on to a federal role for national wireless from the east to west and north to south. (The "winner" technology is already picked here, I say to the industrial policy skeptics among us.) And
   
2. think more carefully about now to develop procurement strategies for major nanoscale outputs like solar panels.