Fiber-Optic Illusion

Why Tom Ammiano's plans to create a city-owned broadband network are a boondoggle-in-the-making

When I first ran across the proposal by Supervisors Tom Ammiano and Chris Daly to fund a $300,000 study on whether the city should go into the business of providing Internet, cable TV, and telephone services to San Franciscans, it seemed like a champion idea. The measure, passed unanimously by the Board of Supervisors last week, will pay analysts to investigate whether the city should embark on a multimillion-dollar program of laying fiber-optic cable in trenches to be dug during an upcoming sewer-system overhaul.

I imagined the new public fiber-optic network functioning somewhat like the streets above, which enable things such as cheap, fresh grocery produce because the government maintains a public way to get from farm to store. With a city-owned broadband network, I imagined, monopoly telephone and cable TV companies wouldn't control electronic communication. Internet-based services such as voice telephone calls and home-delivered groceries would become cheap and convenient, like grocery produce is now. Commerce, education, and communication, I imagined, would flourish, and the city's two main suppliers of broadband Internet access, Comcast and SBC Communications, would no longer be able to extract unfair profits from the exchange of digital information.

But I was wrong. Ammiano's measure is a boondoggle-in-the-making. Laying fiber-optic cable in the sewers would be a mammoth and duplicative waste of money that would not really advance the cause of creating a public communications network. And that's not just me saying it.

"We have plenty of fiber already in the metro area," says San Francisco Telecommunications Commission Vice President Sunil Daluvoy -- to whom an Ammiano staffer referred me as the foremost expert on the issue of creating a government-owned broadband network. "The city already has a lot of fiber of its own that's not being utilized. There are also a number of companies that offer [access to] it at dirt-cheap prices."

Yale Braunstein, a professor in the School of Information Management and Systems at the University of California at Berkeley and one of America's most outspoken critics of private monopoly control of electronic networks, says the proposed San Francisco venture would be doomed to fail. Other public telecom and cable systems, such as a recently privatized one in Palo Alto, have bet on their status as the monopoly provider for success. After struggling with steep losses for years, the Palo Alto co-op sold out to a private operator.

If San Francisco built its own municipal fiber-optic system, the city would become just one of several broadband providers. The economics for public cable or telecommunications networks pencil out only when the public entity is stepping in as a sole provider, and even then, such projects have a history of failure, Braunstein says.

"San Francisco has the most improbable likelihood of success of doing this that I could imagine. You've got to wonder how this makes any sense on several levels," Braunstein says. "I've been an adviser to cable cooperatives, and I've been a big supporter of this basic concept. But I don't think you could do this in greater metropolitan San Francisco."

As San Francisco boondoggles go, this $300,000 study -- and who-knows-how-many-million-dollar fiber-laying project -- is a mere whisper in the wind. Yet it becomes more of a screaming fit in the library when one considers that Ammiano and his fellow supervisors are proposing we throw a tax fortune at the idea of providing better local telecom options for consumers, when for the past six years they've advocated policies that ensure the grip of local monopolists SBC and Comcast on our digital information systems.

For reasons I'll explain, Ammiano's advocacy on behalf of small groups of neighborhood activists who believe, without evidence, that new cell-phone antennae harm their children's brains may have helped preserve SBC and Comcast control over San Francisco data and voice networks. Widespread substitution of cell phones for local home lines represents one of the greatest threats to SBC's monopoly. New wireless broadband technology being implemented this year could threaten the dominance of Comcast and SBC over fast Internet access.

Yet Ammiano's anti-antenna campaign has made San Francisco cell service some of the worst in the world.

"If they would spend the same energy on encouraging new entrants into the local telecom market" as they have on city fiber optics, notes Daluvoy, the city Telecommunications Commission VP, "the economic benefit to the city would be tenfold."

Ammiano and all the other candidates participating in the horrible experiment called district-by-district Board of Supervisors elections in November simply cannot seem to consider economic or social benefits to the city at large. They're not hired to do this, nor are they allowed to do so once in office.

Take, for example, the bizarre policy situation surrounding San Francisco telecommunications. Politicians have vigorously pursued policies encouraging monopoly stranglehold over electronic services -- then proposed dumping a mountain of city money on the problem of a monopoly stranglehold over electronic services -- in one of many instances in which our city legislators are not rewarded for looking at the big picture, because the big picture doesn't much interest their most vocal local constituents.

"Why is San Francisco the most difficult city in which to get these things built? The time to get a permit in San Francisco is more difficult than anywhere else. If you let these local but organized groups impact everyone else, you're never going to accomplish anything. I can tell you, the people affected aren't at those hearings," says Daluvoy, who could be talking about difficulties involved in erecting new apartment buildings or homeless shelters in San Francisco.

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