San Francisco Business Times, December 8, 2005

Al Gore didn't invent the Internet, but from the way San Francisco's politicians are acting, it's clear that they believe technology innovation and deployment depends on the political process.

They couldn't be more mistaken.

In a National Press Club speech in November, San Francisco Congresswoman and Democratic House Leader Nancy Pelosi outlined the Democrats' new "Innovation Agenda." The speech should have been called "Innovation Dilemma." One of the pillars of the plan to "keep America No. 1" is government-regulated broadband. That would be quite a feat: Regulation doesn't create innovation, it stifles it.

Pelosi hopes to extend America's corrupt and broken system of universal service to the broadband arena.

'Waste, fraud and abuse'
A recent report from the Congressional Committee on Energy and Commerce outlined "serious instances of waste, fraud and abuse" in the nation's universal service E-rate program. Indeed, universal service administrators "approved more than $48 million for a plainly fraudulent application" in San Francisco.

Pelosi isn't alone in her plans for greater government control of the Internet. San Francisco Mayor Gavin Newsom has also been pushing a plan described as "free WiFi" that will be anything but free.

In his State of the City address, Newsom said, "We must view access to information as a fundamental government service akin to libraries or public schools." Those who care about free speech and privacy will shudder at that remark. If the government controls access to information, there's no telling how it will manipulate it.

Then there's the fact that Internet access is not a problem in San Francisco, a minor detail the mayor seems to ignore. According to San Francisco's city analyst, at least 76 percent of residents already have Internet access. The residents who reported not having access "likely include those who do not care to use the Internet or do not know how to access it from a library or another place." A recent study from the California Public Utilities Commission offers similar findings: "Although high-speed Internet access is available to 73 percent of Californians, only 13-17 percent of those having a choice have chosen to subscribe to it."

It looks like the mayor and Pelosi are trying to solve a problem that doesn't exist. That's unfortunate, and could wind up hurting Americans in the long run. Consider, for instance, a likely scenario in which Newsom chooses one company to be the single WiFi provider in San Francisco. He would essentially be creating a monopoly where one did not exist before. That's not acceptable.

No feds need apply
Government should not be in the business of picking winners and losers in the marketplace. WiFi is just beginning to take off, and it's hard to predict where it will go.

Internet access has spread exponentially much faster than earlier communications technologies like radio or television, and that will continue so long as governments continue to deregulate and make way for market innovations that bring enormous benefits to consumers.

What's important now is a healthy marketplace, not the rhetoric of well-known politicians. It's time to say "no" to government-controlled broadband plans.

Sonia Arrison is Director of Technology Studies at the Pacific Research Institute. She can be reached at sarrison@pacificresearch.org.)