More on: Rendell caves and signs HB30 - Verizon can prevent municipal networks statewide

[David Farber <dave () farber net>]

Begin forwarded message:

From: Gerry Faulhaber <faulhaber () law upenn edu>
Date: December 2, 2004 11:08:42 AM EST
To: dave () farber net
Subject: Re: [IP] More on: Rendell caves and signs HB30 - Verizon can 
prevent municipal networks statewide

> I consider this to be a very very important topic and will continue to
> send relevant mailings on it
>
> Dave
>
> ps I am looking for someone who can defend the law

I really hesitate to "defend" a law which I don't like very much.  But 
there
is one point that is lost in all this.  Municipalities have shown 
themselves
to be very eager to tax the living bejesus out of any private telecom
service to peoples' homes, imposing very high fees for digging up the
streets plus ongoing taxes on revenues for the service.  To cities,
broadband in its various forms is a honeypot, to be milked for every 
last
tax penny (sorry for mixing metaphors).  For example, several years ago 
the
state of Michigan passed legislation forbidding municipalities from 
levying
"unreasonable" right of way fees and revenue taxes on such services, 
because
they feared this would chill broadband development.  Cable and telephone
firms have struggled to avoid these ruinous taxes.

So how would having a municipal WiFi (or other) network impact this?  
Think
how much more vigorously a municipality would tax a private-sector 
service
offering competitive with its own service!  In essence, you can write 
off
any private deployment of broadband (that is not already there) in a
muncipality with its own network; they will be taxed out of existence 
and we
will be left with a public monopoly.  Now this may be just great if the
municipality runs the network the way "we" think they "should."  But
honestly, how many public monopolies can you think of that are even 
decent,
much less optimal?  For Philadelphia residents, how would you like a
broadband monopoly run like SEPTA?  Makes you think twice, doesn't it?  
If
you think this network will be managed like the streets, perhaps you 
should
take a drive on Philadelphia streets some day and tell me if you think 
this
is a good idea.  And once it's a monopoly, how long do you think it will
take for City Council to start ramping up the fees, in order to meet the
next fiscal crisis?

Prof. Gerry Faulhaber
Wharton School, Univ of Pennsylvania
currently on leave, Penn Law School
Philadelphia, PA 19104
 

Prof. Gerald R. Faulhaber

currently on leave @ Penn Law School S-135

University of Pennsylvania

Philadelphia, PA 19104
 

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