In an attempt to regain some of its Silicon Valley shine, San Jose, California is taking another run at municipal Wi-Fi. The city hopes that by covering a 1.5 square mile block of downtown with fast, robust wireless Internet access, it will become more attractive to the technology entrepreneurs who have, in recent years, been more likely to set up shop in other parts of the valley.

San Jose has twice attempted to offer free public Wi-Fi through privately owned and operated networks. In 2004, Global Netoptex deployed hotspots that never really worked. In 2006, MetroFi tried offering advertising-supported wireless, but was unable to generate enough revenue to cover costs. Just two years later, after failed attempts to sell its networks to the cities in which they operated (including Santa Clara, Cupertino, and Portland, Oregon) MetroFi went out of business.

This time, the City is investing its own funds in a network that will both serve the City’s own communications needs and offer free public access. San Jose is paying approximately $100,000 in start-up costs, and is committing to $22,000 in annual operating expenses. The City’s CIO, Vijay Sammeta, says the City is getting “a sweetheart deal” in exchange for its willingness to be a testing ground for software and firmware updates. Applications will include wireless parking meters and digital pay-to-park signs. The City expects cost savings from moving from other wireless connections to the Wi-Fi network will balance out the annual operating expense.

At the current rate, EPB can shave seven years off the time it will take to pay off its telecom debt, becoming virtually debt-free by 2020 instead of 2027 as projected, Eaves [EPB CFO] said. Even so, the government utility still is spending money to sign up new customers, a process that will increase debt until 2013, Eaves said. The utility has $51 million in total debt so far, but it only needs 30,000 customers to break even on operational costs, Eaves said. "We are currently cash- flow positive from an operations standpoint, but still increasing debt to fund the capital associated with signing up new customers," he said.

We are running a guest commentary today. Eric Null is a third-year law student at Cardozo Law School in New York City. He is passionate about corporate and intellectual property law, as well as technology and telecommunications policy. Follow him @ericnull or check out his papers. While researching a paper about municipal broadband networks, I was struck by the tremendous benefits that municipal networks can provide. It can be the first high-speed Internet link for an area without broadband, or it can provide some much-needed competition in areas that currently have access to broadband, but for some reason that existing access is unsatisfactory (e.g. price, service). Municipalities, in theory, can run the network for the benefit of the public rather than with a vicious profit maximization motive. Indeed, municipal networks bring many benefits. But first, a little history. In the United States, cable providers have set up regional monopolies for themselves, and “competitors” such as DSL and satellite are characterized by slower connection speeds and it is arguable that they are actual substitutes to cable access. Certainly within the cable industry, any “competitive” cable company attempting to compete with incumbents is met with high costs of building new infrastructure and lack of customer base. Municipalities can pick up where smaller, private entities cannot succeed. Municipalities have had a long history of investing in critical infrastructure, and they have the mentality for long-term planning that private companies simply cannot enjoy. A large company like Verizon likely has to justify any expansion of its network to its investors and ensure them that the venture will return a profit relatively quickly. Not so with municipalities; a city network allows its citizens to benefit indirectly (and directly) over the long-term. Thus, city governments can be a formidable competitor in the telecom and cable industries. Some states, regrettably, have banned or restricted the practice. In Nixon v.

Today, the Institute for Local Self-Reliance, which advocates for community broadband initiatives, is tracking more than 60 municipal governments that have built or are building successful fiber networks, just as they created electric systems during the 20th century. In Chattanooga, Tennessee, for example, the city’s publicly owned electric company provides fast, affordable and reliable fiber Internet access. Some businesses based in Knoxville -- 100 miles to the northeast -- are adding jobs in Chattanooga, where connectivity can cost an eighth as much.

Right now, state legislatures -- where the incumbents wield great power -- are keeping towns and cities in the U.S. from making their own choices about their communications networks. Meanwhile, municipalities, cooperatives and small independent companies are practically the only entities building globally competitive networks these days. Both AT&T and Verizon have ceased the expansion of next-generation fiber installations across the U.S., and the cable companies’ services greatly favor downloads over uploads. Congress needs to intervene. One way it could help is by preempting state laws that erect barriers to the ability of local jurisdictions to provide communications services to their citizens. Running for president in 1932, Franklin D. Roosevelt emphasized the right of communities to provide their own electricity. “I might call the right of the people to own and operate their own utility a birch rod in the cupboard,” he said, “to be taken out and used only when the child gets beyond the point where more scolding does any good.” It’s time to take out that birch rod.

We have had one instance where we needed to contact customer service, and the problem was fixed quickly and easily by the most polite customer service rep I’ve ever dealt with. Comcast came by recently to offer us a “substantial savings” if we’d make the switch back to them. My question was, why now? I was a customer for years and treated poorly as rates increased exponentially. Now the offer the discount? No thanks. For the $5 extra per month that we pay for EPB, we receive better features, prompt and polite customer service, and an all around trouble free experience. Thanks EPB!

"The private sector is handling this exceptionally well," Rogers said. "What they don't need is for a governmental entity to come in and compete with them where these types of services already exist.