Bacon's Rebellion

Democracy Thrives in Sunlight

Will Virginia Cities Be among the 600?

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by

James A. Bacon
in ,

wi-fiMadrid-based GOWEX, which specializes in creating wireless smart cities, aims to bring free Wi-Fi connections to 600 cities around the world by 2018 in partnership with Cisco, the American networking giant. (Read details in the “Datamorphosis” blog.)

The Spanish company has an interesting business model. Everyone with a smart phone can get on the Wi-Fi network for free; an upgrade (€8 in European cities) gets them a connection that runs 12 times faster. GOWEX also sells advertising targeted to a person’s specific geographic location. The company charges the host municipality nothing but the city gets a network that can serve as the backbone for such solutions as smart transport and parking, urban safety, traffic management and smart tourism.

Cowex undoubtedly will find its way to the Washington metropolitan area. Will Richmond, Hampton Roads and Virginia’s smaller metros be among the 600? If we aren’t vying for a GOWEX-Cisco solution, is anyone considering an alternative that offers comparable Wi-Fi capabilities? Virginia cities aren’t in the vanguard of change — GOWEX is already in 90 cities around the world, and we’re not among them. Will we at least keep up with the global pack — or will we fall behind?

Is anyone even thinking about these things? All I hear is crickets chirping.

— JAB

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22 responses to “Will Virginia Cities Be among the 600?”

  1. larryg Avatar
    larryg

    well – you’ve encapsulated what net neutrality is about.

    ” Everyone with a smart phone can get on the Wi-Fi network for free; an upgrade (€8 in European cities) gets them a connection that runs 12 times faster.”

    the folks who provide internet want to monetize the speed of it.

    whereas the other side considers any penalty or premium for speed to be unfair.

    I’m conflicted by it myself.. but think about it two different ways:

    1. – would you be okay if the quality and quantity of your electricity was tied to the rate you paid for it and the top quality guaranteed you 100% whereas the cheap rate would cut you off first in a power outage.

    2. – would you want airlines to charge the same price for a ticket no matter when?

    maybe not exactly the two choices but getting in that realm.

    the internet companies want you to pay for tiered services… and it’s already started when you can download two kinds of apps to your smartphone. The “free” version which lacks features and the “paid” version that is fully featured.

    what’s the free market approach?

    1. virginiagal2 Avatar
      virginiagal2

      That really isn’t the net neutrality issue – net neutrality would be more along the lines of, “free for everyone, high speed if you buy your movies from the cable company we own, sure out of luck if you prefer Hulu”

      1. larryg Avatar
        larryg

        is that the same as “all you can eat for one low price”?

  2. James A. Bacon Avatar
    James A. Bacon

    I have absolutely no problem with tiered service — especially if it provides people a basic service for free that they would not have otherwise.

    1. larryg Avatar
      larryg

      isn’t tiered service also “crippled” service for the cheap seats?

      would you agree to “tiered” service for electricity or roads?

      1. James A. Bacon Avatar
        James A. Bacon

        If someone is willing to give me free electricity or free roads, sure, I’d be happy with tiered service. I have no problem with companies charging more for premium service. The idea that companies should offer the same service to everyone, regardless of their ability to pay, is idiotic. Enforcing such a notion would shut down innovation and creation of new products and services.

        1. larryg Avatar
          larryg

          no, no. not free. the same price you’ve been paying but not for all services that used to be the same price.

          peak hour pricing charges you MORE for what you used to pay the same price for …

          can we “redefine” what the tiers are and now charge you more for something that used to be less but it’s now based on supply/demand.

          so electricity that used to cost the same during peak hour would now be 3 times as much… and the goal is to more closely align costs with those who consume…. during peak hour.. much like the airlines work.

          this is essentially what’s on the table now.. for a number of services that used to be one rate no matter how much you used or peak hour.

          Isn’t this the standard Libertarian market supply/demand argument?

          methinks that some would-be Libertarians lose their taste pretty quick when it hits their pocketbooks.

          1. James A. Bacon Avatar
            James A. Bacon

            The problem won’t be the Libertarians — they understand the economics. The problem is the Republicans who give lip service to market principles but pander to the self interest of their voting constituencies. As for the Dems, you can forget it. I’ll give you credit, Larry, you depart from Dem doctrine on this issue, and it’s a big one.

          2. virginiagal2 Avatar
            virginiagal2

            Net neutrality allows charging by usage and congestion pricing. All net neutrality disallows is discrimination by who provides the content.

          3. larryg Avatar
            larryg

            but isn’t this what they are doing right now with TV cable channels?

        2. LifeOnTheFallLine Avatar
          LifeOnTheFallLine

          So, larry misrepresents net neutrality slightly and then you are exactly backwards WRT your final point.

          ISPs already offered tiered access to the Internet and that’s fine. If I don’t feel the need for 1 Gb/s speeds then I don’t pay for them, easy as that. Net neutrality is about making sure ISPs can’t charge content providers different amounts for different types of content or even block it entirely. It’s not about making Verizon provide you and I the same speed as end users, but making sure Verizon can’t charge me more for distributing video files than you for distributing text files.

          Which is important for protecting innovation…if ISPs had been allowed to price discriminate according to content we’d likely have no YouTube or Netflix or Spotify or cheetah cam at the local zoo. If we start allowing them to discriminate now then it makes it harder for newer companies to enter and gain a foothold in the market: they don’t have the capital to pay the higher rates even if they’re offering a product the people want and they don’t have the name recognition that established brands have to attract customers if the price is passed along to them.

          It’s like saying there’s a finite amount of special and delicious fish available to catch. It’s more equitable to put an overall cap on the amount of the population that can be depleted in any given season: it gives smaller fishing companies the samechance to catch the fish as the bigger ones. The other way is to charge a premium to catch the fish, which would disproportionately favor the larger companies.

          1. larryg Avatar
            larryg

            I did get it slightly wrong. But the net result is if the IP wants to charge Netflix more for steaming, it will, in effect, end up costing you more for the service OR take Comcast and the History Channel – where they cannot reach agreement on the price or other terms and History channel disappears all together from your channel line up.

            is there such a thing as monopolistic behaviors among companies and is it the job of the government to decide what is “fair”? Some think that ANY gov regulation of monopoly is anti-free market, right?

            Larger companies have always prevailed over smaller companies. WalMart does that every day.

            anyone who currently has cable service has surely seen the steady increase in your bills… I pay more for cable than electricity now.

            and I don’t know how many people realize it but preferential rates for electricity for larger corporate users of electricity has been a reality for decades. The same for things like car washes. IN both cases, aren’t these preferential rates subsidies – that are paid for by other ratepayers?

            I’m not justifying it – just saying – it’s not some brand new shocking concept.

            seems like we tried electric de-regulation and it was not a success. None of the companies want the residential market.. right?

          2. larryg Avatar
            larryg

            ” but making sure Verizon can’t charge me more for distributing video files than you for distributing text files.”

            I’m going to play devil’s advocate a bit here.

            if you have a resource – and it can be used for different things of economic value but not everything of economic value – then how do you prioritize ?

            I’m trying to think of a situation where a company does not sell something because there is no real profit in it – one step further – two items.. one more profitable than the other – why requires the company to not prioritize the more profitable product?

            How about the transition from gasoline stations that sold auto repair and maintenance services to convenience stores with 5 times as many pumps, that sold gasoline but no repair services?

            I assume there was innovation – and it was driven by economics… and anyone now days that wants to run a gas station/auto repair business would be on a wrong path… but is there something unfair about the Convenience stores fuel sales model?

            WalMart is now moving in to smaller population areas with it’s smaller footprint MarketPlace store – that will likely take down smaller grocery store chains – as well as locally-regionally owned stores.

            maybe I’m getting confused again here.. so would appreciate more discussion.

        3. virginiagal2 Avatar
          virginiagal2

          That really isn’t net neutrality. By all proposed definitions, net neutrality offers ISPs the ability to charge according to usage. People you use, they pay more. The neutrality is about content neutrality and about WHO pays.

          Content neutrality is, if you use 300 Gb for Hulu movies, you would pay the same as for 300 Gb of Netflix movies or 300 Gb of Comcast movies.

          Who pays means, who pays for their usage – the one who uses it or the one who hosts it or both. If you download 300 Gb of Netflix, you pay for 300 Gb. What the cable companies want to do is charge both you for the usage of what you freely chose to download, and then charge the content provider for what you downloaded – to charge twice, in other words.

          It’s like charging a toll for both the car driving downtown, and also charging the museum or restaurant they were going to. You’d see a lot more Mickey D’s and a lot less Virginia Museum of Fine Arts under that model.

          That is not a big deal for Netflix, but it is for non-profits that provide free educational content, and for small commercial providers of free or low cost video.

  3. larryg Avatar
    larryg

    I don’t have a strong position on either side of this. I see the argument for both sides but if you apply it to things we already have – it will change what we are accustomed to .

    In a way – universal service – is subsidized service for some – at the expense of others.

    for instance, trying to provide additional power during peak use – costs about 7 times as much as non-peak times but the rate charged is the same whether you conserve or not.

    bu – we are used to airlines.. we know that if we wait to the last minute and/or not flexible – we’re going to pay a premium – for the same exact service.

    same deal with hotel rooms or now days congestion-priced tolls.

  4. Darrell Avatar
    Darrell

    Why are you waiting for some bankrupt spanish deal? I already have Gowex. It’s Macy’s at the Mall, and some unsecured wireless link in the neighborhood when I don’t want to link to mine. 🙂

    Honestly there are tons of free wireless around. You just need to be smart enough to find them. Go to wifi.boingo.com and look them up. Or Here, buy one of these, hook up your wireless router and go surfing. http://www.radiolabs.com/products/antennas/images/backfire.gif

    1. James A. Bacon Avatar
      James A. Bacon

      Darrell, I still have a lot to learn about this particular topic. I know that there are lots of Wi-Fi spots all around most of our cities. The difference, I think, is that they are not seamlessly connected. Gowex would provide seamless coverage.

      1. larryg Avatar
        larryg

        WiFi is just a physical internet cable with a router that broadcasts it wirelessly.

        behind every Wi Fi “hot spot”, is a physical cable. What can vary is the range of he WiFi routers , the home models limited… retail stores.. campgrounds, etc further… but just like cell towers – the “signal” is basically a radio signal at a certain frequency.. the one allocated by the FCC for “wi-fi”.

        When you use a smartphone with “apps” on them like email or text… you are essentially using the cell tower as a de-facto Wi FI ….and if you are in a car then the cell towers will hand-you-off from one tower to the next and you’ll maintain your connection as long as there is a cell tower in range.

        this is what I suspect Gowex is doing except with WiFi so once you get connected… and then move around the city – you’ll keep your connection and not have to login again if you move around – within the confines of the city.

        but I’m not sure how that is such a big deal anyhow because right now – smartphones are “online” everywhere there is a cell tower.. not only inside the cities but along all major roads…

        you will, for instance, find that most UPS and FedEx delivery trucks have Wi-Fi on their trucks. They have an antenna that connects to the cell tower and a router than then provides internet to the delivery guy when he walks the package to your home… he is carrying a device that he keys in “delivery” at the time he delivers the package – and you can – with the tracking number – see the status change from “out for delivery” to “delivered” within a few seconds of him delivering the package.

        All of this stuff is much further along that many folks realize.

        Our school buses not only have GPS on them but a cell phone connection that transmits back to the central office – where they are at any point in time.

        There a jobs, good jobs, in these fields, for kids that have solid core academic educations… but you have to be continuously reading to stay on top of how the technology is evolving…

  5. DJRippert Avatar
    DJRippert

    The net neutrality question is more complex than a simple free market issue. First of all, the communications market is not a free market. Cox Communications has a government – issued monopoly to provide terrestrial cable TV service in Fairfax County.

    Here is a summary of Cox’s “non-exclusive” renewal in Fairfax County. http://www.fairfaxcounty.gov/cable/cox-cable-franchise-renewal.htm Anybody who can read that agreement and see the free market at work has a far more vivid imagination than I possess.

    At my house I happen to use Cox Communications to get high speed access to the internet. The only other practical choice (that I know of) would be a dSL connection from Verizon.

    So, in one of the wealthiest towns in one of the wealthiest counties in America, where every home will pay for high speed internet connections, there are two practical providers. There are other providers who essentially resell the Cox and Verizon networks but it’s Cox and Verizon underneath. There are satellite companies that will provide a connection through the air but they have latency and bandwidth issues compared to terrestrial connections.

    Why does a duopoly exist? Quite literally multi-volume sets of books have been written on that topic. Perhaps the most charitable explanation is that letting many different companies string cable down public rights of way would reduce the quality of service and cause an eyesore. I happen to hold a significant investment stake in a private company (iVelozity) which provides residential cable service in India. The open “last mile” approach in India does cause problems and, in some cases, is an eyesore.

    Once the government interferes in a market the government must ensure that its interference does not become a method of market abuse by the privileged participants. The government wants its “pound of flesh” (e.g. free cable service for Fairfax County schools in return for the cable franchise) and the government-aided participant wants its franchise protected. This is essentially the issue that causes Uber problems. Taxi companies (somewhat reasonably) feel they have been paying to play and don’t want to see the government mandated supply restrictions lifted.

    Unfortunately, as we all know – everything the government touches turns to s*** and telecommunications is no exception. Instead of demanding that the regulated telecommunications companies remain strict common carriers the government (in response to massive campaign contributions) have allowed the regulated companies to engage in unregulated activities. What might have been a reasonably neat regulatory package has de-evolved through the greed of America’s political class into a twisted semi-regulated, semi-free market mess. In the specific case of telecommunications companies those companies are not only common carriers but content providers as well. Comcast, for example, not only provides telecommunications services but also owns NBC and Universal Studios.

    The problem is that the same telecommunications companies who demand to be able to charge tiered service also compete against the very content providers who they want to “tax” with higher rates. This is a modern analog of a steel baron buying up the railroads and then having the opportunity to overcharge his competitors in the steel business as they try to get their product to market.

    The answer from the liberal lovers of government is predictable – just give the government more power and the government will referee the market and ensure that media companies with common carrier units won’t use those units to unfairly compete. Meanwhile, the line of media company lobbyists bringing bags of cash to the doors of politicians’ offices grows ever longer.

    Opening the markets to new entrants seems like an obvious answer. This is especially true for terrestrial wireless networks which would require little to no new public right of way and couldn’t create an eyesore with their invisible networks if they tried.

    However … we get the “Uber factor”. Cox Communications forks over 8% of its revenues in various direct communications taxes. Cox provides free connectivity to public schools. Will the new wireless competitors be required to provide these government required freebies? If more competition lowers the profit margin on common carriage will companies be willing to provide these freebies and remain in the market? Should government break up the media / common carrier conglomerates and demand that the common carrier businesses stand alone with no ability to create or sell their own content?

    Or, should government just get out of the communications business. If Fairfax County wants connectivity for the public schools maybe it should buy that connectivity on the open market rather than trading a franchise agreement for that connectivity. Maybe communications companies should pay the same corporate taxes as every other type of company with no special provisions for communications specific taxes. Maybe the government should honestly and transparently tax my income in order to pay for its runaway appetite for money rather than using hidden taxes on things like internet connections. Of course … given the corrupt and incompetent nature of American government at all levels – maybe pigs will fly.

    1. larryg Avatar
      larryg

      isn’t this the same problem with electricity, phones, any service that requires a right-of-way?

      but the right-of-way issues is not the net neutrality issue.

      I actually have Verizon FIOS AND Comcast as well as Verizon phone and buried electricity in my subdivision – all sharing the same right-of-way….

      each of those services have their own use policies….

      but I just don’t get the “all government is incompetent and corrupt” story line…

      1. DJRippert Avatar
        DJRippert

        “isn’t this the same problem with electricity, phones, any service that requires a right-of-way?”

        Yes, basically. Now imagine a world where the regulated electric company also makes washers and dryers. The electric company gets to assess whether the washers and dryers on the market are efficient. Efficient washers and dryers get electricity for 4 cents per kilowatt hour while inefficient washers and dryers pay 6 cents per Kwh. Which washers and dryers do you think the electric company will find to be efficient?

        Where government falls down is where it allows a naturally regulated company to enter related unregulated businesses. Like when retail banks are suddenly allowed to “invest” in CDO swaps. Since the government insured individual deposits it has a right to regulate the banks that take those deposits. Hell, it has an obligation to regulate them. So, why was Glass – Stengall repealed? The banks didn’t want to be regulated and they sent their lobbyists to our political class and voila – banks could take insured deposits AND gamble on synthetic derivatives.

        These aren’t my thoughts. These are essentially Robert Reich’s thoughts from Supercapitalism. You can have strong government regulations or you can have a free flow of money from the private sector to politicians – but not both. We have both and it’s literally ruining America.

        We need to either handcuff government to minimalist regulation or we need to stop the tsunami of money from special interests into government.

        Until we do one or the other we’ll keep getting what we’ve been getting – regulations sold to the highest bidder by a corrupt political class bought and paid for by an equally corrupt big business class.

        Read “Bailout” if you want to see a great narrative of how our corrupt politicians sold out average citizens in favor of gigantic banks. It was written by a registered Democrat who contributed to Obama’s 2008 campaign before being appointed as the Special Inspector General for TARP. Go with him on his journey as he comes to realize just what Geithner is doing.

        You can’t read “Bailout” and believe that we should give our government any more money or power. Again – it was written by a lifelong Democrat and Obama campaign contributor.

        If “Bailout” doesn’t make you a libertarian then nothing will.

        1. larryg Avatar
          larryg

          so are people better off with the companies deciding what net neutrality is (or is not) or the government via regulation?

          we go back and forth here on this blog – over regulation and how bad it is but I think fundamentally people want regulation and reject libertarianism…

          they don’t want bad food and drugs or have their savings disappear at a bad bank… or have people without licenses running amok on the highways or people preparing food in unsanitary conditions.

          people want regulation – and they will reject “real” libertarian principles…

          what they want is LESS regulation that affects THEM and the aura of FAUX libertarianism as long as it benefits them but they’ll bail big time once they get burned.

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