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FTC: No easy advice for city-run WiFi

More and more cities have begun boasting of plans to build their own wireless networks, but do municipal bureaucrats know what they're getting themselves into?

A Federal Trade Commission report (click for PDF) released Tuesday attempts to tackle that question, laying out a rundown of the business models and technologies at play, state and federal legislation related to the issue, and a familiar set of pros and cons.

Don't expect any authoritative policy prescriptions from the five commissioners and staff: The decision by municipalities to go into the WiFi business is far too complex for a one-size-fits-all approach, the 61-page document concludes.

The furthest the report goes is a one-page "decision tree" designed to guide contemplative policymakers. According to that rubric, the core question is whether a private provider is currently offering broadband in a given area--or whether a new market entrant would be able to supply parallel service in a "timely manner."

Depending on whether the municipal decision-maker answers "yes" or "no" to that and subsequent questions, the diagram advises one of four options: don't offer service, go for it, pursue incentive strategies, or devise a public-private partnership--a la Earthlink and Philadelphia.

The seemingly uncontroversial FTC report--marketed as the first in a series of upcoming Internet access studies, including Net neutrality--serves as evidence that the subject remains divisive. Free marketers, for instance, have long been suspicious of government competition with the private sector, while advocates for the approach argue that cities are well-situated to step up when private companies are slow to reach distant areas or are charging rates that exclude low-income users.

One commissioner did, however, offer a more definitive take. In a concurring statement (click for PDF), Democrat Jon Leibowitz wrote that city-sponsored broadband is a critical "third pipe" to homes in a market dominated by cable and phone companies, which have already successfully lobbied some state legislatures to restrict involvement by cities.

Leibowitz also called on Congress to approve pending legislation that would essentially zap those state laws and give cities the right, within certain limits, to launch their own networks.