BOB GARFIELD:
Despite the strenuous efforts of nations the world is growing ever more interconnected. But that doesn't much matter if your connection is slow. You can't run an efficient business on a bad connection, and it's increasingly clear you can't run an efficient city on one either, not to mention educate students or support economic growth.

That's why some 300 American municipalities are looking to offer wireless service, or Wi-Fi, everywhere, from a cramped studio apartment to a secluded park bench. But what kind of Wi-Fi?

OTM's Mark Phillips offers a few real-life models, public, private, and one that's a little bit of both.

MARK PHILLIPS:
Whole cities covered with a wireless Internet network, giving free access to everyone, anywhere, for free. It seems like a utopian vision. Is free citywide wireless really possible?

HEATHER PAINTER:
Well, I've always been able to log on. I've always had success keeping a steady signal. It's worked really well for me, and the people that I've talked to, it has worked really, really well for them, too.

MARK PHILLIPS:
Heather Painter lives in St. Cloud, Florida, a small town outside of Orlando. The municipal government spent just under three million dollars to build a Wi-Fi network to cover the 15-square-mile town. Accessing the Internet is free anywhere in the city limits. The network was partially funded by tax dollars, but the free Wi-Fi ends up saving most residents money by eliminating their monthly Internet bill. Howard DeYoung is St. Cloud's IT director.

HOWARD DeYOUNG:
Well, it benefits us from an economic development point locally. You know, instead of paying large telecom companies five to six hundred dollars a year, where that money leave the area, now a resident has five to six hundred dollars a year that they can spend locally.

MARK PHILLIPS:
Residents save, but so does the city. In Corpus Christi, Texas the Wi-Fi network is used regularly in dozens of ways by municipal employees, 70 percent of whom work in the field. Gas, water and electric meters in Corpus Christi are now automated so that each day they turn themselves on and send a reading over the wireless network. Leonard Scott works for Corpus Christi's IT Department.

LEONARD SCOTT:
We started out with about 25 meter readers, and at the end of the meter deployment, we'll be down to about 4 key individuals. So the wireless system pays for itself. It eliminates costs, it avoids costs and has reduced costs.

MARK PHILLIPS:
With everyone seemingly saving on the deal, building a public network should be a no-brainer, but not to Don Berryman, executive vice-president of EarthLink, a big Internet service provider.

DON BERRYMAN:
You've got to think of the cost of the back end of that model. Somebody has to pay for it. So it would be then shared among all of the taxpayers in the community, whether you wanted to use it or not. And so there would be an unfair advantage for those people who actually used it.

MARK PHILLIPS:
The residents of St. Cloud haven't complained, and, in fact, three-quarters of them opened accounts within six months of the free network's launch. Still, Philadelphia decided to go a different way and hired EarthLink to build a citywide private network. Not only is that more fair, says EarthLink's Berryman, but there are other good reasons why cities shouldn't build their own Wi-Fi.

DON BERRYMAN:
We don't necessarily think local governments ought to go out and build these networks, one, because they don't have the expertise, and, two, they don't have the infrastructure to run them once they're built.

SASCHA MEINRATH:
To declare that cities don't have the know-how is utterly ridiculous.

MARK PHILLIPS:
Sascha Meinrath is the co-founder of the Champaign-Urbana Community Wireless Network.

SASCHA MEINRATH:
Cities run police departments. They run fire departments. They respond to anyone and everyone who calls incredibly quickly. So they run incredibly complicated, incredibly critical resources all across the country, and they do it well.

MARK PHILLIPS:
Greg Goldman is the head of Philadelphia Wireless, a nonprofit working with EarthLink and the city to launch the network. He says Philadelphia probably could have managed it logistically, but that the city couldn't hack it politically.

GREG GOLDMAN:
We just don't think it was a political and economic possibility in real terms. You know, we have a major corporate player in Philadelphia, Comcast, which is very much involved in this market.

MARK PHILLIPS:
Comcast is one of Philadelphia's biggest Internet service providers, or ISPs, the businesses we pay each month for Internet access. We pay them and they pay whoever owns the cable or phone lines they use. But Comcast also owns the cable lines, so it makes money in two ways – off the ISPs that use their cable and every customer who subscribes to its service directly.

Meanwhile, Verizon owns Philadelphia's telephone lines, so they get paid by ISPs, too. Needless to say, neither Comcast nor Verizon are thrilled about EarthLink eliminating the need for wires altogether. That's a payday they'll lose to EarthLink. Greg Goldman.

GREG GOLDMAN:
Those folks are not happy about the model that we've created, which is a for-pay model. I can only imagine how much more unhappy they would be if all of a sudden people give it away for free. Plus, it would have required a major investment from the taxpayers of the city, and so from a political perspective you don't see the possibility of how it actually could have been offered for free.

MARK PHILLIPS:
Verizon and Comcast waged serious lobbying efforts to block any Wi-Fi plan that was even indirectly public, and eventually the city turned to EarthLink to build the network. EarthLink, of course, is thrilled to have a network of their own, bypassing Comcast's cable lines. It is now pursuing similar projects in dozens of cities.

But advocates of publicly owned wireless don't believe EarthLink can solve the twin problems of limited access and high prices. After all, EarthLink's for-profit network does come with a price tag to residents. Wi-Fi service will cost 22 dollars a month.

But the company says it aims to be a more compassionate pipeline. If you earn less than $13,000 a year in Philadelphia, you're eligible for a reduced rate. Berryman from EarthLink.

DON BERRYMAN:
It's, in Philadelphia, $9.95 a month for a low-income household. So that's pretty inexpensive. That's less than the cost of McDonald's for the day. And so you have Internet access, high-speed Internet access for the people who currently have access.

MARK PHILLIPS:
About a third of EarthLink's Wi-Fi customers will be eligible for that discount, and the company plans to assist even those with bad credit in opening accounts. Plus, wireless Philadelphia is looking into providing computers and computer training to low-income families.

Other cities are also looking to bridge the digital divide.

PAMELA REEVE:
We have, in Boston, 60 percent of the households and close to 80 percent of the Boston public school children don't have Internet access at home.

MARK PHILLIPS:
Pamela Reeve was a member of the Boston Wireless Task Force, charged with finding a solution in Beantown. The task force wasn't sold on Philadelphia's private model.

PAMELA REEVE:
There were some cases where cities have granted one private entity the right to build and manage a network, and we were concerned that would not give us the kind of openness and the kind of competitive environment for products and services that we felt was going to be really important.

MARK PHILLIPS:
But the Boston Task Force also saw problems in a model that was entirely public.

PAMELA REEVE:
A purely public model, which relies on tax resources or the focus of any given administration, didn't seem to be the way to go, so that's why we decided to create a separate nonprofit organization.

MARK PHILLIPS:
That separate nonprofit organization will raise the money to build the network and will therefore own it, but it won't act as the ISP. The Boston nonprofit will let ISPs use their network at very low rates, so low, in fact, that even small local services can jump in. Reeve says Bostonians will still have to pay for the service, but about half as much as Philadelphians pay – around ten or fifteen dollars per month.

With lots of little ISPs competing in the same market, there will be plenty of room to experiment with pricing.

PAMELA REEVE:
If someone wants to buy bits from us and turn around and offer them for free to their users, maybe an ad-based model, something like that, that's fine. If they want to sell them on a subscription basis, we don't really care. We're going to sell wholesale to any and all ISPs that will jump on this network.

MARK PHILLIPS:
Boston's model is much closer to how Internet service is provided in Europe.

PAMELA REEVE:
In the U.K., by regulation, there is a separation between the network providers and the service providers, the ISPs. And in that country, there are 15 to 25 ISPs in any given location.

MARK PHILLIPS:
The dozens of ISP options in European cities have led to much lower prices for much faster service than what's offered in the U.S. And after leading the world in Internet access and affordability, the U.S. is quickly falling behind.

MICHAEL COPPS:
We're 21st, right behind Estonia.

MARK PHILLIPS:
FCC Commissioner Michael Copps.

MICHAEL COPPS:
And other countries are cleaning our clock and getting a lot of bandwidth out to their folks at a cheap price. We know that we're not in the competition. Other countries are not going to wait for that kid in rural America to catch up.

MARK PHILLIPS:
These new wireless networks offer a chance to catch up, but it also presents another chance to mess up. Cautious municipal governments are reluctant to embark on bold public projects, but once they choose and build the network, residents could be stuck with it indefinitely.

If cities choose incorrectly or stick to the status quo, they'll miss out on not just a utopian wireless future but also the benefits in the technological wave currently sweeping past our shores. For On the Media, I'm Mark Phillips.