Another Municipality Goes Wireless

As recently as this spring (or summer if you consult the Pew report), there were skeptics arguing that broadband penetration will stall in the U.S. Not only is it not going to stall, it's going to eventually be free. (Consumers know this and are less and less willing to pay.)

Anecdotal case in point: When I met with MSN's Erik Jorgensen, we met at Cafe de la Presse in SF. There were numerous Wi-Fi options, at least two of which were free. The choice was obvious.

This article discusses another free municipal Wi-Fi initiative, this time in Arizona (Tempe).

There is growing momentum around free Wi-Fi, making ISP incumbents upset, nervous and very angry in some cases. There will be a concerted legislative effort (Washington lobbyists at the ready) by vested interests to prevent municipalities from offering free Wi-Fi as it gains steam.

What's astounding about all this is that the multibillion-dollar Internet access business has been around only for about 15 years and it's being disrupted (or will be shortly).

Sure, "old media" models are being distrupted, but so are relatively new ones. In addition to the ISP business, think about how the wireless carriers may have business cut out from under them by Wi-Fi-enabled phones in just a couple of years. Indeed, even as Verizon seeks to shed its directory business, it's the "21st century" businesses (wireless, ISP, etc.) that ultimately may be much more vulnerable — so ironically.

Along those same lines, MySpace is king of the "social networks" now but what about tomorrow? Could that Rupert Murdoch US$580 million acquisition be worth a fraction of that two years from now? It happened to Friendster. And while MySpace is a different case, for the scadenfreude crowd it's tantalizing to think so.

The larger point is — even as I've argued that "inertia" applies to user behavior online — there's tremendous economic instability being introduced by the Internet.

I'm not an economist and I'm way out of my league in suggesting this, but it seems to me there's a much longer conversation to be had about how technological development, the Internet and related trends are being driven by traditional, structural incentives in the U.S. economy and how that very same economy is becoming more and more unstable as a result.

There's something paradoxical, strange and fascinating going on and it's so big and so fast, it's very challenging to get one's brain entirely around it.

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And now New York?