Free WiFi: Another Costly Bad Idea From The FCC

Most people understand that when you have a bad idea that’s been rejected time and time again, it’s never a good idea to come up with an even worse idea to replace it.  Unfortunately, that’s not the way the government thinks and it appears that the Federal Communications Commissions (FCC), under the leadership of Chairman Julius Genachowski, never seems to run out of bad ideas.  The latest bad idea came earlier this week when the FCC announced its intent to “create super WiFi networks across the nation, so powerful and broad in reach that consumers could use them to make calls or surf the Internet without paying a cell phone bill every month,” as reported by The Washington Post.

Similar to the ill-fated Universal Service Fund (USF), this latest FCC proposal would waste taxpayers’ resources while simultaneously stunting private sector innovations and investments in the industry.  There is no telling how much a country-wide Wifi network would cost.  With a government that is quickly going broke and the private sector pouring billions of dollars into a strong and reliable WiFi networks, taxpayers should not be funding this.

The USF was supposed to bring telephone service to mainly rural areas.  Since its inevitable failure, Congress has begun discussing futile ways to reform this flawed policy.  There are many similarities between the goals of the USF and the new free WiFi proposal.  As a previous TPA blog explained “In essence, USF was designed to provide subsidies to build the infrastructure and provide telephone service to high cost areas.”  Time has shown the failure of this objective, and there’s no reason to think the free WiFi proposal will play out any differently.

One of the supposed-selling points of this proposal that proponents point to is that “public WiFi could allow many consumers to make free calls from their mobile phones via the Internet. The frugal-minded could even use the service in their homes, allowing them to cut off expensive Internet bills.”  Said differently this means that with this program the federal government would open its doors and allow more people to feed at the government trough.

This is exactly the opposite of what the FCC should be doing regarding new telecommunications policy.  “When the U.S. government made a limited amount of unlicensed airwaves available in 1985, an unexpected explosion in innovation followed.” One of the many reasons this endeavor was so successful is because the government did exactly what we should see it do more often, it got out of the way.  This allowed the private sector to do what it does best and innovate and excel by providing products that meet consumers’ needs and wants.  The FCC would be wise to repeat this success.

As some in Washington have already pointed out that unlike the FCC’s latest proposal that “an auction of the airwaves would raise billions for the U.S. Treasury.”  At a time when Washington is desperately searching for new forms of revenue to cover its mounting debt, this proposal is a far better option.

The Post article correctly notes that Genachowski’s free WiFi proposal is a global first.  There’s a reason for that; everyone else sees it for the bad idea that it is.