Telecom Trends: Competing outside the box

Tuesday, March 07, 2006

Competing outside the box

The Toronto Tourism and Economic Development folks must be happy today. Toronto Hydro Telecom announced that it plans to build a WiFi umbrella over the downtown core of Toronto. Toronto joins an elite club of major world cities, including San Francisco, Philadelphia, London, Ottawa and Whistler.

There are lots of questions that can be asked about this project:

Should the city be competing against the private sector? Since Bell and Rogers pay municipal taxes and both have lots of employees in Toronto paying taxes, do you really want to have the city own a company that will compete against these corporate citizens?
Who are the beneficiaries of this service? This service isn't targetting the Toronto Housing Projects or disenfranchised youths at Jane and Finch; it is blanketing the downtown core, including the bank towers. Is this trying to help make it easier for already rich to make those new car payments?
What about advanced services? Like competitive Voice over WiFi IP to compete against high cellular rates? Things like smart meter reading? Is there going to be an announcement from the electricity side of Toronto Hydro that they have a plan to leverage this new capability to allow time of day incentives for energy conservation?

But there are some very important answers:

The high speed market isn't competitive enough. Both Rogers and Bell have recently announced price increases. Toronto Hydro may help to discipline the pricing from the current duopoly.
Other cities are building these networks. That isn't a good enough reason on its own (just like your mother used to say "and if your friends were jumping off a bridge would you do that too?"). But, the market is pretty fierce for convention recruiting, high tech jobs and other drivers of municipal economic development. A city WiFi network is the kind of 'amenity' that people will come to expect. It doesn't hurt for Toronto to be a leader, not a follower, in offering this kind of service. Premium soap and shampoo used to be amenities reserved for upgraded rooms in superior hotels. Now we have come to expect hair dryers, plush bathrobes and ironing boards in anything above Red Roof Inns. If WiFi helps land one giant convention per year, it will pay for itself many times over.

As Industry Canada has said, consolidation has left the Canadian Telecom industry feeling a little too comfortable. It may take some municipal activity like Toronto Hydro Telecom's WiFi Zone to shake things up.

Posted by Mark Goldberg @ 3/07/2006 01:57:00 PM