One More Time: No Such Thing as Free

If you've not been following this, the FCC is again talking about requiring free wireless Internet access as one of the conditions of an upcoming auction, in this case of the 2155-2175 band. The idea of free service has been around for a long time, and, in principle, there's nothing wrong with the concept. After all, the Web (other than access) practically runs on free. All well and good, except that there's no such thing as free. Let me explain.

The definition of a business is an entity that serves a customer. Most businesses want to make a profit in the process - they always want to get a positive return on assets invested. Now, if it appears that a for-profit business is providing something for free, that could indeed be the case. But someone has to pay the business regardless, or they'll eventually offer nothing, let alone for free. In the case of the Web, with respect to content, anyway, advertising revenues fill that role, so the "free" part really isn't.

On the other hand, access is seldom free, because the provisioning of such involves hardware - networks, installation, maintenance, and support. This is not to say that advertising couldn't be used to pay for access, as is occasionally seen in the case of airport and similar deployments. The idea of free wireless access has recently been popularized (maybe I'm over-using that term here) by startup M2Z Networks, founded by former FCC Wireless Bureau head John Muleta. M2Z originally proposed a nationwide free wireless broadband service back in 2006, and was ready to go if the FCC would just give (for free, of course) them some spectrum. The FCC dismissed the idea, but now it's back, although this time the FCC proposes to auction the spectrum in question and then require that the winner offer service for free. Am I missing something here, or is this one really dumb idea and bad policy all rolled into one? Does the FCC realize this could damage those who already hold licensed spectrum, but will have to charge lower prices to compete with this nonsense? Did I mention that M2Z promises a "family friendly" service, meaning they'll try to edit out porn, of course, but what other censorship might they have in mind? And how much advertising might subscribers have to endure? Broadcast TV is now useless, thanks to way too much advertising. The same could happen here.

And there's a more important issue here - should the government, which can't seem to manage anything very well regardless, be dictating business models? You may also have noticed that the expectation of free has been a factor in the troubles facing the metro-scale Wi-Fi community, with local governments gumming up the works here. I think we'll eventually see that advertising-supported or otherwise "free" access in any form is unlikely to survive. We should instead expect to pay for access, and even embrace the concept. The potential for profit builds markets, which motivate robust competition. Thus, while the price may never be free, it will at least be reasonable.