Business / Gadgets

Are free Internet services sustainable?

By Zhou Xianghong (China Daily) Updated: 2014-04-14 07:13

There are examples of cities in the United States that tried to offer free Wi-Fi. In Philadelphia, EarthLink reached an agreement with the municipal government in 2006, according to which they would make the largest Wi-Fi net at that time and provide Wi-Fi services to locals. However, the users never reached the expected number and in 2008 EarthLink had to withdraw from the program, as well as similar programs with Corpus Christi of Texas and Milpitas of California. Its failure sent a warning that there are many prerequisites when the "for free" mode is being employed in building smart cities.

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In Hong Kong, the government offers free Wi-Fi in 390 public spaces, including government buildings and parks and leaves other areas to commercial service providers; a Fair Usage Policy has been introduced to make sure that users get convenient access to Wi-Fi without disturbing others. Currently it has a ripe market with abundant supply of low cost Wi-Fi services, which lay a solid foundation for a smart city. In the mainland an "upstream charging" mode has been adopted in Jiading, Shanghai municipality, where commercial advertisers pay for the cost in return for users automatically seeing their advertisements when accessing the Wi-Fi; free users are ensured basic access, while paid users enjoy broader bandwidth. These show how Wi-Fi should be introduced in a smart city. Wi-Fi, of course, is only part of the overall plan of a smart city, which will accumulate population, resources, intelligence and consumption and will be a worthy test to local governments. In the process, local governments need to first realize the need to build more platforms to connect different groups and do well its job of connecting them; it is also necessary to analyze the interests of residents, service providers and competitors so as to attain the maximum benefit for all.

Of course, the job won't be finished in a day. Therefore the government should concentrate on building long-term effective mechanisms for them to interact in a win-win way. In details, its responsibilities include coding policies on matters such as taxes or subsidies, overall designations such as dividing cities into zones and granting them different features, and supervision to make sure the rules are obeyed by all. That will not only be helpful in building smart cities, but in the process it will also deepen the reform transforming the role of government.

The author is a professor at School of Economics and Management, Tongji University. This piece first appeared on Dongfang Daily.