Readers of John Dvorak’s column on MarketWatch are going to be astounded by some extremely poor reasoning this week. Dvorak talks about why municipal wifi is turning out to be a pipe dream in most American cities.

Dvorak starts off well enough, alleging that vested corporate interests, especially those of commercial ISPs AT&T and Comcast, are successfully sabotaging attempts by local governments to implement free community wifi.

The argument falls apart when Dvorak lists common arguments made against municipal wifi,and how they ought to be countered.

Argument 1: It’s not good enough. It’s not fast enough.You’ll have to pay more for higher speeds and the lower speeds are unusable except for e-mail and Web surfing.
Dvorak’s suggested counter-argument: “Since 99% of the usage would be for email and web surfing, I wonder how is this not fast enough? Not fast enough for what? All of the systems I’ve seen are plenty fast.”

Argument 2: It stifles competition. Nobody else will be able to compete in a market where something is free.
Dvorak’s suggested counter-argument: “These are the same people that say governments can’t do anything right. But apparently they do this right.”

The last one takes the cake, though.

Argument 3: Government shouldn’t be in the connectivity business.
Dvorak’s suggested counter-argument: “Another standalone bromide. Why shouldn’t it be in this business? Nobody knows.”

It’s fashionable in India in these neosocialist times to spew invective at private service providers and advocate a larger role for Government, but coming from an American, it’s surprising (although I’m not sure if Dvorak is known to have Leftist leanings).

Dvorak observes the symptom corectly, but misreads the problem, and therefore advocates a horrendously wrong solution.

Symptom: Municipal (community) wifi is dying
Dvorak’s reading of the problem: powerful commercial ISPs are derailing government’s efforts
Dvorak’s solution: greater role for Government in providing community wifi (possibly through public money)

The actual problem: there are powerful commercial interests in the first place
A possible solution: lower entry barriers to local wifi providers. Since, as Dvorak mentions, there are only two dominant ISPs, they have enough bargaining power at both the national and local level to block other entrants. The U.S. has had a history of being plagued by vested corporate interests (the alternative energy sector in the U.S. has been chronically starved of funding, not least because of subtle but powerful opposition from Big Oil).

Finally, mandating government to play ISP is an invitation to inefficient use of public money, regulation skewed in favor of the government-owned ISP (think MTNL/BSNL in India), and a sick, wheezing, slow network that people will eventually tire of. It will probably lead them to paying for reliable connectivity from AT&T and Comcast anyway.

A striking parallel to this is the Maharashtra government’s insistence on providing farmers with free electrcity and water - another example of government getting into the business of providing public services. Farmers are by-and-large so fed up with how ridiculously unreliable these utilities are, they’d much rather pay for guranteed supply.

Back in 2005, I wrote about why the government should not be in the business of running business. The Indian pseudo-socialist government, of course, finds it extremely uncomfortable acknowledging that this school of thought even exists. But it looks like two years later, the American Government needs to read that article - more than ever.

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