Yellow light for tax-funded wifi?

Yesterday, the directors general of the FCCA and PTS went on DI Debatt and made it clear that they have no objections to "municipalities implementing digital initiatives to be attractive to residents and visitors" and that municipalities, according to the Competition Act, may offer "tax-funded surfing zones in certain delimited places".

Minister for Enterprise and Innovation Mikael Damberg obviously interpreted the message as a green light and went straight to the Expressen and urged the municipalities to "press the button". But a green light for municipal Wi-Fi is definitely not what the authorities are signaling. It's more like a yellow light, with a lot of unanswered questions.

According to the FCCA, the City of Helsingborg has not exceeded the "limit" for significant market impact with its investment, but the authority says that it may reconsider its decision if the municipality exceeds it in the future. So where is this limit? The authority's message to municipalities is that "such investments should be characterized by restraint so as not to disrupt normal market functions", but is less clear about what this restraint should consist of and who decides where the limit of disruption lies.

Minister Damberg is not worried that "private operators will now be knocked out" because he does not believe that "any municipality is planning to set up Wi-Fi systems throughout the municipality" as it would not be "cost-effective or relevant, [as] these are places where many people move around and where tourists often go". At the same time, it is unclear whether Damberg believes that it will ultimately be interesting for market players to continue investing in an area where there is no revenue. The bottom line is that he does think so. While what the players, and the municipalities, need is clearer information. To know and not to believe.

One thing we already know: ensuring that people have digital connectivity in city centers is not the big challenge today. The fact that relatively few residents in Helsingborg take advantage of free surfing confirms this. It is in rural and sparsely populated areas that we still have many people and businesses in digital exclusion, and a long way to go to reach the broadband targets. It would be a much wiser use of taxpayers' money for municipalities to invest in expanding broadband to them, rather than to those for whom the market already provides connectivity.

In their statement, the heads of authority state that no one benefits in the long run from public actors using taxpayers' money in a way that undermines private companies, and that tax-funded Wi-Fi zones should not compete with the market. This is a very good message. Unfortunately, the question of where the line is drawn as to when there are reasons for the authorities to intervene remains.

Until we know, we hope that Sweden's municipalities will carefully consider and comply with the common principles for municipal initiatives in the field of broadband, which state that in cases where municipal urban networks themselves provide services to end customers, the municipality, as owner, should regularly (annually and based on the Competition Act) reassess whether the needs could be met by privately funded operators. Should we dare to believe that they do?