Philadelpia is well on its way to going wireless. Minneapolis wants a city-wide wireless internet system. St. Paul wants to go wireless as well.
Philly's system will be a government-run firm with monopoly power. Minneapolis's will be a firm with government-granted monopoly power, like cable TV. In either case, you get monopoly power coulpled with bureaucracy.
No tax money would be used for the Minneapolis wireless network, which would be paid for, built, owned and operated by the winning bidder on the city's proposal. That is a markedly different approach than in Philadelphia, where the city will own and operate a new Wi-Fi network.
Offhand, I can think of 2 reasons why this is not as good as it seems. To have a business or residential wireless network, you need high-speed internet service plus a router to spread the internet connection throughout your business/house.
1. Wireless internet does not meet the definition of "public goods." Economists define public goods as those goods that are non excludable and non-rival. A good that is "non excludable" is a good in which the consumer cannot keep another person from deriving substantial benefits from its consumption. To be non-rival, one person's consumption of the good does not substantially reduce the amount another consumer can have.
Wireless networks can be password protected, so it is easy to exclude people from using them. Also, having too many people on at one time can cause serious slowdowns, so the networks are rival.
I'm also not convinced that the externalities associated with wireless networks are all that great. Residential users who have their own wireless networks get the vast majority of benefits from using them. They can keep others from using their networks.
2. If enough cities get into the act, this could limit invention and innovation over time. It's not to say that invention and innovation won't happen. One need only look here and here for two examples of technological innovations that have eaten away at government-granted monopolies.
Most likely, the invention and innovation in the wireless network markets would be delayed, especially for users that would want small wireless networks. The qualifier was "if enough cities get into the act." It's likely that enough cities will get into the act. It's like sports stadiums. If one city builds one, other cities feel they have to have one. One of Minneapolis' reasons for doing this is to attract business:
The network also is expected to create an economic incentive for businesses to locate in Minneapolis.
Other cities will think the same way, and will most likely go towards installing wireless networks.