If California can’t run WiFi at a new airport terminal, can it run high-speed rail?

At least a subset of Californians are enthusiastic about spending what will probably be over $100 billion in taxpayer funds on high-speed rail (previous post). The high-tech train would be built and run by the government. My recent experience with a much simpler technology in California was the following:

  • attended conference of computer programmers, each equipped with a crazy complement of devices, at Chaminade, a privately-run hotel and meeting space. Internet was fast and reliable, even with 200 people in the same room checking the Web, streaming YouTube, etc.
  • visited the International Terminal at SFO, recently constructed at a cost of $1 billion, and tried to use the government-run WiFi network, which was intermittent and delivered about 56 kbps in average throughput, despite the terminal being nearly empty on a Sunday evening.
  • boarded a privately-run JetBlue and used the FlyFi service (the “free”/included in the ticket tier) in which data go up to a ViaSat satellite (see Exede). Service was much faster and more consistent than in the terminal, but did not have the same throughput as at the hotel

Airports have among the best economics of anything that state and local governments do. The runways are all paid for with federal dollars, collected from airline ticket taxes and airplane fuel taxes. The airport gets to charge crazy high rents to retailers and airlines (the full range at SFO) plus charge each passenger an additional $4.50 per flight segment, collected by the airline and hidden in the ticket price (faa.gov). It is so profitable to run an airport that Providence, Rhode Island and Manchester, New Hampshire have aggressively targeted Boston-area passengers by offering lower fees than Massport (Logan, Worchester, Hanscom). The airport authority can also pay employees salaries, benefits, and pensions that are 2-3X above the market-clearing rate (see the Boston Herald for how a garage attendant at Logan in 2012 could make a base salary of $55,000 per year or $94,000 per year with overtime; also “Massport’s payroll soars past $100M despite gov’s call for belt-tightening” from 2014).

What can we infer from this? That government is less efficient at private industry when it comes to a tech-related activity? Given that the Las Vegas airport has awesome WiFi, at most it seems reasonable to say “the California government is incapable of running WiFi.” Or, as one of my crazy rich Facebook friends noted, “The tragedy of the commons. The privileged class has excellent service via their cellphones, while the poor who have only wifi devices must cope with this living hell.” (he is retired from one of the most successful startups in world history and now spends full-time helping Democrats get elected) Personally I cannot see how this is a “tragedy of the commons” any more than being a Verizon subscriber. As with a mobile phone system, every passenger who was in the area of the terminal where I did my study had paid handsomely to be there.

4 thoughts on “If California can’t run WiFi at a new airport terminal, can it run high-speed rail?

  1. $94K per year is only what they make ON the books. In Philly, the parking lot attendants scammed millions more by defrauding the cash registers with counterfeit receipts while pocketing the actual revenues. http://articles.philly.com/2000-03-27/news/25605914_1_airport-parking-scam-tax-evasion

    The “free” internet sucks because “you get what you pay for”. Here are the steps that ONCE could have lead to fast airport WIFI – charge $20/day, with the revenue divided among the airport authority, the crony capitalists who bid for the contract and the insiders that they had to bribe to get the contract. But that path is closed now because everyone carries a smart phone and even with the worst data plan you aren’t going to spend $20 or even $2. The only market clearing price for wifi nowadays (except in places such as planes were no cell signal is possible) is zero so you get that quality of service.

    Hotels used to follow the high priced model until cellular data killed it (and the FCC decreed that they could not jam the cell frequencies to keep their wifi scheme alive). Now (some) have switched to offering good wifi as an amenity to attract customers. Airports as local monopolies don’t NEED to attract customers – they are a captive audience.

    I’m betting that IF they ever get high speed rail in California, even with the massive subsidies the tickets are going to be super expensive.

    I sometimes travel to NY from Philadelphia. The fastest train (the Acela) takes about an hour and 1/4 and costs up to $199 to travel 100 miles. Even a standard fares are around $55 each way with a runtime of about 1.5 hrs. The Bolt and Megabus services (runtime about 1 3/4 hours unless they hit traffic) are usually around $12 each way.

  2. Think I’ll stay here in Northern Thailand where the best class bus (three seats wide, 2 + 1) for the three hour trip on good roads between Chiangmai and Chiangrai (and they really keep moving) costs under $7 and has a hostess like a plane.
    I rent out quality apartments to fund my retirement funny thing is we are getting more and more “digital nomads” who say why work on a project in the US when we can come to Thailand with all it’s benefits and overall one third of the cost of living. Yes we have digital workspace coffee shops and all that, internet is good even in the villages, and fibre optic is becoming the norm anywhere vaguely central.
    I generally agree with your private v public sentiment Phil but you guys need universal healthcare properly run you have (measurably) better systems all over Europe to mix and match from should be easy if you’d have the cajones to get out on the streets and sharpen the knives for the medico-pharma aristocracy.
    Sorry to go off topic but it’s the elephant in the room.

  3. The second season of “True Detective” shows you all you need to know about where the High Speed Rail money really goes.

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