Wow, just came across this bit of news from the Houston Chronicle.

Texas congressman, Rep. Phil King, R-Weatherford, has filed a massive telecommunications bill in Austin this session that, in part, bans Texas cities from participating in wireless information networks.

Telecommunications companies have taken notice as cities, nonprofit organizations and startup companies have begun using these technologies to offer free or steeply reduced Internet access, said Bill Gurley, a Silicon Valley-based venture capitalist with Benchmark Capital who closely follows the issue.

Maybe they read my 2005 VoIP Predictions and it scared them. I wrote:

8) Cities become their own phone companies
You will start to see more cities not only offering high-speed wireless broadband using WiMAX and other high-speed wireless technologies, but you will start to see cities offering their own phone services as well. Just think of the loyalty they can build! If I have my choice between paying a private VoIP company based in New Jersey versus paying my local town, heck I'll give the money to my local town.
My local town can simply send out an ad in one of those "coupon mailers" that most of us in the country receive and say, "Use us as your phone company and your property taxes will go down." SOLD! End of story. I'd drop my current VoIP provider in a heartbeat! I'd tell my neighbors to join so we could reduce our property taxes and they in turn would tell other neighbors in the town. The old "peer-to-peer" system if you will! : )

I predict if cities wise-up and become their own phone companies, this could be the most revolutionary changes in the telecom industry ever. Instead of a few dozen phone companies you could have thousands of phone companies - with each town being its own phone company.