Wireless broadband networks run by cities are based on "dubious claims" and are unlikely to succeed, a research group claimed Thursday.

"Municipal Wi-Fi networks present a number of serious problems that are being overlooked as cities rush into committing millions in taxpayer dollars to pay for network development and expansion," a report issued by the New Millennium Research Council claimed.

The report made the claim even though many municipalities, including Philadelphia, say they will use no taxpayer dollars to create their networks. Currently, more than 100 cities in the U.S. are either considering or have started deploying wireless networks and a variety of business models have been proposed, many of which involve municipalities contracting with private vendors who will charge for the service and assume the primary risk.

Still, the report focused both on the potential impact on taxpayers and what claimed were goals for the networks that can't be met.

"While the intentions of city officials and administrators are admirable, the roll-out of municipally held Wi-Fi networks will likely have a detrimental affect on city budgets and on competition in the telecommunications industry, and fail to produce the economic growth and jobs promised by municipal leaders," the report said.

Some municipalities have said that the municipal networks are needed to help the disadvantaged compete and thrive in the digital economy. However, the report also took exception to that claim

"City ownership of Wi-Fi networks is not the solution for bridging the Digital Divide or encouraging competition in the broadband market," the report said.

Individual authors of the report focused on how the municipal networks will hurt competition.

"If the city is allowed to price its service below cost and use its taxing authority to subsidize the municipal operation, the private sector will have no incentive to reinvest in its network," said Dr. Ron Rizzuto, a professor of finance at the University of Denver.

The NMRC described itself as an independent project of Issue Dynamics, Inc., a public affairs consulting firm.