Fortunately for us, Silicon Valley's geek community has been beavering away at a solution to the last mile problem that they call WiFi. WiFi is a nonproprietary wireless standard that allows many users to cheaply connect to the internet at broadband speeds through the airwaves. It uses a part of the radio spectrum that is designated unlicensed and free for anyone to use, with certain restrictions on the power of the signal. Garage door openers and cordless telephones use similarly unlicensed spectrum.

In the US there are about 10 million WiFi devices (essentially a modem with an antenna) installed in computers and more than 4000 locations where you can connect from your laptop or PC. Commercial WiFi operations run in airports and hotels, but there are also many free networks set up by amateur enthusiasts on university campuses and in bars and coffee shops.

To establish a WiFi network, all you need is a broadband cable connection to the internet and an antenna – the node. Users with WiFi-equipped computers within the range of the node – from 100m to up to 4km, depending on the power of the signal – can then connect to the internet to surf the web or send email at speeds more than 10 times faster than a regular dial-up connection.

A WiFi zone serving 40 users costs roughly $1000 to set up and prices are falling rapidly.

Australian geeks are experimenting with WiFi as well. A Victorian hobbyist group called Melbourne: Digital and Wireless is building a free community network that so far has 150 interlinked nodes.

Its goal is to establish a nonprofit, super-fast, wireless internet connection service across Melbourne in partnership with churches, schools and local councils. Preliminary tests have been successful. Similar groups exist in Adelaide and Mt Gambier, South Australia.

It is early days for Australian WiFi but already these groups are encountering the sort of bureaucratic red tape that stifles innovation. Melbourne: Digital and Wireless founder Steven Haigh says he has been told by the Australian Communications Authority that he can't connect people to the internet – even for free – without a carrier's licence.

ACA spokesman Tony Brown says only 90 such licences exist nationwide and to apply for one requires the payment of a $10,000 fee, hundreds of pages of supporting documentation and many months' wait. "We're just following the rules set out in the Telecommunications Act," Brown says.

Now bear in mind that the radio spectrum is enshrined in legislation as a public asset collectively owned by the Australian people. WiFi uses a supposedly unlicensed segment of the radio spectrum, yet its proponents, who seek to develop a solution to an urgent national problem for no personal gain, are being tied up in federal red tape.

WiFi is a low-cost broadband delivery solution but it requires what is essentially a "spectrum commons" – a space in the airwaves that is unencumbered by licensing regulations and owned by no one.

Unfortunately, the Howard Government has become deeply attached to the millions of dollars in revenues it has been raking in from sales of spectrum licences at auctions.

If Australia is to escape from the broadband quagmire, it needs government policy that promotes innovation and competition. Clearing the bureaucratic impediments hindering the development of WiFi would prove the Government's genuine commitment to these principles.