EDIT
Since you posted 2.7 this is the 2.7 solution:
file = open("./Downloads/lamp-post.csv", "r")
data = [line.decode("utf-16", "replace") for line in file]
Ignoring undecodeable characters:
file = open("./Downloads/lamp-post.csv", "r")
data = [line.decode("utf-16", "ignore") for line in file]