Chapel Hill Technology Advisory Committee

[Terri Buckner <tbuckner AT ibiblio.org>]

From National Journal, August 22, 2005
By Drew Clark

(Monday, August 22) It is a modern-day “Philadelphia Story”: A major 
city bemoans limitations on its high-speed Internet connections, 
technology vendors pine for the prospect of new sales, and dominant Bell 
telecommunications and cable companies cry foul in the statehouse.

The heightened national controversy over municipal networks can be 
traced to Philadelphia’s experiment with wireless broadband, announced 
in 2004. But there is dissension in the City of Brotherly Love. Cities 
from San Francisco to Corpus Christi in Texas are rushing to follow 
Philadelphia’s lead, while statehouses are rushing to follow Pennsylvania’s.

Last December, at the urging of Verizon Communications and 
Philadelphia-based Comcast, the commonwealth barred cities and towns 
from offering Internet access to consumers for a fee. But after protests 
from Philadelphia Mayor John Street, and technology and public-interest 
groups, Democratic Gov. Edward Rendell signed a version of the bill that 
exempted Philadelphia from the legislation.

Wireless Philadelphia, the nonprofit corporation to provide Wi-Fi 
wireless access to the city, was not fully formed until March 31.

Philadelphia Chief Information Officer Dianah Neff repeatedly has said 
the project will be “cost-neutral.” The city expects to float bonds 
worth $18 million to hire technology companies to build and run the 
network, but Neff said it will cover those costs through a monthly 
per-customer fee.

Neff said Wireless Philadelphia is a “cooperative wholesale model.” That 
means the city will not sell service directly to the public but “will 
contract with between four and seven Internet service providers that 
will actually do the end-user service deliver.”

The ISPs will pay a “wholesale fee” of about $9 a month, she said, and 
they will sell broadband at 1 megabit per second for about $20 a month. 
That is slower than Verizon’s digital subscriber lines or Comcast’s 
cable modems. ISPs participating in Wireless Philadelphia also must 
agree “to meet the social goals” of bridging the city’s digital divide 
by subsidizing poorer households to purchase broadband for about $10 a 
month.

“I don’t think we will see high-end customers of Verizon or Comcast” 
switching to Wireless Philadelphia, Neff said in an interview, although 
“they may add it as an adjunct for mobility.”

Last week, Philadelphia announced contract negotiations with EarthLink 
and Hewlett-Packard, the two finalists to become the lead contractor. 
For EarthLink, the largest ISP unaffiliated with a cable or Bell 
company, the project has become a high-stakes bid because of the recent 
decisions by the Supreme Court and FCC limiting competition on cable and 
Bell networks.

Other tech companies are equally supportive. Intel has been a prominent 
advocate of municipal broadband networks and last week announced a 
“Digital Communities” initiative highlighting efforts in Philadelphia, 
Cleveland, Corpus Christi and Taipei, Taiwan.

“For the last two years in the municipal wireless space, much of the 
emphasis was on free networks,” said Paul Butcher, Intel’s marketing 
manager for state and local governments. “In the past six to nine 
months, the dialogue has changed to [focus on] the real economic 
benefits [for cities] and as a way of delivering solutions against the 
digital divide.”
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Links to:
Wireless Philadelphia (customer), http://www.wirelessphiladelphia.net/
Wireless Philadelphia (business plan, mission statement, etc.): 
http://www.phila.gov/wireless/