November 23, 2004, 7:34 AM — A proposed Pennsylvania law now on its way to the governor's desk could pose a hurdle for the city of Philadelphia's ambitious plan to provide broadband service throughout the city via Wi-Fi.
One provision of House Bill 30 (HB30), a wide-ranging telecommunications regulation bill that earned final approval by the state House and Senate on Friday, would prohibit a government or any entity it creates from offering broadband for a fee.
Philadelphia's city government is studying plans to deploy Wi-Fi wireless LAN access points throughout the city, each offering IEEE 802.11b access and linked to others via a wireless mesh network, said Dinanah Neff, the city's chief information officer. Deployment is set to begin in June 2005 and should be completed by June 2006.
The US$7 million to $10 million project is intended to encourage economic growth and help poor residents access the Internet with a broadband service priced at an estimated $15 to $25 per month, she said. About 60 percent of Philadelphia's neighborhoods, primarily poorer neighborhoods and less densely populated ones, don't have access to broadband services, according to Neff.
HB30 would eliminate three of the five possible business models being studied by Neff and the Wireless Philadelphia Executive Committee, according to Neff.
"It will make it more difficult. It will not kill the project," Neff said.
The city could provide the service for free, but it is unlikely to find a funding source for that, she said. Alternatively, it could offer the service through a consortium of private companies that would sell it to the public -- probably at a higher price, Neff believes.
The language on government-supplied broadband in the bill would hand a big favor to Verizon Communications Inc., the incumbent regional telecommunications carrier in Philadelphia, according to Gary Tuma, press secretary to state Senator Vincent Fumo, a Democrat who opposed the bill. Verizon has fallen short on its promises to build a more up-to-date network over the past 10 years, contributing to the lack of broadband availability, he said.
"It's one of many efforts being made by Verizon to prevent competition," Tuma said. "What was going on here was an intense lobbying effort by Verizon to get a version of the bill they were happy with."
Verizon disputed that charge. The carrier has invested $8.5 billion in infrastructure in Pennsylvania over the past 10 years, and competition is thriving in the state, said company spokeswoman Sharon Shaffer.
Local governments that get into the broadband business risk pouring taxpayer dollars into projects that don't pay off, Shaffer said. In addition, they enjoy competitive advantages that include having access to public funds and not having to pay taxes, she added.