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Issue 31 - March/April 2005

Down to the Wire

By Gwen Shaffer

In an attempt to influence telecom regulations, phone and cable giants have hooked up federal lawmakers with nearly a half-billion dollars since 1998. Verizon Communications alone contributed $102 million to elected officials who, frequently, pulled the plug on the competition. So it comes as no surprise to industry watchdogs that this former “Baby Bell” acted with megabit speed last year when Philadelphia Mayor John Street announced plans to provide affordable wireless Internet services to the entire city.

Philadelphia is rolling out a plan to build a $10 million wireless broadband network this summer, charging subscribers a fraction of the prices set by the region’s dominant broadband service providers Comcast and Verizon. A low-cost wireless network run by the city threatens to topple the local duopoly — and apparently that’s scary even for an international corporation like Verizon, which earned $67.8 billion in operating revenues during 2003.

The legislation signed by Pennsylvania Gov. Ed Rendell in November originally contained a provision that would bar local governments from providing telecommunications services for a fee. The language was buried in a complex 30-page bill drafted by industry lobbyists that gives telephone companies financial incentives to hasten the rollout of broadband networks (a deal that will net Verizon about $3 billion).

But just days before a scheduled state Senate vote, Philadelphia wireless advocates discovered the provision. They began lighting up switchboards in Harrisburg. Media justice activists had paid scant attention to the bill earlier because it wasn’t poised to come up for a floor vote in 2004, says Hannah Sassaman, program director for Prometheus Radio in Philadelphia.

“It only started to move after Philadelphia officials made plans to create a WiFi network,” she says. “Then legislators pushed the bill through during Thanksgiving, just before their recess, when they assumed no one was looking.”

Both local organizations (such as Media Tank and the Pennsylvania Public Interest Research Group) and the national groups Common Cause and MoveOn engaged in lobbying efforts. They sent out email alerts to members asking them to urge Gov. Rendell to veto H.B. 30.

In response to the pressure, senators amended the bill to allow broadband services operating by Jan. 1, 2006 to continue, which buys Philadelphia enough time to get its ambitious 135 square-mile WiFi project going. Some activists believe the compromise leaves every other municipality in the state high and dry, but Sassaman is confident.

“The governor didn’t veto what is clearly a crappy bill,” she concedes. “But by making tens of thousands of phone calls, we did have an influence.” When signing the bill, Rendell promised to work with any municipality interested in establishing its own telecom network. “So it wasn’t just a win for Philadelphia,” Sassaman says.

Pennsylvania is the fifteenth state to bar or restrict municipalities from providing telecom services, and both Ohio and Nebraska are considering similar laws. Nonetheless, the circumstances under which the legislation passed constitute “a watershed event,” says Jeffrey Chester, executive director of the Center for Digital Democracy in Washington.

“Previously, telecom lobbyists trying to prevent communities from competing in broadband had fallen under the radar screen.  Now people are asking: is the Internet a system to generate revenue for private companies or is it a global information utility that is core to our democracy?”

Pennsylvania State Rep. William Adolph, Jr. chairs the House Committee on Environmental Resources and Energy. He says he sponsored six public hearings on H.B. 30 during a 20-month period, “without hearing a peep of concern” from local officials in Philadelphia or any other municipality.

It wasn’t until activists fought the companion bill in the state Senate that Adolph realized they opposed restrictions being placed on municipalities, he says.

“At the last minute, I received a copy of the amendment that was worked out. Prior to that, I’d never even heard of the WiFi issue,” Adolph says. “The over-riding goal of H.B. 30 is to accelerate the deployment of broadband. If the city of Philadelphia can deploy a WiFi network, I have no problem with it.”

High-speed, wireless applications like the one planned for Philadelphia have the potential to bridge the digital divide. They require minimal infrastructure investment and are comparatively inexpensive to operate. As WiFi — and soon WiMax — hotspots spread, the policy implications for both mass media access and freedom of speech could be huge.

Philadelphia, where an estimated 60 percent of residents currently lack broadband Internet access, is a prime example. Even if Comcast and Verizon offered broadband in these underserved communities, low-income residents couldn’t afford to shell out $50 a month to pay for it.

Dianah Neff, Chief Information Officer for Philadelphia, says her goal is to keep monthly fees “below $20.” She hopes to create a “blueprint” for tackling the information gap that other cities around the country can emulate. “As CIO, my job is to watch emerging technologies and fuse them with the mayor’s goals,” Neff says. “Strong families and neighborhoods are key ingredients of the Street administration. So I began thinking of a way to encourage economic development, overcome the digital divide and enhance quality of life for Philadelphians.”

Other major U.S. cities including Atlanta, San Francisco, Seattle and Dayton have announced plans to develop their own citywide WiFi networks. Today, wireless networks carry the same cachet as swanky sports stadiums and convention centers. Cities are betting they will help attract tech-savvy businesses, encourage tourism and project a hip image capable of wooing young professionals.

To read the rest of this piece and other great Clamor features, please pick up a copy of the new issue, or subscribe now.

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