[Paleopsych] NYT: Philadelphia Hopes for a Lead in the Wireless Race

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Philadelphia Hopes for a Lead in the Wireless Race
February 17, 2005


    PHILADELPHIA, Feb. 11 - If Mayor John F. Street has his way, by next
    year this 135-square-mile metropolis will become one gigantic wireless
    hot spot, offering every neighborhood high-speed access to the Web at
    below-market prices in what would be the largest experiment in
    municipal Internet service in the country.

    City officials envision a seamless mesh of broadband signals that will
    enable the police to download mug shots as they race to crime scenes
    in their patrol cars, allow truck drivers to maintain Internet access
    to inventories as they roam the city, and perhaps most important, let
    students and low-income residents get on the net.

    Experts say the Philadelphia model, if successful, could provide the
    tipping point for a nationwide movement to make broadband affordable
    and accessible in every municipality. From tiny St. Francis, Kan., to
    tech-savvy San Francisco, more than 50 local governments have already
    installed or are on the verge of creating municipal broadband systems
    for the public.

    But Philadelphia's plan has prompted a debate over who should provide
    the service, and whether government should compete with private
    industry, particularly in hard-to-reach rural areas or low-income
    urban communities. Telecommunications and cable companies say that
    municipal Internet networks will not only inhibit private enterprise,
    but also result in poor service and wasted tax dollars. They have
    mounted major lobbying campaigns in several states to restrict or
    prohibit municipalities from establishing their own networks.

    "This is a growing trend, but an ominous and disturbing one," said
    Adam Thierer, director of telecommunications studies at the
    libertarian Cato Institute and the author of a soon-to-be-released
    study criticizing the Philadelphia plan. "The last thing I'd want to
    see is broadband turned into a lazy public utility."

    Philadelphia officials say that will not happen here. Mr. Street has
    said he will try to raise corporate and foundation financing so the
    strapped city does not have to pay the network's $10 million startup
    costs. He also says the city will recruit private companies to help
    operate the system, asserting it will earn enough revenue to be

    Though details of Mr. Street's plan are still being developed, the
    city expects to install 4,000 wireless antennas along lampposts across
    the city in the next 18 months, creating a network of broadband

    City officials also hope to extend service into homes and businesses
    in poor neighborhoods, using nonprofit organizations to provide
    low-cost equipment, training and service.

    "Just as highways were a critical infrastructure component of the last
    century, wireless Internet access must be a part of our infrastructure
    for the 21st century," Mr. Street said last month in a speech before
    the United States Conference of Mayors.

    Most municipally run Internet systems are in small rural towns, many
    of which provide service at below-market rates. Philadelphia is
    proposing to charge $15 to $25 a month for its service, half of what
    private servers now charge, and even less for low-income users.

    Industry officials say that if the program takes off, it will
    inevitably take customers from providers like the [1]Comcast
    Corporation or [2]Verizon Communications.

    "Is it fair that the industry pay tax dollars to the city that are
    then used to launch a network that would compete with our own?" asked
    David L. Cohen, executive vice president of Comcast, which is based in
    Philadelphia. "I don't think so."

    Officials in Philadelphia and other municipalities contend they never
    intended to compete with private companies. Many say they want to
    provide Internet service only because students, small businesses and
    low-income residents cannot afford or obtain high-speed Internet

    Philadelphia officials say a recent survey found that nearly 40
    percent of residents did not have Internet service. But industry
    officials say that virtually every neighborhood in the city is wired
    for broadband and that many people are choosing not to buy it.

    Industry officials and advocates of limited government also say
    providing Internet access is far more risky, complicated and expensive
    than government officials realize. Equipment will quickly become
    obsolete, and slow-moving governments will not keep pace, they say.

    "Government doesn't do service well," said Eric Rabe, vice president
    for public relations for Verizon.

    "And communications is complicated. The technology changes constantly.
    Verizon has 3.5 million D.S.L. subscribers," Mr. Rabe said, referring
    to digital subscriber lines, "and we're still trying to figure out how
    to make money at $30 per month."

    Pushed by industry lobbyists, lawmakers in Kansas, Ohio, Texas,
    Indiana, Iowa, Oregon and other states have proposed legislation to
    restrict or prohibit local governments from offering
    telecommunications services. Nearly a dozen states have already
    enacted some restrictions.

    Verizon won a victory in Pennsylvania late last year when Gov. Edward
    G. Rendell signed a measure requiring that cities first give the main
    local phone company the right to build a high-speed Internet network.
    If the phone company proceeds within 14 months, the city must drop its
    plans . Philadelphia was exempted from the law.

    In Kansas, the town of St. Francis, population 1,495, began offering
    Internet service nearly three years ago and now has 200 subscribers.

    "We could not get anybody to provide us high-speed Internet," said J.
    R. Landenberger, city manager. "When that didn't work, we decided to
    do it ourselves."

    In Scottsburg, Ind., a city of 6,000 near the Kentucky border,
    officials say a survey conducted in 2002 found that three local
    companies were considering moving or expanding elsewhere because they
    could not get broadband service.

    The officials say they urged several providers to extend a network
    into town, but were told it was too small or remote to justify the
    cost. Consultants recommended that the town build a fiber network, at
    a cost of $5 million. Then city officials discovered wireless.

    For an initial investment of $385,000, the town's municipally owned
    electric utility created a wireless broadband network for the entire
    county. Businesses now can buy high-speed service for $200 per month,
    about half the cost in nearby Louisville, Ky.

    The service has about 600 subscribers, more than enough to cover its
    costs, town officials say. "We're just as pleased as we can be," Mayor
    Bill Graham said. "It's the same system they put into the Pentagon
    after Sept. 11. It is very secure, very fast and very reliable."

    In Philadelphia, the skeptics argue that running a broadband network
    for a small town is far different from running one for a city of 1.5
    million. Though installing a network of antennas might be
    straightforward, creating a system for billing, marketing and fielding
    service complaints will be far more difficult than the city imagines,
    they say. The city estimates the cost of maintaining the system will
    be $1.5 million a year.

    "The real cost will be very different than what they think," Mr. Cohen
    of Comcast said.

    Philadelphia officials say skeptics will come around when they see the
    power of broadband to attract business and improve the lives of poor

    The Philadelphia plan will allow Internet users to roam anywhere in
    the city and remain connected, as long as they are outdoors, said
    Dianah Neff, the city's chief information officer. But bringing the
    signal indoors will require extra equipment. To help low-income
    residents acquire such equipment, the city plans to recruit a network
    of community organizations that can provide training, inexpensive
    computers and wireless equipment to eligible residents.

    In West Philadelphia, the People's Emergency Center, a nonprofit
    group, is already providing such services, including after-school
    computer programs, wireless access at $5 a month, Web site development
    for small businesses and a program that helps welfare recipients
    communicate with caseworkers through the Internet. The group also
    sells refurbished computers to eligible residents for $125.

    "Acquiring low-cost computers is the smallest problem," said Tan B.
    Vu, manager of the center's digital inclusion program. "The bigger
    problem is that people don't have Internet access. And that is where
    the city comes in."

    One of the center's clients, Denise Stoner, 32, embodies both the
    promise and pitfalls of the city's plans.

    A recently homeless mother who has a learning disabled son and a deaf
    daughter, both of whom have heart problems, Ms. Stoner has a
    refurbished desktop computer with broadband wireless service provided
    by the People's Emergency Center.

    But her aging computer is slow and often hampered by viruses, which
    she depends on the center's technicians to eradicate. And while her
    9-year-old son has improved his reading and spelling skills by using
    the Internet, he spends most of his time online playing games.

    Still, Ms. Stoner has found both information and comfort from the
    Internet. She has learned sign language online to converse with her
    2-year-old daughter. And she has discovered chat rooms for parents of
    children who have the same heart problems as her children.

    "I ask them how they get by," she said of her e-mail conversations
    with people as far away as Africa. "They say they take it one day at a

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