[Ecommerce] (Washington Post) Fast Internet Service for The People: Telecoms Fight Plans For Public Networks

[Thiru Balasubramaniam]

<SNIP>

 From San Francisco to St. Cloud, Fla., an estimated 200 communities are
toying with community-owned networks, sparking a battle with cable and
telephone companies over how public, or private, access to the Internet
should be.

The companies are lobbying furiously to block such plans, fearful that
their businesses would be hurt. Their efforts most recently paid off
Tuesday night in Pennsylvania, where a new law bans local governments
from creating their own networks without first giving the primary local
phone company the chance to provide service.

Consumer advocates denounce the new Pennsylvania law. They say it
amounts to governments now needing a permission slip from entrenched
monopolies to put a vital economic and educational tool within
everyone's reach.

<SNIP>

In last-minute negotiations before the bill was signed late Tuesday by
Gov. Edward G. Rendell (D), the law was changed to allow systems
operating before January 2006 to proceed.

That language, and a separate deal with Verizon, will enable
Philadelphia to move forward with plans for a citywide wireless network,
the largest such experiment in the country.

"Just like roads and transportation were keys to our past, a digital
infrastructure and wireless technology are keys to our future,"
Philadelphia Mayor John F. Street said in September when he announced
the plan.

Although residents would still have to own computers, the typical $30 to
$50 monthly cost of high-speed Internet access from commercial services
would be reduced. No details have been decided.





-------------------

*Fast Internet Service for The People*
Telecoms Fight Plans For Public Networks

By Jonathan Krim
Washington Post Staff Writer
Thursday, December 2, 2004; Page A01

For the millions of people who cannot afford high-speed Internet access,
some local officials think they've hit on the answer: Build
government-owned networks to provide service at rates below what big
telecommunications companies charge.

 From San Francisco to St. Cloud, Fla., an estimated 200 communities are
toying with community-owned networks, sparking a battle with cable and
telephone companies over how public, or private, access to the Internet
should be.

The companies are lobbying furiously to block such plans, fearful that
their businesses would be hurt. Their efforts most recently paid off
Tuesday night in Pennsylvania, where a new law bans local governments
from creating their own networks without first giving the primary local
phone company the chance to provide service.

Consumer advocates denounce the new Pennsylvania law. They say it
amounts to governments now needing a permission slip from entrenched
monopolies to put a vital economic and educational tool within
everyone's reach.

For them, government has a long history of providing essential public
services, such as national highways or electricity in rural areas.

"The Internet . . . is a true global public utility," said Jeffrey
Chester, director of the Center for Digital Democracy, an advocate for
consumer rights online. "We should be trying to provide it for free."

At least, they argue, community networks should be able to give the
large companies some competition. In a February survey conducted by the
Pew Internet and American Life Project, 24 percent of U.S. adults said
they had high-speed Internet access at home. About half of those had
incomes of more than $75,000 a year.

Harold J. Feld, associate director of the Media Access Project, a
consumer-media advocacy group, said a phone or cable company could
always come in and provide a wireless network, competing on price and
service with any municipal offering.

"But who gets to decide what municipalities can do?" Feld said. "Will it
be corporations?"

In some cases, governments acted out of concern that spotty service from
commercial providers in rural areas might be inhibiting economic growth.
Allegany County in western Maryland is building a high-speed wireless
network that will be available for homes and businesses.

Companies such as Verizon Communications Inc., which helped shape the
Pennsylvania law, argue that telecommunications firms would have little
incentive to build networks if they have to compete with
government-subsidized service.

Verizon spokesman Eric Rabe noted that the company is under state
mandate to deploy high-speed access to customers in all of its
Pennsylvania territory by 2015.

"If we should be asked to do that, we should be able to make a business
of it," he said, and not compete with governments that can borrow money
to build out a system more cheaply and can tax residents to pay for the
service.

The new law forces local governments to give the local phone carrier
first shot at providing wireless service if a locality intends to charge
for it. If the service is going to be free, the law does not apply.

But Beth McConnell, director of the Pennsylvania Public Interest
Research Group, said it is unreasonable to think that a government would
be able to offer service for nothing.

In last-minute negotiations before the bill was signed late Tuesday by
Gov. Edward G. Rendell (D), the law was changed to allow systems
operating before January 2006 to proceed.

That language, and a separate deal with Verizon, will enable
Philadelphia to move forward with plans for a citywide wireless network,
the largest such experiment in the country.

"Just like roads and transportation were keys to our past, a digital
infrastructure and wireless technology are keys to our future,"
Philadelphia Mayor John F. Street said in September when he announced
the plan.

Although residents would still have to own computers, the typical $30 to
$50 monthly cost of high-speed Internet access from commercial services
would be reduced. No details have been decided.

In the borough of Kutztown, Pa., local officials built a fiber-optic
network in 2000, following the path of the power lines that also are
owned by the town.

Today, Internet service at speeds faster than those generally provided
by phone and cable companies is available to residents and businesses
beginning at $15 a month. The system also provides cable television
service. More than 500 residents take advantage of the system.

Frank P. Caruso, the town's director of information technology, said he
feels sorry for communities that will not be able to meet the 2006
deadline and thus be forced to deal with Verizon first.

"They don't realize that their throats have just been cut," Caruso said.
"It's almost like Verizon is Big Brother." Caruso said that after the
town began offering cable television service, the private provider
dropped its price by 40 percent to compete.

In signing the legislation, Rendell said that he was concerned about the
new restrictions on public networks but that other parts of the bill
involving telecommunications were too important to derail.

Among them are financial incentives for Verizon to accelerate plans to
expand broadband access around the state.

The law will be closely watched around the country, where phone and
cable companies are pressuring state legislatures to limit what
municipalities can do. According to MuniWireless.com, an online
newsletter that tracks community-based wireless projects, 14 states have
passed some type of legislation limiting what municipalities can do.

In Illinois, meanwhile, SBC Communications Inc. and Comcast Corp. teamed
up twice to defeat ballot measures that would have allowed three towns
to create a fiber-optic network to provide telecommunications and cable
television services.

=A9 2004 The Washington Post Company