Philly sells Pennsylvania to Verizon

Big city's WLAN okay. Little towns not so lucky

When Philadelphia begs, Verizon listens. The telco has given Philly permission to build out a citywide wireless network. However, the deal indirectly blocks other Pennsylvania towns from coming to a similar arrangement. Smaller cities and towns will have to do more than get down on their knees if they want cheap broadband because Philadelphia has sold the rest of the state to Verizon.

Philadelphia earlier this month found itself at the center of a large controversy after announcing plans to create a free wireless network for all of its million plus residents. When telco lobbyists learned of the plan, they quickly pushed a bill in front of Pennsylvania's governor that included a provision making it very difficult for Pennsylvania cities to roll out high-speed Internet services to their residents without prior approval from the telcos. This bill put Philadelphia's very ambitious wireless plans in jeopardy with Verizon potentially looking to stop the service rollout.

Verizon, however, agreed on Tuesday in writing to let Philadelphia go ahead with its plans. This decision helped out governor Ed Rendell, who is a former Philadelphia mayor, as it allowed him to let the bill become a law without upsetting Philly residents. Philadelphia got what it wanted and agreed to stop putting pressure on Rendell to block the bill.

What does this mean for other Pennsylvania towns? Well, they're pretty much screwed. They are required to give the local telcos the right of first refusal for municipal high-speed Internet services. Companies that refuse to let the cities go forward with their own internet services are required to provide a similar service within a 14 month window. So here's to happy waiting for cheap wireless access in Pennsylvania.

The good news for Pennsylvanians is that the bill before the governor also provided financial incentives to telcos that speed up the deployment of broadband networks. That's good news for Verizon as well, as it stands to make as much as $3bn from such rollouts.

Residents of Philadelphia should see their new wireless service arrive by late 2005 or early 2006. The city has talked about making the service free or charging a relatively low fee. It's hoping that such widespread wireless access will help bridge the digital divide in the city and make Philly appear as a tech savvy place to tourists. Visitors would be required to pay a small, daily fee to use the network.

It's hard to say who wins in this situation. Without some kind of revenue sharing agreement, hotels, coffee shops and conference centers stand to lose out on wireless revenue should Philly run its own, cheap network. The telcos obviously lose out as well. Philadelphia, however, gains a lot of attention, as it currently has the most aggressive plans of any major city for such a network. Students who can't afford a monthly DSL bill but can afford a Centrino laptop are sure to love the new idea as well.

Here's to municipal/corporate compromise where big cities stab little cities in the back, Starbucks drinkers get free wireless connections and the lobbyists come out mostly on top. ®

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