Cities battle carriers

Municipalities, fed up with waiting on carriers for broadband coverage, are outfitting their skies with Wi-Fi.

Has broadband Internet access become as necessary to individuals as water and electricity? The answer to that question has been at the heart of a long and often-rancorous dispute between municipal governments and telecom service providers. Tempers are now cooling, as the two sides recently coalesced around a common municipal broadband service model.

The firestorm began in the summer of 2004, when some cities made moves to deploy municipal Wi-Fi networks to compensate for the carriers' failure to roll out broadband Internet access - cable modem and DSL services - on a full scale. As carriers concentrated their broadband initiatives on markets in which they would likely see a quick ROI, they left many pockets in inner cities and rural areas with only dial-up Internet access. Many cities felt obliged to close the digital divide between the rich and the poor.

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Has broadband Internet access become as necessary to individuals as water and electricity? The answer to that question has been at the heart of a long and often-rancorous dispute between municipal governments and telecom service providers. Tempers are now cooling, as the two sides recently coalesced around a common municipal broadband service model.

The firestorm began in the summer of 2004, when some cities made moves to deploy municipal Wi-Fi networks to compensate for the carriers' failure to roll out broadband Internet access - cable modem and DSL services - on a full scale. As carriers concentrated their broadband initiatives on markets in which they would likely see a quick ROI, they left many pockets in inner cities and rural areas with only dial-up Internet access. Many cities felt obliged to close the digital divide between the rich and the poor.

"One-third of our city was without broadband Internet access, and our service providers told us years would pass before they would serve those areas," says Dianah Neff, CIO for the city of Philadelphia, where the battle became especially heated.

But as the cities launched their Wi-Fi programs, service providers howled about government getting into the telecom business. David McClure, president of the U.S. Internet Industry Association (USIIA), summarizes the carrier position: "Cities should not finance with taxpayer money network monopolies designed to put viable service providers out of business." The USIIA, a trade association in Washington, D.C., has been a vocal advocate of service providers' position.

Legal action

In Pennsylvania and elsewhere, carriers turned to the courts to try stopping governments from rolling out such networks. In more than a dozen cases, state legislators passed laws putting stipulations on cities that wanted to enter the broadband access market. Legislators passed such a law in Pennsylvania, though they granted Philadelphia a special exemption.

The decision was not without controversy. While McClure says the Pennsylvania law passed in an open process during which all of the affected parties were notified, Neff recollects differently. "The only reason we found out about the proposed law in Pennsylvania was one of our lawyers was watching cable television late one Friday night, and he saw the bill being introduced near midnight," she says. "If the process was truly open, then we would have been informed about it, and the hearings would have been held at a more reasonable hour."

As the cities persevered and shaped their municipal networks, a common ground emerged. In Philadelphia, for example, Neff issued an RFP in the fall of 2004. As a result of the RFP, the city selected EarthLink to install and manage the municipal Wi-Fi network. The city has some test sites operating, with plans to begin rolling out services in 2006.

The USIIA has no objection to this arrangement, McClure says, while noting that such a partnership came about only after Philadelphia determined it would not be able to run the network by itself. Neff counters, "From the start, our plan was to work with a network provider to build out the network and to open it up so multiple ISPs can offer services over it. It was never designed to be run solely by us."