Will Lansing Threaten Wi-Fi Plans

December 27, 2004
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GRAND RAPIDS — A Philadelphia project similar in scope and scale to those proposed in the city of Grand Rapids and in OttawaCounty is now in serious jeopardy after Pennsylvania lawmakers essentially outlawed the deployment of municipal-owned broadband within the state.

A provision of Pennsylvania House Bill 30 (HB 30), a wide-ranging telecommunications bill signed into law by Gov. Edward Rendell earlier this month, contains language prohibiting a government or any entity it creates from offering broadband Internet service for a fee, according to a Nov. 23 ComputerWorld report.

"I'm just livid," said Dirk Koning, executive director of the CommunityMediaCenter and consultant on the city's Wi-Fi project. "A private company is saying these networks will provide unfair competition and (the state of) Pennsylvania agreed.

"What's next? Is B. Dalton (Booksellers) going to complain because libraries are checking out books for free and cutting into their sales?"

The government of Philadelphia is in the developmental process of an initiative that will deploy Wi-Fi Internet access points throughout the city, each offering IEEE 802.11b access and linked to others via a wireless mesh network.

Construction of the $7 million to $10 million project was set to begin in June 2005 and be completed by June 2006, with the intent of encouraging economic growth and bridging the digital divide.

About 60 percent of Philadelphia's neighborhoods, primarily those poorer and less populated, are not currently offered broadband Internet access by incumbent providers. The deployment would allow these residents access at an estimated $15 to $25 a month.

HB 30, however, has eliminated three of the five possible business models being discussed by the city.

"Verizon got legislation passed intended to restrict the Philadelphia project and others like it," said John Pestle, a partner at Varnum, Riddering, Schmidt & Howlett LLP specializing in telecommunications. "There are conflicting goals here. On one hand, everybody wants economic development, education, and to attract new business and development and competition. But on the other hand, you have the incumbent providers who don't want to see more people coming in."

Verizon Communications is the incumbent carrier in Pennsylvania, and Pestle said that its lobbying power was responsible for the new law. Bowing to public pressure, Verizon has stated in writing that it will not challenge the Philadelphia project if it has at least one customer by Jan. 1, 2006

"It's turning out to be quite an amazing little soap opera," Koning said. "Five years ago, I would have said it would be ludicrous that a city or municipality would be challenged for providing their own telecommunications infrastructure, but here we are."

Koning explained that many pieces of social infrastructure have been developed through government entities or public-private partnerships in communities nationwide. There are some strong examples locally in Holland, Zeeland, Grand Haven, and Lowell's electricity, Lowell's cable television, and Holland's fiber-optic ring.

While local Internet providers have given no sign that they will pursue similar efforts in Michigan, Koning is still concerned.

"We certainly have to be cognizant of it," he said. "At this date and time, the state of Michigan does not appear to have any enabling legislation that would prohibit the city from going forward in some kind of wireless partnership, but we're still keeping an eye on it."

The legislation is similar to laws passed by 14 other states across the country concerning fiber-optic urban loops. States are granted full latitude on the legality of municipal entries into broadband Internet and other telecommunications ventures by last year's U.S. Supreme Court case, Nixon vs. Missouri Municipal League.

In Grand Rapids, Koning said that the city's project is steadily advancing toward a series of scheduled demonstration projects in early 2005.    

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