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Looks like Philly is leaping ahead now.


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City 'Wi-Fi' plan hinges on Pa. Senate debate

A bill setting rules and incentives for Verizon and others also would curtail or kill an ambitious effort for access in Phila.

By Akweli Parker

Inquirer Staff Writer | Nov. 19, 2004

Gov. Rendell and small telecommunications firms were locked in a showdown last night with state Senate Republicans and Verizon Communications Inc. over a controversial telephone and Internet bill.

House Bill 30 would set the rules for the next decade under which incumbent phone companies, including Verizon, would wire all of Pennsylvania for fast Internet service.

But language in the bill also could limit, if not crush, Philadelphia's ambition of rolling out free or reduced-cost wireless Internet access citywide.

Already passed by the House, the bill was awaiting action by the full Senate last night. If it passes there, its next and last stop before becoming law would be Rendell's desk.

"In the current form, the governor does not support the bill," said Kate Philips, a spokeswoman for Rendell. "It doesn't do enough for consumer protection, and it does not make sure the companies reinvest their money in Pennsylvania."

Verizon, by some estimates, would become eligible for nearly $3 billion in rate increases if it meets certain deadlines for deploying broadband to everywhere it provides phone service.

Some critics fear the company - and other incumbent phone providers around the state - might just pocket the money instead of investing it in the network. But Verizon spokesman Harry Mitchell said those fears were unwarranted.

Since 1994, when rules for deploying broadband were first established, "we've poured more than $8.5 billion in our Pennsylvania network," Mitchell said. "That's a ton of money, and that's just Verizon."

Rendell submitted several proposed modifications to the Senate, but it was unclear yesterday whether they would be included in a final bill.

"We're working hard and we're hopeful," Philips said.

Verizon's business opponents slammed the bill, saying they were mostly excluded from its crafting.

"It gives Verizon everything they had asked for... without any of the stuff that holds Verizon accountable," said Derek Pew, a telecom investor and representative for the Pennsylvania Carriers' Coalition, which includes King of Prussia-based ATX Licensing Inc., Philadelphia-based Remi Retail Communications L.L.C., and others.

Pew said the bill stripped the state Public Utility Commission of its long-standing power to make sure Verizon treats its competitors - who are often also its wholesale customers - fairly.

"The Pennsylvania PUC has spent an ordinate amount of time" studying Verizon and its policies, Pew said. "The reality is, Verizon has stripped all that language out."

The noncompete clause in House Bill 30 was designed to prevent government entities, such as cities, from running their own municipal cable and telecom businesses. For instance, Kutztown, near Allentown, runs its own cable and telecom system in competition with private providers.

The clause gained new relevance locally when Philadelphia announced plans this fall to set up the citywide Wi-Fi, or wireless fidelity, network.

"I knew what this [bill] meant - they were going to kibosh this thing," said Edward Schwartz, president of the Institute for the Study of Civic Values and a committee member of the city task force studying Wi-Fi.

Mitchell said Verizon, which sells high-speed Internet service over its phone lines, has discussed the Wi-Fi plan with Philadelphia and told the city to consider whether it would take away from other city services and how the city would manage it.

"You've got to build it and maintain it," which are not easy feats, he said.

As part of House Bill 30, incumbent phone providers must take a risk by investing billions in a network that might be rendered worthless if undercut by local governments' offering their own access, Mitchell said.

"You've got the [big phone companies] who are committing to a huge undertaking - broadband deployment from the most urban to the most rural," he said. "There's a fairness issue."

From Philadelphia Inquirer

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