Report Critical of Philly's Wi-Fi Plan

Report Critical of Philly's Wi-Fi Plan By Mark Rockwell April 11, 2005 news@2 direct

WASHINGTON -- A Bell company-supported think tank has issued a report that's highly critical of the City of Philadelphia's recently announced plans for a city-sponsored, city-wide Wi-Fi network.

"My principal conclusion is that the analysis and financial projections contained in [the City of Philadelphia's Wi-Fi] business plan are simply not plausible," says Thomas Lenard, senior fellow and vice president of research at the Progress & Freedom Foundation.

Last Thursday, the City of Philadelphia began asking for bids on the $10 million Wi-Fi project that would provide low-cost Wi-Fi access to all Philadelphia citizens across the city's 135 square miles of territory. The project's aim is to provide low-cost, high-bandwidth connections for all Philadelphia residents for about $16 to $20 a month. The winning bidder will install the network by next summer. The city's plans call for services on the network to be marketed, sold and billed by the 430 independent, private ISPs operating in the city.

"The Business Plan projects that Wireless Philadelphia [the city's plan] will be able to offer wireless broadband access to everyone, everywhere in Philadelphia, at a lower cost than competitive broadband offerings such as DSL and cable modem," Lenard says. "Notwithstanding this rosy scenario, the Business Plan asserts that this service [Wi-Fi] will not be offered by the private sector. But there is no explanation as to why the private sector would pass up such a profit opportunity."

The foundation also issued an accompanying essay questioning the wisdom of local governments' involvement with the rollout of high-speed networks.

The Progress and Freedom Foundation is backed by many high-tech companies, including big local wireline phone companies such as BellSouth, SBC Communications and Verizon Communications, as well as big wireless companies like Nextel Communications and T-Mobile USA. The city of Philadelphia got an exemption last fall from a state law that restricted local governments from installing wireless Internet access networks. Verizon Wireless had backed the legislation that forced the city to accelerate its installation plans and forced the city to give Verizon Wireless "right of first refusal" on any other plans for wireless network services.

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