'Wi-Fi'ght them when you can join them? How the Philadelphia compromise may have saved municipally-owned telecommunications services.

• Author: Christensen, Adam
• Position: Telecommunications Act of 1996: Ten Years Later Symposium

When the Mayor of Philadelphia announced his plan to provide municipally sponsored Wi-Fi Internet access, Verizon, the incumbent telecommunications service provider organized lobbyists to block the plan. The compromise eventually struck between Pennsylvania municipalities and Verizon, which allows municipalities to offer telecommunications services after giving Verizon a right of first refusal has resulted in a certain degree of uncertainty in the future of municipally sponsored Internet access. This Note examines this compromise and argues that it represents an optimistic future for municipally sponsored telecommunications services. The Note first discusses the history of Wi-Fi technology and the development of the law regarding municipally owned telecommunications providers. It then addresses the likelihood that the Philadelphia plan will succeed and the plans implications on telecommunications providers.

1. INTRODUCTION A. Wi-Fi Technology B. The Digital Divide and Legislative Responses C. Telecommunications Act of 1996 II. JUDICIAL INTERPRETATION OF SECTION 253 A. Abilene, Texas: The Meaning of "Any Entity". B. Missouri Municipal League C. Nixon v. Missouri Municipal League III. BUILDING A WIRELESS PHILADELPHIA A. Pennsylvania House Bill 30 IV. THE FUTURE OF MUNICIPAL BROADBAND V. CONCLUSION I. INTRODUCTION

   The advent of the Internet, like telecommunications media before it, has created a division between haves and have nots. And, as it was with the Internet's predecessors, private companies have been the primary suppliers of the services and equipment necessary to stretch the network across the country. However, the speed with which the world has become dependent on the Internet's vast array of resources is unparalleled in the history of mass media, and private providers in the United States are failing to supply the high demands. Furthermore, while the rate of growth is difficult for private companies to keep up with, the speed at which information travels over the Interact has increased staggeringly. The result: poor urban and rural citizens have been left disconnected or only connected at a snail's pace. Politicians and pundits have offered solutions to the problem, providing incentive plans for private telecommunications providers and public high-speed access points at schools and libraries, but for some cities, that is not enough. For these citizens, the digital divide grows wider.

   Municipalities, most of them small in size and budget, have tried to bridge this divide by providing high-speed Interact themselves. However, most have been landline-based and unable to stay afloat after high startup and maintenance costs left them over budget and under expectations. The municipality market participant experiment has been, for the most part, a municipally sponsored mess. Smelling blood in the water, it was not long before big telecommunications companies saw an opportunity to keep municipalities out of the marketplace for good and began lobbying state legislatures to prevent cities from providing high-speed access as a public good. After a host of judicial interpretations sided with the powerful companies, the brief movement toward municipally provided high-speed Internet access was stopped in its tracks.

   Then, in the summer of 2004, Philadelphia Mayor John Street unveiled a plan that would provide high-speed access to every Philadelphian without digging up a street or uncoiling a single foot of wire. By utilizing Wi-Fi--wireless technology made popular in coffeehouses and Internet cafes--the city could keep startup and maintenance costs low, while providing high-speed access to anyone with a wireless card: residents, businesses, and visitors alike. The plan was popular with citizens, politicians, and the media, all seeing this access as a previously undiscovered conduit across the digital divide. However, Verizon Communications, Inc., the incumbent telecommunications provider in Pennsylvania, cried foul. The company launched lobbyists into action in the state legislatures, hoping to block cities from providing telecommunications services. After the two sides clashed in the state capitol, a compromise was formed giving hope to municipal entrants in the broadband market. Hope, however, is not without costs. Pennsylvania municipalities were not banned from providing telecommunications services; they just have to ask Verizon's permission to do so.

   The compromise granting Verizon a right of first refusal over a municipality's ability to provide broadband services has resulted in growing uncertainty over the future of municipally sponsored high-speed access. However, as this Note will argue, proponents of municipally sponsored wireless should be optimistic because the Philadelphia plan is a promising piece of conscientious compromise. First, the plan remedies or avoids most of the shortcomings courts have emphasized while striking down similar municipally sponsored wireless projects. By sidestepping the question of federal preemption and by obtaining private funding to help cover overhead and operating costs, the statute satisfies Justice Souter's concerns in Nixon v. Missouri Municipal League. (1) Secondly, despite its flaws, Mayor Street's plan represents the best attempt to date at reaching a compromise between the interests of municipalities and their constituents, and the interests of major telecommunication corporations. The simple fact that both sides were willing to give ground in this turf war is a sign that municipally sponsored wireless may not have breathed its last breath. To understand how these two sides have converged in the City of Brotherly Love and what the compromise means to the future of municipally provided broadband, this Note explains how the law has developed regarding municipally-owned telecommunications providers, how technology has evolved to logistically provide these services, how likely it is that Mayor Street's plans will succeed, and what such a victory means to both sides of the Philadelphia compromise.

   1. Wi-Fi Technology

      Wi-Fi (2) was born out of the murky waves of radio spectrum affectionately called garbage bands. (3) In 1985, the Federal Communications Commission ("FCC") made the decision to open for communication purposes several bands of wireless spectrum that had originally been used for noncommunication devices such as microwave ovens. Moreover, the FCC left the bands unlicensed, enabling communication entrepreneurs to develop technology utilizing the garbage band frequencies without need for intrusive governmental regulation. (4) The FCC's only stipulation: that any device using the unlicensed bands--2.4GHz and 5.8GHz--must avoid interference with other, pre-existing equipment. (5)

      Enter spread spectrum technology. As its name indicates, spread spectrum technology "spreads a radio signal over a wide range of frequencies." (6) By doing so, the signal is less susceptible to interference and interception than its more linear counterpart. (7) Still, in order to be commercially practical, devices on 2.4 and 5.8GHz would have to be able to connect to other devices using the same bands regardless where they were manufactured. It was not until 1997 when the Institute of Electrical and Electronics Engineers ("IEEE") implemented a standard for each frequency, 802.11b for the 2.4GHz and 802.11a for 5.8GHz, that wireless technology started to attract the attention of major technology developers. (8) Finally, in 1999, Apple introduced AirPort--Wi-Fi hardware available as an option to Apple's iBook laptop computers. In the years since, the Wi-Fi boom has become "a rare bright spot in a bubble-battered market." (9)

      Since 2000, more than 2,500 Wi-Fi products have met industry interoperability standards and received certification. (10) With the ability to radiate an Internet connection as fast as broadband to multiple computers within 300 feet of a hotspot without tangling cords, Wi-Fi products began appearing in coffeehouses, public libraries, airports, and universities across the world. (11) Fast-food giant McDonald's has begun offering wireless Internet service, for a nominal fee, in hundreds of restaurants across twenty countries. (12) Even Tallinn, Estonia, a city that received its independence from the Soviet Union less than fifteen years ago, today boasts more than 300 pay-as-you-go Wi-Fi hotspots. (13) Projections have estimated that the number of hotspots worldwide will grow from 43,850 locations in 2003 to nearly five times that in 2008. (14) In the United States, major telecommunications companies like Verizon Communications, Inc. and AT&T are battling for their share of the wireless services market; a market estimated to grow by more than nine percent annually, reaching $212.5 billion by 2008. (15) Assuming its role as a "key driver in the communications industry," the wireless market is sprinting ahead of its broadband competitors. (16)

   2. The Digital Divide and Legislative Responses

      The rapid growth of the broadband and specifically Wi-Fi markets, however, has not spread high-speed Internet access in any form to some people quickly enough. Despite industry-leading growth and federal legislation to increase high-speed Internet access, broadband availability in the United States has fallen behind that of the rest of the industrialized world. Once the leader in national broadband penetration, the U.S. currently sits in sixteenth place and now lags behind countries such as South Korea, Finland, and Canada. (17)

      The reasons for the decline in the U.S. are numerous, but many have pointed to the exclusion of two groups from the wireless market--poor urban inhabitants and rural inhabitants--as reason for particular concern. According to an FCC report released in 2000, 41% of America's zip codes were without high-speed internet access as of the turn of the millennium. (18) Those zip codes where population density was the sparsest showed significantly lower...