A proposed Pennsylvania law (supported by Verizon) is now on its way to the governor's desk that could pose a hurdle for the city of Philadelphia's ambitious plan to provide broadband service throughout the city via Wi-Fi.

One provision of House Bill 30 (HB30), a wide-ranging telecommunications regulation bill that earned final approval by the state House and Senate on Friday, would prohibit a government or any entity it creates from offering broadband for a fee.

Philadelphia's city government is studying plans to deploy Wi-Fi wireless LAN access points throughout the city, each offering IEEE 802.11b access and linked to others via a wireless mesh network, said Dinanah Neff, the city's chief information officer. Deployment is set to begin in June 2005 and should be completed by June 2006.

The US$7 million to $10 million project is intended to encourage economic growth and help poor residents access the Internet with a broadband service priced at an estimated $15 to $25 per month, she said. About 60 percent of Philadelphia's neighborhoods, primarily poorer neighborhoods and less densely populated ones, don't have access to broadband services, according to Neff.

The language on government-supplied broadband in the bill would hand a big favor to Verizon Communications Inc., the incumbent regional telecommunications carrier in Philadelphia, according to Gary Tuma, press secretary to state Senator Vincent Fumo, a Democrat who opposed the bill. Verizon has fallen short on its promises to build a more up-to-date network over the past 10 years, contributing to the lack of broadband availability, he said.

I was sent a quote from Todd Myers' CEO of the Airpath Provider Alliance and Airpath Wireless. Todd said, "If this PA law passes, it will be in direct conflict with the FCC's broadband initiatives and may slow, but will not stop metropolitan roll-outs. We believe that if the PA governor signs the Verizon-sponsored bill, the FCC and perhaps the FTC will certainly want to chime in to remind the states who has control over wireless broadband regulation."

Certainly, Verizon sees the "writing on the wall". If "free" or low-cost city-wide WiFi is successful in Philadelphia, WiFi users will be able to sign-up for inexpensive VoIP phone service from Verizon competitors such as Vonage, CallVantage, Packet8, etc. Or worse, current Philadelphia Verizon customers could just download Skype and make free Skype-to-Skype phone calls and low-cost PSTN calls via SkypeOut. Verizon obviously doesn't like that and hence their "lobbying" efforts to prevent "fee-based WiFi". The war between the carriers and competing broadband providers is heating up and VoIP is just adding fuel to the fire!

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Macworld