[IP] What We Have Here Is a Failure to Communicate
Begin forwarded message:
From: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
Date: October 29, 2005 10:40:21 PM EDT
To: Dewayne-Net Technology List <dewayne-net@xxxxxxxxxxxxx>
Subject: [Dewayne-Net] What We Have Here Is a Failure to Communicate
Reply-To: dewayne@xxxxxxxxxxxxx
October 30, 2005
Media Frenzy
What We Have Here Is a Failure to Communicate
By RICHARD SIKLOS
<http://www.nytimes.com/2005/10/30/business/yourmoney/30frenzy.html?
ex=1288324800&en=7c9723f865b38715&ei=5090&partner=rssuserland&emc=rss>
JOHN F. STREET, the mayor of Philadelphia, perhaps put it best at the
announcement of a new corporate headquarters for the Comcast
Corporation early this year: "As Microsoft is to Seattle and Coca-
Cola is to Atlanta, Comcast is a symbol of Philadelphia's growth and
innovation." So imagine if the city of Seattle decided to make Linux
a cornerstone of its civic software strategy, or Atlanta sponsored a
program that made Snapple the official beverage of its school system.
That's basically what has happened with a plan by Mr. Street to put
Philadelphia on the map with Wireless Philadelphia, a new municipal
wireless Internet service that, if all goes as planned, would be a
City Hall-sanctioned competitor to Comcast. (Although Comcast would
probably prefer the analogy of Atlanta making something less
palatable - like carrot juice, the official school drink - it doesn't
think Philadelphia's plan is going to fly.)
Municipal wireless programs have become a hotly debated subject,
thanks to the recent news that Philadelphia has selected EarthLink
Inc. to build and run its new network and that mighty Google has
proposed to play a similar role in San Francisco. The general idea -
one that itself is subject to much expostulation - is that broadband
Internet access is too expensive in the United States, which risks
falling behind countries like South Korea and Japan in this area.
Wireless Philadelphia is intended to put the city on the map, both in
proving its technological chops and in bridging the digital divide
with poorer residents who don't tend to have high-speed Internet
services if they have Internet service at all. On the face of it, the
fact that the city is moving ahead without Comcast's involvement -
indeed, over Comcast's open derision - raises a lot of intriguing
questions not only about wireless Internet services but also about
how much brotherly love has been lost between the nation's largest
cable operator and Philadelphia, the fifth-largest city.
It also illustrates the frustration that Brian L. Roberts, the chief
executive of Comcast, must feel: his company has signed up more high-
speed Internet customers than any other and churns out buckets of
cash, yet it has a sagging stock price because the market perceives
that any number of unproven new businesses are going to usurp its
position. Add Wireless Philadelphia - brought to you by the people
who regulate aspects of his business - to the list.
Dianah L. Neff, the city's chief information officer and architect of
Wireless Philadelphia, said that there was no animosity but certainly
a chilly distance between the city and its most famous corporate
citizen. For instance, Comcast officials have repeatedly disputed her
contention that the private sector (read EarthLink) will foot the
entire $10 million to $15 million bill to introduce the service and
that the project will cost taxpayers nothing.
Comcast is wrong, she maintains. "It's not like the $30 million
subsidy they got to build their corporate headquarters," she said.
"This crying about subsidies is a little disingenuous."
David L. Cohen, the executive vice president of Comcast, said the
core issue was whether the city ought to be involved in any way in a
competitive, private-sector marketplace. And, he said, Wireless
Philadelphia "has vast technical complexities that the city has not
yet grasped," adding that the business plan has mathematical errors
and "assumptions that are just ludicrous."
Comcast, like Verizon, the other big broadband provider in the city,
was not even among the 12 companies that bid for the Philadelphia
project. Neither was T-Mobile, which already operates wireless
Internet "hot spots" in the city as it does elsewhere.
Generally, Mr. Cohen said that he and Mr. Roberts were taking the
city's venture in stride. "I don't think corporately or personally we
feel betrayed or insulted or victimized in any way by what the city
has done," Mr. Cohen said.
It is a tangled tale, and Mr. Cohen plays a central role. He has been
something of a corporate, civic and philanthropic rainmaker since
joining the company three years ago. A lawyer, he was previously the
chief of staff for a former mayor, Edward G. Rendell, for six years.
(Mr. Rendell is now governor of Pennsylvania.) Mr. Cohen has also
been a personal friend and self-described close adviser to Mr. Street
for more than a decade. For a nonscientific idea of his standing in
the community, Philadelphia Magazine just named Mr. Cohen the fifth-
most-powerful person in town. The mayor came in 10th. Mr. Roberts
didn't crack the top 10.
Wireless Philadelphia grew out of Mr. Street's neighborhood revival
efforts. Along with such projects as ridding city streets of
abandoned cars and cleaning up drug corners, he wanted to give
Philadelphia, as the initiative's business plan put it, "a digital
infrastructure for open-air Internet access and to help citizens,
businesses, schools and community organizations make effective use of
wireless technology to achieve their goals while providing a greater
experience for visitors to the city."
That sounds fine, and the city says the project won't cost taxpayers
a cent. Instead, the benefit of partnership with the city for the
private sector - in this case, EarthLink - comes in the form of the
marketing muscle the city will put behind the effort and the direct
links it will have to various community programs, including one that
will put thousands of refurbished computers into low-income
households. Residents will be able to subscribe to the service for
$20 a month, and those with the lowest incomes will pay $10.
As far as speeds go, Donald B. Berryman, EarthLink's president for
municipal networks, said Wireless Philadelphia's Wi-Fi service would
be nearly 20 times faster than many dial-up connections, though still
a third to a sixth of the speeds that Comcast provides via cable
modem for $42.95 a month. In other words, it would be positioned as a
lower-cost high-speed alternative - perhaps most similar to a DSL
service that Verizon is offering at an introductory price of $14.95 a
month.
But the attraction of Wireless Philadelphia to its proponents is that
it is a stand-alone, affordable network - not part a broader effort
to sell video, voice and data services, the way companies like
Comcast and Verizon have approached broadband.
"We're going into this with the support and the marketing backing of
the city," Mr. Berryman said. "We see a tremendous value in the
equity of the relationship."
EarthLink's business plan also involves selling à la carte access to
city visitors and providing a wireless add-on for the more than 400
dial-up Internet service providers in the city - for which they would
pay EarthLink a wholesale rate. Ms. Neff says the city can save $2
million a year by using the network for some of its own data needs.
[snip]
Weblog at: <http://weblog.warpspeed.com>
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