PhillyDeals: Stimulus money unlikely for city Internet plans

Congress last winter voted $7 billion in federal recovery money to build broadband Internet for people who aren't online and for places where service is patchy. Philadelphia rushed to grab a chunk.

"We reached out," formed a coalition of city agencies, nonprofit groups and "universal Internet" activists, and wrote proposals, the city's chief technology officer, Allan Frank, told me last week.

The National Telecommunications and Information Administration (NTIA) set out guidelines in June. Frank says the city coalition divided its wish list into three parts:

A city-sponsored plan to link its existing fiber-based Internet loop downtown to neighborhood police, health and recreation centers, for $22 million.

A Free Library-based Internet training program, for $15 million.

A jobs and services system at the Philadelphia Housing Authority, for $2.3 million.

Frank called the plan "an aggressive proposal to light up one third of the city." It would fund, he said, "a dual-purpose municipal and public-safety data net that can be used by police," Licensing & Inspection agents and nonprofits. "As a by-product" it could also enable free Internet at city sites, and lease access to SEPTA, PGW or local firms that want to extend Internet service.

So many applications landed in Washington, the feds requested they be first reviewed by state authorities, Frank told me. And the Philly proposal ran into a Harrisburg wall.

Pennsylvania officials reviewed a majority of the 130 applications, said Gary Tuma, spokesman for Gov. Rendell. They rated 13 of the plans "Highly Recommended," including the Philadelphia Housing Authority proposal. They said they'd "support" another 12 plans, including the Free Library proposal.

But the state left the city's main proposal off its preferred lists. "Our evaluators thought others were better," Tuma said.

Some city Internet advocates blamed corporate Internet providers, believing they feared competition.

They noted that David L. Cohen, the Comcast executive vice president, told Bloomberg News last week the company opposed "applications to provide service in areas where there is already broadband service" because they would compete with Comcast.

"The telephone companies and Comcast didn't want this to happen," said Todd Wolfson, a Rutgers professor who helped write the city's application. "The market model, which they champion, hasn't gotten the Internet into the hands of people who are working class," Wolfson said. He thinks it "is wrong" that they won't tolerate government doing it either.

"It certainly doesn't help if Comcast objects. Or if Gov. Rendell did not put Philadelphia's application on his list," said Beth McConnell, Philadelphia-based executive director of the Ford Foundation-backed Media and Democracy Coalition, which lobbied Congress to fund broadband for the poor.

Tuma said Comcast's stand wasn't a factor: "We didn't get any comment from Comcast, pro or con," he said.

Corporate opposition or gubernatorial indifference wouldn't necessarily keep any plan from getting funded, Tom Power, chief of staff to NTIA head Lawrence Strickling and former general counsel at Blue Bell-based Fiberlink, told me.

"If fewer than 40 percent of the residents of the area are taking service" from existing companies, "we would deem it underserved" and consider it for NTIA money, Power said.

According to the city's application, Philadelphia just about meets that standard for overall Internet penetration citywide, and more than meets it in inner-city neighborhoods.

Frank says he understands why people might not see a city served by Comcast and Verizon as "underserved." But price matters, he added: "There ought to be affordable Internet."

He defended the city plan, and held out hope. Maybe another round of U.S. funding will focus on city needs. Maybe the city's network of lightpole video cameras can be expanded to other services.

"If we get stimulus money, great," Frank concluded. "If not, we're still going to build it. Just over the years," instead of with this year's federal government windfall.