terms of Earthlink-Philadelphia deal disclosed

The Earthlink-Philadelphia contract has been sent to the city council for
approval. Here are the terms:

The contract term is 10 years (seems like a long time to me);

Earthlink will rent 4000 light poles from the city at $74 per year per
pole (approximately $300,000 per year);

Earthlink will subsidize Internet access for low-income families at $9.95
per month

Earthlink will share revenue with the city and pay $2 million in the first
two years as prepayment of future shared revenue. Wireless Philadelphia,
the non-profit set up by the city, will receive 5% of Earthlink’s revenue
derived from the provision of wireless Internet access in the city. The
money will be used for social programs to provide 10,000 computers and
training to kids and low-income households;

The city government gets free or very cheap wireless access and discounted
T-1 access (which allows the city to cancel existing expensive T-1 lines)
as well.

Earthlink has stated that it will cost over $20 million to build out the
network and that it expects full citywide coverage by early 2007. The
company believes it can sign up over 50,000 subscribers in two years.
Since the city’s network is based on a wholesale, open access model,
Earthlink will also sell wholesale access to other ISPs at less than $12
per month – this will allow the other services providers to keep the rate
that they charge to customers under $20.

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