Patrick McCormick

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.

The tide could be turning in Congress where a new bill seeks to preserve network neutrality more or less as we know it. Previous legislative efforts fueled by telco lobbyists and uniformed law makers sought to create a tiered Internet where service providers could impose additional fees upon both content providers and consumers based upon speed and preferences.

March 2, 2006
Senate Bill to Address Fears of Blocked Access to Net

By KEN BELSON
Senator Ron Wyden, Democrat of Oregon, will introduce new legislation today that would prohibit Internet network operators from charging companies for faster delivery of their content to consumers or favoring some content providers over others.

The bill is meant to ease growing fears that open Internet access may be blocked or compromised by the Bell phone carriers and cable operators, which may create tiers of service for delivering content to consumers, much the way the post office charges more for overnight mail delivery than for regular delivery.

Consumer groups and Internet companies like Google and Amazon contend that any move by the network operators to levy fees for premium delivery service would harm Web sites that are unwilling to pay for faster delivery.

The Wyden legislation, called the Internet Non-Discrimination Act of 2006, aims to prohibit network operators from assessing charges that give some content providers better access than others or blocking its subscribers from accessing content.

“You best compete by letting every company play on a level field, but these proposals would tilt the field,” Senator Wyden said of the plans discussed by some network operators. “The Net has been about access and equal treatment and giving everyone a fair shake, and people who own these fat pipes, these cable and telecommunications people who say that they can’t keep doing this, want to undermine that.”