Fast Internet Service for The People

Philadelphia wants to expand its public Internet service. A state law, supported by Verizon Communications, may prevent other cities from doing likewise. (Joseph Kaczmarek -- AP)

Companies such as Verizon Communications Inc., which helped shape the Pennsylvania law, argue that telecommunications firms would have little incentive to build networks if they have to compete with government-subsidized service.

Verizon spokesman Eric Rabe noted that the company is under state mandate to deploy high-speed access to customers in all of its Pennsylvania territory by 2015.

"If we should be asked to do that, we should be able to make a business of it," he said, and not compete with governments that can borrow money to build out a system more cheaply and can tax residents to pay for the service.

The new law forces local governments to give the local phone carrier first shot at providing wireless service if a locality intends to charge for it. If the service is going to be free, the law does not apply.

But Beth McConnell, director of the Pennsylvania Public Interest Research Group, said it is unreasonable to think that a government would be able to offer service for nothing.

In last-minute negotiations before the bill was signed late Tuesday by Gov. Edward G. Rendell (D), the law was changed to allow systems operating before January 2006 to proceed.

That language, and a separate deal with Verizon, will enable Philadelphia to move forward with plans for a citywide wireless network, the largest such experiment in the country.

"Just like roads and transportation were keys to our past, a digital infrastructure and wireless technology are keys to our future," Philadelphia Mayor John F. Street said in September when he announced the plan.

Although residents would still have to own computers, the typical $30 to $50 monthly cost of high-speed Internet access from commercial services would be reduced. No details have been decided.

In the borough of Kutztown, Pa., local officials built a fiber-optic network in 2000, following the path of the power lines that also are owned by the town.

Today, Internet service at speeds faster than those generally provided by phone and cable companies is available to residents and businesses beginning at $15 a month. The system also provides cable television service. More than 500 residents take advantage of the system.

Frank P. Caruso, the town's director of information technology, said he feels sorry for communities that will not be able to meet the 2006 deadline and thus be forced to deal with Verizon first.

"They don't realize that their throats have just been cut," Caruso said. "It's almost like Verizon is Big Brother." Caruso said that after the town began offering cable television service, the private provider dropped its price by 40 percent to compete.

In signing the legislation, Rendell said that he was concerned about the new restrictions on public networks but that other parts of the bill involving telecommunications were too important to derail.

Among them are financial incentives for Verizon to accelerate plans to expand broadband access around the state.

The law will be closely watched around the country, where phone and cable companies are pressuring state legislatures to limit what municipalities can do. According to MuniWireless.com, an online newsletter that tracks community-based wireless projects, 14 states have passed some type of legislation limiting what municipalities can do.

In Illinois, meanwhile, SBC Communications Inc. and Comcast Corp. teamed up twice to defeat ballot measures that would have allowed three towns to create a fiber-optic network to provide telecommunications and cable television services.