BRANCACCIO:
I've got a quiz for you: I say Philadelphia... You say the Liberty Bell, right?
This is the cradle of the Revolution. Walk around this town, and you can't miss all the signs of that historic revolt. But there's something else going on. Something you can't see. It's invisible. A digital revolution aimed at bringing fast Internet service not just to the latte and laptop crowd, but to people of all incomes. William Brangham produced our report.
The forecast for Philadelphia: cloudy skies on the way — not those clouds, but clouds of invisible, Internet connectivity.
Last summer, in Philadelphia's famous Love Park, Mayor John Street announced a bold plan: Philadelphia would become America's first wireless big city.
MAYOR JOHN STREET: What could be a better symbol of our commitment to technology and our commitment to 21st century thinking, than to make Love Park a wireless Internet access point in the city of Philadelphia.
BRANCACCIO: But the mayor's plan reaches far beyond one city park. He wants to deliver cheap, high-speed Internet service — they call it broadband — right through the air to every resident in town.
What's playing out over Philadelphia and in the halls of the statehouse cuts to the heart of a vital question: Is being connected to the Internet an essential part of modern life? If so, does that make Internet access a basic right?
DIANAH NEFF: We feel that we need to be a digital city. And that involves a lot of issues. But one of those is making sure that all of our citizens have access to the Internet to be able to work, play and live.
BRANCACCIO: Dianah Neff is the architect hoping to build that digital city, but she's not some dot-com, private-sector entrepreneur, she's a senior official in city government. The city of Philadelphia has stepped into this business because of what they see as a failure of the market.
Even though this town is full of high-speed Internet providers, including industry heavyweights Comcast and Verizon, Neff argues the cost of that service has effectively cut off tens of thousands of people. Nearly half the city. Putting a whole generation on the wrong side of the digital divide.
DAVID BRANCACCIO: What's the concern? If you didn't build out a high speed wireless network, what are you worried about occurring?
DIANAH NEFF: Having another generation of people that are left out. The government spends millions of dollars on work force development in making sure, you know, that people are able to earn a living. We believe that being connected, being able to compete in the global economy will require a certain level of basic skills and the connection to the Internet.
BRANCACCIO: Neff argues that for $10 million dollars, and a few thousand wireless units bolted to lightposts, the city can do what the market hasn't: make the Internet affordable. They're hoping their service will cost an estimated $15 to $25 per month… almost half of the going rate.
What's next you may be thinking, government provided widescreen TVs or chauffeur driven limousines too? But at what point does a frill become a necessity? One answer to this can be found at a pilot project at this homeless shelter in West Philadelphia.
GLORIA GUARD: People probably wonder what a homeless shelter is doing getting involved in the technology business. But for us it was very intuitive. And just a very natural outgrowth of what we do.
BRANCACCIO: Gloria Guard is the president of the People's Emergency Center. In addition to the housing assistance and job training, her Center also operates a small wireless hotspot — beaming high speed Internet service over their area. Anyone in the neighborhood who completes a computer training class can get a cheap, refurbished computer and then sign up for Internet access for five dollars a month.
DUCHESS VANN COLEMAN: When I heard 5 dollars a month, you know I said oh I can pay this by the year. Don't even worry about it.
BRANCACCIO: Duchess Vann Coleman used to be on the other side of the digital divide. Before she took the computer class and signed up for that wireless plan, she was at a big disadvantage when it came to getting a job.
DUCHESS VANN COLEMAN: Everything I would do in life, somebody would mention a computer, or ask me something with the computer. And then one time, I went to take a test I mean to apply for a job, and they told me go ahead in the room and put it on the computer. And I didn't know what to do! I sat there and I sat there and I didn't know what to do. So then when this program came along, then I said OK, I can get involved in the computer.
GLORIA GUARD:
These families need these PC's just as much as they need a phone. And tomorrow they're going to need them more so, and five years from now, we're not even going to be having these discussions, it's going to be so obvious.
BRANCACCIO: The Center's transmitter covers roughly five city blocks in West Philadelphia. But this is just the kind of thing Mayor John Street wants to see spread over 135 square miles of metro Philadelphia.
But all this city planning has run into some roadblocks.
Lobbyists for Verizon and others got to work, getting a few lines inserted into a telecom bill in the Pennsylvania Legislature. Those lines would block local governments from setting up their own fee-based Internet services.
And Pennsylvania's not an isolated case: the telecoms have been flexing their political muscles nationwide. Thirteen other states passed laws like Pennsylvania's. And nine states are considering new or revised laws to block municipal upstarts.
The telecoms have tremendous clout in state and national politics. They've spent nearly half a billion dollars lobbying politicians over the last six years.
We asked some of those companies to explain their stance on these laws. Verizon suggested we talk to this man. Adam Thierer studies new technology for the Cato Institute, a Libertarian think tank in Washington DC.
ADAM THIERER:
Well, I don't necessarily think that we should consider broadband the equivalent of a natural inalienable right for all human beings or Americans. I think we have to realize that this is not on par with, say, water or sewage or some of these other basic services. It is increasingly important. But life goes on without broadband.
DAVID BRANCACCIO:
But wouldn't you be concerned if, for instance, your kids didn't have access to broadband?
ADAM THIERER: I'd be concerned if my kids didn't have access to a lot of things in this world. But the question of whether or not the government should be primarily responsible for providing all of these services is an entirely different matter.
BRANCACCIO: The Cato Institute is funded in part by big companies such as Comcast and Verizon. Theirer argues that city government has unfair competitive advantages. And so their cheap service could price the private companies right out of the market.
ADAM THIERER: Tthe government could have a very serious unfair advantage in this case, because obviously governments don't pay taxes to themselves when they create these sorts of ventures. They don't regulate themselves the same way. They can basically finance using tax-free financing of all sorts and all varieties. And, these are all things the private sector cannot do.
BEN SCOTT: This is the most disingenuous of arguments.
BRANCACCIO: Ben Scott is policy director for The Free Press, a media reform group. He says if you want to talk about who's benefitting from tax dollars, look no further than the telecom companies themselves.
Industry leaders receive hundreds of millions of dollars in taxpayer dollars every year to subsidize rolling out services to more and more people.
Ben Scott says towns and communities have every right to get into the broadband business.
BEN SCOTT:
We're not talking about a public entity in the form of local governments competing against a purely private entity in the form of huge telephone companies. We're talking about local governments paying regular taxes just like everybody else, competing against heavily subsidized massive former monopoly companies.
BRANCACCIO: Philadelphia and a handful of other big cities have been waging one battle over broadband access, but there's been a similar struggle happening in rural communities across the country.
Like many out-of-the-way places. Scott County, Indiana had for years been overlooked by large Internet providers. That was, until local officials decided to do something about it.
MAYOR BILL GRAHAM: We weren't looking to get into the broadband business. We didn't wanna get into it but we were convinced we just had to do something,
BRANCACCIO: Bill Graham is the mayor of Scottsburg, the county seat. Drop into the local café with him and you'll see the personal touch that has helped keep him in office sixteen years.
MAYOR GRAHAM:
Good to see you too.
OK, where's my hug… I love ya..
I love you.
BRANCACCIO: Graham says that love for this town and its people are what drove him to get into the high-speed Internet game.
It began two years ago when a survey of local businesses revealed troubling news. Several companies were considering pulling up stakes and leaving. Others were planning expansions, but away from Scottsburg, into other areas. The reason? The area's lousy Internet service.
CHRISTY MAYER CONNER:
We had a dial up connection, which was really bad. We all shared one e-mail address. And at that point, I think we had maybe 10 or 12 people in the office. Now we're up to probably 25.
BRANCACCIO: Christy Mayer Conner runs a company called Total Concepts of Design. They manufacture metal parts, and need to communicate electronically with clients across the US. Conner says their slow Internet service was a big drag on their bottom line.
CHRISTY MAYER CONNER: Industry people just couldn't believe the speed that we were connected at. You couldn't transfer data. We couldn't send them prints electronically because it took too long. You know the connection would disconnect in the middle of it.
BRANCACCIO: In 2002, Conner's firm decided to bid on a military contract - their first. With the deadline approaching, they went to email their bid to the federal government, but kept getting error messages. They ran to a local technology center to use their computer. That didn't work either.
CHRISTY MAYER CONNER: So then we rushed to the library and we had just a few minutes left. And we were able to successfully submit it from the library. But we realized that day that we could have lost a huge opportunity.
BRANCACCIO: In the end, they got the contract, but Connor says, they began to worry their time in Scottsburg might be coming to an end.
Stories like this terrified Mayor Graham. He contacted the major cable and phone providers — including SBC and Verizon — begging them to provide high speed service to his county. He was told that sorry, connecting Scott county just didn't make business sense.
MAYOR GRAHAM: We were in a crisis mode. We were gonna lose companies, gonna lose jobs. We just had to do something, you know. How many jobs can a small community lose? None.
BRANCACCIO: It's then the mayor decided town officials had to do it themselves. He formed a committee, they researched their options, and almost $400,000 later, they'd strung a network of wireless transmitters across the county.
One question remained: where's all the rest of the equipment gonna go?
MAYOR BILL GRAHAM: I asked him, I said you know, "What size building and what kind of building is it going to take to house this?" And he said, "Mayor, you can put it in a closet."
BRANCACCIO: Check it out. It does fit.
MAYOR GRAHAM: I would like to be able to tell you what these are, but I can't. I don't know. I'm very technically challenged when it comes to something like this. To me this is a closet full of magic boxes.
BRANCACCIO: Those magic boxes now give Scott County what Philadelphia is still just dreaming of: Wireless, high speed Internet service for everyone. Businesses and local police have started using the system. Scott County's schools are connected, too, saving them thousand dollars a month.
Christy Mayer's company is now working on their fifth military contract and they're sticking around Scottsburg.
CHRISTY MAYER: Our sales have significantly increased since we started doing the military work and I can say that's a direct result of having high speed Internet. It's really made our business thrive.
BRANCACCIO: It's business. And it's personal for Mayor Graham.
MAYOR BILL GRAHAM: My grandson's 12-years-old. Ten years from now he'll be 22. If we don't have the opportunities for him to be able to live here, he won't be able to make a living. We need to make these things happen so that these people can live here and that it's their future. Now am I going to reap the rewards from what's being done here, sure. But nothing like I think they will if we stay ahead of the curve.
BRANCACCIO: End of story. Uh, no. Remember Verizon and SBC? The very companies who opted not to serve Scottsburg in the first place? Up in the state capitol, they're now trying to stop Scottsburg or anyone else from serving themselves.
Industry lobbyists helped craft House Bill 1148 - a bill critics charge is even tougher than Pennsylvania's. And just last week, the mayor went to Indianapolis to speak out against it.
MAYOR BILL GRAHAM: Scottsburg didn't wake up one morning and say we want to be in the broadband business. Scottsburg had business and industry that was going to leave our community because what we had was not fast enough.
BRANCACCIO: A representative from SBC came in supporting the legislation, warning legislators to be watch out for politicians getting in over their heads.
CLEO WASHINGTON: I lay out in the testimony seven examples of municipal failures across the nation. And the reason it's important to think through these examples of failures is the failure in fact falls on the back of the average taxpayer.
BRANCACCIO: This is a key industry argument: municipalities are bound to stumble in the high-tech race and when they do, you, fair taxpayer, are going to be left holding the bag.
ADAM THEIRER:
The problem is, is that government's not particularly well situated to be making choices about technological winners or losers in the future marketplace. And when they do this in municipalizing these services, they are making a very big risk on the back of taxpayers who will ultimately finance these ventures.
BRANCACCIO: Thierer and other industry supporters point to studies that highlight several municipalities that tried home-brew broadband and failed. They like to cite towns like Ashland, Oregon and Marietta, Georgia.
But supporters like Ben Scott call these studies cherry-picking: who couldn't find a few failures in any industry in the U.S.? He says what about the dozens and dozens of towns that have tried and succeeded?
BEN SCOTT:
And I've got to ask, why would the phone companies spend so much money lobbying against municipal broadband if they thought it would fail? If it's going to fail, it will never be a competitor. It will never impact your business model. Why should you care, Verizon? Why should you care, SBC? Why are you spending hundreds of thousands of dollars, millions of dollars in lobbying expenditures and campaign contributions in order to kill municipal broadband if it's a losing effort?
BRANCACCIO: Scott says the real answer's simple: the telecoms don't want the competition. Back at the hearing in Indiana, that very argument was put forward by an industry executive.
LORI MACKLIN, VERIZON:
But in areas where the private sector has indeed already made the risky investment and deployed broadband services whether it's telephone, cable wireless, electric, whatever. We do believe that the private sector should be allowed to compete for the business and government should not be in competition.
BRANCACCIO: But it didn't fly. House Bill 1148 was killed in committee that day.
But Pennsylvania's bill passed. House Bill 30 gives the Verizons and Comcasts of the world the power to effectively block local communities from competing on their turf. But before he signed it, Governor Ed Rendell extracted a promise from Verizon not to stand in the way of Philadelphia's plan.
So while all the other towns in Pennsylvania fall under the law's restrictions, Philadelphia, at least, got a pass. Construction on the wireless project here is scheduled to begin later this year.
| 
