News Item: The "Unwiring of America"

PHILADELPHIA is to become the first big "wireless city" next year with a scheme for web access for all its citizens, putting the wind up cable, telephone and internet companies.

The city's decision to engage Earthlink, America's fourth-biggest internet provider, to blanket the 135-square-mile city with wireless fidelity (wi-fi) is seen as the harbinger of a revolution that could viod billions of pounds of technology infrastructure investment.

Ben Scott, a director of a Philadelphia group that is campaigning for municipal wireless, said: "Increasingly, city officials view broadband in the 21st century the same way they viewed electricity 100 years ago and telephone service 50 years ago.  It is falling into the category of a necessary and essential social service."

Philadelphia is by far the biggest of dozens of towns that have begun adopting overall wireless cover, expanding small "hot spots" that already exist with dozens of radio transmitters to make one big mesh of coverage.  Fast internet access is seen as essential for economic growth and education.  Supplyin low-income districts with low-cost access is increasingly seen as a priority for public policy makers.

In San Fransisco, which is also planning universal wireless for next year, Gavin Newsom, the mayor, said that he viewed internet access as a civil right.

Last week service providers and telecommunications companies were shocked when Google, the California-based search-engine company, offered to provide San Fransisco with free blanket wireless cover, which would be financed by advertising.  If people have access to cheap or free internet, they are likely to drop service providers who charge.

The "unwiring of America" threatens an upheaval on the communications landscape, especially for those comapnies that provide the last link in the present data chain: cable, landline and mobile telephone operators as well as internet service providers.  Using voice-over-internet-protocol technology such as that pioneered by Skype, wireless internet users can bypass mobile telephone providers to make calls anywhere in the world.

The internet auction firm eBay caused a stir two weeks ago when it bought Skype, still a small company, in a deal worth up to $4.1 billion (£2.2 billion).  Cheap universal wi-fi could also bypass cable and satellite television providers.

San Fransisco is considering 24 proposals.  Google's offer of no-cost access worries the competition most.  David Garrity, research director for Investec Inc, an investment bank, said: "Free is very difficult to compete with.  Life has become more interesting and challenging for the telecom companies."

David McClure, the chief executive of the US Internet Industry Association, a trade group that represents internet service providers, said that San Fransisco's wi-fi initiative was unnecessary because residents have already widely adopted broadband.

He sarcastically summed up the mayor's attitude: "By the way, thanks, phone company, for investing a billion dollars in your system over the past couple of years.  Now we are going to put you out of business.  And thanks, cable company, for putting in all the upgrades.  Now we're going to put you out of business."

Industry commentators say that there are many technical pitfalls that have to be overcome before universal access can be guaranteed.  Wi-fi is, for example, so short-ranged that it could take thousands of relays to saturate a large city.

In Philadelphia, which aims to have its network operating by next autumn, residents will initially be offered the relatively slow broadband speed of one megabyte.  Users will pay $20 a month, but low-income residents will be charged only $10.  Visitors will be able to buy access by the hour.  Earthlink is paying up to $15 million to cover Philadelphia and hopes to turn a profit there within two years.

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