In order to simplify my life and give the company that pays me the full value of my work and energy, I will now be posting to my blog on the People’s Production House website. RSS feed coming soon.

People’s Production House is participating in several workshops at the National Conference for Media Reform, taking place in Minneapolis this week.   Our workshops include Shaping the Internet the Fun and Easy Way, Media Reform and Social Change, and When Media Is the Second Issue: Connecting with Social Justice Organizations. Thanks to Free Press for all its work on this important gathering.

The highlight for me is the premier of our Digital Expansion workshop, Shaping the Internet the Fun and Easy Way,” which will be held Friday, June 6th, at 3:30pm in room 208 A.  Have you always wanted to take on the Internet policy wonks, the  geeks, the paid consultants, the corporate lobbyists, and the  politicians, but felt like you lacked the know-how? This highly  interactive workshop is for you. As part of this workshop, we’ll be sharing clips from our new youth-produced video, “Inside the Internet.” I’m helping with this workshop, along with Donald Anthonyson, Alexis Walker, Brian Garrido, and Abdulai Bah, who coordinates the Community News Production Institute.

Check the People’s Production House website for more details on where to find PPH staff and volunteers at NCMR.

On  Saturday, June 7th, at 9:30am in Auditorium Spin 2, PPH
Co-Director Deepa Fernandes will be part of a panel discussion, Media Reform and Social Change with Amalia Anderson, Mark Lloyd, and Medea Benjamin. They will be discussing how critical media reform is for other social change movements.

Later that afternoon, Abdulai will join PPH Co-Director Kat Aaron to delve deeper into this topic with When Media Is the Second Issue: Connecting with Social Justice Organizations. They are joining Nick Szuberla from Appalshop, Karlos Gauna Schmieder from the Center for Media Justice, and Alondra Espejel from the Minnesota Immigrant Freedom Network to discuss strategies for connecting media reform with immigrant rights and other grassroots campaigns for social justice. Come with your own ideas to share in smaller breakout groups. That’s on Saturday, June 7th, at 4:30pm in room 205 C D.

Deepa and Abdulai will also be presenting at the Media Justice Fund breakfast at 9 am on Friday, June 6th, along with the Center for Rural Strategies and the Center for Media Justice. We’ll be talking about the full spectrum of our work to incorporate media  policy into our education and organizing with students and immigrants  in New York, Washington DC, and the Gulf Coast.

Recently, People’s Production House and the Center for Rural Strategies have begun discussing a shared rural-urban Internet policy agenda. This is crucial as we head into 2009, where Republicans and Democrats will try to divide us along these lines as they launch discussion on the Universal Service Fund, the spectrum dividend from
the digital transition, and the need for open handsets and open attachment standards on cellular phone networks. If you are interested in joining us as we continue this discussion at the NCMR, please send me an email.

In addition to these presenters, PPH Operations Manager Jacqueline Kook and DEI Video Team members Darnell Lubin, Kristian Roberts, and Helki Frantzen will also be there. You’ll find us all at the above sessions and at many of the other great workshops, panels, and social events. Please send us your recommendations. We look forward to
seeing you soon!

The Franchise and Concession Review Commission voted unanimously today to approve the Verizon franchise agreement. In response, Common Cause/New York and People’s Production House released this statement.

People’s Production House will continue to educate the public and organize towards community control of communications technology. Common Cause/New York will continue promoting open government in New York.

Check out these past blog posts on the railroading of this deal:

• City Council members, PPH, and Common Cause call for delay in FCRC vote
• Public Hearing on proposed Verizon cable TV franchise tomorrow

And background on what fiber optics will mean for New Yorkers here:

• Fiber Optics: Bringing the Next Big Thing to New York

As reported in Crain’s NY Business, consumer groups want franchise delay. After taking our concerns to the public hearing yesterday, we will join City Council members on the steps of City Hall today at 11:00am.

At the press conference, Councilmember Gale Brewer (chair of the Technology in Government Committee), Councilmember Tony Avella (chair of the Zoning and Franchise Committee), Susan Lerner from Common Cause/NY, Russ Haven from NYPIRG, Chuck Bell from Consumers Union, and I will call for a delay in the Franchise and Concession Review Committee vote on the proposed cable franchise for Verizon to permit greater public scrutiny.

A deal of this magnitude deserves more than a passing glance from the public and our elected officials. It will largely determine how we watch TV, make phone calls, and use the Internet in New York City for the next 20 years. The fine print tells you that this franchise is not designed to serve all New Yorkers equally. Verizon wants it rubber stamped before enough of us notice.

For my specific concerns with the deal, read my testimony here. The response from DoITT to these concerns were insufficient. For example, when Manhattan Borough President Scott Stringer asked why the penalty for a missed appointment dropped from a month of free service to $25, the answer was that “competition” will ensure good customer service.

Even if that were true, the new, lesser consumer protections will soon be written into the new Time Warner and Cabelvision franchises and go into effect immediately citywide. Meanwhile, the “competition” from Verizon that is supposed to provide a new and improved protection will go into effect slowly and unevenly. Huge portions of the Bronx, Brooklyn, and Queens will have no competition and weaker protections for the next 4-9 years. That’s just bad policy.

For other criticism of the hearing schedule, see Bruce Kushnick, “Is New York City and Verizon trying to slip one by you?” and Broadbandreports.com, “Interested In Pretending You Have Influence On Verizon/NYC Deal?“

Although this might be getting ahead of myself, this whole situation shows that we need procedural reforms in the franchising process:

• The public notice of hearings needs to be more extensive.
• The proposed franchise agreement needs to be made available for public review.
• There needs to be more time for public review.
• We need a Cable Franchise Oversight Committee with direct community participation.

The City and Verizon have negotiated a deal that will have a greater impact on our television watching and Internet usage than any other action the City or a company will take in the next 20 years – and you have been shut out of the discussion. The 6-billion-dollar deal (see my earlier post for background) to build a fiber optic network throughout the entire city was negotiated behind closed doors.

As part of the franchise approval process, the Franchise and Concession Review Committee (FCRC) is required to hold a public hearing. That meeting will be held tomorrow, Tuesday, May 20, from 3-6pm at the New York City College of Technology, 285 Jay Street.

As far as I can tell, this is the first place this information has been posted online. This is another instance of a supposedly “public” meeting falling in the city where no one can hear it. Just because you don’t lock the doors doesn’t make the meeting public.

Section 371 of the City Charter prescribes for the publication of notice for a public hearing on a proposed franchise agreement, but the requirements are weak: publish in the City Record and a daily newspaper – nothing about the DoITT website, even though that’s where the City proudly proclaimed that it had reached a deal with Verizon. I don’t expect that many people can make it to downtown Brooklyn at 3pm on a workday regardless of how much notice they have, but by not properly publicizing the hearing the FCRC has cast the legitimacy of the entire process into doubt.

The FCRC has also scheduled a special public meeting for 11am next Tuesday, May 27 at 22 Reade Street, presumably to rubber stamp the franchise.

Section 371 also requires that notice of the public hearing indicate the place where copies of the proposed agreement may be obtained by all those interested. I don’t know how the public can be expected to comment on a document they cannot review. (Leaking to the press doesn’t count.) Since the proper city agencies have not done so, I am posting the proposed franchise to the Web for download here:

• Cable Franchise Agreement by and between The City of New York and Verizon New York Inc. (54 pages)
• Appendices A-K to the agreement (79 pages)
  (Note: These are not the most up-to-date versions; there have been a few modifications.)

I’ll have my own summary and analysis of the franchise in the near term, but there’s very little to be happy about unless you live in Staten Island or want to wait 10-16 years for choice in cable TV or faster Internet speeds. I will also try to record tomorrow’s hearing.

Media Mobilizing Project has just announced that they are holding a public forum on June 3 on the future of Wireless Philadelphia. The announcement is below.

This couldn’t come at a better time. Everyone is hungry to chart a new course, including EarthLink, as I laid out earlier this week. And MMP, which has been offering media trainings to many community and labor organizations in Philadelphia, is the right group to convene this discussion. See the list of sponsors at the bottom.

I’m particularly heartened to see Wireless Philadelphia listed. It’s a sign that Greg Goldman understands the need for public re-engagement and that he cannot make that happen on his own.

I encourage everyone in Philadelphia to attend this event. I expect it will be closely watched by everyone in the field of municipal broadband

The Future of Philadelphia’s Wireless Internet Initiative: A Public Forum

When: Tuesday, June 3, 6:30 p.m.
Where: Tuttleman Learning Center, Room 105,
Corner of 13th St. and Montgomery Ave. Temple University

Get connected!  Learn about the latest issues surrounding Philadelphia’s wireless Internet initiative during a June 3 public forum.

The Media Mobilizing Project and Temple University’s School of Communications and Theater are co-hosting a public forum, which will be the beginning of an ongoing dialogue about the future of Philly WiFi and the city’s promise to provide affordable broadband access to all residents.

Under Earthlink’s management, Philadelphia’s wireless network has faced both technical and customer service challenges, weakening public engagement. Now is a vital time to reignite the discussion about the wireless network as Earthlink officials have announced their intention to sell or transfer the 135-square mile network. With new ownership on the horizon, a renewed opportunity exists for Philadelphia’s WiFi initiative to serve as a national model for community media. The promise of a city where everyone has the potential to be connected, opens new doors for economic, social and political participation.

The forum will host a diverse panel of speakers, while including an open space for participants to speak about the future of the wireless Internet initiative. It will be held in 105 Tuttleman Learning Center, Temple University, at 6:30 p.m.

The time is now. While so much opportunity exists with the WiFi network, it is essential for Philadelphians to have a space to share their ideas about making digital inclusion a reality across the city. By participating in this forum, local residents can help shape the future of the network and ensure that all Philadelphians, regardless of their income or education levels, have access to affordable, high-speed Internet.

The event is co-sponsored by: Wireless Philadelphia, The Philadelphia Student Union, Casino Free Philadelphia, Juntos, Philadelphia FIGHT/Critical Path Project, Geoclan,  Taxi Workers Alliance of Pennsylvania, The Philadelphia Unemployment Project, Prometheus Radio Project and Media and Democracy Coalition.

EarthLink’s dump of its municipal wireless business is almost complete. It walked away from Alexandria and Arlington, Virginia, in April; handed its Milipitas and Corpus Christi systems over to the municipalities; and is set to shut down wireless service to New Orleans on May 18. That leaves just Anaheim and Philadelphia.

Tourist-rich Anaheim is an anomaly. EarthLink’s one-page contract with the city can’t be much of a burden. But there is most certainly a resolution in the works for Philadelphia.

As I argued in a previous post, I believe the best option for Philadelphia is for EarthLink to pass the system to a nonprofit organization with network management experience. EarthLink was not able to find an interested buyer for its New Orleans system, so there’s still no reason to think that is an option for Philly. But I don’t think anyone in Philadelphia, even in the Nutter administration, wants to see the system simply dismantled. So I believe nonprofit intervention is also the most likely scenario. I believe it will happen this quarter, in time for the MuniWireless conference in Philadelphia.

EarthLink is highly motivated. The walk-aways, shut-offs, and give-backs with the cities listed above all happened in this quarter. EarthLink wants to close out Philadelphia this quarter, too. Losses from these soured deals will be offset by $50.8 million of incomeEarthLink received in April from the sale of its share of Covad to Platinum Equity.

As it dumps its municipal wireless business, EarthLink has found that its strongest profits are to be found not in broadband service but in dial-up. The dial-up customers, while declining, are relatively stable and highly profitable, while new customers are expensive to acquire and quick to exit. This strategy has allowed the company to cut the cost of marketing for new customers. EarthLink has also laid off more than half its work force, outsourcing all of its tech support, which probably has helped it get rid of costly customers.

This streamlining yielded first quarter profits of $57.8 million, a huge turnaround from the $30 million it lost in the last quarter of 2008.

EarthLink now sees potential profits in our stagnant digital divide. CEO Rolla Huff has his eye on the remaining 8.5 million subscribers to AOL dial-up service, which Time Warner has said it wants to slough off, as well as United Online, which owns Juno and NetZero, and Microsoft’s MSN subscribers. EarthLink is the second largest dial-up service provider with 2.6 million customers. Huff estimates the total number of commercial dial-up subscribers to be 15 million to 18 million. Consolidating all of those customers would generate a lot of cash.

EarthLink still has the same problem that motivated it to dive headlong into wireless deployments, as I explained in The Philadelphia Story: without its own infrastructure, its DSL days are numbered. But now, instead of pushing forward to build new infrastructure, it is retreating to the old phone lines that are still protected by common carriage.

In other words, EarthLink, once the harbinger of digital inclusion, is becoming the enemy of broadband.

Yesterday, Verizon proposed to build a fiber optic network covering all of New York City. The proposal comes just one day after the City’s Department of Information Technology and Telecommunications (DoITT) published notification of the RFP for cable television providers, which is how you know DoITT’s RFP (request for proposals) and Verizon’s proposal were worked out in tandem over months of closed-door negotiations.

Verizon is offering to finish the installation by midyear 2014, provide a public safety INET (institutional network), pay franchise fees equivalent to five percent of gross revenues on cable TV service, channels for public access. As the precise details emerge and once I’ve had a chance to read the RFP, I’ll give you my assessment on the fine points, but that doesn’t sound like enough off the bat given the scope of the deal.

A hearing from the Franchise and Concession Review Committee is forthcoming. I will keep you posted on that. You should plan to attend.

For background and a discussion of the issues at stake, see the article I just published with Gotham Gazette: Fiber Optics: Bringing the Next Big Thing to New York

This is another example of a phenomenon you may have heard or read me describe before: The general policy and market rules of media simply do not apply to New York City. Other cities are having trouble attracting or holding onto a $20 million investment for a wireless network while New York has a company proposing to invest $5 billion over 6 years to build a fiber optic network and become the second (third or fourth if you count satellite) entrant to the video service. Keep in mind that the incumbents are not citywide: Time Warner and Cablevision currently divide the city between them:

(Click the image to see the map of current franchise areas.)

The scale is hard to fathom. It’s like $100 per person per year or $300 per household, of which there are about $3.1 million – though that’s not counting businesses. It’s around $3 million per year for each of the city’s 322 square miles – as if all those square miles cost the same or were worth the same.

But the rate the money goes into the city is not the most important number. The important number is how fast it goes out. How much will Verizon make off each person, business, or square mile, and over what time frame? Once they put this infrastructure in place, they are going to hold on tight and make as much money as they can off of it. And anyone who wants to compete at the speed levels Verizon will be offering will have to match their massive investment.

We might only get one shot at building a fully fiber optic network for our city. We should try to get it right.

Earlier this week, I wrote about the money that EarthLink owes the city of Philadelphia. That’s separate from the portion of revenue that EL is supposed to pay directly to Wireless Philadelphia: the greater of 5% or $1 of each subscription payment. (Has any of that money been paid?) What most people don’t know is that Wireless Philadelphia is actually required to pay some of that money back to EarthLink.

One of the most convoluted sections of the WP-Earthlink Contract covers the structure of payments to PECO, the local utility. WP agreed to cover half of all electricity costs for EarthLink’s wireless routers. WP’s payments would be deferred for the first two years so they could get going, but then the debt from those first two years would have to be paid to EarthLink over the following eight. By my reckoning, those two years are up this fall. How much does Wireless Philadelphia owe?

The motivation for structuring the payments the way they did was to guilt trip PECO into giving EarthLink a better rate. PECO wanted to charge high rates and a new account fee for each of the 5000+ wireless routers. This arrangement made it Greg Goldman’s job to convince them to give EarthLink a better deal. This matter was still not resolved when I interviewed Mr. Goldman in October 2006. Was it ever worked out?

Whatever they worked out would have blown to hell by the unexpected 40 percent increase in wireless nodes, which would bring a similar increase in the electricity usage. The routers use electricity even if no one is using the network. At this point it’s anyone’s guess how much Wireless Philadelphia will owe to EarthLink and PECO come fall. But given how many subscribers there are, you can be sure that WP’s share of the revenue will not cover it.

And that’s not the only expense WP needs to worry about. On top of this debt to EarthLink and any new utility charges, WP received a $1.4 million loan from the Philadelphia Industrial Development Corporation (PIDC) to get off the ground before it even selected EarthLink’s bid.

In City Council hearings in 2006, Councilmember O’Neill expressed concern that this loan would turn into a grant. Has this happened? If so, it represents a significant contribution from the taxpayers of Philadelphia, on top of the $463,000 spent on Civitium and another $800,000 ($200,000 per year from 2004 to 2008) on a project manager in the Mayor’s Office of Information Services.

To be clear, I’m not making any judgments on the worthiness of any of these payments. I’m simply pointing out the taxpayer dollars that have been spent on a project that was supposed to cost the city nothing.

If the debt to PIDC has not been forgiven, then that’s $1.4 million Wireless Philadelphia owes back to the taxpayers of Philadelphia, on top of its debt to EarthLink. Greg Goldman has bills to pay.

If you read the New York Times or keep up on municipal wireless, you saw this weekend’s article, “Hopes for Wireless Cities Fade as Internet Providers Pull Out.”

The key takeaway from the article is Sascha Meinrath’s statement, “The entire for-profit model is the reason for the collapse in all these projects.” It wasn’t wireless technology or municipal engagement that went awry, but the private franchise business model. If you want an expanded discussion of that idea, check out Sascha’s recent article, “Municipal Wireless Success Demands Public Involvement, Experts Say.”

But the second thing you should note is a factual error – and not just because it’s the New York Times. The article says, “In Philadelphia, the agreement was that the city would provide free access to city utility poles for the mounting of routers.” In fact, EarthLink is supposed to be paying $2 million up front plus $2 per pole per month for access to 5,000 poles.

The second half of that $2 million is due one year after Proof of Concept Acceptance, according to Section 7.1.1.3 of the PAID-EarthLink Street Light Use Agreement. (PAID is the Philadelphia Authority for Industrial Development, which owns the poles.) Counting from the press release from May 24, 2007, that deadline is in about 8 weeks. Any bets on whether the City’s going to collect?

I’m not surprised that the Times wouldn’t check the original contracts or even Becca Vargo Daggett’s comprehensive but readable summary. I’m surprised that the City isn’t making it loud and clear that EarthLink owes them money and they intend to collect.