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Want to read my writing? Check People’s Production House

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.

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Public Hearing on proposed Verizon cable TV franchise tomorrow

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:

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.

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EarthLink, enemy of broadband, seeks Philadelphia deal this quarter

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.

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Or does Wireless Philadelphia owe EarthLink money?

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.

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Hey, look, I’m on the Internet!

Tonight I’ll be a guest on Charing Ball’s People, Places & Things on G-Town Radio discussing Wireless Philadelphia.

On Wednesday, I’ll be in DC at New America Foundation discussing “The Future of Municipal Wireless.” There’s a rumor it might be webcast, so tune it at noon.

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The Allied Media Conference seeks a web developer

If you are interested, fill out the form at http://alliedmediaconference.org/webdevapp before Monday, October 1.

Allied Media Projects seeks a web developer to build the online home of the Allied Media Conference.

The Allied Media Conference is an annual, weekend-long gathering of influential, alternative media-makers and committed social justice activists. We gather in order to share and develop strategies, skills and resources for advancing the human right to communication. The home of the AMC is Detroit, Michigan. The 2008 AMC will be held June 20-22.

We seek a website that performs the following functions:

  • Users and non-users register for the conference, paying with credit card.
  • Users can create profiles and add content.
  • Conference registrants can create profiles of organizations.
  • Conference presenters add additional information about their session and travel.
  • Organize and schedule conference sessions.
  • Manage email lists for discussion and announcement.
  • Store and manage all data from the above plus additional fields in a single database.
  • Integrates data, such as user profiles, from the current Drupal-based site.
  • Flexibility with themes or skins to allow for annual re-design.

We prefer open source software. We want a solution that will work for other conferences, too. The AMC currently uses Drupal, so we lean in that direction.

Interested developers and development teams should complete the form below. If you have any questions, please contact us.

Deadline for responses is October 1, 2007. We will select approximately three finalists shortly thereafter to provide a more detailed response. We aim to complete the website before December 24, 2007.

Please forward this message to anyone who might be interested and post the link – http://alliedmediaconference.org/webdevapp – in relevant online forums.

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