The Wall Street Journal writes about the Pennsylvania legislation to ban municipal networks: The Journal's Jesse Drucker does his usual comprehensive job in describing the scope of the law awaiting the governor's signature in Pennsylvania that would disallow municipalities from building their own networks offered on a fee basis to residents unless they were in place by January 1, 2006.
If you want the summary of why cities and towns are building broadband wireless networks, you have this superb quote. "There are some very specific goals that the city has that are not met by the private sector: affordable, universal access and the digital divide," says Dianah Neff, the city's chief information officer. She says that less than 60% of the city's neighborhoods have broadband access.
The telcos don't want to compete against the government, and I can see how there's a disincentive to build service in a market in which the local municipal authority will be offering the lowest possible rate for the broadest audience. It makes more sense for municipalities to cooperate with telecommunications firms, nonprofits, and other institutions to provide an infrastructure--the wires, towers, radios, and so forth--and not the actual service.
Update: Some good additional detail appears in an IDG News Service article that notes there's ambiguity about the interpretation of the grandfather clause. A staffer of a Republican backer of the bill says having a single subscriber qualifies as an operational service, while Philadelphia is concerned the language isn't clear enough and may accelerate plans.
Don Houser, the guy in the Infoworld article who said a city would only have to have one paying subscriber to qualify for the so-called grandfather clause, is either an idiot or a liar. This is what the clause actually says:
(3) The prohibition in Paragraph (1) shall not be construed to preclude the continued provision or offering of telecommunications services by a political subdivision of the same type and scope as were being provided on the effective date of this section [which would be January 1, 2006].
Note that the clause very deliberately and craftily says that after the ban goes into effect, a city can continue to offer telecom service of the same type and SCOPE. In other words, if a city is servicing one guy by 1/1/06, then it can continue to service that one guy BUT NO MORE. The addition of "and scope" would prevent a city from expanding the size of a wi-fi network beyond what existed as of January 1, 2006. Can Philly wire the entire city in little over a year? I doubt it.