A clash has broken out in the US between the City of Philadelphia and an incumbent telecommunications firm, which illustrates how Wi-Fi is shaking up the telecoms market.
Philadelphia has ambitious plans to build a Wi-Fi network to provide wireless broadband access anywhere in the 135-square-mile city for as low as $15 per month. But Verizon, a major US telecoms operator, has been pushing for the right to prevent Pennsylvanian towns and cities such as Philadelphia from setting up such networks.
This proviso had been included as part of legislation that gives financial inducements to US telcos to roll out broadband services quicker. Late on Tuesday Verizon and Philadelphia reached an agreement under which the company would not block the city's project.
Pennsylvania state governor Edward Rendell approved the law on Wednesday morning, after the proposal giving incumbent telcos the right to block community telecoms networks in the state was watered down. It appears that the bill will still force other communities in Pennsylvania to give the incumbent telcos first refusal at providing a network before they have the right to set it up themselves.
Opponents of this provision have claimed that it unfairly gives the incumbent operators the chance to block innovative new services based on Wi-Fi.
Richard Lander of LocustWorld, a UK company whose mesh networking technology is being deployed in communities in 54 countries, believes that the established telcos face a big threat from wireless. "A number of local authorities around the world are now installing telecoms networking using mesh and other wireless technologies, as a way of providing public services," he said.
Lander pointed out that telecommunications services had started off as state assets before being privatised, and said that the market has "almost gone 360 degrees" now that some local and national governments are moving back into the sector. "The irony is that the last laugh could be with the public sector. They have sold off their telecoms assets, and it could turn out that they are all tied to a finite technology that turns out to be junk," he suggested.
In 2001 the UK government raised over £22bn by auctioning off its 3G licences, which allow operators to offer high-speed mobile services. However, technologies such as Wi-Fi and WiMax have subsequently emerged which used unlicensed spectrum.