COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON TECHNOLOGY AND INFORMATION SERVICES - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, December 11, 2007 1:10 p.m. - - - PRESENT: COUNCILMAN BRIAN J. O'NEILL, CHAIR COUNCILMAN FRANK DiCICCO COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO RESOLUTION 070756 - Resolution authorizing City Council's Committee on Technology and Information Services to hold hearings to evaluate the status of Wireless Philadelphia and its progress toward bridging Philadelphia's Digital Divide... - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
I'd like to call the public hearing to order of the Committee on Technology and Information Services. My name is Councilman Brian O'Neill. I'm Chair of this Committee. Members in the room right now, I believe, are Councilman Frank DiCicco, Councilman Frank Rizzo, the sponsor of the resolution before us, Councilwoman Blondell Reynolds Brown, and I'll introduce other members when and if they arrive. Can the Clerk read the title of the resolution. Then we'll call upon Councilman Frank Rizzo, the sponsor, to make a brief introductory statement and we'll call our witnesses.
Resolution 070756, resolution authorizing City Council's Committee on Technology and Information Services to hold hearings to evaluate the status of Wireless Philadelphia and its progress toward bridging Philadelphia's 3 12/11/07 - TECHNOLOGY - RES. 070756 Digital Divide, and in furtherance of such evaluation authorizing the issuance of subpoenas to compel the attendance of witnesses and the production of documents to the full extent authorized under Section 2-401 of the Home Rule Charter.
Thank you, Councilman Brian O'Neill, for holding this hearing and those in attendance for participating in this dialogue around this important subject. Over two years ago, Philadelphia embarked on an ambitious plan to build a wireless network covering 135 square miles of our city. Today I would like to know where we stand and where we are going. To help answer these questions, I've asked representatives of the Mayor's Office of Information Services, Wireless Philadelphia, the Law Department and EarthLink to join us. I am disappointed 4 12/11/07 - TECHNOLOGY - RES. 070756 that EarthLink, the entity that could best answer most of the questions that need answering, have declined my invitation. As you may know, early research on municipal wireless projects pointed to non-profit ownership being the best model for meeting the primary goal of the digital inclusion. A City task force formed to find the best model called specifically for the creation of Wireless Philadelphia as a non-profit entity to build, own and lease the network. Non-profit ownership would ensure that any private company leasing the network would be held accountable to the non-profit and the City. Unfortunately, that is not what happened here. Wireless Philadelphia disregarded the task force's recommendation and instead entered into an agreement with EarthLink that, by all accounts, was too good to be true. It seems it was too good to be true. 5 12/11/07 - TECHNOLOGY - RES. 070756 Over the past six months, my office has received many calls from EarthLink customers angry over failed access and poor service. Even today some of the most prominent places in Philadelphia, like Love Park, the first free wireless site in the network, got spotty service at best. Calls to EarthLink seemed to fall on deaf ears. There is a need for accountability. On September 1, I introduced a City Council resolution 14 calling for this hearing to examine where this project stands today. I gave EarthLink the opportunity to answer my questions. Unfortunately, their absence gives me great concern about the future of WiFi Philadelphia and bridging the digital divide in Philadelphia. Thank you, Councilman O'Neill.
And let me just mention that I and Committee members have something in front of us with no 25 letterhead, no signature, otherwise just 6 12/11/07 - TECHNOLOGY - RES. 070756 on blank white paper, a statement of EarthLink, Inc. to Philadelphia City Council Committee on Technology. I will submit this for the record. I'm not going to read something that doesn't have a letterhead or anyone's signature or even name on it. I don't know what it is, because if it's a statement, it would be coming from EarthLink. EarthLink is a very large multi-national corporation. This is not the way they communicate. So I wouldn't give this the status of a letter or a formal statement. I will submit it since it is on the table here, but let's move ahead with our witnesses. The Committee members or anyone else is free to read this statement, but it could be from anybody.
Mr. Chairman, do we know if an EarthLink representative is scheduled to testify?
We know that EarthLink is not scheduled -- invited but is not scheduled to testify. 7 12/11/07 - TECHNOLOGY - RES. 070756
And so if EarthLink is not here, is there a representative of EarthLink that may be able to speak --
I'll ask the question formally. Is anyone in the audience here from EarthLink, whether to testify or not? (No response.)
Sure. Terry Phillis, Chief Information Officer for the City and MOIS Department.
8 12/11/07 - TECHNOLOGY - RES. 070756 Mr. Phillis, I think you know why we're here. Aside from all the rhetoric, we're trying to get status on what is going on with Wireless Philadelphia. To the extent you can tell us or explain why you can't tell us, could you please enlighten us on the status of Wireless Philadelphia?
Sure. As of this point in time, we are approximately between 70 and 75 percent complete on the complete build-out of the 135 square miles of the City of Philadelphia. We have a schedule that allows --
Mr. Phillis, if I hear something that I was going to ask a question on, I'm just going to stop you.
I know that the Northeast area that I represent and parts of the Northwest and some other areas, I'm sure, that are not built out, are they being built or has it stopped? 9 12/11/07 - TECHNOLOGY - RES. 070756
Well, there are portions of the network in both of those areas that are being built out and will be completed by the end of December.
So if we went out today to certain parts of the City, we'd see contractors who are working on behalf of EarthLink?
No, no, no. 15 There's no stop work order ever been issued that I'm aware of. The people are still working on building out the sites that they had leases for and where towers were installed, and they're working to complete that. If they stay on schedule and we don't have a major snowstorm or something that would prohibit the completion of that work, they expect to be completed at about an 80 percent level by the end of December. 10 12/11/07 - TECHNOLOGY - RES. 070756 There are some areas that are in the Northeast and Northwest, as you mentioned, that do not have completion dates as of this time. In questioning them as to where the commitment is for those areas, the answer that we have, which I believe is true, and this is their statement, is that they are doing continuing RF studies based on the learning that they've had as to any changes they may have to make in their engineering for those areas and they are working at looking for leases that they could complete those areas with. But we have no date as of this time as to when those will be completed.
And they were certainly here in full measure when we were meeting as a committee to weigh in on whether we should approve this.
I have heard 11 12/11/07 - TECHNOLOGY - RES. 070756 that's true, yes.
And I don't know if you've seen this statement of EarthLink.
Piece of paper. But is this how EarthLink communicates with the Mayor's Office or MOIS or Wireless Philadelphia, to your knowledge --
-- with no 14 letterhead and no signature and no name?
I'm surprised that that was given to you that way, and I guess I don't blame you for the reaction you have about that. I mean, I think a professional way of communicating would have had their letterhead on it and would have had a signature of somebody's. I'm not going to sit here and tell you that that was a proper way to communicate, because I don't think it was. 12 12/11/07 - TECHNOLOGY - RES. 070756
It looks like a litigation strategy to me. I mean, if I'm a large corporation, I can easily disavow knowledge of this. And since our esteemed chief counsel, our City Solicitor, just walked in, I don't know if you've seen EarthLink's statement to the Council, with no letterhead and no 10 signature. It could have been sent by one of its competitors, for all that --
I kind of interrupted Mr. Phillis, so I'll let you keep going. I was just talking about possible litigation. I can't imagine any other reason for that. Mr. Phillis, and then we'll move to this.
Sure. So as I mentioned, we do not have dates for the completion of the network at this point. They have not said that they stopped working on it. They said they're 13 12/11/07 - TECHNOLOGY - RES. 070756 continuing to work on those sites and the completion of that. So from that standpoint, they do expect to complete the network. We have sat with them and told them that we have a contract with them and we expect to hold them accountable to that contract and completing the network.
In the last week, month, has their work been progressing just as rapidly or slowly as it had been in the past?
Well, it's progressing. I don't know that it's as -- they've been -- if you were to look at the whole project, you will find there were certain times where they were more aggressive as to what's being built out 14 12/11/07 - TECHNOLOGY - RES. 070756 and less aggressive at other times. But I haven't noticed anything that would resemble a stoppage in work or an intent to slow down the building.
EarthLink, since their new Chairman came on board -- was not the Chairman that was the wireless enthused Chairman -- has made it pretty clear publicly. You can't pick up a paper about wireless without -- because EarthLink was so closely related with many municipal projects, that that's a piece of their business that's not profitable and they're going to get out of it. I was with a person from Houston last week that they received a $5 million payment because EarthLink decided not to build a system that they had agreed to build and their penalty was a pre-agreed-upon $5 million penalty, and they apparently have put that in an account.
Which kind of leads us to, I think, the reason that we wanted to make sure our Solicitor was here. Are we approaching the -- I mean, this is pretty sad in terms of a corporate response. I don't get this from my worst constituents. Could you just enlighten us, Mr. Diaz, on what the status is of our relationship with EarthLink, whether this is a go, whether there's -- are they trying to get out from under this deal? Because I think it's their last municipal engagement that they haven't gotten out of, and it certainly doesn't look like this is a robust business plan for them now as it was a year and a half, two years ago.
Thank you, Chairman. Romulo L. Diaz, Jr., City Solicitor. I would defer to the Chief Information Officer about exactly the progress that is being made, but it is my 16 12/11/07 - TECHNOLOGY - RES. 070756 understanding that we have gotten assurances from EarthLink that they will meet their commitments. We have reminded them of those commitments. We have had explanations about where some of the delays have been incurred, but if you read the testimony that has been provided or the statement by EarthLink today, again, which I just saw a few minutes ago, they indicate that they are in areas now that cover 90 percent of the households of the City.
You'll agree this is highly unusual, not just slightly unusual?
But I also noted that they had indicated they had already expended some $20 million in capital expenditures when the City had estimated the cost of the build-out of the network at $12 to $15 million and -- 17 12/11/07 - TECHNOLOGY - RES. 070756
It was actually their estimate as well. Their estimate was the key in this, because they decided to build it out at their cost. So it didn't matter what we estimated. It was what they estimated that was important. And I know they have exceeded their estimates. There are more boxes, 40 percent. This has been the national stories. They've spent more money than they thought, but they also have retreated, except in Philadelphia at this point, from this line of business, and maybe it would be better --
-- the point I was trying to make, Chairman? So we've gotten assurances. We've made it very clear that we expected those assurances in connection with EarthLink's legal commitments under the 18 12/11/07 - TECHNOLOGY - RES. 070756 four agreements, to which the City is a party to two of them, that constituted the deal that was approved by City Council last year. Secondly, we've gotten explanations. It's not like they haven't finished building out the network and not given us explanations as to what their technical and, in some cases, real estate issues have been in trying to gain access to the properties where towers need to be constructed. And, you know, we've indicated that we are going to continue to hold their feet to the fire. My point about the $20 million and their statement as to their estimated capital construction costs is as follows: They've made a very significant investment in the network and in the City of Philadelphia's capabilities to bridge the digital divide. They spent millions more, they say, in connection with their advertising and other soft costs. So I don't think this is a 19 12/11/07 - TECHNOLOGY - RES. 070756 situation that's even comparable to the Houston situation. These people are in pretty deep already. We have gotten a million dollars' worth of payments to Wireless Philadelphia over the past year in connection with the agreements. There's a million dollars more that is expected to be paid in May, I believe, of 2008 that will be the complete payment in connection with the access to the City light fixtures. So I think they've made a substantial, substantial commitment to building out the network. We're going to keep putting pressure on them to finally build out that network.
It seems to me that when a company, especially when a change of leadership at a company, decides to get out of a line of business and we're the only city standing and going back to the original hearings, my memory is that we should be pretty confident that we've got a deal we can 20 12/11/07 - TECHNOLOGY - RES. 070756 either rely on to occur or rely on to have them satisfy their obligations. They're not going out of business; they're just maybe going out of business in a particular area, and it happens to be wireless. I believe that most of the money that you or the person that wrote this anonymous letter to the Council, most of that money was spent at the time they cut the ties to wireless outside Philadelphia. I mean, they got out of some pretty big deals around the country and just walked, said they're leaving. Assuming that EarthLink, whether they build out or don't build out, they say, We're not doing anymore, this is just not where this company is going, we have a deal with them. It is looking better and better, from my standpoint, that we didn't build this ourselves with a contract with them to run it or somebody else to run it, but we knew our exposure was the million four 21 12/11/07 - TECHNOLOGY - RES. 070756 grant -- I mean, loan that could be a grant. Everything else was on the private partner. What would you envision happening in the City Solicitor's opinion, as we often talk about, if EarthLink were to withdraw from the deal under the contracts that we have with them? I mean, would the property, the infrastructure stay? Who would own it? Would the City own it? Would they have to pay us to relieve them of the responsibility? Would we then be in a position owning it, but not having had to pay for it to bring in a company, whether it be a local like Comcast or somebody else, to run it for us or for Wireless Philadelphia, however that might work? Could you explain that? Because I think because of what I had stated and what the world knows about EarthLink right now, I think many people see that as a real possibility, that they're going to depart under some 22 12/11/07 - TECHNOLOGY - RES. 070756 circumstances. What is left and whose responsibility is it financially and otherwise?
Let me put it this way, because I don't want to speculate about what the City Solicitor today or the City Solicitor-to-be after January 7 of next year is going to do in connection with seeking remedies, but in terms of the protections that were built into the agreements that City Council gave approval to last year, certainly one of the important protections for the City's interest had to do with specific performance. We made it a major element of all of the agreements that it would be appropriate to seek specific performance, essentially to require that EarthLink meet its commitments. And so that is in all of the agreements that there is a contractual basis for seeking specific performance in the courts. Again, these are the protections, not necessarily the expectations as to next steps. 23 12/11/07 - TECHNOLOGY - RES. 070756 There is liquidated liability in connection with the potential damages for lack of a complete network, and given the responsibilities and the expenses incurred by the network builder, EarthLink, we thought it was appropriate to make that significant, but not at the level that we might seek in connection with a project where the City, for example, might have been incurring those construction costs. So there is a liquidated damages provision for a million dollars in the event the network is not completed. And the City has a right to terminate the use of the street lights use agreement in the event they have not completed the build-out within 12 months of the completion date, which is provided for in the network agreement. And my recollection is that that's November 23 of this year. So here we are essentially two, perhaps three weeks past a completion 24 12/11/07 - TECHNOLOGY - RES. 070756 date on a major innovative project that's never been completed of this magnitude anywhere in the world, and so the fact that two or three weeks past that deadline that we would be contemplating seeking these legal remedies at this juncture is, in my personal opinion, premature. And then in connection with our protections about assignment, I mean, sort of following along the notion that I think you had raised in your comments, Chairman O'Neill, I mean, there is the hypothetical opportunity for EarthLink to assign its rights to someone else. On the other hand, it requires approval by the City, and obviously this is not something that the City would voluntarily agree to unless and until we were assured that our rights under the negotiated agreements were fully protected. So it would be my impression from all that I have seen in the past and negotiated and participated in the 25 12/11/07 - TECHNOLOGY - RES. 070756 various conversations that we have -- and I think I testified to this last spring -- that we have a series of tiered protections, if you will, to give us, I think, the optimism, rightly so, that EarthLink will meet its contractual obligations, because the potential penalties are potentially significant for EarthLink if it were not to complete those contractual obligations.
So if they were to walk today, the liquidated damages clause is the extent of our remedy?
No. I should also point out that, although it's not an offset for the liability, but we also have the protection that the City can step into the shoes of the network owner. So that, again, is another level or layer of protection. So I would say that a million dollars is not the only option that we have. I think all of these are potential 12/11/07 - TECHNOLOGY - RES. 070756 options. We have the option to seek specific performance for the complete build-out. We have the option of liquidated damages. We have the option of terminating the street light agreement. We have the option of approving or not an assignment by EarthLink. We have the option of essentially taking over the network under these agreements. So we have, I think, a very redundant set of protections, all of which I think enhance our negotiations with EarthLink to seek the completion satisfactorily to the City, the completion of its contractual obligations under the agreements approved by Council last year.
Have there been any discussions with EarthLink in regard to any of those options?
We have really focused -- and I will stop here and allow Terry Phillis to augment, but we've been 27 12/11/07 - TECHNOLOGY - RES. 070756 really focused on clarifying in a consistent way our expectations and essentially pressing them to meet their obligations. I think that message has been made loud and clear, and I think the fact that they have responded, even if not in a satisfactory way to Council, and offered to make individuals available to brief Council is an indication that they are still attempting to be responsive, even if not in a way that's satisfactory to Council. Terry?
The conversations that we've had have all been around the fact that we have agreement between them and us, that we do have a contract that we expect them to live up to and, according to their statements, they expect to complete. So from that standpoint, we are still marching forward for completion of this network.
You've had no indications from them that they're not 28 12/11/07 - TECHNOLOGY - RES. 070756 going to complete the network?
No. Only that we do not have dates for the last portion of it as far as completion dates yet.
What have been, if you know, and hopefully you will know, the difficulties in completing the network in the areas that it has not yet been completed?
Well, this is brand new technology. I believe the City of Philadelphia took a calculated risk in stepping out with technology that was recognized around the world as a significant undertaking at the time. We were the first. We were the biggest. We were recognized literally all over the world for what we were trying to do. In doing something like that, there have been obviously speed bumps in the road. No technology at this point in its maturity is delivered without problems. That just isn't the way it works. 29 12/11/07 - TECHNOLOGY - RES. 070756
So the problems -- I'm going to try to get into that, Mr. Chairman. When we did the proof of concept area, which is where we took their designs as they initially put them together and we held them accountable to the right kind of performance during that square mile proof of concept area, it 13 was determined that they had 14 underestimated the number of nodes that 15 would be needed for this network. So if you just consider that alone, the bad news for EarthLink was they had underestimated by 40 percent. The good news for the City of Philadelphia was they recognized their problem, they increased their design to allow for that extra 40 percent, which then required 40 percent more poles, et cetera, to complete that. As they began to build the 30 12/11/07 - TECHNOLOGY - RES. 070756 network out, they ran into problems with foliage that interfered more than they anticipated with the signal. They ran into interference because of whatever else was going on in the airwaves or in those areas. It has required some technical changes. They brought in some different kinds of equipment such as Alvarion, who deals with this type of a situation better than what they had originally done. The acquiring of the leases were more of a struggle for them than they thought it would be initially. It took them longer to do that. There was a particular area -- it was actually the Wissahickon site -- where they had a smoke stack and they had the lease and all their equipment was going to go on it. When they went to place it, the smoke stack began to crumble. It would not support the equipment that was to be mounted to it. So they had to stop and engineer a different way to do that. Do 31 12/11/07 - TECHNOLOGY - RES. 070756 they go and find another lease, how do they do that. So they finally have engineered a way to do that with a ring that actually slides down over the outside of the structure, which means you no longer have to drill holes in it. So from that standpoint, that particular area, if you were to look at the build-out, would have been like a hole in the middle of a serviceable area. Well, obviously that was a problem for people, but that is being corrected. They've come up with an engineering design, and they're actually implementing that right now. So that whole Wissahickon area is being completed. So there have been many, many issues that have come up. Some are very minor and some have been a little bit more major. They had to do a firmware upgrade on some of their equipment. They found there was an error or a fault in that that had to be corrected. So there have been lots of 32 12/11/07 - TECHNOLOGY - RES. 070756 technical challenges with this, and it would be nice to say that this was a mature technology and by rolling it out there would be no issues with it, but if you draw a correlation to DSL, cable modems of or years ago, it's not a 8 whole lot different. There were many 9 problems in those days. 10 If you look back at the initial 11 DSL rollout, the average around the 12 country in those early days is that it would take five truck rolls in order to fix a problem. Those truck rolls at the time were averaging $100 a piece. So DSL is a pretty mature system today, but they did have problems in the beginning when they first rolled out that. That last distance to the central office was a real issue for them. Cable modems was the same kind of a thing. Until they got the right ones, everything in place, they had problems. I think the wireless initiative 33 12/11/07 - TECHNOLOGY - RES. 070756 that we have here is cutting technology. It's something no one else had tried to do before, and it does have some speed bumps that we are overcoming. And I think that in the most part, we consider this an asset to the City and I think it's something that the City intends to use.
We have a great many mobile workers in the City that could take advantage of a network that they could extend their services out to the street and beyond the line, full time, realtime in how they do their jobs. This network would allow us to do that. So there's the whole retail arrangement of what EarthLink is trying to do to recover their costs, but there's also the future of what we can use this for as a city for this network. So we consider it to have significant value to the City.
Again, it's no secret that we have a very large 34 12/11/07 - TECHNOLOGY - RES. 070756 corporation that was two years ago chomping at the bit to be the sole builder of this, owner of it, and they would market the success in Philly throughout the world, not just throughout the United States. They are now essentially out of the business but for Philadelphia. No longer in the same position. We are aware of that. I mean, we as a city are not with our head in the ground. I mean, we know that our partner here is hopefully going to do the right thing and the legally enforceable thing, but this is not where we were two years ago. And no one could foresee this. I mean, every other city in the country was jealous of us at the time. And it still may turn out to be something very good in a different way than we anticipated it before, which is something you were just alluding to. But short of EarthLink spinning this part of its company off to somebody else -- and it doesn't seem like the 35 12/11/07 - TECHNOLOGY - RES. 070756 private sector is real interested right now -- we are probably going to be looking at some option in the future. They're not going to run one city and do nothing else in this area. Companies don't work that way. What would you say would be the preferable way -- if you can talk about it. If you can't, I understand that. They're not here. Do they still have an office in the City?
I guess he was in Atlanta today. I don't know. He ran out of letterhead, couldn't sign his name, all those things. But what is your vision for a post-EarthLink era? I mean, how does this system -- whether we force them to build it out under the specific performance or they pay us some 36 12/11/07 - TECHNOLOGY - RES. 070756 agreed-upon funds because they just want out and somebody builds it out for us if we so choose, what is an alternative scenario if there is no EarthLink? EarthLink isn't essential to this operation, correct?
I mean, they came into Corpus Christi after it was built out. They left after they had signed a huge deal with Corpus Christi to run it. I mean, there's other examples like that. If the infrastructure is here, whether they finish building it or we get paid to have somebody build it, we own it or another company owns it, do we see a future here?
Either way. I think the one scenario shows someone 37 12/11/07 - TECHNOLOGY - RES. 070756 buying the network and taking on the ownership of their business plan as to how they could make this network work while meeting the City's need. That's one scenario. If nobody was to buy the network and in some way the City acquired this network for nothing or for some settlement purpose, I think there is a strong ability for the City to utilize this network to benefit the City and especially the government. I don't know that -- and this is just my opinion now that I'm giving to you, but if I owned the network, I would not be real interested in going out and competing in the retail environment. I think that when this project came upon the Philadelphia scene, the cost for broadband service in this City was around $39 a month. That was about the least expensive one you could get. With EarthLink on the scene and this wireless project going, the cost for 38 12/11/07 - TECHNOLOGY - RES. 070756 services now has dropped tremendously. You can get -- for instance, Verizon just recently came out with a 14.99 -- Councilman Rizzo shared this with me this morning.
And I hadn't seen that, but they have come up with a lifetime charge of 14.99, I believe was the cost, to provide DSL service to people in the City. So obviously it costs a lot less than that or they wouldn't be willing to sell it for $14 forever. So I think the competition of having this network here has driven down the price for most of the constituents in the City. They now have choices for broadband that are much better than they were three years ago. So that's one benefit to the City, but beyond that, if I owned the network, I think I would -- well, I know 39 12/11/07 - TECHNOLOGY - RES. 070756 I would continue to service the digital divide. I think this gives us an opportunity to do that. I think it would give us the opportunity to establish perhaps a commercial use of the network to where we would wholesale it out to other people, and, most importantly, we would have the opportunity to use this network to extend our CityNet internal coverage within the City out to mobile workers. If you can imagine -- and we're doing these trials now. Our L&I inspectors, to be able to work remotely from the site that they're doing inspections, that would be a tremendous productivity gain for us to be able to do that. Our Health inspectors that go out, to be able to do their work remotely from the site where they're at. If we were able to take our Streets program, the Sweeps program where they find violations of what's been placed on the curbs, if they had the proper hand-held device, they could use this wireless network 40 12/11/07 - TECHNOLOGY - RES. 070756 remotely to take a picture of the infringement that's been perpetrated out there. They could log onto the BRT site and find out who the actual owner of the property was. That could all be done remotely as they were standing out there. There are many, many uses that we could make of all of our mobile workers within the City with a network such as this. Not that it wouldn't take some work to enhance some of these applications and to make some other changes, but the facility to be able to reach 135 square miles of the City with our mobile workforce is a very strong thing for us to go after, and we intend to do that, whether EarthLink owns this or whether ABC Rental owns it or whether the City owns it.
Of all the cities or counties around the country, since we're both, that have a robust wireless network and applications -- and there aren't many, I know that. Of all 41 12/11/07 - TECHNOLOGY - RES. 070756 of them, there aren't that. A lot have talked about it and some of them got cheaper rates based on that. Some got a $5 million penalty due to their intentions. But the City I always hear about -- and part of it is PTI, Public Technology Institute, being so close to the City project -- is the Corpus Christi, which started out almost accidentally when they did wireless meter reading. And they have a flat city and there's differences and all that, but that's when I started hearing about all the things that you could do with this, some of which you're talking about now, some economic development initiatives that can come out of it, certainly municipal productivity, even cost savings with the kind of wireless applications. Is there a city out there that you would say there's more good ideas we can -- because most of it is already out there. Is there a city that you would want to look at or something in this city 42 12/11/07 - TECHNOLOGY - RES. 070756 and something in that city that you think maybe would be something we might be able to do with this in the future?
I don't know that I have a good answer for that. I think that your assumption is correct and, that is, there's no reason to reinvent the wheel here in Philadelphia. I just haven't gone out and talked to all the other cities about what they're accomplishing. Almost every city has some wireless initiative in it today, but most of them are in a very limited and small scope kind of an arrangement. It might be in the financial district, it might be the visitor area, but nobody has ever approached 135 square miles like we have. But I would think there would be things to learn from almost every city out there.
I always thought that we looked very brilliant in this entire negotiation, mainly because 43 12/11/07 - TECHNOLOGY - RES. 070756 of one legal opinion that said we couldn't float taxable bonds to benefit a non-profit. I think that was the decision. And EarthLink jumped right on it and said, We'll build it, we'll pay for it. And our exposure instead of being the $15 to $25 million exposure was reduced to the possibility of not being paid back the million four from Wireless Philadelphia, and I think people lose sight of that. I think we're going to get to the success, the early success or lack of success, from the digital divide and digital inclusion issues -- I want to be positive about it -- the digital inclusion issues. And I think even those issues are much more difficult than anybody had imagined. In talking to other cities, their success has been very difficult to really crack through the wall of the population that if they don't become digitized are not going to be able to function in this society pretty soon. 44 12/11/07 - TECHNOLOGY - RES. 070756 What they're cracking is people of limited means who are using Internet services for free in libraries and this is an opportunity for them to become digital in their homes and take advantage of programs that are there. So they're kind of elevating a lot of people's lives that are already doing some digital work, but cracking through that barrier is something that I think is much more difficult than anybody thought, and I'm hearing that from cities and counties all around the country. And I'll give one, Los Angeles County, 10 million people only, 10 million people were urged to do this. They set up meetings in their poorest areas. They didn't have one person come to the meetings. It is -- and that was with a lot of outreach from both their elected officials and the city and county itself. It's not there yet in terms of people's wanting this that have none of it and it's not part of their lives 45 12/11/07 - TECHNOLOGY - RES. 070756 today. So I think the --
Along those lines, Chairman, one of the statistics that always amazes me in connection with the diversity communities that we're trying to attract to this technology, because it can do so much for so many people and it reflects the information-age skill sets that are needed for success in the future, but then I look at the statistics associated with high school students and the dropout rate, and you get a sense of the enormity of the populations at risk that we're trying to help here. And I see that an African-American high school student is twice as likely to drop out of high school as a white student today in high school, and a Latino student is three times as likely to drop out of high school, and then you realize the very people that we're trying to reach and help and support and enrich their lives and to give them the tools for success are the ones that inevitably have so many 46 12/11/07 - TECHNOLOGY - RES. 070756 other challenges that trying to get this message across to them, this may not be the total answer, but this is something that can help you succeed, it's a real challenge. (Applause.)
Thank you. I'm going to move to Councilman Rizzo for some questions.
Mr. Phillis, I'd like to go back to the original arrangement with EarthLink. When I asked for EarthLink's participation in this hearing, I was told that we had no 16 leverage over EarthLink. I just cannot imagine having this kind of an arrangement where -- let's call us the customer, our city, even though they're building the system allegedly for free, your time here isn't free, my time is not. Why we would engage with a company that would be asked to come to a hearing and not participate? Eventually I'm going to ask you to answer the question 47 12/11/07 - TECHNOLOGY - RES. 070756 of why you think they're not here. Secondarily, I have tried on numerous occasions to ask a simple question, how many customers does EarthLink have. I'm not talking about EarthLink and their total population. I'm talking about people that have signed up for Wireless Philadelphia. We don't know and they won't tell us because they believe that that's proprietary information? I've asked Wireless Philadelphia office through my staff and was told, We don't have that information. Well, that's outrageous. In our deal with EarthLink, I believe they're supposed to be paying us on a monthly basis a fee for every, to Wireless Philadelphia, for every subscriber. If they won't tell us -- and I understand they threw this million dollars at us and said, Be happy with that and don't expect whatever the fee is per month. I just can't imagine us involving ourselves -- and I know it's 48 12/11/07 - TECHNOLOGY - RES. 070756 prior to Terry Phillis's arrival that this deal was struck. You ask EarthLink to come and they say no. You ask how many customers they have. They say they can't tell us or they won't tell us. This is a disgrace, and I think for our record, you need for the record to tell us EarthLink's mission statement, which says a lot about what they plan to do with Wireless initiatives. And I'll end it. EarthLink hasn't spent a dime. I haven't seen EarthLink advertise or spend one dime to promote the people recently to sign up for this technology. So tell me what you think about -- maybe you should start off with the mission statement and try to answer the rest of the questions.
Well, your first question was about what do I think about them not coming to this --
-- with your invitation. They've also had the 49 12/11/07 - TECHNOLOGY - RES. 070756 invitation of our Wireless Philadelphia non-profit agency and they've had the invitation from myself as the CIO of the City. This contract was signed with a different leadership at EarthLink that was very committed to the City. They had a different business plan at that point. I can't answer the question as to why they refused to come here. They were asked to come by you, Councilman. They were asked to come by the CEO of Wireless Philadelphia, and they were asked to be here by the CIO of the City. They chose not to do that. They chose to instead enter into the testimony the unsatisfactory document that was already described. I honestly don't know why they chose not to do that. They have been invited. I don't know what else I could do to get them here.
How many customers -- 50 12/11/07 - TECHNOLOGY - RES. 070756
Councilman, could I address two other points that you raised, including the one you just did? In terms of the leverage, I don't know where you heard. It certainly wasn't from the City Law Department, I suspect not from the Chief Information Officer that we don't believe we have leverage in connection with EarthLink in getting EarthLink to meet its commitments. I don't believe that. I've testified just the opposite a few minutes ago. As to the customer information, again, I can only repeat what I've heard, but I understand why they've made the point. In our negotiations with EarthLink, they consistently made the point about their customer base being proprietary information and that as a 51 12/11/07 - TECHNOLOGY - RES. 070756 publicly traded corporation, they needed to make sure that this information was provided to the SEC, for example, before it could be provided publicly to others, including the City of Philadelphia. I know that in other telecommunication situations, I don't know what the Verizon customer base is, for example, in Philadelphia. I believe the telecommunications industry, with the exception of the cable industry, which has different regulatory requirements, I believe that for the most part, it's my understanding that telecommunications companies, either because they consider it to be sensitive information or because it requires disclosure to the SEC before it's disclosed to others, but I do know that that was a consistent point raised by EarthLink during our negotiations.
Counselor, isn't there supposed to be a fee paid for every account per month? How do we manage that if we don't know how many 52 12/11/07 - TECHNOLOGY - RES. 070756 customers we have? I mean, if EarthLink was pleased with the performance of this project, I'd be here saying that we have X numbers of customers, and should be proud of that. Tell me about the accounting responsibility, which I understand may exist or not exist.
The fee that is to be paid back to Wireless Philadelphia is after two years. That is not part of the agreement today. It's after two years.
And that accounting process has been established on how you're going to collect that money? I mean, how will you audit that after two years? We're getting close. What are we, another year out?
All of the payment requirements that are currently in place, it's my understanding, are based upon physical attributes of the system that can be -- for which there is 53 12/11/07 - TECHNOLOGY - RES. 070756 accountability. In terms of the monitoring of the payments of fees after two years, clearly there is work that needs to be done as between Wireless Philadelphia and EarthLink. And I think you'll be hearing from Wireless Philadelphia, but the network agreement that provides for that payment, my recollection, is between EarthLink and Wireless Philadelphia. It is not between the City of Philadelphia and EarthLink. There were four agreements, you may recall, two of which the City was a direct party to and two of which the City was a third-party beneficiary of. The two that we were a direct party to were the street lights use agreement between the City and PAID, and we had the management agreement as between the City and Wireless Philadelphia, the non-profit. So I don't know if Wireless Philadelphia has had discussions 54 12/11/07 - TECHNOLOGY - RES. 070756 specifically on this point about after two years how that compensation would be monitored and audited, but I'm not directly aware of that included in the City agreements at this point.
Thank you, Mr. Solicitor. Thank you, Mr. Chairman. I'll have an opportunity maybe for another question later.
I don't know how long we have the Solicitor, so I want to --
I think you reminded me that these were important clients when I was first confirmed, Mr. Chairman, so I'll be here as long as you need me.
Thank you. We'll try to make it as short a period of time as possible. Thank you both, and if you could stay around -- I'm sorry. Councilwoman Blondell Reynolds Brown.
Thank you. 55 12/11/07 - TECHNOLOGY - RES. 070756 Good morning, gentlemen.
Just as a way of context, what is the role of your department now with WiFi Philadelphia, if any?
Yes. The actual management of the network is between the non-profit agency, Wireless Philadelphia, and EarthLink. I act as a Board member for Wireless Philadelphia.
And I provide oversight basically just from a technology standpoint to verify what's 56 12/11/07 - TECHNOLOGY - RES. 070756 being done out there by EarthLink to make sure it's working and we're participating in the operations committees, et cetera, to keep this project going, but I do not have an official role in managing EarthLink today.
Are there any reporting requirements, procedures, expectations between your office and EarthLink?
There's a news flash here. EarthLink's statement on EarthLink letterhead, not signed, but maybe by the end of the hearing we'll get another one that's actually signed on the letterhead. But it's an improvement from an hour ago.
Let me just clarify for the Councilwoman. I am a participant in the Technical Advisory Board, which is an advisory board that 57 12/11/07 - TECHNOLOGY - RES. 070756 approves new technology to the contract between EarthLink, Wireless Philadelphia and the City's CIO. I do participate in some of those, but I don't take a daily -- I don't have a daily responsibility to the build-out of this network.
Okay. Those are all my questions for you, Mr. Department Head. Thank you.
Do you have any initial statement in response to the resolution?
I do have a 58 12/11/07 - TECHNOLOGY - RES. 070756 statement, if you wouldn't mind.
Thank you. Mr. Chairman, Councilwoman Reynolds Brown, Councilman Rizzo and other members, thank you all for coming. Wireless Philadelphia welcomes this opportunity to brief City Council on the status of the Wireless Philadelphia initiative. First, Wireless Philadelphia is succeeding in addressing the digital divide. Second, we are confident in the future value of this ambitious network, which now covers roughly 75 percent of the City and is being built with no 18 public funds. Third, we fully recognize that there have been issues related to technology and customer service that have been well reported from the media. Such problems, while unfortunate, come with the territory of leadership in new technology. As the CEO of Wireless 59 12/11/07 - TECHNOLOGY - RES. 070756 Philadelphia and as a citizen of Philadelphia, I am personally proud that the City Administration and City Council joined together to put Philadelphia on the technology cutting edge and, in so doing, enabled our entire City to begin addressing one of the major socioeconomic issues we face, the digital divide. Philadelphia stands alone among major cities with our effort to extend affordable broadband access to all neighborhoods and in the development of a collaborative, community-based strategy to provide low-wealth families with the tools they need to connect to the Internet for education, employment and other life opportunities. We have no choice but to succeed in our efforts. The digital divide means that today one cannot even apply for entry-level employment in hospitals, hotels, universities and retail without Internet access. It means that while 80 percent of high schoolers 60 12/11/07 - TECHNOLOGY - RES. 070756 require Internet access to complete their assignments each night, less than half of the low-wealth students are connected. And it means that vital online health resources proven to improve the quality of care for people with chronic illness are simply unavailable as the majority of people with chronic illness are low income and lack Internet access. This is the real mission of Wireless Philadelphia and where Wireless Philadelphia has started to make an impact. We are just at the beginning, but the seeds of future success are planted. Too much has been accomplished for a few bumps in the road to take us off this course. By way of status report, I wish to highlight the following points: First, Wireless Philadelphia network is approximately 75 percent built out to date, and testing and refining of the system is ongoing. EarthLink is contracted to complete the network and 61 12/11/07 - TECHNOLOGY - RES. 070756 the build-out citywide. This network is being constructed at no cost to the City or its taxpayers, and there is no requirement in the contract for the City to purchase network services. For the opportunity to construct the network, the contract calls for payments to the City that never would have been received without this initiative in place: $2 million guaranteed, inspection fees totalling $450,000, a rental fee of $2 per month for each street light used. The contract also provides 3,000 free accounts for City workers and 700 free T1 alternative accounts for City offices. EarthLink has also invested large sums in the network infrastructure. Twenty million has been spent on equipment and services. Well over the 30 percent target for non-capital expenditures has been allocated to women, disabled and minority-owned firms. 62 12/11/07 - TECHNOLOGY - RES. 070756 The contract also includes free zones in parks and public spaces around the City, including one in each councilmanic district. It includes 25,000 reduced-price accounts for digital inclusion and free links of real 8 estate on the network's landing and 9 welcome pages. 10 We have been discussing that 11 EarthLink has recently stated publicly 12 that it is considering strategic alternatives for municipal wireless business.
For the record, the network 15 agreement is a ten-year contract, and any 16 other entity assuming operational control 17 of the network in the future will also 18 assume the obligations enumerated in the 19 network agreement. 20 We recognize and regret that 21 some customers have experienced technical 22 and customer service issues, but 23 unfortunately, this is to be expected with all new technology. These issues have been and will continue to be 63 12/11/07 - TECHNOLOGY - RES. 070756 addressed by EarthLink, with oversight from the City and Wireless Philadelphia. Wireless Philadelphia is succeeding in its efforts to address the digital divide by creating a collaborative, community-based method to distribute wireless Internet bundles to low-income households across the City. The bundle includes a refurbished laptop, one year of wireless Internet access, a signal booster, and local training and technical support. In less than a year and a half and with the citywide wireless network still under construction, Wireless Philadelphia has provided bundles to hundreds of households. Funding is in place to serve several hundred more this fiscal year, and fundraising is ongoing. The total number of sign-ups of digital inclusion customers to date is 613. As Councilman Rizzo noted, Wireless Philadelphia has not achieved the original goal that it set for itself 64 12/11/07 - TECHNOLOGY - RES. 070756 of 1,000 subscriptions by 2007, June 2007. Factors include a proof of concept acceptance that was anticipated at the end of 2006 but was actually achieved on May 24, 2007 and the first sign-ups took place in early June. Certain funds expected for Fiscal Year '07 were not secured for Fiscal Year '08. The digital inclusion sign-up process for customers lacking banking and credit was not completed. And, additionally, the lack of computer hardware in the home is a bigger barrier to direct subscriptions among the digital inclusion population than was originally realized. However, Wireless Philadelphia has received funds from more than 30 sources and is working in partnership with more than 30 community partners to identify qualifying households and distribute bundles to families based on achievement of benchmarks as determined by the partner. In total, Wireless Philadelphia 65 12/11/07 - TECHNOLOGY - RES. 070756 has secured more than $1 million for digital inclusion through these partners and funders, demonstrating strong and widespread community engagement with the Wireless Philadelphia movement. While much is in place, there is much more to do, and we are 100 percent focused on achieving our goals for this fiscal year. In conclusion, and I repeat, Wireless Philadelphia is succeeding. As a result of Philadelphia's bold leadership in creating this initiative, more than 600 low-wealth families now have broadband access to employment, education, health and other opportunities that before were closed to them, and several hundred more will receive computers and broadband accounts this fiscal year. Several digital inclusion customers and partners are here to briefly explain the impact of Wireless Philadelphia on their lives and on their organizations. It is imperative that we 66 12/11/07 - TECHNOLOGY - RES. 070756 all work together to build on this investment so that this cutting-edge initiative can achieve its enormous potential for citizens, neighborhoods, government and business. Thank you, Mr. Chairman.
Yes. I asked Mr. Phillis for the record to read in the mission statement of EarthLink.
Could you for the record read that in or Mr. Phillis come up and read it into the record.
I do not -- I am not personally familiar with the mission statement of EarthLink.
Mr. Phillis, could you come back to the witness table and reiterate the mission statement of EarthLink? I think you know it by heart.
I do not know it 67 12/11/07 - TECHNOLOGY - RES. 070756 by heart. I don't know that I've ever seen it, quite honestly. So I didn't forget to answer your question. I don't know the answer to it.
EarthLink hasn't issued a mission statement basically defining their municipal wireless initiatives?
If they did, I'm not aware of it. It doesn't mean they didn't do it. It's just I'm not aware of it.
I have a number of questions here, and in reading past clippings, I'm struck by a provision that actually Councilman Frank DiCicco and I introduced around minority and women-owned business participation.
So I have a number of questions around that. But, first, let me commend WiFi for the air warfare that we've been seeing in terms of just raising the awareness of WiFi as a service.
And that matters. Community outreach is helpful and probably more effective with a balance of ground warfare as well, ground tactics that allow us to do the community-based outreach, which is absolutely essential for success. At the top of , Paragraph No. 5, you indicate that to date there are free zones. 19
No; the 21 contract includes 23 free zones. How 22 many do you have at this hour? 23
If you give me a moment, I can give you that information. Just shuffle through my papers. 69 12/11/07 - TECHNOLOGY - RES. 070756 My apologies. Just one moment.
The answer, I'm sorry, Councilwoman, is, there are of 7 the free zones are currently completed. 8
You 14 indicate that a number of your customers 15 have experienced technical and customer 16 service issues. So what strategies are 17 you using? What strategies have you and 18 the Board developed to better address 19 that reality?
We are working in very direct contact with EarthLink on a day-to-day basis through the operational meetings that take place on a weekly basis. We created, in partnership with EarthLink, an executive escalation 70 12/11/07 - TECHNOLOGY - RES. 070756 process for complaints coming to Wireless Philadelphia, many of which were coming from our digital inclusion customers. And we do, despite EarthLink's non-presence here today, we do have a day-to-day working relationship with the EarthLink staff on the ground here in Philadelphia and Atlanta to address those problems. We also have an open blog on the Wireless Philadelphia website where we invite customers to let us know of any complaints that they have with the service. We respond to each one of those as a team at Wireless Philadelphia, and we also provide -- we escalate those problems, any problems that come to us, to EarthLink. EarthLink has made -- I do think it's important to note that EarthLink has made substantial changes and improvements in their overall customer service over the last 60 days, and I believe a great deal of that is in 71 12/11/07 - TECHNOLOGY - RES. 070756 direct response to customer input to EarthLink and also to the advocacy of Wireless Philadelphia and the Mayor's Office of Information Services through the ongoing communication that we have with them.
Okay. I think I followed most of that. The abbreviated version of that would be that the customer voices or registers their dissatisfaction with EarthLink and then EarthLink contacts you?
It's actually often the other way around. What usually happens is, there's a customer complaint that goes to EarthLink that may be resolved or may not be resolved satisfactorily, and if the customer complaint is not resolved satisfactorily through EarthLink, then often those customers call us because we are local. And so what we then do is communicate those problems to EarthLink, and we have created a new process for EarthLink to 72 12/11/07 - TECHNOLOGY - RES. 070756 address those problems. In addition, I'd like to point out that as part of our digital inclusion program, we also have local training and technical support that we offer on a daily basis so that customers, most of whom are new to the digital inclusion service, have a local number to call on a daily basis where they know that they can receive direct technical support from folks who specialize in providing information to new users to the Internet.
That is actually staffed by a private company that we have a relationship with, a woman-owned, minority-owned firm that's highly regarded in Philadelphia called VKG Associates. VKG Associates. And I recommend them.
Okay. I'll get back to that. I want to try to stay on track. 73 12/11/07 - TECHNOLOGY - RES. 070756 Community-based participation, Item No. 11. You said that there are 30 community partners?
I would ask that you submit the list to the Chair of the Committee, and please tell me how they're broken down. For example, are they broken down by councilmanic district? Are they broken down by police district? Are they broken down by school district? How are they broken down?
I would be more than happy to provide that information to the Chairman. Some of the wireless Internet partners are actually here to testify, several of them. They aren't actually addressed in that way. We've more gone about developing partnerships via various population segments. So, for example, one of the first areas that we focused on was the issue of welfare to work, and so we reached out to all of the EARN 74 12/11/07 - TECHNOLOGY - RES. 070756 centers. These are organizations that are based within highly regarded, well-known community-based organizations and they provide welfare to work services for people making that transition from welfare to work. So we went after that population group. Then we tried to address low-income young people who are leaving the -- forgive me -- who are leaving the foster care system, and we're working that way. So what we're trying to do, rather than go neighborhood by neighborhood or district by district, rather we are trying to address the various segments of the population in that way. And, actually, if I might say, that's actually partly a funding strategy to provide ongoing long-term funding to Wireless Philadelphia, because that is how funding is provided, through foundations as well as through statewide public agencies. And so we have, in 75 12/11/07 - TECHNOLOGY - RES. 070756 effect, tried to take advantage of existing structures and existing systems that serve these segments of the population citywide. This is a very specific and I believe a very creative strategy that is enabling us to avoid duplication of services and allowing us to provide services in such a way that promotes and supports existing organizations and existing structures.
I believe it is absolutely working, and I hope that you will hear in a few moments from several organizations that represent several of our wireless Internet partners. I do believe it is working. We have a long way to go, as I indicated, but, yes, I believe very strongly that this is a good strategy.
So then I would hope in the information that you send of the 613 that if we use and apply 76 12/11/07 - TECHNOLOGY - RES. 070756 just what you outlined, that a good portion of them come from EARN centers and foster care, young people aged out.
Yes. You'll see EARN centers, foster care, ex-offenders, et cetera. That's sort of how we're doing it, and that way we're hitting the entire City citywide.
That makes sense. So I'll look forward to reviewing that list.
Tell me about your Board. What's the makeup of your Board?
The Board is comprised of 12 individuals. This was created in the management agreement that governs Wireless Philadelphia. Four are appointed by the Mayor of Philadelphia on rotating terms. Three are appointed by City Council on rotating terms. One is the gentleman who was just seated to my right, ex-officio, is the CIO, the Chief 77 12/11/07 - TECHNOLOGY - RES. 070756 Information Officer serves on the Board as an ex-officio member, and then the remaining four members are appointed by the Board of Directors itself. Several of the Board members are actually here today as well.
The Board includes -- off the top of my head, the Board includes -- can I do a quick count?
I will be able to submit that to you. Let me say, we have a highly diverse Board racially and by gender, and I will submit the names to you as part of my submission.
Because we know when you have a Board that's reflective of the world that it comes from, there is a greater chance of making sure that issues impacting, in this case the low-wealth communities, if it's 78 12/11/07 - TECHNOLOGY - RES. 070756 registered at the Board level, then there's some revelation or appearance of that in the execution of what you're trying to do.
No question about it. You will be very proud of the Board members of Wireless Philadelphia, I assure you.
Okay. So you've spoken to the criteria for getting on the Board. And one becomes a partner. What criteria, what requirements are there to become what you define as a wireless Internet partner?
It really varies quite a lot according to each organization. We work with the organizations, as I mentioned, according to the population segments, and we try to identify those organizations that have the capability of providing a certain degree of technical support to their customers. In many cases, they actually 79 12/11/07 - TECHNOLOGY - RES. 070756 have computer training and other kinds of support on site. And we work with those organizations to enable them to create benchmarks for their population, their customers, so that -- I want to be very clear. We're not sort of handing out bundles at the street corner. We are working with organizations that create specific benchmarks of achievement for these low-wealth families to achieve in order for them to receive these wireless bundles. And, again, several of them are here and I think they can speak to the specific benchmarks. The benchmarks will vary according to the population segment. Something would be different for an ex-offender population than it would be for a welfare to work population, et cetera.
Indeed. Now, the City Solicitor very aptly described the reality facing our City when it comes to young people and what is 80 12/11/07 - TECHNOLOGY - RES. 070756 or what is not happening with our School District.
So in what you are doing, is there any link with the Philadelphia public school system? Is there a link with the Community College of Philadelphia?
Yes, ma'am. The first question is, yes, there is a link with the School District of Philadelphia, which has been a great partner to us in terms of providing a sign-up location for low-wealth families to come to various locations throughout the City. The City has also -- I'm sorry. The School District has also worked with us to disseminate information about Wireless Philadelphia to every child and every family affected that participates in the Philadelphia schools.
As Steve Harvey would say, stop right there. If that be so, you're at 613, then it raises 81 12/11/07 - TECHNOLOGY - RES. 070756 some questions about what is or what may not be happening with the School District in terms of the dissemination of information, because top down helps, but it's got to happen from the bottom up as well to get to the kids.
Well, right. What we did, just to be specific, what we did was, we went and we spoke to every single individual school at their regional meetings of principals in the beginning of the school year and we provided a bracelet, a red bracelet, indicating the presence of Wireless Philadelphia and a very small card that stated that Wireless Philadelphia is a great way for families to connect to FamilyNet, which is a wonderful resource that the School District provides online, and providing the contact information and the sign-up information for every family in the School District. I think it's just important to say that Wireless Philadelphia has been 82 12/11/07 - TECHNOLOGY - RES. 070756 working very, very hard to disseminate this information to the School District. It's actually been one of our main partners for information dissemination. There are, quite simply, truth of the matter, as Councilman -- as the Chairman mentioned and as others have mentioned, there are barriers to direct sign-up. Hardware is an issue and there are other issues. We are at the beginning of this process and we are pushing very, very hard. We have a long way to go, but the School District is one of our important partners. Also I'd like to mention that we're working very closely with several charter schools who also --
What does that mean, working very closely with charter schools? What does that mean?
A good example would be a representative from Mariana Bracetti Charter School is here and can explain to you in a few moments the 83 12/11/07 - TECHNOLOGY - RES. 070756 relationship that we have with them, where that school actually serves as a sign-up location, and that's how we're trying to do our sign-ups. We're trying to create ongoing presence in the community for people to come to to locations and organizations that they already have relationships with and have regular sign-ups in those locations.
I don't want to beat a dead horse when it comes to community outreach and working at the ground. It is important to take into consideration the barriers you've had to face.
We're 400 young people shy or 400 families shy in a city that has 50 percent of our young people not graduating. So the hope and expectation is that a year from now, the Board and the leadership and your staff will have worked through hitting the target. When we know we're losing a 84 12/11/07 - TECHNOLOGY - RES. 070756 hundred thousand -- if you use 200,000 as the total number of young people in the Philadelphia public school system, we're losing half of them by the time they get to 12th grade.
So I'm going to pause here, because I have a number of questions around MBE/WBE participation, and allow Councilman Rizzo to pick up.
Mr. Goldman, are you aware -- I asked Mr. Phillis -- of a major statement made by EarthLink on November the 16th?
Perhaps might you clarify which statement perhaps you're referring to?
I'll read it to you, because this is very significant, and I think that both of you in the 85 12/11/07 - TECHNOLOGY - RES. 070756 positions you're in should recognize that question. "EarthLink considers strategic alternatives for municipal wireless business. "Atlanta, November 16th. EarthLink today announced that it would begin a process to consider its strategic alternatives for its municipal wireless business. "After thorough review and analysis of our municipal wireless business, we have decided that making significant further investments in this business could be inconsistent with our objectives of maximizing shareholder value, said Rolla P. Huff, EarthLink President and CEO. "Accordingly, at this time, we are considering our strategic alternatives with respect to this business, Huff added. EarthLink will seek to work closely with the municipalities in which it has operations 86 12/11/07 - TECHNOLOGY - RES. 070756 as it considers these alternatives. The net book value of the assets attributed to EarthLink's municipal wireless business is approximately 40 million."
Frankly, no, it does not trouble me. As was testified by the City Solicitor, as well as Mr. Phillis and as I myself noted in my testimony, we have a ten-year agreement with EarthLink, and any entity assuming operational control of the network assumes the obligations of the network agreement. So everything that I would have to say on that subject would echo the testimony of Solicitor Diaz and Mr. Phillis.
Tell me, we have how many signed up in the program that you just described? 800 people?
615. EarthLink would have to be nuts to hold onto a system that they spent $20 million to build with 600-plus customers. Do you know how many customers they have that are not part of that program which you said to my staff that you didn't know?
I do not have the specific information. As was discussed before, I do not have the specific information for the same reasons that were mentioned before as to the specific number of EarthLink retail customers in this network.
How could you get into a deal and allow that to be privileged? How do you know your success? If you don't know how many customers have signed up to Wireless Philadelphia, you do know the number that you just discussed. I think it's amazing to me. How do you know your value or how do we know your value if you have no clue 88 12/11/07 - TECHNOLOGY - RES. 070756 on how many people have subscribed? The churning in and out, I understand it's incredible. People are in for a week, they're ready to throw the equipment out the window because they can't get a signal in their property. You don't know how many people have signed up to Wireless Philadelphia?
We are provided with general information about these subscriptions via EarthLink according to the contract and according to the discussion that the Solicitor is certainly more qualified than myself to give you, and as mentioned, in the third year of the contract, when the network agreement changes for EarthLink to provide to Wireless Philadelphia a revenue share, then we will be in a different position vis-a-vis customer service numbers.
What is "general information" on the number of customers? Give me an example of that. 89 12/11/07 - TECHNOLOGY - RES. 070756
For a $20 million investment, several thousand? If you were the CEO -- if I were the CEO, I'll put it that way, of a $20 million investment and I had less than 3,000 subscribers, I can understand why they have had a change at the top there after reading the mission statement. I'd be troubled. So let's hope that everybody jumps on board, but when you see a lifetime deal for 14 bucks out of Verizon and in Comcast and the reputation that EarthLink -- not any advertising right now, the reputation that they have is not good and I don't know how many people would sign up for this service knowing the problems that are associated with it. 90 12/11/07 - TECHNOLOGY - RES. 070756 Myself, Channel went to various hot spots, couldn't get on, even experts, impossible. Love Park, couldn't get on. I agree with you. I know a little bit about technology, just enough, that there are bumps, as you call them, in the road, but if a person goes, a visitor to our city, to a free hot spot like Love Park and wants to check their e-mail and just slams their laptop shut and walks away, not a good thing for Philadelphia. Thank you, Mr. Chairman.
I'd like to give this to the stenographer for the record, the EarthLink press release, please.
One other hope when we crafted the legislation was linking hopefully senior citizen homes, those on that side of their lives. Of the 613, can you speculate what number 91 12/11/07 - TECHNOLOGY - RES. 070756 might be indeed in that population? And if you're not able to --
I would just have to say at the present time, it's a small number, but I can tell you that myself and my organization have spent considerable effort in trying to address this, and we're seeking funds in trying to create programs along the lines of what I explained before to address this population, because you are absolutely right, that Internet access for the senior population is essential.
Okay. So when you submit the number of 16, if you would, break it down and break out the various categories that they represent.
A few more. You've spoken about linkages with public and charter schools in low-wealth areas.
And you 92 12/11/07 - TECHNOLOGY - RES. 070756 stated the barriers that have taken this to scale. Well, let me say this, the barriers that have impeded achieving the mark of 1,000 for this year.
Yes. Drexel University, as a matter of fact, is a major user of the network and has provided to this effort one of the major contracts. Drexel provides wireless Internet access via EarthLink across the City to all of its students. I believe faculty as well, although please don't quote me on that.
Okay. Let's talk a little bit about MBE/WBE participation.
And help me remember, because I don't, an equal opportunity plan. What we know is this, 93 12/11/07 - TECHNOLOGY - RES. 070756 that we wanted 50 percent of the $12 million in start-up services to go to minority and women-owned businesses. And so tell us where you are to date with MBE/WBE participation.
Where we are with MBE participation, the numbers that I have provided, which are reviewed on a quarterly basis by a diversity oversight committee, which includes the Director of the Minority Business Enterprise Council, the Managing Director of the City of Philadelphia, the Board Treasurer for Wireless Philadelphia and others, the most recent numbers that we have are for Quarter 2 for 2007. So that would be June of 2007. My understanding was that the target for MBEC's spend was 30.75 percent. That's the number that I have been working with since I have been involved.
Women or 94 12/11/07 - TECHNOLOGY - RES. 070756 minority owned?
I'm sorry. That was the total. The total target MBE spend was 30.75, and the total spend as of June 30th of 2007 was 88.49 percent. So we were really quite good in terms of that expenditure, and that is one area where EarthLink, is one among many areas, where EarthLink has performed well.
If you do not have the information at this hour, of that 88.9 percent, we'd be interested in knowing the number of contractors.
The breakdown of PR firms. We want everything from soup to nuts, all 95 12/11/07 - TECHNOLOGY - RES. 070756 categories. We want to know how we get to 88.9.
Would you like me to submit that as part of these other items to submit?
And we would ask the same for WiFi Philadelphia as well.
Absolutely. I'd be more than happy to provide that information.
So I think that is it for me, Mr. Chairman. I got another question. When you submit your information on the community-based organizations, you will let us know -- I want us to be clear -- of the 30 where they are, whether or not 96 12/11/07 - TECHNOLOGY - RES. 070756 they're EARN centers as you just described.
Yes. Essentially, what we're looking for here is, DPW has done a lot of work in geomapping, if you will, areas in our city where you have low wealth, high pregnancy, juvenile delinquency, at risk associated with young people, and in an attempt to work smarter, we want to make sure that those areas where young people are at high risk, that the opportunities like WiFi are connected in the world where they are.
Councilman Rizzo. 97 12/11/07 - TECHNOLOGY - RES. 070756
Mr. Goldman, in reference to the initial commitment, if you didn't know about Wireless Philadelphia right now, I don't think EarthLink has spent any money or made an effort to try to get additional subscribers to sign up. Could you tell me what their commitment was for the promotion of this WiFi and why it is basically unadvertised at this point, completely unadvertised?
Well, again, I am not qualified really to speak on behalf of EarthLink. All I can tell you is that my understanding -- I am unaware of a specific --
Well, let me interrupt you. You mean we put a deal together and we didn't establish some parameters on a budget to promote it? I just can't imagine that -- some of the things that have occurred in getting this deal going amaze me, not sharing information on how many people are 98 12/11/07 - TECHNOLOGY - RES. 070756 customers, not having a budget for advertising. I can't remember the last time I saw anything out of EarthLink about this project. So go ahead. Excuse me for interrupting you.
I just want to be clear the question that you're asking me. I'm sorry.
The question is, is there an advertising budget that EarthLink committed to in putting this deal together and is it a signal that there is a significant problem based on the statement that I read earlier released by EarthLink on November the 16th? There is no advertising budget. There is no advertising at all about signing up for this program.
I don't even think the average citizen knows what it would cost to be a customer.
The answer to the 99 12/11/07 - TECHNOLOGY - RES. 070756 question is that an advertising budget is not part of the management or network agreement, a specific number. So the answer to that unfortunately is no, there is not. And unfortunately, I am not in a position to answer for EarthLink as to their specific strategy as to the marketing of their retail product. EarthLink is responsible for the marketing of these products that are available over this network to their own retail customers. One thing I can tell you is that we did forge a side agreement with EarthLink assuring that Wireless Philadelphia's message of digital inclusion and participation in digital inclusion be part of advertising that goes forward, but the agreement does not include a specific statement or a specific target on a monthly, quarterly, annual basis related to a required dollar amount spent.
Well, I 100 12/11/07 - TECHNOLOGY - RES. 070756 think it should have been, because this project can't be successful without reaching out to people to sign up for this. And I don't think it's a good sign, and I've been told that by others. It's not a good sign that there is no 8 advertising of this product. I don't know how you're going to sell EarthLink's Philadelphia wireless service without any advertising to get beyond 3,000 subscribers, which I think you have to admit is not good.
I actually did not say the number 3,000. I said several thousand. And I'm just not qualified to comment to you on what their expectations are for their numbers vis-a-vis a retail subscription.
Again, that proves my point, that maybe this was not a good idea. If we allowed EarthLink to come in here, build this system, use the name Philadelphia -- maybe we need to get Philadelphia's name out of it and let it 101 12/11/07 - TECHNOLOGY - RES. 070756 just be EarthLink wireless network. I think it's a disgrace that this city allowed EarthLink to come in here or any vendor without providing information, without providing an advertising budget, without all of the things that we're identifying today, and I'm sure we'll identify more. I think that it's going to tarnish our city if this project fails. And I don't know what you mean by several thousand. And just the way you're spinning it here today, tell us the number if you know the number. Several thousand means to me a few thousand, maybe two, three thousand people. I don't know. And I think it's a disgrace that EarthLink wouldn't confide in you. Them not being here, they won't be candid and tell us. They should be proud if they had 60. What did they say that they were looking at, 80,000 subscribers? Is that what the number was when they came in here and did the dog and pony show? How many 102 12/11/07 - TECHNOLOGY - RES. 070756 subscribers were they looking for?
I'm sorry. I wasn't in the position at that time. I don't know the specific number that was stated in the Council hearing.
If I might just say in response to that, I do think it's important to just state that with all due respect, I certainly understand many of the concerns that you raise, but I do think that we have -- as was testified to by the Solicitor and by Mr. Phillis, this is a complex contract. It's a very highly detailed contract, and we have, I feel, good protections in the contract. And so I feel very confident, as I stated and as I stated in my testimony.
And to take over a system that would cost many million dollars to give Health inspectors and L&I inspectors the ability to work hands-free, to take on a $20 million 103 12/11/07 - TECHNOLOGY - RES. 070756 investment and to suggest that that's going to be the savior of this program because we have a few dozen inspectors that are going to use this system, to me to spend millions of dollars to accomplish that or try to say that this is an alternative use for the system if EarthLink decides to give it back to the City or to some other private entity, to me that's funny. To think that we're going to take a system that would probably cost many, many millions of dollars a year to operate, where we could probably again go to a private vendor and accomplish the same thing. It would be better just like we did many years ago in the City, before you put the technology on top of all the light standards this go-around, you remember or I hope you remember or at least you were told that there was another wireless network in the City that was abandoned in place prior to this one. You're aware of that, correct?
I have heard of 104 12/11/07 - TECHNOLOGY - RES. 070756 that.
Thank you. Mr. Goldman, I have a question for you about fundraising, but I keep thinking back to the original hearings and Philadelphia had carved out its mission in dealing with this was the digital divide, to accomplish as much digital inclusion as possible. To my knowledge, we are talking it and walking it. Most people are still talking it. Whether we're successful or not I think still remains to be seen, but I think everyone is realizing this is even more difficult than anybody had thought. I'm assuming completion. I have every confidence in the testimony of the Solicitor that we will continue to be cost free in terms of the build-out, and if we are able to get millions of dollars in savings from having employees not have to buy accounts from a private provider, 105 12/11/07 - TECHNOLOGY - RES. 070756 that's above and beyond anything we originally anticipated doing. We basically were getting enough money from this deal to fund your office.
Pay our utility bills, our share of it, hoping they would go down in the future. But the purpose of funding your office and having enough money to do that was to be able to raise money from the foundation, non-profit sector, government sector, to the extent that other governments or our government was willing to contribute, and also from individuals, whether they be rich or poor. I am sure this hasn't been made easier by all the questions that are out there every day about build-out and service levels and all that, but could you give us a brief report? I mean, you come from a fundraising background and one where fundraising wasn't real easy either for the cause you were involved with, at 106 12/11/07 - TECHNOLOGY - RES. 070756 least your most recent one, and you did a great job at that.
Could you kind of give us a snapshot of today where Wireless Philadelphia is with its fundraising and also how you feel about the chances for the future or your success for the future with that, given that we may not have EarthLink but we'll have a system. I think we all have to assume that, particularly based on the legal analysis that was presented to us.
Right. Well, thank you for those comments. I appreciate that, and I guess I have to chuckle in response to your comment that fundraising in the current environment isn't exactly the easiest thing to do with all the questions, but nevertheless, it is the responsibility that we have, and so here we are, and we're continuing to go about that in as aggressive a way as we possibly can. We're reaching out 107 12/11/07 - TECHNOLOGY - RES. 070756 to individuals, foundations, corporations and the public sector in this very building. Just last week we had the major donation of 447 refurbished laptops from Shier Pharmaceuticals of Chester County. Tomorrow morning we'll be announcing another donation of refurbished computers from Rohm and Haas. We continue to be reaching out to the corporate sector for hardware, as well as direct cash donations. The William Penn Foundation has provided our largest grant so far of 250,000 over two years, and many other foundations and a few corporations, PNC Bank notably, have also provided funding for this. Our efforts to reach out to individuals are just getting started, and so I do have confidence that the community is recognizing that this, as many others before me have said and as people behind me will also say, that this is absolutely one of the vital needs our community is facing. It's one of the 108 12/11/07 - TECHNOLOGY - RES. 070756 vital needs that low-income families, students and others face, and I do feel very, very passionately, myself and my team and the members of our Board and Advisory Committee, we are totally dedicated to the mission of this project, and part of carrying out the mission of this project is speaking passionately and convincingly to people who have resources to contribute to it. It's a momentum that needs to be built. It's a momentum that is building, and it is something that I do feel confident in. I think that we have done an extraordinary amount of work so far in a relatively short time, a little bit more than a year. We have roughly $1 million that we have generated in new monies that are committed to this project. Many more proposals are pending in foundation, corporate and public sector, particularly at the state level, and I do feel confident. Again, we have an awful long 109 12/11/07 - TECHNOLOGY - RES. 070756 way to go, and fundraising is the kind of thing that you need momentum and you need to sort of get your wagon going down Main Street, but I do feel very confident in our ability to continue to generate financial resources to support this cause, because the community recognizes it as a need and the community recognizes Philadelphia's leadership in addressing this social cause.
I will start off where you finished, Philadelphia's leadership in stepping forward on this issue. I have to put on the record and I sat here for a long time thinking not to, but we are at philosophically different places, and if we're serious about bridging the digital divide, then it means that we have to take some chances, but take what I call calculated risk. 110 12/11/07 - TECHNOLOGY - RES. 070756 (Applause.)
And I wrote notes here, because it hits me here as well. Sometimes it requires -- well, Philadelphia is venturing into new territory and I learned along the way 8 months ago in listening to our City 9 Solicitor and those of us on Council that 10 even this arrangement is unprecedented. 11 So as we're expecting you'll manage the 12 bumps and right now it's across -- but 13 Philadelphia is across that, but 14 Philadelphia was one of the first, and 15 with anything new, when you're moving to 16 shift a paradigm, then you got to figure 17 out the wrinkles along the way. And when 18 I hear that there has been what we had hoped for and expected and, that is, attracting the attention of the foundation community and others that get it, if you're doing that in the way you just described, then that's an affirmation that doing this was indeed a good and right thing to do. 111 12/11/07 - TECHNOLOGY - RES. 070756 (Applause.)
This is not my area of expertise, but Verizon has many companies that have gone around the country, have lowered rates as soon as there was an announcement that there might be unity WiFi, and that's been commented on in different cities all over. Verizon, I think everyone knows, they're not a DSL company in the future. Their massive investment is in fiberoptic. They also pretty much have a business plan to do the suburbs first and then move into the City. I noticed in the small print this lifetime, that when they no longer offer DSL, the lifetime offer is over. At some point they are not going to be offering DSL. They're going to be doing fiber. Fiber is phenomenal, which it's what everyone wishes they had into every building, residential and otherwise, in their city, but it is much more expensive 112 12/11/07 - TECHNOLOGY - RES. 070756 and it is more along the lines of cable or cable plus with the broadband. If I were being asked by somebody in very lay terms, if I sign up for this service, it may not be EarthLink, but whatever the service is --
-- our City wireless service and I know the speed that AOL was charging $24 a month for at dial-up and I know the speed of Verizon's half speed DSL, or whatever it is, where does this fit in? If I'm only surfing the net, doing e-mail, which is what most people use it for -- and I know there's other applications that get more intense levels of this -- how is this service for me speed-wise? Speed is what everybody --
It's broadband service at one megabit per second. So it's a good bit faster than the lowest level DSL, it's quite a bit faster than dial-up, and it's probably not as fast as 113 12/11/07 - TECHNOLOGY - RES. 070756 some of the higher end services that you mentioned that are offered by other companies.
Would the person doing what I just described, basic use of the computer --
Basic everyday uses would be absolutely -- would absolutely be easily obtained through this service at that speed.
Mr. Chairman, would that support streaming audio, that speed?
I know there's other things that are more robust in terms of needing --
Yes. To my knowledge, streaming audio would be -- 114 12/11/07 - TECHNOLOGY - RES. 070756 although I have seen the network used for streaming audio, the speed is not as good as higher speeds for streaming audio.
So if you wanted to listen in to an all-news station, like KYW, you'd have difficulty doing that?
I think -- I personally have utilized the service for that and I have observed it being used for that service, although higher speed would provide you with a better connection for the kind of utilizations that you're referring to.
When EarthLink came in here, they indicated that one of the obstacles also would be that the service would not work above the third or fifth floor in Center City. When will that be overcome where our constituents in some of the high-rise properties would be able to become customers?
I don't know the 115 12/11/07 - TECHNOLOGY - RES. 070756 answer to when that service will be offered, but my understanding is that as the network continues to be built out, that is an issue that will be addressed.
So right now in Center City or other areas of the City that may be in a high-rise configuration, we're limited to what floor?
It depends. It depends. The higher floors in higher rise apartment buildings without a direct connection to fixed wireless would not probably be able to be serviced, but it does depend and it varies building to building and according to a variety of other factors as to why that service is or is not offered. I see my friend has joined me over here, so maybe a more detailed answer to that one may be coming.
I thought maybe I could add a little bit enlightenment to that. First of all, the EarthLink, when it was originally proposed, was a 116 12/11/07 - TECHNOLOGY - RES. 070756 symmetrical one meg download speed and upload speed. Since most of us do most of our work through a download process, where we're really not uploading into the Internet as the average use that you explained, the current thing is they get about 1.5 meg on the download, which is almost twice as fast as the DSL advertisement that you have on your desk there. As far as servicing the high rises, you can reach the higher floors. Third floor was what was originally proposed in the contract, but just like cable and many other things, the distribution within a high-rise building is one of the things where EarthLink would distribute the signal to the building and it would be redistributed within that building so that you could have total use within there, but that's up to the building ownership as to whether they want to approach it that way or not. 117 12/11/07 - TECHNOLOGY - RES. 070756
But that would not be wireless? In other words, the way the system is designed now, if you have a wireless laptop, you should not need any wires or any modems or anything in your home, correct?
If you are outside, you do not need any CPE equipment for the wireless network that we have, you're correct. If you're inside, it is recommended that you do take a piece of CPE equipment or a signal booster type of an arrangement. And that's one of the changes that Greg mentioned earlier as to how the provisioning process was being done by EarthLink. In the early adoption as they rolled this system out, they did not require people to buy a piece of CPE equipment like you do with DSL or with cable. They have revisited that and if you sign up for the service today and 118 12/11/07 - TECHNOLOGY - RES. 070756 you're not signing up through the actual Internet on your laptop where you're actually using their site, you have to buy a piece of CPE equipment.
In other words, because the signal doesn't penetrate the structure, you need to have the signal enhancement to get your laptop or device to work?
Final question, what's the monthly rate currently for WiFi customers, the monthly rate?
It's 6.95. It's still a promotional rate for everyone, including digital inclusion customers. It's 6.95 a month, although we don't know exactly how long that promotion will last. When that promotion ends, the base 119 12/11/07 - TECHNOLOGY - RES. 070756 price will be roughly $20 per month for retail customers and 9.95 per month for digital inclusion customers.
That's very encouraging, because that's exactly what is in testimony when we've had these hearings April '06.
So it's encouraging to note that you all have been able to honor the initial thinking around this initiative. I thank you for your testimony.
Before you begin, do you have any Board members that are here from Wireless Philadelphia? Just stand and be recognized. 120 12/11/07 - TECHNOLOGY - RES. 070756 (Board members standing.)
We do appreciate your service and appreciate you coming out to the hearings. Could you identify yourself for the record and decide who is going to go first?
Sure. My name is Alexis Brown. I'm the Executive Director of Community Women's Education Project.
Tony Alvarez, Co-founder and Community Relations Director of Mariana Bracetti Charter School.
As I stated, I'm the Executive Director of Community Women's Education Project. We were the recipients of laptops for the clients 20 that we serve, which are primarily low-income women in the Kensington community. We provide educational services for women that have dropped out of school, for out-of-school youth that are trying to get a GED, move on into 121 12/11/07 - TECHNOLOGY - RES. 070756 job, move on into post-secondary education. So what has been a value for us, in Kensington several of the households do not have a computer. Several of the women that visit our site do not have a computer. One of the programs that we specifically targeted is for the adult diploma program where the women have to perform about 160 tasks and those tasks are research related. In order for them to complete that and get their high school diploma, which takes about months, they need access to the 16 computers, and they come to our site for 17 that access. It's through this 18 particular program that we are able to give these women the laptops so that they can do this work at home. And not just for them. It's for their children. So their children also have access for the young children that are in school as well. The other way that these 122 12/11/07 - TECHNOLOGY - RES. 070756 laptops are to be used are for women that are in our family literacy program, that are also residents in a residential facility also located in Kensington and they do not have access or do not have computer, do not have access to a computer. So we are awarding them the laptops so that as they are awarded permanent housing, they will be able to use these laptops in their own facility. And they range in age from about late teens to the middle 30's. So they have children that are also in school. And one of the problems they have is their children have no access to the computers as well to complete their homework assignments and things of that nature. So that has been a significant impact for us for the ladies there in our center.
And all of 123 12/11/07 - TECHNOLOGY - RES. 070756 those families have had the option to benefit from --
We've targeted. Because it's 20. So we had to target. So that's why we chose actually the adult diploma program, as I said, because that's a heavily research-based program. So they use the computers even more than the other pre-GED, GED participants.
So just a little bit about our school. We are a science and technology charter school. We service predominantly the low-income Latino student population, Grade 6 through 12. Our Wireless Philadelphia sign-up center opened a couple weeks ago on November 29th, and our center is completely student operated under adult supervision. Our decision to launch this partnership with Wireless Philadelphia was made with a dual purpose in mind. First, we were able to turn this 124 12/11/07 - TECHNOLOGY - RES. 070756 opportunity into a service learning course by training our high school engineering club students on this technology. Now they're serving the community and advancing their knowledge on this emerging technology. Secondly, as a community school, we are now able to target our low-income families and neighbors and put affordable and quality information technology into their hands. For some of our families that are unable to afford computers, we provide them computers through our partnership with the School of Engineering and Applied Sciences at the University of Pennsylvania. Although our relationship with Wireless Philadelphia is still in the early stages, it's been a tremendous success so far and there's a buzz in our community.
You're happy with Wireless Philadelphia? 125 12/11/07 - TECHNOLOGY - RES. 070756
Thank you for this opportunity. My name is Aissia Richardson. I serve as an Advisory Committee member of Wireless Philadelphia and I'm also a WiFi user and I'm an avid supporter of digital inclusion. I do have my testimony prepared. There have been issues with the technology around WiFi, but the premise behind low-cost wireless Internet access is one that the City of Philadelphia was correct in taking a leadership role in 126 12/11/07 - TECHNOLOGY - RES. 070756 municipal wireless Internet service, and I'd just like to caution Council to measure the success of Wireless Philadelphia on the quality of its programs rather than the quantity of the members that have signed up on a network that really hasn't been fully installed in the entire City. And as Councilman O'Neill stated, in LA not one person attended committee members regarding WiFi services in LA, but Wireless Philadelphia has built tremendous community support around WiFi in Philadelphia. And as you know, the City of Philadelphia has the sixth largest population in the United States behind New York, Los Angeles, Chicago, Houston, and Phoenix respectively. Our city has the lowest median household income at $32,000, highest percentage of individuals in poverty and lowest amount of residents over the age of 16 in the labor force, 58.9 percent of the sixth largest cities in the country. 127 12/11/07 - TECHNOLOGY - RES. 070756 The poverty rate in Philadelphia County has increased by 1.6 percent since 2000, moving from 22.9 percent to 24.5 percent. While the median household income saw a decline since 2000 in Philadelphia County, the race/ethnicity group that went through the most dramatic decline in household income was the black or African-American race/ethnicity category. This category went through a decline of 17.3 percent since 2000. And in 2000, 55 percent of the residents in just North Central Philadelphia, which is primarily African-American, lived 200 percent below the poverty line and only percent had 18 graduated from high school. 19 And I just wanted to give you those statistics, because many employers only accept applications for employment online, even for jobs that don't require computer skills. While I believe this is an unfair practice that the Labor Department needs to address more 128 12/11/07 - TECHNOLOGY - RES. 070756 effectively, the reality is that many low-income Philadelphians do not have the resources or tools they need to access positions they may be eligible for. The low-cost wireless service and the hardware needed to access the Internet that Wireless Philadelphia's digital inclusion program provides can make a real difference in the lives of participants. In my opinion, if you're not online, be prepared to be left behind. Every Philadelphian regardless of income cannot access City services, state or federal services online. If that's true, then the poverty rate will continue to increase. Digital inclusion is part of the solution, and your support of Wireless Philadelphia will ensure that the solution will have a chance to be more successful. Thank you.
Thank you. Sir? 129 12/11/07 - TECHNOLOGY - RES. 070756
My name is Hercules Jones and I'm here to testify about the usage that I have received from Wireless Philadelphia and EarthLink, to testify about any problems and what the system has done for me.
My name is Ingrid Jackson and I also am a customer of Wireless Philadelphia. I enrolled in the program because I heard an interview on the radio about the digital inclusion program and I was very excited about it. The next day, as a matter of fact, I contacted them, and they referred me to Wireless Philadelphia, where I immediately went to be interviewed and signed up for the program. And I'm very, very pleased with it. It's helped me find another job. Before that time, before I was a customer of Wireless Philadelphia, I would have to go to the Free Library and wait for an assigned time to use the computer there, and you're only given approximately an hour 130 12/11/07 - TECHNOLOGY - RES. 070756 to do your research or fill out an application online. So it's proved quite beneficial for me personally, because I can do this in the privacy of my home. I have a used computer that a relative gave me. When I signed up for Wireless Philadelphia, they sent me my kit. I was able to connect it myself. I'm not technologically advanced at all in any way, but it was simple enough, clear enough to connect my computer to the components that they sent me through the mail. When I first tried to get online, it was a little spotty, but I just -- I'd come back later on and be able to get online, and I'm a hundred percent satisfied with Wireless Philadelphia.
Do you 131 12/11/07 - TECHNOLOGY - RES. 070756 want to add anything to what you originally said?
Yes. What she was talking about about the Free Library is true. The time there is quite limited. Having the service in your home allows you to do a lot of things such as research, look for jobs, look for education or funding to get education. You can keep in contact with relatives that also have Internet access. You're able to see things around the world that you didn't see before, communicate with other people around the world that you may never have been able to do without Internet access, as well as check your e-mail and read books. And the streaming audio is not that bad. Streaming video is not that good, but the streaming audio is not that bad. The service is great in the daytime. Sometimes it bogs down at night because more users may be on it, and routers can only support so many 132 12/11/07 - TECHNOLOGY - RES. 070756 computers at one time. I was surprised how fast it reached my neighborhood and how fast I was able to get connected once I contacted Wireless Philadelphia, went to their meeting, understood what I was about to receive in the mail and what was going on with my part to get into the connection. Actually, I got connected the next day without the box, but once I got the box, the service was much better. There were a couple outages, but they fixed them right away, and all of the complaints that I have made to EarthLink were addressed immediately without any problems. I haven't experienced anything where they were unresponsive or unwilling to resolve any issues that I've had. And when I contact Wireless Philadelphia about any issues, they were quick to respond to them and very supportive of what I needed. I'm pretty pleased with the service myself. It is way better than 133 12/11/07 - TECHNOLOGY - RES. 070756 dial-up, because dial-up you wait all day for a web page.
No. 7 I'm a pretty Internet junkie, so I'm on it all the time.
And I have been able to get connected mostly every time. I go to the Love Park, also in Rittenhouse Square and a few other places that I've picked the signal up at. So I don't know what happened to other people that can't get connected.
I don't go to a city without checking out hot spots, though, before I get there. I'm not paying anybody for something I can get for free.
How did I hear about it? It was -- 134 12/11/07 - TECHNOLOGY - RES. 070756
Let me ask more of a specific question. The SEPTA bus ads, over the radio, through a community center? What was the post point?
No, no word of mouth at the library. I saw an ad in the paper and I was aware that the Mayor was trying to initiate something like this from newspapers and stuff like that. I did see a couple ads on the bus and I got ads in my mailbox actually about EarthLink service.
No other questions for this panel, we'll call up our next three witnesses. Thank you all.
Good afternoon. 135 12/11/07 - TECHNOLOGY - RES. 070756
Hi. I'm Richard Cermele. I'm from the -- I'm part of the Advisory Committee. I also happen to work at City Hall myself.
-- as we used to call him before he got promoted about four times to Girard College?
Well, it's been my experience with the Advisory Committee that Philadelphia Wireless has been very responsive. They've listened to what I have had to say. I was concerned when I read that article too in the newspaper and I heard about it, but, you know, 136 12/11/07 - TECHNOLOGY - RES. 070756 talking with the people from Philadelphia Wireless, they've been very open and honest about what's going on, and my experience -- I have the service myself. I've had some initial problems with it, but, you know, my use of it, it's improved. Like any emerging technology, it's not going to be perfect, but I really like the idea of Philadelphia moving forward. There was a point last year where I was -- they took a picture of me in Love Park using the Internet service, you know, and like I just feel really proud to be part of that. And I remember when the Mayor made his initial announcement that Philadelphia was moving forward with this. This is a great thing, that numbers alone cannot define what's happening here and how quickly they're signing up subscribers. And that's not the mission of Philadelphia Wireless. The mission of Philadelphia Wireless is to provide this to people who would not 137 12/11/07 - TECHNOLOGY - RES. 070756 otherwise have Internet service. But just to be part of something so innovative, I'm willing to go through some growing pains, and I'm just glad to be a part of it.
Okay. Well, thank you very much. Any questions of this witness? (No response.)
Are there any other witnesses who aren't on our list that would like to testify? (No response.)
I would just like to say in closing -- and I'll ask my colleagues here for any comments they want to make -- that since we approved this as a Council and as a city, this program, a year and a half ago, it's become very clear to the corporate world that this is not a dynamic profitable area with business plans and expansion plans, and I think EarthLink just happens to be the company that had the most 138 12/11/07 - TECHNOLOGY - RES. 070756 activity out there and recognized it and said we're going to retrench. That having been said, Philadelphia's plan was not about making money for Philadelphia. It was basically about breaking even and trying to have somebody else pay for it, and if the other party made money, fine. If the other party didn't make money, that was their risk. Businesses are big people. If they lost $20 million or whatever in this or they wind up losing, I think if you look at EarthLink's balance sheets, $20 million won't be a big deal in the bigger picture of their company. But they do have a responsibility to their shareholders, and if it's not making money, it's not making money. That is something that we'll have to keep in mind. Some day it may be profitable. It's not profitable today. Other cities are just dropping it, dropping the idea, because they don't want to fund it or have their taxpayers 139 12/11/07 - TECHNOLOGY - RES. 070756 fund it. We're in the fortunate position because of our place in time with the negotiations with EarthLink that we didn't have to take that risk. So hopefully this will continue to be something that may crawl more than it walks or runs, but will serve the original purpose of this project, which was not an economic one, it was a social one, and at this point, it is still the only program of its kind in the country. While there are smaller pieces of wireless in different cities and they have hired companies to do what our home-grown Wireless Philadelphia Board and advisory councils do, we're not paying anybody to do that from Washington, DC or whatever. And they're nice people. Don't get me wrong. They testified at our last hearing. They were even consultants on this project. But we're the only city that has our own people making decisions for our own people. 140 12/11/07 - TECHNOLOGY - RES. 070756 So I'm sure if not Councilman Rizzo, myself or Councilwoman Blondell Reynolds Brown will have a resolution 5 bringing us back here within six months or so to have another afternoon like this to talk about where we are. And so we should recognize that not all is perfect, but that things could be a whole lot worse. Thank you.
You're correct. I will be reintroducing my resolution shortly after we reconvene to continue to get these updates, because I think I learned a lot today and I want to continue to learn. Like I mentioned many times, I would like to be wrong. I would like to see this project be very, very successful, because inclusion is very important to me. 141 12/11/07 - TECHNOLOGY - RES. 070756 I've been asked to, with your permission, to invite everyone here to stay for an important panel discussion in the Council Chamber that builds on this issue immediately following the hearing, hosted by the Media Mobilizing Project and the New America Foundation. So they'll be here as soon as we end this hearing.
Okay. So we probably went an hour and a half longer than their original anticipated time, but anybody that wants to stay for that doesn't have to leave the room. That's the good part. Thank you all for your attendance, and the hearing is over. (Committee on Technology and Information Services adjourned at 3:20 p.m.) - - - 142 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on December 11, 2007, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)