From Muniwireless.com:

The Pennsylvania Senate passed House Bill 30 which prohibits municipalities from delivering telecommunications services for compensation if it competes with private enterprise. The bill is now awaiting signature by Governor Rendell but he has grave reservations about the proposed law and won't sign it unless significant revisions are made, notably to the prohibition on municipalities offering telecoms services.

In the comments to this post comes an excellent follow-on from Philadelphia, a city that's proposing to spend $10 million on wireless for everyone:

The City of Philadelphia intends to aggressively pursue a veto of the Bill. The bill as it stands is not good for Philadelphia or the State of Pennsylvania. Philadelphia is ranked as the 33 most wired or wireless City in the U.S. With the implementation of Wireless Philadelphia, the City would have moved into the top 3 cities in the country. With just the announcement to create a business plan and funding model to implement Wireless Philadelphia, we have generated world-wide interest and support.

Today less than 60 percent of the city's neighborhoods even have the option to subscribe to high-speed broadband (DSL or cable modem). The City believes adamantly that any citizen or business should have the opportunity to compete in this global, knowledge economy regardless of a neigborhood's economic status or area household density. Affordable, universal access benefits everyone.