Wireless Connectivity

Bye Bye, WiFi? Local Governments Abandoning Network Plans

Written by Anonymous on 12:12 AM

Dreams of highly subsidized municipal wireless Internet access aren't dead, but a string of failed initiatives is forcing local governments to rethink the scale and cost of rolling out WiFi access to their residents.

Several years ago, government officials and executives from private companies hailed municipal WiFi as a solution for improved public safety infrastructure, cheaper broadband service and access for areas with slow or no Internet access. The assumption was that private service providers could set up networks with minimal financial burden on governments, since there would be plenty of subscribers and advertising would heavily subsidize the cost of service.

However, several early initiatives failed to meet those expectations, making municipal WiFi look like a noble cause without commercial sense. Advertising revenues missed projections, and subscriber numbers were also lower than forecast, with many residents getting enough options from private Internet service providers. Chicago backed away from its citywide municipal wireless plans last year, and the casualties continue to mount. EarthLink (Nasdaq: ELNK) said last week that it's taking down its WiFi network in Philadelphia. Closer to home, WiFi provider MetroFi is no longer building out free wireless networks in Aurora and Naperville, Ill. The networks are still running while the company negotiates with the two cities, but they could shut down if funding doesn't appear from government coffers or a third party.

Round and Round

"It's totally in limbo," said Don Carlsen, Naperville's director of information technology. He said city officials are open to another company buying MetroFi's network. If no one steps in, Naperville might also walk away. The city viewed its free downtown WiFi network as an amenity for residents who mostly enjoy broadband Internet access in their homes, as well as a boost to local businesses in the coverage area.

Several months ago, Mountain View, Calif.-based MetroFi proposed a new model where the cities would provide more money in exchange for the continued roll-out of the networks. Officials were leery, however, as the price for Naperville topped US$3.5 million.

In Aurora, where the MetroFi network is roughly 20 percent complete, city spokesperson Amy Roth said officials are at least a month from making a decision on the future of the service. She added that city officials are still hoping for broad WiFi coverage so people without fixed-line residential service can access a high-speed network without visiting the public library or another hot spot.

"It is a great idea," Roth said. "It's just putting it to work where we're running into some challenges."

Get Real

Supporters of municipal wireless say governments should adjust their financial expectations and, in some cases, scale back their ambitions to provide more limited coverage, focusing on crucial areas.

"It's a hard message to tell people: 'You know what? You're going to have to set aside some budget money or some grant money,'" said Karl Edwards, chief operating officer of Excelsio Communications, a wireless consulting firm. "But when they start hearing that, it's amazing how much more realistic they get."

Proponents also say WiFi will still have a role in broadband Internet access even as next-generation wireless technology, such as WiMax, gains momentum. WiMax has a greater range than WiFi and is expected to deliver speeds close to fixed broadband service, but for portable gadgets like mobile phones and digital cameras.

Hybrid Ideas

However, WiMax will take several years to roll out nationally, and initial costs to use the service will likely be too high to allow universal broadband access. Carlsen said Naperville might want to use Sprint's WiMax network for its public safety agencies and municipal employees. Edwards said other cities could adopt a hybrid model, using WiMax for municipal needs and WiFi for citizens.

Chris O'Brien, a partner at Diamond Management & Technology Consultants, said local governments should also keep pushing for traditional cellular operators to provide affordable service to lower-income residents.

"This is an absolutely critical part of [cities'] efforts to ensure continued livability, to have a thriving economic development platform and so forth," said O'Brien, who used to be Chicago's chief information officer. "You can't abdicate that to the private sector just because the municipal wireless world has come to somewhat of a halt recently. In many ways, that means cities only have to work harder."

By Wailin Wong, Chicago Tribune