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The Death and Life of Municipal Wi-Fi

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The municipal Wi-Fi sector has a pulse. It's faint, but it's there.

 

The Wall Street Journal earlier this month outlined the problems and possible salvation of the sector. The problems are well documented: Vendors jumped the gun by building networks without solid business models and before revenue streams developed. Consequently, the money didn't flow. It trickled in at a pace too slow to build businesses. The story points out that there were technical problems and disagreements between sponsors and municipalities on where to focus coverage.

 

The resurrection is pegged to more modest projects, increased rate flexibility by municipalities and the placement of anchor tenants on networks to jump start revenue generation. The story offers vignettes of projects in Oklahoma City, San Francisco, Philadelphia and Minneapolis.

 

This week, InformationWeek went into more depth on Minneapolis. The bad news is that there are problems. The good news, however, is that they aren't tied to the overall viability of the business. Instead, it's a squabble between the people deploying poles and radios and the Minneapolis Park & Recreation Board. The company, US Internet, didn't get the proper permits. The project is on hold. The story says that the network is expected to be turned on in some manner even if the permit application is denied.

 

Philadelphia's Wi-Fi project was the poster child for the rise of the concept -- and for its demise. Now, perhaps, it may be emblematic of the idea's rebirth. Two weeks ago, Network Acquisition Company-which took the project over when builder Earthlink pulled out-said that its goal is to cover 10 percent of the city by early 2009. The company said 125,000 people use the system monthly, and that number could grow to 140,000 during the first part of the year. Immediate plans include providing wireless services to Center City and building a parallel wired network for municipal and business customers.

 

The municipal Wi-Fi comeback theme continues in this RCR Wireless piece. It describes a project in Solon, a Cleveland suburb, being built by Proxim Wireless, Radiant Networks and Winncom Technologies. The companies are providing free services to a new community center and in the public parks. The interesting element of the piece is that the 24,000-resident town seems to be using the older model in which the network is built for the public good. Attracting businesses seems to be a secondary concern.

 

It may simply that municipal Wi-Fi will remain a niche. There are tons of commercial Wi-Fi networks, and the establishment of 3G networks and the coming of WiMax means that the lion's share of people who want highly mobile wireless can get it at a reasonable price. Free and highly subsidized services for the poor and municipal uses remains a laudable goal. Those aims can be fulfilled, to some extent, by municipal Wi-Fi. At the end of the day, however, projects will be far less ambitious than those envisioned at the turn of the century.

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