I had a previous post dealing with municipal wireless networks and associated problems.
Here is a related article:
The city of Chicago is abandoning its plan to build a municipal WiFi network. Negotiations with the two providers who had offered to run the network were not fruitful. The development is typical of changes in the field of municipal WiFi, which has seen a series of failures in deployments and commercial ventures. Just a few years ago, numerous cities large, medium, and small announced plans to build WiFi networks that would blanket the city.
There were many major goals: the biggest rhetorical one, at least in larger cities such as Philadelphia, was "to bridge the digital divide." Wireless access would be available in parts of the city underserved by broadband providers. It would be inexpensive and, to qualified customers, free. It would be available to schools. The other major goal was competitiveness. Universal availability of wireless access would make the city more attractive to business and conventions, or so the theory went. But many of the early deployments are disappointing, and Earthlink, the ISP that had invested heavily in large municipal wireless installations, is laying off people and backing away from the projects. Several years ago, when the muni WiFi craze began, it must have seemed that $20 a month for wireless access that was available anywhere in the city was a good deal.
Once looked at in the light of day, it’s not such a compelling deal. The service is slow compared to commercial broadband alternatives. Being wireless and based on hardware on street lamps and similar outside infrastructure, it doesn’t penetrate well into buildings. Rooms not on the periphery of the building are not likely to get good service, if they get service at all. Basements have similar problems. Deals which companies were happy to sign years ago don’t look so good anymore. When Philadelphia signed up Earthlink to run its municipal wireless network, it agreed to be an "anchor tenant" using the network extensively.
Chicago, on the other hand, refused to agree to this. It’s not clear how much the city of Philadelphia is actually using what has been built of its network. If the city won’t agree to use it, how much confidence should individuals and businesses have in the network? Very few in Lompoc, CA have had confidence in theirs so far. The city of 40,000 has signed up 500 subscribers according to reports, although city officials protest that they have not had a "grand opening" or done any advertising yet. After several years of tests and build-out, the city of Philadelphia claims to have made 25 of the city’s 135 miles wireless, generally in less-affluent areas.
The city and Earthlink now claim 80% coverage. It also began giving away computers to five welfare-to-work women, launching a program promising more extensive giveaways (although the computers came not from Wireless Philadelphia, but from a different city jobs agency). Earthlink, which is building out Philadelphia’s network, is not so hot on muni initiatives anymore. While announcing 900 layoffs recently, including some in the municipal wireless group, the company said that it will not launch any new municipal wireless initiatives until it comes up with a new business model. Said Rola Huff, CEO of Earthlink, "WiFi is generally sold at a lower price point. And we simply have not found a way in the old business model to provide the returns necessary for further investment."
Traditional broadband is surprisingly competitive with the subsidized model, and offers better service. In Chicago, AT&T charges $20 a month for DSL speeds of 1.5Mbps, and new subscribers can get connections half that speed for $10. It’s not wireless, but WiFi routers are cheap, and the signal in your home connected to a broadband router will be much cleaner and faster. The situation is similar in Philadelphia, where cable modem is also widely available. Rola Huff is correct that a shift in the business model is needed before these projects can make sense. Efforts like Philadelphia’s that already have substantial deployment could become problems if nobody is making money from them. But in the meantime, look for a deep freeze in new projects.