Once heralded as the way to bridge the digital divide and attract high-value “knowledge workers” to towns across America with free or nearly free tiers of service (often accompanied by a faster paid tier to offset costs), citywide 802.11 mesh networking was dealt several high-profile blows this year, casting its long-term survival as a business plan into doubt.
Muni Wireless growth Municipal spending still is increasing despite recent bad news. Source: MuniWireless LLC
First were the city pullouts. Chicago cancelled its planned network, while EarthLink Inc. pulled out of the San Francisco deal, citing it as financially unviable. And, another EarthLink venture, the Wireless Philadelphia project — one of the oldest and largest mesh initiatives — was delayed indefinitely.
Unsurprisingly, at EarthLink’s second-quarter earnings call in late July, President and CEO Rolla Huff said the company’s approach to muni wireless was flawed, and that “the Wi-Fi business as currently constituted will not provide an acceptable return. As we recognize that our growth platforms are not performing as expected, we need to be prepared to change the underlying business models and cost structures. And we’re prepared to do that.”
All of this has led to EarthLink, MetroFi Inc. and other service providers eschewing the free service or tiered service model, now demanding the municipality shoulder some of the financial responsibility for the networks by becoming anchor tenants, or primary users, of the network, for public-safety applications and the like. This turn of events has prevented many larger cities from pressing forward with their plans.
Even so, there may yet be hope: Google Inc. announced that its own municipal Wi-Fi network in Mountain View, Calif., is growing in traffic by around 10 percent each month. AT&T Inc. has partnered successfully with Riverside, Calif., in an anchor-tenant arrangement. The city pays for municipal services like traffic monitoring and in-car voice and video, and provides access to the mounting assets, while a free offering has been rolled out for residents. And mesh researcher Esme Vos, founder of MuniWireless.com, released a report showing U.S. expenditures on municipal wireless networks would exceed $329 million this year, despite slips in project schedules at several major cities, making for a 35 percent jump this year compared to 2006.
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