Muni Wireless Snowballs

Talk about your snowball effect. It seems every week brings new RFPs for citywide municipal Wi-Fi networks, or news of deployments. Only a few months back this nascent movement to bring broadband to the masses as a public service looked to be in trouble thanks to legislative challenges from incumbents (muni Wi-Fi “doesn’t stand a snowball’s chance,” in one pundit’s words), and a confusing, unproven business model. But as winter came to a close this year, the muni Wi-Fi snowball was moving uphill and growing in size.

“Cities are not just announcing intent to build public Wi-Fi networks, but are now actually deploying them,” says Chuck Haas, president and CEO at MetroFi Inc. “The muni model is now being proven out.”

For instance, EarthLink’s digital-divide-oriented Wireless Philadelphia is up and running, while a Strix Systems Inc./Mobile Pro deployment in and around Tempe, Ariz., had 1,500 users signed up across a 187-square-mile footprint as of late March. Madison, Wis., meanwhile, has gone live with a first phase of deployment, and the Orlando suburb of St. Cloud, Fla., expects to reach 9,000 users for its free service by August. In all, about 300 municipalities have turned up Wi-Fi networks in the United States.

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“We are seeing exponential growth,” says Greg Richardson, founder and managing partner at municipal wireless consulting firm Civitium LLC. “Last year was a year of experimentation and small deployments. This year and next we will likely see that inflection point where it will scale into major markets and really prove its viability.”

Indeed, large cities such as Denver, Houston, Minneapolis and New York City are looking at the technology. And Chicago and San Francisco are the latest to make splashes with high-profile RFPs.

In February, Chicago’s CIO office said the city would invite proposals for affordable, citywide Wi-Fi sometime this spring, with a goal of presenting recommendations to the mayor and city council before fall. It is likely to be a franchising model, where private companies pay the city a fee to build and bill the service. “The city won’t invest money or operate the service,” says Chris O’Brien, Chicago’s outgoing CIO.

Meanwhile, San Francisco has put out a formal RFP, requiring companies to include free access and an affordable 1mbps premium service in the bids. The implementation will be a public/private partnership, and San Francisco will capitalize on the online advertising revenue and fees for premium services. Google Inc. and EarthLink submitted a high-profile joint proposal in February that includes free access with 300kbps downstream and online advertising, along with a 1mbps ad-free premium service offered for $20 per month. Other bids came from a Cisco Systems Inc./IBM/SeaKay Inc. partnership, and from MetroFi, which already runs municipal Wi-Fi in nearby Cupertino and Sunnyvale, Calif. EarthLink and Google come with some experience under their belts. EarthLink has won contracts in Philadelphia and Anaheim, Calif., for similar networks, while Google already is sponsoring free Wi-Fi in San Francisco’s Union Square.

Originally thought of as providing free Internet access to bridge the digital divide, municipal wireless has evolved to contribute to municipal opex reduction, supporting applications such as automatic meter reading and in-field technician reporting. It also has become a way to encourage economic development, by attracting new businesses and jobs. In Cincinnati, Project Lily Pad is a citywide volunteer project (supported by Time Warner Cable) to roll out free Wi-Fi to create an environment that attracts mobile “creatives” to the Greater Cincinnati area.

As a result, multiservice networks that support a range of uses have become more prevalent in RFPs, covering commercial hotspot connectivity; VoWi-Fi; free broadband service; public safety access; real-time video surveillance applications; and remote municipal worker connectivity, such as on-site access to survey records, report filing by building inspectors, and the automated reading of water, gas, electric and parking meters. “When it comes to supporting municipal applications, the ROI case becomes better for cities,” says Linda Kalcic, vice president of corporate marketing at SkyPilot Networks Inc. “Often you can calculate that the city gets back an additional hour per day per person with just one in-field application deployment.”

Incumbents Embrace Wi-Fi

After months of fighting muni wireless through lobbying and court battles, the incumbents had a change of heart in March, bringing gasps from all corners. The Wall Street Journal (WSJ) reported that AT&T responded to RFPs in Michigan, while Time Warner Cable bid in Dublin, Ohio. Meanwhile, Cox Communications Inc. has partnered with ISP NeoReach Wireless to pursue muni opportunities, while Comcast Corp. has invested in Wi-Fi mesh vendor BelAir Networks. “Having tried to stop cities from offering cut-rate or free wireless Internet access to their citizens, some large phone and cable companies now are aiming to get into the market themselves,” wrote WSJ author Amol Sharma.

“They were previously worried about cannibalizing their EV-DO or DSL business, but if you don’t move forward at this point, someone else will eat your young,” says Nan Chen, vice president of marketing at Strix.

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