Muni Wi-Fi Business Model is Evolving

Ina Sebastian | August 07, 2007, 12:25 PM

My colleague Julie Ask recently blogged about the SF mayor’s plan to clarify public interest in the current citywide network proposal by including a measure in the November election. This project is in danger of failing before it begins, because of the city’s hesitation and EarthLink’s recent announcement of strategy adjustments. EarthLink has not yet committed to the city’s current proposal.

EarthLink and other citywide providers (like MetroFi, a free ad-supported WISP) are now in the position to evaluate profitability of such networks, based on early experience of the last couple of years. Anchor tenantship, meaning significant long-term commitments by city government to purchase services, has emerged as a critical requirement given high capital and operational expenditures of muni networks. It makes sense, we looked at more than 300 current and planned initiatives –cities look at citywide Wi-Fi mainly for economic development and efficiency. We have seen a variety of high-profile large cities that issued RFPs with unrealistic expectations. But there are also many – in fact more – medium and smaller cities that want to be anchor tenants. There are many applications – automated meter reading, building inspection, traffic coordination, access for remote workers, public safety, access in libraries and schools, agricultural applications in rural areas, etc. WISPs and cities have to negotiate for feasible models on both sides.

Our data on demand for mobile and residential access show that city anchor tenants are crucial for providers. Clients can learn more in our municipal wireless research.