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US municipal Wi-Fi loses its shine

Business models followed technology too closely

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A year ago, hardly a week went by without news of a major municipal wireless project in the US, supporting free or subsidized access and a host of shiny business models. Now hardly a week goes by without news of the death of one of these plans.

The San Francisco roll-out, the poster child for the free Wi-Fi movement, largely thanks to Google’s involvement and genius for publicity, hangs in the balance; now Chicago has cancelled its plans, saying it would be “too costly and too few residents will use it”.

But just as the wilder theories that municipal Wi-Fi would sideline the telcos and kill the cellular business case were patently unrealistic, so talk of the death of municipal networking and non-viability of alternative service models is also exaggerated.

The mistake was to associate the new business approach too closely with the technology. Wi-Fi in unlicensed spectrum was readily available, but was never going to be a sufficiently robust technology to support the ambitions of the Google-inspired internet lobby. This is not to say the concept of an open access wireless internet has been fatally, or even seriously, damaged – it has just shifted to new platforms that stand more chance of delivering an experience that is friendly for the users and profitable for the providers.

Hence Google’s defocusing on muni Wi-Fi and new-found passion for 700MHz licensed spectrum and new devices. The search giant knows, as do Intel, Microsoft and the other drivers in this space, that licensed spectrum and technologies remain the key, at least in the medium term, and that the challenge is to change the rules to support open internet models, new operators and wider availability – rather than try to build an unlicensed new structure from scratch, with the danger of creating anarchy and commercial failure, rather than a brave new world.

There are various reasons why the municipal Wi-Fi phenomenon was always doomed to be an interlude in the history of US telecoms rather than a defining force - which is not to say it has not been important. Like Wi-Fi hotspots, it has challenged the telcos to adapt to a more open world, more rapidly than they would have liked, and it has helped to reshape user expectations of what a wireless internet service can provide. Familiarity with low cost, flat rate, always-available and open access services, even if the experience has been flawed, has certainly hastened the collapse of the walled gardens.

But the early municipal trend was built on idealistic notions of bridging digital divides and opening internet access to all, and was largely reliant on the old-fashioned concept that universal access would benefit society and the economy, and therefore should be funded largely from the public purse.

Such approaches quickly foundered on taxpayer reluctance, and the cities’ desire for blanket networks to raise their own profiles played into the hands of the companies leading the drive for new telecoms models in the US, with Google as their cheerleader. These, of course, wanted to hasten the introduction of services that followed the PC internet approach, providing flat rate, low cost broadband with open access and with the main revenues geared to advertising.

The interest in municipal Wi-Fi mesh clearly offered a readymade opportunity for Google to demonstrate its ad-driven model and find a delivery network for it, one that did not require lengthy and expensive negotiations for spectrum rights.

Amid the enthusiasm for ad-driven wireless businesses, however, it was notable that those with real experience of city networks remained skeptical – the well respected MobilePro, for instance, backed away from free access/advertising projects, claiming these were unworkable. The future of real city networks may well lie with companies like this, building out systems for cities with genuine underserved communities, and for applications with real ROI such as traffic monitoring – in other words, traditional business models resting on a mixture of public funding and provider tariffs.

The problems for implementing the Google approach on unlicensed Wi-Fi boiled down to inadequate technology; high risk spectrum; limited user demand; and conflicting operator requirements. Wi-Fi, for all its merits, is constrained in what it can deliver by its confinement to unlicensed bands, which are subject to interference and poor performance.

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