Municipal Wi-Fi moving ahead despite EarthLink pullout

Computerworld - Despite EartLink Inc.'s exit from the market, municipal wireless is alive and well in the U.S., mostly in small-to-midsize cities, and it's beginning to spread to Europe, said Esme Vos, founder of MuniWireless LLC, the self-styled "voice of municipal broadband."

In MuniWireless' "2007 State of the Market" report, released earlier this month, she said, "We estimated the U.S. wireless market would experience year-to-year growth rates of around 33% from 2007 through 2010." At that rate, the U.S. market for municipal broadband wireless, mostly Wi-Fi, including equipment and set up costs, will exceed $900 million by the end of the decade. That is down from the 2006 projection, mainly because of EarthLink's withdrawal, but the market is still growing.

EarthLink, Vos said, was focused on very large cities and has pledged to finish its wireless project in Philadelphia. With its withdrawal, the large-city market has become quiescent, in part because projects the size of Philadelphia are beyond the financial reach of the vendors building the systems. "If you don't have the entire city of Philadelphia to cover, it's faster and easier to roll out," she said. "You also don't have the big city politics, as we've seen in San Francisco. Smaller communities don't have that dynamic."

Smaller communites lead the charge

However, many smaller cities and even rural counties are going ahead with their own plans for municipal, public Wi-Fi. As of Vos' last count in August, 400 U.S. communities were in some stage of broadband service creation, from the pioneers with systems running to communities selecting a vendor. Many, she said, such as the farming community of Highland, Ill., are motivated by the lack of high-speed Internet connectivity or a lack of competition, allowing a single provider to charge high fees for services that many need for their small businesses and agribusinesses.

Initially, the economic model for municipal Wi-Fi installations was for the supplier to install and run the service on speculation. The municipality provided space on utility poles for the Wi-Fi antennas and received free access to the network. The vendor recovered its costs from a combination of fees charged to local businesses and private subscribers and advertising. That model proved economically nonviable and has almost disappeared, although WildFire Connections has announced that it will go ahead with an advertising-supported municipal Wi-Fi service in Concord, N.C., a city of about 56,000 people.