Wednesday, August 15, 2007

Will telecoms put the kaibosh on muni WiFi? (and could this seriously hurt W. Mass...)

Well, if we go by a recent story in BusinessWeek, telecoms are at least getting cold feet:
While 415 U.S. cities and counties are now building or planning to build municipal Wi-Fi networks, "deployments are slowing down slightly," says Esme Vos, founder of consultancy Vos's tally still marks a nearly 70% jump from mid-2006, when there were 247 muni Wi-Fi projects on tap, but that's down from the torrid pace of a year earlier, when deployment plans doubled.

Perhaps the clearest hint of trouble ahead is that some of the companies partnering with cities on these projects, including EarthLink (ELNK) and AT&T (T), are having second thoughts about remaining in the municipal Wi-Fi business.

Impacting this is what's gone on in the city of San Francisco, possible the most wired city in the U.S. A 15%-30% sign up rate is needed for muni wifi to be feasible--right now only 1%-2% have signed up (says Glenn Fleishman, editor of Malik gives the inside scoop on SF's muni wifi woes.

What's getting to the potential subscribers? Competition and weak signal (a real killer). According to BusinessWeek, Lompoc, California (a wifi'd city) has about 422 subscribers, but ideally needs a total of 4,000 subscribers to cover costs. Muni wifi is about $16 a month, but folks can get super-speedy broadband for about $33--double, but better. Esp. when considering that the wifi is great downtown, but the signal isn't as reliable when going indoors.

Telecoms would like cities to foot most of the bill for muni wifi--thing is, cities sometimes can't do it alone
Similarly, cities that have deals that don't currently require a government investment are being asked to renegotiate existing muni Wi-Fi contracts. In Portland, Ore., MetroFi says it is pushing the city for a formal commitment to buy network services. Thus far the network is about 20% complete, and serves the downtown area

And there's *lots* of reasons why governments don't want to get involved in providing money for muni wifi...

So, what does that mean for a place like Western Massachusetts--not a very wired place, where many towns aren't even within shouting distance to a major metropolitan area, and in desperate need of good broadband to help education and economic growth. In fact, a major metropolitan area within our state, Boston, for many years didn't even know we were part of the state (and some still prefer to think of us as Northern Connecticut or Southern Vermont.) Pioneer Valley Connect, a combined effort between Hamden, Hampshire and Franklin counties, since 2003 had been making concerted effort to get through to our state government the need for better connectivity in this part of the state (from the FAQ):
"Pioneer Valley Connect is a regional initiative to create a more competitive and robust telecommunications landscape in the three counties of the Pioneer Valley region. The purpose for greater access to broadband in traditionally, underserved areas is to encourage economic development as well as promote improved communication systems for education, health care and public safety purposes. The effort is led by business and community leaders from Franklin, Hampshire and Hampden Counties.

Another great boon for the state has been the election of Governor Deval Patrick. Unlike Mitt Romney, who, I don't think, ever set foot out here (being one of those who may have preferred to view us as CT's stepchild) Patrick's been very involved, has visited Springfiled, many of the hilltowns, as well as Pittsfield (which some think of as a suburb of Albany.) Patrick's office recently (8/2/07) unveiled an $25 Million Broadband Incentive Fund (pdf) and appointed Sharon E. Gillett to the post of commissioner in the Department of Telecommunications and Cable (recently Q&A'd in the Boston Globe:
Q The big news is the state's $25 million broadband incentive fund, which will help bring broadband access to 32 towns that don't have high-speed Internet. What are the details?

A [The fund] is to be used to invest in hard capital assets with long lives -- things like conduits, fiber, wireless towers. Those are big parts of the up-front capital required to serve communities, and the idea is having the state invest in those assets lowers the cost for private companies to come in and do the rest of the job. The state is not a service provider . . . We're also technology neutral -- whatever works

So, it appears that, at least in Massachusetts, there will be some funds to help assist with the build-out in different ways (towers, fiber, etc) which will then help smaller, community- centered companies, like Crocker Communications, to finish up and spread the service around (although Crocker's done a fairly decent job of things so far. There are other companies in some of the hilltowns that will most certainly benefit from this initiative.)

So, while the issue of money and muni wifi are inseparable, the issue may play out differently in rural areas such as Western Mass than they do out in high-tech, high-stakes places like San Francisco and Boston (which, I believe has its own issues with wiring places like Roxbury.)

I always say, the issues of the Country are far different from the issues of the City and its suburbs, and the solutions needed are different as well. Let's see if W. Mass can float the best solution for itself and get high-speed broadband to its people (perhaps, in some places, via WiMAX?) without falling under the long shadows of its far off urban cousins.

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