WATPA: FW: Municipal wireless industry risks backlash if hype exceeds customer experience

From: Norm Jacknis <norm@jacknis.com>
Date: Fri Jun 23 2006 - 18:19:55 EDT

Municipal wireless industry risks backlash if hype exceeds customer

By Mike Langberg, Mercury News

Wed, Jun. 21, 2006 [San Jose Mercury News]

Residents of St. Cloud, Florida, get more than just free streets lights,
parks and libraries -- they live in the first U.S. community to offer free
city-owned wireless Internet access.

Cyber Spot, operated by Hewlett-Packard under a city contract, launched in
St. Cloud on March 6. Less than four months later, 55 percent of the Orlando
suburb's 10,000 households have signed up.

St. Cloud's apparent success with the much-hyped concept of municipal
wireless networks was the talk of this week's Muni Wireless Silicon Valley
'06 conference, which ended its three-day run Wednesday at the Santa Clara

An audience of about 600, including officials from cities around the
country, equipment vendors and venture capitalists, heard speaker after
speaker talk about the Florida town.

One statistic in particular should strike fear into existing Internet
service providers, or ISPs, especially phone and cable companies: A
staggering 84 percent of Cyber Spot users, according to a recent city
survey, ``are either currently or plan to ultimately use (the service) as
their only access to the Internet.''

In other words, several thousand households in St. Cloud may be in the
process of dropping their DSL lines or cable modems.

Muni wireless systems are cheap to build -- St. Cloud spent about $3 million
-- and tap the same Wi-Fi technology found in most notebook computers.

Cities around the country are racing to set up their own wireless networks,
or allowing private companies to build and run them, by attaching two-way
Wi-Fi radios to light poles.

Google is in the process of launching a free Wi-Fi network in Mountain View
this month, and is working on a Wi-Fi network for San Francisco in
partnership with EarthLink. Wirless Silicon Valley, a coalition of
government and non-profit agencies, is seeking to blanket 40 local cities
with wireless Internet access. The first round of bids from contractors is
due June 30.

But amid all the excitement, there was an undercurrent of anxiety running
through the conference.

Several speakers worried openly that muni wireless is being oversold, and
two projects that were prominently featured at previous Muni Wireless
conferences were hardly mentioned this time around.

Chaska, Minn., was the muni wireless poster child before St. Cloud.

The Minneapolis suburb launched a municipally-owned and operated system in
September 2004 offering wireless access to all of its 7,000 households for
$16 a month. Within a few months, a third of the community -- 2,300
households -- signed up.

But a story in the Chicago Tribune on June 11 revealed the Chaska network
had previously undisclosed problems with poor connections, unresponsive
customer service and high customer turnover. Earlier this year, the city had
to replace all of its radio equipment with a new generation of hardware, and
turned over management of the network to an outside contractor.

Another notable absence from this week's conference was MetroFi of Mountain
View, which runs a free wireless network in much of Cupertino, Santa Clara
and Sunnyvale.

MetroFi initially tried selling service at $19.95 a month, but found few
takers. In January, the company began offering the service for free --
inserting a small strip of ads in the browser to pay the bills.

But, according to a story in The Wall Street Journal on Tuesday, the MetroFi
system today has only about 10,000 users in an area with a population of
about 250,000.

I tested MetroFi's service for a column back in February. While I liked the
idea of getting Internet access for free, the quality was spotty. The
service wasn't always fast, and the signal was often blocked by walls.

Before you dismiss me as a professional skeptic, or a stooge for AT&T and
Comcast, listen to some of the comments from the Muni Wireless stage.

``Hype happens with every new technology, but -- boy -- with wireless it
really comes out,'' said Steve Goldberg of the venture capital firm Venrock
Associates in Menlo Park.

``Performance isn't quite as good as everybody hoped it would be,'' Goldberg

Chris Sacca, head of Google's wireless projects in Mountain View and San
Francisco, said, ``Whenever I talk to vendors in this space, I can never get
a straight answer.''

Equipment makers trash each other instead of offering hard performance data,
Sacca complained, then make ``outrageous and exaggerated claims'' about
their own products.

I'm a believer in the potential of muni wireless. If the evangelists start
making realistic estimates of cost and performance, muni wireless could
evolve into a long-overdue ``third pipe'' into the home that would force
more competitive pricing from the two-headed monopoly of cable and DSL

Until that happens, though, the industry risks a stinging backlash from
disappointed cities and citizens.

Contact Mike Langberg at mike@langberg.com or (408) 920-5084. Past columns
may be read at www.langberg.com.

Received on Fri Jun 23 18:21:00 2006

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