Is There a Future For Muni WiFi?

Any small or midsize business that needs Internet access and is sick of paying lots of money to get on the Web should be interested in the progress of various municipal WiFi projects around the country.But the funny thing is that if you have been paying attention and reading up on what's going on it could be you're only getting part of the story. While many of these public Internet access projects have failed or stalled in a number of major cities, a recent report by MuniWireless LLC indicates that $329 million will be spent this year on municipal wireless networks.

A release that accompanied the report states: "Despite slips in project schedules at several major cities, the third annual Municipal Wireless State of the Market Report says the market will grow 35 percent this year compared to 2006."

Huh?

Citywide WiFi projects in Houston, Chicago, St. Louis, and San Francisco all encountered major roadblocks -- and were hammered in the press for it.

MuniWireless's report acknowledges these difficulties: "This years statistics are lower than had been predicted in last years report, because several major cities including San Francisco, Chicago and Philadelphia have either delayed, stretched out or re-evaluated their initiatives. Additionally, major service provider EarthLink Networks is recasting its strategy for this market as part of a larger corporate overhaul."

MuniWireless founder Esme Vos says, "But despite some setbacks, the market has continued to grow by strong percentages. The bottom line is that networks that are up and running are delivering real, tangible value to their communities, and decision-makers are generally quite satisfied with the positive impact of these networks on government operations, in particular."

The report continues: "Vos also notes that the predicted growth rates from 2007 to 2010 are impressive considering that respondents to the survey answered during a 4-week period from late August to late September 2007."

"This was a time when there was a lot of negative press coverage about a few high-visibility projects, mostly surrounding public access projects," she points out. Theres little doubt that this cloud of bad news dampened peoples outlooks to at least some degree, and still the survey respondents indicated that they expect expenditures to rise strongly over the next several years."

Is it possible that more of us will be experiencing the excitement of WiFi for all soon? Is it possible that we wont have to pay through the nose to get Internet access at the office or for our telecommuting employees?

Before we all get too excited one of the findings of the report could spell trouble for. "Overall, survey respondents indicate they are somewhat less concerned with most major challenges to successful projects, compared to a year ago. The biggest exceptions, however, are seen in wireless network performance and unclear ROI scenarios  each of which is considered a bigger challenge today than a year ago."

Poor wireless network performance has plagued some of these projects and an unclear ROI scenario is likely to scare away ISPs (Has anyone seen Earthlink around lately?)

Houston's $40 million planned WiFi network was thrown a curveball by EarthLink's decision to scale back it's Municipal WiFi business but comments made by the city's CIO Richard Lewis are telling in demonstrating how just trying to set up a wireless network in a locale can have some unanticipated -- but positive -- results.

In an interview, Lewis said that the city remains committed to developing a municipal WiFi network. He then said, "There are three basic business objectives for the city in this field. Number one is to bring the cost of broadband down, and we've already accomplished that. As soon as we announced what we were doing, Comcast and AT&T dropped their rates. Before our project in Houston, the broadband/DSL rates were anywhere from $30 to $50 per month. Today they are $15 to $20."