Wi-Fi networks are moving forward. But not without a few bumps
along the way.
By Shawn Young
The Wall Street Journal
Monday, October 23, 2006
The effort to blanket cities and towns across the U.S. with
wireless Internet access is starting to move from the drawing
board to real life. But not without plenty of kinks along the
"It's a little bit learn-as-you-go," says Jerry Sullivan,
president and chief operating officer of MobilePro Corp., a
Bethesda, Md., company that is building systems in several
Arizona communities and in parts of Ohio, Texas, Colorado and
The challenges for municipal Wi-Fi, which is short for wireless
fidelity, range from technical issues, like getting signals in
and out of buildings, to grappling with the intricacies of local
politics. There are debates going on around the country about
whether networks should be publicly owned and largely free, or
privately owned and operated for profit by companies like
EarthLink Inc. and
AT&T Inc. For now, most municipalities are splitting the
difference -- having private companies build and operate
networks that provide a mix of free and paid service.
Most municipal networks are still taking baby steps, serving
limited batches of test customers in a few neighborhoods. But a
few communities, including Tempe, Ariz., which is near Phoenix,
and St. Cloud, Fla., a suburb of Orlando, have systems up and
running that are proving such projects can work. Within six
months of the launch of a free high-speed network this spring in
St. Cloud, 77% of the city's residents had opened accounts, says
Jonathan Baltuch, president of Marketing Resources Inc., a
marketing and consulting firm that advised the city on its
system. About 38% of those who signed up had been offline or
using slow dial-up connections before the new system became
widely available, Mr. Baltuch says. The city views the free
system as a vital economic-development feature, he adds.
More than 300 communities, including Philadelphia, San Francisco
and Portland, Ore., have or are planning wireless Internet
projects, according to
MuniWireless.com, a Web site devoted to such projects. About
100 cities and towns have projects that are advanced enough to
provide at least some service to consumers, according to the
"There's not going to be any stopping this momentum over the
next few years," says Greg Richardson, a managing partner at
Civitium LLC, an Alpharetta, Ga., consulting firm that works
with local governments and has advised Philadelphia and San
Francisco on their projects. As more ventures come to fruition,
"2007 is the year when you're finally going to be able to look
at measurable results."
But first, there are hurdles to clear.
Just negotiating the contract typically takes six to eight
months, says Mr. Richardson. This is where local politics
imposes itself, by shaping the terms of the agreement.
Often, the biggest stumbling block in negotiations is the
question of pricing. Local government officials generally want
people to have as much free access to high-speed wireless
services as possible. Instead of charging people to use the
Wi-Fi system, they argue, companies can make money by selling
advertising that will appear on users' computer screens. But
companies generally prefer the more-predictable revenue stream
that user fees provide.
This debate is being resolved in a number of ways. In some
communities, companies building networks are offering a free
service, funded by advertising, that operates at a relatively
slow speed that is adequate for basic Web surfing and emailing.
Anyone who wants faster service -- better suited for gaming,
video downloads and business use -- has to pay for it. Typical
fees range from about $5 for a couple of hours of access to
about $30 a month for unlimited access. Some projects, like the
one in Philadelphia, offer discounted access to faster service
for low-income residents. Some companies also offer free access
in certain public areas, like parks, and many include free
access for local government agencies.
Sometimes companies and local governments find it impossible to
come to terms. Negotiations between MobilePro and Sacramento,
Calif., broke down over the summer after city officials pushed
for more free service, to be supported by advertising that might
appear on a corner of the user's screen. "We just do not feel
that an advertising-based revenue model is sustainable" unless
it is accompanied by some levels of paid service, MobilePro's
Mr. Sullivan says. The city is now looking for another company
to work with.
Even when things go more smoothly, there are hundreds of
technical and financial points that need to be ironed out. For
example, cities and companies must work out agreements about
access for disadvantaged communities, the extent to which the
city is entitled to regulate prices, and what data the providers
will gather about users.
Once a contract is in place, setting up the network brings its
own challenges. Local Wi-Fi systems typically rely on hundreds
of small radio transmitters -- attached to streetlights,
buildings and other structures -- that beam Internet connections
out to users' computers and receive their return signals.
EarthLink spent three months in a six-square-mile section of
Anaheim, Calif., perfecting the radio grid and otherwise
polishing its system there before expanding it. "The design
takes a lot of front-end work," says Donald Berryman, president
of municipal networks at EarthLink, which also is building
MobilePro built the system in Tempe, which has been operating
since March and now covers 20 square miles. "We gave them six
months to build it," says David Heck, the city's chief technical
officer. "We should have given them 12. That way, they could
have perfected it."
The kinks have largely been worked out, but the system faced
problems that experts say are typical in the early stages of
these projects. The project required more radios than expected,
there were some dead spots, and there were engineering problems
to be solved in gathering data from the various radios and
routing it back onto the Internet, says Mr. Heck.
In addition, the local police department had to update some of
its software so that its laptops could connect to the network.
The police department now loves the system, which also has
become a surprise hit with the town's traffic engineers, says
Mr. Heck. They delight in adjusting the timing of traffic lights
right from a congested intersection, he says.
Getting signals in and out of buildings also is tricky. Most
systems that rely on radios planted on street fixtures like
light poles have trouble reaching above the third floor, say
people involved in such projects. "The equipment providers are
doing some interesting things with directional antennae," says
Mr. Richardson, but the problem is far from solved. It helps to
get equipment onto rooftops and other tall structures. But "that
means a lot of work running around with the landlord," says
EarthLink's Mr. Berryman. Support from government officials
often helps when dealing with building owners. "They listen to
the mayor a lot more than they listen to us," he says.
Even on lower floors, buildings can pose problems. Often, the
trouble isn't the network, it's the computer. The signal from
the network may reach the computer easily enough, but most
computers have puny transmitters that may not be strong enough
to push a signal back out. The solution is an amplifier, usually
called a bridge, that is about the size of a wallet. In St.
Cloud, the city sells them and about one-third of the system's
users have gotten one, says Mr. Baltuch. He says the city
prefers to err on the side of telling people they'll probably
need one, rather than have them frustrated by technical trouble.
Facing the Divide
In Philadelphia, Mr. Berryman says, EarthLink is grappling with
the complexities of fulfilling the project's ambition to reduce
the digital divide -- the gulf between low-income people and
those with higher incomes in terms of access to all the benefits
of the Internet. The system the company is building there
includes access for $9.95 a month for low-income users.
"It's turning out to be a lot more work than we thought setting
up the digital-divide programs," Mr. Berryman says. "We
originally thought that if we just charged $9.95 for access, the
problem would take care of itself." What the company found was
that it needed to work intensively with local charities and
businesses that could help low-income families get computers,
and that it needed to help train local groups that teach people
how to use computers.
At the other end of the digital divide, EarthLink was surprised
when it turned on part of a system near Temple University that
it wasn't planning to promote yet, and over a weekend 74 people
signed up after their computers automatically detected the
Networks built by start-ups like MobilePro and Internet
powerhouses like EarthLink and
Google Inc., which are working together in San Francisco,
are the latest in a long series of challenges to the traditional
phone companies' dominance of communications.
Verizon Communications Inc. both lobbied heavily against
early municipal projects, viewing them as unfair, tax-subsidized
competition. But AT&T recently has begun bidding for municipal
work, and two months ago it announced its first municipal
customer, the city of Springfield, Ill. The company signed an
agreement last week with the city of Riverside, Calif., to build
a citywide Wi-Fi network, scheduled to be available early next
AT&T says its change of heart happened in part because cities
have become less adversarial and more receptive to
public-private partnerships. Getting on the Wi-Fi bandwagon also
has strategic value for a phone company or Internet-service
provider because it makes a portable connection a service the
company can use to attract and retain customers.
"It's all about the extension of the broadband access for our
customers," says Eric Shepcaro, vice president for business
development at AT&T. "It's also about leveraging assets that we
already have in place."
AT&T thinks large companies like itself that have long histories
of providing large-scale public networks are best equipped to
create municipal Wi-Fi systems. "We believe cities don't realize
the complexities" involved in building, running, marketing,
maintaining and expanding networks over time, Mr. Shepcaro says.
Many Wi-Fi advocates passionately disagree. In Sandoval County,
N.M., a municipal project that combines off-the-shelf radios,
free open-source software and local technicians has customized
radios to send signals that will travel 60 miles -- instead of
just a few hundred feet like most Wi-Fi transmitters -- says
Dewayne Hendricks, chief executive of Dandin Group Ltd., a
consulting firm that is involved with the project. "You can do a
lot more with Wi-Fi than people realize," he says.
The ambitious goal is to bring a connection fast enough to
support remote education and medical care both to the county's
fast-growing southern portion and to its rural north, which is
home to several Native American communities.
The county-owned project doesn't provide service directly to
consumers. Its goal is to bring a high-speed network to each
community's doorstep, a function that normally is fulfilled by
local and long-distance phone-company networks.
Qwest Communications International Inc., the regional phone
provider, had long neglected the area in building its high-speed
network, says Mr. Hendricks.
In a reversal of the usual roles, county officials met with
Qwest representatives about six months ago and offered to sell
Qwest access to the county's network. "They were dumbfounded,"
says Mr. Hendricks, who is also an adviser to the Federal
Communications Commission and an editor at MuniWireless.com.
They said they would schedule additional meetings, but they
never did, says Mr. Hendricks.
Qwest spokesman Jon Lentz declines to comment about the
specifics of the meeting with Sandoval County officials, but
says the company has made progress extending high-speed Internet
connections using its existing, wired DSL technology. Qwest
remains focused on using DSL to provide high-speed service, he
--Ms. Young is a former
reporter in The Wall Street Journal's New York bureau.
Write to Shawn Young at