Municipal Wi-Fi thrives – on a small scale

The dream that free wireless Internet hubs would blanket downtowns across the country abruptly faded for several cities this summer. In San Francisco, Houston, Chicago, and St. Louis, plans that were supposed to make Wi-Fi access as cheap and ubiquitous as tap water seemingly all fell apart at the same time.

With the collapse of several major metropolitan projects, analyst forecasts for municipal Wi-Fi turned dark. Business models were unproven. Eager hype fizzled to dismissive pessimism.

But not everywhere.

While big-city Wi-Fi wilts, hundreds of smaller communities have fostered thriving networks. These success stories often take place in cities and counties few have ever heard of – Owensboro, Ky.; Rio Rancho, N.M.; Kutztown, Pa. Their town borders don't extend very far, their populations are relatively small, and their main streets may be unglamorous. But in many ways, that's how they pulled off what most metropolises have not.

"Many of the cities that are building successful Wi-Fi networks are those that never had the luxury of dreaming that Earthlink or some other major company would drive by and offer them a great deal," says Esme Vos, founder of the industry's news and consultancy website MuniWireless.com. It was this do-it-ourselves attitude, she says, that shepherded many of the successes.

This summer was hard on urban Wi-Fi. Exhibit A: the extreme corporate shake-up at Earthlink, one of the biggest names in municipal wireless. In the same few days, the Atlanta-based Internet provider abandoned its much-heralded proposal to build San Francisco's wireless network, faced a $5 million fine from Houston for missing a contractual deadline in rolling out that city's network, and announced it would shed some 900 jobs – half of its staff – including the company's head of municipal Wi-Fi.

In St. Louis, a $12 million plan stalled out this summer when AT&T and the city couldn't untangle an electricity snarl. Engineers planned to hang the Wi-Fi hubs from street lamps and they had hoped to use the bank switches that power the light poles to also power the routers. The problem: The lamp systems shut off during the day. That plan is on hold indefinitely.

With these signs of the industry buckling, Chicago officials backed off their plans to install a city network after failing to reach an agreement with either of the competing wireless providers.

But as these cities floundered, analysts swung from being too exuberant about Wi-Fi to being too dismissive, says Joanne Hovis, president of the Columbia Telecommunications Corporation, a public-interest consulting firm in Columbia, Md.

"The hype cycle was destructive because it made cities think they could get more than was really feasible," she says. But, "it's more destructive to be thinking the way we are now – that 'Oh, these networks can never be built.' "

Just ask St. Cloud, Fla. This central Florida community of 28,000 residents commissioned and now owns a truly citywide Wi-Fi network at no additional cost to residents. For more than a year, it has been the only town in the country able to offer 100 percent service availability, according to a study released earlier this year by the independent wireless testing company Novarum. The survey dubbed St. Cloud's $3 million network the best metro Wi-Fi in North America – ahead of Mountain View, Calif., where locally grown Internet giant Google provides free wireless.

"The really amazing thing about St. Cloud is that more than two-thirds of households have signed up," says Sascha Meinrath, research director for the Wireless Future Program at the New America Foundation in Washington. "National cable and DSL companies aim for ... the 15 to 20 percent realm."

For now at least, St. Cloud is the goal for wireless plans – not the norm. Of the 415 American cities and counties operating or deploying wireless systems, very few can pull off a free network, says Ms. Vos. Initially, some communities considered an ad-supported network, but that approach has been largely abandoned because it hasn't proved viable. Instead, communities are looking to partner with a company that will build the network and run a subscription service off the Wi-Fi hubs.

This is partly why Earthlink ran into trouble. In the early days of these deals, cities got off easy, says Glenn Fleishman, a journalist who specializes in the wireless industry.

"San Francisco and some other cities thought they could get something for free," he says. "They thought they could get the network and not pay for it.... They only needed to share some streetlights."

But with Earthlink bearing the brunt, the business model cracked. The networks cost far more than expected, and the investments took far longer to mature.

Small communities, such as Brookline, Mass. (population 57,000), knew that Internet providers would be less willing to take a gamble on cities lacking instant name recognition, says Mr. Fleishman.

So Brookline signed on with a small IT firm, Galaxy Internet Service, based in neighboring Newton, Mass. The new network caters to the five principles that Fleishman says are the most successful:

Homeowners: Most municipal plans offer residents a competitive choice against what Vos calls the "duopoly of cable and DSL." By offering a third way, towns can keep Internet costs down and provide more access for lower-income residents.

Public safety: In January, Cocoa Beach, Fla., (population 12,000) finished outfitting its police cars with wireless computers connected to real-time video, dispatch software, and state and federal crime databases. Ocean City, N.J. (population 15,000), plans to roll out wireless bracelets, which would employ the Wi-Fi hubs to track young children on the boardwalk.

Businesses: Citywide Wi-Fi is a boon to small businesses and helps draw new companies to the area. Similarly, wireless hookups spread that coffee-shop phenomenon of surfing the Net while nibbling on snacks to every store downtown.

Mobile users: With the popularity of Wi-Fi devices, residents are increasingly likely to expect Internet access on the go.

Municipal workers: Most city Wi-Fi deals now require that the local government sign on as an "anchor tenant" to the network. This ensures the million-dollar projects will at least have some subscribers and can save city departments countless man-hours. For instance, Corpus Christi, Texas, uses its network to automate home meter readings instead of dispatching workers to individual homes.

But, of course, not all small cities have found wireless success. Almost a year after launching its $2 million Wi-Fi system, Lompoc, Calif., (population 40,000) has attracted fewer than 500 registered users.

"Is Wi-Fi doomed? No," says Craig Settles, a wireless consultant. "The concept that you can get wireless for free ... is dead. Cities will have to find the right mixture for them and bring something to the table in order to get it."