Wagering on Wi-Fi

St. Cloud, Fla., recently celebrated its 100th day of offering residents access to Cyber Spot, one of the country’s first free, citywide, city-owned wireless networks. Broadband provider Earthlink is moving ahead with plans to bring all of Philadelphia under a Wi-Fi cloud by next year. Google has announced plans to introduce wireless service in San Francisco, and advertising revenue will partially pay for it. And in Cincinnati and Savannah, Ga., nonprofit groups are bringing wireless to the masses — on a budget.

From Madison, Wis., to Corpus Christi, Texas, hundreds of municipalities nationwide are pursuing a range of strategies for delivering Wi-Fi despite legal challenges from traditional telecommunications companies wary of competition. The flurry of activity, however, belies a Wi-Fi market that remains mostly untapped. A standard delivery model has not emerged yet — if one ever will.

“Right now, this is kind of the Wild West of the Internet,” said Zach Britton, chief executive officer of Front Porch, a company that helps Internet service providers deliver personalized online messages to Wi-Fi subscribers. “It’s exciting. You wonder which of these horses will win the race.”

Some observers say wireless service is quickly becoming a public utility that is as essential as water and roads. Others hold that Wi-Fi already is indispensable for cities that are eager to attract the knowledge workers that make economies hum in the 21st century.

“It’s no different than 130 years ago when we finally got technology to a point where we could deploy an electric network and bring electricity” into people’s homes, said Jeffrey King, director of sales and marketing at Northrop Grumman Information Technology. “Broadband wireless access is the next city service.”

Besides juicing economic activity, Wi-Fi promises to improve city services, make broadband affordable by breaking up the duopoly of cable and telephone companies, close the digital divide between people who have Internet access and those who don’t, and improve the United States’ standing in the global techno-hierarchy.

“The fact that the United States has dropped to 16th in the world in connectivity is kind of crazy,” said Jonathan Baltuch, president of MRI, the company that worked with St. Cloud to build its Wi-Fi network. “This is a unique opportunity for us to leapfrog back into a place of leadership.”

But how should municipalities provide Wi-Fi? Via a city-owned service? A public/private partnership? A single service provider? Multiple ones?

“There is no one way to do this,” said Jon Peha, associate director for wireless systems at Carnegie Mellon University’s Center for Wireless and Broadband Networking. “Do you try to blanket the city? Do you focus on certain areas? If so, which areas? Do you make this an entirely free service run by the city with tax dollars? Do you use advertising revenue? Do you use subscription revenue?”

Peha said cities should think hard before ceding control to a single provider that promises free service or other concessions. “Free service is nice, but lack of competition tends to bite you in the long run,” he said. “This is a time for experimentation. We don’t know yet what will be effective.”

Developed in 1997, Wi-Fi’s 802.11 protocol quickly became the basis for ubiquitous Internet hot spots in coffee houses and elsewhere and gave the technology its initial burst of commercial appeal. Wi-Fi connection speeds are generally faster than DSL service but slower than cable.

Municipal Wi-Fi works by blanketing an area with strategically placed radios that operate in an unregulated 2.4 GHz band. A mesh of radio nodes communicate with a wired Internet connection and one another, an arrangement that creates a self-organizing and self-healing system. The nodes determine the fastest path to the main connection, for example. If one radio dies, other units in the mesh pick up the slack.

As is the case with many new technologies, a few bumps in the road have slowed municipal Wi-Fi. Early users encountered setbacks, such as dead spots in their grids, which have emboldened critics.

“You can try to use Wi-Fi to cover a municipality, but it’s akin to using a boat to drive down a highway or a car to go across a lake,” said Derek Kerton, founder of the Kerton Group, a small consulting firm in the wireless telecommunications industry. Municipal Wi-Fi projects expect more of the technology than it was designed to do, he said.

Not surprisingly, the view within the industry is more upbeat. Wi-Fi is still in its infancy, but despite inevitable growing pains, advocates say, it will mature and prosper.

“Technology and expectations are not quite aligned,” said Rick Rotondo, director of marketing at Motorola’s Mesh Networks Product Group. “The technology will improve to deal with issues like congestion and [signal] interference. You’ll get lower cost [and] faster, cheaper, smaller access points. New technologies will emerge to solve” those problems.

The cost of creating a municipal Wi-Fi network is $40,000 to $80,000 per square mile, depending on the system’s capacity, said Michael Voellinger, an analyst who covers the wireless industry at Telwares Communications, a telecom research and consulting firm. Megabit-per-square-mile costs will decrease as systems become more robust, he said. Intel, for example, announced the development of a chip to reduce noise on Wi-Fi networks. Cohda Wireless developed Wi-Fi radios with stronger signals that will reduce node density in mesh networks by one-half to two-thirds, company officials said.

Adoption of WiMax technology and economies of scale could further reduce costs.

The Wi-Fi world has recently focused its attention on St. Cloud, whose free, city-owned Wi-Fi system went live this spring. About 55 percent of St. Cloud’s households registered for the free service in the first 100 days, a figure that the city projects will jump to 80 percent within three months.

The city paid for the implementation. Wi-Fi costs are typically less than the expense of blanketing an area with cable Internet or DSL service. Consumers usually bear much of those expenses. City officials project $500,000 in annual operating costs, which they expect to be more than offset by savings generated by the Wi-Fi network. For example, city employees will switch from cellular phone service to less expensive Wi-Fi phones.

City departments have responded enthusiastically when asked to find ways to use Wi-Fi connections to improve government services. “They’re like potato chips,” Baltuch said. “Once they start eating them, they can’t stop.”

Some early reviews, however, have been mixed. Residents with access to a strong signal like the free service, but others have complained about weak signals and dead spots. The city is working to correct both issues. St. Cloud has received fewer service calls than expected, and user surveys show strong support for the new service, city officials said.

In Corpus Christi, interest in Wi-Fi grew after a pit bull mauled a city worker assigned to read a utility meter in a backyard. The city considered moving meters to the fronts of houses before deciding to set up a Wi-Fi network to automate the meter-reading task.

Corpus Christi’s Wi-Fi cloud covers 85 square miles and reaches 90 percent of the city’s residents. Until now, access has been free, but “eventually that has got to be a paid system,” King said. He predicted that cities will develop different models for providing municipal Wi-Fi, just as some own public utilities while others rely on private providers. “I don’t think there is one single model,” King said. “It’s kind of based on need.”

In Philadelphia, Earthlink said it will allow other Internet service providers to use the Wi-Fi network it is building to cover the city’s 135 square miles. The company has agreed to charge some residents $9.95 per month to access its broadband service. Everyone else will pay $21.95.

Google proposed charging about $20 per month for wireless service that will give San Francisco residents access to download speeds of 1 megabit/sec. Slower 300 kilobits/sec access will be free to users who are willing to watch ads. Google will tailor ads based on users’ registration profiles, their physical locations and their Internet activity. It is a business model that has raised the hackles of some privacy advocates.

Trading access for ads, however, is a proven communications model. “Isn’t that how TV got started?” asked John Logan, a former acting chief of the Federal Communications Commission’s Cable Service Bureau who serves as regulatory counsel at Tropos. “Isn’t that what Google does?”

Pulley is a freelance writer based in Arlington, Va.

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