Muni Wi-Fi Projects Struggle with Technology and Economic Challenges

Municipal wireless rollouts from Philadelphia to San Francisco face unrealistic demands and business models. 

by / January 21, 2008

When Philadelphia announced its ambitious "Digital Inclusion" plan for a citywide municipal Wi-Fi program in 2005, cities across the country took notice. Philadelphia was planning to become the first metropolitan city with a citywide Wi-Fi network covering 135 square miles. It claimed the network would benefit citizens, business, schools and community organizations.

In a frenzy comparable to the dot-com bubble, other cities announced similar plans for municipal Wi-Fi projects, partnering with service providers such as EarthLink who promised to pay all upfront installation costs. Politicians, activists and Internet providers touted free citywide Wi-Fi as a means to bridge the digital divide and increase business development in cities.

Yet in the two years since Philadelphia's announcement, municipal Wi-Fi projects have recently hit the stumbling block of economic and technological reality. Last August, EarthLink recanted its promise to pay for all upfront network costs in some of its proposed municipal Wi-Fi programs, claiming the municipal Wi-Fi business model that attracted numerous municipalities wasn't viable. The company requested that cities pay for network construction and announced that it was cutting 900 jobs - or nearly half its work force - in a massive restructuring. Several cities that worked with EarthLink reacted to the announcement by canceling or postponing their projects, including Chicago; San Francisco; Houston; Alexandria and Arlington, Va.; and St. Petersburg, Fla.

Municipalities are also finding citywide Wi-Fi has technological shortcomings. Philadelphia is about half finished with its Wi-Fi project, but already complaints have mounted about spotty reception from areas of the city where Wi-Fi was supposed to reach. As another blow, subscriptions have been lower than expected. Philadelphia also had to become an "anchor tenant" and commit to funding the network for city services for a set number of years.

Other cities are also encountering Wi-Fi problems, such as where to put transmitters, geographical complications, and interference from buildings, leaves and water. Yet a primary obstacle for municipal Wi-Fi programs seeking to blanket cities with Internet access is who pays for it, if not the city.

EarthLink's new President and CEO Rolla Huff announced EarthLink will reduce its investments in municipal Wi-Fi and Helio, a mobile device and service provider, but added the company will not abandon Wi-Fi projects completely. Huff's appointment came soon after EarthLink reported a $30 million first quarter loss.

"After thorough review and analysis of our municipal wireless business, we have decided that making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value," Huff said in a November 16 press release.

"That was never a sustainable business model, but the hype became so great it drove things forward much like the dot-com bubble and illusion," said Craig Settles, a wireless business strategist and consultant.

In the past few years, many municipal CIOs were caught between fulfilling their elected officials' unrealistic demands and deadlines for low-cost, or in other cases no-cost, citywide Wi-Fi, Settles said. Some cities had even copied RFP plans directly from other cities like Philadelphia and San Francisco in the rush to carry out municipal Wi-Fi directives. 


Inadequate Research
San Francisco's high-profile Wi-Fi project was recently put on the back burner, negating three years of planning after EarthLink backed out of its promise to pay an estimated $14 million to $17 million in installation costs for citywide Wi-Fi. San Francisco Mayor Gavin Newsom blamed the San Francisco Board of Supervisors for stalling, yet supervisors claimed the mayor negotiated a contract without their involvement. The result: San Francisco will not have citywide municipal Wi-Fi access for years to come.

"As CIO, the challenge is being a technology leader and ensuring you share your vision and incorporate as much processes with the community as possible so that we are all working together," said Chris Vein, CIO of San Francisco. "We were able to find the best deal in the country and it would've been adequate. I'm still very proud of the deal."

Vein blames fractious politics in San Francisco for stalling and ultimately killing the original Wi-Fi deal. However Settles, who is based in the Bay Area, believes San Francisco did not do adequate research or needs analysis, instead negotiating a deal before involving community input, in effect putting the cart before the horse.

"If you don't do an accurate needs assessment or technological due diligence before deciding what you're going to do, that's about as bad as it gets," Settles said. "Those are the fundamentals of what needs to be done."

San Francisco's proposed Wi-Fi plan involved EarthLink paying $2 million in exchange for the right to build, install and run a free Wi-Fi network, with Google providing the Internet service. Yet San Francisco's and other cities' reliance on EarthLink and other service providers to pay upfront costs for Wi-Fi projects is proving to be an unrealistic business model.

"When you build networks, put up towers and antennas across the whole city and then secondly make it free, well those two things are incongruent," said Bill Schrier, chief technology officer of Seattle. "Somebody has got to pay for all the electronics and equipment. Somebody has to operate it, pay for Internet access and fix the equipment when it goes down, and that's in direct conflict of free."

Schrier is an outspoken critic of municipal Wi-Fi projects, questioning not only the feasibility of city-sponsored Wi-Fi, but the claims that free Wi-Fi could bridge the digital divide when low-income citizens first need access to computers with Wi-Fi capabilities.

Seattle launched a pilot program called Seattle Wi-Fi in May of 2005, which focused on public use in the University and Columbia City business districts, City Hall, and four downtown parks, using light poles for access points. The study found one of the primary challenges to a free citywide Wi-Fi network was the shortcomings of the Wi-Fi technology: Wi-Fi coverage has trouble transmitting through some walls, while hills, foliage and rain can also disrupt the signal.

"We found significant problems with the technology," Schrier said. "First of all, if you put up a Wi-Fi point, it will work outdoors, but radio waves don't go through walls. If you put the Wi-Fi points down low, it reaches to the back of restaurants and buildings, but you don't get a wide coverage, but if you put the Wi-Fi points up high, you get a broader footprint, but don't get the interior coverage you want."

The study also found users were monopolizing bandwidth by sending spam and participating in Internet gaming, while other users attempted to hack into the system. The study also found numerous benefits to free citywide Wi-Fi, including increased revenue for businesses situated in the service area, improved access to users who had no other means of access, a reduction of road congestion from users who claimed Seattle Wi-Fi helped reduce driving time, and an increase in services.

Seattle is considering implementing Wi-Fi in certain areas of the city, but is also considering shelling out $500 million for fiber-optic lines throughout the city to increase future bandwidth demands and increase competition of Internet service providers, Schrier said.


Meshing with MIT
Cambridge, Mass., is also in the process of a two-year pilot called the Cambridge Public Network, which currently provides free Wi-Fi to a square mile of the city. The goal of the project is to help bridge the digital divide by bringing Internet access to city residents.

So far, Cambridge has found that it would be feasible to set up a citywide Wi-Fi network by utilizing light poles in the city - which the city owns - but also prepare the poles for the next upcoming wireless technology. Cambridge is utilizing Massachusetts Institute of Technology's RoofNet, a mesh networking technology that allows individual computers to become new access points, projecting the reach of the network beyond its original antennas. The maximum speed of the current network is 54 megabits per second, but the speed will decline as more people access the network.

"We don't want to spend a lot of money until we're sure we're spending money on something sustainable," said Mary Hart, CIO of Cambridge. "We didn't think it wise to spend money on technology until the technology looks like it's going to be around for a while."

The cautionary approach by Cambridge that incorporates flexibility for expanding bandwidth requirements is key to constructing enduring municipal broadband projects, according to Diamond Management and Technology Consultants. Many municipal CIOs are looking at the upcoming WiMAX technology that may provide better service than Wi-Fi in the coming years. Sprint announced earlier in 2007 that it would offer WiMAX service in 18 U.S. cities and hoped to reach 100 million people nationwide by the end of 2008. But that deal was canceled in November as the company chose to re-evaluate its WiMAX plans.

"Municipal governments should lean heavily on stable, long-term investments," said Chris O'Brien, vice president and partner of Diamond Management and Technology Consultants. "From our standpoint, wireless technology should be viewed cautiously since the long-term path is fairly uncertain. We caution our clients to look toward those investments that are enduring then find targeted opportunities in short-term ways that aren't as risky."

As CIO of Chicago from 2000 to 2006, O'Brien believes there is a compelling interest for local government to roll out free wireless in the community, since it can contribute to an increased quality of life for residents. Yet recently Chicago became one of the cities that suffered from EarthLink's change of direction, scrapping its proposed Wi-Fi plans after it was unwilling to commit to becoming an anchor tenant for the network.


Clash of the Networks
While many cities are attempting to create municipal wireless platforms in efforts to bridge the digital divide, other cities are building municipal wireless programs for city services. Settles suggests cities that want broad-reaching Wi-Fi consider first building a foundation of wireless communication infrastructure before jumping into wireless for all programs.

"Once a city network is built, then cities can build off that building inspection application or whatever it is and have a bigger indication that provides them with speed, durability and capacity that they don't have elsewhere and they can go about their merry way," Settles said.

Providence, R.I., took the approach of building a municipal wireless program for the city, with no intention of opening it up to the public. In 2003, when Providence CIO Charlie Hewitt was faced with a critical technology decision to find a new communication network for first responders, the Rhode Island Wireless Innovation Network that was attempting to create statewide connectivity was under way. When the program clashed with Verizon and Cox networks, which claimed a publicly owned free Wi-Fi model would eliminate competition, Providence city managers decided not to go down that road, sensing it would delay progress.

"I took that as my marching orders, and frankly to this day I'm blessed that [the mayor] told me to concentrate with the mission of the city and don't get involved with public access because it's a hornets' nest," Hewitt said.

Today, Providence has a 20-square-mile citywide public safety wireless network enabling myriad police and fire applications such as dispatching, mobile reporting, traffic monitoring, license plate checks and administrative functions. The network utilizes Motorola's mesh technology and was built with 50 access points, 460 wireless routers and more than 200 mesh-enabled devices such as laptops and tablets. Hewitt helped garner $800,000 in federal grant money, and the city doled out $1.5 million for the project. At the time, public safety officials opposed spending such a large amount of money on a network, but today they "love the network and thank me profusely," Hewitt said.


Captivating Corpus
Corpus Christi, Texas, began what is now considered a highly successful municipal Wi-Fi program in 2002, as an automated meter reading system (AMR). The city built a Wi-Fi mesh network from network receivers posted on traffic poles, covering a 147-square-mile area. The network relays gas and water meter data from the field to the city's Utilities Business office system. The city spent around $20 million for the AMR and Wi-Fi network, and claims $30 million in savings compared with an estimated $50 million that would've been spent over 20 years without an AMR system.

Once the network was completed, city officials realized the AMR application uses only a portion of the Wi-Fi network bandwidth. Corpus Christi partnered with Intel and within a year of deployment, the city increased usage of the network for remote access for code enforcement, health inspection, animal control, public works and utilities, building inspections and public safety.

As uses of the city's network burgeoned, city officials realized they would have to either build a new bureaucracy to run the system or find a private operator to run it. While in negotiations with EarthLink to run the system, EarthLink officials offered to buy the network and have the city be an anchor tenant for city services. City officials agreed and now EarthLink provides a citywide network as well as a subscription-based citywide Wi-Fi service, while nonsubscribers can access city government Web sites free of charge.

"Despite all the doom and gloom going on across the country about EarthLink and their plans in San Francisco and Philadelphia all going down the tubes, we have a contract in place and continue to operate successfully," said Leonard Scott, former business unit manager of the municipal information systems department for Corpus Christi, who was the lead in implementing the Corpus Christi network. "EarthLink is making money off the operation for the city, and the city has lowered its cost of services and is streamlining operations for the public with the anchor tenancy. So it's been a win-win situation for us here."

In 2006, Corpus Christi was rated one of the nation's top 10 digital-savvy cities in a Center for Digital Government poll and has had to limit the number of inquiries into the system to annual conferences, Scott said.


A Federal Fix?
In Asia and Europe, broadband policies are set at the national level. Not so in the United States. Broadband critics point to the absence of a coherent federal policy as a major reason why countries like Japan and the European Union are far ahead of the United States in terms of broadband services, including Wi-Fi. Without a coherent and meaningful federal policy, cities are left to figure one out on their own. Today's wave of faulty and failed Wi-Fi initiatives are a result of that leadership vacuum, say some critics.

As elected officials struggle to figure out what municipal broadband program will work for their city, beware of expensive citywide network projects, warns Diamond Consulting. The company projects that within the next five years, capacity requirements will rise from their current level of 1 to 5 Mbps to more than 100 Mbps and city Wi-Fi networks may not be able to support growing bandwidth requirements.

Cities should have a clear definition of the problem that needs to be solved. Many municipal network initiatives fail before they begin broadband projects because city leaders have not decided which problems they wish to solve and thus have failed to tailor specific solutions to the unique set of problems, according to O'Brien.

"The biggest challenge of the city CIO is figuring out what elected officials want to do," O'Brien said. "Elected officials decide what objectives are, and once you have the objective, you can devise a proper solution. If it's economic development, it could very well be fiber to premises and allowing a business to create networks. It might be a robust technology program, but the biggest challenge is educating and helping elected officials understand what problems they are trying to solve."

Seattle CIO Schrier and Providence CIO Hewitt also feel the biggest challenge is educating and helping elected officials to realize their goals then figure out the best way to enact them.

San Francisco CIO Vein is looking forward to working with elected officials to figure out the best possible broadband solution for San Francisco. He gains inspiration from Contra Costa County, which is east of San Francisco and implemented a Wi-Fi network after about six years.

"We need to make sure citizenry are OK with trying things that may not work and spend money and learn something and everybody understands it's a lot of give and take," Vein said. "Technology is an enabling tool, and it's not a perfect science. We need to work with each other to come up with the right steps to solve the problem."

Elected leaders and CIOs should not be daunted by the recent shortcomings of other municipal Wi-Fi projects that have hit stumbling blocks, O'Brien suggests, since citywide broadband solutions need to be addressed.

"I think the most important thing for CIOs is to understand that just because there have been difficulties for municipal wireless, it doesn't mean it's not an issue that needs to be solved and wireless is not a part of that solution," O'Brien said. "What it means is cities have to do more research about the problems that need to be solved and a careful investigation of a portfolio of services to see what the best solution may be. Our cities are far behind international cities as far as broadband, and this is a matter that has to be addressed."


Chandler Harris has written for Adventure Sports Journal, Surfer's Journal, Information Week, Government Technology, Emergency Management and Digital Communities magazines. He is the former editor of Shout Out newspaper.

Chandler Harris Contributing Writer