Why have municipal Wi-Fi networks been such a flop?

Innovation, the Internet, gadgets, and more.
Sept. 27 2007 12:53 PM

Where's My Free Wi-Fi?

Why municipal wireless networks have been such a flop.

(Continued from Page 1)

The result, as this summer has made clear, has been telecom's Bay of Pigs—a project the government wanted to happen but left to underqualified private parties to deliver. Firms like Earthlink promised too much, and the cities have stood by and watched as the firms trying to build Wi-Fi systems have twisted and died on the beachhead. This summer, Earthlink fired half of its staff, including the head of the municipal Wi-Fi division. Major projects in Chicago and San Francisco have been stopped cold, and Houston has fined Earthlink for falling behind deadlines.

Some observers blame these failures on Wi-Fi's technical limits. Wi-Fi does have serious limitations, but wireless Internet technology has worked well even on large college campuses. The deeper problem is economics. When municipal Wi-Fi became a private service, it fell into the same economic trap as the toilet robots. Private municipal wireless networks have to compete against competitors with better infrastructure who paid off their capital investments years ago.

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Setting up a large wireless network isn't as expensive as installing wires into people's homes, but it still costs a lot of money. Not billions, but still millions. To recover costs, the private "partner" has to charge for service. But if the customer already has a cable or telephone connection to his home, why switch to wireless unless it is dramatically cheaper or better? In typical configurations, municipal wireless connections are slower, not dramatically cheaper, and by their nature less reliable than existing Internet services. Those facts have put muni Wi-Fi in the same deathtrap that drowned every other company that peddled a new Net access scheme.

Today, the limited success stories come from towns that have actually treated Wi-Fi as a public calling. St. Cloud, Fla., a town of 28,000, has an entirely free wireless network. The network has its problems, such as dead spots, but also claims a 77 percent use rate among its citizens. Cities like St. Cloud understand the concept of a public service: something that's free, or near-free, like the local swimming pool. Most cities have been too busy dreaming of free pipes to notice that their approach is hopelessly flawed.

The lesson here is an old one about the function of government. When it comes to communications, the United States relies on a privateer system: We depend on private companies to perform public callings. That works up to a point, but private industry will build only so much. Real public infrastructure costs real public money. We already know that, in the real world, if you're not willing to invest in infrastructure, you get what we have: crumbling airports, collapsing bridges, and broken levees. Why did we think that the wireless Internet would be any different?

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