I'm constantly amazed at the places Glenn Fleishman's excellent articles turn up. That latest, on the problems municipal wi-fi networks are facing is in The Economist (the only newsweekly worth reading anymore). I originally met Glenn when he interviewed me years ago for a article on Warchalking, of all things, for the NY Times. How he finds time to research all this stuff, let alone write it up s beyond me.
Municipal wi-fi networks were supposed to change how intercity poor, along with city workers and others, accessed the Web and bring ubiquitous wireless access to the hearts of America's cities. It hasn't quite turned out like that. Partners like EarthLink are suffering from larger problems and others are concluding that there's no money there.
It's no surprise to me that the business models aren't working out. The margins on subscriber wireless are paper thin and there's a lot of uncertainty in the municipal wi-fi space. For one thing, the cities aren't necessarily in a position to capitalize on the new infrastructure because of poor back-end systems. From Glenn's article:
[F]ew municipalities are in a position to do much with the networks. Despite vague talk about wireless parking meters and enabling building inspectors to submit reports using Wi-Fi hand-helds, most cities lack the back-office systems needed to do such things. "You're building them a better track," says Craig Settles, a telecoms consultant, "but they don't even have running shoes yet."
To understand the problems associated with building municipal wi-fi networks, Google's initiatives in Mountain View and San Francisco are instructive. I recently published a presentation from the Emerging Telephony Conference on IT Conversations by Chris Sacca, head of special initiatives for Google. In this case, Google was footing the bill, so money wasn't a problem. Still the political and legal challenges to putting these networks in place are enormous.
I believe that it's difficult for most to imagine the difference between the unexpected pleasure of finding wi-fi when we're out and about and the economic fruits that would result being able to count on it. As Glenn points out, some forward looking cities are willing to commit to anchor tenant status and guarantee a certain amount of business to make these networks happen. Others are willing to put up with it if it's free. Time will tell which of these strategies is right, but I think history has shown that cities that are on the vanguard of technological change, whether it be sewer systems 100 years ago or wi-fi today, reap the rewards of sustained economic development.