AP: Cities losing millions on Wi-Fi
In a sad tale of dashed hopes, many cities across the country are struggling to pay back loans on wireless infrastructure that never materialized, reports the Associated Press.
A typical story is that of Lompoc, CA, which poured $3 million into a system that less than 4,000 people signed up for. City-wide Wi-Fi projects across the country have cost more than $230 million last year, and industry website MuniWireless projects $460 million will be spent in 2007.
"They are the monorails of this decade: the wrong technology, totally overpromised and completely undelivered," said Anthony Townsend, research director at the Institute for the Future, a think tank.It's really to early to judge whether these systems are successful or not. But the early signs are troubling, AP reports.
"I will be surprised if the majority of these are successful and they do not prove to be drains on taxpayers' money," said Michael Balhoff, former telecom equity analyst with Legg Mason Inc. "The government is getting into hotly contested services."
The vendors are hopeful, however, that as more people have cell phones and make Wi-Fi calls and as city workers improve productivity by reading electric meters remotely, things will improve. Afterall, Wi-Fi networks are far cheaper to build than cable and DSL, which is broadband over phone lines, says Chuck Haas, MetroFi Inc.'s chief executive.
Prices dropped and quality of service went up," he said. "That's the way a lot of cities look at it. They don't look at business profits and losses. They see it as a driver for quality of life," said Mark McKibben, Lompoc's former wireless consultant.