Minneapolis' municipal wireless network will be a public-private affair, the City Council decided recently, because the city doesn't have the startup capital needed and is worried about the potential liability of ownng the network outright, the Star-Tribune reports.
Under the plan that the council approved, a private company will build, own and operate the city network at its own expense. The city will become an anchor tenant, and consumers and businesses will be encouraged to buy Internet access and other services.... "A big delay could have caused the project to lose momentum," said Karl Kaiser, the city's chief information officer. Because Chicago and Houston are competing for the attention of companies willing to build city networks at their own expense, project delays in Minneapolis might have encouraged those companies to go elsewhere, he said.
The Institute for Local Self-Reliance had lobbied heavily for a munipially owned network, claiming these benefits would be realistic:
- Payback period of just over 5.2 years - a 20 percent
annual return on investment
- $2 million in surplus revenues annually, beginning
with the first year of operation.
- $19 million in surplus revenue over the first
- $30 million more in surplus revenue over
the following 5 years (after the $28.8 million
debt is retired)
- $5.7 million in annual savings for customers