Muni Wi-fi, where is the market?

Business Week reports on the struggles of municipal wi-fi to gain a foothold. I think it's a fine thing that private companies are trying to make this work -- but the fact that it inevitably involves the local government means that it won't die when it should.

The first rule for promoting a new technology is to make sure it works. So it's a surprise when a four-person team from EarthLink Inc. (ELNK) tells me that the wireless broadband service the company is rolling out for the city of Anaheim, Calif., won't work in a coffee shop there. This is the same Starbucks (SBUX) where the EarthLink folks had just spent an hour pitching their Feather service. "The walls are too thick," explained Cole Reinwand, vice-president of products strategy and marketing. [...]

[I]n buildings of more than three stories, you need additional receivers to boost the signal. [...]

With only 2,000 subscribers in the five cities that are up and running, CEO Mike Lunsford told analysts in April that it will reduce plans to bid on more cities so it can "demonstrate the marketability" of Wi-Fi.

As I've mentioned before, municipal wi-fi is a solution in search of a problem. Most people have their needs served indoors and outdoors, and muni wi-fi seems to be aimed at a strange niche: people that want mobile Internet, yet only out of doors and only within the city limits.

Cynthia over at IP Democracy offers her own experience:

Get too far away from the transmitters and you’re out of luck. Go into a building with thick walls and the signals just can’t through. If too many people are on the network, the speeds drop to below dial-up levels. Most of the time muni-Wi-Fi is a Rube Goldberg proposition and, to make matters worse, even when everything is working well, customers aren’t flocking to it.

I don't mean this as schadenfreude -- I live on technological progress. The great thing about truly free markets is that we get a lot of hard information, very quickly, about the applicability of a solution to a problem. If there is city money involved, however, that market information tends to fall on deaf ears.

Comments

[jay dedman]

So let's say we dump municipal wifi. Gone. Now we leave it up to the open market.

Is it cool in your book if wifi is built in the wealthy parts of town? Are against any kind of regulation to make sure there's wifi in parts of town that probably can't afford it yet. You know the issue: truly free markets (no corporate subsidies) can make marginalized areas/communities even more marginalised. Is this an issue for you?

[Matt S]

Hi there Jay, well, short answer, yes it's theoretically cool in my book. New technology usually goes to the wealthy first and then becomes cheap and widespread. Just look at the PC market or mobile phones. But it's also a very theoretical example, and one I don't think will come to pass.

I think your example assumes that the primary goal of muni wi-fi is to bridge the digital divide. The pols who push it often mention it as a side note, but I don't think that's the real impetus behind the whole thing. It's more about mayors being able to claim cutting-edgedness, etc.

That said, if our goal is to provide access to poorer parts of our city, muni wi-fi is kinda silly. (It won't work well inside houses, for example.)

A better solution would simply be to subsidize access to those who you feel deserve it. Cut them a check and let them choose their own means of access. You, and every other citizen, can do that today.

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