Boston will tap a nonprofit corporation to provide their city-wide WiFi Cloud, reports The Boston Globe. Boston Mayor Thomas M. Menino unveiled the plan (pdf), hatched by the Mayor’s Task Force on Wireless in Boston. Boston is proposing a wholesale network, built by the city and sold to retailers who will deliver a variety of services.
“We believe the non-profit route may be the best way to bring low-cost service to every neighborhood while providing a platform for innovation unlike any in the nation,”Mayor Menino said. “By keeping the network open, we believe we can create a hotbed of entrepreneurial activity, which will spur economic growth and job creation.”
Wi-Fi service in Boston is expected be offered at $15 per month, but the non-profit entity running the network will not sell retail access — it wholesales bandwidth to other companies. Competing companies are expected to offer end users a variety of high speed or free (ad-supported) wireless access. The network will span 49 square miles and serve some 590,000 residents,
The plan envisions raising $16 million to $20 million from local businesses and foundations. It is a departure from the business models used by other cities, including Philadelphia, San Francisco and Portland, which turned over responsibility for their wireless data networks to outside companies such as Earthlink, Google and MetroFi.
The cover letter from the Task Force (pdf), says:
The Task Force has identified a new and highly disruptive business model that addresses a key bottleneck in the value chain for the delivery of broadband. Therefore, we recommend that the City facilitate the deployment of a carrier-neutral, wholesale network that is open to all broadband providers, entrepreneurs, and researchers alike. This network will be ubiquitous, with customizable bit plans that facilitate the development of innovative applications.
According to the Boston Globe:
By empowering an independent organization to own and operate the city’s WiFi, or wireless fidelity, network, Boston is hoping to keep control of the technology deployment and use it to spur innovation, improve city services, and extend wireless Internet access into low-income neighborhoods across the so-called digital divide.
It was crafted by the mayor’s Wireless Task Force and cochaired by Joyce Plotkin , president of the Massachusetts Technology Leadership Council; Rick Burnes , cofounder of the venture capital firm Charles River Ventures; and retired Harvard Business School professor James Cash.
The mayor created the task force in February to enable Boston to catch up to the dozens of other US cities working to spread wireless Internet access.
Michael Oh, of newburyopen.net,co-founder of BostonWAG, was a member of the task force. The task force expects Boston will take up to two years to blanket the city with radio transmitters, or routers, and wireless Internet access points.
A Verizon spokesman made it clear last winter that the company would view any new entrant into the high-speed Internet broadband market as competition.
According to the Task Force Report:
The proposed non-profit model seeks to drastically increase competition in this segment by operating a wholesale network that provides retail ISPs with a connection between Internet “backhaul” operators and customers at very low cost. The non-profit would enable entrepreneurs, researchers, and companies large and small to offer uniquely specialized and highly localized Internet services to end users. With this new competition, prices would decline and variety increase.
“We’ve identified a highly disruptive business model,” said Rick Burnes. “By harnessing new technologies and implementing a unique network model, we can eliminate much of the cost of delivering broadband, thus providing an inexpensive platform for entrepreneurs while also bringing cheaper service to underserved populations.”
While Internet broadband is currently available to nearly 90% of Boston residents, according to the report, only 40% of Boston households subscribe, with 30% still using dial-up, and the remaining 30% doing without home Internet.
“What we’re trying to do is bring Internet access to as many people across the City as possible,” said Menino. “We believe this model could be the best way to bridge the so-called ‘Digital Divide.’ The student in Mattapan should have the same access to the knowledge available from the Web as the student living on Beacon Hill.”
Meanwhile, Berkeley voted 5:1 to find a municipal partner for fiber, reports The Register. “A successful economic model for running municipal Wi-Fi networks has yet to emerge,” says the city’s director of IT, Chris Mead.
The city also noted that while subscription models for Wi-Fi have been a flop, advertising-based revenue “cannot be taken for granted”, either. “It may be that municipal Wi-Fi is a passing fad that will be left behind by economic reality and new technology,” advised Mead.
The idea is simple, says Bob Cringely — run Fiber To The Home (FTTH) and run it as a cooperative. The cost per fiber drop, is estimated at $1,000-$1,500 if 40 percent of homes participate. Using the higher $1,500 figure, the cost to finance the system over 10 years at today’s prime rate would be $17.42 per month.