Broadband Reports and Katie Fehrenbacher of GigOm say San Francisco’s free Wi-Fi cloud is being delayed by a slow-moving city bureaucracy, five months after Google and Earthlink won the highly publicized contract to build and operate the network.
The city says progress is being made, but the Institute for Local Self-Reliance and the Media Alliance are pitching a city-owned and operated muni-Fi San Francisco network, as opposed to the corporate-owned Google proposal.
The publicly-owned network claims it would
- Payback its original investment in 4.2 years.
- Generate at least $6.1 million in surplus revenues over the first 5 years.
- Generate at least $16.8 million more in surplus revenue over the following 5 years (after the million debt is retired).
It seems a little late to go back to the drawing board, although apparently no contracts have yet been signed by Google and Earthlink. Boston went the Non-Profit route this summer.
MIT Technology Review wonders whether free municipal wireless is more boondoggle than boon due to lack of knowledge, misunderstandings, technology limitations and a weak business case. They examine the San Francisco project, a planned collaboration between Google and Earthlink.
In short, Philadelphia’s city government did its homework and knew what to ask for. But San Franciscans fear that Newsom will repeat his 2005 deal with Comcast, in which the city extended the company’s cable franchise for four years without negotiating service improvements or lower subscription fees.
Berkeley voted 5:1 to find a municipal partner for fiber, this summer. “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.
